`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark One)

|X|   QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE OF
      1934

                  For the quarterly period ended March 31, 2007

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from __________________ to __________________

                       Commission file number: 333-130586

                                   SWMX, INC.
--------------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                 Delaware                                20-5296949
------------------------------------------  ------------------------------------
     (State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
      Incorporation or Organization)

                     1 Bridge St., Irvington, New York 10533
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (914) 406-8400
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)


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

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

      As of April 30, 2007, there were 205,925,000 shares of the issuer's common
equity outstanding.

      Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|



                              TABLE OF CONTENTS

                                                                            Page
                                                                            ----
Part I    FINANCIAL INFORMATION

   Item 1 Financial Statements (Unaudited).................................   2

          Condensed  Consolidated Balance Sheets - March 31, 2007
          and December 31, 2006

          Condensed Consolidated Statements of Operations for the
          three months ended March 31, 2007 and 2006

          Condensed Consolidated Statements of Cash Flows for the
          three months ended March 31, 2007 and 2006

          Condensed   Consolidated   Statements   of  Changes  in
          Stockholders'  Equity for the three  months ended March
          31, 2007

          Notes to  Unaudited  Condensed  Consolidated  Financial
          Statements

   Item 2 Management's Discussion and Analysis or Plan of Operation .......   15

   Item 3 Controls and Procedures..........................................   19

Part II   OTHER INFORMATION

   Item 1 Legal Proceedings................................................   20

   Item 6 Exhibits.........................................................   21


                                        i


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS.

                                   SWMX, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                   March 31, 2007   December 31,
                                                     (Unaudited)        2006
                                                    ------------    ------------
                            ASSETS

CURRENT ASSETS

Cash and cash equivalents                           $  1,881,313    $  2,619,713
Restricted cash                                           70,000          70,000
Accounts receivable, net                               4,869,641       3,099,378
Prepaid expense and other current assets                 265,538         284,040
Note receivable related party                               --           169,941
                                                    ------------    ------------

TOTAL CURRENT ASSETS                                   7,086,492       6,243,072

Property and equipment, net                            3,469,725       3,152,749
Deferred financing costs                                 635,899            --
Security deposit                                         151,893         151,893
                                                    ------------    ------------

TOTAL ASSETS                                        $ 11,344,009    $  9,547,714
                                                    ============    ============

             LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                    $  5,195,362    $  3,924,798
Accrued expenses                                         943,344         532,890
Current portion of long-term debt                        450,000            --
Customer advances                                        173,237       1,439,855
Deferred revenue                                         198,776         214,407
Obligation under capital lease                           482,460         593,740
                                                    ------------    ------------

TOTAL CURRENT LIABILITIES                              7,443,179       6,705,690
                                                    ------------    ------------

LONG TERM LIABILITIES
Long-term debt                                         2,550,000            --
Non-current capital lease obligation                     502,886         437,700
Other long term liabilities                              124,000         193,000
                                                    ------------    ------------

TOTAL LONG TERM LIABILITIES                            3,176,886         630,700
                                                    ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Common Stock, 205,925,000 and 160,000,000
  shares, respectively, at a par value of
  $.01 per share (see note 1)                          2,059,250       2,059,250
Additional paid in capital                            12,870,795      12,317,962
Accumulated deficit                                  (14,206,101)    (12,165,888)
                                                    ------------    ------------

TOTAL STOCKHOLDERS' EQUITY                               723,944       2,211,324
                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 11,344,009    $  9,547,714
                                                    ============    ============


                See notes to unaudited financial statements


                                       2


                                   SWMX, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                     Three           Three
                                                     months          months
                                                  ended March      ended March
                                                    31, 2007        31, 2006
                                                 -------------    -------------
Net Revenues                                     $   1,294,225    $     208,755

Costs and expenses:

   Cost of revenues                                    612,650          162,363
   Selling, general and administrative expenses      2,696,048          784,816
                                                 -------------    -------------
Total costs and expenses                             3,308,698          947,179
                                                 -------------    -------------

Operating loss                                      (2,014,473)        (738,424)

Interest expense, net of interest income of
  $15,015 and $4,969                                    25,740          205,792
                                                 -------------    -------------

Net loss                                         $  (2,040,213)   $    (944,216)
                                                 =============    =============



Net loss per common share - basic and diluted    $       (0.01)   $       (0.00)

Weighted average number of shares outstanding
  - basic and diluted                              205,925,000      191,555,556


                  See notes to unaudited financial statements


                                       3



                                      SWMX, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)

                                                         Three months   Three months
                                                          ended March    ended March
                                                            31, 2007       31, 2006
                                                          -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net  loss                                               $(2,040,213)   $  (944,216)
  Adjustments to reconcile net loss to net cash
  used in operating activities:

  Depreciation and amortization                               311,141        101,364
  Amortization of deferred financing costs                      2,166           --
  Stock-based compensation                                    294,833          3,000
  Changes in operating assets and liabilities:
  Accounts receivable                                      (1,770,262)      (612,691)
  Prepaid expenses and other current assets                    18,502           --
  Accounts payable                                          1,270,564        384,035
  Accrued expenses                                          (940,794)       190,000
  Due to related parties                                         --         (262,461)
                                                          -----------    -----------
    Net Cash Used in Provided by Operating Activities      (2,854,063)    (1,140,969)
                                                          -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                         (370,933)      (147,817)
  Repayment of note receivable from related party             169,941           --
                                                          -----------    -----------
    Net Cash used in Investing Activities                    (200,992)      (147,817)
                                                          -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of common stock, net of expenses                      --        1,779,000
  Increase in notes payable to related parties                   --          206,889
  Repayment of capital lease obligations                     (303,280)          --
  Borrowings under credit facility                          3,000,000           --
  Deferred financing costs                                   (380,065)          --
                                                          -----------    -----------
    Net Cash Provided by Financing Activities               2,316,655      1,985,889
                                                          -----------    -----------

Net increase (decrease) in cash                              (738,400)       697,105

Cash at beginning of period                                 2,619,713         79,820
                                                          -----------    -----------
Cash at end of period                                     $ 1,881,313    $   776,925
                                                          ===========    ===========

            SUPPLEMENTAL INFORMATION
Cash interest paid                                        $    44,001    $    16,333


Non-cash transactions -

In January 2006 the Company issued common stock of $200,000 for cash received in
the prior  period  which was  reflected  as a liability in the December 31, 2005
balance sheet.

In February 2007 the Company  entered into a capital  lease,  acquiring  certain
computer equipment at a cost of approximately $257,000.

In  connection  with the debt  financing  entered  into on March 23,  2007,  the
Company  issued a warrant to purchase  shares of common  stock (see Note 7), the
fair value of the warrant of $258,000  has been  included as deferred  financing
costs and will be  amortized  to  interest  expense  over the life of the credit
facility.


                     See notes to unaudited financial statements


                                          4


                                                     SWMX, INC.
                        CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                     FOR THE THREE MONTHS ENDED MARCH 31, 2007
                                                    (UNAUDITED)

                                            Common Stock              Additional
                                      ---------------------------       Paid-in      Accumulated
                                        Shares           Amount         Capital        Deficit             Total
                                      -----------    ------------    ------------    ------------     ------------
Balance, January 1, 2007              205,925,000    $  2,059,250    $ 12,317,962    $(12,165,888)    $  2,211,324


Stock-based compensation expense                                          294,833                          294,833
Issuance of warrants                                                      258,000                          258,000

Net loss                                                                               (2,040,213)      (2,040,213)
                                      -----------    ------------    ------------    ------------     ------------
Balance, March 31, 2007               205,925,000    $  2,059,250    $ 12,870,795    $(14,206,101)    $    723,944
                                      ===========    ============    ============    ============     ============


                                    See notes to unaudited financial statements


                                                         5


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE -1-    SUMMARY OF BUSINESS AND BASIS FOR PRESENTATION

      BUSINESS DESCRIPTION

      SWMX, Inc.  ("SWMX" or the "Company")  operates the SWMX  Marketplace,  an
      electronic  open  marketplace  for  the  purchase,  sale,  management  and
      distribution  of  advertising  media  time.  The  Company  operates in one
      segment.

      BASIS OF PRESENTATION

      The accompanying consolidated financial statements include the accounts of
      SWMX, Inc. and its wholly-owned  subsidiary SoftWave Media Exchange,  Inc.
      Intercompany balances and transactions have been eliminated.

      HISTORY

      On July 26,  2006,  Edgemont  Resources,  Inc.  created  a  wholly-owned
      subsidiary,  SWMX Acquisition,  Inc., to acquire and merge with and into
      SoftWave Media  Exchange,  Inc.,  pursuant to a merger  agreement.  Upon
      conclusion of the merger,  Edgemont Resources,  Inc. changed its name to
      SWMX,  Inc.  and the  subsidiary  changed  its  name to  SoftWave  Media
      Exchange, Inc.

      The merger of a private operating company,  SoftWave Media Exchange,  Inc.
      into a non-operating public shell corporation,  Edgemont Resources,  Inc.,
      with  nominal  assets  or  liabilities  resulted  in the  shareholders  of
      SoftWave  Media  Exchange,  Inc.  having actual  operating  control of the
      merged company after the transaction.  The transaction is considered to be
      a capital  transaction in substance,  rather than a business  combination.
      That is, the transaction is the equivalent to the issuance of stock by the
      private  company  for  the  net  monetary  assets  of the  shell  company,
      accompanied by a recapitalization.  Accordingly, the outstanding shares of
      SoftWave  Media  Exchange,  Inc. were  restated in the balance  sheets and
      statement of changes in  stockholders'  equity (deficit) to give effect to
      the merger.  Pursuant to the merger  agreement  the common stock  exchange
      ratio was one to one. The restated  shares were used in the computation of
      loss per share.  The merger  resulted in  SoftWave  Media  Exchange,  Inc.
      issuing 1,900,000 shares of common stock to Edgemont  Resources,  Inc. for
      net assets of no value and the payment of $400,000 to the  shareholders of
      Edgemont  Resources,  Inc.  which was  included  in  Selling,  General and
      Administrative expenses in the third quarter of 2006.

      All information  presented reflects the recapitalization of SWMX, Inc. and
      the  operations  of  SoftWave  Media  Exchange,   Inc.  and  not  Edgemont
      Resources,  Inc. Any references to predecessor  companies are predecessors
      to SoftWave  Media  Exchange,  Inc. and not Edgemont  Resources,  Inc. The
      "Company" shall refer to SWMX, Inc. and or SoftWave Media Exchange, Inc.

      On  January  19,  2006,  SoftWave  Media  Exchange,  Inc.  entered  into a
      contribution agreement with Soft Wave Media, LLC and its members,  Alowex,
      LLC ("Alowex") and Remnant Media,  LLC,  whereby Soft Wave Media, LLC (the
      "Predecessor") contributed all of its assets and all of its liabilities to
      SoftWave Media  Exchange,  Inc. These assets included but were not limited
      to software,  intellectual property, domain name and website content. This
      transaction   effectively  merged  the  Predecessor  into  SoftWave  Media
      Exchange,  Inc.  and did not result in any change in ownership or control.
      As such the assets and liabilities of SoftWave Media Exchange, Inc., as of
      the  contribution  date,  were  reflected  at the  carryover  basis of the
      Predecessor.


                                       6


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


      LIQUIDITY

      The Company has incurred  substantial  losses from inception through March
      31, 2007, which raise substantial doubt about its ability to continue as a
      going concern. Such losses resulted from the Company's lack of significant
      revenue and costs incurred in the establishment of its infrastructure. The
      Company  expects to continue to incur  significant  operating  expenses in
      order to execute its current  business  plan.  In March 2007,  the Company
      entered  into a credit  facility  (see  note 7) and  believes  that it has
      access to sources  of  working  capital  that are  sufficient  to fund its
      operations for the year ending December 31, 2007, however, there can be no
      assurances  that  sufficient  funds will be  available.  The Company  also
      believes  that  additional  capital   requirements   associated  with  its
      development can be met by raising debt or equity when needed, though there
      can be no  assurances  that the  Company  will be able to  raise  any such
      capital or upon what terms. The accompanying  financial  statements do not
      include any adjustments that might result from this uncertainty.

NOTE -2-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      UNAUDITED INTERIM FINANCIAL INFORMATION

      The  accompanying  condensed  consolidated  balance  sheet as of March 31,
      2007,  the condensed  consolidated  statements of operations for the three
      months  ended  March 31,  2007 and 2006,  and the  condensed  consolidated
      statements  of cash flows for the three  months  ended  March 31, 2007 and
      2006 and the condensed  consolidated statement of changes in stockholders'
      equity for the three  months  ended  March 31, 2007 are  unaudited.  These
      unaudited  interim  financial  statements have been prepared in accordance
      with  accounting  principles  generally  accepted in the United  States of
      America.  In the opinion of management,  the unaudited  interim  financial
      statements  include all adjustments of a normal recurring nature necessary
      for the fair presentation of our financial  position as of March 31, 2007,
      our results of  operations  for the three  months ended March 31, 2007 and
      2006 and our cash  flows for the three  months  ended  March 31,  2007 and
      2006.  The results of operations for the three months ended March 31, 2007
      are not necessarily  indicative of the results to be expected for the year
      ending December 31, 2007.

      These unaudited interim financial statements should be read in conjunction
      with the December 31, 2006 audited  financial  statements  and the related
      notes.

      USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

      The  preparation  of financial  statements in conformity  with  accounting
      principles  generally  accepted in the United  States of America  requires
      management  to make  estimates  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.  The
      Company's  most   significant   estimates  and  assumptions  made  in  the
      preparation  of the financial  statements  relate to revenue  recognition,
      allowance for doubtful accounts and capitalized  software.  Actual results
      could differ from those estimates.

      CASH AND CASH EQUIVALENTS

      The Company  considers all highly  liquid  investments  purchased  with an
      original maturity of three months or less to be cash equivalents. Cash and
      cash  equivalents,  which primarily  consist of cash on deposit with banks
      and money market funds, are stated at cost, which approximates fair value.


                                       7


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


      RESTRICTED CASH

      The  Company's  restricted  cash  balance of $70,000 at March 31, 2007 and
      December  31, 2006  consists of a  certificate  of deposit  that serves as
      collateral for the Company's merchant credit card account. The term of the
      certificate of deposit is one year and expires on August 9, 2007.

      ACCOUNTS RECEIVABLE

      Accounts  receivable  are recorded at the gross amount billed and reported
      at the amount  outstanding,  net of any  allowances  for amounts  that the
      Company  believes are not collectible.  In addition to billed  receivables
      the Company  also has unbilled  receivables.  These  unbilled  receivables
      result  from the timing  delay  between  the time the  Company  recognizes
      revenue,  on the date an advertisement is aired, and the date on which the
      invoice is generated. (See Note 4)

      In certain  instances  the Company  requests its  customers to pay for the
      services  rendered  by  the  Company  in  advance  of the  services  being
      provided. These customer advances received prior to year or period end for
      which the services  were not  provided  until after year or period end are
      classified as customer advances in the accompanying balance sheet.

      DEFERRED FINANCING COSTS

      The Company  capitalizes  costs incurred in connection  with borrowings or
      establishment  of  credit  facilities.  These  costs are  amortized  as an
      adjustment  to interest  expense over the life of the borrowing or life of
      the credit facility.

      CAPITALIZED SOFTWARE

      In accordance with Statement of Position 98-1, Accounting for the Costs of
      Computer  Software  Developed or Obtained  for Internal Use ("SOP  98-1"),
      certain direct development costs associated with internal-use software are
      capitalized.  These costs  include  external  direct  costs of service and
      payroll costs for employees devoting time to software projects principally
      related to software coding,  designing system  interfaces and installation
      and testing of the software.  These costs are recorded as fixed assets and
      are amortized  over a period not to exceed three years  beginning when the
      asset  is   substantially   ready  for  use.  Costs  incurred  during  the
      preliminary  project stage,  as well as maintenance and training costs are
      expensed as incurred.  For the three months ended March 31, 2007 and 2006,
      the  Company  capitalized  $184,000  and $0,  respectively,  based  on the
      criteria of SOP 98-1.

      PROPERTY AND EQUIPMENT

      Property and  equipment is stated at cost less  accumulated  depreciation.
      The Company  provides for  depreciation  and  amortization on property and
      equipment  used by applying the  straight-line  method over the  following
      estimated useful lives:

                                                             Estimated
      Assets                                                Useful Lives

      Capitalized software                                    3 years
      Computer equipment                                      3 years
      Furniture and fixtures                                  3 years
      Leasehold improvements                 Shorter of 5 years or life of lease


                                       8


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


      REVENUE RECOGNITION AND PRESENTATION

      The Company  recognizes  revenue when all of the  following  criteria have
      been met: persuasive evidence of an arrangement exists; services have been
      rendered;  the  price  to the  customer  is  fixed  and  determinable  and
      collectibility from the customer is reasonably assured. In most instances,
      these criteria are met when the customer's  advertisement is aired, and it
      is at this point that the Company recognizes revenue.

      The Company has an agreement  with a customer,  whereby the customer  paid
      the Company  $75,000 in December 2005 and $150,000 in January 2006.  Based
      on the achievement of certain  milestones within the agreement the Company
      has the ability to earn up to the  $225,000.  If at the end of the term of
      the  agreement,  December  2007,  the milestones in the agreement have not
      been met,  the  unearned  portion of the  $225,000  is to be repaid to the
      customer.  The unearned  amount  under this  agreement  is  classified  as
      deferred revenue in the  accompanying  balance sheets and was $198,776 and
      $214,407 at March 31, 2007 and December 31, 2006, respectively.

      In compliance  with Emerging  Issues Task Force  ("EITF") Issue No. 99-19,
      Reporting Revenue Gross as a Principal versus Net as an Agent, the Company
      assesses whether the Company or the third party broadcaster is the primary
      obligor. In addition, the Company gives appropriate consideration to other
      key  indicators  such as latitude in  establishing  price,  discretion  in
      broadcaster  selection  and who has  credit  risk.  Considering  that  the
      Company  operates  broadly as a network  exchange  along with the industry
      practice to generally  record  revenue on a net versus  gross  basis,  the
      Company  believes that there must be strong  evidence in place to overcome
      the  presumption  of net  revenue  accounting.  Accordingly,  to date  the
      Company has recorded  revenue net of  pass-through  charges,  based on the
      Company's assessment of the key indicators.  Should the Company enter into
      transactions  where  the key  indicators  suggest  they  are  acting  as a
      principal,  then the  Company  will  record  the  gross  amount  billed as
      revenue.

      For the three months ended March 31, 2007 and 2006,  approximately 47% and
      73%  of  the  Company's  revenues  came  from  three  and  two  customers,
      respectively.  These three customers  accounted for 22% and 8% of accounts
      receivable as of March 31, 2007 and December 31, 2006, respectively.

      COST OF REVENUES

      Cost of revenues consists of the expenses associated with the operation of
      the Company's  data centers  including  depreciation,  labor and bandwidth
      costs.  Cost of revenues also include expenses related to the amortization
      of capitalized software development costs,  acquired  technologies as well
      as other software  development  costs that are expensed in accordance with
      SOP 98-1.

      INCOME TAXES

      The  Company  applies  the  asset  and  liability  approach  to  financial
      accounting and reporting for income taxes.  Deferred income tax assets and
      liabilities are computed for differences  between the financial  statement
      and tax bases of assets and liabilities that will result in future taxable
      or deductible amounts, based on enacted tax laws and rates for the periods
      in which the differences are expected to affect taxable income.  Valuation
      allowances are established,  when necessary, to reduce deferred tax assets
      to the amount expected to be realized.

      In July 2006,  the FASB issued  Financial  Interpretation  No. 48 (FIN 48)
      ("Accounting  for Uncertainty in Income Taxes, as  Interpretation  of FASB
      Statement No. 109").  This  Interpretation  clarifies the  accounting  for
      uncertainty  in  income  taxes  recognized  in an  enterprise's  financial
      statements in accordance  with FASB  Statement  No. 109,  "Accounting  for
      Income Taxes".  FIN 48 prescribes a recognition and measurement  threshold
      attributable for the financial statement  recognition and measurement of a
      tax  position  taken or expected to be taken in a tax return.  FIN 48 also
      provides guidance on recognition,  classification, interest and penalties,
      accounting  in interim  periods,  disclosures  and  transition.  FIN 48 is
      effective for fiscal years beginning after December 15, 2006. The adoption
      of FIN 48 had no material impact on the Company's financial statements.


                                       9


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


      STOCK - BASED COMPENSATION

      In December 2004, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial  Accounting  Standards  ("SFAS") No. 123 (revised),
      "Share-Based   Payment"  ("SFAS  123(R)").   SFAS  123(R)  eliminates  the
      alternative  to use  the  intrinsic  value  method  of  accounting,  which
      generally  resulted in no compensation  expense  recorded in the financial
      statements  related to the issuance of equity  awards to  employees.  SFAS
      123(R)  requires  that the cost  resulting  from all share  based  payment
      transactions be recognized in the financial statements.

      SFAS  123(R)  establishes  fair  value  as the  measurement  objective  in
      accounting for share based payment arrangements and requires all companies
      to apply a fair value based measurement method in accounting for generally
      all share based payment  transactions with employees.  The Company adopted
      SFAS No.  123(R) in connection  with its issuance of stock options  during
      the three months ended March 31, 2006.  During the year ended December 31,
      2006, the Company issued  options to purchase  2,370,000  shares of common
      stock at various  exercise  prices.  No options  have been  granted in the
      quarter ended March 31, 2007.  In accordance  with SFAS 123(R) the Company
      recorded  an expense  relating  to the  options  granted of  approximately
      $295,000  and $3,000 for the three  months  ended March 31, 2007 and 2006,
      respectively,  included in selling, general and administrative expenses in
      the accompanying statement of operations.


      The following  tables  summarize  information  about the  Company's  stock
      options outstanding at March 31, 2007:

                            Options Outstanding                                    Options Exercisable
      ------------------------------------------------------------------    ---------------------------------
                           Number          Weighted          Weighted           Number           Weighted
         Range of        Outstanding       Average            Average       Exercisable as        Average
      Exercise Prices    at 3/31/07     Remaining Life    Exercise Price      of 3/31/07      Exercise Price
      ---------------    -----------    --------------    --------------    --------------    --------------
         $0.05              600,000          3.83              $0.05           400,000             $0.05
         $0.50              725,000          4.06              $0.50           650,000             $0.50
         $1.00            1,010,000          6.09              $1.00           460,000             $1.00
         $1.50               35,000          4.09              $1.50            35,000             $1.50


                                                                               Weighted
                                                                  Weighted     Average
                                                                   Average    Remaining     Aggregate
                                                                  Exercise   Contractual    Intrinsic
                                                       Shares      Price        Term          Value
                                                     ---------    --------   -----------    -----------
      Stock options outstanding at March 31, 2007    2,370,000    $   0.61    4.87 years    $ 560,000

      Stock options exercisable at March 31, 2007    1,545,000    $   0.56    4.83 years    $ 456,000

      On July 26, 2006, the Company's Board of Directors  adopted the 2006 Stock
      Option Plan (the "Plan"). 630,000 shares of the Company's common stock has
      been reserved for issuance  under the Plan. As of March 31, 2007, no stock
      options have been granted under this Plan.


                                                10


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


      RECENT ACCOUNTING PRONOUNCEMENTS

      In   September   2006,   the  FASB  issued  SFAS  No.  157,   "Fair  Value
      Measurements".  This Statement defines fair value, establishes a framework
      for measuring fair value in generally accepted accounting principles,  and
      expands disclosures about fair value measurements.  This Statement applies
      under other  accounting  pronouncements  that require or permit fair value
      measurements,  the FASB having  previously  concluded in those  accounting
      pronouncements  that fair  value is the  relevant  measurement  attribute.
      Accordingly,   this   Statement  does  not  require  any  new  fair  value
      measurements.   However,  for  some  entities,  the  application  of  this
      Statement  will change current  practice.  This Statement is effective for
      financial  statements issued for fiscal years beginning after November 15,
      2007,  and interim  periods  within  those  fiscal  years.  The Company is
      currently  evaluating  the  impact  of  this  Statement  on its  financial
      statements.

      In February 2007, the Financial Accounting Standards Board ("FASB") issued
      Statements of Financial  Accounting  Standard  ("SFAS") No. 159, "The Fair
      Value Option for Financial  Assets and Financial  Liabilities -- Including
      an Amendment of FASB Statement No. 115" ("SFAS 159"). SFAS 159 permits all
      entities  the option to measure  many  financial  instruments  and certain
      other items at fair value.  If a company  elects the fair value option for
      an eligible item, then it will report unrealized gains and losses on those
      items at each subsequent  reporting date. SFAS 159 is effective for fiscal
      years  beginning  after  November 15,  2007,  which for the Company is our
      fiscal year beginning July 1, 2007. We are currently  determining  whether
      fair value  accounting is  appropriate  for any of our eligible  items and
      cannot  estimate  the  impact,  if any,  which  SFAS  159 may  have on our
      consolidated financial statements.

NOTE -3-    LOSS PER SHARE

      Net loss per share has been presented  pursuant to SFAS No. 128, "Earnings
      per Share".  Basic net loss per share is computed by dividing reported net
      loss  available  to common  shareholders  by the weighted  average  shares
      outstanding  for the  period.  Diluted  net loss per share is  computed by
      dividing  reported net loss available to common  shareholders  by weighted
      average  shares  outstanding  for the period,  adjusted  for the  dilutive
      effects of common stock equivalents, which consist of stock options, using
      the treasury stock method.

      All stock options have been excluded from the  computation of earnings per
      share due to their  anti-dilutive  effect. The number of such shares would
      have been  approximately  1,498,000  and 570,000 for the three month ended
      March 31, 2007 and 2006, respectively.

NOTE -4-    ACCOUNTS RECEIVABLE, NET

       The Company's Accounts receivable, net consists of the following:


                                          March 31, 2007   December 31, 2006
                                          --------------   -----------------
      Billed accounts receivable           $ 4,521,452        $ 3,448,290
      Unbilled accounts receivable           1,990,189          1,293,088
                                           -----------        -----------
                                             6,511,641          4,741,378

      Less: Allowance for doubtful
      accounts                              (1,642,000)        (1,642,000)
                                           -----------        -----------
      Accounts receivable, net             $ 4,869,641        $ 3,099,378


                                       11


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE -5-    PROPERTY AND EQUIPMENT

      Property and equipment consists of:

                                            March 31, 2007   December 31, 2006
                                           ----------------  -----------------
      Capitalized software                   $ 1,576,666       $ 1,327,449
      Computer equipment                       2,350,701         2,017,591
      Furniture and fixtures                      91,537            91,537
      Leasehold improvements                     454,582           408,792
                                             -----------       -----------
                                               4,473,486         3,845,369
      Less: Accumulated depreciation
       and amortization                       (1,003,761)         (692,620)
                                             -----------       -----------
      Property and equipment, net            $ 3,469,725       $ 3,152,749
                                             ===========       ===========


      Depreciation  and  amortization  expense was  approximately  $311,141  and
      $101,364  for the  three  month  period  ended  March  31,  2007 and 2006,
      respectively.

NOTE -6-    NOTE PAYABLE TO RELATED PARTY

      On August 23, 2005, the Predecessor entered into an Agreement of Sale with
      Alowex, an entity that is wholly-owned by two shareholders and founders of
      the  Predecessor  whereby  Alowex  agreed to sell to the  Predecessor  the
      software  and any  intellectual  property  related  to the  Remnant  Radio
      Software Platform, which is the predecessor to the SoftWave Radio Software
      Platform. As consideration,  the Predecessor issued to Alowex a promissory
      note  ("Original  Alowex  Promissory  Note")  in the  original  amount  of
      $1,242,000,  representing  an amount mutually agreed to by the co-founders
      as fair value.  The note  provided for interest at a rate of 4% per annum,
      with monthly payments of principal and interest commencing on September 1,
      2005  through  August 31,  2008 and is  subject  to a  security  agreement
      consisting of substantially all of the assets of the Company.  However, no
      amounts were paid during 2005 or 2006, and the Original Alowex  Promissory
      Note was canceled  with a new note  entered  into on January 19, 2006,  as
      noted below.

      As the  Original  Alowex  Promissory  Note was  issued  at a below  market
      interest rate, the Company imputed  interest at a market rate resulting in
      a debt discount of approximately $55,000.

      On January 19, 2006,  SoftWave Media Exchange,  Inc. canceled the Original
      Alowex  Promissory  Note and issued to Alowex a new promissory note in the
      amount of $1.4 million ("Alowex,  LLC Promissory  Note").  The Alowex, LLC
      Promissory  Note provides for monthly  payments of interest at the rate of
      7% per annum  commencing  February  19,  2006 and  monthly  principal  and
      interest  payments of $33,524  commencing  February 19, 2007 until January
      19, 2011 on which date all  outstanding  principal  and  accrued  interest
      shall  be due  and  payable.  This  agreement  is  subject  to a  security
      agreement  consisting of substantially  all assets of the Company.  In the
      event the Company receives  proceeds from the sale of equity securities in
      any single or a series of related  transactions in which the amount raised
      equals  or  exceeds  $10  million,  the  entire  note,  including  accrued
      interest, is due and payable. In connection with entering into the Alowex,
      LLC Promissory Note and canceling the Original Alowex Promissory Note, the
      Company  wrote  off the  remaining  debt  discount,  the  Original  Alowex
      Promissory Note and the accrued interest payable  resulting in an interest
      expense  charge  of  approximately   $195,000  in  2006  related  to  this
      transaction

      In connection with the private placement transaction that was completed on
      July 26, 2006 (see note 10),  this  liability,  $1,400,000,  was repaid in
      full.


                                       12


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE -7-    CREDIT FACILITY

      In March 2007, the Company  entered into a credit  facility with BlueCrest
      Capital  Finance,  L.P. The credit facility  consists of a $3 million term
      loan ("Term Loan") and a $6 million revolving loan ("Revolving Loan"). The
      Term Loan bears  interest at the sum of (i) 600 basis points plus (ii) the
      greater of (a) 4.84% or (b) the yield on Three-Year U.S. Treasury Notes on
      the date of such loan. The Term Loan shall be repaid in forty (40) monthly
      scheduled  installments  as follows:  (i) commencing on the first business
      day of first  month  after the date of the Term Loan,  three (3) months of
      interest only (paid in arrears); (ii) commencing on the first business day
      of the fourth  month  after the date of the Term Loan,  twelve  (12) equal
      monthly  payments,  each  consisting of 1.6667% of the original  principal
      amount of the Term Loan,  plus interest  thereon  (paid in arrears);  then
      (iii)  commencing on the first  business day of the sixteenth  month after
      the date of the Term Loan, twenty four (24) equal monthly  payments,  each
      consisting  of 3.3333% of the  original  principal  amount of the relevant
      Loan,  plus interest  thereon  (paid in arrears);  and finally (iv) on the
      first  business day of the fortieth month after the date of the Term Loan,
      $150,000.  The Revolving Loan has a term of two years.  Each advance under
      the  Revolving  Loan shall bear interest at a rate equal to the Prime Rate
      plus 1.65% per annum.  The Revolving Loan provides for advances based on a
      formula of 80% of eligible  receivables,  as defined.  In connection  with
      this  transaction  the Company  incurred  financing fees of  approximately
      $380,000.  In addition,  the Company issued a warrant to purchase  850,340
      shares of common stock at $.88 per share,  the average  trading  price for
      the five days  prior to  closing,  subject to  adjustment  based on future
      equity offerings.  The warrant expires in 2010, with the fair value of the
      warrant,  $258,000,  included  in  deferred  financing  fees  as  well  as
      additional paid-in-capital, and being charged to interest expense over the
      life of the credit facility.

      As of March 31, 2007 the Company had  borrowings of  $3,000,000  under the
      Term Loan and had no borrowings outstanding under the Revolving Loan.

NOTE -8-    ALOWEX AND REMNANT LETTER AGREEMENTS

      On January 19, 2006, in consideration  for services provided by Alowex and
      Remnant Media, LLC to the Predecessor and the contributions  that each had
      made to the development of the Predecessor,  its software and its website,
      the Company agreed to pay each party $1.3 million. If the Company receives
      proceeds  from the sale of equity  securities in any single or a series of
      related  transactions  in which the amount  raised  equals or exceeds  $10
      million,  under the terms of these letter  agreements  all amounts are due
      and payable, otherwise these amounts are due on demand at an interest rate
      of 6%.

      In connection with the private placement transaction that was completed on
      July 26, 2006 (see note 10), this  liability of $2.6 million was converted
      into equity for an aggregate 866,667 shares of the Company's common stock,
      based on current market value.

NOTE -9-    COMMITMENTS AND CONTINGENCIES

      At March 31, 2007, future minimum payments under non-cancelable  operating
      leases and  capital  leases  are as  follows  over the next five years and
      thereafter:

               Year        Operating Leases      Capitalized Leases
                           ----------------------------------------
               2007              $ 467,000               $ 421,000
               2008                643,000                 561,000
               2009                667,000                  99,000
               2010                692,000                  16,000
               2011                353,000                      --
               Thereafter               --                      --
                           ----------------------------------------
                                $2,822,000              $1,097,000
                           ========================================


                                       13


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


         Less: Amount representing interest (at a rate of 10.45%)    (112,000)
                                                                    ---------
         Present value of net minimum lease payments                $ 985,000
                                                                    =========

      In August 2006, the Company terminated the employment of one its officers.
      This former officer commenced an arbitration proceeding,  alleging that he
      is due  compensation  and  benefits  in  connection  with his  termination
      pursuant to his employment agreement with the Company. Despite the Company
      believing  it has  meritorious  defenses in such  proceeding  it agreed to
      settle this matter in March 2007. In the  settlement the Company agreed to
      pay this former  officer  $500,000,  with  $75,000  paid in March 2007 and
      $25,000 to be paid each month thereafter  through August 2008. The present
      value of the  amount  due  within  one year has been  included  in accrued
      expenses with the amount due beyond one year  reflected as other long term
      liabilities in the accompanying balance sheet.

NOTE -10-   STOCKHOLDERS' EQUITY

      On April 20, 2006, certain  shareholders of the Company  collectively sold
      2,078,479  shares of their own common  stock of SoftWave  Media  Exchange,
      Inc.  in a  private  placement  to 65  purchasers  at a price of $1.50 per
      share.

      On July 26, 2006, the Company  completed a private  placement  pursuant to
      which it sold 4.0  million  shares of common  stock for gross  proceeds of
      $12.0 million,  including  through the conversion of the $2.6 million owed
      to Alowex and  Remnant  Media,  LLC (as  discussed  further in Note 8). In
      addition,  the Company  used $1.4  million of the net  proceeds to repay a
      loan due to Alowex  (see  Note 6) and $1.5  million  to repay the  balance
      outstanding  at that time under the `revolving  credit  facility (see Note
      7).

NOTE -11-   INCOME TAXES

      The Company has no  provision  for income taxes for any period as a result
      of its operating losses.  Deferred income taxes reflect the net effects of
      temporary   differences   between  the  carrying  amounts  of  assets  and
      liabilities  for  financial  reporting  purposes  and the amounts used for
      income tax purposes.  Significant components of the Company's deferred tax
      assets and liabilities for the period ended March 31, 2007 are as follows:

      Deferred tax asset:
        Current:
          Allowance for doubtful accounts            $   654,830
        Long-term:
          Stock based compensation                       485,273
          Net operating loss carryforward              3,268,600
                                                     -----------
      Total deferred tax asset                         4,408,703

      Deferred tax liability:
        Long-term:
          Depreciation                                   (47,856)

                                                     -----------
      Net deferred tax asset                           4,360,847
      Valuation allowance                             (4,360,847)
                                                     -----------
      Net deferred tax asset                         $      --
                                                     ===========


                                       14


                                   SWMX, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


      As of March 31, 2007, the Company has approximately  $8,196,000 of federal
      net  operating   loss   carryforwards,   expiring  in  2021.   These  loss
      carryforwards  are subject to annual  limitations  under Internal  Revenue
      Code  Section  382 and some may be  subject to  further  limitations.  The
      Company has recognized a full  valuation  allowance  against  deferred tax
      assets as, at this point in the Company's history,  it is more likely than
      not that  sufficient  taxable  income  will not be  generated  during  the
      carryforward  period available under tax law to utilize these deferred tax
      assets.


                                       15


ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

This  Quarterly  Report on Form  10-QSB  contains  statements  which  constitute
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended.  The following  discussion  may contain  forward-looking  statements
regarding  us, our business,  prospects  and our results of operations  that are
subject to certain risks and uncertainties posed by many factors and events that
could cause our actual  business,  prospects and results of operations to differ
materially   from  those  that  may  be  anticipated  by  such   forward-looking
statements.  Factors that could cause or contribute to such differences include,
but are not limited to,  those  described in the "Risk  Factors"  section of our
Current Report on Form 8-K, as filed with the Securities and Exchange Commission
on July 27, 2006.  Readers are  cautioned  not to place undue  reliance on these
forward-looking  statements,  which speak only as of the date of this report. We
undertake no  obligation  to revise any  forward-looking  statements in order to
reflect events or circumstances that may subsequently  arise.  Readers are urged
to  carefully  review and consider  the various  disclosures  made by us in this
report  and  in our  other  reports  filed  with  the  Securities  and  Exchange
Commission  that advise  interested  parties of the risks and  factors  that may
affect our business.  This  discussion  should be read in  conjunction  with the
audited financial statements of SWMX, Inc. for the year ended December 31, 2006.

The  following  discussion  reflects  management's  analysis  of  the  financial
condition,  results of operations  and the operating  history of SoftWave  Media
Exchange,  Inc. and its predecessor  entity,  Soft Wave Media, LLC. As such, the
discussion only represents  management's current assessment of the operations of
the business.

On July 26, 2006,  Edgemont Resources,  Inc. created a wholly-owned  subsidiary,
SWMX  Acquisition,  Inc.,  to  acquire  and merge with and into  SoftWave  Media
Exchange,  Inc., pursuant to a merger agreement.  Upon conclusion of the merger,
Edgemont  Resources,  Inc.  changed its name to SWMX,  Inc.  and the  subsidiary
changed its name to SoftWave Media Exchange, Inc.

The merger of a private operating company,  SoftWave Media Exchange, Inc. into a
non-operating public shell corporation,  Edgemont Resources,  Inc., with nominal
assets or liabilities  resulted in the  shareholders of SoftWave Media Exchange,
Inc.  having  actual   operating   control  of  the  merged  company  after  the
transaction.  The  transaction  is  considered  to be a capital  transaction  in
substance,  rather than a business combination.  That is, the transaction is the
equivalent to the issuance of stock by the private  company for the net monetary
assets of the shell company, accompanied by a recapitalization. Accordingly, the
outstanding  shares of SoftWave  Media  Exchange,  Inc. were restated in balance
sheets and statement of changes in stockholders' equity (deficit) to give effect
to the merger.  Pursuant to the merger agreement the common stock exchange ratio
was one to one. The  restated  shares were used in the  computation  of loss per
share.

On January 19, 2006,  SoftWave Media Exchange,  Inc. entered into a contribution
agreement with Soft Wave Media, LLC and its members,  Alowex, LLC ("Alowex") and
Remnant Media, LLC, whereby Soft Wave Media, LLC (the "Predecessor") contributed
all of its assets and all of its  liabilities to SoftWave Media  Exchange,  Inc.
These assets included but were not limited to software,  intellectual  property,
domain  name and  website  content.  This  transaction  effectively  merged  the
Predecessor into SoftWave Media Exchange,  Inc. and did not result in any change
in ownership or control.  As such the assets and  liabilities  of SoftWave Media
Exchange,  Inc., as of the  contribution  date,  were reflected at the carryover
basis of the Predecessor.

OVERVIEW

We operate as an intermediary  in  implementing  the buying and selling of media
time.  Our long-term  goal is to establish and operate a broad-based  electronic
media  marketplace  and to develop the  clientele  and  systems to support  that
marketplace.  We are in our early stage of implementing this strategy. In August
2005, we were organized as a limited liability company after acquiring the right
to operate a platform for the sale of radio  advertising that had been developed
and tested by several  affiliated  companies  during the previous several years.
After  adding  additional  personnel  and  securing  additional  investors,  the
business entity was merged into a corporation in January 2006.


                                       16


Since inception,  we have considered that the ability to achieve rapid growth in
the number of entities that participate in our marketplace and to quickly expand
the  marketplace  to include  additional  segments  of the media  market will be
essential to our long run competitiveness and success.  This policy has dictated
that the  support  systems  that  have  been  designed  for the  marketplace  be
sufficiently  robust to  accommodate  large,  rapid  increases  in volume and be
inherently  scalable so that the  marketplace  can be  expanded  to  incorporate
additional  market  segments  without the need for  fundamental  redesign of our
underlying systems.  Consequently,  the level of expenses has been high relative
to revenues and significant losses have been incurred through March 31, 2007.

The policy of pursuing rapid growth is based on the  assessment  that one of the
primary  risks we face is the  relatively  low cost of  simulating  our business
model  through the  creation  and  marketing of web sites that appear to offer a
product  similar to the SWMX  Marketplace,  but without the  underlying  support
systems and productivity  features that we provide.  To the extent that such low
cost  competitors  fail to fully deliver on the promise of an  electronic  media
exchange,   the  resulting  confusion  and  disappointment   could  inhibit  the
acceptance of the SWMX Marketplace.  In addition,  our management believes that,
to the  extent  that we are  successful  in our  efforts  to  achieve  dramatic,
industry-wide  efficiencies  in as large a market  as global  advertising  media
sales, we will and already are attracting  large,  well-funded  competitors that
may be successful in capturing a  significant  share of the market.  Although we
consider  such  competition  to be to some extent  inevitable  and perhaps  even
beneficial,  we believe that a key component of success for any such marketplace
will be the  ability to  achieve a large  volume of  participants  in its system
early in the trend.

A related risk is the risk that we will not be able to raise sufficient  capital
to sustain the level of growth that management  considers optimal,  particularly
because our current  business model is to promote  confidence in our marketplace
by acting as a principal in guaranteeing payment for advertising placements.  To
the extent that payables to broadcasters  are incurred and satisfied faster than
receivables  from  advertisers,  our position as a principal in  supporting  our
marketplace results in increased credit risk and a heightened need for cash.

Other major risks that management has been addressing  since inception are risks
associated with  developing the human,  physical,  technological  and management
resources  necessary to sustain  such a high level of growth in our system,  the
risk  of  unanticipated  equipment  or  other  systems  failures,  the  risk  of
unforeseen  legal or regulatory  problems and the need to develop robust control
systems for a rapidly growing enterprise.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our  discussions of our financial  condition and results of operations are based
upon  our  consolidated  financial  statements,  which  have  been  prepared  in
accordance with accounting  policies  generally accepted in the United States of
America,  or GAAP. The  preparation of financial  statements in conformity  with
GAAP requires  management  to make  estimates  and  assumptions  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  period.  On an ongoing
basis,  we evaluate our estimates and  assumptions,  including  those related to
revenue  recognition,  bad debts,  fixed assets,  stock-based  compensation  and
certain accruals. Actual results could differ from those estimates. The critical
accounting policies discussed herein are not intended to be a comprehensive list
of all of our accounting policies.  In many cases, the accounting treatment of a
particular  transaction is specifically  dictated by GAAP and does not result in
significant management judgment in the application of such principles. There are
also areas in which management's judgment in selecting any available alternative
would not produce a materially different result from the result derived from the
application of our critical accounting  policies.  We believe that the following
accounting  policies are most critical to us in that they  represent the primary
areas where financial  information is subject to the application of management's
estimates,  assumptions  and  judgment in the  preparation  of our  consolidated
financial statements.

CAPITALIZED SOFTWARE

In  accordance  with  Statement of Position  98-1,  Accounting  for the Costs of
Computer Software  Developed or Obtained for Internal Use ("SOP 98-1"),  certain
direct development costs associated with internal-use  software are capitalized.
These costs  include  external  direct  costs of service  and payroll  costs for
employees  devoting time to software  projects  principally  related to software
coding,  designing  system  interfaces  and  installation  and  testing  of  the
software.  These costs are  recorded as fixed  assets and are  amortized  over a
period not to exceed three years beginning when the asset is substantially ready


                                       17


for use.  Certain other costs incurred during the preliminary  project stage, as
well as maintenance  and training costs,  are expensed as incurred.  Included in
capitalized software costs in the accompanying balance sheets is the cost of the
software  purchased from Alowex,  a related party, as well as development  costs
associated  with our market  place  applications  including  SWMX Radio and SWMX
Television.

REVENUE RECOGNITION AND PRESENTATION

We  recognize  revenue  when  all of  the  following  criteria  have  been  met:
persuasive evidence of an arrangement exists;  services have been rendered;  the
price to the  customer is fixed and  determinable  and  collectibility  from the
customer is  reasonably  assured.  Generally,  these  criteria  are met when the
customer's  advertisement  is aired,  and it is at this point that we  recognize
revenue. In compliance with Emerging Issues Task Force ("EITF") Issue No. 99-19,
Reporting Revenue Gross as a Principal versus Net as an Agent, we assess whether
we or the third party broadcaster is the primary obligor.  In addition,  we give
appropriate   consideration   to  other  key  indicators  such  as  latitude  in
establishing price, discretion in broadcaster selection and who has credit risk.
As we  operate  broadly  as a  network  exchange  and the  advertising  industry
practice is to generally  record revenue on a net versus gross basis, we believe
that there must be strong  evidence in place to overcome the  presumption of net
revenue accounting.  Accordingly,  we have historically  recorded revenue net of
pass-through charges,  based on our assessment of the key indicators,  resulting
in our net transaction fees as revenue.  Should we enter into transactions where
the key indicators suggest it is acting as a principal,  then we will record the
gross amount billed as revenue.

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Based on experience  and judgment,  we establish an allowance for  uncollectible
accounts.  Our judgment  includes  evaluating the willingness and the ability of
the  customer  to satisfy his  obligation  to us.  Although we believe  that our
reserves are adequate, if the financial condition of our customers deteriorates,
resulting  in  an  impairment  of  their  ability  to  make  payments,  or if we
underestimate the allowance  required,  additional  allowances may be necessary,
which will result in increased selling,  general and administrative  expenses in
the period such  determination  is made.  As noted above our revenue is recorded
net yet our  receivables  reflect  the  gross  amount  of the  transaction  thus
exposing us to credit risk greater than our net revenue.

EFFECT OF INFLATION

Inflation has not had a material effect on our operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  157,  "Fair  Value  Measurements".   This  Statement  defines  fair  value,
establishes  a  framework  for  measuring  fair  value  in  generally   accepted
accounting  principles,  and expands  disclosures about fair value measurements.
This Statement  applies under other  accounting  pronouncements  that require or
permit fair value  measurements,  the FASB having previously  concluded in those
accounting pronouncements that fair value is the relevant measurement attribute.
Accordingly,  this Statement  does not require any new fair value  measurements.
However,  for some  entities,  the  application  of this  Statement  will change
current  practice.  This Statement is effective for financial  statements issued
for fiscal years  beginning  after November 15, 2007, and interim periods within
those fiscal years. We do not expect there to be any impact of this Statement on
our financial statements.

In February  2007, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statements of Financial  Accounting  Standard  ("SFAS") No. 159, "The Fair Value
Option for Financial Assets and Financial  Liabilities -- Including an Amendment
of FASB  Statement  No. 115" ("SFAS  159").  SFAS 159 permits all  entities  the
option to measure many  financial  instruments  and certain  other items at fair
value.  If a company elects the fair value option for an eligible item,  then it
will  report  unrealized  gains  and  losses on those  items at each  subsequent
reporting  date. SFAS 159 is effective for fiscal years beginning after November
15, 2007,  which for the Company is our fiscal year  beginning  July 1, 2007. We
are currently  determining  whether fair value accounting is appropriate for any
of our eligible items and cannot estimate the impact, if any, which SFAS 159 may
have on our consolidated financial statements.


                                       18


RESULTS OF OPERATIONS

The following  table sets forth selected  consolidated  statements of operations
data for each of the periods indicated:

                                 Three months     Three months   Three months
                                     ended           ended          ended
                               March 31, 2007   March 31, 2006  December 31, 2006
                               --------------   --------------  -----------------
Net revenues                     $ 1,294,225     $   208,755     $   999,884

Costs and expenses:
  Cost of revenues                   612,650         162,363         505,780
  Selling, general and
  administrative                   2,696,048         784,816       3,008,076
                                 -----------     -----------     -----------
Total costs and expenses           3,308,698         947,179       3,513,856
                                 -----------     -----------     -----------
Operating loss                    (2,014,473)       (738,424)     (2,513,972)

Interest expense, net                 25,740         205,792          (6,090)
                                 -----------     -----------     -----------
Net Loss                         $(2,040,213)    $  (944,216)    $(2,507,882)
                                 ===========     ===========     ===========

REVENUES.  Revenues  generated by our marketplace are largely  determined by the
transaction volume or gross advertising dollars and the transaction fees we earn
on that  transaction  volume.  Our transaction fees vary per transaction due too
many factors  including,  the type of spot (remnant or  flighted),  seasonal and
other  factors,  such  as the  impact  of  political  campaigns,  as well as the
participants in the transaction.

Our  transaction  volume for the three months ended March 31, 2007 and 2006, was
$8,337,000 and $997,000 respectively,  and $7,041,000 for the three months ended
December  31,  2006.  Our net revenues for the three months ended March 31, 2007
and 2006 was $1,294,000 and $209,000,  respectively,  and $994,000 for the three
months ended December 31, 2006. Our increase in both transaction  volume as well
as net revenues,  is attributable to several factors,  including access to media
owner inventory as well advertiser and advertising agency participation.  At the
end of  March  2006 we had 560  radio  stations  providing  us  access  to their
inventory.  By the end of March 2007,  our radio station count grew to 1,800 and
we also had  access to local  spot cable  inventory  as well as local  broadcast
television inventory.  Our advertiser base also grew during this same period. By
the end of March 2006 we had 23 customers and no  advertising  agencies  working
with us.  At March  31,  2007,  this  number  had  grown to over 249  customers,
including 48 advertising  agencies.  Despite the growth in our advertiser  base,
our net revenues are still  concentrated with several  customers.  For the three
months ended March 31,  2007,  approximately  47% of our net revenues  came from
three customers, each contributing in excess of 10% of net revenues.

Through May 2006, our  marketplace  only  facilitated  the buying and selling of
radio spots purchased within seven days of airing,  referred to as remnant buys.
Since May 1, 2006 we have also  facilitated  the buying and selling of scheduled
spots,  referred to as flighted  buys. For the three months ended March 31, 2007
approximately 85% of our net revenues came from flighted buys compared to 0% for
the same period prior year.

COST OF REVENUES. Our cost of revenues for the three months ended March 31, 2007
and 2006 were  $613,000 and $162,000,  respectively,  and $506,000 for the three
months  ended  December  31,  2006.  Cost of revenues  consists of the  expenses
associated   with  the  operation  of  the  Company's  data  centers   including
depreciation,  labor and bandwidth costs. Cost of revenues also include expenses
related to the amortization of capitalized software development costs,  acquired
technologies  as well as other software  development  costs that are expensed in
accordance with SOP 98-1.

SELLING,   GENERAL  AND  ADMINISTRATIVE   EXPENSES.  Our  selling,  general  and
administrative  expenses for the three months ended March 31, 2007 and 2006 were
$2,696,000 and $785,000, respectively, and $3,008,000 for the three months ended
December 31, 2006.  Our selling,  general and  administrative  expenses have and


                                       19


will continue to grow as we execute our business plan,  including increasing our
employee  base from 49 employees at the  beginning of the year to 65 as of March
31, 2007, to support our revenue  growth.  Our  personnel  related costs for the
three months ended March 31, 2007 and 2006,  accounted for approximately 49% and
58%, respectively,  of our total selling,  general and administrative  expenses,
and 34 % for the three months ended December 31, 2006.

Included in selling,  general and  administrative  expenses for the three months
ended March 31, 2007 and 2006 was stock based compensation  expense, of $295,000
and $3,000,  respectively,  and $280,000 for the three months ended December 31,
2006.  In addition,  we recognized no bad debt expense for the three month ended
March 31, 2007 and 2006,  respectively,  and $360,000 for the three months ended
December 31, 2006.  Selling,  general and  administrative  expense for the three
months ended December 31, 2006 also included a $487,000 charge, representing the
present value of the settlement of a dispute with a former officer.

INTEREST  EXPENSE,  NET.  Our interest  expense,  net for the three months ended
March  31,  2007 and 2006,  was  $26,000  and  $206,000,  respectively,  and net
interest income of $6,000 for the three months ended December 31, 2006. Included
in  interest  expense  for the three  months  ended  March 31,  2007 is interest
related to the capital leases the Company  entered into in December 2006 as well
the first  quarter of 2007.  Included in interest  expense for the three  months
ended March 31, 2006 was the write-off of  unamortized  debt  discount  costs of
$195,000.

INCOME TAXES. We have incurred losses since inception,  and such losses create a
deferred tax asset.  We have  approximately  $8,196,000  of net  operating  loss
carryforwards.  In  addition  to the  deferred  tax asset  generated  by our net
operating  losses,  we have  additional  deferred  tax  assets  relating  to the
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes  and the  amounts  used for income tax  purposes.  Our gross
deferred tax asset as of December 31, 2006 was approximately $4,361,000. We have
established  a valuation  reserve equal to the full value of this asset as it is
more likely than not that this benefit will not be realized.

LIQUIDITY AND CAPITAL RESOURCES

We have  historically met our cash  requirements and financed our growth through
private placement transactions in which we raised gross proceeds of $14 million,
including the  conversion of $2.6 million,  owed to founders of our company into
equity.  We also had a $1.5 million  revolving  credit  facility  with an entity
owned by  shareholders  of our company from January 2006 through July 2006, with
an interest rate of 8%. The revolving credit facility expired in accordance with
its terms upon the completion of the private placement transaction in July 2006.
Cash flows are summarized in the table below.

                                                        Three Months
                                                       Ended March 31,    Three Months Ended    Three Months Ended
                                                            2007            March 31, 2006       December 31, 2006
                                                       ---------------    ------------------    ------------------
Net cash (used in) provided by operating activities     (2,854,063)           (1,140,969)            1,272,777
Net cash (used in) investing activities                   (200,992)             (147,817)             (622,265)
Net cash provided by financing activities                2,316,655             1,985,889                     -

As a result of the  operating  losses as well as the growth of  activity  in the
SWMX  marketplace,  which  resulted  in  an  increase  in  accounts  receivable,
$2,854,000 and  $1,141,000  has been used in operating  activities for the three
months  ended March 31,  2007 and 2006,  respectively.  During the three  months
ended March 31, 2007 we acquired  $628,000 of  equipment,  of which  $257,000 is
subject to a capital lease. In addition  $170,000 owed to the Company was repaid
during the three months  ended March 31,  2007.  In March 2007 we entered into a
credit  facility  with  BlueCrest  Capital  Finance,  L.P.  The credit  facility
consists of a  revolving  line of credit as well as a term loan.  The  revolving
line of credit has a term of two years,  bears  interest  at the prime rate plus
1.65%,  and has a maximum  borrowing  amount of $6 million,  based on an advance
rate of 80% of eligible receivables as defined.  Under the term loan we borrowed
$3  million at an annual  interest  rate of  10.84%,  subject  to the  following
repayment schedule: (i) three (3) months of interest only, (ii) 12 equal monthly


                                       20


payments  of 1.6667% of the  original  principal  amount of the term loan,  plus
interest;  (iii)  twenty-four  (24) equal monthly  payments , each consisting of
3.3333% of the original principal amount of the term loan, plus interest; (iv) a
final  payment  equal to $150,000.  In  addition,  we issued  BlueCrest  Capital
Finance,  L.P. a warrant to purchase  850,340 shares of common stock at $.88 per
share, the average trading price for the five days prior to closing,  subject to
adjustment based on future equity offerings.

The Company has incurred  substantial  losses from  inception  through March 31,
2007,  which  raise  substantial  doubt about our ability to continue as a going
concern.  We believe we will continue to incur significant  operating  expenses,
including significant expenditures on computer hardware, in order to execute our
current  business  plan.  While we  believe  that we have  access to  sources of
working  capital that are  sufficient to fund our operations for the year ending
December  31,  2007,  there  can be no  assurance  that  such  amounts  will  be
sufficient to meet our business objectives.

ITEM 3.     CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

CHANGES IN INTERNAL CONTROLS

There were no significant  changes in our internal  controls or in other factors
that  could  significantly  affect  these  controls  subsequent  to the  date of
evaluation by our principal executive officer and principal financial officer.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

We, including our principal  executive officer and principal  financial officer,
do not expect  that our  disclosure  controls  and  procedures  or our  internal
control over financial reporting will prevent or detect all error and all fraud.
A control  system,  no matter how well designed and  operated,  can provide only
reasonable, not absolute, assurance that the control system's objectives will be
met.  The  design of a  control  system  must  reflect  the fact that  there are
resource  constraints,  and the benefits of controls must be considered relative
to their  costs.  Further,  because of the inherent  limitations  in all control
systems,   no  evaluation  of  controls  can  provide  absolute  assurance  that
misstatements  due to error or fraud will not occur or that all  control  issues
and instances of fraud, if any, have been detected.  These inherent  limitations
include the realities that judgments in  decision-making  can be faulty and that
breakdowns  can occur  because of simple error or mistake.  Controls can also be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management  override of the controls.  The design of any system of
controls is based in part on certain  assumptions about the likelihood of future
events,  and there can be no assurance that any design will succeed in achieving
its stated  goals under all  potential  future  conditions.  Projections  of any
evaluation  of controls  effectiveness  to future  periods are subject to risks.
Over time,  controls may become  inadequate  because of changes in conditions or
deterioration in the degree of compliance with policies or procedures.

                                     PART II
                                OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

      In August 2006, Charles Omphalius,  the former President of SoftWave Media
Exchange, Inc., commenced an arbitration proceeding, pending before the American
Arbitration  Association,  alleging that he is due  compensation and benefits in


                                       21


connection  with his termination  pursuant to his employment  agreement with the
Company.  Despite  the Company  believing  it has  meritorious  defenses in such
proceeding it agreed to settle this matter in March 2007. In the  settlement the
Company agreed to pay this former officer  $500,000,  with $75,000 paid in March
2007 and $25,000 to be paid each month thereafter through August 2008.

ITEM 6.     EXHIBITS

Exhibit
Number       Description
------       -----------

 31.1*       Section 302 Certification of Principal Executive Officer

 31.2*       Section 302 Certification of Principal Financial Officer

 32.1*       Section 906 Certification of Principal Executive Officer

 32.2*       Section 906 Certification of Principal Financial Officer

-----------------
* Filed herewith.


                                       22


                                   SIGNATURES

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

                                         SWMX, Inc.


Dated: May 14, 2007                     By:  /s/ Joshua Wexler
                                             -----------------------------------
                                             Joshua Wexler
                                             Chief Executive Officer
                                             (Principal Executive Officer)


Dated: May 14, 2007                     By:  /s/ James Caci
                                             -----------------------------------
                                             James Caci
                                             Chief Financial Officer
                                             (Principal Financial Officer and
                                             Principal Accounting Officer)


                                       23


                                  EXHIBIT INDEX

Exhibit
Number       Description
------       -----------

 31.1*       Section 302 Certification of Principal Executive Officer

 31.2*       Section 302 Certification of Principal Financial Officer

 32.1*       Section 906 Certification of Principal Executive Officer

 32.2*       Section 906 Certification of Principal Financial Officer

-----------------
* Filed herewith.


                                       24`