UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-Q








x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
the quarterly period ended March 31, 2009


or





 ̈
              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 000-51661








BIGSTRING
CORPORATION


(Exact
name of registrant as specified in its charter)





Delaware
              
              20-0297832(State
      or other jurisdiction of incorporation or organization)
              
              (I.R.S.
      Employer Identification No.)








157 Broad Street, Suite 109,
Red Bank, New Jersey07701


(Address
of principal executive offices) (Zip Code)








(732) 741-2840(Registrant’s
      telephone number, including area
code)








(Former
      name, former address and formal fiscal year, if changed since last
      report)





Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 xNo  ̈





Indicate
by check mark whether the registrant has submitted and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).  Yes xNo  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large
      accelerated filer  ̈
                    Accelerated
      filer  ̈Non-accelerated
      filer  ̈
                    Smaller
      reporting company x(Do
      not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  ̈No x





Number of
shares of Common Stock outstanding at May 14, 2009:





Common Stock, par value $0.0001 per
      share
                53,238,144(Class)
                (Number
      of Shares)











BIGSTRING CORPORATION





INDEX TO FORM
10-Q








PAGEPART
      I. FINANCIAL INFORMATIONItem
      1.
                                                                Financial Statements
                                                                1Consolidated Balance Sheets (unaudited) as of March 31, 2009
      and December 31, 2008
                                                                2Consolidated
      Statements of Operations (unaudited) for the Three Months Ended March 31,
      2009 and2008 and the period October 8, 2003 (Date of Formation)
      through March 31, 2009
                                                                3Consolidated Statements of Stockholders’ Equity (Deficiency)
      (unaudited) for the Three Months Ended March 31, 2009 and 2008 and the
      period October 8, 2003 (Date of Formation) through March 31,
      2009
                                                                4Consolidated Statements of Cash
      Flows (unaudited) for the Three Months Ended March 31, 2009 and 2008
      and the period October 8, 2003 (Date of Formation) through March 31,
      2009
                                                                5Notes to Unaudited Consolidated Financial
      Statements
                                                                6Item
      2.
                                                                Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                                                                21Item
      3.
                                                                Quantitative and Qualitative Disclosures About Market
      Risk
                                                                27Item
      4.
                                                                Controls and Procedures
                                                                27PART
      II. OTHER INFORMATIONItem
      1.
                                                                Legal Proceedings
                                                                28Item
      1A.
                                                                Risk Factors
                                                                28Item
      2.
                                                                Unregistered Sales of Equity Securities and Use of
      Proceeds
                                                                28Item
      3.
                                                                Defaults Upon Senior Securities
                                                                28Item
      4.
                                                                Submission of Matters to a Vote of Security
      Holders
                                                                28Item
      5.
                                                                Other Information
                                                                28Item
      6.
                                                                Exhibits
                                                                28Signatures
                                                                29Index of Exhibits
                                                                E-1
 
 Index


SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS








Certain
information included in this Quarterly Report on Form 10-Q and other filings of
the Registrant under the Securities Act of 1933, as amended (the “Securities
Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as well as information communicated orally or in writing between the dates of
such filings, contains or may contain “forward-looking statements” within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act.  Such statements are subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from expected
results.  Among these risks, trends and uncertainties are the
availability of working capital to fund our operations, the competitive market
in which we operate, the efficient and uninterrupted operation of our computer
and communications systems, our ability to generate a profit and execute our
business plan, the retention of key personnel, our ability to protect and defend
our intellectual property, the effects of governmental regulation and other
risks identified in the Registrant’s filings with the Securities and Exchange
Commission (the “SEC”) from time to time, including our registration statement
on Form SB-2 (Registration No. 333-143793), filed with the SEC on June 15, 2007,
and the subsequent amendments and supplements thereto.





In some
cases, forward-looking statements can be identified by terminology such as
“may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative of such terms
or other comparable terminology.  Although the Registrant believes
that the expectations reflected in the forward-looking statements contained
herein are reasonable, the Registrant cannot guarantee future results, levels of
activity, performance or achievements.  Moreover, neither the
Registrant, nor any other person, assumes responsibility for the accuracy and
completeness of such statements.  The Registrant is under no duty to
update any of the forward-looking statements contained herein after the date of
this Quarterly Report on Form 10-Q.


Index


PART
I.  FINANCIAL INFORMATION








Item 1.
            Financial
      Statements





Certain
information and footnote disclosures required under accounting principles
generally accepted in the United States of America have been condensed or
omitted from the following consolidated financial statements pursuant to the
rules and regulations of the Securities and Exchange Commission (the
“SEC”).  It is suggested that the following consolidated financial
statements be read in conjunction with the year-end consolidated financial
statements and notes thereto included in the Annual Report on Form 10-K for the
year ended December 31, 2008 of BigString Corporation
(“BigString”).





The
results of operations for the three months ended March 31, 2009 and 2008 are not
necessarily indicative of the results of the entire fiscal year or for any other
period.


1
 Index




BIGSTRING
CORPORATION AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(A
DEVELOPMENT STAGE COMPANY)


(Unaudited)








March
      31, 2009
                                
                                
                                December
      31, 2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                                
                                $
                                21,032
                                
                                
                                $
                                178,787Accounts
      receivable - net of allowance of $25 and $660
                                
                                
                                2,831
                                
                                
                                
                                15,115Prepaid
      expenses and other current assets
                                
                                
                                4,770
                                
                                
                                
                                17,922Total
      current assets
                                
                                
                                28,633
                                
                                
                                
                                211,824Property
      and equipment - net
                                
                                
                                62,879
                                
                                
                                
                                74,737Other
      assets
                                
                                
                                131,829
                                
                                
                                
                                155,677TOTAL
      ASSETS
                                
                                $
                                223,341
                                
                                
                                $
                                442,238LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCurrent
      liabilities:Accounts
      payable
                                
                                $
                                298,576
                                
                                
                                $
                                294,521Accrued
      expenses
                                
                                
                                232,063
                                
                                
                                
                                216,938Unearned
      revenue
                                
                                
                                6,066
                                
                                
                                
                                7,104Accrued
      interest
                                
                                
                                37,875
                                
                                
                                
                                60,000Total
      current liabilities
                                
                                
                                574,580
                                
                                
                                
                                578,563Long
      term liabilities:Long-term
      debt
                                
                                
                                960,168
                                
                                
                                
                                892,824TOTAL
      LIABILITIES
                                
                                
                                1,534,748
                                
                                
                                
                                1,471,387Stockholders'
      deficiency:Preferred
      stock, $.0001 par value - authorized 1,000,000 shares; outstanding 400,000
      and 400,000 shares, respectively
                                
                                
                                40
                                
                                
                                
                                40Common
      stock, $.0001 par value - authorized 249,000,000 shares; outstanding
      52,769,394 and 52,244,394 shares, respectively
                                
                                
                                5,277
                                
                                
                                
                                5,224Additional
      paid in capital
                                
                                
                                13,323,807
                                
                                
                                
                                13,119,632Deficit
      accumulated during the development stage
                                
                                
                                (14,640,531
                                )
                                
                                
                                (14,154,045
                                )Total
      stockholders' deficiency
                                
                                
                                (1,311,407
                                )
                                
                                
                                (1,029,149
                                )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                                
                                $
                                223,341
                                
                                
                                $
                                442,238








See notes
to unaudited consolidated financial statements.


2
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


(A
DEVELOPMENT STAGE COMPANY)


(Unaudited)





PeriodOctober
      8, 2003For
      the Three Months Ended
                                  
                                  
                                  (Date
      of Formation)March
      31,
                                  
                                  
                                  Through2009
                                  
                                  
                                  2008
                                  
                                  
                                  March 31, 2009Operating
      revenues
                                  
                                  $
                                  12,103
                                  
                                  
                                  $
                                  9,698
                                  
                                  
                                  $
                                  141,257Operating
      expenses:(1)Cost
      of revenues
                                  
                                  
                                  25,958
                                  
                                  
                                  
                                  21,240
                                  
                                  
                                  
                                  528,199Research
      and development
                                  
                                  
                                  119,855
                                  
                                  
                                  
                                  130,130
                                  
                                  
                                  
                                  2,200,649Sales
      and marketing
                                  
                                  
                                  23,905
                                  
                                  
                                  
                                  32,649
                                  
                                  
                                  
                                  991,080General
      and administrative
                                  
                                  
                                  217,851
                                  
                                  
                                  
                                  318,124
                                  
                                  
                                  
                                  4,337,221Amortization
      of intangibles
                                  
                                  
                                  -
                                  
                                  
                                  
                                  240,153
                                  
                                  
                                  
                                  4,490,190Impairment
      of assets
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,042,876Total
      operating expenses
                                  
                                  
                                  387,569
                                  
                                  
                                  
                                  742,296
                                  
                                  
                                  
                                  13,590,215Loss
      from operations
                                  
                                  
                                  (375,466
                                  )
                                  
                                  
                                  (732,598
                                  )
                                  
                                  
                                  (13,448,958
                                  )Other
      income (expense):(1)Interest
      income
                                  
                                  
                                  46
                                  
                                  
                                  
                                  2,131
                                  
                                  
                                  
                                  72,635Interest
      expense
                                  
                                  
                                  (19,875
                                  )
                                  
                                  
                                  (12,998
                                  )
                                  
                                  
                                  (132,960
                                  )Other,
      net
                                  
                                  
                                  (91,191
                                  )
                                  
                                  
                                  (89,913
                                  )
                                  
                                  
                                  (1,338,239
                                  )Total
      other income (expenses)
                                  
                                  
                                  (111,020
                                  )
                                  
                                  
                                  (100,780
                                  )
                                  
                                  
                                  (1,398,564
                                  )Loss
      before income tax benefit
                                  
                                  
                                  (486,486
                                  )
                                  
                                  
                                  (833,378
                                  )
                                  
                                  
                                  (14,847,522
                                  )Income
      tax benefit
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  686,991Net
      loss
                                  
                                  $
                                  (486,486
                                  )
                                  
                                  $
                                  (833,378
                                  )
                                  
                                  $
                                  (14,160,531
                                  )Net
      loss per common share:Basic
      and diluted
                                  
                                  $
                                  (0.01
                                  )
                                  
                                  $
                                  (0.02
                                  )Weighted
      average common shares outstanding:Basic
      and diluted
                                  
                                  
                                  52,413,561
                                  
                                  
                                  
                                  51,001,594(1)Stock-based and other
      non-cash compensation by function above:Cost
      of revenues
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  5,653Research
      and development
                                  
                                  
                                  26,348
                                  
                                  
                                  
                                  45,513
                                  
                                  
                                  
                                  217,321Sales
      and marketing
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  222,725General
      and administrative
                                  
                                  
                                  135,880
                                  
                                  
                                  
                                  157,588
                                  
                                  
                                  
                                  1,702,157Other,
      net
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  269,094Total
      stock-based and other non-cash compensation
                                  
                                  $
                                  162,228
                                  
                                  
                                  $
                                  203,101
                                  
                                  
                                  $
                                  2,416,950





See notes
to unaudited consolidated financial statements.


3
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(DEFICIENCY)


(A
DEVELOPMENT STAGE COMPANY)


(Unaudited)





Preferred
      Stock
                              
                              
                              Common
      Stock
                              
                              
                              AdditionalNo.
      of
                              
                              
                              
                              
                              
                              No.
      of
                              
                              
                              
                              
                              
                              Paid-In
                              
                              SubscriptionTotal
                              
                              
                              Shares
                              
                              
                              Amount
                              
                              
                              Shares
                              
                              
                              Amount
                              
                              
                              Capital
                              
                              Receivable
                              
                              
                              DeficitBalance,
      October 8, 2003
                              
                              $
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              -
                              
                              
                              
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Issuance
      of common stock (at $.0001 per share)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              21,210,000
                              
                              
                              
                              2,121
                              
                              
                              
                              (2,121
                              )
                              
                              
                              -
                              
                              
                              
                              -Contribution
      of capital
                              
                              
                              45,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              45,000
                              
                              
                              
                              -
                              
                              
                              
                              -Sale
      of common stock (at $0.25 per share)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              40,000
                              
                              
                              
                              4
                              
                              
                              
                              9,996
                              
                              
                              
                              (10,000
                              )
                              
                              
                              -Net
      loss
                              
                              
                              (29,567
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (29,567
                              )Balance,
      December 31, 2003
                              
                              
                              15,433
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              21,250,000
                              
                              
                              
                              2,125
                              
                              
                              
                              52,875
                              
                              
                              
                              (10,000
                              )
                              
                              
                              (29,567
                              )Cash
      received from prior sale of common stock
                              
                              
                              10,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              10,000
                              
                              
                              
                              -Sale
      of common stock (at $0.25 per share)
                              
                              
                              217,500
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              870,000
                              
                              
                              
                              87
                              
                              
                              
                              217,413
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for services (valued at $0.21 per share)
                              
                              
                              39,251
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              185,000
                              
                              
                              
                              19
                              
                              
                              
                              39,232
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for acquisition (valued at $0.24 per
share)
                              
                              
                              4,800,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              20,000,000
                              
                              
                              
                              2,000
                              
                              
                              
                              4,798,000
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of warrants for services (valued at $0.07 per share)
                              
                              
                              3,500
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,500
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss
                              
                              
                              (729,536
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (729,536
                              )Balance,
      December 31, 2004
                              
                              
                              4,356,148
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              42,305,000
                              
                              
                              
                              4,231
                              
                              
                              
                              5,111,020
                              
                              
                              
                              -
                              
                              
                              
                              (759,103
                              )Sale
      of common stock (at $0.25 per share)
                              
                              
                              230,500
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              922,000
                              
                              
                              
                              92
                              
                              
                              
                              230,408
                              
                              
                              
                              -
                              
                              
                              
                              -Exercise
      of warrants (at $0.25 per share)
                              
                              
                              11,250
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              45,000
                              
                              
                              
                              4
                              
                              
                              
                              11,246
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for services (valued at $0.25 per share)
                              
                              
                              12,500
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              50,000
                              
                              
                              
                              5
                              
                              
                              
                              12,495
                              
                              
                              
                              -
                              
                              
                              
                              -Sale
      of common stock (at $0.16 per share)
                              
                              
                              1,511,700
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              9,448,125
                              
                              
                              
                              945
                              
                              
                              
                              1,510,755
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of warrants for services (valued at $0.07 per share)
                              
                              
                              179,200
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              179,200
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss
                              
                              
                              (2,102,587
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (2,102,587
                              )Balance,
      December 31, 2005
                              
                              
                              4,198,711
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              52,770,125
                              
                              
                              
                              5,277
                              
                              
                              
                              7,055,124
                              
                              
                              
                              -
                              
                              
                              
                              (2,861,690
                              )Redemption
      of shares from stockholders (at $0.05 per share)
                              
                              
                              (400,000
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (8,000,000
                              )
                              
                              
                              (800
                              )
                              
                              
                              (399,200
                              )
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for consulting services (valued at $0.82 per
      share)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,250,000
                              
                              
                              
                              125
                              
                              
                              
                              (125
                              )
                              
                              
                              -
                              
                              
                              
                              -Stock-based
      compensation expense
                              
                              
                              314,250
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              314,250
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of warrants for consulting services (valued at $0.08, $0.18 and $0.42 per
      share)
                              
                              
                              36,595
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              36,595
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for website acquisition (valued at $0.80 per
      share)
                              
                              
                              600,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              750,000
                              
                              
                              
                              75
                              
                              
                              
                              599,925
                              
                              
                              
                              -
                              
                              
                              
                              -Sale
      of preferred stock (at $.0001 per share)
                              
                              
                              1,860,000
                              
                              
                              
                              400,000
                              
                              
                              
                              40
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,859,960
                              
                              
                              
                              -
                              
                              
                              
                              -Dividends
      from allocation of proceeds for the beneficial conversion feature of
      preferred stock
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              480,000
                              
                              
                              
                              -
                              
                              
                              
                              (480,000
                              )Exercise
      of warrants (at $0.16, $0.20 and $0.25 per share)
                              
                              
                              18,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              165,000
                              
                              
                              
                              17
                              
                              
                              
                              34,233
                              
                              
                              
                              (16,250
                              )
                              
                              
                              -Net
      loss
                              
                              
                              (3,114,225
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (3,114,225
                              )Balance,
      December 31, 2006
                              
                              
                              3,513,331
                              
                              
                              
                              400,000
                              
                              
                              
                              40
                              
                              
                              
                              46,935,125
                              
                              
                              
                              4,694
                              
                              
                              
                              9,980,762
                              
                              
                              
                              (16,250
                              )
                              
                              
                              (6,455,915
                              )Cash
      received from prior exercise of warrants
                              
                              
                              16,250
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              16,250
                              
                              
                              
                              -Issuance
      of common stock for consulting services (valued at $0.50 and $0.33 per
      share)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              432,000
                              
                              
                              
                              43
                              
                              
                              
                              (43
                              )
                              
                              
                              -
                              
                              
                              
                              -Allocation
      to warrants from sale of convertible promissory notes and
      warrants
                              
                              
                              31,320
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              31,320
                              
                              
                              
                              -
                              
                              
                              
                              -Beneficial
      conversion feature of convertible promissory notes
                              
                              
                              666,648
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              666,648
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for conversion of convertible promissory notes (at $0.18
      per share)
                              
                              
                              155,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              861,111
                              
                              
                              
                              86
                              
                              
                              
                              154,914
                              
                              
                              
                              -
                              
                              
                              
                              -Stock-based
      compensation expense
                              
                              
                              672,532
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              672,532
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of warrants, net (valued at $0.10 per share)
                              
                              
                              19,094
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              
                              
                              
                              
                              19,094
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for waiver and release (valued at $0.25 per
      share)
                              
                              
                              250,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,000,000
                              
                              
                              
                              100
                              
                              
                              
                              249,900
                              
                              
                              
                              -
                              
                              
                              
                              -Exercise
      of warrants (at $0.10 per share)
                              
                              
                              150,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,500,001
                              
                              
                              
                              150
                              
                              
                              
                              149,850
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss
                              
                              
                              (3,949,184
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (3,949,184
                              )Balance,
      December 31, 2007
                              
                              
                              1,524,991
                              
                              
                              
                              400,000
                              
                              
                              
                              40
                              
                              
                              
                              50,728,237
                              
                              
                              
                              5,073
                              
                              
                              
                              11,924,977
                              
                              
                              
                              -
                              
                              
                              
                              (10,405,099
                              )Exercise
      of warrants (at $0.10 per share)
                              
                              
                              21,333
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              213,333
                              
                              
                              
                              21
                              
                              
                              
                              21,312
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for conversion of convertible promissory notes (at $0.18
      per share)
                              
                              
                              20,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              111,111
                              
                              
                              
                              11
                              
                              
                              
                              19,989
                              
                              
                              
                              -
                              
                              
                              
                              -Allocation
      to warrants from sale of convertible promissory notes and
      warrants
                              
                              
                              76,176
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              76,176
                              
                              
                              
                              -
                              
                              
                              
                              -Beneficial
      conversion feature of convertible promissory notes
                              
                              
                              188,740
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              188,740
                              
                              
                              
                              -
                              
                              
                              
                              -Stock-based
      compensation expense
                              
                              
                              727,800
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              727,800
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for accrued interest (at $0.15 per share)
                              
                              
                              43,757
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              291,713
                              
                              
                              
                              29
                              
                              
                              
                              43,728
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for website acquisition (valued at $0.13 per
      share)
                              
                              
                              117,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              900,000
                              
                              
                              
                              90
                              
                              
                              
                              116,910
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss
                              
                              
                              (3,748,946
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (3,
      748,946
                              )Balance,
      December 31, 2008
                              
                              
                              (1,029,149
                              )
                              
                              
                              400,000
                              
                              
                              
                              40
                              
                              
                              
                              52,244,394
                              
                              
                              
                              5,224
                              
                              
                              
                              13,119,632
                              
                              
                              
                              -
                              
                              
                              
                              (14,154,045
                              )Stock-based
      compensation expense
                              
                              
                              162,228
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              162,228
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of common stock for accrued interest (at $0.08 per share)
                              
                              
                              42,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              525,000
                              
                              
                              
                              53
                              
                              
                              
                              42,000
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss
                              
                              
                              (486,486
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (486,486
                              )Balance,
      March 31, 2009
                              
                              $
                              (1,311,407
                              )
                              
                              
                              400,000
                              
                              
                              $
                              40
                              
                              
                              
                              52,769,394
                              
                              
                              $
                              5,277
                              
                              
                              $
                              13,323,807
                              
                              
                              $
                              -
                              
                              
                              $
                              (14,640,531
                              )





See notes
to unaudited consolidated financial statements.


4
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(A
DEVELOPMENT STAGE COMPANY)


(Unaudited)





PeriodOctober
      8, 2003For
      the Three Months Ended
                                        
                                        
                                        (Date
      of Formation)March
      31,
                                        
                                        
                                        Through2009
                                        
                                        
                                        2008
                                        
                                        
                                        March 31, 2009Cash
      flows from operating activities:Net
      loss
                                        
                                        $
                                        (486,486
                                        )
                                        
                                        $
                                        (833,378
                                        )
                                        
                                        $
                                        (14,160,531
                                        )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization of property and equipment, intangible and other
      assets
                                        
                                        
                                        31,950
                                        
                                        
                                        
                                        273,366
                                        
                                        
                                        
                                        4,867,446Gain
      on sale of property and equipment
                                        
                                        
                                        3,755
                                        
                                        
                                        
                                        (3,698
                                        )
                                        
                                        
                                        2,058Impairment
      of intangible assets
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        1,042,876Accretion
      for beneficial conversion feature and discount on notes
                                        
                                        
                                        67,344
                                        
                                        
                                        
                                        66,324
                                        
                                        
                                        
                                        598,052Stock-based
      compensation
                                        
                                        
                                        162,228
                                        
                                        
                                        
                                        203,101
                                        
                                        
                                        
                                        2,147,856Other
      non-cash compensation
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        269,094Changes
      in operating assets and liabilities:Decrease
      (increase) in accounts receivable, net
                                        
                                        
                                        12,284
                                        
                                        
                                        
                                        958
                                        
                                        
                                        
                                        (2,831
                                        )Decrease
      (increase) in prepaid expenses and other assets
                                        
                                        
                                        13,153
                                        
                                        
                                        
                                        (99,706
                                        )
                                        
                                        
                                        (367,392
                                        )Increase
      (decrease) in accounts payable
                                        
                                        
                                        4,055
                                        
                                        
                                        
                                        (86,372
                                        )
                                        
                                        
                                        298,576Increase
      (decrease) in accrued expenses and other liabilities
                                        
                                        
                                        35,000
                                        
                                        
                                        
                                        (6,358
                                        )
                                        
                                        
                                        352,630(Decrease)
      increase in unearned revenue
                                        
                                        
                                        (1,038
                                        )
                                        
                                        
                                        2,903
                                        
                                        
                                        
                                        6,066Net
      cash used in operating activities
                                        
                                        
                                        (157,755
                                        )
                                        
                                        
                                        (482,860
                                        )
                                        
                                        
                                        (4,946,100
                                        )Cash
      flows from investing activities:Purchase
      of property and equipment
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (262,290
                                        )Sale
      of property and equipment
                                        
                                        
                                        -
                                        
                                        
                                        
                                        50,000
                                        
                                        
                                        
                                        50,889Acquisitions
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (13,000
                                        )Net
      cash used in investing activities
                                        
                                        
                                        -
                                        
                                        
                                        
                                        50,000
                                        
                                        
                                        
                                        (224,401
                                        )Cash
      flows from financing activities:Proceeds
      from issuance of convertible notes and warrants
                                        
                                        
                                        -
                                        
                                        
                                        
                                        700,000
                                        
                                        
                                        
                                        1,750,000Proceeds
      from issuance of preferred stock, net
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        1,860,000Proceeds
      from the exercise of common stock warrants and issuance of common
      stock
                                        
                                        
                                        -
                                        
                                        
                                        
                                        21,333
                                        
                                        
                                        
                                        2,231,533Payments
      for redemption of notes
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (250,000
                                        )Payments
      for redemption of common stock
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (400,000
                                        )Net
      cash provided by financing activities
                                        
                                        
                                        -
                                        
                                        
                                        
                                        721,333
                                        
                                        
                                        
                                        5,191,533Net
      (decrease) increase in cash
                                        
                                        
                                        (157,755
                                        )
                                        
                                        
                                        288,473
                                        
                                        
                                        
                                        21,032Cash
      and cash equivalents - beginning of period
                                        
                                        
                                        178,787
                                        
                                        
                                        
                                        298,033
                                        
                                        
                                        
                                        -Cash
      and cash equivalents - end of period
                                        
                                        $
                                        21,032
                                        
                                        
                                        $
                                        586,506
                                        
                                        
                                        $
                                        21,032Supplementary
      information:Cash
      paid during the periods for:Interest
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        9,328Acquisitions
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        13,000Details
      of acquisitions:Fair
      value of assets acquired
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        2,790Fair
      value of liabilities assumed
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (5,857
                                        )Intangibles
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        5,533,067Common
      stock issued to effect acquisition
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        5,517,000Non-cash
      transactions during the periods for:Conversion
      of promissory notes
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        20,000
                                        
                                        
                                        $
                                        175,000Issuance
      of common stock for accrued interest
                                        
                                        $
                                        42,000
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        85,757Common
      stock issued for services
                                        
                                        $
                                        85,416
                                        
                                        
                                        $
                                        85,417
                                        
                                        
                                        $
                                        1,247,278Common
      stock options issued for services
                                        
                                        
                                        65,538
                                        
                                        
                                        
                                        106,410
                                        
                                        
                                        
                                        579,811Common
      stock warrants issued for services
                                        
                                        
                                        11,274
                                        
                                        
                                        
                                        11,274
                                        
                                        
                                        
                                        320,767Total
      stock-based compensation:
                                        
                                        
                                        162,228
                                        
                                        
                                        
                                        203,101
                                        
                                        
                                        
                                        2,147,856Issue
      of warrants, net
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        19,094Issuance
      of common stock for waiver and release
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        250,000Total
      other non-cash compensation
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        269,094Total
      stock-based and other non-cash compensation
                                        
                                        $
                                        162,228
                                        
                                        
                                        $
                                        203,101
                                        
                                        
                                        $
                                        2,416,950





See notes
to unaudited consolidated financial statements.


5
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








FOR THE THREE MONTHS ENDED
MARCH 31, 2009 AND 2008 AND THE PERIOD OCTOBER 8, 2003 (DATE OF FORMATION)
THROUGH MARCH 31, 2009





NOTE
1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





BASIS OF
PRESENTATION





The
consolidated balance sheet as of March 31, 2009, and the consolidated statements
of operations, stockholders’ equity and cash flows for the periods presented
herein have been prepared by BigString and are unaudited.  In the opinion
of management, all adjustments (consisting solely of normal recurring
adjustments) necessary to present fairly the financial position, results of
operations, changes in stockholders' equity and cash flows for all periods
presented have been made.  The information for the consolidated balance
sheet as of December 31, 2008 was derived from audited financial
statements.  The results of operations for the three months ended
March 31, 2009 are not necessarily indicative of the results to be expected
for the year ending December 31, 2009.





These
Notes to Unaudited Consolidated Financial Statements should be read in
conjunction with the consolidated financial statements and related notes
included in BigString’s 2008 Annual Report on Form 10-K filed with the SEC on
March 31, 2009.





ORGANIZATION





BigString
was incorporated in the State of Delaware on October 8, 2003 under the name
“Recall Mail Corporation.”  The company’s name was formally changed to
“BigString Corporation” in July 2005.  BigString was formed to develop
technology that would allow the user of email services to have comprehensive
control, security and privacy relating to the email generated by the
user.  In March 2004, the BigString email service was introduced to
the market.





BigString
Interactive, Inc. (“BigString Interactive”), incorporated in the State of New
Jersey, was formed by BigString in early 2006 to develop technology relating to
interactive web portals.





PeopleString
Corporation (“PeopleString”), incorporated in the State of Delaware, was formed
by BigString in early 2009 to develop technology relating to social
networks.





Email
Emissary, Inc. (“Email Emissary”), incorporated in the State of Oklahoma, was
acquired by BigString in July 2004; in September 2006, all of Email Emissary’s
assets, including its pending patent application, were transferred to
BigString.  Email Emissary was dissolved on May 17, 2007.





BigString
is considered a development stage enterprise as defined in Statement of
Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting for
Development Stage Companies,” issued by the Financial Accounting Standards Board
(the “FASB”).  BigString has limited revenue to date, continues to
raise capital and there is no assurance that ultimately BigString will achieve a
profitable level of operations.





PRINCIPLES OF
CONSOLIDATION





The
consolidated financial statements include the accounts of BigString and its
subsidiaries, all of which are wholly-owned subsidiaries.  All
intercompany transactions and balances have been eliminated.





USE OF
ESTIMATES





The
preparation of consolidated financial statements in conformity with generally
accepted accounting principles in the United States of America requires
management to make estimates, judgments and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.  On an on-going
basis, BigString evaluates its estimates.  Actual results could differ
from those estimates.





RECLASSIFICATIONS





Certain
reclassifications have been made to prior period balances in order to conform to
the current period’s presentation.





CASH
EQUIVALENTS





Cash
equivalents include short-term investments in United States treasury bills and
commercial paper with an original maturity of three months or less when
purchased.  At March 31, 2009 and December 31, 2008, cash equivalents
approximated $21,000 and $179,000, respectively.


6
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








CERTAIN RISKS AND
CONCENTRATION





Financial
instruments which potentially subject BigString to concentrations of credit risk
consist principally of temporary cash investments.  BigString places
its temporary cash investments with quality financial institutions and
commercial issuers of short term paper.





BigString
grants credit to customers based on an evaluation of the customer’s financial
condition, sometimes without requiring collateral. Exposure to losses on
receivables is principally dependent on each customer’s financial condition.
BigString controls its exposure to credit risk through credit approvals, credit
limits and monitoring procedures and establishes allowances for anticipated
losses.





REVENUE
RECOGNITION





BigString
derives revenue from online services, electronic commerce, advertising and data
network services.  BigString also derives revenue from marketing
affiliations.  BigString recognizes revenue in accordance with the
guidance contained in the SEC Staff Accounting Bulletin (“SAB”) No. 104,
“Revenue Recognition in Financial Statements.”





Consistent
with the provisions of the FASB’s Emerging Issues Task Force (“EITF”) Issue No.
99-19, “Reporting Revenue Gross as a Principal Versus Net as an Agent,”
BigString generally recognizes revenue associated with its advertising and
marketing affiliation programs on a gross basis due primarily to the following
factors:  BigString is the primary obligor; has general inventory
risk; has latitude in establishing prices; has discretion in supplier selection;
performs part of the service; and determines specifications.  In
connection with contracts to provide email services to marketing affiliates,
BigString may be obligated to make payments, which may represent a portion of
revenue, to its marketing affiliates.





Consistent
with EITF Issue No. 01-9, “Accounting for Considerations Given by a Vendor to a
Customer (Including the Reseller of the Vendor’s Product),” BigString accounts
for cash considerations given to customers, for which it does not receive a
separately identifiable benefit or cannot reasonable estimate fair value, as a
reduction of revenue rather than an expense.  Accordingly,
corresponding distributions to active users and distributions of referral fees
are recorded as a reduction of gross revenue.





BigString
records its allowance for doubtful accounts based upon an assessment of various
factors, including historical experience, age of the accounts receivable
balances, the credit quality of customers, current economic conditions and other
factors that may affect customers’ ability to pay.  Allowances for the
three months ended March 31, 2009 and the year ended December 31, 2008 were $25
and $660, respectively.





DEPRECIATION





Property
and equipment are stated at cost less accumulated depreciation and
amortization.  Depreciation and amortization are calculated primarily
using the straight-line method over their estimated useful lives of these
assets.





RESEARCH AND
DEVELOPMENT





BigString
accounts for research and development costs in accordance with accounting
pronouncements, including SFAS No. 2, “Accounting for Research and Development
Costs,” and SFAS No. 86, “Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed.”  BigString has determined that
technological feasibility for its software products is reached shortly before
the products are released.  Research and development costs incurred
between the establishment of technological feasibility and product release have
not been material and have accordingly been expensed when incurred.





EVALUATION OF LONG-LIVED
ASSETS





BigString
reviews property and equipment and finite-lived intangible assets for impairment
whenever events or changes in circumstances indicate the carrying value may not
be recoverable.  In accordance with the guidance provided in SFAS No.
144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” if the
carrying value of the long-lived asset exceeds the estimated future undiscounted
cash flows to be generated by such asset, the asset would be adjusted to its
fair value and an impairment loss would be charged to operations in the period
identified.





The
impairment analysis of finite-lived intangible assets conducted by BigString
indicated that the intangible assets were impaired as of the assessment date. As
a result, BigString recorded impairment charges of $627,584 and $415,292 for the
years ending December 31, 2008 and 2007, respectfully. See Note 5 of Notes to
Unaudited Consolidated Financial Statements for the detailed information
regarding the valuation methods and key assumptions used in coming to this
determination.





INTANGIBLES





SFAS No.
142, “Goodwill and other Intangible Assets,” specifies the financial accounting
and reporting for acquired goodwill and other indefinite life intangible
assets.  Goodwill and other indefinite-lived intangible assets are no
longer amortized, but are reviewed for impairment at least
annually.


7
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








DEFERRED FINANCING
COSTS





Debt
issue costs were deferred and amortized in other income (expense) over the term
of the related debt. BigString issued notes in August 2008, February 2008 and
May 2007 and incurred issuance costs of $18,977, $91,706 and $248,939,
respectively, which are being amortized over the term of the notes. Amortization
expense related to these costs is included in other, net in the consolidated
statements of operations and was $23,847, $23,589 and $230,793 for the three
months ended March 31, 2009 and 2008 and the period October 8, 2003 (Date of
Formation) through March 31, 2009, respectively.





INCOME
TAXES





BigString
accounts for income taxes using an asset and liability approach under which
deferred income taxes are recognized by applying enacted tax rates applicable to
future years to the differences between the financial statement carrying amounts
and the tax basis of reported assets and liabilities. A valuation allowance
reduces the deferred tax assets to the amount estimated more likely than not to
be realized.





The
principal items giving rise to deferred taxes are timing differences between
book and tax amortization of intangible assets and other
expenditures.





EARNINGS (LOSS) PER COMMON
SHARE





Basic
earnings (loss) per common share is computed by dividing net earnings (loss) by
the weighted average number of common shares outstanding during the specified
period and after preferred stock dividend requirements.  Diluted
earnings (loss) per common share is computed by dividing net earnings (loss) by
the weighted average number of common shares and potential common shares
outstanding during the specified period and after preferred stock dividend
requirements.  All potentially dilutive securities, which include
convertible notes, outstanding preferred stock, warrants and options, have been
excluded from the computation, as their effect is antidilutive.





STOCK-BASED
COMPENSATION





Effective
January 1, 2006, BigString accounts for stock-based compensation under SFAS No.
123(R), “Share-Based Payment” (“SFAS No. 123(R)”).  BigString adopted
SFAS No. 123(R) using the modified prospective method.  Under this
method, SFAS No. 123(R) applies to new awards and to awards modified,
repurchased, or cancelled after the required effective date of SFAS No.
123(R).  Additionally, compensation costs for the portion of the
awards outstanding as of the required effective date of SFAS No. 123(R), for
which the requisite service has not been rendered, are being recognized as the
requisite service is rendered after the required effective date of SFAS No.
123(R).  The compensation cost for the portion of awards is based on
the grant-date fair value of those awards as calculated for either recognition
or pro forma disclosures under SFAS No. 123, “Accounting for Stock Based
Compensation.”  Changes to the grant-date fair value of equity awards
granted before the required effective date of SFAS No. 123(R) are
precluded.  The compensation cost for those earlier awards is
attributed to periods beginning on or after the required effective date of SFAS
No. 123(R) using the attribution method that was used under SFAS No. 123, except
that the method of recognizing forfeitures only as they occur was not
continued.





BigString
issues shares of common stock to non-employees as stock-based
compensation.  BigString accounts for the services using the fair
market value of the consideration issued, generally measured at the closing
price of BigString’s common stock on the date of the agreement.  For
the three months ended March 31, 2009 and 2008, BigString recorded compensation
expense of $85,416 and $85,417, respectively, in connection with the issuance of
shares of common stock to non-employees.  For the period October 8,
2003 (Date of Formation) through March 31, 2009, BigString recorded compensation
expense of $1,247,278 in connection with the issuance of shares of common stock
to non-employees. For the period October 8, 2003 (Date of Formation) through
March 31, 2009, BigString also recorded $250,000 other non-cash compensation
expense for shares of common stock issued to non-employees.





BigString
issues stock purchase warrants to non-employees as stock-based
compensation.  The fair values of the stock purchase warrants are
estimated on the date of grant using the Black-Scholes option-pricing
model.  For the three months ended March 31, 2009 and 2008, BigString
recorded compensation expense of $11,274 and $11,274, respectively, associated
with issuances of stock purchase warrants.  For the period October 8,
2003 (Date of Formation) through March 31, 2009, BigString recorded compensation
expense of $320,767 in connection with the issuance of stock purchase warrants
for services. For the period October 8, 2003 (Date of Formation) through March
31, 2009, BigString also recorded $19,094 other non-cash compensation expense,
net for the cancellation and issue of warrants.





BigString
has one stock-based compensation plan under which incentive and nonqualified
stock options or rights to purchase stock may be granted to employees, directors
and other eligible participants.  The fair values of the stock options
are estimated on the date of grant using the Black-Scholes option-pricing
model.  For the three months ended March 31, 2009 and 2008, BigString
recorded compensation expense of $65,538 and $106,410,
respectively.  For the period October 8, 2003 (Date of Formation)
through March 31, 2009, BigString recorded compensation expense of
$579,811.  BigString did not grant stock options prior to
2006.


8
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








BUSINESS
COMBINATIONS





Business
combinations which have been accounted for under the purchase method of
accounting include the results of operations of the acquired business from the
date of acquisition. Net assets of the company acquired are recorded at their
fair value at the date of acquisition.





ACCOUNTING FOR
DERIVATIVES





BigString
evaluates its options, warrants or other contracts to determine if those
contracts or embedded components of those contracts qualify as derivatives to be
separately accounted for under SFAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” and related interpretations including EITF
Issue No. 00-19, “Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company’s Own Stock.”





FAIR VALUE OF FINANCIAL
INSTRUMENTS





For
financial instruments, including cash investments, accounts receivable, accounts
payable and accrued expenses, the carry amount approximates fair value because
of the short maturities of such instruments. Convertible notes are carried at
estimated fair value less any unamortized discount.





BENEFICIAL CONVERSION
FEATURE





When debt
or equity is issued which is convertible into common stock at a discount from
the common stock market price at the date the debt or equity is issued, a
beneficial conversion feature for the difference between the closing price and
the conversion price multiplied by the number of shares issuable upon conversion
is recognized. The beneficial conversion feature is presented as a discount to
the related debt or a dividend to the related equity, with an offsetting amount
increasing additional paid-in capital.





NEW FINANCIAL ACCOUNTING
STANDARDS





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (“GAAP”) in the United
States. BigString adopted SFAS No. 162 on January 1, 2009, and it did not have a
material impact on BigString’s consolidated financial position, cash flows and
results of operations.





In
December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 “Business
Combinations.” This statement is intended to improve the relevance, completeness
and representational faithfulness of the information provided in financial
reports about the assets acquired and the liabilities assumed in a business
combination. This statement requires an acquiror to recognize the assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the statement. Under SFAS 141(R),
acquisition-related costs, including restructuring costs, must be recognized
separately from the acquisition and will generally be expensed as incurred. That
replaces SFAS 141’s cost-allocation process, which required the cost of an
acquisition to be allocated to the individual assets acquired and liabilities
assumed based on their estimated fair values. SFAS 141(R) shall be applied
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual report period beginning on or after
December 15, 2008. BigString adopted SFAS No. 141(R) on January 1, 2009, and it
did not have a material impact on BigString’s consolidated financial position,
cash flows and results of operations.





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
enhances existing guidance for measuring assets and liabilities using fair
value. This standard provides a single definition of fair value, together with a
framework for measuring it, and requires additional disclosure about the use of
fair value to measure assets and liabilities. In February 2008, the FASB
issued FASB Staff Position (“FSP”) SFAS 157-1, “Application of SFAS No. 157 to
SFAS No. 13 and Its Related Interpretative Accounting Pronouncements that
Address Leasing Transactions” (“FSP SFAS 157-1”) and FASB Staff Position SFAS
157-2, “Effective Date of SFAS No. 157” (“FSP SFAS 157-2”). FSP SFAS 157-1
excludes SFAS No. 13 and its related interpretive accounting pronouncements that
address leasing transactions from the requirements of SFAS No. 157, with the
exception of fair value measurements of assets and liabilities recorded as a
result of a lease transaction but measured pursuant to other pronouncements
within the scope of SFAS No. 157. FSP SFAS 157-2 delays the effective date
of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value in the financial statements
on a recurring basis (at least annually). FSP SFAS 157-1 and FSP SFAS 157-2
became effective for BigString upon adoption of SFAS No. 157 on January 1, 2008.
BigString completed its implementation of SFAS No. 157 effective January 1,
2009, and it did not have a material impact on BigString’s consolidated
financial position, cash flows and results of operations.





NOTE
2. GOING CONCERN





For the
three months ended March 31, 2009, BigString’s unaudited consolidated financial
statements reflect a net loss of $486,486, net cash used in operations of
$157,755, working capital deficit of $545,947, a stockholders’
deficit


9
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








accumulated
during the development stage of $14,640,531 and a cumulative net loss of
$14,160,531.  These matters raise doubt about the ability of BigString
to continue as a going concern.  BigString’s unaudited consolidated
financial statements do not include any adjustments to reflect the possible
effects on recoverability and classification of assets or the amounts and
classification of liabilities that may result from the inability to continue as
a going concern.





The
ability of BigString to continue as a going concern is dependent on BigString’s
ability to further implement its business plan, raise capital and generate
additional revenues.  BigString can give no assurances that it will
generate sufficient cash flow from operations or obtain additional
financing.





The time
required for BigString to become profitable is highly uncertain, and BigString
can give no assurances that it will achieve or sustain profitability or generate
sufficient cash flow from operations to meet planned capital expenditures,
planned marketing expenditures and working capital requirements.  If
required, the ability to obtain additional financing from other sources also
depends on many factors beyond BigString’s control, including the state of the
capital markets and the prospects for BigString’s business.  The
necessary additional financing may not be available to BigString or may be
available only on terms that would result in further dilution to the current
stockholders of BigString.





NOTE
3. ACQUISITIONS





On July
9, 2008, BigString completed the acquisition of the website, BuddyStumbler,
pursuant to an asset purchase agreement.  BigString issued 900,000
shares to the sellers. The market value of BigString’s common stock on July 9,
2008 was $0.13 per share. The purchase price of $117,000 has been allocated to
intangible assets based on estimated fair value.  The acquisition
includes right, title and interest in domain names, customer and member lists
and source code.





A
condensed balance sheet of the major assets and liabilities associated with the
acquisition of BuddyStumbler as of the date of the acquisition is as
follows:





Intangible
      assets
                      
                      $
                      117,000Net
      assets acquired
                      
                      $
                      117,000





The
results of operations of the assets acquired were not material, and accordingly,
pro forma summary results have not been included.





On
December 11, 2006, BigString completed the acquisition of the website, DailyLOL,
pursuant to an asset purchase agreement.  The cash purchase price of
$13,000 has been allocated to intangible assets based on estimated fair
value.  The acquisition includes right, title and interest in domain
names, customer and member lists and source code. The results of operations of
the assets acquired were not material.





On May
19, 2006, BigString completed the acquisition of certain assets, including two
websites, from a principal of Lifeline Industries, Inc.  In
consideration for the assets, BigString issued 750,000 shares of BigString’s
common stock.  The market value of BigString’s common stock on May 19,
2006 was $0.80 per share.  In conjunction with this acquisition,
BigString acquired an intangible asset for $600,000 based on estimated fair
value.  The acquisition included right, title and interest in domain
names, customer and member lists and source code. The results of operations of
the assets acquired were not material. Lifeline Industries, Inc. previously
entered an agreement on May 2, 2006, to provide business consultant services to
BigString for three years.





On July
16, 2004, BigString completed the acquisition of Email
Emissary.  BigString purchased 100% of Email Emissary’s stock for
20,000,000 shares of BigString’s common stock.  BigString acquired
Email Emissary to consolidate its marketing and development
operations.  The purchase price of $4,800,000 was allocated to both
tangible and intangible assets and liabilities based on estimated fair
values.  Approximately $4,803,000 of identifiable intangible assets
(patent application, trademark and websites) arose from this
transaction.  Such intangible assets are being amortized on a
straight-line basis over the estimated economic life of five years.





This
acquisition was accounted for using the purchase method of accounting, and
accordingly, the results of operations of Email Emissary has been included in
BigString’s consolidated financial statements from July 16, 2004, the date of
closing.





NOTE
4. PROPERTY AND EQUIPMENT





Property
and equipment consist of the following:





March
      31, 2009
                      
                      
                      December
      31, 2008Computer
      equipment and internal software
                      
                      $
                      159,313
                      
                      
                      $
                      177,326Furniture
      and fixtures
                      
                      
                      5,721
                      
                      
                      
                      5,848165,034
                      
                      
                      
                      183,174Less
      accumulated depreciation
                      
                      
                      102,155
                      
                      
                      
                      108,437$
                      62,879
                      
                      
                      $
                      74,737


10
 Index




BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








Depreciation
expense for the three months ended March 31, 2009 and 2008, and for the period
October 8, 2003 (Date of Formation) through March 31, 2009, was $8,103, $9,624
and $146,462, respectively.





NOTE
5. GOODWILL AND OTHER INTANGIBLES





Other
intangibles consisted of a patent application and trademark, logos, source codes
and websites.  Amounts assigned to these intangibles were determined
by management.  Management considered a number of factors in
determining the allocations, including an independent formal
appraisal.  Other intangibles were being amortized over five
years.





Other
intangible assets consist of the following:





March
      31, 2009
                  
                  
                  December
      31, 2008Patent
      application and trademark
                  
                  $
                  4,803,067
                  
                  
                  $
                  4,803,067Logos,
      websites and source codes
                  
                  
                  730,000
                  
                  
                  
                  730,0005,533,067
                  
                  
                  
                  5,533,067Impairment
                  
                  
                  (1,042,876
                  )
                  
                  
                  (1,042,876
                  )4,490,191
                  
                  
                  
                  4,490,191Accumulated
      amortization
                  
                  
                  4,490,191
                  
                  
                  
                  4,490,191$
                  -
                  
                  
                  $
                  -





Other
intangibles are tested annually for impairment. If events indicate that
impairment could exist, a recoverability test is performed comparing future net
cash flows from the asset to the carrying value of the asset. If the
recoverability test indicates the asset is impaired and the asset carrying
amount is greater than fair market value, an impairment charge adjusts the
carrying value to fair market value. Continuing losses associated with the
assets indicated that impairments may exist.





In 2008,
the recoverability test for the patent application and trademark assets
indicated impairment. The fair market value, based on weighted, discounted cash
flows and disposition values, was not material, and an impairment loss of
$520,334 for the carrying amount was recognized.





In 2008,
the recoverability test for the logos, websites and source codes, which
primarily include the website BuddyStumbler, indicated impairment. The fair
market value, based on weighted, discounted cash flows and disposition values,
was not material, and an impairment loss of $107,250 for the carrying amount was
recognized.





In 2007,
the recoverability test for the logos, websites and source codes, which
primarily include the websites FindItAll, AmericanMoBlog and DailyLOL, indicated
impairment. The fair market value, based on weighted, discounted cash flows and
disposition values, was not material, and an impairment loss of $415,292 for the
carrying amount was recognized.





In June
2008, BigString entered into an asset purchase agreement to sell FindItAll and
AmericanMoBlog for a nominal fee and 20,000,000 shares of common stock in
FindItAll, Inc. The shares and fee were received in July 2008. Fair market value
was determined using the cost method of investment because BigString has
determined that this is a passive investment in a non-marketable equity and
BigString does not have significant influence over the company.





Estimated
remaining amortization expenses for intangible assets for the next five years is
zero.





NOTE
6. OTHER INCOME (EXPENSE)





Other
income (expense) consists of interest income, interest expense, and other,
net.





Interest
income was $46, $2,131 and $72,635 for the three months ended March 31, 2009 and
2008, and for the period October 8, 2003 (Date of Formation) through March 31,
2009, respectively.





Interest
expense consists of interest on convertible debt payable on each anniversary
date of the promissory notes and is included in accrued interest. Interest
expense was $19,875, $12,998 and $132,960 for the three months ended March 31,
2009 and 2008, and for the period October 8, 2003 (Date of Formation) through
March 31, 2009, respectively.





The
components of other, net consist of expenses related to the convertible
debenture financing, preferred stock financing and warrant and common stock
financings and are as follows:


11
 Index




BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








PeriodOctober
      8, 2003Three
      months ended
                  
                  
                  (Date
      of Formation)March
      31,
                  
                  
                  Through2009
                  
                  
                  2008
                  
                  
                  March 31, 2009Amortization
      of debt issue costs
                  
                  $
                  23,847
                  
                  
                  $
                  23,589
                  
                  
                  $
                  230,793Amortization
      of promissory note discount
                  
                  
                  8,388
                  
                  
                  
                  4,779
                  
                  
                  
                  49,995Amortization
      of beneficial conversion feature
                  
                  
                  58,956
                  
                  
                  
                  61,545
                  
                  
                  
                  548,057Other
      financing expenses
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  509,394$
                  91,191
                  
                  
                  $
                  89,913
                  
                  
                  $
                  1,338,239





Debt
issue costs for the August 2008, February 2008 and May 2007 financings were
$18,977, $91,706 and $248,939, respectively, and are being amortized over the
term of each note, which is 5, 36 and 36 months, respectively. Amortization is
accelerated for the proportion of promissory notes which are converted in a
period.





Other
financing expenses include $250,000 of stock-based other non-cash compensation
for the fair market value of common stock issued for a waiver and release
related to the debt financing in 2007.





NOTE
7. INCOME TAXES





BigString
adopted the provisions of the FASB Financial Interpretation No. 48, “Accounting
for Uncertainty in Income Taxes” (“FIN 48”), on January 1, 2007.  As a
result of the implementation of FIN 48, BigString recognized no adjustment in
the net liability for unrecognized income tax benefits.





BigString
participated in the State of New Jersey’s Corporation Business Tax Benefit
Certificate Transfer program (the “Program”), which allows certain high
technology and biotechnology companies to sell unused NOL carryforwards to other
New Jersey corporation business taxpayers. The Program requires that the
purchaser pay at least 75% of the amount of the surrendered tax benefit. For the
three months ending March 31, 2009 and 2008, and for the period October 8, 2003
(Date of Formation) through March 31, 2009, BigString recorded a net state tax
benefit of $0, $0 and $686,991, respectively, as a result of its sale of New
Jersey state net operating losses and New Jersey state research and development
credits. Since New Jersey law provides that net operating losses can be carried
over for up to seven years, BigString may be able to transfer its unused New
Jersey net operating losses in future years.





The tax
effects of temporary differences that give rise to significant portions of
deferred tax assets include NOL carry forwards and research and development
credits. A valuation allowance is provided when it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Valuation
allowances for the three months ended March 31, 2009 and 2008, and for the
period October 8, 2003 (Date of Formation) through March 31, 2009, have been
applied to offset the deferred tax assets in recognition of the uncertainty that
such tax benefits will be realized as BigString continues to incur
losses.





At
December 31, 2008, BigString has available NOL carry forwards of approximately
$12.6 million for federal income tax reporting purposes and $5.0 million for
state income tax reporting purposes which expire in various years through 2028.
The differences between book income and tax income primarily relates to
amortization of intangible assets and other expenditures.  Pursuant to
Section 382 of the Internal Revenue Code of 1986, as amended, the annual
utilization of a company’s NOL and research credit carry forwards may be
limited, and, as such, BigString’s NOL carry forwards available to offset future
federal taxable income may be limited. Similarly, BigString may be restricted in
using its research credit carry forwards to offset future federal income tax
expense.





NOTE
8. SHORT-TERM DEBT





On August
25, 2008, BigString closed on a financing. Providing the financing were Dwight
Lane Capital, LLC, a limited liability company in which Todd M. Ross, a former
director of BigString, has an interest, and Marc W. Dutton, a former director of
BigString. In connection with such financing, BigString issued promissory notes
in the aggregate principal amount of $250,000 and common stock purchase warrants
to purchase up to an aggregate 800,000 shares of BigString's common stock. Each
note had a term of five months and accrued interest at a rate of 12% annually.
The warrants have an exercise price of $0.08 per share.





BigString
incurred transaction fees of approximately $19,000. BigString accounted for the
convertible feature of the notes under SFAS No. 133, and related interpretations
including EITF Issue No. 00-19.  Due to the conversion rights only
upon an event of default, $2,080 was included as additional paid in capital
based on a weighted conversion discount. The warrants did not have a conversion
discount, and accordingly, no proceeds were allocated to the warrants based on
fair value, nor included as additional paid in capital.


12
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








The
conversion price for the outstanding convertible notes and the exercise price
and number of shares of common stock underlying the warrants previously issued
by BigString in February 2008 and May 2007 and the conversion price of the
shares of outstanding Series A Preferred Stock were subject to adjustment under
anti-dilution provisions.





In
December 2008, all amounts due under the notes were paid by BigString, including
accrued interest of $9,328, and, as a result, the notes were
cancelled.





NOTE
9. LONG-TERM DEBT





On
February 29, 2008, BigString entered into a financing arrangement with several
accredited financing parties. Proceeds from the financing have
been used to support ongoing operations and the advancement of BigString’s
technology, and fund the marketing and the development of its
business.





Pursuant
to the Subscription Agreement entered into by BigString with Whalehaven Capital
Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP
(collectively, the “2008 Subscribers”), the 2008 Subscribers purchased
convertible notes in the aggregate principal amount of $700,000, which notes are
convertible into shares of BigString’s common stock, and warrants to purchase up
to 2,333,333 shares of BigString's common stock, resulting in net proceeds of
approximately $608,000 after transaction fees of approximately
$92,000.  BigString accounted for the convertible notes under SFAS No.
133, and related interpretations including EITF Issue No.
00-19.  Approximately $76,200 of the proceeds was allocated to the
warrants based on fair value, and included as additional paid in
capital.  Due to the beneficial conversion feature of the convertible
notes, $186,660 was included as additional paid in capital based on the
conversion discount.





Each
convertible note has a term of three years and accrues interest at a rate of 6%
annually.  The holder of a convertible note shall have the right from
and after the issuance thereof until such time as the convertible note is fully
paid, to convert any outstanding and unpaid principal portion thereof into
shares of common stock at a conversion price of $0.15 per share, as adjusted.
The conversion price and number and kind of shares to be issued upon conversion
of the convertible notes are subject to adjustment from time to time. The
warrants have an exercise price of $0.15 per share, as adjusted.  The
number of shares of common stock underlying each warrant and the exercise price
are subject to certain adjustments.





In
connection with the February 29, 2008 financing, BigString paid Gem Funding LLC
(the “Finder”) $56,000 and issued a warrant to purchase 373,333 shares of
BigString’s common stock to the Finder on February 29, 2008.  The
Finder's warrant is similar to and carries the same rights as the warrants
issued to the 2008 Subscribers.





As a
result of this financing, the conversion price for the outstanding convertible
notes previously issued by BigString in May 2007 was adjusted from $0.18 to
$0.15.  In addition, the conversion price of the shares of outstanding
Series A Preferred Stock was adjusted as provided for in the Certificate of
Designations with respect to same.





On May 1,
2007, BigString entered into a financing arrangement with several accredited
financing parties. Pursuant to the Subscription Agreement entered into by
BigString with Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut
Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear (collectively,
the “2007 Subscribers”), the 2007 Subscribers purchased convertible notes in the
aggregate principal amount of $800,000, which notes are convertible into shares
of BigString’s common stock, and warrants to purchase up to 1,777,779 shares of
BigString's common stock, resulting in net proceeds of approximately $551,000
after transaction fees of approximately $249,000.  BigString accounted
for the convertible notes under SFAS No. 133, and related interpretations
including EITF Issue No. 00-19.  Approximately $31,300 of the proceeds
was allocated to the warrants based on fair value, and included as additional
paid in capital.  Due to the beneficial conversion feature of the
convertible notes, $666,648 was included as additional paid in capital based on
the conversion discount.





Each
convertible note has a term of three years and accrues interest at a rate of 6%
annually.  The holder of a convertible note shall have the right from
and after the issuance thereof until such time as the convertible note is fully
paid, to convert any outstanding and unpaid principal portion thereof into
shares of BigString’s common stock at a conversion price of $0.15 per share, as
adjusted.  The conversion price and number and kind of shares to be
issued upon conversion of the convertible notes are subject to adjustment from
time to time. The warrants have an exercise price of $0.30 per share, as
adjusted.  The number of shares of common stock underlying each
warrant and the exercise price are subject to certain adjustments.





In
connection with the May 1, 2007 financing, BigString paid the Finder $64,000 and
issued a warrant to purchase 213,333 shares of BigString’s common stock to the
Finder on May 1, 2007.  The Finder's warrant is similar to and carries
the same rights as the warrants issued to the 2007 Subscribers.





On
November 30, 2007, BigString and the 2007 Subscribers entered into an Agreement,
Waiver and Limited Release. As part of the Agreement, Waiver and Limited
Release, the 2007 Subscribers released BigString from liquidated damages
relating to the outstanding convertible notes. At the date of the Agreement,
Waiver and Limited Release, BigString had accrued $24,267 in liquidated damages.
BigString also granted the 2007 Subscribers 1,000,000 restricted shares of
BigString’s common stock. BigString recorded $250,000 of stock-based other
non-cash compensation expense related to the debt issue.


13
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








Information
regarding the convertible notes outstanding at March 31, 2009 and December 31,
2008 is as follows:





March
      31, 2009
                    
                    
                    December
      31, 2008Convertible
      note, May 1, 2007
                    
                    $
                    625,000
                    
                    
                    $
                    625,000Beneficial
      conversion feature
                    
                    
                    (188,076
                    )
                    
                    
                    (231,477
                    )Note
      Discount
                    
                    
                    (8,833
                    )
                    
                    
                    (10,873
                    )428,091
                    
                    
                    
                    382,650Convertible
      note, February 29, 2009
                    
                    $
                    700,000
                    
                    
                    $
                    700,000Beneficial
      conversion feature
                    
                    
                    (119,255
                    )
                    
                    
                    (134,810
                    )Note
      Discount
                    
                    
                    (48,668
                    )
                    
                    
                    (55,016
                    )532,077
                    
                    
                    
                    510,174$
                    960,168
                    
                    
                    $
                    892,824





For the
three months ended March 31, 2009 and 2008, and for the period October 8, 2003
(Date of Formation) through March 31, 2009, $0, $20,000 and $175,000 of the
convertible notes dated May 1, 2007 were converted resulting in 0, 111,111 and
972,222, respectively, shares of BigString’s common stock being issued to the
holders of the convertible notes. For the three months ended March 31, 2009 and
2008, and for the period October 8, 2003 (Date of Formation) through March 31,
2009, there were no conversions of the convertible notes dated February 29,
2008.





For the
three months ended March 31, 2009 and 2008, and for the period October 8, 2003
(Date of Formation) through March 31, 2009, BigString issued 525,000, 0 and
816,713 shares, respectively, of BigString’s common stock in lieu of $42,000, $0
and $85,757, respectively, of accrued interest. Future accrued interest
payments, which may include shares of BigString’s common stock in lieu of
accrued interest, on the May 1, 2007 and February 29, 2008 convertible notes are
currently estimated as follows:


AccruedYears
      Ending
                        
                        InterestDecember
      31,
                        
                        Payments2009
                        
                        
                        $
                        37,5002010
                        
                        
                        
                        79,5002011
                        
                        
                        
                        42,000$
                        159,000








NOTE
10. COMMON STOCK





On July
18, 2005, BigString amended its Certificate of Incorporation to, among other
things, (1) change its name from Recall Mail Corporation to BigString
Corporation, and (2) increase the number of shares BigString is authorized to
issue from 50,000,000 shares to 250,000,000 shares, consisting of 249,000,000
shares of common stock, par value $0.0001 per share, and 1,000,000 shares of
preferred stock, par value $0.0001 per share.  The board of directors
has the authority, without action by the stockholders, to designate and issue
the shares of preferred stock in one or more series and to designate the rights,
preference and privileges of each series, any or all of which may be greater
than the rights of BigString’s common stock.  Currently, there are
400,000 shares of preferred stock outstanding.





In
October 2003, the month of BigString’s formation, BigString issued 21,210,000
shares of its common stock to principals of BigString at no cost to such
principals.





During
2003, BigString concluded a private placement of securities, pursuant to which
it sold 40,000 shares of BigString’s common stock at a per share purchase price
of $0.25.  BigString received $10,000 in gross proceeds as a result of
this private placement.





During
2004, BigString concluded a private placement of securities, pursuant to which
it sold 870,000 shares of BigString’s common stock at a per share purchase price
of $0.25.  BigString received $217,500 in gross proceeds as a result
of this private placement.





During
2004, BigString issued 185,000 shares of common stock valued at $0.21 per share
in consideration for consulting services provided by two marketing
consultants.  BigString recorded consulting expense of $39,251 in
connection with the issuance of these shares. Fair market value was based on
most recent private placement per share purchase price and an agreed upon per
share purchase price discount.


14
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








During
2004, BigString completed the acquisition of Email Emissary for 20,000,000
shares of BigString’s common stock for a purchase price of $4,800,000. Fair
market value of $0.24 per share was based on the weighted average private
placement per share purchase prices in 2003 and 2004.





During
2005, BigString issued 50,000 shares of common stock valued at $0.25 per share
for business advisory services. Fair market value was based on the concurrent
private placement per share purchase price.





For the
year ended December 31, 2005, BigString concluded several private placements
pursuant to which it sold 922,000 shares of its common stock at a per share
purchase price of $0.25 and 9,448,125 shares of its common stock at a per share
purchase price of $0.16.  As a result of these private placements,
BigString received $1,742,200 in gross proceeds.





On May 2,
2006, BigString issued 1,250,000 shares of common stock in consideration for
business consultant services to be provided by Lifeline Industries,
Inc.  The market value of BigString’s common stock at May 2, 2006 was
$0.82 per share.





On May
19, 2006, BigString completed the acquisition of certain assets, including two
websites, from a principal of Lifeline Industries, Inc.  In
consideration for the assets, BigString issued 750,000 shares of common
stock.  The market value of BigString’s common stock at May 19, 2006
was $0.80 per share.





Additionally,
in May 2006, BigString redeemed 2,000,000 shares of its common stock from each
of Charles A. Handshy, Jr. and David L. Daniels, former directors of BigString,
and 2,000,000 shares of its common stock from each of their spouses, June E.
Handshy and Deborah K. Daniels, at a purchase price of $0.05 per
share.





On
February 26, 2007, BigString agreed to issue 140,000 shares of common stock to
CEOcast, Inc. in consideration for investor relations services.  The
market value of BigString’s common stock at February 26, 2007 was $0.50 per
share.





Additionally,
on February 26, 2007, BigString agreed to issue 192,000 shares of common stock
to Howard Greene in consideration for public relations services provided by
Greene Inc. Communications.  The market value of BigString’s common
stock at February 26, 2007 was $0.50 per share.





On May 1,
2007, BigString issued 100,000 shares of common stock to Jonathan Bomser in
consideration for online marketing services provided by CAC, Inc.  The
market value of BigString’s common stock at May 1, 2007 was $0.33 per
share.





On
November 30, 2007, BigString agreed to issue 1,000,000 shares of its common
stock to the 2007 Subscribers as part of the Agreement, Waiver and Limited
Release. The market value of BigString’s common stock at November 30, 2007 was
$0.25 per share.





During
November and December 2007, BigString issued an aggregate 861,111 shares of
common stock for the conversion of convertible promissory notes totaling
$155,000. The conversion price was $0.18 per share.





On
February 8, 2008, BigString issued 111,111 shares of its common stock for the
conversion of convertible promissory notes totaling $20,000. The conversion
price was $0.18 per share.





On May 1,
2008, BigString issued 291,713 shares of its common stock for accrued interest
on convertible promissory notes totaling $43,757. The conversion price was $0.15
per share.





On July
9, 2008, BigString completed the acquisition of certain assets and issued
900,000 shares of its common stock.  The market value of BigString’s
common stock at July 9, 2008 was $0.13 per share.





On March
2, 2009, BigString issued 525,000 shares of its common stock for accrued
interest on convertible promissory notes totaling $42,000. The conversion price
was $0.08 per share.





NOTE
11. PREFERRED STOCK





On May
19, 2006, BigString issued a total of 400,000 shares of Series A Preferred
Stock, par value $0.0001 per share, and warrants to purchase 1,000,000 shares of
its common stock to Witches Rock Portfolio Ltd., The Tudor BVI Global
Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., for an aggregate purchase
price of $2,000,000.  The shares of Series A Preferred Stock are
convertible under certain circumstances into shares of BigString’s common stock,
and have certain dividend, voting, liquidation and conversion
rights.   The warrants are convertible into shares of BigString’s
common stock at an exercise price per share of $1.25, as
adjusted.  BigString has registered the shares of common stock
issuable upon conversion of the shares of Series A Preferred Stock and the
shares of common stock underlying the warrants.  In conjunction with
this transaction, BigString incurred a fee of $140,000, which is included in
additional paid in capital.





BigString
accounted for the convertible preferred stock under SFAS No. 133, and related
interpretations including EITF Issue No. 00-19.  BigString performed
calculations allocating the proceeds of the Series A Preferred Stock with
detachable warrants to each respective security at their fair
values.  The value of the warrants of $400,000 was recorded as a
reduction of the Series A Preferred Stock and credited to additional
paid-in-capital.  The recorded discount of $480,000
resulting


15
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








from
allocation of proceeds to the beneficial conversion feature is analogous to a
dividend and is recognized as a return to the preferred stockholders at the date
of issuance of the convertible preferred stock.





NOTE
12. SHARE-BASED COMPENSATION





On
January 1, 2006, BigString adopted SFAS No. 123(R) requiring the recognition of
compensation expense in the consolidated statements of operations related to the
fair value of its employee and non-employee share-based options and
warrants.  SFAS No. 123(R) revises SFAS No. 123, “Accounting for
Stock-Based Compensation,” and supersedes APB Opinion No. 25, “Accounting for
Stock Issued to Employees.”  SFAS No. 123(R) is supplemented by SAB
No. 107 and SAB No. 110 which express the SEC staff’s views regarding the
interaction between SFAS No. 123(R) and certain SEC positions and regulations
including the valuation of share-based payment arrangements.





Warrants:





During
2004, BigString granted warrants as payment for advisory
services.  The warrants provided for the purchase of 60,000 shares of
BigString’s common stock at an exercise price of $0.25.  Certain of
these warrants were exercised in 2005, which resulted in 45,000 shares of
BigString’s common stock being issued to the holders thereof.  As a
result of these exercises, BigString received $11,250 in gross
proceeds.  The remainder of these warrants was exercised in 2006,
which resulted in 15,000 shares of BigString’s common stock being issued to the
holder thereof.  As a result of this exercise, BigString recorded a
subscription receivable of $3,750.  In connection with the grant of
these warrants, BigString recorded an expense of $3,500 which is included in
BigString’s consolidated statement of operations for the year ended December 31,
2004.  The fair value of the warrants granted was estimated on the
date of grant using the Black-Scholes option-pricing model with the following
weighted average assumptions used: dividend yield of 0%; expected volatility of
47%; risk free rate of return of 5%; and expected life of 2
years.  The weighted average fair value of these warrants was $0.07
per share.





On
January 1, 2005, BigString granted warrants to two consultants as payment for
advisory services. Each warrant provided for the purchase of 50,000 shares of
BigString’s common stock at an exercise price of $0.25 per share.  One
of the warrants was exercised in 2006, which resulted in 50,000 shares of
BigString’s common stock being issued to the holder thereof.  As a
result of this exercise, BigString recorded a subscription receivable of
$12,500.  In addition, the other warrant providing for the purchase of
50,000 shares of BigString’s common stock expired on January 1,
2007.  In connection with the grant of these warrants, BigString
recorded an expense of $7,400 which is included in BigString’s consolidated
statements of operations for the year ended December 31, 2005.  The
fair value of the warrants granted was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions used: dividend yield of 0%; expected volatility of 47%; risk free
rate of return of 5%; and expected life of 2 years.  The weighted
average fair value of these warrants was $0.07 per share.





On
September 23, 2005, BigString granted warrants to a consultant, as payment for
advisory services. One warrant provides for the purchase of 1,246,707 shares of
BigString’s common stock with a per share exercise price of $0.16, and the
second warrant provides for the purchase of 1,196,838 shares of BigString’s
common stock with a per share exercise price of $0.20.  Each of these
warrants is due to expire on September 23, 2010 and each grant is
non-forfeitable.  A portion of each warrant, representing 50,000
shares of common stock, was assigned to a third party.  The assigned
portions of the warrants were exercised in 2006, which resulted in 100,000
shares of BigString’s common stock being issued to the holder
thereof.  As a result of these exercises, BigString received $18,000
in gross proceeds.  In connection with the grant of these warrants,
BigString recorded an expense of $171,800 which is included in BigString’s
consolidated statements of operations for the year ended December 31,
2005.  The fair value of the warrants granted was estimated on the
date of grant using the Black-Scholes option-pricing model with the following
weighted average assumptions used:  dividend yield of 0%; expected
volatility of 47%; risk free rate of return of 5%; and expected life of 2
years.  The weighted average fair value of these warrants was $0.07
per share.





On May 2,
2006, BigString granted warrants to purchase shares of BigString’s common stock
in consideration for business consultant services to be provided by Lifeline
Industries, Inc.  A total of $135,300 of the deferred compensation in
connection with the warrants is being expensed over a period of 36
months.  For the three months ended March 31, 2009 and 2008, BigString
expensed $11,274 and $11,274, respectively, in connection with these services,
and the balance of $3,763 of total unrecognized compensation cost is included
within paid-in-capital on BigString’s consolidated balance sheet.  The
fair value of the warrants granted was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions used: dividend yield of 0%; expected volatility of 47%; risk free
rate of return of 5%; and expected life of 2 years.  The weighted
average fair value of these warrants was $0.42 and $0.18 per share.





On
December 1, 2006, BigString granted warrants to two consultants, as payment for
advisory services.  Each warrant provides for the purchase of 50,000
shares of BigString’s common stock at an exercise price of $0.50 per
share.  Each of these warrants is due to expire on December 1,
2011.  In connection with the grant of these warrants, BigString
recorded an expense of $6,530 which is included in BigString’s consolidated
statements of operations for the year ended December 31, 2006. The fair value of
the warrants granted was estimated on the date of grant using the Black-Scholes
option-pricing


16
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








model
with the following weighted average assumptions used: dividend yield of 0%;
expected volatility of 47%; risk free rate of return of 4%; and expected life of
3 years.  The weighted average fair value of these warrants was $0.08
per share.





As
discussed in Note 9, on May 1, 2007, BigString granted warrants to purchase up
to 1,991,112 shares of BigString's common stock to the 2007 Subscribers and the
Finder.  Each of the warrants has a term of five years from May 1,
2007 and was fully vested on the date of issuance. The warrants are exercisable
at $0.30 per share of common stock, as adjusted.  A total of $31,320
of the purchase price for the convertible notes and warrants was allocated to
the warrants based on fair value.





In
November 2007, BigString repriced warrants to purchase 1,713,334 shares of
common stock previously issued to the 2007 Subscribers, which warrants were
subsequently exercised by the 2007 Subscribers at the reduced exercise
price.  The exercise price of the repriced warrants was reduced from
$0.30 per share to $0.10 per share.  As a result of this repricing,
the warrants with an exercise price of $0.30 per share were deemed cancelled and
new warrants with an exercise price of $0.10 per share were deemed
issued.  In December 2007, five repriced warrants were exercised at
the exercise price of $0.10 per share, which resulted in 1,500,001 shares of
BigString’s common stock being issued to the holders thereof.  As a
result of these exercises, BigString received $150,000 in gross proceeds. In
addition, one repriced warrant was exercised in January 2008 at the exercise
price of $0.10 per share, which resulted in 213,333 shares of BigString’s common
stock being issued to the holder thereof and $21,333 in gross proceeds to
BigString. The fair value of the warrants deemed cancelled and deemed issued was
estimated on the date of approval by the board of directors of BigString using
the Black-Scholes option-pricing model with the following weighted average
assumptions used: dividend yield of 0% and 0%; expected volatility of 69% and
69%; risk free rate of return of 4% and 3%; and expected life of 4 and 0 years
for the deemed cancellation and deemed issue of warrants,
respectively.  The weighted average fair value of the deemed
cancellation and deemed issue of warrants was $0.11 per share and $0.12 per
share, respectively. BigString expensed the net fair value of $19,094 for the
year ended December 31, 2007.





As
discussed in Note 9, on February 29, 2008, BigString granted warrants to
purchase up to 2,706,666 shares of BigString's common stock to the 2008
Subscribers and Finder.  Each of the warrants has a term of five years
from February 29, 2008 and was fully vested on the date of issuance. The
warrants are exercisable at $0.15 per share of common stock, as
adjusted.  A total of $76,176 of the purchase price for the
convertible notes and warrants was allocated to the warrants based on fair
value.





As
discussed in Note 8, on August 25, 2008, BigString granted warrants to purchase
up to 800,000 shares of BigString's common stock to Dwight Lane Capital, LLC and
Marc W. Dutton.  Each of the warrants has a term of ten years from
August 25, 2008 and was fully vested on the date of issuance. The warrants are
exercisable at $0.08 per share of common stock.  The warrants did not
have a conversion discount, and accordingly, no proceeds for the convertible
notes and warrants was allocated to the warrants, based on fair value, nor
included as additional paid in capital. As a result of this transaction, certain
warrants to purchase shares of BigString’s common stock issued to the 2007
Subscribers and 2008 Subscribers and the Finder were adjusted; this adjustment
was not material.





The
number of warrants outstanding as of January 1, 2009 and changes to such number
during the three months ended March 31, 2009 is as follows:





WeightedWeighted
                  
                  
                  AverageAverage
                  
                  
                  Remaining
                  
                  
                  AggregateExercise
                  
                  
                  Contractual
                  
                  
                  IntrinsicShares
                  
                  
                  Price
                  
                  
                  Term
                  
                  
                  ValueWarrants
      outstanding at January 1, 2009
                  
                  
                  10,393,545
                  
                  
                  $
                  0.25
                  
                  
                  
                  4.2
                  
                  
                  $
                  -Warrants
      granted
                  
                  
                  -
                  
                  
                  $
                  -Warrants
      exercised
                  
                  
                  -
                  
                  
                  $
                  -Warrants
      cancelled/forfeited/expired
                  
                  
                  -
                  
                  
                  $
                  -Warrants
      outstanding at March 31, 2009
                  
                  
                  10,393,545
                  
                  
                  $
                  0.25
                  
                  
                  
                  4.0
                  
                  
                  $
                  -Warrants
      exercisable at March 31, 2009
                  
                  
                  10,393,545
                  
                  
                  $
                  0.25
                  
                  
                  
                  4.0
                  
                  
                  $
                  -





The
aggregate intrinsic value in the table above represents the total pre-tax
intrinsic value (the aggregate difference between the closing stock prices of
BigString’s common stock at the specified dates and the exercise prices for
in-the-money warrants) that would have been received by the warrant holders if
all in-the-money warrants had been exercised on the specified
dates.





Warrants
granted during the three months ended March 31, 2009 and 2008 were 0 and
2,706,666, respectively.  For the period October 8, 2003 (Date of
Formation) through March 31, 2009, warrants to purchase a total of 17,064,657
shares of BigString’s common stock were granted.





Warrants
exercised during the three months ended March 31, 2009 and 2008 were 0 and
213,333, respectively.  Cash received during the three months ended
March 31, 2009 and 2008 from the exercise of warrants was $0 and
$21,333,


17
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








respectively.  For
the period October 8, 2003 (Date of Formation) through March 31, 2009, a total
of 1,923,334 shares of BigString’s common stock were purchased upon the exercise
of warrants.





During
the three months ended March 31, 2009 and 2008, no warrants were cancelled,
forfeited or expired. During the period October 8, 2003 (Date of Formation)
through March 31, 2009, warrants to purchase a total of 50,000 shares of
BigString’s common stock expired with an aggregate intrinsic value of $26,000 at
the date of expiration. In addition, for the period October 8, 2003 (Date of
Formation) through March 31, 2009, warrants to purchase a total of 4,697,778
shares of common stock were cancelled with an aggregate intrinsic value of $0 at
the date of cancellation.





Equity
Incentive Plan and Stock Options Issued to Consultant:





At the
2006 annual meeting of stockholders of BigString, the BigString Corporation 2006
Equity Incentive Plan (the “Equity Incentive Plan”) was adopted and approved by
a majority of BigString’s stockholders.  Under the Equity Incentive
Plan, incentive and nonqualified stock options and rights to purchase
BigString’s common stock may be granted to eligible
participants.  Options are generally priced to be at least 100% of the
fair market value of BigString’s common stock at the date of the
grant.  Options are generally granted for a term of five or ten
years.  Options granted under the Equity Incentive Plan generally vest
between one and five years.





On July
11, 2006, BigString approved the grant of a non-qualified stock option to
purchase 575,100 shares of BigString’s common stock to a vendor. The
non-qualified stock option has a term of five years from July 11, 2006 and an
exercise price of $0.32 per share.  For the year ended December 31,
2006, BigString recorded a consulting expense of $47,775 in connection with the
contractual relationship between Mr. Vogel and BigString.





On July
11, 2006, BigString granted incentive stock options to purchase 2,620,000 shares
of BigString’s common stock under its Equity Incentive Plan to certain of
BigString’s employees.  Incentive stock options to purchase 1,450,000
shares of BigString’s common stock were granted at an exercise price of $0.32
per underlying share with 25% vesting every three months for one year, and
incentive stock options to purchase 1,170,000 shares of BigString’s common stock
were granted at an exercise price of $0.50 per underlying share with vesting
over periods of three and four years.  In addition, non-qualified
stock options to purchase 600,000 shares of BigString’s common stock were
granted to two non-employee directors at an exercise price of $0.50 per
underlying share with vesting over a period of three years.





On
September 18, 2006, BigString granted an incentive stock option to purchase
1,800,000 shares of BigString’s common stock under its Equity Incentive Plan to
a new BigString officer. When vested, 400,000 shares of BigString’s common stock
will be eligible for purchase at the per share price equal to $0.24; 600,000
shares of BigString’s common stock will be eligible for purchase at $0.50 per
share; 400,000 shares of BigString’s common stock will be eligible for purchase
at $.90 per share; and 400,000 shares of BigString’s common stock will be
eligible for purchase at $1.25 per share. The incentive stock option vests
quarterly over a three year period, and the shares of BigString’s common stock
subject to the incentive stock option will vest in order of exercise price, with
the shares with the lower exercise price vesting first.





On
November 14, 2007, BigString granted incentive stock options to purchase
1,275,000 shares of BigString’s common stock under its Equity Incentive Plan to
certain of BigString’s employees.  Incentive stock options were
granted at an exercise price of $0.18 per underlying share with 25% vesting
every three months for one year.  In addition, non-qualified stock
options to purchase 800,000 shares of BigString’s common stock were granted to
three non-employee directors at an exercise price of $0.18 per underlying share
with 25% vesting every three months for one year.





On
January 14, 2008, BigString granted incentive stock options to purchase 800,000
shares of BigString’s common stock under its Equity Incentive Plan to a new
BigString employee.  Incentive stock options were granted at an
exercise price of $0.22 per underlying share with 25% vesting every three months
for one year.  These options were forfeited.





On April
11, 2008, BigString granted incentive stock options to purchase 2,580,000 shares
of BigString’s common stock under its Equity Incentive Plan to certain of
BigString’s employees.  Incentive stock options were granted at an
exercise price of $0.21 per underlying share with 25% vesting every three months
for one year.  In addition, non-qualified stock options to purchase
1,000,000 shares of BigString’s common stock were granted to two non-employee
directors at an exercise price of $0.21 per underlying share with 25% vesting
every three months for one year.





On
October 13, 2008, BigString granted incentive stock options to purchase 300,000
shares of BigString’s common stock under its Equity Incentive Plan to a
BigString employee.  Incentive stock options were granted at an
exercise price of $0.10 per underlying share with 25% vesting every three months
for one year.





On
November 17, 2008, BigString granted non-qualified stock options to purchase
300,000 shares of BigString’s common stock to a BigString vendor under a
partnering arrangement.  The stock options were granted at an exercise
price of $0.08 per underlying share with 25% vesting every three months for one
year.





For the
three months ended March 31, 2009 and 2008 and the period October 8, 2003 (Date
of Formation) through March 31, 2009, BigString recorded stock-based option
compensation expense of $65,538, $106,410 and $579,811,
respectively.  SFAS No. 123(R) requires forfeitures to be estimated at
the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from initial estimates. Stock-based compensation expense was
recorded net of estimated forfeitures.


18
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








The
number of stock options outstanding as of January 1, 2009 and changes to such
number during the three months ended March 31, 2009 is as follows:





WeightedWeighted
                  
                  
                  AverageAverage
                  
                  
                  Remaining
                  
                  
                  AggregateExercise
                  
                  
                  Contractual
                  
                  
                  IntrinsicShares
                  
                  
                  Price
                  
                  
                  Term
                  
                  
                  ValueOptions
      outstanding at January 1, 2009
                  
                  
                  9,950,100
                  
                  
                  $
                  0.33
                  
                  
                  
                  5.5
                  
                  
                  $
                  -Options
      granted
                  
                  
                  -
                  
                  
                  $
                  -Options
      exercised
                  
                  
                  -
                  
                  
                  $
                  -Options
      cancelled/forfeited/expired
                  
                  
                  (400,000
                  )
                  
                  $
                  0.20Options
      outstanding at March 31, 2009
                  
                  
                  9,550,100
                  
                  
                  $
                  0.34
                  
                  
                  
                  5.5
                  
                  
                  $
                  -Options
      exercisable at March 31, 2009
                  
                  
                  8,425,100
                  
                  
                  $
                  0.32
                  
                  
                  
                  5.5
                  
                  
                  $
                  -





The
aggregate intrinsic value in the table above represents the total pre-tax
intrinsic value (the aggregate difference between the closing stock prices of
BigString’s common stock at the specified dates and the exercise prices for
in-the-money options) that would have been received by the option holders if all
in-the-money options had been exercised on the specified
dates.





Options
granted during the three months ended March 31, 2009 and 2008 were 0 and
800,000, respectively.  For the period October 8, 2003 (Date of Formation)
through March 31, 2009, options to purchase a total of 12,650,100 shares of
BigString’s common stock were granted.





No
options were exercised, and no cash received from option exercises and purchases
of shares for the three months ended March 31, 2009 and 2008 and the period
October 8, 2003 (Date of Formation) through March 31, 2009. The total tax
benefit attributable to options exercised in the period October 8, 2003 (Date of
Formation) through March 31, 2009 was $0.





During
the three months ended March 31, 2009 and 2008, and the period October 8, 2003
(Date of Formation) through March 31, 2009, options to purchase a total of
400,000, 1,000,000, and 3,100,000 shares of BigString’s common stock,
respectively, were forfeited or expired with an aggregate intrinsic value of $0
at the date of expiration.





The fair
value of each option award is estimated on the date of grant using the
Black-Scholes valuation model, consistent with the provisions of SFAS No.
123(R), SAB No. 107 and SAB No. 110.  Because option-pricing models
require the use of subjective assumptions, changes in these assumptions can
materially affect the fair value of the options.  BigString has
limited relevant historical information to support the expected exercise
behavior because BigString’s common stock has been publicly traded only since
May 1, 2006.





The
following table presents the weighted-average assumptions used to estimate the
fair values of the stock options granted in the periods presented:





Three
      Months EndedMarch
      31,2009
                    
                    2008Risk-free
      interest rate
                    
                    
                    -
                    %
                    
                    
                    3
                    %Expected
      volatility
                    
                    
                    -
                    %
                    
                    
                    98
                    %Expected
      life (in years)
                    
                    
                    -
                    
                    
                    
                    2Dividend
      yield
                    
                    
                    -
                    
                    
                    
                    -





The
risk-free interest rate is based on the U.S. Treasury yield for a term
consistent with the expected life of the awards in effect at the time of the
grant.





BigString
estimates the volatility of its common stock at the date of the grant based on
historical volatility, expected volatility and publicly traded peer
companies.





The
expected life of stock options granted under the Equity Incentive Plan is based
on management judgment, historical experience and publicly traded peer
companies.





BigString
has no history or expectations of paying cash dividends on its common
stock.


19
 Index


BIGSTRING
CORPORATION AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
13. COMMITMENTS AND CONTINGENCIES





Leases:





BigString
leases its facilities which require BigString to pay certain executory costs
(such as insurance and maintenance). Future minimum lease payments for operating
leases are approximately as follows:





MinimumYears
      Ending
                      
                      LeaseDecember
      31,
                      
                      Payments2009
                      
                      
                      $
                      63,2002010
                      
                      
                      
                      21,100$
                      84,300





Rental
expense was $5,000, $11,340 and $200,109 for the three months ended March 31,
2009 and 2008, and the period October 8, 2003 (Date of Formation) through March
31, 2009, respectively.





Computer
co-location, power and Internet access expense was $14,455, $14,704 and $196,338
for the three months ended March 31, 2009 and 2008, and the period October 8,
2003 (Date of Formation) through March 31, 2009, respectively.





Consulting
Agreements:





On
January 27, 2004, BigString entered into an agreement with Greene Inc.
Communications to provide public relations services.  In consideration
for services performed, BigString agreed to issue to Howard Greene 140,000
shares of common stock in April, 2005 and 192,000 shares of common stock in
February, 2007.  Total public relation expenses, including the
services of Greene Inc. Communications, were $13,130, $24,297 and $314,929 for
the three months ended March 31, 2009 and 2008, and the period October 8, 2003
(Date of Formation) through March 31, 2009, respectively.





On May 2,
2006, BigString signed a three-year business consultant services agreement with
Lifeline Industries, Inc.  In consideration for the services to be
performed under the agreement, BigString issued to Lifeline Industries, Inc. (1)
1,250,000 shares of common stock, (2) a fully vested, five year warrant to
purchase 225,000 shares of common stock at a per share purchase price of $0.48,
and (3) a fully vested, five year warrant to purchase 225,000shares of common stock
at a per share purchase price of $1.00.  BigString incurred
corresponding consulting expenses of $96,690, $96,691 and $1,128,064 for the
three months ended March 31, 2009 and 2008, and the period October 8, 2003 (Date
of Formation) through March 31, 2009, respectively.





Marketing
Affiliate Commitments:





In
connection with contracts to provide email services to marketing affiliates,
BigString may be obligated to make payments, which may represent a portion of
net advertising and/or service revenues, to its marketing
affiliates.  As of the three months ended March 31, 2009 and 2008, and
the period October 8, 2003 (Date of Formation) through March 31, 2009, these
commitments were not material.





Other
Commitments:





In the
ordinary course of business, BigString may provide indemnifications to
customers, vendors, lessors, marketing affiliates, directors, officers and other
parties with respect to certain matters.  It is not possible to
determine the aggregate maximum potential loss under these indemnification
agreements due to the limited history of prior indemnification claims and unique
circumstances involved in each agreement.  Historically, BigString has
not incurred material costs as a result of obligation under these agreements and
has not accrued any liabilities related to such agreements.





As of
March 31, 2009, BigString did not have any relationships with unconsolidated
entities or financial partnerships, such as structured finance or special
purpose entities, which would have been established for the purpose of
facilitating off-balance sheet arrangements or other limited
purposes.  BigString is not exposed to financing, liquidity, market or
credit risks that could arise under such relationships.





NOTE
14. SUBSEQUENT EVENTS





On April
6, 2009, BigString sold a portion of its shares in FindItAll, Inc., which
BigString held as an investment, for $40,000.


20
 Index


Item 2.  Management’s Discussion and
Analysis of Financial Condition and Results of
Operations





We have
provided below information about BigString Corporation’s (“BigString”) financial
condition and results of operations for the three months ended March 31, 2009
and 2008.  This information should be read in conjunction with
BigString’s unaudited consolidated financial statements for the three months
ended March 31, 2009 and 2008, and the period October 8, 2003 (Date of
Formation) through March 31, 2009, including the related notes thereto, which
are included on pages 1 through 20 of this report.





Background





BigString
was incorporated in the State of Delaware on October 8, 2003 under the name
“Recall Mail Corporation.”  The company’s name was formally changed to
“BigString Corporation” in July 2005.  BigString was formed to develop
technology that would allow the user of email services to have comprehensive
control, security and privacy relating to the email generated by the
user.





BigString
Interactive, incorporated in the State of New Jersey, was formed by BigString in
early 2006 to develop technology relating to interactive web
portals.





PeopleString,
incorporated in the State of Delaware, was formed by BigString in early 2009 to
develop technology relating to social networks.





Email
Emissary, incorporated in the State of Oklahoma, was acquired by BigString in
July 2004. In September 2006, all of Email Emissary’s assets, including its
pending patent application, were transferred to BigString.  Email
Emissary was dissolved on May 17, 2007.





Development
Stage Company





BigString
is considered a development stage enterprise as defined in SFAS No. 7,
“Accounting and Reporting for Development Stage Companies,” issued by the
FASB.  BigString has limited revenue to date and continues to raise
capital. There is no assurance that ultimately BigString will achieve a
profitable level of operations.





Overview





BigString
is a technology firm with a global client base, focused on providing a superior
online communications experience for its users. BigString’s goal is to make
Internet communication more efficient, reliable and valuable, while protecting
individual privacy and proprietary information.  BigString has
developed innovative messaging services that allow users to easily send, recall,
erase, self-destruct and secure electronic messages.





BigString’s
innovations in recallable, erasable email provide a new level of privacy and
security for those who wish to protect their proprietary information and manage
their digital rights.  BigString serves three main email markets: free
and paid email accounts for individuals, professional business email solutions,
and email hosting services. BigString 3.0 email provides, at no cost to its
users, advanced spam filters, virus protection and large-storage, web-based
email accounts with features similar to those offered by AOL®,
Yahoo®,
Hotmail®,
Google®,
Verizon® and
Comcast®. In
addition to the equivalent features provided by competitors, BigString 3.0
offers erasable, recallable and self-destructing applications, non-printable and
non-forwardable emails, set time or number of views (including ‘view-once’) and
masquerading to protect the sender’s privacy and security. BigString 3.0 also
allows a sender to view tracking reports that indicate when emails were opened
by the recipient and how many times they were viewed.  Senders can
add, change and/or delete attachments before or after a recipient opens the
email.  In addition, BigString 3.0 allows senders to direct emails to
disintegrate in front of their recipient’s eyes and allows senders to create,
save and send self-destructing video email.





BigString’s
self-destructing, instant messaging technology enables users to send instant
messages (“IM”) that self-destruct after being sent. BigStringIM, available as a
web version or a free plug-in for AOL’s AIMTM, prevents logging, saving or screen
printing to address security and privacy gaps in the large, growing instant
messaging market. BigString also offers a multi-platform IM integration which
allows users to sign into BigStringIM, AIMTM, YahooTM, MSNTM and Google TalkTM
concurrently.





BigString’s
self-destructing, Short Message Service (“SMS”) text messaging technology
enables users to send text messages and pictures that self-destruct after being
sent. SMS Eraser, available for BlackBerry phones, can be downloaded for a fee
at www.BigString.com or
one of several third-party global BlackBerry application distributors.
BigString’s entry into the mobile phone messaging market expands the
availability and use of BigString’s proprietary self-destructing messaging
platforms.





BigString
also provide hosting, private label, and co-branded solutions. Web publishers
and content sites may offer BigString’s messaging services to their existing
registered member base as well as all future members that register. The web
publishers and content sites are responsible for marketing. BigString receives
advertising revenue associated with these marketing affiliations and may also
receive premium fees when registered members upgrade


21
 Index


service.  In
conjunction with contracts to provide email services to marketing affiliates,
BigString may be obligated to make payments, which may represent a portion of
revenue, to its marketing affiliates.





Building
on the popularity of the social networking sites such as Facebook®,
MySpace®,
Friendster® and
LinkedIn®,
BigString’s social networking applications allow users to easily send and
receive messages, notifications, email and videos that self-destruct on command.
These rapidly growing, adjacent markets offer BigString the opportunity to
leverage its capabilities in messaging and streaming audio and video to create
complementary messaging applications. BigString’s development efforts are
focused to address security and privacy gaps in social networking messaging
applications.





In March,
2009, BigString announced the launch of PeopleString, an incentive-based social
network that pays users to receive regular direct mail and perform internet
activities, such as email, instant messaging, video mail, online file storage,
search and shopping. In addition, members generate additional revenue by
creating a personal affiliate network. The service provides entrepreneurs with
business tools to earn additional revenue through PeopleString.
PeopleString also provides fee-based development services.





For
BigString to increase its revenue, BigString needs to establish a large customer
base.  A large customer base of free email and messaging services
provides BigString with more opportunities to sell its premium services, which
could result in increased revenue.  In addition, a large customer base
may allow BigString to increase its advertising rates and attract other Internet
based advertising and marketing firms to advertise and form marketing
affiliations with BigString, which could result in increased advertising and
product fee revenues.





BigString’s
marketing efforts focus on increasing brand awareness and consumer adoption of
its messaging products. Promotions included email tag lines, organic search,
paid search, banners, blogs, social networks, video and other viral tactics,
multimedia, print, and radio. BigString has also developed product packages
which may help BigString in achieving critical mass, including hosting, private
label, and co-branded solutions, email marketing services and a video alliance
program.





BigString
currently markets to Internet users who seek to utilize the Internet as their
source for email and messaging services.  Generally, BigString
products and services can be readily accessed through the Internet and thus from
virtually anywhere where the Internet is accessible.  Email users can
access BigString’s English language site, www.BigString.com, on a global basis,
24 hours a day.  As of March 31, 2009, BigString email visitors
accessed www.BigString.com from 227 countries/territories, compared to 207
countries/territories as of March 31, 2008, and 60 countries/territories as of
December 31, 2006.  The top five countries by visits to
www.BigString.com are as follows: United States 56%, United Kingdom 9%, Canada
5%, India 2%, and Peru 2%, followed by Mexico, Australia, Columbia, Germany and
Brazil.





Certain
criteria BigString reviews to measure its performance are set forth
below:





·
            the
      number of first time and repeat users of the
  services;





·
            the
      number of pages of the website viewed by a
user;





·
            the
      number of free and/or paid accounts for each
  service;





·
            the
      number of users of the free services who purchase one of the premium
      product packages;





·
            the
      length of time between the activation of a free account and the conversion
      to a paid account;





·
            the
      retention rate of customers, including the number of account closures and
      the number of refund requests;





·
            the
      acquisition cost per user for each of the
  services;





·
            the
      cost and effectiveness for each of the promotional
  efforts;





·
            the
      revenue and effectiveness of advertisements served;
  and





·
            the
      revenue, impressions, clicks and actions per
  user.





Critical
Accounting Policies





BigString’s discussion and analysis of
financial condition and results of operations are based upon BigString’s
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of
America.  The preparation of these consolidated financial statements
requires BigString to make estimates and judgments that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting
period.  On an on-going basis, BigString evaluates its estimates,
including those related to intangible assets, income taxes and contingencies and
litigation.  BigString bases its estimates on historical expenses and
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis


22
 Index


for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources.  Actual results may differ from
these estimates under different assumptions or conditions.





BigString
believes the following critical accounting policies affect its more significant
judgments and estimates used in the preparation of its consolidated financial
statements.





Revenue
Recognition.  BigString derives revenue from online services,
electronic commerce, advertising and data network services.  BigString
also derives revenue from marketing affiliations.  BigString
recognizes revenue in accordance with the guidance contained in SAB No. 104,
“Revenue Recognition in Financial Statements.”





Consistent
with the provisions of the FASB’s EITF Issue No. 99-19, “Reporting Revenue Gross
As A Principal Versus Net As An Agent,” BigString generally recognizes revenue
associated with its advertising and marketing affiliation programs on a gross
basis due primarily to the following factors:  BigString is the
primary obligor; has general inventory risk; has latitude in establishing
prices; has discretion in supplier selection; performs part of the service; and
determines specifications.  In connection with contracts to provide
email services to marketing affiliates, BigString may be obligated to make
payments, which may represent a portion of revenue, to its marketing
affiliates.





Consistent
with EITF Issue No. 01-9, “Accounting for Considerations Given by a Vendor to a
Customer (Including the Reseller of the Vendor’s Product),” BigString accounts
for cash considerations given to customers, for which it does not receive a
separately identifiable benefit or cannot reasonable estimate fair value, as a
reduction of revenue rather than an expense.  Accordingly,
corresponding distributions to active users and distributions of referral fees
are recorded as a reduction of gross revenue.





BigString
records its allowance for doubtful accounts based upon an assessment of various
factors, including historical experience, age of the accounts receivable
balances, the credit quality of customers, current economic conditions and other
factors that may affect customers’ ability to pay.





Stock-Based
Compensation.    Effective January 1, 2006, BigString
accounts for stock-based compensation under SFAS No. 123(R), “Share-Based
Payment.” BigString adopted SFAS No. 123(R) using the modified prospective
method.  Under this method, SFAS No. 123(R) applies to new awards and
to awards modified, repurchased, or cancelled after the required effective date
of SFAS No. 123(R).  Additionally, compensation costs for the portion
of the awards outstanding as of the required effective date of SFAS No. 123(R),
for which the requisite service has not been rendered, are being recognized as
the requisite service is rendered after the required effective date of SFAS No.
123(R).  The compensation cost for the portion of awards is based on
the grant-date fair value of those awards as calculated for either recognition
or pro forma disclosures under SFAS No. 123, “Accounting for Stock Based
Compensation.”  Changes to the grant-date fair value of equity awards
granted before the required effective date of SFAS No. 123(R) are
precluded.  The compensation cost for those earlier awards is
attributed to periods beginning on or after the required effective date of SFAS
No. 123(R) using the attribution method that was used under SFAS No. 123, except
that the method of recognizing forfeitures only as they occur was not
continued.





BigString
has one stock-based compensation plan under which incentive and nonqualified
stock options or rights to purchase stock may be granted to employees, directors
and other eligible participants. BigString issues shares of its common stock,
warrants to purchase common stock and non-qualified stock options to
non-employees as stock-based compensation.  BigString accounts for the
services using the fair market value of the consideration issued.





Research and
Development.  BigString accounts for research and development
costs in accordance with accounting pronouncements, including SFAS No. 2
“Accounting for Research and Development Costs,” and SFAS No. 86, “Accounting
for the Costs of Computer Software to be Sold, Leased, or Otherwise
Marketed.”  BigString has determined that technological feasibility
for its software products is reached shortly before the products are
released.  Research and development costs incurred between the
establishment of technological feasibility and product release have not been
material and have accordingly been expensed when incurred.





Evaluation of Long-Lived
Assets.  BigString reviews property and equipment and
finite-lived intangible assets for impairment whenever events or changes in
circumstances indicate the carrying value may not be recoverable.  In
accordance with the guidance provided in SFAS No. 144, “Accounting for the
Impairment or Disposal of Long-Lived Assets,” if the carrying value of the
long-lived asset exceeds the estimated future undiscounted cash flows to be
generated by such asset, the asset would be adjusted to its fair value and an
impairment loss would be charged to operations in the period identified. Should
the impairment loss be significant, the charge to operations could have a
material adverse effect on BigString’s results of operations and financial
condition.





Intangibles.  SFAS
No. 142, “Goodwill and other Intangible Assets” specifies the financial
accounting and reporting for acquired goodwill and other indefinite life
intangible assets. Goodwill and other indefinite-lived intangible assets are no
longer amortized, but are reviewed for impairment at least
annually.  The valuation of intangible assets has been determined by
management after considering a number of factors.





Accounting for
Derivatives.  BigString evaluates its options, warrants or
other contracts to determine if those contracts or embedded components of those
contracts qualify as derivatives to be separately accounted for under
SFAS


23
 Index


No. 133
and related interpretations including EITF 00-19, “Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own
Stock.”





Results
of Operations





For
the Three Months Ended March 31, 2009 and 2008





Net Loss.  For the
three months ended March 31, 2009, net loss was $486,486, as compared to a net
loss of $833,378 for the three months ended March 31, 2008. The $346,892
decrease in net loss was primarily attributable to a $354,727 decrease in
operating expenses related to general and administrative expenses and
amortization expenses.





Revenues.  For the
three months ended March 31, 2009, revenues were $12,103, a $2,405 increase from
revenues of $9,698 earned in the three months ended March 31,
2008.  Of the revenues generated for the three months ended March 31,
2009, $7,194 was generated from product and service fees and $4,909 was
generated from advertisers, as compared to $5,273 from product and service fees
and $4,425 from advertisers for the three months ended March 31,
2008.





The 25%
increase in revenues for the three months ended March 31, 2009 over the same
prior year period was primarily due to increased product and service fees of
36%. This increase was primarily due to the adoption of BigString’s private
label email services by other firms and the introduction of new fee based
services, such as SMS and text services. The increases were partially offset by
a decrease in premium upgrades and business solutions, and a client credit which
reduced product and service fees by 64%.





PeopleString,
which began service in February 2009, contributed 26% of net revenues for the
three months ended March 31, 2009.





At March
31, 2009, unearned revenue from product and service fees decreased 15% to $6,066
from $7,104 at December 31, 2008.





BigString’s
advertising revenues are paid based on a mix of impressions, clicks and
actions.  On a normalized impression basis, the average revenue per
paid-impression for the three months ended March 31, 2009 decreased by 25% over
the same prior year period. BigString offset the lower rates with a 41% increase
in impressions served to net an 11% increase in advertising
revenues.





Operating
Expenses.  For the three months ended March 31, 2009, operating
expenses were $387,569, a $354,727 decrease from operating expenses of $742,296
incurred in the three months ended March 31, 2008. Operating expenses, excluding
amortization, depreciation, impairment and share-based compensation expenses,
for the three months ended March 31, 2009 were $217,238, a $72,180 decrease from
the same prior year period.





·
            Cost
      of revenues: Cost of revenues for the three months ended March 31, 2009
      were $25,958, as compared to $21,240 for the same prior year
      period.  The $4,718 increase in cost was primarily attributable
      to increased activity associated with increased
  revenues.





·
            Research
      and development: Research and development expenses for the three months
      ended March 31, 2009 were $119,855, as compared to $130,130 for the same
      prior year period.  The $10,275 decrease in expenses was
      primarily attributable to a reduction in development staffing and
      associated overhead costs.





·
            Sales
      and marketing: Sales and marketing expenses for the three months ended
      March 31, 2009 were $23,905, as compared to $32,649 for the same prior
      year period.  The $8,744 decrease in expenses was primarily
      attributable to decrease public relations expenses, partially offset by an
      increase in sales consultant
expenses.





·
            General
      and administrative: General and administrative expenses for the three
      months ended March 31, 2009 were $217,851, as compared to $318,124 for the
      same prior year period.  The $100,273 decrease in expenses was
      primarily attributable to decreased compensation expenses, partially
      offset by a slight increase in professional
  fees.





·
            Amortization:
      Amortization expenses for the three months ended March 31, 2009 were $0,
      as compared to $240,153 for the same prior year period.  The
      decrease in expense was attributable to the 2008 impairment of intangible
      assets and completion of amortization
expenses.





Other income
(expense).  For the three months ended March 31, 2009, other
expenses were $111,020, a $10,240 increase over other expenses of $100,780 in
the three months ended March 31, 2008.





·
            Interest
      income: Interest income for the three months ended March 31, 2009 was $46,
      as compared to $2,131 for the same prior year period. The $2,085 decrease
      was primarily attributable to lower rates and cash
    balances.


24
 Index


·
            Interest
      expense: Interest expense for the three months ended March 31, 2009 was
      $19,875, as compared to $12,998 for the same prior year period. The $6,877
      increase was primarily attributable to the 2009 full period interest on
      debt from the February 29, 2008
financing.





·
            Other,
      net: Other, net expenses for the three months ended March 31, 2009 were
      $91,191, as compared to $89,913 for the same prior year period. The $1,278
      increase was primarily attributable to the 2009 full period amortization
      of the February 29, 2008 promissory note discount, partially offset by the
      accelerated amortization for the proportion of promissory notes which were
      converted in the three months ended March 31,
  2008.





Income Taxes.  For
the three months ended March 31, 2009 and 2008, BigString has applied valuation
allowances to offset the deferred tax assets in recognition of the uncertainty
that such tax benefits will be realized.





·
            At
      December 31, 2008, BigString has available net operating loss carry
      forwards of approximately $12.6 million for federal income tax reporting
      purposes and $5.0 million for state income tax reporting purposes which
      expire in various years through 2028. The differences between book income
      and tax income primarily relates to amortization of intangible assets and
      other expenditures.  Pursuant to Section 382 of the
      Internal Revenue Code of 1986, as amended, the annual utilization of a
      company’s net operating loss and research credit carry forwards may be
      limited, and, as such, BigString may be restricted in using its net
      operating loss and research credit carry forwards to offset future federal
      income tax expense.





Liquidity
and Capital Resources





BigString’s
operating and capital requirements have exceeded its cash flow from operations
as BigString has been building its business.  Since inception through
March 31, 2009, BigString has expended $5,170,501 for operating and investing
activities, which has been primarily funded by investments of $5,191,533 from
BigString’s stockholders and convertible note and warrant
holders.  For the three months ended March 31, 2009, BigString
expended $157,755 for operating and investing activities, a decrease of $275,105
from the amount expended during the three months ended March 31,
2008.





BigString’s
cash balance as of March 31, 2009 was $21,032, which was a decrease of $157,755
from the cash balance of $178,787 as of December 31, 2008.  This
decrease to the cash balance was attributable to the operating outlays of
$157,755 primarily associated with the development of products and services,
marketing and professional fees.





Management
believes BigString’s current cash balance of $35,228 at May 13, 2009 is not
sufficient to fund the minimum level of operations for the next twelve
months.





BigString’s
unaudited consolidated financial statements beginning on page 2 have been
prepared assuming BigString will continue as a going concern.  As more
fully explained in Note 2 to BigString’s unaudited consolidated financial
statements, BigString has a working capital deficit and has incurred losses
since operations commenced.  BigString’s continued existence is
dependent upon its ability to obtain needed working capital through additional
equity and/or debt financing and revenue to cover expenses as BigString
continues to incur losses.  These uncertainties raise substantial
doubt about BigString’s ability to continue as a going
concern.  BigString’s unaudited consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties should BigString be unable to continue as a going
concern.





On
February 29, 2008, BigString entered into a financing arrangement with
Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap
Opportunities LP, pursuant to which the 2008 Subscribers purchased convertible
notes in the aggregate principal amount of $700,000, which notes are convertible
into shares of BigString’s common stock, and warrants to purchase up to
2,333,333 shares of BigString's common stock. Each convertible note has a term
of three years and accrues interest at a rate of six percent
annually.  The holder of a convertible note shall have the right from
and after the issuance thereof until such time as the convertible note is fully
paid, to convert any outstanding and unpaid principal portion thereof into
shares of common stock at a conversion price of $0.15 per share, as
adjusted.  The conversion price and number and kind of shares to be
issued upon conversion of the convertible note are subject to adjustment from
time to time. The warrants have an exercise price of $0.15 per share, as
adjusted.  The number of shares of common stock underlying each
warrant and the exercise price are subject to certain adjustments.





On August
25, 2008, BigString closed on a financing with Dwight Lane Capital, LLC, a
limited liability company in which Todd M. Ross, a former director of BigString,
has an interest, and Marc W. Dutton, a former director of BigString. In
connection with such financing, BigString issued promissory notes in the
aggregate principal amount of $250,000 and common stock purchase warrants to
purchase up to an aggregate 800,000 shares of BigString's common stock. Each
note had a term of five months and accrued interest at a rate of 12% annually.
The warrants have an exercise price of $0.08 per share. In December 2008, the
all amounts due under the notes were paid by BigString, including accrued
interest of $9,328, and, as a result, the notes were cancelled.


25
 Index


BigString
participated in the State of New Jersey’s Corporation Business Tax Benefit
Certificate Transfer program, which allows certain high technology and
biotechnology companies to sell unused NOL carryforwards to other New Jersey
corporation business taxpayers.  On December 16, 2008 and December 19,
2007, BigString received net proceeds of $428,137 and $258,854, respectively.
BigString may also be able to transfer its unused New Jersey net operating
losses in future years and plans to again participate in 2009.





On April
6, 2009, BigString sold a portion of its shares in FindItAll, Inc., which
BigString held as an investment, for $40,000.





If the
revenue from our operations are not adequate to allow us to pay the principal
and interest on the outstanding convertible notes, and the convertible notes are
not converted into shares of common stock, we will seek additional equity
financing and/or debt financing.  It is also possible that we will
seek to borrow money from traditional lending institutions, such as
banks.





BigString
has completed significant development of our email and messaging services and
social networking services and have made adjustments to our cost structure, such
as the elimination of expenses associated with the production of OurPrisoner and
the reduction of a portion of compensation costs associated with
development.  We have also reduced general expenses such as rent and
other discretionary expenses. As a result, our operating and investing cash
expenditures were reduced by $275,105, or 64%, for the three months ended
March 31, 2009, as compared to the same prior year period.





BigString
expects to continue development on our messaging, email and related service
offerings. We expect to continue development on our social network platform. We
also expect sales, marketing and advertising expenses and cost of revenues to
increase as we promote and grow our products and services.  However,
if our revenue and cash balance are insufficient to fund the continued growth of
our business, we will seek additional funds.  There can be no
assurance that such funds will be available to us or that adequate funds for our
operations, whether from debt or equity financings, will be available when
needed or on terms satisfactory to us.  Our failure to obtain adequate
additional financing may require us to delay or curtail some or all of our
business efforts and could cause us to seek bankruptcy protection. Any
additional equity financing may involve substantial dilution to our
then-existing stockholders.





As part
of our cash conservation efforts, BigString’s officers began deferring a portion
of their salaries in March 2009. For the three months ended March 31, 2009,
accrued, payable compensation was $12,000. Other than the aforementioned
deferred compensation, BigString’s officers and directors have not, as of the
date of this filing, loaned any funds to BigString, and there are no formal
commitments or arrangements to advance or loan funds to BigString or repay any
such advances or loans.


26
 Index


Item 3.
            Quantitative and
      Qualitative Disclosures About Market
Risk





BigString
is a smaller reporting company and is therefore not required to provide this
information.








Item 4.
            Controls and
      Procedures





(a)
Evaluation of disclosure controls and procedures.





Management,
with the participation of our chief executive officer and chief financial
officer, evaluated the effectiveness of our disclosure controls and procedures
pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating
the disclosure controls and procedures, management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives. In addition,
the design of disclosure controls and procedures must reflect the fact that
there are resource constraints and that management is required to apply its
judgment in evaluating the benefits of possible controls and procedures relative
to their costs.





Based
on management’s evaluation, our chief executive officer and chief financial
officer concluded that, as of March 31, 2009, our disclosure controls and
procedures are designed at a reasonable assurance level and are effective to
provide reasonable assurance that information we are required to disclose in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms, and that such information is accumulated and communicated to our
management, including our chief executive officer and chief financial officer,
as appropriate, to allow timely decisions regarding required
disclosure.





(b)
Changes in internal control over financial reporting.





We review
our system of internal control over financial reporting and make changes to our
processes and systems to improve controls and increase efficiency, while
ensuring that we maintain an effective internal control environment. Changes may
include such activities as implementing new, more efficient systems,
consolidating activities, and migrating processes.





There
were no changes in our internal control over financial reporting that occurred
during the period covered by this Quarterly Report on Form 10-Q that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.


27
 Index


PART
II.  OTHER INFORMATION











Item 1.
            Legal
      Proceedings





BigString
is not a party to, and none of its property is the subject of, any pending legal
proceedings. To BigString’s knowledge, no governmental authority is
contemplating any such proceedings.





Item 1A.
            Risk
      Factors





BigString
is a smaller reporting company and is therefore not required to provide this
information.





Item 2.
            Unregistered Sales of
      Equity Securities and Use of
Proceeds





The
information required by this Item with respect to sales of unregistered
securities has been previously disclosed by BigString in its Current Report on
Form 8-K which was filed with the SEC on August 27, 2008.





Item 3.
            Defaults Upon Senior
      Securities





None.





Item 4.
            Submission of Matters
      to a Vote of Security
Holders





None.





Item 5.
            Other
      Information





None.





Item 6.
            Exhibits





See Index
of Exhibits commencing on page E-1.


28
 Index


SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.








BigString CorporationRegistrantDated:
              May
      15, 2009
              /s/ Darin M. MymanDarin
      M. MymanPresident
      and Chief Executive Officer(Principal
      Executive Officer)Dated:
              May
      15, 2009
              /s/ Robert S.
  DeMeulemeesterRobert
      S. DeMeulemeesterChief
      Financial Officer(Principal
      Financial and Accounting
Officer)


29
 Index




INDEX OF EXHIBITS





Exhibit No.
                                                      Description of Exhibit3.1.1
                                                      Certificate
      of Incorporation of BigString, placed into effect on October 8, 2003,
      incorporated by reference to Exhibit 3.1.1 to the Registration Statement
      on Form SB-2 (Registration No. 333-127923) filed with the SEC on August
      29, 2005.3.1.2
                                                      Certificate
      of Amendment to the Certificate of Incorporation of BigString, placed into
      effect on July 19, 2005, incorporated by reference to Exhibit 3.1.2 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 2005.3.1.3
                                                      Certificate
      of Designations of Series A Preferred Stock, par value $0.0001 per share,
      of BigString, incorporated by reference to Exhibit 3.1.3 to the Current
      Report on Form 8-K filed with the SEC on May 22, 2006.3.2
                                                      Amended
      and Restated By-laws of BigString, incorporated by reference to Exhibit
      3.2 to the Registration Statement on Form SB-2 (Registration No.
      333-127923) filed with the SEC on August 29, 2005.4.1
                                                      Specimen
      certificate representing BigString’s common stock, par value $.0001 per
      share, incorporated by reference to Exhibit 4.1 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.4.2
                                                      Form
      of Convertible Note, dated May 1, 2007, issued to the following persons
      and in the following amounts: Whalehaven Capital Fund Limited ($250,000);
      Alpha Capital Anstalt ($250,000); Chestnut Ridge Partners LP ($125,000);
      Iroquois Master Fund Ltd. ($125,000); and Penn Footwear ($50,000),
      incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K
      filed with the SEC on May 3, 2007.4.3
                                                      Form
      of Convertible Note, dated February 29, 2008, issued to the following
      subscribers and in the following amounts: Whalehaven Capital Fund Limited
      ($250,000); Alpha Capital Anstalt ($250,000); and Excalibur Small Cap
      Opportunities LP ($200,000), incorporated by reference to Exhibit 4.3 to
      the Current Report on Form 8-K filed with the SEC on March 6,
      2008.4.4
                                                      Non-Negotiable
      Convertible Promissory Note, dated August 25, 2008, issued to Dwight Lane
      Capital, LLC ($175,000), incorporated by reference to Exhibit 4.1 to the
      Current Report on Form 8-K filed with the SEC on August 27,
      2008.4.5
                                                      Non-Negotiable
      Convertible Promissory Note, dated August 25, 2008, issued to Marc W.
      Dutton ($75,000), incorporated by reference to Exhibit 4.2 to the Current
      Report on Form 8-K filed with the SEC on August 27,
  2008.10.1
                                                      Registration
      Rights Agreement, dated August 10, 2005, between BigString and AJW New
      Millennium Offshore, Ltd., incorporated by reference to Exhibit 10.1 to
      the Registration Statement on Form SB-2 (Registration No. 333-127923)
      filed with the SEC on August 29, 2005.10.2
                                                      Registration
      Rights Agreement, dated August 10, 2005, between BigString and AJW
      Partners, LLC, incorporated by reference to Exhibit 10.2 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 2005.10.3
                                                      Registration
      Rights Agreement, dated August 10, 2005, between BigString and AJW
      Qualified Partners, LLC, incorporated by reference to Exhibit 10.3 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 2005.10.4
                                                      Registration
      Rights Agreement, dated June 17, 2005, between BigString and David Matthew
      Arledge, incorporated by reference to Exhibit 10.4 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.5
                                                      Registration
      Rights Agreement, dated June 17, 2005, between BigString and David A.
      Arledge, incorporated by reference to Exhibit 10.5 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.6
                                                      Registration
      Rights Agreement, dated July 31, 2005, between BigString and Jeffrey M.
      Barber and Jo Ann Barber, incorporated by reference to Exhibit 10.6 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 2005.10.7
                                                      Registration
      Rights Agreement, dated June 17, 2005, between BigString and Nicholas
      Codispoti, incorporated by reference to Exhibit 10.7 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29,
2005.


E-1
 Index




10.8
                                            Registration
      Rights Agreement, dated June 17, 2005, between BigString and Nicholas
      Codispoti, IRA Account, incorporated by reference to Exhibit 10.8 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 2005.10.9
                                            Registration
      Rights Agreement, dated June 17, 2005, between BigString and Nicholas
      Codispoti, President, Codispoti Foundation, incorporated by reference to
      Exhibit 10.9 to the Registration Statement on Form SB-2 (Registration No.
      333-127923) filed with the SEC on August 29, 2005.10.10
                                            Registration
      Rights Agreement, dated June 17, 2005, between BigString and Jon M.
      Conahan, incorporated by reference to Exhibit 10.10 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.11
                                            Registration
      Rights Agreement, dated July 31, 2005, between BigString and Michael
      Dewhurst, incorporated by reference to Exhibit 10.11 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.12
                                            Registration
      Rights Agreement, dated June 17, 2005, between BigString and Theodore
      Fadool, Jr., incorporated by reference to Exhibit 10.12 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 200510.13
                                            Registration
      Rights Agreement, dated June 17, 2005, between BigString and Charles S.
      Guerrieri, incorporated by reference to Exhibit 10.13 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.14
                                            Registration
      Rights Agreement, dated August 9, 2005, between BigString and James R.
      Kauffman and Barbara Kauffman, incorporated by reference to Exhibit 10.14
      to the Registration Statement on Form SB-2 (Registration No. 333-127923)
      filed with the SEC on August 29, 2005.10.15
                                            Registration
      Rights Agreement, dated July 31, 2005, between BigString and Joel Marcus,
      incorporated by reference to Exhibit 10.15 to the Registration Statement
      on Form SB-2 (Registration No. 333-127923) filed with the SEC on August
      29, 2005.10.16
                                            Registration
      Rights Agreement, dated August 10, 2005, between BigString and New
      Millennium Capital Partners II, LLC, incorporated by reference to Exhibit
      10.16 to the Registration Statement on Form SB-2 (Registration No.
      333-127923) filed with the SEC on August 29, 2005.10.17
                                            Registration
      Rights Agreement, dated July 31, 2005, between BigString and Richard and
      Georgia Petrone, incorporated by reference to Exhibit 10.17 to the
      Registration Statement on Form SB-2 (Registration No. 333-127923) filed
      with the SEC on August 29, 2005.10.18
                                            Registration
      Rights Agreement, dated July 31, 2005, between BigString and David and Kim
      Prado, incorporated by reference to Exhibit 10.18 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.19
                                            Registration
      Rights Agreement, dated August 4, 2005, between BigString and Marc
      Sandusky, incorporated by reference to Exhibit 10.19 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.20
                                            Registration
      Rights Agreement, dated August 6, 2005, between BigString and Shefts
      Family LP, incorporated by reference to Exhibit 10.20 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29, 2005.10.21
                                            Registration
      Rights Agreement, dated June 17, 2005, between BigString and Thomas
      Shields, incorporated by reference to Exhibit 10.21 to the Registration
      Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on
      August 29,
2005.


E-2
 Index





10.22
                                          Agreement,
      dated December 1, 2005, by and among BigString and the following selling
      stockholders:  AJW New Millennium Offshore, Ltd., AJW Qualified
      Partners, LLC, AJW Partners, LLC, David M. Adredge, David A. Arledge,
      Susan Baran, Jeffrey M. Barber and JoAnn Barber, Nicholas Codispoti,
      Nicholas Codispoti, IRA, Codispoti Foundation, Jon M. Conahan, Dean G.
      Corsones, Michael Dewhurst, Marc Dutton, Theodore Fadool, Jr., Howard
      Greene, Harvey M. Goldfarb, Charles S. Guerrieri, Brenda L. Herd and Glenn
      A. Herd, Herd Family Partnership, Ronald C. Herd and Michele Herd, Steven
      Hoffman, James R. Kaufman and Barbara Kaufman, Jeffrey Kay and Lisa Kay,
      Gerald Kotkin, Paul A. Levis PSP, Joel Marcus, Barbara A. Musco and Barrie
      E. Bazar, Craig Myman, New Millennium Capital Partners II, LLC, Alfred
      Pantaleone, Sara R. Pasquarello, Richard P. Petrone and George Petrone,
      David Prado and Kim Prado, Lee Rosenberg, Todd M. Ross, Marc Sandusky,
      Adam Schaffer, H. Joseph Sgroi, Shefts Family LP, Thomas Shields, Mark
      Yuko, Bradley Zelenitz and Shefts Associates, Inc., incorporated by
      reference to Exhibit 10.24 to the Annual Report on Form 10-KSB filed with
      the SEC on March 31, 2006.10.23
                                          Business
      Consultant Services Agreement by and between BigString and Shefts
      Associates, Inc., incorporated by reference to Exhibit 10.30 to Amendment
      No. 1 to the Registration Statement on Form SB-2 (Registration No.
      333-127923) filed with the SEC on October 21, 2005.10.24
                                          Lease
      between BigString, as Tenant, and Walter Zimmerer & Son, as Landlord,
      dated February 3, 2009, for the premises located at 157 Broad Street,
      Suite 109, Red Bank, New Jersey 07701, incorporated by reference to
      Exhibit 10.24 to the Annual Report on Form 10-K filed with the SEC on
      March 31, 2009.10.25
                                          Business
      Consultant Services Agreement, dated May 2, 2006, by and between BigString
      and Lifeline Industries, Inc., incorporated by reference to Exhibit 10.32
      to the Current Report on Form 8-K filed with the SEC on May 4,
      2006.10.26
                                          Securities
      Purchase Agreement, dated as of May 19, 2006, by and among BigString and
      Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and
      Tudor Proprietary Trading, L.L.C., including Schedule 1 – Schedule of
      Purchasers, and Exhibit C – Form of Warrant.  Upon the request
      of the SEC, BigString agrees to furnish copies of each of the following
      schedules and exhibits:  Schedule
      2-3.2(d) – Warrants; Schedule 2-3.3
      – Registration Rights; Schedule 2-3.7
      – Financial Statements; Schedule 2-3.10
      – Broker’s or Finder’s Fees; Schedule 2-3.11
      – Litigation; Schedule 2-3.16
      – Intellectual Property Claims Against the Company;Schedule
      2-3.17 – Subsidiaries; Schedule
      2-3.19(a) – Employee Benefit Plans; Schedule 2-3.22
      – Material Changes; Exhibit A –
      Form of Certificate of Designations of the Series A Preferred Stock; Exhibit B –
      Form of Registration Rights Agreement; Exhibit D –
      Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion, incorporated
      by reference to Exhibit 10.33 to the Current Report on Form 8-K filed with
      the SEC on May 22, 2006.10.27
                                          Registration
      Rights Agreement, dated as of May 19, 2006, by and among BigString and
      Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and
      Tudor Proprietary Trading, L.L.C., incorporated by reference to Exhibit
      10.34 to the Current Report on Form 8-K filed with the SEC on May 22,
      2006.10.28
                                          Asset
      Purchase Agreement, dated as of May 19, 2006, by and between BigString and
      Robb Knie.  Upon the request of the SEC, BigString agrees
      to furnish a copy of Exhibit A –
      Form of Registration Rights Agreement, and Exhibit B –
      Investor Suitability Questionnaire, incorporated by reference to Exhibit
      10.35 to the Current Report on Form 8-K filed with the SEC on May 22,
      2006.10.29
                                          Registration
      Rights Agreement, dated as of May 19, 2006, by and between BigString and
      Robb Knie, incorporated by reference to Exhibit 10.36 to the Current
      Report on Form 8-K filed with the SEC on May 22, 2006.10.30
                                          Stock
      Redemption Agreement, dated May 31, 2006, by and between BigString and
      David L. Daniels, incorporated by reference to Exhibit 10.37 to the
      Registration Statement on Form SB-2 (Registration No. 333-135837) filed
      with the SEC on July 18, 2006.10.31
                                          Stock
      Redemption Agreement, dated May 31, 2006, by and between BigString and
      Deborah K. Daniels, incorporated by reference to Exhibit 10.38 to the
      Registration Statement on Form SB-2 (Registration No. 333-135837) filed
      with the SEC on July 18, 2006.10.32
                                          Stock
      Redemption Agreement, dated May 31, 2006, by and between BigString and
      Charles A. Handshy, Jr., incorporated by reference to Exhibit 10.39 to the
      Registration Statement on Form SB-2 (Registration No. 333-135837) filed
      with the SEC on July 18,
2006.


E-3
 Index





10.33
                                            Stock
      Redemption Agreement, dated May 31, 2006, by and between BigString and
      June E. Handshy, incorporated by reference to Exhibit 10.40 to the
      Registration Statement on Form SB-2 (Registration No. 333-135837) filed
      with the SEC on July 18, 2006.10.34
                                            Letter
      Agreement, dated September 18, 2006, between BigString and Robert
      DeMeulemeester, incorporated by reference to Exhibit 10.41 to the Current
      Report on Form 8-K filed with the SEC on September 21,
    2006.10.35
                                            BigString
      Corporation 2006 Equity Incentive Plan, incorporated by reference to
      Exhibit 10.42 to the Annual Report on Form 10-KSB filed with the SEC on
      April 2, 2007.10.35.1
                                            Form
      of Incentive Option Agreement (Employees), incorporated by reference to
      Exhibit 10.42.1 to the Annual Report on Form 10-KSB filed with the SEC on
      April 2, 2007.10.35.2
                                            Form
      of Director Option Agreement (Non-employee
      Directors),  incorporated by reference to Exhibit 10.42.2 to the
      Annual Report on Form 10-KSB filed with the SEC on April 2,
      2007.10.36
                                            Subscription
      Agreement, dated as of April 30, 2007, by and among BigString and
      Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge
      Partners LP, Iroquois Master Fund Ltd. and Penn Footwear, including Exhibit B –
      Form of Common Stock Purchase Warrant.  Upon the request of the
      Securities and Exchange Commission, BigString agrees to furnish copies of
      each of the following schedules and exhibits:  Schedule 5(a) –
      Subsidiaries; Schedule 5(d) –
      Additional Issuances/Capitalization; Schedule 5(f) –
      Conflicts; Schedule 5(q) –
      Undisclosed Liabilities; Schedule 5(v) –
      Transfer Agent; Schedule 8 –
      Finder’s Fee; Schedule 9(s) –
      Lockup Agreement Providers; Schedule
      11.1(iv) – Additional Securities to be Included in the Registration
      Statement; Exhibit A –
      Form of Convertible Note (included as Exhibit 4.2); Exhibit C –
      Form of Escrow Agreement; Exhibit D –
      Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E –
      Proposed Public Announcement; and Exhibit F –
      Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.43 to
      the Current Report on Form 8-K filed with the SEC on May 3,
      2007.10.37
                                            Agreement,
      Waiver and Limited Release, dated as of November 30, 2007, by and among
      BigString and the Releasors, incorporated by reference to Exhibit 10.37 to
      the Current Report on Form 8-K filed with the SEC on December 5,
      2007.10.38
                                            Subscription
      Agreement, dated as of February 29, 2008, by and among BigString and
      Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small
      Cap Opportunities LP, including Exhibit B –
      Form of Common Stock Purchase Warrant.  Upon the request of the
      Securities and Exchange Commission, BigString agrees to furnish copies of
      each of the following schedules and exhibits:  Schedule 5(a) –
      Subsidiaries; Schedule 5(d) –
      Additional Issuances/Capitalization; Schedule 5(f)– Conflicts; Schedule 5(q) –
      Undisclosed Liabilities; Schedule 5(v) –
      Transfer Agent; Schedule 8 –
      Finder’s Fee; Schedule 9(s) –
      Lockup Agreement Providers; Exhibit A –
      Form of Convertible Note (included as Exhibit 4.2); Exhibit C –
      Form of Escrow Agreement; Exhibit D –
      Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E –
      Proposed Public Announcement; and Exhibit F –
      Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.43 to
      the Current Report on Form 8-K filed with the SEC on March 6,
      2008.31.1
                                            Section
      302 Certification of Chief Executive Officer.31.2
                                            Section
      302 Certification of Chief Financial Officer.32.1
                                            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section
    1350.32.2
                                            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section
    1350.





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