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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 000-29929

COMMUNICATE.COM INC.(Exact name of small business as specified in its charter)

|Nevada                          | 88-0346310            
|------------------------------- | ----------------------
|(State or other jurisdiction of | (IRS Employer         
|incorporation or organization)  | Identification Number)

375 Water Street Suite 645Vancouver,
British Columbia V6B 5C6(Address of principal executive offices)

(604) 453-4870(Issuers telephone number)

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

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

As of November 14, 2007, there were21,446,623 shares of
  the registrants common stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yes
[   ]   No [X]

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COMMUNICATE.COM INC. 
  REPORT ON FORM 10-QSBQUARTER ENDED SEPTEMBER 30, 2007 TABLE OF CONTENTS

|PART I.        | FINANCIAL INFORMATION                                                                                                   | 3  
|-------------- | ----------------------------------------------------------------------------------------------------------------------- | ---
|               |                                                                                                                         |    
|Item 1.        | Financial Statements                                                                                                    | 3  
|               |                                                                                                                         |    
|               | Consolidated Balance Sheets as of September 30, 2007 (unaudited)
      and December 31, 2006                            | F-2
|               |                                                                                                                         |    
|               | Consolidated Statements of Operations for the three and
      nine months ended September 30, 2007 and 2006 (unaudited) | F-3
|               |                                                                                                                         |    
|               | Consolidated Statements of Cash Flows for the nine months
      ended September 30, 2007 and 2006 (unaudited)           | F-4
|               |                                                                                                                         |    
|               | Notes to Consolidated Financial Statements                                                                              | F-5
|               |                                                                                                                         |    
|Item 2.        | Managements Discussion and Analysis of Financial
      Condition and Results of Operations                             | 3  
|               |                                                                                                                         |    
|Item 3.        | Controls and Procedures                                                                                                 | 10 
|               |                                                                                                                         |    
|PART II.       | OTHER INFORMATION                                                                                                       | 11 
|               |                                                                                                                         |    
|Item 1.        | Legal Proceedings                                                                                                       | 11 
|               |                                                                                                                         |    
|Item 2.        | Unregistered Sales of Equity Securities and Use of Proceeds                                                             | 11 
|               |                                                                                                                         |    
|Item 3.        | Defaults Upon Senior Securities                                                                                         | 11 
|               |                                                                                                                         |    
|Item 4.        | Submission of Matters to a Vote of Security Holders                                                                     | 11 
|               |                                                                                                                         |    
|Item 5.        | Other Information                                                                                                       | 11 
|               |                                                                                                                         |    
|Item 6.        | Exhibits                                                                                                                | 11 
|               |                                                                                                                         |    
|**SIGNATURES** | 13                                                                                                                     

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PART I  FINANCIAL INFORMATION

Item 1: Financial Statements

The response to Item 1 has been submitted as a separate section
of this Report beginning on page F-1.

Item 2: Managements discussion and analysis or plan of
operation

Forward Looking Statements

The Company makes forward-looking statements in this report and
may make such statements in future filings with the Securities and Exchange
Commission. The Company may also make forward-looking statements in its press
releases or other public shareholder communications. The Companys
forward-looking statements are subject to risks and uncertainties and include
information about its expectations and possible or assumed future results of
operations. When the Company uses any of the words believes, expects,
anticipates, estimates or similar expressions, it is making forward-looking
statements.

To the extent it is entitled, the Company claims the protection
  of the safe harbor for forward-looking statements contained in the Private Securities
  Litigation Reform Act of 1995 for all of its forward-looking statements. While
  the Company believes that its forward-looking statements are reasonable, you
  should not place undue reliance on any such forward-looking statements, which
  speak only as of the date made. Because these forward-looking statements are
  based on estimates and assumptions that are subject to significant business,
  economic and competitive uncertainties, many of which are beyond the Companys
  control or are subject to change, actual results could be materially different.
  Factors that might cause such a difference include, without limitation, the
  following: the Companys inability to generate sufficient cash flow to
  meet its current liabilities, the Companys potential inability to hire
  and retain qualified sales and service personnel, the potential for an extended
  decline in sales, the possible failure of revenues to offset additional costs
  associated with its change in business model, the potential lack of product
  acceptance, the Companys potential inability to introduce new products
  to the market, the potential failure of customers to meet purchase commitments,
  the potential loss of customer relationships, the potential failure to receive
  or maintain necessary regulatory approvals, the extent to which competition
  may negatively affect prices and sales volumes or necessitate increased sales
  expenses, the timing of and proceeds from the sale of restricted securities
  held by the Company and the other risks and uncertainties set forth in this
  report.

Other factors not currently anticipated by management may also
materially and adversely affect the Companys results of operations. Except as
required by applicable law, the Company does not undertake any obligation to
publicly release any revisions which may be made to any forward-looking
statements to reflect events or circumstances occurring after the date of this
report.

The Company, through its majority-owned subsidiary, Domain Holdings,
  Inc. (DHI, formerly Communicate.com Inc.) is involved in businesses
  that monetize the Companys portfolio of domain names, a number of which
  generate high amounts of internet traffic because of, among other things, their
  generic description of a specific product or services category. The Company
  has decided to unwind its relationship with majority-owned subsidiary FrequentTraveller.com
  Inc., (FT) and effective November 12, 2007, pursuant to an Asset
  Purchase Agreement between the Company and FT, the Company has acquired all
  of the tangible and intangible assets associated or used in connection with
  the operation of FTs travel business, exclusive of all cash and real property,
  in consideration for (a) the 8,000,000 shares of FT owned by the Company; and
  (b) the cancellation of $261,833.19 of debt owed by FT to the Company. As such,
  the Company has acquired all rights associated with the operation of the frequentraveller.com
  website. FT is no longer a subsidiary of the Company

The Company has focused, since the beginning of 2001, on developing
  revenue streams from its domain names and improving its financial position.
  The Company generates revenue from leasing domain names, sales commissions from
  the sale of third-party products and services utilizing the Internet, "pay-per-click"
  revenue and the trading of domain name assets. Since May 2003, the Company began
  selling fragrances and beauty and sports products online directly to consumers
  and in October 2003 began selling travel services through its website FrequentTraveller.com.

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The Company presently employs fifteen full-time employees and
  eight consultants. The Company occupied approximately 5,000 square feet of office
  space in Vancouver, British Columbia and Seattle, Washington until September
  20, 2007. Effective October 1, 2007, the Company has entered into a new five
  year office lease in Vancouver for approximately 5,400 square feet.

(a)        Selected Financial
Data

The following selected financial data was derived from the
Companys unaudited consolidated financial statements. The information set forth
below should be read in conjunction with the Companys financial statements and
related notes included elsewhere in this report.

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|                                 |   | For
      the three months ended (unaudited) |   |   | For
      the nine months ended (unaudited) | 
|-------------------------------- | - | -------------------------------------------- | - | - | ------------------------------------------- | 
|                                 |   | September 30,                                |   |   | September 30,                               | 
|                                 |   | 2007                                         |   |   | 2006                                        | 
|Statements of Operations Data    |   |                                              |   |   |                                             | 
|                                 |   |                                              |   |   |                                             | 
|eCommerce                        | $ | 1,642,530                                    |   | $ | 1,555,396                                   | 
|Domain Name                      |   | -                                            |   |   | 500,000                                     | 
|Domain Name Leasing and          |   |                                              |   |   |                                             | 
|Advertising                      |   | 128,064                                      |   |   | 72,432                                      | 
|Total Sales                      |   | 1,770,594                                    |   |   | 2,127,828                                   | 
|                                 |   |                                              |   |   |                                             | 
|eCommerce                        |   | 1,289,535                                    |   |   | 1,238,542                                   | 
|Domain Names                     |   | -                                            |   |   | 125,112                                     | 
|Total Cost of Sales              |   | 1,289,535                                    |   |   | 1,363,654                                   | 
|                                 |   |                                              |   |   |                                             | 
|Gross Profit                     |   | 481,059                                      |   |   | 764,174                                     | 
|                                 |   |                                              |   |   |                                             | 
|Depreciation                     |   | 2,802                                        |   |   | 3,790                                       | 
|General and Administrative       |   | 147,019                                      |   |   | 98,592                                      | 
|Management Fees and Salaries     |   | 547,689                                      |   |   | 221,939                                     | 
|Professional Fees                |   | 91,932                                       |   |   | 29,423                                      | 
|Marketing                        |   | 145,571                                      |   |   | 73,965                                      | 
|                                 |   |                                              |   |   |                                             | 
|Operating (Loss) Income          |   | (453,954                                     | ) |   | 336,465                                     | 
|                                 |   |                                              |   |   |                                             | 
|Non-Recurring Income             |   | -                                            |   |   | -                                           | 
|Interest Income                  |   | 24,788                                       |   |   | 11,394                                      | 
|                                 |   |                                              |   |   |                                             | 
|Net (Loss) Income for the Period | $ | (429,166                                     | ) | $ | 347,859                                     | 
|                                 |   |                                              |   |   |                                             | 
|Basic (Loss) Earnings per Share  | $ | (0.02                                        | ) | $ | 0.02                                        | 
|Weighted Average Shares          |   |                                              |   |   |                                             | 
|Outstanding                      |   | 18,948,362                                   |   |   | 17,836,339                                  | 

Balance Sheet Data
    
    As at
    
    
    As atSeptember 30, 2007
    
    
    December 31, 2006(unaudited)$
    
    
    $Current Assets
    
    4,872,498
    
    
    2,388,458Restricted Cash
    
    -
    
    
    20,000Fixed Assets
    
    35,943
    
    
    45,032Intangible Assets
    
    1,645,061
    
    
    1,645,061****Total
      Assets
    
    6,553,502
    
    
    4,098,551Accounts Payable &
      Accrued Liabilities
    
    958,861
    
    
    991,855Due to Related Party
    
    43,180
    
    
    -Common Stock
    
    10,906
    
    
    8,846Additional Paid in Capital
    
    6,725,401
    
    
    3,605,579Accumulated Deficit
    
    (1,184,846
    )
    
    (507,729
    )Total Stockholders
      Equity
    
    5,551,461
    
    
    3,106,696Total Liabilities and Stockholders
      Equity
    
    6,553,502
    
    
    4,098,551


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(b)        Results of
Operations

Three months ended September 30, 2007 versus three months
ended September 30, 2006:

Sales and Costs of Sales

eCommerce Sales. We began converting Internet traffic
  into customers by directly marketing and selling consumable goods. We launched
  our cologne.com and perfume.com Internet retail sites in May 2003, our karate.com
  Internet retail site in 2004, and most recently soft-launched our body.com Internet
  retail site in March 2006. In the third quarter of 2007, the combined retail
  sites generated sales of $1,642,530 (2006 Q3 - $1,555,396), or approximately
  $17,864 per day (2006 Q3 - $16,906 per day), with cost of purchases and shipping
  totaling $1,289,535 (2006 Q3 - $1,238,542) resulting in gross profit of $352,995
  and gross profit margin of approximately 21.5% (2006 Q3  20.4%). Comparable
  quarterly sales have decreased by 2.5% while gross profit margin in percentage
  term has increased by 22.0%. We have exceeded our minimum margin target of 20%
  and managed to maintain sales at the same time. We are pleased with the margin
  improvement as it has worked to increase margin for the past year by sourcing
  from more suppliers and from negotiating for better costs. We credit our vendor
  management system implemented last year. The heuristic system, based on analyzing
  a vendors stock selection, calculated margin, past service history and
  shipping costs, has proved effective. We will continue to monitor our overall
  product offerings to maintain a target gross profit margin of between 20% and
  22% and to grow eCommerce sales.

In the third quarter of 2007, we, through our travel business
  subsidiary FT, generated eCommerce service sales of $142,992 at a cost of $113,700
  as compared to sales of $116,730 at a cost of $100,702 in the third quarter
  of 2006. The travel operation incurred a net loss of $3,435, excluding the minimum
  royalty of $37,500 to Domain Holdings Inc., in the third quarter of 2007. While
  we believe that we have developed the platform for a worthwhile travel business,
  we are disappointed that the business has not reached its goal for break-even
  sales of $150,000 per month. Accordingly, we decided to unwind our relationship
  with FT. Effective November 12, 2007, pursuant to an Asset Purchase Agreement
  between the Company and FT, the Company has acquired all of the tangible and
  intangible assets associated or used in connection with the operation of FTs
  travel business, exclusive of all cash and real property, in consideration for
  (a) the 8,000,000 shares of FT owned by the Company; and (b) the cancellation
  of $261,833.19 of debt owed by FT to the Company. As such, the Company has acquired
  all rights associated with the operation of the frequentraveller.com website.
  FT is no longer a subsidiary of the Company.

Domain Name Sales. In the third quarter of 2007, we did
not trade in any domain names. Currently we have no intention to sell any of our
domain names and we have been looking to acquire certain domain names that would
complement either our advertising business or our eCommerce business.

Domain Name Leasing and Advertising. In the third quarter
  of 2007, we generated domain name leasing and advertising revenue of $128,064
  as compared to $72,432 in the third quarter of 2006, an increase of 11.3%. Advertising
  revenue has declined relative to the previous years quarter because we
  have instead focused on our eCommerce business. However, advertising revenue
  has improved somewhat in the second quarter as a result of our efforts to increase
  the visibility of the Companys advertising websites. Because there is
  no assurance that the implemented changes will have a long-lasting effect we
  intend to continue to make improvements to increase this line of revenue.

Royalty. In the third quarter of 2007 and 2006, we did
not report any royalty revenue. In the second quarter of 2006, we and Manhattan
Assets Corp. agreed to settle all future royalty obligations in exchange for the
return of call.com which had been recorded at its estimated fair value of
$250,000 resulting in a non-recurring income of $250,000.

General and Administrative Expenses. Our general and
administrative expenses consist of costs for general and corporate functions,
including facility fees, travel, telecommunications, and investor relations. In
the third quarter of 2007, we recorded general and administrative expense of
$147,019 (8% of total sales) as compared to $98,592 in the third quarter of
2006, an increase of 49%. The increase came from an increase in server hosting
fees because servers maintenance had been outsourced, from an increase in audit
and legal fees, from an increase in travel and entertainment as efforts were put
into investor relations and equity financings, from costs of moving our offices,
and from an increase in foreign currency exchange as expenses denominated in
Canadian dollars gained rapidly against U.S. currency. Credit card chargeback
costs which were a problem in 2006 were negligible in 2007 as we made
improvements to validate online orders. We believe our chargeback experience
ratio is below industry average and that its preauthorization screening process
remains effective. We expect general and administrative expenses to

6

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increase as total revenue increases but will attempt to
maintain general and administrative costs below 10% of total sales.

Professional FeesIn the third quarter of 2007,
we recorded professional fees expenses of $91,932, versus $29,423 in the same
period in 2006, a 212% increase which occurred primarily because of a change in
lawyers combined with more corporate activity in the form of new agreements and
financings.

Management Fees and Salaries. In the third quarter of
  2007, we incurred management fees and staff salaries of $547,689, an increase
  of 147% over the third quarter of 2006 of $221,939. We have incurred increased
  management fee costs as a result of hiring a new Chief Executive Officer and
  Chief Operating Officer. We have also recorded a $200,000 severance accrual
  in this quarter. We see the tightened job market and the appreciating Canadian
  dollar serving as the basis for an increasing trend in the coming quarters.
  We anticipate we will hire additional senior employees which will further increase
  management fees and salaries. On November 9, 2007 we have hired a Chief Corporate
  Development Officer who will assume office on January 1, 2008.

Marketing. We continue to advertise online by
paying-for-clicks and search-engine-placements and affiliate marketing. In the
third quarter of 2007, we recorded marketing expenses of $145,571 or 9% of
eCommerce sales as compared to $73,965 or 4.8% of comparable third quarter sales
in 2006. While a quarter to quarter comparison shows an increase of 97%,
marketing expense is in line with plan. We expect marketing expenses to increase
as sales increase and have planned to spend up to 10% of gross product sales for
marketing in 2007.

Nine months ended September 30, 2007 versus September 30,
  2006:

Sales and cost of sales. In the nine months ended September 30,
2007 our combined gross sales totaled $5,118,003 versus $5,245,104 in the nine
months ended September 30, 2006, a 2% overall decrease. Decreased sales are
largely as a result of the fact that we sold no Domain names during 2007 and we
received no royalty revenue. In 2006 these sales accounted for approximately
$645,000 or 12% of our total 2006 revenue. However, the 2007 decrease in these
two revenues largely offset by the increase in our e-commerce and domain name
leasing revenues which in total have increased by approximately $518,000, an 11%
increase over the same period last year.

Costs of sales overall have increased and were $3,831,041 for
the nine months ended September 30, 2007 versus $3,756,284 for the nine months
ended September 30, 2007. This increase is largely comprised of an increase in
cost of sales with respect to our e-commerce business which increased from
$3,565,272 for the nine months ended September 30, 2006 to $3,831,041 for the
nine months ended September 30, 2007, a 7% increase. The increase in costs is
directly attributable to our increase in e-commerce business of 11%, as
described above.

General and Administrative Expenses. Our general and
administrative expenses consist of costs for general and corporate functions,
including facility fees, travel, telecommunications, investor relations and
professional fees. In the nine months ended September 30, 2007 we recorded
general and administrative expenses of $407,715 as compared to $305,297 in the
nine months ended September 30, 2006, an increase of 34%. The increase came from
an increase in server hosting fees because servers maintenance had been
outsourced, from an increase in audit and legal fees, from an increase in travel
and entertainment as efforts were put into investor relations and equity
financings, and from an increase in foreign currency exchange as expenses
denominated in Canadian dollars gained rapidly against U.S. currency.

Professional Fees. In the nine months ended September
30, 2007, we recorded professional fees expenses of $151,845, versus $64,532 in
the same period in 2006, a 135% increase which occurred primarily because of a
change in lawyers combined with more corporate activity in the form of new
agreements and financings.

Management Fees and Salaries. In the nine months ended
September 30, 2007, we incurred management fees and staff salaries of
$1,096,053, an increase of 39% over the $789,010 expense incurred in the nine
months ended September 30, 2006.

Marketing.In the nine months ended September 30, 2007,
we recorded marketing expenses of $357,027 or 7.4% of eCommerce sales as
compared to $215,373 or 5.0% of comparable sales for the nine months ended
September 30, 2006.

(c)        Liquidity and
Capital Resources

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The Company seeks to generate revenue from (i) leasing domain
names to third parties to conduct on-line businesses; (ii) selling products and
services of both company owned inventory and of inventory owned by third
parties; and (iii) fees resulting from Internet traffic click-throughs generated
by company owned domain name assets.

As at September 30, 2007 we had current assets in excess of
current liabilities resulting in a positive working capital of $3,870,457 as
compared to a working capital of $1,396,603 at the fiscal year ending December
31, 2006. During the nine months ended September 30, 2007, we had a net loss of
$677,118 and an increase in cash of $1,965,765, compared to net income of
$388,280 and a decrease in cash of $60,904 for the same nine month period of
last year. Operating activities generated cash outflows of $615,847 after
adjustments for non-cash items the most significant of which is a $200,000
accrual for severance. During the nine months ended September 30, 2007, we
invested $372,344 in investment-grade corporate bonds and term-deposits and
raised $1,000,000 from our new Chief Executive Officer. We also received
approximately $5,100,000 from the sale of our common shares, pursuant to a
private placement. From the beginning of the fiscal year to September 30, 2007,
we have increased our accumulated deficit to $1,184,846 from $507,729 and have
increased stockholders equity to $5,551,461 from $3,106,696.

Effective November 12, 2007, pursuant to an Asset Purchase
Agreement between the Company and FT, the Company has acquired all of the
tangible and intangible assets associated or used in connection with the
operation of FTs travel business, exclusive of all cash and real property, in
consideration for (a) the 8,000,000 shares of FT owned by the Company; and (b)
the cancellation of $261,833 of debt owed by FT to the Company.

While we have a positive working capital position, our
currently reported quarter has experienced a loss. Management expects to
continue to incur losses in the coming quarters as planned marketing
expenditures increase and an expanded management team is hired. The Company has
sufficient cash and will generate sufficient working capital allowing it to meet
these anticipated increases in costs over the next twelve months. However, if
the operating losses continue and exceed plan we may be required to seek
additional capital from external sources. We expect to raise any additional
funds by way of equity and/or debt financing, and through the sale of
non-strategic domain name assets. The Company may not be able to raise the
required funds from such financings, depending on volatile market conditions and
the perception by investors of those companies that, like the Company, engage in
e-commerce and related businesses.

Common Share Subscriptions

On June 11, 2007, the Company issued 1,000,000 shares of common
stock and 1,000,000 common stock share purchase warrants with an exercise price
of $1.25 to a company owned and controlled by the Companys Chief Executive
Officer in exchange for $1,000,000 cash. The warrants expire June 10, 2009.

During September and October 2007 the Company accepted
subscriptions from 11 accredited investors pursuant to which the Company has
issued and sold 2,550,000 of the Companys shares of common stock, at a price of
$2.00 per share for total gross proceeds of $5,100,000 (the Offering). The
shares were issued pursuant to the subscriptions as follows: 1,000,000 shares
for $1,999,956 net cash proceeds were issued before September 30, 2007, and the
balance of 1,550,000 shares for net cash proceeds of $3,000,944, were issued in
October 2007.

Pursuant to the terms of the Offering, the Company has agreed
to file a registration statement on Form SB-2 or other appropriate registration
form with the Securities and Exchange Commission (the Registration Statement)
on or before December 31, 2007 covering the resale of the common stock (the
Registrable Securities) sold. The Company is further required to use its
reasonable best efforts to maintain the Registration Statement effective for a
period of (i) two years or (ii) until such time as all the Registrable
Securities are eligible for sale under Rule 144k of the Securities Act of 1933,
as amended. In the event the Registration Statement is not filed on or before
December 31, 2007, the Company would be required to pay each investor, as a
one-time penalty, shares of common stock of the Company equal to (i) 5% of the
investors subscription amount, divided by (ii) the Offering Price (the Penalty
Shares). The Penalty Shares shall be issued to the investor on or before
January 15, 2008, and the Company shall include all such shares as Registrable
Securities in the Registration Statement.

The Offering was conducted in reliance upon an exemption from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), including, without limitation, that under Section 506 of Regulation D
promulgated under the Securities Act. The securities were offered and sold by
the Company to accredited investors in reliance on Section 506 of Regulation D
of the Securities Act of 1933, as amended.

8

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We have no current plans to purchase any plant or significant
equipment.

(d)Recent Accounting Pronouncements

Effective January 1, 2007, the Company adopted the provisions
of the FASB Staff Position (FSB) on EITF Issue 00-19-2 Accounting for
Registration Payment Arrangements. This accounting position was adopted on a
prospective basis with no restatement of prior period consolidated financial
statements. This position specifies that the contingent obligation to make
future payments or otherwise transfer consideration under a registration payment
arrangement, whether issued as a separate agreement or included as a provision
of a financial instrument or other agreement, should be separately recognized
and measured in accordance with FASB Statement No. 5 Accounting for
Contingencies. Transition to the FSP will be achieved by reporting a change in
accounting principle through a cumulative-effect adjustment to the opening
balance of deficit.

The Company adopted FASB Interpretation No.48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109 (FIN
48) on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in
income taxes by prescribing a two-step method of first evaluating whether a tax
position has met a more likely than not recognition threshold and second,
measuring that tax position to determine the amount of benefit to be recognized
in the financial statements. FIN 48 provides guidance on the presentation of
such positions within a classified statement of financial position as well as on
derecognition, interest and penalties, accounting in interim periods,
disclosure, and transition. The adoption of this statement did not have a
material effect on the Companys interim unaudited consolidated financial
statements.

SFAS 159

In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities". This Statement permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. The Company is currently assessing the
impact of SFAS No. 159 on its financial position and results of operations.

SFAS 158

In September 2006, the FASB issued SFAS No. 158, "Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans." This
Statement requires an employer to recognize the over funded or under funded
status of a defined benefit post retirement plan (other than a multiemployer
plan) as an asset or liability in its statement of financial position, and to
recognize changes in that funded status in the year in which the changes occur
through comprehensive income. SFAS No. 158 is effective for fiscal years ending
after December 15, 2006. The Company does not expect that the implementation of
SFAS No. 158 will have any material impact on its financial position and results
of operations.

SFAS 157

In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measures". This Statement defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), expands
disclosures about fair value measurements, and applies under other accounting
pronouncements that require or permit fair value measurements. SFAS No. 157 does
not require any new fair value measurements. However, the FASB anticipates that
for some entities, the application of SFAS No. 157 will change current practice.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, which for the Company would be the fiscal
year beginning December 31, 2008. The Company is currently evaluating the impact
of SFAS No. 157 but does not expect that it will have a material impact on its
financial statements.

9

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SAB 108

In September 2006, the SEC issued Staff Accounting Bulletin
("SAB") No. 108, "Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements." SAB No. 108
addresses how the effects of prior year uncorrected misstatements should be
considered when quantifying misstatements in current year financial statements.
SAB No. 108 requires companies to quantify misstatements using a balance sheet
and income statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006. The Company is currently evaluating the impact of adopting SAB No. 108
but does not expect that it will have a material effect on its financial
statements.

Item 3: Controls and Procedures.

Disclosure Controls and Procedures

C Geoffrey Hampson, the Companys Chief Executive Officer, and
J. Cameron Pan, the Companys Chief Financial Officer have evaluated the
effectiveness of the Companys disclosure controls and procedures (as such term
is defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934
(the Exchange Act)) as of the end of the period covered by this quarterly
report (the Evaluation Date). Based on such evaluation, they have concluded
that, as of the Evaluation Date, the Companys disclosure controls and
procedures are effective in alerting the Company on a timely basis to material
information required to be included in its reports filed or submitted under the
Exchange Act.

Changes in Internal Controls

During the quarter of the fiscal year covered by this report,
there were no changes in the Companys internal controls or, to the Companys
knowledge, in other factors that have materially affected, or are reasonably
likely to materially affect, these controls and procedures subsequent to the
date the Company carried out this evaluation.

In preparation for the annual report of management regarding
our evaluation of our internal controls that is required to be included in our
annual report for the year ended December 31, 2007 by Section 404 of the
Sarbanes-Oxley Act of 2002, we will need to assess the adequacy of our internal
control, remediate any weaknesses that may be identified, validate that controls
are functioning as documented and implement a continuous reporting and
improvement process for internal controls. We are currently evaluating our
existing controls against the standards adopted by the Committee of Sponsoring
Organizations of the Treadway Commission. During the course of our ongoing
evaluation and integration of the internal controls of our business, we may
identify areas requiring improvement, and we may have to design enhanced
processes and controls to address issues identified through this review.

We believe that the out-of-pocket costs, the diversion of
managements attention from running the day-to-day operations and operational
changes caused by the need to comply with the requirements of Section 404 of the
Sarbanes-Oxley Act could be significant. If the time and costs associated with
such compliance exceed our current expectations, our results of operations could
be adversely affected.

We cannot be certain at this time that we will be able to
successfully complete the procedures, certification and attestation requirements
of Section 404 or that we will not have to report a material weakness in
connection with our internal controls over financial reporting. If we fail to
comply with the requirements of Section 404, the accuracy and timeliness of the
filing of our annual report may be materially adversely affected and could cause
investors to lose confidence in our reported financial information, which could
have a negative effect on the trading price of our common stock. In addition, a
material weakness in the effectiveness of our internal controls over financial
reporting could result in an increased chance of fraud and the loss of
customers, reduce our ability to obtain financing and require additional
expenditures to comply with these requirements, each of which could have a
material adverse effect on our business, results of operations and financial
condition.

10

---

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, the Company may become involved in various
lawsuits and legal proceedings which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result
in these or other matters may arise from time to time that may harm the
Company's business. Except as otherwise disclosed herein, the Company is
currently not aware of any such legal proceedings or claims that it believes
will have, individually or in the aggregate, a material adverse affect on its
business, financial condition or operating results.

The Company is not aware of any pending or threatened material
legal proceedings during the quarter.

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

During the quarter of the fiscal year covered by this report,
(i) the Company did not modify the instruments defining the rights of its
shareholders, (ii) no rights of any shareholders were limited or qualified by
any other class of securities, and (iii) the Company did not sell any
unregistered equity securities, except for the following:

During September and October 2007 the Company accepted
subscriptions from 11 accredited investors pursuant to which the Company has
issued and sold 2,550,000 of the Companys shares of common stock, at a price of
$2.00 per share for total gross proceeds of $5,100,000 (the Offering). The
shares were issued pursuant to the subscriptions as follows: 1,000,000 shares
for $1,999,956 net cash proceeds were issued before September 30, 2007, and the
balance of 1,550,000 shares for net cash proceeds of $3,000,944, were issued in
October 2007. The Offering was conducted in reliance upon an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), including, without limitation, that under Section 506 of
Regulation D promulgated under the Securities Act. The securities were offered
and sold by the Company to accredited investors in reliance on Section 506 of
Regulation D of the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities.

During the quarter of the fiscal year covered by this report,
no material default has occurred with respect to any indebtedness of the
Company. Also, during this quarter, no material arrearage in the payment of
dividends has occurred.

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

No matter was submitted to a vote of security holders, through
the solicitation of proxies or otherwise, during the three months of the fiscal
year covered by this report.

Item 5. Other Information.

During the quarter of the fiscal year covered by this report,
the Company reported all information that was required to be disclosed in a
report on Form 8-K.

Item 6. Exhibits.

(A) ****Index to and Description of Exhibits.

Exhibit Index

| | 3.1  | Articles of Incorporation (1)                                                                             
| | ---- | ----------------------------------------------------------------------------------------------------------
| |      |                                                                                                           
| | 3.2  | Bylaws (2)                                                                                                
| |      |                                                                                                           
| | 3.3  | Certificate of Amendment to the
        Articles of Incorporation *                                       
| |      |                                                                                                           
| | 3.4  | Text of Amendment to the Bylaws (3)                                                                       
| |      |                                                                                                           
| | 4.1  | Form of Subscription Agreement (4)                                                                        
| |      |                                                                                                           
| | 10.1 | Communicate.com, Inc. 2007 Stock Incentive Plan
      (5)                                                 
| |      |                                                                                                           
| | 10.2 | Employment Agreement dated September 8, 2007, between
      Communicate.com, Inc. and Jonathan Ehrlich
(6)

11

---

| | 10.3 | Incentive Stock Option Agreement Granted
        Under the 2007 Stock Incentive Plan dated September 8, 2007 between Communicate.com,
        Inc. and Jonathan Ehrlich (7)
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                            
| | 10.4 | Employment Severance Agreement dated September
        27, 2007, between Communicate.com, Inc. and David M. Jeffs (8)                                                      
| |      |                                                                                                                                                                            
| | 10.5 | Employment Agreement dated November 9, 2007,
        between Communicate.com Inc. and Mark Melville (9)                                                                    
| |      |                                                                                                                                                                            
| | 10.6 | Incentive Stock Option Agreement Granted
        Under the 2007 Stock Incentive Plan dated November 9, 2007 between Communicate.com
        Inc. and Mark Melville (10)    
| |      |                                                                                                                                                                            
| | 10.7 | Asset Purchase Agreement dated November 12,
        2007, between Communicate.com Inc. and FrequentTraveller.com Inc. (11)                                                 
| |      |                                                                                                                                                                            
| | 10.8 | Real Property Lease
        Agreement between Communicate.com, Inc. and Landing Holdings Limited and
        Landing Properties Limited. *                                 
| |      |                                                                                                                                                                            
| | 31.1 | Certification of
        Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002 *                                                       
| |      |                                                                                                                                                                            
| | 31.2 | Certification of
        Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002 *                                                       
| |      |                                                                                                                                                                            
| | 32.1 | Certification pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002 (Chief Executive Officer) *        
| |      |                                                                                                                                                                            
| | 32.2 | Certification pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002 (Chief Financial Officer) *        

*Filed herewith

|(1)  | Previously filed as exhibit 2(a) to the Communicate.com,
      Inc.s Registration Statement on Form 10-SB as filed on March 10, 2000 and
      incorporated herein by this reference.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                       
|(2)  | Previously filed as exhibit 2(b) to the Communicate.com,
      Inc.s Registration Statement on Form 10-SB as filed on March 10, 2000 and
      incorporated herein by this reference.
|     |                                                                                                                                                                                       
|(3)  | Previously filed as exhibit 3.4 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on August 22, 2007 and
      incorporated herein by this reference.          
|     |                                                                                                                                                                                       
|(4)  | Previously filed as exhibit 10.1 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on September 25, 2007 and
      incorporated herein by this reference.      
|     |                                                                                                                                                                                       
|(5)  | Previously filed as exhibit 4.1 to the Communicate.com,
      Inc.s Registration Statement Form S-8 as filed on August 22, 2007 and
      incorporated herein by this reference.     
|     |                                                                                                                                                                                       
|(6)  | Previously filed as exhibit 10.1 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on September 12, 2007 and
      incorporated herein by this reference.      
|     |                                                                                                                                                                                       
|(7)  | Previously filed as exhibit 10.2 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on September 12, 2007 and
      incorporated herein by this reference.      
|     |                                                                                                                                                                                       
|(8)  | Previously filed as exhibit 10.1 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on October 3, 2007 and
      incorporated herein by this reference.         
|     |                                                                                                                                                                                       
|(9)  | Previously filed as exhibit 10.1 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on November 16, 2007 and
      incorporated herein by this reference.       
|     |                                                                                                                                                                                       
|(10) | Previously filed as exhibit 10.2 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on November 16, 2007 and
      incorporated herein by this reference.       
|     |                                                                                                                                                                                       
|(11) | Previously filed as exhibit 10.1 to the Communicate.com,
      Inc.s Current Report on Form 8-K as filed on November 16, 2007 and
      incorporated herein by this reference.       

12

---

SIGNATURES

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

|                         | **COMMUNICATE.COM INC.**
|------------------------ | ------------------------
|                         |                         
|                         |                         
|                         |                         
|                         |                         
|Dated: November 19, 2007 | By:                     
|                         | Name:                   
|                         | Title:                  
|                         |                         
|                         |                         
|                         |                         
|                         |                         
|                         |                         
|Dated: November 19, 2007 | By:                     
|                         | Name:                   
|                         | Title:                  

13

---

COMMUNICATE.COM INC.



CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007



(UNAUDITED)





|CONSOLIDATED BALANCE SHEETS               
|------------------------------------------
|                                          
|CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                          
|CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

---

COMMUNICATE.COM INC.

CONSOLIDATED BALANCE SHEETS

|                                                          |   | September 30, |   |   | December 31, |  
|--------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                          |   | 2007          |   |   | 2006         |  
|                                                          |   | (unaudited)   |   |   |              |  
|                                                          |   |               |   |   |              |  
|ASSETS                                                    |  
|                                                          |   |               |   |   |              |  
|CURRENT ASSETS                                            |   |               |   |   |              |  
|Cash and cash equivalents                                 | $ | 4,071,105     |   | $ | 2,105,340    |  
|Available for sale securities                             |   | 634,256       |   |   | 261,912      |  
|Prepaid expenses and deposit                              |   | 83,289        |   |   | -            |  
|Accounts receivable                                       |   | 83,848        |   |   | 21,206       |  
|                                                          |   |               |   |   |              |  
|                                                          |   | 4,872,498     |   |   | 2,388,458    |  
|                                                          |   |               |   |   |              |  
|RESTRICTED CASH                                           |   | -             |   |   | 20,000       |  
|EQUIPMENT, net                                            |   | 35,943        |   |   | 45,032       |  
|INTANGIBLE ASSETS                                         |   | 1,645,061     |   |   | 1,645,061    |  
|                                                          |   |               |   |   |              |  
|                                                          | $ | 6,553,502     |   | $ | 4,098,551    |  
|                                                          |   |               |   |   |              |  
|                                                          |   |               |   |   |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY                      |  
|                                                          |   |               |   |   |              |  
|CURRENT LIABILITIES                                       |   |               |   |   |              |  
|Accounts payable and accrued
      liabilities            | $ | 958,861       |   | $ | 948,675      |  
|Due
      to related parties                              |   | 43,180        |   |   | 43,180       |  
|                                                          |   | 1,002,041     |   |   | 991,855      |  
|                                                          |   |               |   |   |              |  
|STOCKHOLDERS EQUITY                                      |   |               |   |   |              |  
|Capital stock                                             |   |               |   |   |              |  
|Authorized:                                               |   |               |   |   |              |  
|50,000,000 common shares, $0.001 par value                |   |               |   |   |              |  
|Issued
      and outstanding:                             |   |               |   |   |              |  
|19,896,623 common shares (December 31, 2006  17,836,339) |   | 10,906        |   |   | 8,846        |  
|Additional paid-in capital                                |   | 6,725,401     |   |   | 3,605,579    |  
|Accumulated
      deficit                                 |   | (1,184,846    | ) |   | (507,729     | )
|                                                          |   |               |   |   |              |  
|                                                          |   | 5,551,461     |   |   | 3,106,696    |  
|                                                          |   |               |   |   |              |  
|                                                          | $ | 6,553,502     |   | $ | 4,098,551    |  
|                                                          |   |               |   |   |              |  
|CONTINGENCY(Note 4)                                       |   |               |   |   |              |  
|COMMITMENT(Note 6)                                        |   |               |   |   |              |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-2

---

COMMUNICATE.COM INC.

CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

|                                            |   | Three months  |   |   | Three months  |  |   | Nine months   |   |   | Nine months   | 
|------------------------------------------- | - | ------------- | - | - | ------------- |  | - | ------------- | - | - | ------------- | 
|                                            |   | ended         |   |   | ended         |  |   | ended         |   |   | ended         | 
|                                            |   | September 30, |   |   | September 30, |  |   | September 30, |   |   | September 30, | 
|                                            |   | 2007          |   |   | 2006          |  |   | 2007          |   |   | 2006          | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|SALES                                       |   |               |   |   |               |  |   |               |   |   |               | 
|eCommerce                                   | $ | 1,642,530     |   | $ | 1,555,396     |  | $ | 4,849,346     |   | $ | 4,358,228     | 
|Domain
      names                          |   | -             |   |   | 500,000       |  |   | -             |   |   | 623,800       | 
|Domain name leasing
      and advertising   |   | 128,064       |   |   | 72,432        |  |   | 268,657       |   |   | 241,403       | 
|Royalties                                   |   | -             |   |   | -             |  |   | -             |   |   | 21,673        | 
|Total sales                                 |   | 1,770,594     |   |   | 2,127,828     |  |   | 5,118,003     |   |   | 5,245,104     | 
|COST OF SALES                               |   |               |   |   |               |  |   |               |   |   |               | 
|eCommerce                                   |   | 1,289,535     |   |   | 125,112       |  |   | 3,831,041     |   |   | 3,565,272     | 
|Domain names                                |   | -             |   |   | 1,238,542     |  |   | -             |   |   | 191,012       | 
|Total cost of sales                         |   | 1,289,535     |   |   | 1,363,654     |  |   | 3,831,041     |   |   | 3,756,284     | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|GROSS PROFIT                                |   | 481,059       |   |   | 764,174       |  |   | 1,286,962     |   |   | 1,488,820     | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|EXPENSES                                    |   |               |   |   |               |  |   |               |   |   |               | 
|Depreciation                                |   | 2,802         |   |   | 3,790         |  |   | 9,089         |   |   | 11,756        | 
|General and administrative                  |   | 147,019       |   |   | 98,592        |  |   | 407,715       |   |   | 305,297       | 
|Management
      fees and employee salaries |   | 547,689       |   |   | 221,939       |  |   | 1,096,053     |   |   | 789,010       | 
|Marketing                                   |   | 145,571       |   |   | 73,965        |  |   | 357,027       |   |   | 215,373       | 
|Professional fees                           |   | 91,932        |   |   | 29,423        |  |   | 151,845       |   |   | 64,532        | 
|                                            |   | 935,013       |   |   | 427,709       |  |   | 2,021,729     |   |   | 1,385,968     | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|(LOSS) INCOME BEFORE OTHER ITEMS            |   | (453,954      | ) |   | 336,465       |  |   | (734,767      | ) |   | 102,852       | 
|NON RECURRING INCOME                        |   | -             |   |   | -             |  |   | -             |   |   | 250,000       | 
|INTEREST INCOME                             |   | 24,788        |   |   | -             |  |   | 57,649        |   |   | 35,428        | 
|NON-CONTROLLING INTEREST SHARE OF           |   |               |   |   |               |  |   |               |   |   |               | 
|LOSS
      IN FT.COM                        |   | -             |   |   | 11,394        |  |   | -             |   |   | -             | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|NET (LOSS) INCOME                           | $ | (429,166      | ) | $ | 347,859       |  | $ | (677,118      | ) |   | 388,280       | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|BASIC AND DILUTED NET (LOSS) INCOME         |   |               |   |   |               |  |   |               |   |   |               | 
|PER
      SHARE                             | $ | (0.02         | ) | $ | 0.02          |  | $ | (0.04         | ) | $ | 0.02          | 
|                                            |   |               |   |   |               |  |   |               |   |   |               | 
|WEIGHTED AVERAGE NUMBER OF COMMON           |   |               |   |   |               |  |   |               |   |   |               | 
|SHARES OUTSTANDING                          |   |               |   |   |               |  |   |               |   |   |               | 
| BASIC                                     |   | 18,948,362    |   |   | 17,836,339    |  |   | 18,317,646    |   |   | 17,836,339    | 
| DILUTED                                   |   | 21,149,378    |   |   | 17,836,339    |  |   | 20,276,187    |   |   | 17,836,339    | 

The accompanying notes are an integral part of these consolidated
  financial statements.

F-3

---

COMMUNICATE.COM INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)

|                                                           |   | Nine months        |   |   | Nine months        |  
|---------------------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                                           |   | ended              |   |   | ended              |  
|                                                           |   | September 30, 2007 |   |   | September 30, 2006 |  
|                                                           |   |                    |   |   |                    |  
|CASH FLOWS FROM OPERATING ACTIVITIES                       |   |                    |   |   |                    |  
|Net (loss) income                                          | $ | (677,118           | ) | $ | 388,280            |  
|Adjustments to reconcile
      net income to net cash      |   |                    |   |   |                    |  
|provided
      by operating activities:                    |   |                    |   |   |                    |  
|Non-cash cost of
      domain name sales (Note 7)          |   | -                  |   |   | 191,012            |  
|Non-recurring income                                       |   | -                  |   |   | (250,000           | )
|Interest charged
      to additional paid-in capital       |   | -                  |   |   | 3,414              |  
|Stock based compensation                                   |   | 62,847             |   |   | -                  |  
|Accrued and unpaid
      severance costs                   |   | 200,000            |   |   | -                  |  
|Share issuance costs                                       |   | -                  |   |   | 64,800             |  
|Depreciation                                               |   | 9,089              |   |   | 11,756             |  
|Changes in operating assets and liabilities:               |   |                    |   |   |                    |  
|Accounts receivable                                        |   | (62,642            | ) |   | (289,925           | )
|Prepaid expenses                                           |   | (83,289            | ) |   | (41,608            | )
|Accounts payable and accrued
      liabilities             |   | (135,367           | ) |   | (291,010           | )
|                                                           |   |                    |   |   |                    |  
|CASH FLOW USED IN OPERATING ACTIVITIES                     |   | (686,684           | ) |   | (291,010           | )
|                                                           |   |                    |   |   |                    |  
|CASH FLOWS FROM INVESTING ACTIVITIES                       |   |                    |   |   |                    |  
|Purchase of available for sale securities                  |   | (372,344           | ) |   | (160,008           | )
|Purchase of domain name                                    |   | -                  |   |   | (4,126             | )
|Purchase
      of computer equipment                       |   | -                  |   |   | (7,669             | )
|                                                           |   |                    |   |   |                    |  
|CASH FLOW USED
      IN INVESTING ACTIVITIES               |   | (372,344           | ) |   | (171,803           | )
|                                                           |   |                    |   |   |                    |  
|CASH FLOWS FROM FINANCING ACTIVITIES                       |   |                    |   |   |                    |  
|Restricted cash                                            |   | 20,000             |   |   | -                  |  
|Proceeds from issuance of common stock                     |   | 3,004,793          |   |   | -                  |  
|Loan proceeds                                              |   | -                  |   |   | 43,180             |  
|                                                           |   |                    |   |   |                    |  
|CASH FLOW PROVIDED BY FINANCING ACTIVITIES                 |   | 3,024,793          |   |   | 43,180             |  
|                                                           |   |                    |   |   |                    |  
|NET INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS |   | 1,965,765          |   |   | (60,904            | )
|                                                           |   |                    |   |   |                    |  
|CASH AND CASH EQUIVALENTS, BEGINNING                       |   | 2,105,340          |   |   | 1,735,887          |  
|                                                           |   |                    |   |   |                    |  
|CASH AND CASH EQUIVALENTS, ENDING                          | $ | 4,071,105          |   | $ | 1,674,983          |  
|                                                           |   |                    |   |   |                    |  
|SUPPLEMENTAL CASH FLOW INFORMATION                         |   |                    |   |   |                    |  
|Cash paid for:                                             |   |                    |   |   |                    |  
|Interest                                                   | $ | -                  |   | $ | -                  |  
|Income taxes                                               | $ | -                  |   | $ | -                  |  

The accompanying notes are an integral part of these consolidated
  financial statements.

F-4

---

|COMMUNICATE.COM INC.                      
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|SEPTEMBER 30, 2007                        
|(unaudited)                               
|                                          
|NOTE 1  BASIS
      OF PRESENTATION      

Unaudited Interim Financial InformationThe consolidated financial statements of Communicate.com Inc. and subsidiaries
  (the Company) have been prepared in accordance with generally accepted
  accounting principles for interim consolidated financial information and with
  the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities
  and Exchange Commission ("SEC"). Accordingly, these consolidated financial statements
  are condensed and do not include some of the information necessary to obtain
  a complete understanding of the financial data. Accordingly, your attention
  is directed to footnote disclosures found in the Annual Report on Form 10-KSB
  for the year ended December 31, 2006, and particularly to Note 2, which includes
  a summary of significant accounting policies. In the opinion of management,
  the unaudited consolidated financial statements furnished herein include all
  adjustments, all of which are of a normal recurring nature, necessary for a
  fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with generally
  accepted accounting principles requires the use of estimates and assumptions
  that affect the reported amounts of assets and liabilities, disclosure of contingent
  assets and liabilities known to exist as of the date the financial statements
  are published, and the reported amounts of revenues and expenses during the
  reporting period. Uncertainties with respect to such estimates and assumptions
  are inherent in the preparation of the Company's financial statements; accordingly,
  it is possible that the actual results could differ from these estimates and
  assumptions that could have a material effect on the reported amounts of the
  Company's financial position and results of operations. Operating results for
  the nine month period ended September 30, 2007 are not necessarily indicative
  of the results that may be expected for the year ended December 31, 2007.

|NOTE 2  RELATED
      PARTY TRANSACTIONS
|-----------------------------------------

Employment Severance AgreementPursuant to the terms and conditions of an employment severance agreement,
  dated September 27, 2007 (the Severance Agreement), between the
  Company and its former President, the Company has agreed to pay a severance
  allowance in the amount of $200,000 less any and all applicable government withholdings
  and deductions. Accordingly, the Company has accrued a $200,000 liability to
  its former President which has been expensed as management fees in the period
  ended September 30, 2007. Furthermore, pursuant to the Severance Agreement,
  for a period commencing on October 1, 2007 until December 31, 2007, the Company
  has agreed to retain its former President as a consultant for a monthly fee
  of $10,000 to assist in the day- to-day operations of the Company, the transition
  of duties, and the relocation of the Companys offices.

Chief Executive Officer (CEO)Effective June 1, 2007 the Company entered into a five year employment agreement
  with its CEO (the CEO Agreement). The CEO Agreement provides that
  the CEO will receive (1) an annual base salary of CAD$300,000; (2) a bonus of
  up to 60% of base salary. On September 11, 2007, the CEO was granted an incentive
  stock option to purchase up to 1,000,000 shares of common stock of the Company
  at an exercise price of $2.50 per share. The option to purchase shares of common
  stock vests over the term of the incentive stock option plan as follows: (i)
  330,000 shares exercisable on September 11, 2008 and (ii) thereafter the option
  to purchase 83,300 shares vests after each successive three-month period until
  the granted amount has vested. Unless earlier terminated, the option shall expire
  on September 11, 2012.

On June 11, 2007, the Company issued 1,000,000 shares of common
  stock and 1,000,000 share purchase warrants to purchase 1,000,000 common stock
  with an exercise price of $1.25 effective and expiring June 10, 2009 to Hampson
  Equities Ltd., a company owned and controlled by the Companys CEO, in
  exchange for $1,000,000 cash (received) pursuant to a subscription agreement
  dated June 1, 2007. These shares and share purchase warrants are restricted
  securities and are subject to resale restrictions under Rule 144.

F-5

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|COMMUNICATE.COM INC.                                   
|-------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS             
|SEPTEMBER 30, 2007                                     
|(unaudited)                                            
|                                                       
|NOTE 2  RELATED
      PARTY TRANSACTIONS  (continued)

Chief Operating Officer and President (COO)Pursuant to the terms and conditions of an employment agreement, dated September
  8, 2007 (the COO Agreement), the Company has appointed a Chief Operating
  Officer and President (the COO), as of October 1, 2007 (the Effective
  Date). The COO Agreement provides for a term of five years. The COO Agreement
  provides that the COO will receive (a) an annual base salary of CDN $275,000;
  (b) a special bonus of CDN $200,000 to be paid on the Effective Date; (c) two
  additional special bonuses of $250,000 each, to be paid on each of the first
  and second anniversary of the Effective Date; (d) an additional cash bonus of
  up to 50% of base salary; and (e) a grant of 1,500,000 incentive stock options
  which will be subject to vesting as follows: (i) 500,000 Shares on the first
  anniversary of the Effective Date and (ii) thereafter 125,000 Shares vest after
  each successive three-month period. The Incentive Stock Options were granted
  under the Companys 2007 Stock Option Plan on October 1, 2007.

|NOTE 3  SEGMENTED
      INFORMATION
|------------------------------------

The Companys eCommerce operations are conducted in three
  business segments, Domain Sales, Leasing and Advertising; eCommerce Products
  and eCommerce Services. Revenues, operating profits and net identifiable assets
  by business segments are as follows:

For the nine months ended September 30, 2007Domain Sales, 
        Leasing and 
        Advertising
      eCommerce 
        Products
      eCommerce 
        Services
      Total$
      $
      $
      $Revenue
      268,657
      4,387,072
      462,274
      5,118,003Segment Profit (Loss)
      (498,448)
      (169,552)
      (66,767)
      (734,767)As at September 30, 2007$
      $
      $
      $Total Assets
      1,389,395
      5,094,109
      69,998
      6,553,502Intangible Assets
      1,389,395
      252,366
      3,300
      1,645,061


|NOTE 3  SEGMENTED
      INFORMATION  (continued)
|--------------------------------------------------

For the nine months ended September 30, 2006Domain Sales, 
        Advertising and 
        Royalty
      eCommerce 
        Products
      eCommerce 
        Services
      Total$
      $
      $
      $Revenue
      886,876
      3,960,228
      398,000
      5,245,104Segment Profit (Loss)
      385,865
      (125,384)
      (157,629)
      102,852As at September 30, 2006
      $
      $
      $
      $Total Assets
      1,347,126
      2,357,606
      68,422
      3,773,154Intangible Assets
      1,347,126
      252,366
      3,300
      1,602,792


The reconciliation of the segment profit to net income as reported
  in the financial statements is as follows:

For the nine months ended September 30,
      2007
      2006$
      $Segment (Loss) Profit
      (734,767)
      102,852Non-Recurring Income
      -
      250,000Interest Income
      57,649
      35,428Net (Loss) Income
      (677,118)
      388,280 F-6


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|COMMUNICATE.COM INC.                      
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|SEPTEMBER 30, 2007                        
|(unaudited)                               
|                                          
|                                          
|NOTE 4 CONTINGENCY                       

The former Chief Executive Officer of DHI commenced a legal action
  against DHI on March 9, 2000 for wrongful dismissal and breach of contract.
  He is seeking, at a minimum, 18.39% of the outstanding shares of DHI, specific
  performance of his contract, special damages in an approximate amount of $30,000,
  aggravated and punitive damages, and interest and costs. On June 1, 2000, DHI
  filed a Defence and Counterclaim against this individual claiming damages and
  special damages for breach of fiduciary duty and breach of his employment contract.
  The outcome of these legal actions is currently not determinable and as such
  the amount of loss, if any, resulting from this litigation is presently not
  determinable. To date, there has been no further action taken by the plaintiff
  since the filing of the initial legal action on March 9, 2000.

|NOTE 5  CAPITAL
      STOCK
|----------------------------

Common Share Subscriptions

On June 11, 2007, the Company issued 1,000,000 shares of common
  stock and 1,000,000 common stock share purchase warrants with an exercise price
  of $1.25 to a company owned and controlled by the Companys CEO in exchange
  for $1,000,000 cash. The warrants expire June 10, 2009.

During September and October 2007 the Company accepted subscriptions
  from 11 accredited investors pursuant to which the Company has issued and sold
  2,550,000 of the Companys shares of common stock, at a price of $2.00
  per share for total gross proceeds of $5,100,000 (the Offering).
  The shares were issued pursuant to the subscriptions as follows: 1,000,000 shares
  for $1,999,956 net cash proceeds were issued before September 30, 2007, and
  the balance of 1,550,000 shares for net cash proceeds of $3,000,944, were issued
  in October 2007.

Pursuant to the terms of the Offering, the Company has agreed
  to file a registration statement on Form SB-2 or other appropriate registration
  form with the Securities and Exchange Commission (the Registration Statement)
  on or before December 31, 2007 covering the resale of the common stock (the
  Registerable Securities) sold. The Company is further required to
  use its reasonable best efforts to maintain the Registration Statement effective
  for a period of (i) two years or (ii) until such time as all the Registerable
  Securities are eligible for sale under Rule 144k of the Securities Act of 1933,
  as amended. In the event the Registration Statement is not filed on or before
  December 31, 2007, the Company would be required to pay each investor, as a
  one-time penalty, shares of common stock of the Company equal to (i) 5% of the
  investors subscription amount, divided by (ii) the Offering Price (the
  Penalty Shares). The Penalty Shares shall be issued to the investor
  on or before January 15, 2008, and the Company shall include all such shares
  as Registerable Securities in the Registration Statement.

The Offering was conducted in reliance upon an exemption from
  registration under the Securities Act of 1933, as amended (the "Securities Act"),
  including, without limitation, that under Section 506 of Regulation D promulgated
  under the Securities Act. The securities were offered and sold by the Company
  to accredited investors in reliance on Section 506 of Regulation D of the Securities
  Act of 1933, as amended.

Stock Options

The Board of Directors and stockholders approved the 2007 Stock
  Incentive Plan and adopted it August 21, 2007 (the Plan). The Company
  has reserved 5,000,000 shares of its common stock for issuance to the directors,
  employees and consultants under the Plan. The Plan is administered by the Board
  of Directors. Vesting terms of the options range from immediately to five years
  and no options will be exercisable for a period of more than ten years.

On September 11, 2007 the Company granted a total of 1,250,000
  stock options to purchase the Companys common stock at an exercise price
  of $2.50 per share, vesting over three years and exercisable for a period of
  five years, to the following individuals:

| | (a) | 1,000,000 to the Companys CEO;
| | --- | -------------------------------
| | (b) | 50,000 to a consultant; and    
| | (c) | 100,000 each to two directors. 

F-7

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|COMMUNICATE.COM INC.                      
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|SEPTEMBER 30, 2007                        
|(unaudited)                               
|                                          
|                                          
|NOTE 5  CAPITAL
      STOCK  (continued)

Stock Options (continued)

All of the above options were valued using the Black Scholes
  option pricing model using the following assumptions: no dividend yield; expected
  volatility rate of 120.92%; a risk free interest rate of 4.07% - 4.11% and an
  average life of 3 years resulting in a value of $1.81 per option granted. The
  fair value of these options of $2,262,500 will be recognized on a straight-line
  basis over the next 3 years and accordingly, an expense of $62,847 has been
  recognized as of the period ended September 30, 2007.

A summary of the option activity for the nine months ended September
  30, 2007 pursuant to the terms of the 2007 Plan is as follows:

2007
        PlanWeightedOutstanding
      
      
      AverageOptions
      
      
      ExercisePriceOptions outstanding , December 31, 2006Granted
      
      1,250,000
      
      $
      2.50Exercised
      
      
      
      
      Cancelled or expired
      
      
      
      
      Options outstanding, September 30, 2007
      
      1,250,000
      
      $
      2.50Options exercisable September 30, 2007
      
      Exercise price
      $
      2.50Weighted average remaining life
      
      4.95


Effective October 1, 2007, the Company granted to its COO 1,500,000
  options to purchase the Companys common stock at a price of $2.42 per
  share. These options vest over three years and are exercisable for a period
  of five years. The Company valued the foregoing options using the Black Scholes
  option pricing model using the following assumptions: no dividend yield; expected
  volatility rate of 120.92%; risk free interest rate of 4.23% and an average
  life of 3 years resulting in a value of $1.42 per option granted. The fair value
  of these stock options of $2,130,000 will be recognized on a straight-line basis
  over the next 3 years, commencing October 1, 2007.

Common Stock Purchase Warrants

As of September 30, 2007, the Company has 1,000,000 warrants
  to purchase the Companys common stock outstanding as follows:

WeightedAverageOutstanding
      
      
      ExerciseWarrants
      
      
      PriceWarrants outstanding , December 31, 2006
      
      -
      
      $
      -Granted
      
      1,000,000
      
      
      1.25Cancelled or expired
      
      -
      
      
      -Warrants exercisable September 30, 2007
      
      1,000,000
      
      $
      1.25Exercise price
      $
      1.25Weighted average remaining life
      
      1.70
        Years F-8


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|COMMUNICATE.COM INC.                      
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|SEPTEMBER 30, 2007                        
|(unaudited)                               
|                                          
|NOTE 6 
      COMMITMENT                 

Effective October 1, 2007 the Company leased a 5,400 square
  feet office in Vancouver, Canada from an unrelated party for a 5-year period
  starting from October 1, 2007 to September 30, 2012. Pursuant to the terms of
  the lease agreement, the Company has committed to basic rent costs for the next
  5 years commencing October 1, 2007 as follows: (a) year 1 - $109,511; (b)
  year 2 - $114,853; (c) year 3 - $120,915; (d) year 4 - $125,537;
  and (e) year 5 - $130,879. The Company will also be responsible for common
  costs which are currently estimated to be equal to approximately 75% of basic
  rent.

|NOTE 7 
      DOMAIN NAME SALE
|-------------------------------

On August 11, 2006, DHI completed the sale and transfer of
  a sports domain name with a cost of $125,112 to an arms-length party for
  cash proceeds of $500,000.

|NOTE 8 
      SUBSEQUENT EVENTS
|--------------------------------

Effective November 6, 2007, pursuant to an Asset Purchase
  Agreement between the Company and FT, the Company acquired all of the tangible
  and intangible assets associated or used in connection with the operation of
  FTs travel business, exclusive of all cash and real property, in consideration
  for (a) the 8,000,000 shares of FT owned by the Company; and (b) the cancellation
  of $261,833 of debt owed by FT to the Company.

As of November 9, 2007, the Company entered into a five year
  employment agreement with its Chief Corporate Development Officer (CCDO)
  (the CCDO Agreement), effective January 1, 2008 (the Effective
  Date). The CCDO Agreement provides that the CCDO will receive (1) an annual
  base salary of CDN$250,000, commencing January 1, 2008; (2) a bonus of up
  to 50% of base salary; (3) a special bonus of CDN $300,000 to be paid on
  or the Effective Date; (4) two special bonuses of $100,000 each to be paid
  on each of the first and second anniversary of the Effective Date; and (5) an
  incentive stock option to purchase up to 1,000,000 shares of common stock of
  the Company at an exercise price equal to the market closing price of the Companys
  common shares on the Effective Date. The option to purchase shares of common
  stock vests over the term of the CCDO Agreement as follows: (i) exercisable
  as to 33.333% of the shares on the first anniversary of the Effective Date and
  (ii) an additional 8.333% of the shares on the last day of each successive three
  month period thereafter, until all such shares have vested. Unless earlier terminated,
  the option shall expire on January 1, 2013. The Incentive Stock Options will
  be granted under the Companys 2007 Stock Option Plan.

F-9

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