UNITED
STATES




SECURITIES
AND EXCHANGE COMMISSION




WASHINGTON,
D.C. 20549




FORM
10-Q


x
            Quarterly
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the quarterly period ended June 30,
2008.




or


 ̈
            Transition
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the transition period from
                                   to                               .




Commission
File Number: 333-128415




FUND.COM
INC.


(Exact
name of registrant as specified in its charter)


Delaware
            30-0284778(State
      or Other Jurisdiction of
            (I.R.S.
      EmployerIncorporation
      or Organization)
            Identification
      No.)





14
Wall Street


20th
Floor


New
York, NY 10005


(Address
of Principal Executive Offices including Zip Code)




212-618-1633


(Registrant’s
Telephone Number, Including Area Code)




Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes oNo x




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




Large
      Accelerated Filer  ̈
            Accelerated
      Filer  ̈
            Non-Accelerated
      Filer  ̈
            Smaller
      Reporting Company ý




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




There
were 44,087,335 shares of the Registrant’s  Class A Common Stock and
6,387,665 shares of Class B Common Stock issued and outstanding as
of  November 14, 2008.


















Fund.com
Inc.




Index
to Form 10-Q




Part
      I.
            Financial
      InformationItem
      1. Financial Statements (unaudited)Balance
      SheetsStatements
      of OperationsStatement
      of Cash FlowsNotes
      to Financial StatementsItem
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of OperationsItem
      3. Quantitative and Qualitative Disclosures About Market
    RiskItem
      4T. Controls and ProceduresPart
      II.
            Other
      InformationItem
      1. Legal ProceedingsItem
      1A. Risk FactorsItem
      2. Unregistered Sales of Equity Securities and Use of
    ProceedsItem
      3. Defaults Upon Senior SecuritiesItem
      4. Submission of Matters to a Vote of Security HoldersItem
      5. Other InformationItem
      6. ExhibitsSIGNATURES












PART
I - FINANCIAL INFORMATION




ITEM
1 – FINANCIAL STATEMENTS (UNAUDITED)




FUND.COM INC.(A
      Development Stage Company)CONSOLIDATED
      BALANCE SHEETSSeptember
      30, 2008
              
              
              December
      31, 2007ASSETS
              
              (Unaudited)
              
              
              (Audited)CURRENT
      ASSETSCash
              
              $
              100,132
              
              
              $
              603,558Total
      current assets
              
              
              100,132
              
              
              
              603,558Intangible
      Assets, net
              
              
              9,999,500
              
              
              
              9,999,500Certificate
      of Deposit
              
              
              20,888,333
              
              
              
              20,138,333TOTAL
      ASSETS
              
              $
              30,987,965
              
              
              $
              30,741,391LIABILITIES
      AND STOCKHOLDERS' EQUITY:CURRENT
      LIABILITIES:Accounts
      payable
              
              $
              705,276
              
              
              $
              137,657Advances
      from shareholders
              
              
              23,580
              
              
              
              77,150Total
      current liabilities
              
              
              728,856
              
              
              
              214,807TOTAL
      LIABILITIES
              
              
              728,856
              
              
              
              214,807COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITY:Preferred
      stock, 10,000,000 shares authorized, none issued and
      outstanding
              
              
              -
              
              
              
              -Class
      A Common stock, $0.001 par value, 100,000,000 sharesauthorized;
      44,087,335 shares issued and outstanding
              
              
              44,087
              
              
              
              436Class
      B Common stock, $0.001 par value, 10,000,000 sharesauthorized;
      6,387,665 shares issued and outstanding
              
              
              6,388
              
              
              
              6,388Additional
      paid-in-capital
              
              
              32,563,282
              
              
              
              30,694,740Accumulated
      deficit during the Development Stage
              
              
              (2,354,648
              )
              
              
              (174,980
              )Total
      stockholders' equity
              
              
              30,259,109
              
              
              
              30,526,584TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              30,987,965
              
              
              $
              30,741,391The
      accompanying notes are an integral part of these consolidated financial
      statements













FUND.COM
      INC.(A
      Development Stage Company)CONSOLIDATED
      STATEMENT OF OPERATIONSFOR
      THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 ANDFOR
      THE PERIOD SEPTEMBER 20, 2007 (INCEPTION) THROUGH SEPTEMBER 30,
      2008For
      the Period fromSeptember
      20,Three
      Months Ended
            
            
            Nine
      Months Ended
            
            
            2007
              (inception)
      toSeptember
      30, 2008
            
            
            September
      30, 2008
            
            
            September
      30, 2008Revenue
            
            $
            -
            
            
            $
            -
            
            
            $
            -Costs
      of revenue
            
            
            -
            
            
            
            -
            
            
            
            -Gross
      profit
            
            
            -
            
            
            
            -
            
            
            
            -Operating
      expense
            
            
            1,237,934
            
            
            
            2,930,605
            
            
            
            3,244,046Loss
      from operations before interest income andprovision
      for (benefit from) income tax
            
            
            1,237,934
            
            
            
            2,930,605
            
            
            
            3,244,046Interest
      income
            
            
            250,649
            
            
            
            750,937
            
            
            
            889,398Provision
      for (benefit from) income tax
            
            
            -
            
            
            
            -
            
            
            
            -250,649
            
            
            
            750,937
            
            
            
            889,398Net
      loss
            
            $
            (987,285
            )
            
            $
            (2,179,668
            )
            
            $
            (2,354,648
            )Weighted
      Average Common Shares Outstanding:Basic
      and diluted
            
            
            50,570,000
            
            
            
            50,570,000Earnings
      per share:Basic
      and diluted
            
            $ nil
            
            
            $ nilThe
      accompanying notes are an integral part of these consolidated financial
      statements












FUND.COM INC.(A
      Development Stage Company)CONSOLIDATED
      STATEMENT OF CASH FLOWSFOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2008 ANDFOR
      THE PERIOD SEPTEMBER 20, 2007 (INCEPTION)THROUGH
      SEPTEMEBER 30, 2008For
      the Period from
              
              
              For
      the Period fromSeptember
      20,
              
              
              September
      20,Nine
      Months Ended
              
              
              2007
                (inception)
      to
              
              
              2007
                (inception)
      toSeptember
      30, 2008
              
              
              September
      30, 2007
              
              
              September
      30, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (2,179,668
              )
              
              $
              -
              
              
              $
              (2,354,648
              )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Compensation
      recognized under stock incentive plan
              
              
              962,188
              
              
              
              -
              
              
              
              962,188Changes
      in assets and liabilities:Accounts
      payable
              
              
              567,624
              
              
              
              -
              
              
              
              705,281Net
      cash used in operating activities
              
              
              (649,856
              )
              
              
              -
              
              
              
              (687,179
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Certificate
      of deposit
              
              
              -
              
              
              
              -
              
              
              
              (20,000,000
              )Accrued
      interest from certificate of deposit
              
              
              (750,000
              )
              
              
              -
              
              
              
              (888,333
              )Purchase
      of intangible asset
              
              
              -
              
              
              
              -
              
              
              
              (9,999,500
              )Net
      cash used in  investing activities
              
              
              (750,000
              )
              
              
              -
              
              
              
              (30,887,833
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from the sale of common stock
              
              
              950,000
              
              
              
              -
              
              
              
              31,651,564Advances
      from shareholders
              
              
              -
              
              
              
              -
              
              
              
              77,150Repayment
      of shareholders advances
              
              
              (53,570
              )
              
              
              -
              
              
              
              (53,570
              )Net
      cash provided by financing activities
              
              
              896,430
              
              
              
              -
              
              
              
              31,675,144INCREASE
      (DECREASE) IN CASH
              
              
              (503,426
              )
              
              
              -
              
              
              
              100,132CASH,
      BEGINNING OF YEAR
              
              
              603,558
              
              
              
              -
              
              
              
              -CASH,
      END OF YEAR
              
              $
              100,132
              
              
              $
              -
              
              
              $
              100,132Supplemental
      DisclosuresCash
      paid during the year for interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cash
      paid during the year for taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -The
      accompanying notes are an integral part of these consolidated financial
      statements












FUND.COM
INC.


(a
corporation in the development stage)




NOTES
TO UNAUDITED FINANCIAL STATEMENTS


September
30, 2008





NOTE 1 –
ORGANIZATION





The
consolidated financial statements of Fund.Com Inc. (the “Company”) include the
accounts of its wholly owned subsidiaries, Fund.com Technologies Inc. (“FOT”),
Fund.com Managed Products Inc. (“FMP”) and Fund.com Capital Inc.
(“FC”).  The year end for the Company and its wholly owned
subsidiaries is December 31.





On
September 20, 2007, the Company was incorporated in the state of
Delaware.  The Company is in its development stage and has not begun
the process of operating this business.  The Company is still in the
process of researching and developing its business and raising
capital.





On
September 27, 2007, FOT was incorporated in the state of Delaware. FOT is a
wholly owned operating subsidiary of the Company and was established to acquire
the domain name “fund.com” and other related intellectual property and
assets.  The subsidiary will be responsible for operating the
Company’s internet properties.





On
September 27, 2007, FMP was incorporated in the state of
Delaware.  FMP is a wholly owned operating subsidiary of the Company
that focuses on asset management advisory services and related
products.





On
September 27, 2007, FC was incorporated in the state of Delaware.  FC
is a wholly owned operating subsidiary of FMP that will serve as an investment
vehicle for the purposes of making active (non-passive) investments in other
financial institutions, fund management companies or, in certain instances,
products offered or managed by either.





The
accompanying interim unaudited financial information has been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission
(SEC).  Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted pursuant to such rules and regulations.  In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of the Company as of
September 30, 2008 and the related operating results and cash flows for the
interim period presented have been made. The results of operations of such
interim periods are not necessarily indicative of the results of the full
year.  This financial information should be read in conjunction with
the Consolidated Financial Statements and Notes thereto included in the
Company’s Form 8-K filed on January 17, 2008. There have been no changes in
significant accounting policies since January 17, 2008.





NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States of America.
Significant accounting policies are as follows:





Basis of
Presentation





The
Company has not produced any revenue from its principal business and is a
development stage company as defined by the Statement of Financial Accounting
Standards (SFAS) No. 7 “Accounting and Reporting by Development Stage
Enterprises.”





Principles of
Consolidation





The
consolidated financial statements include the accounts of Fund.com Inc. and its
wholly owned subsidiaries.  All material intercompany accounts and
transactions are eliminated in consolidation.














Use of
Estimates





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.  These estimates and assumptions also affect
the reported amounts of revenues, costs and expenses during the reporting
period.  Management evaluates these estimates and assumptions on a
regular basis.  Actual results could differ from those
estimates.





Revenue
Recognition





The
Company recognizes revenue in accordance with Staff Accounting Bulletin (SAB)
No. 104, “Revenue Recognition in Financial Statements” which established that
revenue can be recognized when persuasive evidence of an arrangement exists, the
product has been shipped, all significant contractual obligations have been
satisfied and collection is reasonably assured.





Cash and Cash
Equivalents





The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.  Cash and cash
equivalents are defined to include cash on hand and cash in the
bank.





Certificate of
Deposit





On
November 9, 2007, the Company deposited $20,000,000 into a fixed Certificate of
Deposit with an interest rate of 5.00% per annum, for a term of three
years.  Accrued interest of $888,333 has been recorded as of September
30, 2008.





Advertising
Costs





All
advertising costs are charged to expense as incurred. There was no advertising
expense for the period ended September 30, 2008.





Research and
Development





Costs are
expensed as incurred.  There were no research and development expense
for the period ended September 30, 2008.





Property and
Equipment





Property
and equipment is recorded at cost and depreciated over the estimated useful
lives of the assets using principally the straight-line method. When items are
retired or otherwise disposed of, income is charged or credited for the
difference between net book value and proceeds realized
thereon.  Ordinary maintenance and repairs are charged to expense as
incurred, and replacements and betterments are capitalized.  The range
of estimated useful lives to be used to calculate depreciation for principal
items of property and equipment are as follows:




Asset
      Category
            
            Depreciation/
      Amortization PeriodFurniture
      and Fixture
            
            3
      YearsOffice
      equipment
            
            3
      YearsLeasehold
      improvements
            
            5
      Years





Income
Taxes





Deferred
income taxes are recognized based on the provisions of SFAS No. 109, “Accounting
for Income Taxes” (“SFAS 109”) for the tax consequences in future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts based on enacted tax laws and statutory tax rates applicable
to 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 FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statement No. 109” (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes by prescribing the
recognition threshold a tax position is required to meet before being recognized
in the financial statements. It also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. The cumulative effects, if any, of applying FIN 48
will be recorded as an adjustment to retained earnings as of the beginning of
the period of adoption. FIN 48 is effective for fiscal years beginning after
December 15, 2006, and the Company was required to adopt it in the first quarter
of fiscal year 2008. The Company is currently evaluating the effect that the
adoption of FIN 48 will have on its consolidated results of operations and
financial condition and is not currently in a position to determine such
effects, if any.














Reclassification





Certain
amounts in the prior year consolidated financial statements have been
reclassified for comparative purposes to conform to the presentation in the
current year consolidated financial statements.





Earnings Per Share





Basic
earnings per share is computed by dividing net income (loss) available to common
shareholders by the weighted average number of common shares outstanding during
the reporting period. Diluted earnings per share reflects the potential dilution
that could occur if stock options and other commitments to issue common stock
were exercised or equity awards vest resulting in the issuance of common stock
that could share in the earnings of the Company.  As of September 30,
2008, there were no potential dilutive instruments that could result in share
dilution.





Fair Value of Financial
Instruments




The fair
value of a financial instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties other than in a
forced sale or liquidation.   The carrying amounts of financial
instruments, including cash, accounts payable and accrued expenses approximate
fair value because of the relatively short maturity of the
instruments.





Accounting for the
Impairment of Long-Lived Assets





The
long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
assets may not be recoverable.  It is reasonably possible that these
assets could become impaired as a result of technology or other industry
changes.  Determination of recoverability of assets to be held and
used is by comparing the carrying amount of an asset to future net undiscounted
cash flows to be generated by the assets.  If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of assets exceeds the fair value of the
assets.  Assets to be disposed of are reported at the lower of the
carrying amount or fair value less costs to sell.  There was no
impairment of long-lived assets as of September 30, 2008.





Stock-Based
Compensation





On
October 10, 2006 FASB Staff Position (FSP) issued FSP FAS 123(R)-5 “Amendment of
FASB Staff Position FAS 123(R)-1 - Classification and Measurement of
Freestanding Financial Instruments Originally issued in Exchange of Employee
Services under FASB Statement No. 123(R)”.  The FSP provides that
instruments that were originally issued
as  employee  compensation  and
then  modified, and that modification is made to the terms of the
instrument solely to reflect an
equity  restructuring  that  occurs  when
the  holders  are no longer employees, then no change in the
recognition or the measurement (due to a change
in  classification)  of
those  instruments  will result if both of the following
conditions are met: (a). There is no increase in fair value of the award (or the
ratio of intrinsic  value to the exercise price of the award is
preserved,  that is, the holder is made whole), or the antidilution
provision is not added to the terms of the award
in  contemplation  of an
equity  restructuring;  and (b). All holders of the same
class of equity instruments (for example, stock options) are treated in the same
manner.  The provisions in this FSP have been applied in the first
reporting period beginning January 1, 2007.  The Company does not
expect that its adoption of FSP FAS 123(R)-5 will have a material impact on its
consolidated results of operations and financial condition.





Recent Accounting
Pronouncements





Recent
accounting pronouncements that the Company has adopted or will be required to
adopt in the future are summarized below.













Fair value
measurements





In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. SFAS 157 addresses the requests from investors for expanded
disclosure about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
not expand the use of fair value in any new circumstances. SFAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and has been adopted by the Company in the first quarter of fiscal year
2008. The Company is unable at this time to determine the effect that its
adoption of SFAS 157 will have on its consolidated results of operations and
financial condition.





Taxes collected from
customer and remitted to governmental authorities





In June
2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06−3 (EITF
06-3), “How Taxes Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That Is, Gross versus
Net Presentation).” EITF 06−3 applies to any tax assessed by a governmental
authority that is directly imposed on a revenue producing transaction between a
seller and a customer. EITF 06−3 allows companies to present taxes either gross
within revenue and expense or net. If taxes subject to this issue are
significant, a company is required to disclose its accounting policy for
presenting taxes and the amount of such taxes that are recognized on a gross
basis. The Company currently presents such taxes net. EITF 06−3 has been adopted
during the first quarter of fiscal year 2008. These taxes are currently not
material to the Company’s consolidated financial statements.





Effects of Prior Year
Misstatements when Quantifying Misstatements in the Current Year Financial
Statements





In
September 2006, the SEC issued SAB No. 108, "Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements" (SAB 108). SAB 108 provides guidance on the consideration of the
effects of prior year misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB 108 establishes an approach
that requires quantification of financial statement errors based on the effects
of each on a company's balance sheet and statement of operations and the related
financial statement disclosures. Early application of the guidance in SAB 108 is
encouraged in any report for an interim period of the first fiscal year ending
after November 15, 2006, and has been adopted by the Company since its inception
on September 20, 2007. The Company does not expect the adoption of SAB 108 to
have a material impact on its consolidated results of operations and financial
condition.





Fair Value Option for
Financial Assets and Financial Liabilities





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities”(“SFAS 159”),
which provides companies with an option to report selected financial assets and
liabilities at fair value with the changes in fair value recognized in earnings
at each subsequent reporting date. SFAS 159 provides an opportunity to
mitigate potential volatility in earnings caused by measuring related assets and
liabilities differently, and it may reduce the need for applying complex hedge
accounting provisions. If elected, SFAS 159 is effective for fiscal years
beginning after November 15, 2007. Management is currently evaluating the
impact that this statement may have on the Company’s consolidated results of
operations and financial position.




Business
Combinations





In
December 2007, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141 (revised 2007), “Business
Combinations” (hereinafter “SFAS No. 141 (revised 2007)”). This statement
establishes principles and requirements for how an acquirer a) recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed and any noncontrolling interest in the acquiree, b)
recognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase and c) determines what information to disclose to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. The scope of SFAS No. 141 (revised 2007) is
broader than the scope of SFAS No. 141, which it replaces. The effective date of
SFAS No. 141 (revised 2007) is for all acquisitions in which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. The adoption of this statement is not expected to
have an immediate material effect on the Company’s consolidated financial
condition or results of operations.














Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB 51





In
December, 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51” (hereinafter
“SFAS No. 160”). This statement establishes accounting and reporting standards
that require a) the ownership interests in subsidiaries held by parties other
than the parent be clearly identified, labeled and presented in the consolidated
statement of financial position with equity, but separate from the parent’s
equity, b) the amount of consolidated net income attributable to the parent and
to the noncontrolling interest be clearly identified and presented on the face
of the consolidated statement of income, c) changes in a parent’s ownership
interest while the parent retains its controlling financial interest in its
subsidiary be accounted for consistently, d) when a subsidiary is
deconsolidated, any retained noncontrolling  equity investment in the
former subsidiary be initially measured at fair value and e) entities provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling owners. The
effective date of this standard is for fiscal years and interim periods
beginning on or after December 15, 2008. The adoption of this statement had no
immediate material effect on the Company’s consolidated financial condition or
results of operations.





Disclosure about Derivative
Instruments and Hedging Activities





In March
2008, the FASB issued SFAS No. 161, “Disclosure about Derivative Instruments and
Hedging Activities,” an amendment of FASB Statement No. 133, (SFAS 161). This
statement requires that objectives for using derivative instruments be disclosed
in terms of underlying risk and accounting designation. The Company is required
to adopt SFAS 161 on January 1, 2009. The Company is currently evaluating the
potential impact of SFAS No. 161 on the Company’s consolidated financial
statements.





Determination of the Useful
Life of Intangible Assets





In April
2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets,”, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets  under FASB 142 “Goodwill and Other Intangible
Assets”.  The intent of this FSP is to improve the consistency between
the useful life of a recognized intangible asset under SFAS 142 and the period
of the expected cash flows used to measure the fair value of the asset under
FASB 141 (revised 2007) “Business Combinations” and other U.S. generally
accepted accounting principles.    The Company is currently
evaluating the potential impact of FSP FAS 142-3 on its consolidated financial
statements.





NOTE 3 –
INTANGIBLE ASSET





Intellectual Property
Asset:





During
2007, the Company acquired the domain name “fund.com” and other intangible
assets related to intellectual property and trademarks for a total cost of
$9,999,950.





NOTE 4 –
EQUITY





Stock Option
Plan





On
December 27, 2007, the Company adopted the Meade Technologies Inc. 2007
Incentive Compensation Plan.  Under this plan, stock options may be
granted to employees, officers, consultants or others who provide services to
the Company.





The
Black-Scholes method option pricing model was used to estimate fair value as of
the date of grant using the following assumptions:




Risk-Free
            4.23%Expected
      volatility
            50%Forfeiture
      rate
            10%Expected
    life
            4
  Years















On
December 27, 2007, 2,076,111 stock options with a purchase price of $2.30 per
share were granted to officers and employees of the
Company.    Based on the assumptions noted above, the fair
market value of the options issued was valued at $1,627,777.  For the
nine months ended September 30, 2008, the compensation expense associated with
these options was $339,120.





In
February 2008, 2,000,000 stock options with a purchase price of $3.50 per share
were granted to officers and employees of the
Company.    Based on the assumptions noted above, the fair
market value of the options issued was valued at $3,818,430.  For the
nine months ended September 30, 2008, the compensation expense associated with
these options was $556,854.





In May
2008, 250,000 stock options with a purchase price of $4.00 per share were
granted to officers and employees of the Company.    Based
on the assumptions noted above, the fair market value of the options issued was
valued at $260,051.  For the nine months ended September 30, 2008, the
compensation expense associated with these options was $21,671.





In August
2008, 653,000 stock options with a purchase price of $3.25 per share were
granted to officers and employees of the Company.  Based on
assumptions noted above, the fair market value of the options issued was valued
at $801,757.  For the nine months ended September 30, 2008, the
compensation expense associated with these options was $44,542.





NOTE 5 –
MERGER





On
January 15, 2008, Fund.com Inc. merged (the “Merger”) with and into Eastern
Services Holdings, Inc. (“Eastern”) pursuant to an Agreement and Plan of Merger,
dated as of January 15, 2008 (the "Agreement"). In connection with the merger
Eastern changed its name to Fund.com Inc. (the "Surviving
Corporation").  Pursuant to the Agreement, each share of common stock,
par value $0.00001 per share of Fund (“Fund Common Stock”) was converted into
the right to receive .1278 validly issued, fully paid and non-assessable
shares of Class A Common Stock of the Surviving Corporation; provided, however,
if a holder of Fund Common Stock also held Series A Preferred Stock, par value
$.001 per share, of Fund (“Fund Preferred Stock”) then each share of Fund Common
Stock held by such holder was converted into the right to receive
..1278 validly issued, fully paid and non-assessable shares of Class B
Common Stock (and Fund Preferred Stock held by such holder was
cancelled).  Also pursuant to the Agreement, each share of common
stock, $0.001 par value per share, of Eastern was converted into the right to
receive one validly issued, fully paid and non-assessable share of Class A
Common Stock of the Surviving Corporation.  Holders of such shares
were entitled to receive the previously declared 9-for-1 stock dividend payable
to holders of record as of January 15, 2008. As a result, at closing (and giving
effect to the stock dividend) the Company issued an aggregate of 37,112,345
shares of our Class A Common Stock and 6,387,665 shares of our Class B Common
Stock to former shareholders of Fund.com Inc., representing 87% of our
outstanding Class A Common Stock and 100% of our Class B Common Stock following
the merger. The merger consideration was determined as a result of arm’s-length
negotiations between the parties. Each share of Class A Common stock has one (1)
vote per share.  Each share of Class B Common Stock has ten (10) votes
per share.  The holders of Class B Common Stock have the right to
convert each share of Class B Common Stock into one share of Class A Common
Stock (adjusted to reflect subsequent stock splits, combinations, stock
dividends and recapitalizations).





NOTE 6 –
SUBSEQUENT EVENTS





On
October 31, 2008, the Company entered into a Purchase and Contribution Agreement
(the “Purchase and Contribution Agreement”), with AdvisorShares Investments, LLC
(“AdvisorShares”), and joined by other parties.  Pursuant to the
Purchase and Contribution Agreement the Company purchased 6,000,000 Units of
AdvisorShares, (representing 60% of the outstanding membership interests of
AdvisorShares) for a purchase price of $4,000,000, with an initial contribution
of $275,000 and up to an additional $3,725,000 being contributed to
AdvisorShares upon the meeting of certain milestones relating to AdvisorShares’,
including total assets under management.





On
October 31, 2008, the Company issued, and IP Global Investors Ltd. purchased, a
promissory note of the Company in the aggregate principal amount of $325,000
(the “Note”).  The principal and unpaid interest on the Note is due
upon demand (with 30 business days notice), and carries a 9% interest
rate.  The Company used the $325,000 gross proceeds from the Note to
purchase the Units from AdvisorShares as described above and for working
capital.














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





Forward
Looking Statements




This
Quarterly Report on Form 10-Q includes 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. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to known and unknown
risks, uncertainties and assumptions about us that may cause our actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or
the negative of such terms or other similar expressions. Factors that might
cause or contribute to such a discrepancy include, but are not limited to, those
described in our other Securities and Exchange Commission filings. The following
discussion should be read in conjunction with our Financial Statements and
related Notes thereto included elsewhere in this report.




Business
Overview




We are a
development stage company that operates an internet based investment fund
marketplace and online community. Our main web presence, www.fund.com, will
provide consumers with free information about investment funds including
original, aggregated and community selected articles about the fund industry,
statistics on fund performance and other fund-specific detail. Our objective is
to establish www.fund.com as a
source of information for individual investors regarding investment funds,
including mutual funds, hedge funds, money market funds, exchange traded funds,
closed end funds, commodity funds and other types of pooled investment
vehicles.  We intend to operate www.fund.com as an
online vertical marketplace and search directory for fund information. We
anticipate that www.fund.com will
derive revenue from online advertising, lead generation and referral
fees.  We also intend, through our wholly owned subsidiary Fund.com
Managed Products Inc., to research and develop intellectual property in the form
of fund investment indexes and related index-linked investment products and to
license this intellectual property to third parties in consideration for
recurring license fees paid to us based on a fixed percentage of assets managed
by such third party using our index-linked investment products. Through another
of our wholly-owned subsidiaries, Fund.com Capital Inc. we intend to invest in
index-linked investment products, generally referred to as structured products,
as well as acquire organizations that complement the Company’s business strategy
including asset managers, hedge funds, mutual funds, ETF issuers, investment
product developers and fund service providers.





Merger





Prior to
January 15, 2008, we were known as Eastern Services Holdings, Inc., a Delaware
corporation (“Eastern”).  On January 15, 2008, Fund.com Inc., a
Delaware corporation, merged (the “Merger”) with and into us pursuant to an
Agreement and Plan of Merger, dated as of January 15, 2008. In connection with
the merger, we changed our name to Fund.com Inc.   Following the
Merger, we succeeded to the business of Fund.com as our sole line of business
and we ceased being a “shell company”, as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. As a
result of the Merger, summarized in our Form 8-K filed with the Securities and
Exchange Commission on January 17, 2007, management does not believe that it is
informative or useful to compare our results of operations with those of
Eastern.  Instead, below we discuss our results of operations and
financial performance.




Critical
Accounting Policies




Our
financial statements are presented in U.S. dollars and have been prepared in
accordance with accounting principles generally accepted in the United States of
America and pursuant to the rules and regulations of the Securities and Exchange
Commission.




Development
Stage Company




We comply
with the reporting requirements of SFAS No. 7, “Accounting and Reporting by
Development Stage Enterprises.”




Net
Income Per Ordinary Share




We comply
with the accounting and disclosure requirements of SFAS No. 128, “Earnings Per
Share.” Net income per ordinary share is computed by dividing net income by the
weighted average number of ordinary shares outstanding for the period. Net
income per ordinary share, assuming dilution, reflects the maximum potential
dilution that could occur if securities or other contracts to issue ordinary
shares were exercised or converted into ordinary shares and would then share in
our earnings except where the result would be anti-dilutive.













Fair
Value of Financial Instruments




The fair
value of our assets and liabilities, which qualify as financial instruments
under SFAS No. 107, “Disclosure About Fair Value of Financial Instruments,”
approximates the carrying amounts represented in our balance sheet.




Concentration
of Credit Risk




Financial
instruments that potentially subject us to concentrations of credit risk consist
of cash accounts in a financial institution, which at times, exceeds the Federal
depository insurance coverage of $250,000. We have not experienced losses on
these accounts and management believes we are not exposed to significant risks
on such accounts.




Use
of Estimates




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. Actual results could differ from those
estimates.




Income
Taxes




We follow
the asset and liability method of accounting for income taxes. Deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that included the
enactment date.




Foreign Currency
Translation




The
United States dollar is our reporting and functional currency.




In
accordance with SFAS 52, “Foreign Currency Translation”, foreign currency
balance sheets will be translated using the end of period exchange rates and
statements of operations will be translated at the average exchange rates for
each period. The resulting translation adjustments to the balance sheet will be
recorded in accumulated other comprehensive income (loss) within stockholders’
equity.




Foreign
currency transaction gains and losses will be included in the statement of
operations as they occur.




Results
of Operations for the Three and Nine Month Periods ended September 30,
2008




We reported a net loss of
$987,285and$2,179,668 for thethree-month periodand the nine-month periodendedSeptember
30,
2008,
respectively.  Until we
implement our business plan, we will not have operating
revenues.




Overall, for thethree-month
periodendedSeptember
30, 2008, we
incurred $1,237,934 inoperating
costs.  This amount includes$401,200 related to
compensation expense for stock options,$117,300related to legal and
professional fees, $239,700related to payroll and
benefits for the officers of the Company,and$438,100for consulting
expenses.




Overall, for thenine-monthsendedSeptember 30, 2008, we incurred
$2,930,605 inoperating costs.  This amount includes$962,200 related to
compensation expense for stock options,$374,300related to legal and
professional fees, $565,300related to payroll and
benefits for the officers of the Company,$724,000for consulting
expensesand
$129,000 related to promotional and public relations expense.




The $20million certificate of
deposit with the Global Bank of Commerce (an Antiguan bank), held by our
wholly-owed subsidiary Fund.com Capital Inc., earned interest of
$250,000and $750,000for thethree-month period and the
nine-month periodendedSeptember 30, 2008, respectively.













Liquidity
and Capital Resources




At
September 30, 2008, we had cash of $100,132 and a working capital deficit of
approximately $628,724.  We will require additional cash in order to
fund operating expenses and other expenses related to infrastructure and
business development.  The Company has entered into a Demand Note
Agreement for an additional $325,000 in funding which was received on October
31, 2008.  The Company will be required to raise additional capital to
allow the Company to develop its revenue generating
opportunities.  Additional sources or cost of funds may include equity
raises or borrowings, but have not been identified at this time.




Off-Balance
Sheet Arrangements




We do not
have any off balance sheet arrangements that are reasonably likely to have a
current or future effect on our financial condition, revenues, results of
operations, liquidity or capital expenditures.




Contractual
Obligations




We do not
have any long term debt, capital lease obligations, operating lease obligations,
purchase obligations or other long term liabilities.




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Market
risk is a broad term for the risk of economic loss due to adverse changes in the
fair value of a financial instrument. These changes may be the result of various
factors, including interest rates, foreign exchange rates, commodity prices
and/or equity prices. On November 9, 2007, Fund.com Capital entered into a
$20,000,000 certificate of deposit with Global Bank of Commerce, an Antiguan
bank.  The certificate of deposit is denominated in U.S. Dollars and
therefore we believe there is no significant risk related to foreign currency
exchange rates.  The certificate of deposit earns interest at a fixed
rate of 5% and therefore management believes there is no significant risk
related to interest rate fluctuation.




ITEM
4T. CONTROLS AND PROCEDURES




(a) Evaluation of Disclosure Controls and
Procedures. Based on an evaluation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended) required by paragraph (b) of Rule 13a-15 or
Rule 15d-15, as of September 30, 2008, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures
were effective in ensuring that information required to be disclosed by us in
the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Commission’s rules and forms. Our Chief Executive Officer and Chief Financial
Officer also concluded that, as of September 30, 2008, our disclosure controls
and procedures were effective in ensuring that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.




(b) Changes in internal controls.
During the quarter ended September 30, 2008, there were no changes in our
internal control over financial reporting identified in connection with the
evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.













PART
II - OTHER INFORMATION




ITEM
1. LEGAL PROCEEDINGS




None.




ITEM 1A. RISK FACTORS




In addition to the Risk Factor
disclosure in our Form 8-K filed with the Securities and Exchange Commission on
January 17, 2008, the Company has the following additional risk
factor.
 
 We may be unable to meet our demand note
repayment obligations.
 
 On October 31, 2008, we issued a note to
IP Global Investors Ltd. in the amount of $325,000 which is payable upon demand
(with 30 business days notice). Should  IP Global Investors Ltd.
decide to call the note, we do not currently have the cash on hand available to
repay our borrowings. If the note is called, we would be forced to seek
alternative and possibly more expensive financing, which may or may not be
available. If we are unable to find additional financing, the note would be in
default, and it could have a material adverse effect on our business, results of
operations, cash flows, financial condition and business
prospects.




ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




On June
30, 2008 the Company entered into a Securities Purchase Agreement, as amended
August 6, 2008, for the sale and issuance of unregistered securities as
previously included on the Company’s Form 8-Ks filed on July 11, 2008 and August
7, 2008.  Of the $1,950,000 due pursuant to the Securities Purchase
Agreement, as amended, the Company has received $950,000.  The Company
does not anticipate receiving the remaining funds and has not determined whether
it will pursue any remedies at this time.


Repurchases
of Equity Securities




None.




ITEM
3. DEFAULTS UPON SENIOR SECURITIES




None.




ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS




None.




ITEM
5. OTHER INFORMATION




None.




ITEM
6. EXHIBITS




Exhibit No.
            Description4.1
            Securities
      Purchase Agreement, dated June 30, 2008 between Fund.com Inc. and
      Westmoore Capital Group, Series II (Filed as Exhibit 99.1 to Form
      8-K, filed on July 11, 2008)4.2
            Amendment
      to Securities Purchase Agreement, dated August 6, 2008 between Fund.com
      Inc. and Westmoore Capital Group, Series II (Filed as Exhibit 99.2 to Form
      8-K, filed on August 7, 2008)31.1
            Certification
      of the Chief Executive Officer (Principal Executive Officer) pursuant to
      Rule 13a-14(a) of the Securities Exchange Act, as
      amended.31.2
            Certification
      of the Chief Financial Officer (Principal Financial and Accounting
      Officer) pursuant to rule 13A-14(a) of the Securities Exchange Act, as
      amended.32.1
            Certification
      of the Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002 .













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.




FUND.COM
      INC.November
      14, 2008
            By:/s/
      Gregory WebsterGregory
      WebsterChief
      Executive Officer
              (Principal
      Executive Officer)





November
      14, 2008
            By:/s/
      Michael HlavsaMichael
      HlavsaChief
      Financial Officer
              (Principal
      Accounting Officer)













Exhibit
Index




Exhibit No.
            Description4.1
            Securities
      Purchase Agreement, dated June 30, 2008 between Fund.com Inc. and
      Westmoore Capital Group, Series II (Filed as Exhibit 99.1 to Form
      8-K, filed on July 11, 2008)4.2
            Amendment
      to Securities Purchase Agreement, dated August 6, 2008 between Fund.com
      Inc. and Westmoore Capital Group, Series II (Filed as Exhibit 99.2 to Form
      8-K, filed on August 7, 2008)31.1
            Certification
      of the Chief Executive Officer (Principal Executive Officer) pursuant to
      Rule 13a-14(a) of the Securities Exchange Act, as
      amended.31.2
            Certification
      of the Chief Financial Officer (Principal Financial and Accounting
      Officer) pursuant to rule 13A-14(a) of the Securities Exchange Act, as
      amended.32.1
            Certification
      of the Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002 .