UNITED
      STATES


SECURITIESANDEXCHANGE
      COMMISSION


Washington,D.C.20549





FORM
      10-QSB








QUARTERLY
      REPORT PURSUANT TO SECTION 13
      OR 15(d)


OF
      THE SECURITIES EXCHANGE ACT OF
      1934





For
      the quarterly period endedOctober
      31, 2007





EXOBOX
      TECHNOLOGIES
      CORP.


(Exact
      name of registrant as specified
      in its charter)





Nevada
            88-0456274(State
                or other
                jurisdictionof
                incorporation)
            (I.R.S.
                EmployerIdentification
                No.)6303BeverlyHill,Suite210,Houston,Texas
            77057-6501(Address
                of principal executive
                offices)
            (Zip
                code)








(Former
      name, former address, and former
      fiscal


year
      if changed since last
      report)





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





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. YesTNo£








Indicate
      the number of shares
      outstanding of each of the issuer's classes of common stock, as of the latest
      practicable date.





Outstanding
      Common stock, par value
      $0.001 per share as ofDecember 14, 2007:363,143,203
      shares







1





EXOBOX
      TECHNOLOGIESCORP.


FORM
      10-QSB FOR THE QUARTER ENDEDOctober 31,
      2007





INDEX





PAGEPARTI.FINANCIAL
                INFORMATIONItem
                1. Financial
                StatementsBalance
                Sheets as ofOctober 31, 2007andJuly
                31,
                2007(Unaudited).
            3Statements
                of Operations for the
                three months endedOctober 31,
                2007and 2006 and for the period
                from
                Inception toOctober 31,
                2007(Unaudited).
            4Statements
                of Cash Flows for the
                three months endedOctober 31,
                2007and 2006 and for the period
                from
                Inception toOctober 31,
                2007(Unaudited).
            5Notes
                to the Financial Statements
                (Unaudited)
            6Item
                2. Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            12Item
                3. Controls and
                Procedures
            16PART
                II. OTHER INFORMATIONItem
                1. Legal
                Proceedings
            17Item
                3. Defaults Upon Senior
                Securities
            17Item
                6.
                Exhibits
            17Signatures
            18





2
 Index





EXOBOX
      TECHNOLOGIESCORP.


(A
      DEVELOPMENT STAGE
      COMPANY)


BALANCE
      SHEETS


(Unaudited)





October 31, 2007
            
            
            July31, 2007ASSETSCurrent
                assetsCash
            
            $
            378
            
            
            $
            8,363Other
                Current
                Assets
            
            
            130,411
            
            
            
            14,000Total
                Current
                Assets
            
            
            130,789
            
            
            
            22,363Property
                and equipment,
                net
            
            
            10,625
            
            
            
            12,164Patents
            
            
            67,233
            
            
            
            67,233Intangibles,
                net
            
            
            2,660
            
            
            
            3,290TOTAL
                ASSETS
            
            $
            211,307
            
            
            $
            105,050LIABILITIESANDSTOCKHOLDERS'
                EQUITY
                (DEFICIT)Current
                Liabilities:Accounts
                Payable
            
            $
            73,988
            
            
            $
            46,148Accounts
                Payable-Stockholder
            
            
            5,176
            
            
            
            4,461Accrued
                Liabilities
            
            
            1,670,137
            
            
            
            1,391,853Advances
                from
                Stockholder
            
            
            266,300
            
            
            
            194,800Convertible
                Note
                Payable
            
            
            -
            
            
            
            105,000Derivative
                Liability
            
            
            
            
            
            
            2,025,042Total
                Current
                Liabilities
            
            
            2,015,601
            
            
            
            3,767,304Note
                Payable
            
            
            500,000
            
            
            
            -Total
                liabilities
            
            
            2,515,601
            
            
            
            3,767,304STOCKHOLDERS'
                EQUITY
                (DEFICIT)Preferred
                stock:Series
                A convertible preferred
                stock, $0.001 par, 2,500,000 shares authorized, 789,539 shares issued
                and
                outstanding atOctober 31,
                2007and 2,031,986
                shares issued and
                outstanding atJuly
                31, 2007
            
            
            790
            
            
            
            2,032Series
                B convertible preferred
                stock, $0.001 par, 2,000,000 shares authorized, 17,668 shares issued
                and
                outstanding atOctober 31,
                2007and 660,132
                shares issued and
                outstanding atJuly
                31, 2007
            
            
            18
            
            
            
            661Series
                C convertible preferred
                stock, $0.001 par, 25,000 shares authorized, 0 shares issued and
                outstanding atOctober 31,
                2007and 19,400
                shares issued and
                19,400 shares outstanding atJuly 31,
                2007
            
            
            -
            
            
            
            19Series
                D convertible preferred
                stock, $0.001 par, 110,150 shares authorized, 19,827 shares issued
                and
                outstanding atOctober 31,
                2007and 104,992
                shares issued and
                outstanding atJuly
                31, 2007
            
            
            20
            
            
            
            105Class
                A Common stock, $0.001 par value, 9,939,101 shares authorized 0 shares
                issued and outstanding at October 31, 2007 and 9,939,101 Shares issued
                and
                outstanding at July 31, 2007
            
            
            -
            
            
            
            9,939Common
                stock, $0.001 par value,
                500,000,000 shares authorized, 274,675,150 shares issued and outstanding
                atOctober 31,
                2007and78,172,639 shares
                issued and outstanding atJuly 31,
                2007
            
            
            274,676
            
            
            
            78,173Additional
                paid-in
                capital
            
            
            3,337,957
            
            
            
            2,736,566Deficit
                accumulated during the
                development stage
            
            
            (5,917,755
            )
            
            
            (6,489,749
            )Total
                stockholders' equity
                (deficit)
            
            
            (2,304,294
            )
            
            
            (3,662,254
            )TOTAL
                LIABILITIESANDSTOCKHOLDERS'
                EQUITY  (DEFICIT)
            
            $
            211,307
            
            
            $
            105,050





See
      accompanying notes to the financial
      statements





3
 Index





EXOBOX
      TECHNOLOGIESCORP.


(A
      DEVELOPMENT STAGE
      COMPANY)


STATEMENTS
      OF
      OPERATIONS


(Unaudited)





Three
                Months
                EndedOctober 31,
                2007
            
            
            Three
                Months
                EndedOctober 31,
                2006 (restated)
            
            
            Inception
                (October 21, 2002)
                toOctober 31,2007Revenues
            
            $
            -
            
            
            $
            -
            
            
            $
            -General
&
                Administrative
            
            
            38,206
            
            
            
            92,270
            
            
            
            597,994Depreciation
                and
                amortization
            
            
            2,168
            
            
            
            2,138
            
            
            
            15,811Professional
                Fees
            
            
            726,597
            
            
            
            44,636
            
            
            
            1,965,850Payroll
                Expenses
            
            
            288,000
            
            
            
            295,229
            
            
            
            2,185,236Software
                development
                expense
            
            
            -
            
            
            
            243
            
            
            
            446,393Research
                and
                Development
            
            
            -
            
            
            
            -
            
            
            
            288,259Total
                Operating
                Expenses
            
            
            1,054,971
            
            
            
            434,516
            
            
            
            5,499,543Loss
                from
                Operations
            
            
            (1,054,971
            )
            
            
            (434,516
            )
            
            
            (5,499,543
            )Other
                Income
                (Expense)Gain
                (Loss) on
                derivatives
            
            
            2,025,042
            
            
            
            (1,539,298
            )
            
            
            100,000Loss
                on Extinguishment of
                Convertible Note
            
            
            (395,000
            )
            
            
            -
            
            
            
            (395,000
            )Interest
                Expense
            
            
            (3,077
            )
            
            
            -
            
            
            
            (123,212
            )Total
                Other Income
                (Expenses)
            
            
            1,626,965
            
            
            
            (1,539,298
            )
            
            
            (418,212
            )Income
                (Loss) Before Income
                Taxes
            
            
            571,994
            
            
            
            (1,973,814
            )
            
            
            (5,917,755
            )-
            
            
            
            -
            
            
            
            -Provision
                for Income
                TaxesNet
                Income
                (Loss)
            
            $
            571,994
            
            
            $
            (1,973,814
            )
            
            $
            (5,917,755
            )Basic
                and
                dilutedNet
                Income (loss) per common
                share-basic
            
            $
            0.00
            
            
            $
            (0.18
            )Weighted
                average shares
                outstanding-basic
            
            
            137,841,642
            
            
            
            10,917,500Net
                Income (loss) per common
                Share-diluted
            
            $
            0.00
            
            
            $
            (0.18
            )Weighted
                average shares
                outstanding-diluted
            
            
            363,312,984
            
            
            
            10,917,500





See
      accompanying notes to the financial
      statements





4
 Index





EXOBOX
      TECHNOLOGIESCORP.


STATEMENTS
      OFCASHFLOWS


(Unaudited)





3
                Months
              Ended
              October 31,
              2007
            
            
            3
                Months
              Ended
              October 31,
              2006
            
            
            Inception
              (October 21,
              2002)
              to
              October 31,
              2007CASH
                FLOWS FROM OPERATING ACTIVITIES
            
            
            
            
            (restated)Net
                Income (Loss)
            
            $
            571,994
            
            
            $
            (1,973,814
            )
            
            $
            (5,917,755
            )Adjustments
                to reconcile net loss to net cash used
                in operating activities:Share-based
                compensation
            
            
            -
            
            
            
            -
            
            
            
            750,000Warrant
                issued for consulting services Stock issued for services
            
            
            434,165213,948
            
            
            
            -
            
            
            
            446,660386,948Depreciation
                and amortization
            
            
            2,168
            
            
            
            2,167
            
            
            
            15,811Loss
                on derivatives and gain on Extinguishment of convertible
                notes
            
            
            (1,630,042
            )-
            
            
            1,634,187
            
            
            
            400,000-Accretion
                of debt discount
            
            
            
            
            
            
            (93,593
            )Changes
                in operating assets and liabilities: Other current assets
            
            
            (3,911
            )
            
            
            
            
            
            
            (17,911
            )Increase
                in Accounts Payable
            
            
            27,841
            
            
            
            20,326
            
            
            
            73,989Increase
                in Accrued Liabilities
            
            
            290,137
            
            
            
            193,500
            
            
            
            1,682,718Accounts
                payable
            
            
            715
            
            
            
            -
            
            
            
            5,176NET
                CASH USED IN OPERATING ACTIVITIES
            
            
            (92,985
            )
            
            
            (217,227
            )
            
            
            (2,174,364
            )CASH
                FLOW FROM INVESTING ACTIVITIESInvestment
                in patents
            
            
            -
            
            
            
            -
            
            
            
            (67,233
            )Investment
                in intangible assets
            
            
            -
            
            
            
            -
            
            
            
            (7,700
            )Investment
                in property and equipment
            
            
            -
            
            
            
            -
            
            
            
            (21,397
            )NET
                CASH USED IN INVESTING ACTIVITIES
            
            
            -
            
            
            
            -
            
            
            
            (96,330
            )CASH
                FLOWS FROM FINANCING ACTIVITIESCapital
                contributions
            
            
            -
            
            
            
            -
            
            
            
            1,874,000Advances
                from stockholder
            
            
            80,500
            
            
            
            -
            
            
            
            347,212Proceeds
                from Warrants Exercised
            
            
            13,500
            
            
            
            
            
            
            
            31,500Repayment
                of advances from stockholders
            
            
            (9,000
            )
            
            
            -
            
            
            
            (81,640
            )Convertible
                note proceeds (payments)
            
            
            -
            
            
            
            100,000
            
            
            
            100,000NET
                CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            85,000
            
            
            
            100,000
            
            
            
            2,271,072NET
                CHANGE IN CASH AND CASH EQUIVALENTS
            
            
            (7,985
            )
            
            
            (117,227
            )
            
            
            378Cash
                and cash equivalents at beginning of period
            
            
            8,363
            
            
            
            117,719
            
            
            
            -Cash
                and cash equivalents at end of period
            
            $
            378
            
            
            $
            492
            
            
            $
            378SUPPLEMENTAL
                DISCLOSURESCash
                paid for interest
            
            $
            3,077
            
            
            $
            -
            
            
            $
            3,197Cash
                paid for income taxes
            
            
            -
            
            
            
            -
            
            
            
            -





See
      accompanying notes to the financial
      statements





5
 Index





EXOBOX
      TECHNOLOGIESCORP.


(A
      DEVELOPMENT STAGE
      COMPANY)


NOTES
      TO THE FINANCIAL
      STATEMENTS


(UNAUDITED)





NOTE
      1 - SUMMARY OF ACCOUNTING
      POLICIES





Organization
      and Nature of Operations. Exobox Technologies Corp. (formerly known as Exobox
      Technologies LLC), referred to as “Exobox” or the “Company”, was incorporated in
      Delaware on June 28, 2004 to patent and market proprietary internet security
      technology. Exobox Technologies LLC was incorporated in Texas on October 21,
      2002 (inception) and legally dissolved with the formation of Exobox Technologies
      Corp. Kilis, Inc. was originally incorporated in Nevada on December 8,
      1999.  OnJune 22,
      2005, Kilis,
      Inc. changed its name to JinPin, Inc.  On September 14, 2005, JinPin,
      Inc. changed its name to Exobox Technologies Corp.  On September 15,
      2005, Exobox (Nevada) acquired Exobox Technologies Corp., a Delaware corporation
      (Exobox) in exchange for 3,513,845 shares of Exobox (Nevada) convertible
      preferred stock (2,392,915 shares of Series A convertible preferred stock and
      1,120,930 shares of Series B convertible preferred stock).  On the
      effective date, all of the issued and outstanding shares of common stock of
      Exobox (Nevada) were converted into the 3,513,845 shares of preferred stock
      of
      Exobox (Nevada) with the Exobox shareholders owning 100% of Exobox’s outstanding
      shares of preferred stock.





Exobox
      is a developer of innovative
      enterprise and home user endpoint and server security software products,
      headquartered inHouston,Texas.Exobox’s
      patented and
      patent-pending technology is based on enforcing appropriate system and
      application behaviors by isolating and controlling real-time access to the
      file
      system, memory, network and inter-process communication with the goal to insure
      that the security implemented is proactive, not reactive. Exobox’s technology
      creates an isolated user environment that protects the host environment from
      all
      unauthorized modifications by treating all data from all sources as if it is
      malicious. Traditional computer security, such as common anti-virus and
      anti-spy/ad-ware, tends to rely on a data-base of known signatures, rendering
      it
      capable only of attempting to provide security against perpetually updated
      lists
      of previously identified threats. Exobox’s technology integrates into the
      operating system, which enables it to provide protection for the user’s computer
      and network.





Use
      of
      Estimates. In preparing financial statements, management makes estimates and
      assumptions that affect the reported amounts of assets and liabilities in the
      balance sheet and expenses in the statement of expenses. Actual results could
      differ from those estimates. Areas involving the use of significant estimates
      include revenue recognition; estimation of our allowance for doubtful accounts
      and billing adjustments; valuation and recoverability of long-lived assets,
      including depreciation, impairment, amortization and intangible assets;
      determination of technological feasibility and capitalization of software
      development costs; and income taxes.





Property
      and Equipment.  Property and Equipment is stated at cost and
      depreciated using the straight-line method over the shorter of the estimated
      useful life of the asset or the least term, ranging from three to five
      years.  Significant improvements and betterments are
      capitalized.  Routine repairs and maintenance are expensed when
      incurred.  When property and equipment is sold or otherwise disposed
      of, the asset account and related accumulated depreciation account are relieved,
      and any gain or loss is included in operations.





Impairment
      of Long−lived assets. Exobox periodically reviews the carrying value of
      intangible assets not subject to amortization to determine whether impairment
      may exist. Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill
      and Other Intangible Assets”, requires that certain intangible assets be
      assessed annually for impairment using fair value measurement techniques. The
      impairment test for other intangible assets not subject to amortization consists
      of a comparison of the fair value of the intangible asset with its carrying
      value. If the carrying value of the intangible asset exceeds its fair value,
      an
      impairment loss is recognized in an amount equal to that excess. The estimates
      of fair value of intangible assets not subject to amortization are determined
      using various discounted cash flow valuation methodologies. Significant
      assumptions are inherent in this process, including estimates of discount rates.
      Discount rate assumptions are based on an assessment of the risk inherent in
      the
      respective intangible assets.





Revenue
      Recognition. Exobox recognizes revenue when persuasive evidence of an
      arrangement exists, services have been rendered, the sales price is fixed or
      determinable, and collectability is reasonably assured. For the period from
      Inception to October 31, 2007, Exobox had no revenues.





Income
      Taxes. Income taxes are computed using the asset and liability method. Under
      the
      asset and liability method, deferred income tax assets and liabilities are
      determined based on the differences between the financial reporting and tax
      bases of assets and liabilities and are measured using the currently enacted
      tax
      rates and laws. A valuation allowance is provided for the amount of deferred
      tax
      assets that, based on available evidence, are not expected to be
      realized.





Earnings
      Per Share.  Basic and diluted earnings or loss per share (EPS) amounts
      in the financial statements are computed in accordance with SFAS No. 128,
      "Earnings Per Share." Basic EPS is based on the weighted average number of
      common shares outstanding. Diluted EPS is based on the weighted average number
      of common shares outstanding and dilutive common stock equivalents. Basic EPS
      is
      computed by dividing net income/loss available to common stockholders
      (numerator) by the weighted average number of common shares outstanding
      (denominator) during the period.





6
 Index








For
                the Quarter EndedOctober 31,
                2007Income
              (Numerator)
            
            
            Shares
              (Denominator)
            
            
            Per-Share
              AmountNet
                Income
            
            $
            571,994Less:
                Preferred stock
                dividends
            
            
            (0
            )Basic
                EPSIncome
                available to common
                stockholders
            
            
            571,994
            
            
            
            137,841,642
            
            
            $
            0.00Effect
                of Dilutive
                SecuritiesWarrants
            
            
            
            
            
            
            4,995,761Convertible
                preferred
                stock
            
            
            0
            
            
            
            220,475,581Diluted
                EPSIncome
                available to common
                stockholders + assumed conversions
            
            $
            571,994
            
            
            
            363,312,984
            
            
            $
            0.00





Potential
      shares related to preferred
      stock that was not converted during the quarter endedOctober 31, 2006werenot
      included in the computation of
      diluted EPSbecause their
      conversion would have an antidilutive effect on the computation of diluted
      loss
      per share.





Fair
      Value of Financial Instruments.  Fair value is described as the amount
      at which the instrument could be exchanged in a current transaction between
      informed willing parties, other than a forced liquidation.  Cash and
      cash equivalents, accounts receivable and payable, accrued expenses and other
      current liabilities are reported on the balance sheet at carrying value which
      approximates fair value due to the short-term maturities of these
      instruments.  Exobox does not have any off balance sheet financial
      instruments.





Derivatives.  Exobox
      has used a financial derivative instrument on our debt outstanding. We account
      for our derivative instruments under the provisions of Statement of Financial
      Accounts Standard ("SFAS") No. 133, “Accounting for Derivative Instruments and
      Hedging Activities.” Under this statement, derivative instruments, other than
      those meeting the normal purchases and sales exception or other exceptions,
      are
      recorded on our balance sheet as either assets or liabilities measured at fair
      value determined by reference to published future market prices and interest
      rates with changes in the fair value of derivatives recorded in net income
      or
      other comprehensive income as appropriate.





Research
      and Product Development. Research and product development includes all research
      and development expenses and software development costs. We expense all research
      and development expenses as incurred. We expense all software development costs
      associated with establishing technological feasibility, which we define as
      completion of beta testing. Because of the insignificant amount of costs
      incurred between completion of beta testing and general customer release, we
      have not capitalized any software development costs in the accompanying
      financial statements.





Recent
      Accounting Pronouncements. OnFebruary
      1,
      2006, Exobox adopted SFAS
      No. 123(R), “Share-Based Payment.” SFAS 123(R) replaced SFAS No. 123 and
      supersedes APB Opinion No. 25. SFAS 123(R) requires all share-based payments
      to
      employees, including grants of employee stock options, to be recognized in
      the
      financial statements based upon their fair values. The pro forma disclosures
      previously permitted under SFAS No. 123 are no longer an alternative to
      financial statement
      recognition. As ofOctober31, 2007, Exobox had no outstanding
      employee
      stock options.





In
      September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board 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’s management is
      currently evaluating the effect of this pronouncement on the financial
      statements.





7
 Index





In
      July
      2006, the FASB released FASB Interpretation No. 48, Accounting for Uncertainty
      in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48) FIN 48
      clarifies the accounting and reporting for uncertainties in income tax law.
      This
      interpretation prescribes a comprehensive model for the financial statement
      recognition, measurement, presentation and disclosure of uncertain tax positions
      taken or expected to be taken in income tax returns. This statement is effective
      for fiscal years beginning after December 15, 2006. The Company’s management
      believes that the effect of the adoption of FIN 48 will be
      immaterial.





In
      February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments.” SFAS No. 155 amends SFAS No 133, “Accounting for
      Derivative Instruments and Hedging Activities,” and SFAF No. 140, “Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities.” SFAS No. 155, permits fair value remeasurement for any hybrid
      financial instrument that contains an embedded derivative that otherwise would
      require bifurcation, clarifies which interest-only strips and principal-only
      strips are not subject to the requirements of SFAS No. 133, establishes a
      requirement to evaluate interest in securitized financial assets to identify
      interests that are freestanding derivatives or that are hybrid financial
      instruments that contain an embedded derivative requiring bifurcation, clarifies
      that concentrations of credit risk in the form of subordination are not embedded
      derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
      qualifying special-purpose entity from holding a derivative financial instrument
      that pertains to a beneficial interest other than another derivative financial
      instrument. The Company’s management believe that there will be no material
      effect to its financial statements by SFAS No. 155.





In
      May
      2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections".
      SFAS No. 154 replaces APB Opinion No. 20 "Accounting Changes" and SFAS No.
      3,
      "Reporting Accounting Changes in Interim Financial Statements". SFAS No. 154
      requires retrospective application to prior periods' financial statements of
      changes in accounting principle, unless it is impracticable to determine either
      the period-specific effects or the cumulative effect of the change. The adoption
      of SFAS No. 154 did not impact the Company's financial statements.





Certain
      reclassifications have been made to the prior years’ financial statements to
      conform to the current year presentation. These reclassifications had no effect
      on previously reported results of operations, financial position, or cash
      flows.





NOTE
      2 - GOING
      CONCERN





From
      Inception toOctober31,
      2007, Exobox has accumulated
      losses of
      $5,917,755.
      The ability of Exobox to emerge from
      the development stage with respect to any planned principal business activity
      is
      dependent upon its success in raising additional equity financing and/or
      attaining profitable operations. Management has plans to seek additional
      capital. There is no guarantee that Exobox will be able to complete any of
      the
      above objectives. These factors raise substantial doubt regarding Exobox's
      ability to continue as a going concern.





NOTE
      3 –
PATENTS





Exobox
      has two technological inventions with patents pending in United States and
      throughout the world.   The rights and interest include, among
      other things, (i) the patent applications and any changes or amendments thereto,
      (ii) the invention, (iii) the technical information, trade secrets, identities
      of customers, studies, plans, drawings, blueprints and specifications,
      production methods, (iv) the embodiment of any claim described and claimed
      in
      any valid claim of the patent application, (v) right to file foreign patent
      applications, and (vi) any all patents resulting from current patent
      applications.





Patents
      are mainly comprised of legal services paid to a shareholder and patent
      application fees.  No amortization will be recorded until the patents
      have been granted.





NOTE
      4 -
      INCOME TAXES





Exobox
      has incurred net losses since inception and, therefore, has no tax
      liability.  The net deferred tax asset generated by the loss
      carry-forward has been fully reserved. The cumulative net operating loss
      carry-forward is approximately $2 million at October 31, 2007, and will expire
      in the years 2023 through 2025.





At
      October 31, 2007, deferred tax assets consisted of the following:





Deferred
                tax assets
            
            $
            750,000Valuation
                allowance
            
            
            (750,000
            )Net
                deferred taxes
            
            $
            0





8
 Index





NOTE
      5 –
RELATED PARTIES





Accounts
      payable to stockholders represent amounts owed to stockholders primarily for
      reimbursement of general and administrative costs paid on behalf of
      Exobox.  Accounts payable to stockholders totaled $5,176 at October
      31, 2007.





Certain
      of Exobox’s stockholders have advanced cash to the company for working capital
      purposes.  The advances are payable upon demand and do not accrue
      interest.  Advances totaled $266,300 at October 31, 2007.





Exobox
      paid consulting fees to certain executive officers and stockholders totaling
      $0
      during the quarter ended October 31, 2007and $0 in related party consulting
      fees
      during the year ended July 31, 2007.








NOTE
      6 –
COMMITMENTS





Beginning
      in September 2004, Exobox leased an office in Houston, Texas from a third party
      for $500 per month.  The lease is on a month-to-month
      basis.  Rent expense totaled $1,500 for the quarter ended October 31,
      2007.








NOTE
      7 – STOCKHOLDERS’
EQUITY





Exobox
      is
      authorized to issue 500,000,000 shares of Class A common stock and undesignated
      common stock, $.001 par value, and 4,630,150 shares of preferred stock, $.001
      par value, of which 2,500,000 shares have been designated Series A convertible
      preferred stock, 2,000,000 shares have been designated Series B convertible
      preferred stock, 25,000 shares have been designated Series C convertible
      preferred stock and 110,150 shares have been designated Series D convertible
      preferred stock.





Common
      Stock





Holders
      of common stock are entitled to one vote per share on all matters to be voted
      upon by the shareholders and holders of Class A common stock are entitled to
      100
      votes per share. Except as otherwise provided by law, the holders of shares
      of
      common stock vote as one class.





Except
      for the voting rights for Class A common stock, each share of common stock
      shall
      have the same relative powers, preferences and rights as, and shall be identical
      in all respects with, all our other shares of common stock.





Shares
      of
      Class A common stock convert to shares of common stock in certain circumstances,
      including (i) upon sale or other transfer, (ii) at the time the holder of shares
      of Class A common stock ceases to be affiliated with our company, and (iii)
      upon
      the sale of the shares in a registered public offering.





Preferred
      Stock





Exobox
      is
      authorized to issue 4,630,150 shares of preferred stock in one or more
      series.





Series
      A
      Convertible Preferred Stock. Exobox designated 2,500,000 shares as “Series A
      convertible preferred stock." The shares of the Series A preferred stock rank
      prior to the common stock, and prior to any class or series of capital stock
      now
      outstanding or hereafter created. No dividends shall be payable to the holder
      of
      shares of Series A preferred stock, except dividends in liquidation. Each share
      of Series A preferred stock has the number of votes equal to the number
      authorized by the shares of Class A common stock into which such share of Series
      A preferred stock is then convertible. Except as otherwise required by law,
      the
      holders of shares of common stock and Series A preferred stock shall vote
      together and not as separate classes.





Series
      A
      preferred stock is convertible 12 months after issue into common
      stock.  The shares of Series A preferred, along with the shares of
      Series B preferred, are convertible into 92% of the total outstanding common
      before the issuance of any shares of Series C preferred stock. The holders
      of
      Series A preferred vote on an as converted basis.





Series
      B
      Preferred Stock. Exobox has designated 2,000,000 shares as Series B convertible
      preferred stock. The shares of the Series B preferred stock rank prior to the
      common stock; and prior to any class or series of capital stock now outstanding
      or hereafter created. No dividends shall be payable to the holder of shares
      of
      Series B preferred stock, except dividends in liquidation. Each share of
      outstanding Series B preferred stock has the number of votes equal to the number
      of shares of common stock into which such share of Series B preferred stock
      is
      then convertible. Except as otherwise required by law or by the Articles, the
      holders of shares of common stock and Series B preferred stock shall vote
      together and not as separate classes.





Series
      B
      preferred stock is convertible 12 months after issue into common stock. The
      shares of Series B preferred, along with the shares of Series A preferred,
      are
      convertible into 92% of the total outstanding common before the issuance of
      any
      shares of Series C preferred stock. The holders of Series B preferred vote
      on an
      as converted basis.





9
 Index





Series
      C
      Preferred Stock. Exobox has designated 20,000 shares as Series C convertible
      preferred stock each in the face amount of $25. No dividends shall be payable
      to
      the holders of shares of Series C preferred stock.





The
      Shares of Series C preferred stock are collectively convertible into five (5%)
      percent of the total number of outstanding shares of all classes of common
      stock
      immediately after conversion of all outstanding shares of Series A and Series
      Bpreferred stock.





Series
      D
      Preferred Stock. Exobox has designated 110,150 shares as Series D convertible
      preferred stock each in the face amount of $0.001. No dividends shall be payable
      to the holders of shares of Series D preferred stock.





The
      Shares of Series D preferred stock are collectively convertible into 4.00064800% of the total
      number of outstanding shares of all classes of common stock immediately after
      conversion of all outstanding shares of Series A, Series B, and Series C
      preferred stock.





During
      August through December, 2007, all of the holders of the all of the Company’s
      Class A Common Stock, Series A Preferred Stock, Series B Preferred Stock and
      Series D Preferred Stock converted into shares of the Company’s common
      stock.  Due to the conversions the Company exchanged (i) 9,939,101
      shares of common stock for 9,939,101 shares of our Class A Common Stock, (ii)
      187,062,449 shares of our common stock for 2,031,986 shares of Series A
      Preferred Stock, (iii) 58,041,041shares of our common stock for 660,132 shares
      of Series B Preferred Stock and (iv) 14,013,930 shares of our common stock
      for
      104,992 shares of Series D Preferred Stock.








Stock
      Option, Stock Warrant and Stock Award Plan





On
      September 15, 2005, Exobox adopted a stock option, stock warrant and stock
      award
      plan for officers, directors, consultants and key employees of Exobox. Exobox
      will reserve 1,630,125 shares of common stock, warrants, options, preferred
      stock or any combination thereof for the plan.





OnJune
      18, 2007Exobox filed with the
      SEC an S-8
      registration statement registering 20,000,000 shares reserved for officers,
      directors, consultants and key employees of Exobox.





WARRANTS


At
      October 31, 2007, Exobox had outstanding and exercisable warrants to purchase
      an
      aggregate of 5,892,500 shares of


common
      stock. The weighted average remaining life is 3.52 years and the weighted
      average price per share is $0.23 per share as follows:





The
      status of the warrants as of October 31, 2007, is as follows:





WeightedAverageExerciseWarrants
                Outstanding and Exercisable
            
            Warrants
            
            
            PriceOUTSTANDING,
                July 31, 2005
            
            
            -
            
            
            
            -Granted
            
            
            4,550,000
            
            
            $
            0.20Expired
            
            
            -
            
            
            
            -Exercised
            
            
            -
            
            
            
            -OUTSTANDING,
                July 31, 2006
            
            
            4,550,000
            
            
            $
            0.20Granted
            
            
            -
            
            
            
            -Expired
            
            
            -
            
            
            
            -Exercised
            
            
            (90,000
            )
            
            $
            0.20OUTSTANDING,
                July 31, 2007
            
            
            4,460,000
            
            
            $
            0.20Granted
            
            
            1,500,000
            
            
            $
            0.30Expired
            
            
            -
            
            
            
            -Exercised
            
            
            (67,500
            )
            
            $
            0.20OUTSTANDING,
                July 31, 2007
            
            
            5,892,500
            
            
            $
            0.23





Following
      is the details of warrants outstanding as of October 31, 2007





Number
                of Common Stock Equivalents
            
            Expiration
                Date
            
            Remaining
                Contracted Life (Years)
            
            
            Exercise
                Price4,342,500
            
            10/31/2010
            
            
            3.00
            
            
            $
            0.201,500,000
            
            9/24/2012
            
            
            5
            
            
            $
            0.3050,000
            
            7/31/2011
            
            
            3.75
            
            
            $
            0.25





10
 Index





For
      the
      quarter ended October 31, 2007, 67,500 warrants were exercised at an exercise
      price of $0.20 per share for total proceeds of $13,500.





Note
      Payable





On
      September 14, 2006, Exobox received $100,000 cash from a Preferred Shareholder
      in exchange for a 10% Convertible Promissory Note for $100,000 due on January
      1,
      2007. The conversion option of this note was determined to be a
      derivative.  The note payable was in default at July 31, 2007and was
      subsequently cancelled.   Effective September 10, 2007, we
      entered into a settlement agreement and mutual release with Manillo Investments,
      Ltd (“Manillo Settlement”), pursuant to which we agreed to issue Manillo
      Investment, Ltd a new promissory note in the principal amount of $500,000 with
      principal and accrued interest due in five years in exchange for Manillo
      Investment, Ltd. (i) cancelling a convertible note with an outstanding balance
      as of July 31, 2007 of $105,000, (ii) terminating the securities purchase
      agreement issued in connection with the convertible note, and (iii) assigning
      the Series C Preferred Stock to us.  Therefore as a result of the
      Manillo Settlement, there are no Series C Preferred Stock
      outstanding.








NOTE
      8 –
SUBSEQUENT EVENTS





Mr.
      Dillon has $352,000 of accrued salary through October 31, 2007 and has agreed
      to
      be paid in cash of 15% or $52,800 and 85% in Company common stock valued on
      November 12, 2007.  Mr. Dillon was issued 2,992,000 shares of Exobox
      Common Stock on November 20, 2007 and has agreed to be paid his 15% cash portion
      at the time the Company determines it has sufficient cash to make such
      payment.





Mr.
      Copeland has $352,000 of accrued salary through October 31, 2007 and has agreed
      to be paid in cash of 15% or $52,800 and 85% in Company common stock valued
      on
      November 12, 2007.  Mr. Copeland was issued 2,992,000 shares of Exobox
      Common Stock on November 20, 2007 and has agreed to be paid his 15% cash portion
      at the time the Company determines it has sufficient cash to make such
      payment.





Mr.
      Wittenburg has $352,000 of accrued salary through October 31, 2007 and has
      agreed to be paid in cash of 15% or $52,800 and 85% in Company common stock
      valued on November 12, 2007.  Mr. Wittenburg was issued 2,992,000
      shares of Exobox Common Stock on November 20, 2007 and has agreed to be paid
      his
      15% cash portion at the time the Company determines it has sufficient cash
      to
      make such payment.





Mr.Perniahas
      $352,000 ofaccrued salary
      through
      October 31, 2007 and has agreed to be paid in cash of 15% or $52,800 and 85%
      in
      Company common stock valued on November 12, 2007.  Mr. Pernia was
      issued 2,992,000 shares of Exobox Common Stock on November 20, 2007 and has
      agreed to be paid his 15% cash portion at the time the Company determines it
      has
      sufficient cash to make such payment.





Mr.
      Wirtz
      has $212,000 of accrued salary through October 31, 2007 and has agreed to be
      paid in cash of 15% or $31,800 and 85% in Company common stock valued on
      November 12, 2007.  Mr. Wirtz was issued 1,802,000 shares of Exobox
      Common Stock on November 20, 2007 and has agreed to be paid his 15% cash portion
      at the time the Company determines it has sufficient cash to make such
      payment.








NOTE
      9--RESTATEMENT





The
      Company determined that its
      compensation expense was
      understated by $193,500 in the quarter endedOctober31,
      2006and needed toaccrue
      in 2006 an amount of
      $193,500.




11
 Index




Below
      is the detailed effect of the
      restatement:





2006
            
            
            2006As Reported
            
            
            As RestatedBalance
                SheetASSETSCurrent
                Assets
            
            $
            493
            
            
            $
            493Non-current
                Assets
            
            $
            89,189
            
            
            $
            89,189TOTAL
                ASSETS
            
            $
            89,682
            
            
            $
            89,682LIABILITIESCurrent
                Liabilities
            
            $
            1,744,374
            
            
            $
            1,937,874Non-current
                Liabilities
            
            
            -
            
            
            
            -Total
                Liabilities
            
            $
            1,744,374
            
            
            $
            1,937,874STOCKHOLDERS'
                EQUITYCapital
                Stock
            
            $
            14,562
            
            
            $
            14,562Additional
                Paid-in
                capital
            
            $
            2,621,933
            
            
            $
            2,621,933Accumulated
                Deficit
            
            $
            (4,291,187
            )
            
            $
            (4,484,687
            )TOTAL
                STOCKHOLDERS'
                EQUITY
            
            $
            (1,654,692
            )
            
            $
            (1,848,192
            )TOTAL
                LIABILITIESANDSTOCKHOLDERS'
                EQUITY
            
            $
            89,682
            
            
            $
            89,682Statement
                of
                OperationsNet
                Revenue
            
            
            -
            
            
            
            -Total
                Operating
                Expenses
            
            $
            1,780,314
            
            
            $
            434,516Loss
                from
                Operations
            
            $
            (1,780,314
            )
            
            $
            (434,516
            )Other
                Expenses
            
            
            -
            
            
            $
            (1,539,298
            )Loss
                before Income
                Taxes
            
            $
            (1,780,314
            )
            
            $
            (1,973,814
            )
              )Provision
                for Income
                Taxes
            
            
            -
            
            
            
            -Net
                Loss
            
            $
            (1,780,314
            )
            
            $
            (1,973,814
            )Earnings
                (Loss) per common share
                (basic and diluted)
            
            $
            (0.16
            )
            
            $
            (0.18
            )Weighted
                averages shares
                outstanding
            
            
            10,917,500
            
            
            
            10,917,500STATEMENTS
                OFCASHFLOWSNet
                Income
                (Loss)
            
            $
            (1,780,314
            )
            
            $
            (1,973,814
            )Net
                cash used in operating
                activities
            
            $
            (217,227
            )
            
            $
            (217,227
            )Net
                cash used in investing
                activities
            
            
            -
            
            
            
            -Net
                cash provided by financing
                activities
            
            $
            100,000
            
            
            $
            100,000Net
                decrease in cash and cash
                equivalents
            
            $
            117,227
            
            
            $
            117,227






PART
      I





ITEM
      2





MANAGEMENT'S
      DISCUSSIONANDANALYSIS
      OF FINANCIAL CONDITIONANDRESULTS
      OF
      OPERATIONS





This
      report on Form 10-QSB contains
      forward-looking statements within the meaning of Section 27A of the Securities
      Act of 1933, as amended, and Section 23E of the Securities Act of 1934, as
      amended. These statements relate to the Company's expectations regarding future
      events or future financial performance. Any statements contained in this report
      that are not statements of historical fact may be deemed forward-looking
      statements. In some cases, forward-looking statements can be identified by
      terminology such as "may," "will," "should," "expect," "plan," "anticipate,"
      "intend", "believe," "estimate," "predict," "potential" or "continue," or the
      negative of such terms or other comparable terminology. These statements are
      only predictions. Actual events or results may differ
      materially.





Although
      the Company believes that the
      expectations reflected in the forward-looking statements are reasonable, the
      Company cannot guarantee future results, levels of activity, performance or
      achievements. Moreover, neither the Company, nor any other entity, assumes
      responsibility for the accuracy and completeness of the forward-looking
      statements. The Company is under no obligation to update any of the
      forward-looking statements after the filing of this Form 10-QSB to conform
      such
      statements to actual results or to changes in the Company's
      expectations.





12
 Index





The
      following discussion should be read
      in conjunction with the Company's condensed consolidated financial statements,
      related notes and the other financial information appearing elsewhere in this
      Form 10-QSB. Readers are also urged to carefully review and consider the various
      disclosures made by the Company, which attempt to advise interested parties
      of
      the factors which affect the Company's business, including without limitation,
      the disclosures made under the caption "Certain Factors That May Affect Future
      Performance."





Certain
      Factors that may Affect Future
      Performance





We
      have a limited operating history with
      significant losses and expect losses to continue for the foreseeable
      future.





We
      have incurred annual operating losses
      since our inception. As a result, atOctober31,
      2007, we had an accumulated
      deficit of
      $5,917,755.
      We had no gross revenuesfor the quarterendedOctober31,
      2007, anda
      lossfrom operations of $1,054,971.
      As we pursue our business plan, we
      expect our operating expenses to increase significantly, especially in the
      areas
      of sales and marketing. As a result we expect continued losses in fiscal 2008
      and thereafter.





We
      will not be able
      to continue our business operations unless we raise additional
      financing.





We
      are a development stage company and
      as such have generated no revenues or profits to date.  Our success
      will depend on the ability to attract external financing for our working capital
      needs and to develop our patent rights in connection with our software
      solutions.  As of the date hereof, we do not have sufficient funding
      to satisfy our working capital needs or to develop our products and, the failure
      to obtain sufficient funding, will preclude us from conducting meaningful
      business operations. We have historically financed our operations through best
      efforts private equity and debt financings. We do not have any commitments
      for
      equity or debt funding at this time, and additional funding may not be available
      to us on favorable terms, if at all.





We
      may not be able
      to meet our current and future liabilities and remain in operation until we
      receive additional capital.





As
      ofOctober31,
      2007,
      we have current assets of
      $130,789and
      current liabilities of $2,015,601, of
      which $1,670,137 is for an accrued liability.  In connection with the
      Manillo Settlement, the $105,000 convertible note has been replaced with a
      long
      term note with an original principal amount of $500,000. Additionally, as a
      result of the Manillo Settlement, in which the Series C Preferred Stock was
      returned to us, the derivativeliability of $2,025,042
      has been
      reversed forthe quarter
      endingOctober 31,
      2007and will no longer be
      reflected on our balance sheet on that date.  Our current liquidity
      position only allows us to meet nominal working capital needs.  We
      will need $750,000 to meet our working capital needs through fiscal
      2008.  Any failure to obtain such financing could force us to abandon
      or curtail our operations.





We
      will need to
      raise additional funds to fund product development.





Our
      cash does not afford us adequate liquidity
      to fundproduct development.  In order
      to fund our product development, including marketing and testing, we will need
      toraise at least an
      additional $2,000,000 over the next two years.Moreover, we anticipate
      that we will
      need additional capital in excess of $7,000,000 million to continue to fund
      and
      expand our business operations. There is no assurance that we can raise
      additional capital from external sources, the failure of which could cause
      us to
      sell assets or curtail operations.





Ours
      auditor has substantial doubts as
      to our ability to continue as agoingconcern.





Our
      auditor's report on ourJuly31,
      2007financial statements
      expresses an
      opinion that substantial doubt exists as to whether we can continue as an
      ongoing business.  Because we do not have sufficient capital, we may
      be required to suspend or cease the implementation of our business plans within
      12 months. Becauseof
      thesubstantial doubt as
      to
      whether we can continue as agoingconcern
      it may be more difficult for us
      to attract investors.  Our future is dependent upon our ability to
      obtain financing and upon future profitable operations from the sale of our
      products.





Additional
      capital
      may dilute current stockholders.





In
      order to provide capital for the
      operation of our business we may enter into additional financing arrangements.
      These arrangements may involve the issuance of new common stock, preferred
      stock
      that is convertible into common stock, debt securities that are convertible
      into
      common stock or warrants for the purchase of common stock. Any of these items
      could result in a material increase in the number of shares of common stock
      outstanding which would in turn result in a dilution of the ownership interest
      of existing common shareholders. In addition, these new securities could contain
      provisions, such as priorities on distributions and voting rights, which could
      affect the value of our existing common stock.





The
      market price of
      our common stock is very volatile and the value of your investment may be
      subject to sudden decreases.





13
 Index





The
      trading price for our common stock
      has been, and we expect it to continue to be, volatile. For example, the price
      of our stock has fluctuated between $22.00 per share
      and
      $0.10per share sinceJanuary
      1, 2006. The price at which
      our common stock
      trades depends upon a number of factors, including our historical and
      anticipated operating results, and general market and economic conditions,
      which
      are beyond our control.  In addition, the stock market has, from time
      to time, experienced extreme price and volume fluctuations. These broad market
      fluctuations may lower the market price of our common stock. Moreover, during
      periods of stock market price volatility, share prices of many companies have
      often fluctuated in a manner not necessarily related to their operating
      performance. Accordingly, our common stock may be subject to greater price
      volatility than the stock market as a whole.





We
      lack an operating
      history which you can use to evaluate us, making any investment in us
      risky.





We
      lack an operating history which
      investors can use to evaluate our previous earnings. This makes it harder for
      you as an investor to predict how we may do in the future. Therefore, an
      investment in us is risky because we have no business history and it is hard
      to
      predict what kind of return our stock will have in the future, if at
      all.





There
      can be no assurance that we
      will successfully commercialize any products or services.





There
      can
      be no assurance that we will successfully commercialize any products and
      services based on our technology or manage the related manufacturing, marketing,
      sales, licensing and customer support operations in a profitable manner. In
      particular, our prospects must be considered in light of the problems, delays,
      expenses and difficulties encountered by any company in the startup stage,
      many
      of which may be beyond our control. These problems, delays, expenses and
      difficulties include unanticipated problems relating to product development
      and
      formulation, testing, quality control, production, inventory management, sales
      and marketing and additional costs and competition, any of which could have
      a
      material adverse effect on our business, financial condition and results of
      operations. There can be no assurance that our products and services can be
      successfully marketed or that it will ever achieve significant revenues or
      profitable operations.





To
      develop our
      software solutions we will need to engage third party developers.





At
      this time, we do not have the
      resources to directly conduct full product development, obtain regulatory
      approvals, or manufacture or commercialize any products. Therefore, we depend
      upon others to carry out such activities. As a result, we anticipate that we
      may
      enter into collaborative agreements with third parties able to contribute to
      developing our technologies. Such agreements may limit our control over any
      or
      all aspects of development.





There
      can be no assurance that we will
      ever be profitable.





To
      be profitable, we must successfully
      commercialize our technologies. We are in the early stages of development and
      will require significant further research, development and testing, and are
      subject to the risks of failure inherent in the development of products based
      on
      innovative or novel technologies.





Our
      industry changes
      rapidly due to evolving technology standards and our future success will depend
      on our ability to adapt to market change.





Our
      future success will depend on our
      ability to address the increasingly sophisticated needs of the market. We will
      have to keep pace with technological developments, evolving industry standards
      and changing customer requirements. We expect that we will have to respond
      quickly to rapid technological change, changing customer needs, frequent new
      product introductions and evolving industry standards that may render our
      contemplated products obsolete. We may not have sufficient resources to make
      the
      necessary investments, which could have a material adverse effect on our
      business.





We
      depend upon our
      intellectual property and our failure to protect existing intellectual property
      or secure and enforce such rights for new proprietary technology could adversely
      affect our future growth and success.





Our
      ability to successfully protect our
      proprietary technology is essential to our success. We have filed trademark
      and
      patent applications to protect intellectual property rights for technology
      that
      we have developed. Our future success also may depend upon our ability to obtain
      additional licenses for other intellectual properties. We may not be successful
      in acquiring additional intellectual property rights with significant commercial
      value on acceptable terms. Even if we are successful in acquiring such rights,
      it can provide no assurance that we will be successful in adapting or deploying
      them as to the timing or cost of such development efforts or as to the
      commercial success of the resulting products or services.





Our
      competitors may
      develop non-infringing products or technologies that adversely affect our future
      growth and revenues.





It
      is possible that our competitors will
      produce proprietary technologies similar to ours without infringing on our
      intellectual property rights. We also rely on unpatented proprietary
      technologies. It is possible that others will independently develop the same
      or
      similar technologies or otherwise obtain access to the unpatented technologies
      upon which we rely for future growth and revenues. Failure to meaningfully
      protect our trade secrets, know-how or other proprietary information could
      adversely affect our future growth and revenues.





14
 Index





Our
      success is
      dependent upon our ability to protect our proprietary technologies.





Our
      success is substantially dependent
      upon our proprietary technologies and our ability to protect our intellectual
      property rights.Exobox was granted its second patent, Application No.
      7,281,266, issued on October 9, 2007 from the United States Patent and Trademark
      Office (USPTO).We currently have
      filed for 20 patent applications with the U.S. Patent Office and other foreign
      patent offices that relate to software security solutions. We rely upon our
      patent applications and trade secret laws, non-disclosure agreements with our
      employees, consultants and third parties to protect our intellectual property
      rights. The complexity of patent and common law, combined with our limited
      resources, create risk that our efforts to protect our proprietary technologies
      may not be successful. We cannot assure you that our patent applications will
      be
      upheld or that third parties will not invalidate our patent rights. In the
      event
      our intellectual property rights are not upheld, such an event would have a
      material adverse effect on us. In addition, there is a risk that third parties
      may independently develop substantially equivalent or superior
      technologies.





Any
      litigation to
      protect our intellectual property or any third party claims to invalidate our
      patents could have a material adverse effect on our business.





Our
      success depends on our ability to
      protect our intellectual property rights. In the future, it may be necessary
      for
      us to commence patent litigation against third parties whom we believe require
      a
      license to our patents. In addition, we may be subject to third-party claims
      seeking to invalidate our patents. These types of claims, with or without merit,
      may subject us to costly litigation and diversion of management’s focus. In
      addition, based on our limited financial resources, we may not be able to pursue
      litigation as aggressively as competitors with substantially greater financial
      resources. Based on our limited financial resources, it may be necessary for
      us
      to engage third party professionals on a contingency basis pursuant to which
      such parties would be entitled to share in the proceeds of any successful
      enforcement of our intellectual property rights. If third parties making claims
      against us seeking to invalidate our patent are successful, they may be able
      to
      obtain injunctive or other equitable relief, which effectively could block
      our
      ability to license or otherwise capitalize on our proprietary technologies.
      Successful litigation against us resulting in a determination that our patent
      applications are invalid would have a material adverse effect on
      us.





We
      may be unable to
      successfully compete against companies with resources greater than ours, if
      we
      are unable to protect our patent rights and trade secrets, or if we infringe
      on
      the proprietary rights of third parties.





We
      will need to obtain additional
      patents on our technology to protect our rights to our technology. To obtain
      a
      patent on an invention, one must be the first to invent it or the first to
      file
      a patent application for it. We cannot be sure that the inventors of subject
      matter covered by patents and patent applications that we own or may license
      in
      the future were the first to invent, or the first to file patent applications
      for, those inventions. Furthermore, patents we own or may license in the future
      may be challenged, infringed upon, invalidated, found to be unenforceable,
      or
      circumvented by others, and our rights under any issued patents may not provide
      sufficient protection against competing software or otherwise cover commercially
      valuable software or processes.





We
      seek to protect trade secrets and
      other un-patented proprietary information, in part by means of confidentiality
      agreements with our collaborators, employees, and consultants. If any of these
      agreements is breached, we may be without adequate remedies. Also, our trade
      secrets may become known or be independently developed by
      competitors.





Our
      industry is
      competitive and as such competitive pressures could prevent us from obtaining
      profits, forcing us to abandon or curtail our business plan and possibly
      liquidate our assets.





One
      of the main factors in determining
      in whether we will be able to realize any profits and/or be able to continue
      its
      business plan will be whether or not we are able to successfully compete in
      the
      software industry. The virus protection software industry is highly competitive
      and we may be competing against companies with greater resources and more
      experience in the industry. If we are unable to compete in the marketplace
      and
      fail to generate any profits, we may be forced to liquidate its assets and
      any
      investment in us could be lost.





We
      are under a
      government investigation which clouds our ability to conduct
      business.





In
      November 2006, we received a subpoena
      from the United States Securities & Exchange Commission requesting the
      production of documents fromJanuary 1, 2000until
      present and testimony; this formal
      inquiry following up an informal inquiry commenced in September 2006. The SEC
      continues to investigate matters related to us and this negatively impacts
      our
      ability to raise money and hire personnel.





We
      rely upon key
      personnel and if any one leaves us our business plan and our business operations
      could be adversely effected.





15
 Index





We
      rely on our executives for our
      success. Their experience and inputs create the foundation for our business
      and
      they are responsible for the implementation and control over our development
      activities. We currently have six employment contracts and we do not hold “key
      man” insurance on any of these people. Moving forward, should they be lost for
      any reason, we will incur costs associated with recruiting replacement personnel
      and could face potential delays in operations. If we are unable to replace
      any
      one of them with other suitably trained individuals, we may be forced to scale
      back or curtail our business plan. As a result of this, your securities in
      us
      could become devalued.





Investors
      may face
      significant restrictions on the resale of our common stock due to federal
      regulations of penny stocks.





Our
      common stock is not listed on any
      exchange; however, it is traded in the over-the-counter market. If our common
      stock is listed on the OTC Bulletin Board, it will be subject to the
      requirements of Rule 15(g)9, promulgated under the Securities Exchange Act,
      as
      long as the price of our common stock is below $5.00 per share. Under such
      rule,
      broker-dealers who recommend low-priced securities to persons other than
      established customers and accredited investors must satisfy special sales
      practice requirements, including a requirement that they make an individualized
      written suitability determination for the purchaser and receive the purchaser’s
      consent prior to the transaction. The Securities Enforcement Remedies and Penny
      Stock Reform Act of 1990, also requires additional disclosure in connection
      with
      any trades involving a stock defined as a penny stock. Generally, the Commission
      defines a penny stock as any equity security not traded on an exchange or quoted
      on Nasdaq that has a market price of less than $5.00 per share. The required
      penny stock disclosures include the delivery, prior to any transaction, of
      a
      disclosure schedule explaining the penny stock market and the risks associated
      with it. Such requirements could severely limit the market liquidity of the
      securities and the ability of purchasers to sell their securities in the
      secondary market.





RESULTS
      OF
      OPERATIONS





NETSALES.
      The Company has no sales since
      inception.





RESEARCHANDDEVELOPMENT
      EXPENSES. The Company had no
      research and development expenses for the three months endedOctober 31, 2007and
      2006. The Company incurred $288,259
      in research and development expenses since inception.





GENERALANDADMINISTRATIVE
      EXPENSES("G&A"). The Company's G&A
      expenses for the three months endedOctober
      31, 2006and 2007 decreased from
      $92,270 to
      $38,206, respectively.The
      decrease was primarily
      due to having lesser activity of developing the company’s software.Companyincome
      (loss) before income
      taxesfor the
      three months ended
      October, 2006 and 2007changedfrom
      $(1,973,814)to
      $571,994.The
      change was primarily due to the
      reversal of the prior  loss from the derivative
      instrument.





LIQUIDITYANDCAPITAL
      RESOURCES. As ofOctober 31,
      2007, the Company had a working
      capital deficit of
      $1,884,812. As ofOctober31,
      2006, the Company’s working capitaldeficit
      was
      $1,743,881. During the
      periods fromJuly 31,
      2007throughOctober
      31, 2007andJuly
      31, 2006throughOctober
      31, 2006, the Company's workingcapital
      deficit decreasedby $1,860,129
      and increased by $1,778,147.
      The increases
      in working capital wasthe result ofexchanging
      the convertible derivative
      note for a promissory note and the decrease was the resultincurring company expenses,
      raising no
      additional capital during and having no income during the
      period.





The
      Company will require additional
      capital to support the development stage activities of the development of its
      proprietary software. There can be no assurance that any required capital will
      be available on terms acceptable to the Company, if at all, at such time or
      times as required by the Company. The Company has been funded primarily for
      the
      last two years by the $1,000,000 equity raised from its private placement,
      a
      $500,000 unregistered sale of its securities and non interest bearing loans
      from
      the companies officers and affiliates.





ITEM
      3. CONTROLSANDPROCEDURES





We
      have carried out an evaluation, under
      the supervision and with the participation of our management, including our
      Chief Executive Officer (the "CEO")
      and our Chief Financial Officer (the
      "CFO"), of the effectiveness of the design and operation of our disclosure
      controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the
      Securities Exchange Act of 1934, as amended (the "Act")) as of the end of the
      fiscal quarter covered by this report. Based upon that evaluation, ourCEOand
      CFO concluded that our disclosure
      controls and procedures were effective in providing reasonable assurance that
      (a)the information required to be disclosed by us in the reports that we file
      or
      submit under the Act is recorded, processed, summarized and reported within
      the
      time periods specified in the Securities and Exchange Commission's rules and
      forms, and (b) such information is accumulated and communicated to our
      management, including ourCEOand
      CFO, as appropriate to allow timely
      decisions regarding required disclosure.





There
      has been no change in our internal
      control over financial reporting during the fiscal quarter covered by this
      report that has materially affected, or is reasonably likely to materially
      affect, our internal control over financial reporting.





16
 Index





PART
      II.





EXOBOX
                TECHNOLOGIES
                CORP.
            OTHER
                INFORMATION





Item
      1. LegalProceedings





The
      Company is not a party to any
      litigation and to the best of the Company's knowledge no litigation is
      threatened.





Item
      3. DefaultsUpon
      Senior Securities





None





Item
      6.
      Exhibits





(a)
      Exhibits





31.1
      Certification ofCEO,
      Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002





31.2
      Certification of CFO,
      Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002





32.1
      Certification ofCEO,
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002





32.2
      Certification of CFO,
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002





17
 Index





EXOBOX
      TECHNOLOGIES
      CORP.





SIGNATURES





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











EXOBOX
                TECHNOLOGIES
                CORP.Dated:December
                21,
                2007
            By:
                /s/ RobertB.DillonRobertB.DillonChief
                Executive
                Officer(Principal
                Executive
                Officer)Dated:December
                21,
                2007
            By:
                /s/ MichaelG.WirtzMichaelG.WirtzChief
                Financial
                Officer(Principal
                Financial and
                Accounting Officer)






18