**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-QSB**





x
            **Quarterly
                Report Pursuant to Section 13 or 15(****d****)
                of the Securities Exchange Act of
                1934.**





**For
      the Quarterly Period Ended** **September** **30,
      2007**





**or**





o
            **Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.**




**For
      the Transition Period From ________ To ________**





**Commission
      File Number: 000-30781**





**MANGOSOFT,
      INC.**


(Exact
      name of small business issuer as specified in its charter)





**Nevada**
            
            **87-0543565**(State
                or other jurisdiction of
                incorporation or organization)
            
            (IRS
                Employer Identification
                No.)**29
                Riverside St., Ste A Box 8Nashua,
                NH**
            
            **03062**(Address
                of principal executive
                offices)
            
            (Zip
                code)





**Issuer’s
      telephone number: (603) 324-0400**





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes x No o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date:




**Common
                Stock**
            **3,413,038
                Shares**$0.001
                Par Value
            (Outstanding
                on November 9,
                2007)





Transitional
      Small Business Disclosure Format (check one) Yes o No x







**MANGOSOFT,
      INC. AND SUBSIDIARY**





**INDEX
      TO FORM 10-QSB**





PagePART I.FINANCIAL
              INFORMATIONITEM 1 - Condensed Consolidated Financial
              Statements (unaudited):Balance Sheets as of September 30, 2007
              and
              December 31, 2006
            
            3Statements of Operations for the Three
              Months
              Ended September 30, 2007 and 2006
            
            4Statements of Operations for the Nine
              Months
              Ended September 30, 2007 and 2006
            
            5Statements of Cash Flows for the Nine
              Months
              Ended September 30, 2007 and 2006
            
            6Notes to the Condensed Consolidated
              Financial
              Statements
            
            7ITEM 2 - Management’s Discussion and Analysis
              of Financial Condition and Results of Operations
            
            10ITEM 3 - Controls and Procedures
            
            17PART II.OTHER
              INFORMATIONITEM 1 - Legal Proceedings
            
            18ITEM 6 - Exhibits and reports on form
              8-K
            
            19Signature
            
            21Officer Certification
            
            22




2


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





**September
                30,**
            
            **December
                31,********2007**
            
            **2006****(Unaudited)****ASSETS**Current
                Assets:Cash
                and cash equivalents
            
            $
            460,666
            
            $
            125,348Accounts
                receivable
            
            
            19,444
            
            
            20,900Total
                assets
            
            $
            480,110
            
            $
            146,248**LIABILITIES
                AND STOCKHOLDERS’ EQUITY (DEFICIT)**Current
                Liabilities:Accounts
                payable
            
            $
            -
            
            $
            51,738Accrued
                compensation
            
            
            3,894
            
            
            7,788Other
                accrued expenses and current liabilities
            
            
            41,105
            
            
            54,243Total
                current liabilities
            
            
            44,999
            
            
            113,769Long
                Term Liabilities:Note
                payable
            
            
            -
            
            
            250,000Total
                liabilities
            
            
            44,999
            
            
            363,769Commitments
                and contingenciesStockholders’
                Equity (Deficit):Preferred
                stock - $.001 par value; authorized, 5,000,000
              shares;
                issued and outstanding, 20,000
            
            
            20
            
            
            20Common
                stock - $.001 par value, authorized 15,000,000shares
                in September 2007 and 3,703,704 shares in
              December
                2006; issued and outstanding, 3,413,038 in
              September
                2007 and 1,013,038 in December 2006
            
            
            3,413
            
            
            1,013Additional
                paid-in capital
            
            
            89,904,757
            
            
            88,725,694Accumulated
                deficit
            
            
            (89,473,079
            )
            
            (88,944,248
            )Total
                stockholders' equity (deficit)
            
            
            435,111
            
            
            (217,521
            )Total
                liabilities and stockholders' equity (deficit)
            
            $
            480,110
            
            $
            146,248





See
      notes
      to the unaudited condensed consolidated financial statements.




3


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





**Three
                Months EndedSeptember 30,****2007**
            
            **2006****(Unaudited)**Service
                revenues
            
            $
            61,059
            
            $
            67,845Costs
                and expenses:Cost
                of services
            
            
            65,117
            
            
            65,201General
                and administrative
            
            
            105,228
            
            
            78,112Loss
                from operations
            
            
            (109,286
            )
            
            (75,468
            )Interest
                income
            
            
            5,826
            
            
            2,462Net
                loss
            
            $
            (103,460
            )
            $
            (73,006
            )Net
                loss per share - basic and diluted
            
            $
            (0.03
            )
            $
            (0.07
            )Weighted
                average shares outstanding - basic and diluted
            
            
            3,413,038
            
            
            1,013,038





See
      notes
      to the unaudited condensed consolidated financial statements.





4


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**




**Nine
                Months EndedSeptember 30,****2007**
            
            **2006****(Unaudited)**Service
                revenues
            
            $
            183,234
            
            $
            210,919Costs
                and expenses:Cost
                of services
            
            
            195,115
            
            
            197,237General
                and administrative
            
            
            539,339
            
            
            269,941Loss
                from operations
            
            
            (551,220
            )
            
            (256,259
            )Interest
                income
            
            
            22,389
            
            
            8,574Net
                loss
            
            $
            (528,831
            )
            $
            (247,685
            )Net
                loss per share - basic and diluted
            
            $
            (0.16
            )
            $
            (0.24
            )Weighted
                average shares outstanding - basic and diluted
            
            
            3,325,126
            
            
            1,013,038





See
      notes
      to the unaudited condensed consolidated financial statements.




5


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**Nine
                Months EndedSeptember 30,****2007**
            
            **2006****(Unaudited)**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (528,831
            )
            $
            (247,685
            )Adjustments
                to reconcile net loss to net cash used by
              operating
                activities:Increase
                (decrease) in cash from the change in:Accounts
                receivable
            
            
            1,456
            
            
            (3,854
            )Accounts
                payable
            
            
            (51,738
            )
            
            (6,067
            )Accrued
                compensation
            
            
            (3,894
            )
            
            (7,009
            )Other
                accrued expenses
            
            
            (6,675
            )
            
            (558
            )Net
                cash used in operating activities
            
            
            (589,682
            )
            
            (265,173
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Investment
                maturities
            
            
            -
            
            
            2,403Interest
                receivable
            
            
            -
            
            
            1,135Net
                cash provided by investing activities
            
            
            -
            
            
            3,538CASH
                FLOWS FROM FINANCING ACTIVITIES:Net
                Proceeds from Private Placement of Common Stock
            
            
            925,000
            
            
            -Net
                cash provided by financing activities
            
            
            925,000
            
            
            -NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            335,318
            
            
            (261,635
            )CASH
                AND CASH EQUIVALENTS, BEGINNING OFPERIOD
            
            
            125,348
            
            
            480,662CASH
                AND CASH EQUIVALENTS, END OF PERIOD
            
            $
            460,666
            
            $
            219,027




SUPPLEMENTAL
        DISCLOSURE OF NON CASH ACTIVITIES:




In
        connection with the Private Placement sale of Common Stock on January 10,
        2007,
        the bridge financing note payable to an investor and related party in the
        amount
        of $250,000 and accrued interest in the amount of $6,463 was converted into
        500,000 shares of Common Stock.




See
      notes
      to the unaudited condensed consolidated financial statements.




6


**MANGOSOFT,
      INC. AND SUBSIDIARY**





**NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**1.**
            **NATURE
                OF BUSINESS AND BASIS OF
                PRESENTATION**





MangoSoft,
      Inc. and subsidiary (the "Company") markets, sells and supports Internet
      business software and services that improve the utility and effectiveness of
      Internet-based business applications. The Company’s software solutions address
      the networking needs of small businesses, workgroups and large enterprises.
      The
      Company is engaged in a single operating segment of the computer software
      industry.




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared on the same basis as the annual financial statements. In the opinion
      of
      management, all significant adjustments, which are normal, recurring in nature
      and necessary for a fair presentation of the financial position, cash flows
      and
      results of the operations of the Company, have been consistently recorded.
      The
      operating results for the interim periods presented are not necessarily
      indicative of expected performance for the entire year. Certain amounts from
      the
      prior year have been reclassified to conform to the current year
      presentation.





The
      unaudited information should be read in conjunction with the audited financial
      statements of the Company and the notes thereto for the year ended December
      31,
      2006 included in the Company’s Annual Report on Form 10-KSB filed with the
      Securities and Exchange Commission.





As
      shown
      in the unaudited condensed consolidated financial statements, during the nine
      months ended September 30, 2007 and 2006, the Company incurred net losses of
      $528,831 and $247,685 respectively. Cash used in operations during the nine
      months ended September 30, 2007 and 2006 was $589,682 and $265,173,
      respectively. These factors, among others, raise significant doubt about the
      Company’s ability to continue as a going concern. The unaudited condensed
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability and classification of assets or the amounts and classification
      of
      liabilities that might be necessary should the Company be unable to continue
      as
      a going concern. The Company’s continuation as a going concern is dependent upon
      its ability to generate sufficient cash flow and meet its obligations on a
      timely basis and ultimately attain profitability.





On
      September 11, 2006, Mangosoft Corp. assigned the ownership and legal titles
      of
      twelve of its patents and applications with no recorded value to Mangosoft
      Intellectual Property, Inc., (a wholly owned subsidiary), Pursuant to the
      agreement, Mangosoft Corp. assigned the entire right, title, and interest in
      and
      to the following applications to Mangosoft Intellectual Property,
      Inc.:





**Title**
            
            **Application
                No./Patent No.**
            
            **Filing
                Date/Issue Date**System
                For Tracking Data
            
            08/848,970
            
            05/02/97Method
                For Scheduling Thread Execution OnA Limited Number Operating
                System
            
            09/069,352
            
            04/29/98Internet-Based
                Shared File Service With NativePC Client Access And Semantics And
                Distributed Access Control
            
            09/704,050
            
            11/01/00Internet-Based
                Shared File Service With NativePC Client Access And
                Semantics
            
            09/704,262
            
            11/01/00Dynamic
                Directory Service
            
            10/704,327
            
            11/07/03Internet-Based
                Shared File Service With NativePC Client Access And Semantics And
                Distributed Version Control
            
            11/285,423
            
            11/21/05




7




System
                and Method For Providing HighlyAvailable Data Storage Using Globally
                Addressable Memory
            
            5,909,540
            
            06/01/99Remote
                Access And Geographically DistributedComputers In A Globally
                Addressable Storage Environment
            
            5,987,506
            
            11/16/99Shared
                Client-Side Web Caching Using GloballyAddressable
                Memory
            
            6,026,474
            
            02/15/00Dynamic
                Directory Service
            
            6,647,393
            
            11/11/03Distributed
                Virtual Web Cache ImplementedEntirely in Software
            
            6,760,756
            
            07/06/04Internet-Based
                Shared File Service With NativePC Client Access And
                Semantics
            
            7,058,696
            
            06/06/06





On
      January 10, 2007, the Company announced the sale of an aggregate of 2,400,000
      shares of common stock, par value $.001 per share to a group of investors led
      by
      current stockholders. Through the private placement of its common stock, the
      Company raised aggregate gross proceeds of $1,200,000. One of the investors
      in
      the offering provided bridge financing to the Company on September 20, 2006
      in
      the principal amount of $250,000. This principal amount and accrued interest
      of
      $6,463, was automatically converted into a subscription for Common Stock
      pursuant to the offering. The Company intends to utilize the net proceeds of
      the
      private placement to pay past due expenses and to fund its various patent
      litigations.





On
      April
      25, 2007, the Company announced that its Mangomind Business Internet File
      Service now supports Microsoft's Windows Vista. With the addition of Windows
      Vista, Mangomind runs on all of the most commonly used Windows PC business
      platforms, including Windows 97, 98, ME, NT, 2000, XP and Windows Server
      2003.





On
      July
      3, 2007, the Company filed a registration statement with the Securities and
      Exchange Commission announcing the rights offering to purchase up to 2,400,000
      shares of its common stock to current stockholders of the Company at an
      unspecified date. Each full right will be exercisable for one share of common
      stock at a subscription price of approximately $.50 per share. The Company
      has
      reserved a total of 2,400,000 shares of common stock for the exercise of these
      rights. The Company has agreed to pay the fees and expenses of the subscription
      agent in the rights offering. The Company has also agreed to indemnify the
      subscription agent from any liability which it may incur in connection with
      the
      rights offering, including liabilities under the Securities Act of 1933. The
      Company will not engage the services of any third party solicitation agent
      or
      information agent with respect to the rights offering. The material conditions
      required to consummate the above rights offering are subject to the approval
      of
      the registration statement filed with the Securities and Exchange Commission.





**2.**
            **NET
                LOSS PER SHARE**





Basic
      net loss per share is computed by dividing net loss by the weighted average
      number of common shares outstanding for the period. Diluted net loss per share
      reflects, in addition to the weighted average number of common shares, the
      potential dilution if stock options and warrants outstanding were exercised
      and/or converted into common stock, unless the effect of such equivalent shares
      was anti-dilutive.





For
      the nine months ended September 30, 2007 and 2006, the effect of stock options
      and other potentially dilutive shares were excluded from the calculation of
      diluted net loss per common share as their inclusion would have been
      anti-dilutive.





8


**3.**
            **REVENUE
                RECOGNITION**





The
      Company recognizes revenue generated from product sales when persuasive evidence
      of an arrangement exists, the price is fixed and determinable, delivery has
      occurred and collection is probable. The Company recognizes revenue generated
      from the sale of the Mangomind SM and
      fileTRUST SM services
      as the service is provided. The Company recognizes revenue generated from the
      sale of the Mangomind SM product
      over the period of the first year’s maintenance agreement when persuasive
      evidence of the arrangement exists, the price is fixed and determinable,
      delivery and any required installation has been completed and collection is
      probable.





**4.**
            **STOCK-BASED
                COMPENSATION**





The
      Company currently has one stock-based compensation plan, which is described
      more
      fully in Note 8 in the Company’s Annual Report on Form 10-KSB for the period
      ended December 31, 2006, as filed on March 30, 2007. As amended, this plan
      provides for the issuance of up to 296,297 shares of common stock to employees,
      officers, directors and consultants in the form of nonqualified and incentive
      stock options, restricted stock grants or other stock-based awards, including
      stock appreciation rights. The stock options are exercisable as specified at
      the
      date of grant and expire no later than ten years from the date of grant. As
      of
      September 30, 2007, there were 179,652 remaining options available under this
      plan.




Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of Statement of Financial Accounting Standards (“SFAS”)
      No. 123(R), *Share-Based Payment* (“SFAS
      123R”), using the modified-prospective-transition method. Under this transition
      method, compensation cost to be recognized during 2006 and thereafter would
      include: (a) compensation cost for all stock-based payments granted, but
      not yet vested as of January 1, 2006, based on the grant-date fair value
      estimated in accordance with the original provisions of SFAS No. 123, *Accounting
      for Stock Based Compensation* ,
      and
      (b) compensation cost for all stock-based payments granted subsequent to
      January 1, 2006, based on the grant-date fair value estimated in accordance
      with the provisions of SFAS 123R. Results
      for prior periods have not been restated. There were no unvested stock based
      payments at January 1, 2006 and there were no stock based payments granted
      during the nine months ended September 30, 2007 and 2006.





9


**ITEM
                2.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND****RESULTS
                OF OPERATIONS**





This
      Quarterly Report on Form 10-QSB contains forward-looking statements within
      the
      safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
      Any statements in this Quarterly Report that are not statements of historical
      facts are forward-looking statements, which involve risks and uncertainties.
      Without limiting the foregoing, the words “believes,” “anticipates,” “plans,”
“expects,” and similar expressions are intended to identify forward-looking
      statements. Our actual results may differ materially from those indicated in
      the
      forward-looking statements as a result of the factors set forth elsewhere in
      this Quarterly Report on Form 10-QSB, including under “Risk Factors.” You should
      read the following discussion and analysis together with our condensed
      consolidated financial statements for the periods specified and the related
      notes included herein. Further reference should be made to our Annual Report
      on
      Form 10-KSB for the period ended December 31, 2006 filed with the Securities
      and
      Exchange Commission.





**Overview**





We
      market, sell and support Internet business software and services that improve
      the utility and effectiveness of Internet-based business applications. Our
      software solutions address the networking needs of small businesses, workgroups
      and large enterprises. Our products and services enhance the performance of
      PC
      networks and deliver improved service utilizing existing equipment. We no longer
      develop new software products or services.




Mangomind SM is a
      multi-user, business-oriented, peer-to-peer file sharing system, allowing
      individual users to collaborate over the Internet across organizational
      boundaries in a safe and secure manner. The architecture is a blend of the
      manageability of client/server with the autonomy, clustering, and caching
      optimizations of peer-to-peer. The user experience is one of easy file sharing
      with colleagues through what looks like an ordinary LAN shared drive.
      Mangomind SM provides
      the secure file sharing benefits of a VPN without additional hardware and
      configuration complexities. Mangomind SM is sold
      as both a service and a standalone software product.





fileTRUST SM is an
      online data storage service we purchased from Bank of America (formerly
      FleetBoston) in February 2002 for approximately $427,000, of which $175,000
      was
      paid in cash and the balance in our common stock and warrants to purchase our
      common stock at $14.31 per share. fileTRUST SM users
      can access their stored files from any Internet-connected system. The
      fileTRUST SM service
      compliments our Mangomind SM service
      by providing customers with a lower cost online storage system. In conjunction
      with our purchase of fileTRUST SM ,
      we
      executed a two-year enterprise license agreement with Bank of America (formerly
      FleetBoston) for the internal use of fileTRUST SM by Bank
      of America (formerly FleetBoston), which expired in February 2004. The terms
      and
      conditions of this agreement provided for automatic renewals on a month-to-month
      basis.





**Critical
      Accounting Policies**





Our
      accounting policies are fully described in Note 2 to our consolidated financial
      statements. The following describes the application of accounting principles
      that have significant impact on our consolidated financial
      statements:





*Going
      Concern Assumption* - The
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability and classification of assets or the amounts and classification
      of
      liabilities that might be necessary should we be unable to continue as a going
      concern. If the consolidated financial statements were prepared on liquidation
      basis, the carrying value of our assets and liabilities would be adjusted to
      net
      realizable amounts. In addition, the classification of the assets and
      liabilities would be adjusted to reflect the liquidation basis of
      accounting.





10


*Revenue
      Recognition* - We
      recognize revenue generated from product sales when persuasive evidence of
      an
      arrangement exists, the price is fixed and determinable, delivery has occurred
      and collection is probable. We recognize revenue generated from the sale of
      the
      Mangomind SM and
      fileTRUST SM services
      as the service is provided. We recognize revenue generated from the sale of
      the
      Mangomind SM product
      over the period of the first year’s maintenance agreement when persuasive
      evidence of the arrangement exists, the price is fixed and determinable,
      delivery and any required installation has been completed and collection is
      probable.





*Stock-based
      Compensation* - As
      part of our compensation programs offered to our employees, we grant stock
      options. In addition, we have engaged third-party consultants and advisors
      and
      have compensated them in the form of stock options. Effective January 1,
      2006, the Company adopted the fair value recognition provisions of Statement
      of
      Financial Accounting Standards (“SFAS”) No. 123(R), *Share-Based Payment* (“SFAS
      123R”), using the modified-prospective-transition method. Under this transition
      method, compensation cost to be recognized during 2006 and thereafter would
      include: (a) compensation cost for all stock-based payments granted, but
      not yet vested as of January 1, 2006, based on the grant-date fair value
      estimated in accordance with the original provisions of SFAS No. 123, *Accounting
      for Stock Based Compensation* ,
      and
      (b) compensation cost for all stock-based payments granted subsequent to
      January 1, 2006, based on the grant-date fair value estimated in accordance
      with the provisions of SFAS 123R using the Black-Scholes valuation model.
      Results for prior periods have not been restated. There were no unvested stock
      based payments at January 1, 2006 and there were no stock based payments granted
      during the nine months ended September 30, 2007 and 2006.





Because
      of the cashless exercise feature of the stock options granted in 1999 and the
      repricing of options granted in 2000 and 2003, we are required to remeasure
      the
      compensation related to these awards at each reporting date. As the quoted
      market price of our common stock fluctuates, our reported operating expenses
      will continue to fluctuate. These fluctuations can be significant.





*Deferred
      Taxation* -
      Because of the significant operating losses incurred and projected future
      operating losses, we have provided a full valuation allowance against the
      deferred tax assets created by our net operating loss
      carryforwards.





**Costs
      and Expenses**





*Cost
      of services* - Cost
      of services consist solely of the expenses we incur to administer and service
      the Mangomind SM and
      fileTRUST SM services.
      These expenses consist primarily of salaries and related personnel costs, the
      cost of our outsourced data center, the license royalties we pay to our
      e-security software provider for the encryption used in the
      Mangomind SM service
      and the fees we pay to Built Right Networks to manage our billable services
      infrastructure.





*Engineering
      and Development Expenses* -
      Engineering and development expenses consist primarily of costs related to
      the
      design, development, testing, deployment and enhancement of our products and
      services. We have expensed our engineering and development costs as incurred.
      At
      September 30, 2007, there were no full time employees performing engineering
      or
      development on our products and services. We have outsourced the maintenance
      of
      our billable services infrastructure as well as product and customer support
      to
      Built Right Networks.





*Other
      Operating Expenses* --
      Selling and marketing expenses consist primarily of costs incurred to market
      our
      products and services such as the costs of attending and presenting at trade
      shows. General and administrative expenses consist primarily of salaries and
      related personnel costs and other general corporate costs such as facility
      costs, commercial and general liability insurance, accounting and legal expenses
      and other costs typical of a publicly held corporation. At September 30, 2007,
      there were no full time employees performing selling and marketing activities.
      Our remaining employee is performing general and administrative
      activities.





11


*Reduction
      in Force* - We
      have reduced our work force on four occasions since April 23, 2001 due to
      adverse economic conditions and our need to conserve capital. At September
      30,
      2007, we had one employee, working in a general and administrative
      capacity.





**Results
      of Operations - Three Months Ended September 30, 2007 and
      2006**





Revenues
      for the three months ended September 30, 2007 decreased $6,786 or 10% to $61,059
      from $67,845 for the comparable period in 2006. The decrease in our revenues
      was
      primarily due to a decrease in software license revenue. No customer accounted
      for more than 10% of our revenues for the three-month period ended September
      30,
      2007.





We
      recognized $58,513 from the sale of our Mangomind SM service
      and $2,546 from the sale of our fileTRUST SM service
      during the three months ended September 30, 2007. During the comparable period
      in 2006, we recognized $64,852 from the sale of our Mangomind SM service,
      $2,993 from the sale of our fileTRUST SM service.





Cost
      of
      services for the three months ended September 30, 2007 decreased $84 to $65,117
      compared to $65,201 for the comparable period in 2006. The decrease in the
      cost
      of delivering our services was primarily a result of our continued reductions
      and our switch to a lower cost data center Built Right Networks.





For
      the
      three-month period ended September 30, 2007, general and administrative expenses
      increased $27,116 or approximately 35% to $105,228 compared with $78,112 for
      the
      comparable period in 2006. The increase in general and administrative expenses
      was primarily due to increases in professional, and legal fees, travel and
      travel related expenses. For the three-month period ended September 30, 2007
      and
      2006, we had one (1) full-time employee working in a general and administrative
      capacity.





Our
      loss
      from operations increased $33,818 to $109,286 for the three month period ended
      September 30, 2007 compared with a loss from operations of $75,468 for the
      comparable period in 2006 as a result of the above factors.





Interest
      income increased $3,364 to $5,826 for the three months ended September 30,
      2007
      compared to $2,462 for the three months ended September 30, 2006 primarily
      as a
      result of an increase in our cash balances available for investment.





**Results
      of Operations - Nine Months Ended September 30, 2007 and
      2006**





Revenues
      for the nine months ended September 30, 2007 decreased $27,685 or 13% to
      $183,234 from $210,919 for the comparable period in 2006. No customer accounted
      for more than 10% of our revenues for either period.





We
      recognized $175,302 from the sale of our Mangomind SM service
      and $7,932 from the sale of our fileTRUST SM service
      during the nine months ended September 30, 2007. During the comparable period
      in
      2006, we recognized $198,916 from the sale of the Mangomind SM service
      and $12,003 from the sale of our fileTRUST SM service.




Cost
      of
      services for the nine months ended September 30, 2007 decreased $2,122 or 1%
      to
      $195,115 compared to $197,237 for the comparable period in 2006. The decrease
      in
      the cost of delivering our services was primarily a result of our continued
      reductions and our switch to a lower cost data center. In response to our loss
      of Bank of America (formerly FleetBoston) as a customer, we have instituted
      cost
      reductions to lessen the adverse effects of the loss of the Bank of America
      (formerly FleetBoston) revenues, including restructuring our business
      relationships with key vendors such as Built Right Networks.





12


For
      the
      nine months ended September 30, 2007, other operating expenses including selling
      and marketing and general and administrative expenses increased $269,398 or
      100%
      to $539,339 compared with $269,941 for the comparable period in 2006. The
      increase in other operating expenses was due primarily to legal costs incurred
      in pursuit of patents and in defense of our patents combined with a reduction
      of
      public relations, legal and other corporate consultants and facility rent in
      addition to reductions in our marketing, selling and general and administrative
      personnel associated with our work force reductions. During the nine months
      ended September 30, 2007 and 2006, our one (1) full-time employee was working
      in
      a general and administrative capacity.





There
      was
      no stock-based compensation recorded for the nine-month period ended September
      30, 2007 and 2006.





Our
      loss
      from operations increased $294,961 to $551,220 for the nine months ended
      September 30, 2007 compared with a loss from operations of $256,259 for the
      comparable period in 2006 as a result of the above factors.





Interest
      income increased $13,815 to $22,389 for the nine months ended September 30,
      2007
      compared to $8,574 for the comparable period in 2006 due to the availability
      of
      working capital.





**Financial
      Condition, Liquidity and Capital Resources**





We
      were
      formed in June 1995 and, since our formation, have raised approximately
      $75,425,000 in financing from private placements of debt and equity securities.
      In addition to the financing we received through the sale of our securities,
      we
      have, at times, depended upon loans from stockholders and directors and credit
      from suppliers to meet interim financing needs. Borrowings from stockholders
      and
      directors have generally been refinanced with new debt instruments or converted
      into additional equity. At September 30, 2007, approximately $45,000 in
      additional financing was provided through accounts payable, accrued expenses
      and
      other trade credit, a significant portion of which is past due.





On
      January 10, 2007, the Company completed the sale of an aggregate of 2,400,000
      shares of common stock, par value $.001 per share to a group of investors led
      by
      current stockholders. Through the private placement of its common stock, the
      Company raised aggregate gross proceeds of $1,200,000. One of the investors
      in
      the offering provided bridge financing to the Company on September 20, 2006
      in
      the principal amount of $250,000. This principal amount and accrued interest
      of
      $6,463 was automatically converted into a
      subscription for Common Stock pursuant to the offering. The Company intends
      to
      utilize the net proceeds of the private placement to pay past due expenses
      and
      to fund its various patent litigations.





On
      July
      3, 2007, the Company filed a registration statement with the Securities and
      Exchange Commission announcing the rights offering to purchase up to 2,400,000
      shares of its common stock to current stockholders of the Company at an
      unspecified date. Each full right will be exercisable for one share of common
      stock at a subscription price of approximately $.50 per share. The Company
      has
      reserved a total of 2,400,000 shares of common stock for the exercise of these
      rights. The Company has agreed to pay the fees and expenses of the subscription
      agent in the rights offering. The Company has also agreed to indemnify the
      subscription agent from any liability which it may incur in connection with
      the
      rights offering, including liabilities under the Securities Act of 1933. The
      Company will not engage the services of any third party solicitation agent
      or
      information agent with respect to the rights offering. The material conditions
      required to consummate the above rights offering are subject to the approval
      of
      the registration statement filed with the Securities and Exchange Commission.





13


At
      September 30, 2007, we had a cash balance of approximately $461,000 and working
      capital of approximately $435,000. We do not have any commercial commitments
      or
      off balance sheet financing. Our commitments are described in Note 10 to our
      consolidated financial statements filed on Form 10-KSB for the period ended
      December 31, 2006 as reported to the Securities and Exchange
      Commission.





We
      did
      not make any capital expenditures during the nine months ended September 30,
      2007.





We
      have
      significantly modified our operations and reduced our work force on four
      separate occasions since April 2001. We currently have one (1) employee, working
      in a general and administrative capacity. We outsource the management of our
      billable services infrastructure, software code base, customer support and
      reseller channel management to Built Right Networks for approximately $21,000
      per month, under an agreement, which can be cancelled with a ninety (90) day
      notice.





Unless
      we
      can generate significant on-going revenue, we will need additional sources
      of
      equity or debt financing. Although we have been successful in raising past
      financing, there can be no assurances that additional financing will be
      available to us on commercially reasonable terms, or at all.





As
      shown
      in the unaudited consolidated financial statements, during the nine months
      ended
      September 30, 2007 and 2006, we incurred a net loss of $528,831 and $247,685,
      respectively. Cash used in operations during the nine months ended September
      30,
      2007 and 2006 was $589,682 and $265,173, respectively. The factors, among
      others, raise significant doubt about our ability to continue as a going
      concern. Our continuation as a going concern is dependent upon our ability
      to
      generate sufficient cash flow and meet our obligations on a timely basis and
      ultimately attain profitability.





**Business
      Strategy**





We
      no longer develop new software products or services. We continue to market,
      sell
      and support our software services. Our strategy also includes seeking strategic
      business partnerships and distribution channels to leverage our patented
      technology. All of our business operations are overseen by our sole officer
      and
      director, who utilizes third party contractors, as required, to implement the
      Company’s business strategy.





**Plan
      of Operations**





We
      believe that we may be required to raise additional funds in order to meet
      our
      cash requirements. In the event that our revenues from the current marketing,
      sales and support of our business software and services are insufficient, we
      may
      need to seek alternative sources of capital over the next twelve (12) months.
      While we do not anticipate any capital expenditures, product research and
      development or significant increase in employees over the next twelve (12)
      months, we continue to have additional cash needs related to our ongoing
      operations in general and our various ongoing intellectual property litigations
      in particular. In the event that cash flow from operations is insufficient
      for
      us to meet our obligations on a timely basis, we will be required to raise
      additional capital from stockholders, of which there can be no assurances.
      The
      Company has filed a registration statement on Form S-1 with the Securities
      and
      Exchange Commission with respect to a proposed rights offering pursuant to
      which
      the Company would propose to offer to its stockholders an aggregate of 2,400,000
      shares of its common stock at a per share purchase price of $.50 per share,
      which, if effected in full, would result in gross proceeds to the Company of
      $1,200,000.





14


**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      do not
      have any commercial commitments or off-balance sheet financing. Our commitments
      are described in Note 10 to our consolidated financial statements filed on
      Form
      10-KSB for the period ended December 31, 2006, as reported to the Securities
      and
      Exchange Commission.




**Risk
      Factors**





*We
      Have A Limited Operating History And A History Of Substantial Operating Losses.*





We
      have a
      history of substantial operating losses and an accumulated deficit of
      $89,473,079 as of September 30, 2007. For the nine months ended September 30,
      2007, our loss from operations was $551,220. For the year ended December 31,
      2006 our net income was $125,751 predominantly due to the settlement of accrued
      legal fees in the amount of $677,777. We have historically experienced cash
      flow
      difficulties primarily because our expenses have exceeded our revenues. We
      expect to incur additional operating losses. These factors, among others, raise
      significant doubt about our ability to continue as a going concern. If we are
      unable to generate sufficient revenue from our operations to pay expenses or
      we
      are unable to obtain additional financing on commercially reasonable terms,
      our
      business, financial condition and results of operations will be materially
      and
      adversely affected.





*We
      Will Need Additional Financing.*





We
      may
      require additional capital to finance our future operations. We can provide
      no
      assurance that we will obtain additional financing sufficient to meet our future
      needs on commercially reasonable terms or otherwise.





*Our
      Success Depends On Our Outsourced Services Agreement.*





Effective
      September 30, 2002, we outsourced the management of our internal information
      systems, billable services infrastructure, software code base, customer support
      and reseller channel management to Built Right Networks under our September
      30,
      2002 Information Management Services Agreement (the “Outsourced Services
      Agreement”). The principals of Built Right Networks are all former MangoSoft
      employees. Our contract represents a large majority of Built Right Networks’
revenue. We can provide no assurance that Built Right Networks will remain
      solvent or can retain their key personnel. Built Right Network’s inability to
      retain key personnel or to remain solvent would have a material and adverse
      effect on our business, financial condition and results of
      operations.





*Our
      Performance Depends On Market Acceptance Of Our Products.*





We
      expect
      to derive a substantial portion of our future revenues from the sales of
      Mangomind SM and
      fileTRUST SM .
      Due to
      our small size and need to conserve capital, our selling and marketing
      activities for these products and services is limited. If markets for our
      products fail to develop, develop more slowly than expected, are subject to
      substantial competition or react negatively to Bank of America’s (formerly
      FleetBoston) termination of its February 2002 enterprise license agreement
      with
      us, our business, financial condition and results of operations will be
      materially and adversely affected.





*We
      Depend On Strategic Marketing Relationships.*





We
      expect
      our future marketing efforts will focus in part on developing business
      relationships with technology companies that seek to augment their businesses
      by
      offering our products to their customers. Our inability to enter into and retain
      strategic relationships, or the inability of such technology companies to
      effectively market our products, could materially and adversely affect our
      business, operating results and financial condition.





15


*There
      May Be Limited Liquidity in Our Common Stock and Its Price May Be Subject to
      Fluctuation.*





Our
      common stock is currently traded on the OTC Bulletin Board and there is only
      a
      limited market for our common stock. We can provide no assurances that we will
      be able to have our common stock listed on an exchange or quoted on NASDAQ
      or
      that it will continue to be quoted on the OTC Bulletin Board. If there is no
      trading market for our common stock, the market price of our common stock will
      be materially and adversely affected.





*SEC
      Rules Concerning Sales of Low-Priced Securities May Hinder Re-Sales of Our
      Common Stock*





Because
      our common stock has a market price that is less than five dollars per share,
      our common stock is not listed on an exchange or quoted on NASDAQ and is traded
      on the OTC Bulletin Board. Brokers and dealers who handle trades in our common
      stock are subject to certain SEC disclosure rules when effecting trades in
      our
      common stock, including disclosure of the following: the bid and offer prices
      of
      our common stock, the compensation of the brokerage firm and the salesperson
      handling a trade and legal remedies available to the buyer. These requirements
      may hinder re-sales of our common stock and may adversely affect the market
      price of our common stock.





*Rapidly
      Changing Technology And Substantial Competition May Adversely Affect Our
      Business.*





Our
      business is subject to rapid changes in technology. We can provide no assurances
      that research and development by competitors will not render our technology
      obsolete or uncompetitive. We compete with a number of computer hardware and
      software design companies that have technologies and products similar to those
      offered by us and have greater resources, including more extensive research
      and
      development, marketing and capital than us. We can provide no assurances that
      we
      will be successful in marketing our existing products and developing and
      marketing new products in such a manner as to be effective against our
      competition. If our technology is rendered obsolete or we are unable to compete
      effectively, our business, operating results and financial condition will be
      materially and adversely affected.




*Litigation
      Concerning Intellectual Property Could Adversely Affect Our
      Business.*




We
      rely
      on a combination of trade secrets, copyright and trademark law, contractual
      provisions, confidentiality agreements and certain technology and security
      measures to protect our trademarks, patents, proprietary technology and
      know-how. However, we can provide no assurance that our rights in our
      intellectual property will not be infringed upon by competitors or that
      competitors will not similarly make claims against us for infringement. If
      we
      are required to be involved in litigation involving intellectual property
      rights, our business, operating results and financial condition will be
      materially and adversely affected.





*Defects
      In Our Software Products May Adversely Affect Our Business.*




Complex
      software such as the software developed by MangoSoft may contain defects when
      introduced and also when updates and new versions are released. Our introduction
      of software with defects or quality problems may result in adverse publicity,
      product returns, reduced orders, uncollectible or delayed accounts receivable,
      product redevelopment costs, loss of or delay in market acceptance of our
      products or claims by customers or others against us. Such problems or claims
      may have a material and adverse effect on our business, financial condition
      and
      results of operations.





16


*We
      Have Limitations On The Effectiveness Of Our Internal
      Controls.*





We
      have
      one full-time employee. This employee is engaged in general and administrative
      capacities. A complete set of internal controls is not possible in an
      organization of this size. Management does not expect that its disclosure
      controls or its internal controls will prevent all errors and intentional
      misrepresentations. A control system, no matter how well conceived and operated,
      can provide only reasonable, not absolute, assurance that the objectives of
      the
      control system are met. Further, the design of a control system must reflect
      the
      fact that there are resource constraints and the benefits of controls must
      be
      considered relative to their costs. Because of the inherent limitations in
      all
      control systems, no evaluation of controls can provide absolute assurance that
      all control issues, if any, within the organization have been
      detected.





17


**ITEM
              3.**
            **CONTROLS
                AND PROCEDURES**





We
      have
      significantly reduced our work force on several occasions during 2001 and 2002.
      At September 30, 2007 and 2006, we had one (1) employee, Mr. Dale Vincent,
      our
      President, Chief Executive Officer and sole director. A complete set of internal
      controls including segregation of duties is not possible in an organization
      of
      this size. However, we have implemented control procedures surrounding the
      maintenance of our accounting and financial systems and the safeguarding of
      our
      assets. Further, all transactions entered into outside the normal course of
      our
      day-to-day operations must be approved by Mr. Vincent.





Our
      principal executive and financial officer has evaluated the effectiveness of
      our
      disclosure controls and procedures (as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”)), as of the end of the period covered by this Annual Report on
      Form 10-KSB. Based on such evaluation, our principal executive and
      financial officer has concluded that as of such date, our disclosure controls
      and procedures were designed to ensure that information required to be disclosed
      by us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in
      applicable SEC rules and forms and were effective.





There
      was
      no change in our internal control over financial reporting (as defined in
      Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during
      the quarter ended September 30, 2007 that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.




18


**PART
      II - OTHER INFORMATION**





**ITEM
              1.**
            **LEGAL
                PROCEEDINGS**





On
      November 22, 2002, the Company filed a complaint in the United States District
      Court of New Hampshire, against Oracle Corporation for infringement of U.S.
      Patent No. 6,148,377 and U.S. Patent No. 5,918,229. The complaint seeks
      unspecified monetary damages and injunctive relief and awards for interest,
      costs and attorneys’ fees.





On
      May
      15, 2003, Oracle Corporation filed a complaint in the United States District
      Court, Northern District of California, against the Company and Built Right
      Networks for infringement of a patent held by Oracle Corporation. The complaint
      seeks unspecified monetary damages and injunctive relief and awards for
      interest, costs and attorneys’ fees.





On
      July
      2, 2003, the Company filed a complaint in the United States District Court,
      Northern District of California, against Oracle Corporation, Sun Microsystems,
      Inc., Dell Computer Corporation and Electronic Arts, Inc. for infringement
      of
      U.S. Patent No. 6,148,377 and U.S. Patent No. 5,918,229. The complaint seeks
      unspecified monetary damages and injunctive relief and awards for interest,
      costs and attorneys’ fees.




On
      March
      14, 2006, the U,S., District Court in New Hampshire ruled in favor of Oracle’s
      motion for summary judgment that did it did not infringe U.S. Patent No.
      6,148,377 held by Mangosoft, Inc. Mangosoft had sued Oracle in 2002, claiming
      infringement of its patent on shared memory technology as described above.





On
      September 22, 2006, the Company through its subsidiary Mangosoft Intellectual
      Property, Inc., filed a civil action in the United States District Court for
      the
      Eastern District of Texas alleging patent infringement against eBay, Inc. of
      San
      Jose and its subsidiaries Skype Technologies SA and Skype Software Sarl of
      Luxembourg. The Complaint alleges that each of the defendants have infringed,
      and continue to infringe, U.S. Patent No. 6,647,393 entitled "Dynamic Directory
      Service" in violation of one or more provisions of 35 U.S.C. section 271. The
      complaint seeks damages for willful infringement as well as injunctive relief.





On
      October 26, 2006 Mangosoft Inc. was successful in its motion for summary
      judgment of non-infringement of United States Patent No. 6,371,790 in an action
      brought by Oracle International Corp. Oracle's motion for summary adjudication
      of patent validity, along with Mangosoft's motion to amend its final contentions
      of patent invalidity, and Oracle's motion to preclude Mangosoft from asserting
      a
      defense of inequitable conduct were denied by the United States District Chief
      Judge.





On
      March
      29, 2007 the Company filed a Notice of Appeal in the United States District
      Court for the District of New Hampshire in the case of Mangosoft,
      Inc., et al. v. Oracle Corporation ,
      C.A.
      No. 02-545-M. By filing the Notice of Appeal, Mangosoft has commenced an appeal
      in the United States Court of Appeals for the Federal Circuit challenging,
      among
      other things, the District Court’s Claim Construction Order of September 21,
      2004, the District Court’s order granting defendant Oracle Corporation’s motion
      for summary judgment of non-infringement entered on March 14, 2006, and the
      District Court’s entry of final judgment entered on March 29, 2007.





Other
      than the matters listed above, there are no material pending legal proceedings,
      other than the routine litigation occurring in the normal course of operations,
      to which we are party or of which any of our properties are
      subject.





19


**ITEM
                6.**
            **EXHIBITS
                AND REPORTS ON FORM 8-K**





**(a)**
            **Exhibits:**




**Number**
              **Description of
                Exhibit**  2.1
              Agreement
                  and Plan of Merger by and among First American Clock Co., MangoSoft
                  Corporation and MangoMerger Corp., dated as of August 27,1999.
                  (1)
 3.1
              Articles
                  of Incorporation, as amended. (2)
 3.2
              By-laws.
                  (2)
 4.1
              Rights
                  Plan. (6)
 10
              Lease
                  of Westborough Office Park, Building Five, dated November 10, 1995.
                  (3)
 14
              Code
                  of Ethics. (7)
 21
              Subsidiary
                  of the Registrant. (2)
 31.1
              Certification
                  of Principal Executive Officer required by Rule 13a 14(a) or Rule
                  15-d14
                  (a) of the Securities Exchange Act of 1934, as adopted pursuant
                  to Section
                  302 of the Sarbanes-Oxley Act of
                  2002.
 32.1
              Certification
                  of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.
 99.1
              1999
                  Incentive Compensation Plan, as amended and restated on May 1,
                  2000.
                  (1)
 99.2
              Form
                  of Subscription Agreement for purchase of common stock, dated as
                  of March
                  20, 2000. (1)
 99.3
              Form
                  of Warrant Agreement. (1)
 99.4
              Asset
                  Purchase Agreement, dated February 11, 2002, between MangoSoft,
                  Inc. and
                  Fleet National Bank. (4)
 99.5
              Warrant
                  Agreement, dated February 11, 2002, between MangoSoft, Inc. and
                  Fleet
                  National Bank. (4)
 99.6
              Information
                  Management Services Agreement, dated September30,
                  2002, between MangoSoft, Inc. and Built Right Networks LLC.
                  (5)
 99.7
              Rights
                  Agreement, dated March 14, 2003, between MangoSoft, Inc. and Interwest
                  Transfer Co., Inc. (6)




(1)
            Filed
                as an exhibit to our Current Report on Form 8-K for an event dated
                September 7, 1999 and hereby incorporated by reference
                thereto.


(2)
            Filed
                as an exhibit to our Registration Statement on Form 10-SB, filed
                June 9,
                2000, and hereby incorporated by reference
                thereto.


(3)
            Filed
                as an exhibit to our Quarterly Report filed November 9, 1999 for
                the
                quarter ended September 30, 1999 and hereby incorporated by reference
                thereto.


(4)
            Filed
                as an exhibit to our Quarterly Report filed August 14, 2002 for the
                quarter ended June 30, 2002 and hereby incorporated by reference
                thereto.


(5)
            Filed
                as an exhibit to our Current Report on Form 8-K for an event dated
                September 30, 2002 and hereby incorporated by reference
                thereto.


(6)
            Filed
                as an exhibit to our Current Report on Form 8-K for an event dated
                March
                21, 2003, as amended on July 25, 2003, and hereby incorporated by
                reference thereto.


(7)
            Filed
                as an exhibit to our Annual Report filed on March 26, 2004 for the
                year
                ended December 31, 2003 and hereby incorporated by reference
                thereto.




20


**(b)**
            **Reports
                on Form 8-K:**





On
      January 17, 2007, Form 8-K was filed indicating the private placement of its
      common stock, par value $.001 per share, raising aggregate gross proceeds of
      $1,200,000 through the sale of 2,400,000 shares of Common Stock.





21


**SIGNATURE**





In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.


November
                9, 2007
            
            MANGOSOFT,
                INC./s/ *Dale
              Vincent*Dale
              VincentChief
              Executive
              Officer(Principal
                Financial and AccountingOfficer)




22