**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
  
 
 **FORM
        10-KSB**


xANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
 
 For
        the
        fiscal year ended June 30, 2008
 Commission
        file number 0-24001
 
 **WHERIFY
        WIRELESS, INC.**
 (Name
        of
        small business issuer in its charter)
 
 **Delaware**
              **76-0552098**(State
                  or other jurisdiction of
                incorporation
                  or organization)
              (I.R.S.
                  Employer
                Identification
                  No.)
  **63
        Bovet Rd, #521**
 **San
        Mateo, California 94402**
 **Tel:
        (650) 641-2225**
 (Address,
        including zip code, and telephone number, including area code, of registrant’s
        principal executive offices)
  Securities
        registered pursuant to Section 12(b) of the Act: **None**
  Securities
        registered pursuant to Section 12(g) of the Act:
 **Common
        Stock, $.01 Par Value**
 Title
        of
        Each Class
  Check
        whether issuer is not required to file reports pursuant to Section 13 or
        15(d)
        of the Exchange Act.  ̈
 
 Check
        whether the issuer (1) has filed all reports to be filed by Section 13 or
        15(d)
        of the Exchange Act during the past 12 months (or for such shorter period
        that
        the registrant was required to file such reports), and (2) has been subject
        to
        such filing requirements for the past 90 days. Yes x  No  ̈
 
 Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of registrant’s knowledge, in definitive proxy or information
        statements incorporated by reference in Part III of this Form 10-KSB or any
        amendment to this Form 10-KSB.  ̈
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes  ̈ No x
 
 The
        issuer’s revenues for the fiscal year ended June 30, 2008 were
        $1,440,665
 
 State
        the
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates computed by reference to the price at which the common equity
        was
        sold, or the average bid and asked price of such common equity, as of a
        specified date within the past 60 days. (See definition of affiliate in Rule
        12b-2 of the Exchange Act.) The aggregate market value of the voting and
        non-voting common equity on September 29, 2008 was approximately $3,839,491,
        based on the closing price of such stock of $0.0325 per share on such
        date.
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date. Number of shares Common Stock, $.01 par
        value, outstanding as of September 29, 2008 was 119,864,201.
 
 Transitional
        Small Business Disclosure format (Check one): Yes  ̈ No x
  
  **PART
        I**
 
 **Items
        1 and 2. Description of Business and Properties.**
 
 **INFORMATION
        REGARDING FORWARD-LOOKING STATEMENTS**
 
 In
        addition to historical information, this report contains predictions, estimates
        and other forward-looking statements that relate to future events or our
        future
        financial performance. These statements involve known and unknown risks,
        uncertainties and other factors 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
        the forward-looking statements. These risks and other factors include those
        listed under “Risk Factors” and elsewhere in this report, and some of which we
        may not know. In some cases, you can identify forward-looking statements
        by
        terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of
        these terms or other comparable terminology.
 
 Forward-looking
        statements involve known and unknown risks, uncertainties and other factors
        that
        may cause our actual results, performance or achievements to be materially
        different from any future results, performances or achievements expressed
        or
        implied by the forward-looking statements. We discuss many of these risks
        in
        this report in greater detail under the heading “Risk Factors.” Given these
        uncertainties, you should not place undue reliance on these forward-looking
        statements. Also, forward-looking statements represent our management’s beliefs
        and assumptions only as of the date of this report. You should read this
        report
        and the documents that we reference in this report and have filed as exhibits
        to
        the report completely and with the understanding that our actual future results
        may be materially different from what we expect.
 
 Except
        as
        required by law, we assume no obligation to update these forward-looking
        statements publicly, or to update the reasons actual results could differ
        materially from those anticipated in these forward-looking statements, even
        if
        new information becomes available in the future. References in this annual
        report to “we,” “us,” “or,” “the company,” or “Wherify” refer to Wherify
        Wireless, Inc., a Delaware corporation, and its subsidiaries, unless the
        content requires otherwise.
 
 **General**
 
 Wherify
        Wireless, Inc. (“Wherify” or the “Company”) is a pioneering developer of
        patented wireless location products and services for family safety and business
        communications. Our portfolio of intellectual property includes our proprietary
        integration of the US Government’s Global Positioning System (GPS) and wireless
        communication technologies; our patented back-end location service; the
        WherifoneTM GPS locator phone which provides real-time location information and
        lets families with pre-teens, seniors, or those with special medical needs,
        stay
        connected and in contact with each other. Our name, Wherify Wireless, reflects
        our mission and objective: verify the location of loved ones or possessions
        of
        value through wireless technology.
 
 On
        April
        14, 2004, Wherify (formerly known as IQ Biometrix, Inc., formally known as
        JVWeb, Inc.), a transitory wholly owned special purpose acquisition
        subsidiary of Wherify, and Wherify California, Inc., a California corporation
        (formerly known as Wherify Wireless, Inc.) (“Wherify California”) entered into
        an Agreement and Plan of Merger pursuant to which the  transitory
        wholly owned subsidiary merged with and into Wherify California, with Wherify
        California surviving as a wholly owned subsidiary of Wherify. Both Wherify
        and
        Wherify California received stockholder approval for the merger at special
        meetings held on July 19, 2005, and the merger was closed on July 21,
        2005. Subsequent to the merger, Wherify, a Delaware corporation (which was
        then known as “IQ Biometrix, Inc.”), changed its name to “Wherify Wireless,
        Inc.”, and shortly thereafter Wherify California (which was then known as
“Wherify Wireless, Inc.”) changed its name to “Wherify California, Inc.” Wherify
        was originally the result of a merger of JVWeb, Inc., a Delaware corporation,
        and IQ Biometrix California, Inc., a California corporation. JVWeb was
        incorporated on October 28, 1997. Wherify California was incorporated
        in March of 1998, and was founded to develop products and services to
        compete in the wireless location-based services (“WLBS”) market.
 
 **DESCRIPTION
        OF OUR WIRELESS LOCATION PRODUCTS BUSINESS**
 
 **General**
 
 We
        have
        developed a comprehensive, end-to-end location system, which includes both
        the
        Wherifone (cell phone) utilizing a proprietary Location Based Software (“LBS”)
        for communications with the Wherifone. Our tested and proven location system
        enables subscribers to obtain accurate location information for loved-ones
        or
        valuable property directly through the Internet, 24 hours-a-day, seven days
        a
        week. Two-way voice communications enabled in the hand held unit will allow
        direct voice communication between the subscriber and a loved one or care
        giver.
 
 2
  Our
        technology combines the power of enhanced GPS and tri-band GSM technologies.
        This product allows a remote user to not only “ping” the device to receive
        location information, but also to make a call to the device to speak directly
        with the device user.
 
 We
        can
        provide location and tracking information in real-time to customers using
        the
        Wherifone, and other smart phones in 2009, for both routine and emergency
        situations through Wherify’s Location Based Software platform (“Springboard”).
        Following purchase and service activation, a subscriber may determine the
        locations of the product through the Springboard internet portal.
 
 Wherify’s
        Location Based Software platform (“Springboard”) is fully equipped with an
        off-the-shelf database, computer and credit card billing application
        software.
 
 Wherify
        will modify its Springboard Location Platform to support quick development
        and
        deployment of enterprise class LBS applications.  These modifications
        include:
  ·
              Support
                  for standards based location enabled GSM
                  handsets
 ·
              Support
                  for CDMA handsets utilizing 3rdparty location gateways
 ·
              Offering
                  a full compliment of access options including Text Messaging, Email,
                  and
                  automated voice gateways
 ·
              GIS
                  services
 ·
              Simple
                  to use API for ease of integration
  Once
        complete, the new Springboard platform will enable enterprise application
        developers to quickly design, build and deploy LBS applications by providing
        a
        rich compliment of location and notification services, freeing the application
        developer from the complexities of handset location  determination and
        allowing them to focus on the unique needs of their specific
        application.
  Wherify
        is planning to develop and deploy the first Springboard-based applications
        in
        2009, focusing on Mobile Enterprise Employee Management.
 
 We
        expect
        that the majority of our gross margin after subscriber buildup will come
        from
        recurring location based service revenues. Monthly recurring location service
        revenues will vary based upon the application it is coupled with. We expect
        that
        standard location service plans will range from $4.95 to $14.95 per
        month.
 
 We
        believe our core GSM/ GPS cell phone technology which was used in the Wherifone
        will allow us to further penetrate the market for Location Based Services.
        The
        Wherifone is in production and has passed all three international GSM Industry
        certifications (PCS Type Certification Review Board, Full Type Approval,
        and
        Global Certification Forum) and has passed several international mobile
        operators final network approvals. **** For
        our
        next generation products, we plan to partner with strategic hardware
        manufactures, carriers and business solution providers who would work together
        with us to leverage our success with our core GSM/ GPS cell phone technology
        and
        our Location Based Software platform (“Springboard”) in order market and
        distribute new hardware products through their channels.
 
 **Industry
        Overview**
 The
          wireless location-based services market is a relatively new industry. Following
          is a brief description of some of its characteristics:
 ·
                Prices
                    of enabling “location” technologies (GPS, wireless connectivity, Internet)
                    and products are falling while their capabilities are
                    increasing;·
                Availability
                    and deployment of higher speed wireless data networks (GPRS,
                    EDGE, WCDMA)
                    and products are emerging;·
                The
                    Internet has provided the ability to host application services
                    eliminating
                    the technical infrastructure and management expense;·
                Network
                    operators and wireless carriers are seeking new, higher margin
                    services to
                    offset declining voice access revenues; and·
                Consumer
                    awareness and interest is increasing in personal location safety,
                    vehicle
                    tracking, roadside safety and anti-theft
                    services.
  3
  **Our
        Strategy for Location Based Services Business**
 
 Our
        objective is to be the leading provider of wireless location services by
        pioneering the convergence of state-of-the-art enhanced global positioning,
        wireless communications and other propriety software that empowers people
        and
        businesses to locate employees, loved-ones or personal property and bring
        location information to cellular and GPS devices.
 
 As
        Wherify has shown with the launch of the Wherifone, there is a need for a
        sophisticated software platform to control the integration of location
        information from a GPS or cellular device and the applications required by
        today’s businesses and safety conscience consumers. Our future business entails
        licensing additional devices and applications requiring location, to utilize
        our
        Location Based Services platform (Springboard).
 
 **Forge
        Strategic Relationships**
 
 Establishing
        and building United States and international partnerships, licensing agreements
        for our Location Based Services platform, and carrier relationships utilizing
        our technologies will facilitate efficient entry into new markets. Forging
        strategic partnerships including co-branding, distribution and marketing
        with
        telecommunication companies, wireless carriers, national retailers, major
        consumer brand companies and mass media will align our sales and marketing
        efforts with established sales channels.
 
 **Wireless
        Location Segment Products and Services**
 
 We
        have
        developed a comprehensive, miniaturized, end-to-end personal location system,
        which includes both a hand held locator (hardware) and a proprietary Location
        Based Software Service (Springboard). Our tested and proven technology will
        enable people to obtain accurate location information for loved-ones, employees
        or valuable property directly through the Internet 24 hours-a-day, seven
        days a
        week. Having developed the first phone with enhanced GPS with GSM technology,
        we
        plan to leverage our experience with this technology and license our
        location-based services (LBS) software platform for a wide variety of cellular
        devices and cellular applications that require location to complete their
        product offering. We believe our LBS software platform will be able to serve
        the
        GSM/GPS location marketplace. By facilitating a wide range of devices and
        applications we believe we are in an excellent position to benefit from the
        emerging location-based services marketplace around the world. Our LBS platform
        potentially could provide location information to a wide range of devices
        connected through the worldwide GSM networks to Wherify’s Location Based
        Software Service. The searching party will be given the user’s exact location
        through the Internet via a map interface on Wherify’s web site or via one of our
        business partner’s applications.
 
 Wherify’s
        proprietary Location Based Software Service provides the complete array of
        back-end services to subscribers and business partners’ applications. Using the
        Wherifone as an example of a device using the Wherify LBS platform and the
        family finder as the application we can examine how the location information
        is
        provided to the client. The user experience begins with the selection of
        a
        service plan and activation of service. Customers then begin by establishing
        their personal pass code and configuring their Wherifone (for example by
        programming the five one-touch dialing buttons for out-bound calling). A
        subscriber can have more than one product included on his or her account,
        and
        can set up individual profiles for each product.
 
 The
        subscriber initiates requests for information on their product’s location
        through the Internet via Wherify’s web site Wherify’s Location Service Center
        (“LSC”) automatically contacts the product via the local cellular communications
        infrastructure, requesting the product’s location. The Wherifone utilizes
        GSM/GPRS technology and transmits on a GSM network. The Wherifone locator
        utilizes tri-band GSM technology.
 
 The
        product’s GPS electronics, utilizing advanced “weak signal server-enhanced”
technology, will provide rapid location identification. With this technology,
        the most current satellite data (“Ephemeris data”) is delivered to the product
        during the request for location. This greatly enhances GPS performance in
        less-than-ideal circumstances (i.e. urban canyons, deep building interiors,
        and
        other difficult areas), enabling the product to get a location from GPS
        satellites ten times faster (10 seconds versus 100 seconds) than with Standard
        GPS. The cellular tower ID is also used to augment the location information
        provided.
 
 Having
        determined its location, the product then communicates the location information
        to the Location Based Service Software. The location information is then
        passed
        to the subscriber via the Internet (with a map and closest street address).
        In
        most cases, the entire process takes less than 60 seconds. A copy of the
        event
        is stored in the customer’s files.
 
 The
        accuracy of the location information provided by Wherify products will be
        within
        a few feet in optimum conditions, significantly better than that required
        by FCC
        (accuracy to be within a radius of 150 feet 67% of the time).
 
 In
        addition to these basic location reporting capabilities, the Location Based
        Service Software also offers several additional features to
        subscribers:
  4
  *Breadcrumbing.* The
        subscriber is able to get a report on a series of location events through
        “breadcrumbing.” With this feature, the user can determine the location history
        of the user. Parents may want to use this feature to confirm the whereabouts
        of
        their child if he or she is in the care of a guardian and has several
        appointments throughout the day. To utilize this feature, the subscriber
        predetermines the number of locations he or she wishes to track, as well
        as the
        desired time interval between locations (i.e. Identify a total of 12 locations,
        one every 15 minutes). Once all locations are identified, a report will be
        automatically issued. The subscriber can then request a mapping of the desired
        locations.
 
 **Technology**
 
 Our
        wireless products are wireless location technology-independent. Consequently,
        whether the various wireless operators choose to use GPS, AOA, TDOA, adaptive
        antenna arrays or multipath fingerprint location systems, Wherify’s product and
        Location Service Center is equally effective. Our current product design
        utilizes tri-band GSM telephony chip sets and can be adapted in the future
        to
        the then prevalent wireless technology, be it 2.5G or 3G. The product’s GPS
        electronics, utilizing advanced “weak signal server-enhanced” technology will
        provide rapid location identification.
 
 Each
        Wherifone, and other smart phones in 2009, is programmed with a unique I.D.
        number and uses standard cellular frequencies to communicate its location.
        The
        product is also programmed with a unique subscriber I.D. number. This allows
        the
        owner to subscribe to the service needed.
 
 We
        have
        developed a “carrier-class” architecture and facility to create and manage our
        proprietary Location Based Service Software (reliable to 99.999%). The Local
        Based Service Center runs on redundant off-the-shelf servers. This enables
        cost-efficient expansion, without the need for application code
        changes.
 
 **Sales**
 
 *Business
        Development Sales Channel* .
        To
        build market share and profitability, we will be working directly with
        Application Development business partners. We believe these vertical
        business-to-business distribution channels, along with the direct-to-consumer
        channels, will create opportunities for us to pursue a diverse range of
        consumers globally.
 
 Within
        our business-to-business channel, we plan to target several vertical markets,
        such as the security market and the cellular carrier’s subscriber base. We
        intend to leverage their customer base for increased market share.
 
 **Manufacturing**
 
 We
        no
        longer intend to directly contract for the manufacture of the Wherifone.
        We have
        licensed all manufacturing, assembly, testing and supply chain functions
        to our
        distribution partner, SOS GPS in order to reduce fixed overhead and personnel
        costs, thus providing flexibility in meeting market demand and to focus on
        the
        development of our Location Based Service Software (Springboard).
 
 **Competition**
 
 The
        wireless location-based services market is a relatively new and immature
        industry, and we expect it to become highly competitive. There are substantial
        barriers to entry, but competition from existing competitors and new market
        entrants will intensify in the future. Current and potential competitors
        in our
        markets include, but are not limited to the following: uLocate Communications,
        Autodesk, and WaveMarket
 
 **Intellectual
        Property**
 
 We
        rely
        on a combination of copyright, trademark, trade secret and other intellectual
        property laws, nondisclosure agreements and other protective measures to
        protect
        our proprietary rights in our wireless location products business. Our first
        patent in this business segment was approved by the United States Patent
        Office
        on December 7, 1998, and was issued on May 18, 1999. Additional patents have
        been issued on March 26, 2002 and May 14, 2002. Other patents, filed in June
        2003 and March 2005, are pending as of June 30, 2008. We rely on third-party
        licensors and other vendors for patented hardware and/or software license
        rights
        in technology that are incorporated into and are necessary for the operation
        and
        functionality of our products.
 
 5
  On
        January 5, 2007, Westport Office Park, LLC (“Westport”), filed an Entry of
        Stipulation and Agreement allowing entry of a stipulated judgment ("Judgment")
        against Wherify Wireless, Inc, a California Corporation (“Wherify California”),
        in the Superior Court of California for San Mateo County.  The judgment
        extinguished Wherify California's right to possession of certain leased premises
        that Wherify California occupied as its principal offices in favor of Westport,
        and awarded Westport approximately $1.1 million for then-outstanding amounts
        due
        and owing under the terms of the lease and certain other owed amounts.  On
        January 17, 2007, Wherify California vacated the leased premises.
 
 On
        March
        20, 2007, Westport obtained a writ of execution to enforce the judgment against
        the assets of Wherify California in the amount of $1,405,485.75.  On March
        30, 2007, Westport recorded a judgment lien with the United States Patent
        and
        Trademark Office on two patents held in name of Wherify California.  The
        specific patents are U.S. Patent Application 11/126,827 and U.S. Design Patent
        D526985. One appropriate means to remove a judgment lien is to pay the amount
        due the creditor.
 
 **Facilities**
 
 Wherify’s
        no longer maintains a physical headquarters facility in San Mateo, California.
        Our employees all work remotely and collaborate over the internet on a regular
        basis.
 
 **Working
        Capital**
 
 As
        of
        June 30, 2008, we had cash and cash equivalents of approximately $50,299,
        other
        current assets of approximately $48,084 and current liabilities of approximately
        $13.2 million, excluding approximately $3.1 million in past due rent obligations
        to our former landlord. We also had a liability related to the non-current
        payable portion of the convertible debenture and convertible note of
        approximately $4.5 million. As of October 3, 2008, we had cash and cash
        equivalents of approximately $42,000.
 
 On
        March
        15, 2006, we filed a registration statement with the Securities and Exchange
        Commission (File No. 333-132461) to register 16.8 million shares of our common
        stock to be sold by us in a direct offering, on July 18, 2006 we were notified
        that this direct offering was effective, and on November 2, 2006 we announced
        that the direct offering was closed and that approximately 16.6 million shares
        had been sold raising approximately $4.2 million.
 
 On
        February 22, 2007, we sold a $1.2 million 10% Senior Convertible Promissory
        Note
        which was convertible into 12,000,000 shares. In connection with the issuance
        of
        the Note we issued warrants to purchase 6,000,000 shares of common stock
        at $.10
        per share. In June 2008, the note was converted into 12,000,000
        shares.
 
 On
        April
        11, 2007 and April 18, 2007 we sold an aggregate of 7,500 shares of Series
        A
        Convertible Preferred Stock convertible into 60,000,000 shares of common
        stock.
        In connection with this transaction we granted warrants to purchase 6,000,000
        shares of common stock at an exercise price of $0.15 per share. As a result
        of
        these financings Wherify received net proceeds of approximately $5.27
        million.
 
 On
        August
        1, 2007 and August 31, 2007 we sold an aggregate of 1,129 shares of Series
        B
        Convertible Adjustable Preferred Stock which is convertible into 7,056,250
        shares of common stock. In connection with this transaction we granted warrants
        to purchase 2,469,688 shares of common stock at an exercise of a minimum
        of
        $0.16 to a maximum of $0.20 at the conversion. As a result of
        these financings Wherify received net proceeds of approximately
        $856,000.
 
 On
        February 8, 2008, we sold our FACES software product to a private party for
        $150,000.
 
 On
        May
        16, 2008, we borrowed $43,750 under a promissory note. This note bears interest
        at an annual rate of 12% and is convertible into common stock at $0.01 per
        share. We also issued 437,500 five year warrants to the note holder exercisable
        at a price of $0.01.
 
 On
        June
        6, 2008, we sold approximately $550,000 principal amount of its Senior Secured
        Convertible Promissory Bridge Notes (“Bridge Notes”) of the anticipated amount
        of $800,000 principal amount to accredited investors. After the placement
        agent
        commission of $55,000 and other placement expenses, we received net cash
        proceeds of approximately $440,000. The Bridge Notes initially bear interest
        at
        an annual rate of 12.5%, commencing on the date of issuance and paid monthly.
        Since the Bridge Notes were not paid by August 31, 2008, the interest has
        been
        increased to an annual rate of 17.5% pursuant to the terms of the of the
        Bridge
        Notes. As of October 3, 2008 the Bridge Notes were still
        outstanding.
  6
  **[add
        additional bridge issuances here]**
 
 We
        intend
        to pursue various sources of public and private financing, including direct
        issuances of common stock, to provide us greater flexibility and certainty
        with
        respect to our financing needs.
 
 **Research
        and Development**
 
 The
        Company incurred engineering and development costs including the cost of
        preparing manufacturing processes up to the prototype production efforts
        and
        prior to demonstrating technical feasibility totaling $759,547 and $1,371,084
        for fiscal years 2008 and 2007, respectively as such expenses are included
        in
        the Statement of Operations.
 
 **Employees**
 
 As
        of
        September 28, 2008, we employed 5 full time people, of whom 3 were employed
        in
        engineering and information technology, 2 in executive and finance. Our
        employees are not represented by a labor union. In addition, two consultants
        work closely with the Company.
 
 **Recent
        Developments**
 
 On
        August
        12, 2008, Wherify Wireless and certain of its subsidiaries, Wherify Acquisition,
        Inc., a Delaware corporation and wholly owned subsidiary of Wherify (“Merger
        Sub”), LY Holdings, LLC, a Kentucky corporation (“LY Holdings”), Lightyear
        Network Solutions, LLC, a Kentucky limited liability company (“Lightyear”) and
        certain of LY Holdings’ affiliates entered into an Agreement and Plan of Merger
        (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into
        LY Holdings (the “Merger”), with LY Holdings continuing as the surviving
        company. LY Holdings will become a subsidiary of Wherify following the Merger.
        Sherman Henderson, President and Chief Executive Officer of Lightyear, will
        serve as Chief Executive Officer of the combined entity, which will be
        headquartered in Louisville, Kentucky.
 
 Merger
        Agreement
 
 Subject
        to the terms and conditions of the Merger Agreement, at the effective time
        of
        the Merger, Wherify will be obligated to issue to the holders of outstanding
        membership interests of LY Holdings a number of shares of a newly created
        series
        of preferred stock (the “Merger Shares”) pursuant to an exchange ratio that is
        intended to result in LY Holdings members and LY Holdings noteholders holding
        51% of Wherify’s fully diluted outstanding common stock at the effective time of
        the Merger on an as converted basis, in exchange for all outstanding membership
        interests of LY Holdings and restructuring of existing Lightyear debt.
 
 The
        Shares are being issued in a private placement pursuant to Section 4(2) of
        the
        Securities Act of 1933, as amended (the “Act”), and Rule 506 of Regulation D
        promulgated under the Act and are subject to restrictions on resale thereunder.
        Each Merger Share will be convertible into common stock in amount to be
        determined which is intended to result in LY Holdings members and LY Holdings
        noteholders holding 51% of Wherify’s common stock on a fully diluted basis after
        the effective time of the Merger. Holders of the Merger Shares will vote
        with
        the holders of Wherify’s common stock as one class, except as otherwise required
        by Delaware law, and will receive one vote per share on an as converted to
        common stock basis on all matters except for the election of members of the
        Board of Directors. Holders of Merger Shares will have 1.3 votes per share
        on an
        as converted to common stock basis on the election of members to the Board
        of
        Directors.
 
 The
        initial Board of Directors of the combined company at the effective time
        of the
        Merger will consist of seven persons - five directors chosen by LY Holdings
        (one
        of which will be approved by Wherify), one director chosen by Wherify, and
        one
        director chosen by GPS Associates, LLC.
 
 The
        Merger is subject to a number of closing conditions, including, but not limited
        to, (i) obtaining a minimum of $15 million in new equity capital, (ii) the
        restructuring of Wherify’s existing debt, (iii) the conversion of Wherify’s
        Series A and Series B preferred stock, (iv) the elimination of any conversion
        features currently underlying the Yorkville Associates debt, and (v) receipt
        of
        applicable regulatory approvals.
 
 Under
        the
        agreement, $2.5 million of the new equity capital is anticipated to be used
        to
        restructure approximately $18 million of Wherify's current unsecured
        liabilities. An additional $2.5 million of the new capital is anticipated
        to be
        used to restructure Wherify's secured debt with Yorkville Associates. Upon
        completion of the merger and financing, Wherify will retain approximately
        $2.5
        million of secured debt with Yorkville, which shall no longer be convertible
        into shares of Wherify, in addition to approximately $17.5 million of existing
        long-term Lightyear debt. Wherify is anticipated to net approximately $6.5
        million in working capital from the financing, from which approximately $1.6
        million in termination fees from Lightyear debt will be paid.
 
 7
  The
        Merger Agreement contains customary representations and warranties by Wherify,
        Merger Sub, LY Holdings and Lightyear. The Merger Agreement also contains
        customary covenants and agreements, including with respect to the operation
        of
        the business of each of Wherify and Lightyear and their respective subsidiaries
        between signing and closing, restrictions on solicitation of proposals with
        respect to alternative transactions, governmental filings and approvals,
        public
        disclosures and similar matters.
 
 The
        Merger Agreement contains certain termination rights for Wherify and LY
        Holdings, and further provides that if the Merger Agreement is terminated
        or the
        parties fail to close the transactions set forth in the Merger Agreement,
        except
        where the Merger Agreement is terminated or the transactions do not close
        because of a material breach of the Merger Agreement by LY Holdings, Wherify
        will be required to pay LY Holdings a termination fee of approximately $100,000.
  8
 
 **RISK
        FACTORS**
 
 **RISKS
        RELATED TO WHERIFY’S BUSINESS**
 
 Wherify’s
        business is subject to numerous risks and uncertainties, including risks
        and
        uncertainties relating to our limited operating history; liquidity; incurrence
        of net losses; lengthy development, manufacturing and sales cycles; competition;
        product related risks; and other risks as discussed below. The following
        important factors, among others, could cause actual results to differ materially
        from those contained in forward-looking statements made in this report or
        presented elsewhere by management from time to time.
 
 ***We
        cannot assure you that all conditions to the Merger with Lightyear will be
        completed and the merger consummated.***
 
 The
        Merger is subject to the satisfaction of closing conditions, including (i)
        obtaining a minimum of $15 million in new equity capital, (ii) the restructuring
        of Wherify’s existing debt, (iii) the conversion of Wherify’s Series A and
        Series B preferred stock, (iv) the elimination of any conversion features
        currently underlying the Yorkville Associates debt, and (v) receipt of
        applicable regulatory approvals ,
        and we
        cannot assure you that the merger will be completed. In the event the merger
        is
        not completed, we may be subject to many risks, including the costs related
        to
        the proposed merger, such as legal, accounting, and advisory fees, which
        must be
        paid even if the merger is not completed, or the payment of the previously
        described termination fee to Lightyear under specified circumstances. If
        the
        merger is not completed, the market price of our common stock could decline.
        If
        the Merger is not consummated there is no guarantee that Wherify will be
        able to
        raise the necessary capital to continue operations.
 
 ***We
        Require Additional Capital In Order to Successfully Operate Our Business
        Which
        We May Not Be Able to Obtain.***
 
 We
        require additional capital in order to successfully operate our business.
        There
        is no guarantee that we will be able to obtain future funding or consummate
        the Merger or, if we do obtain future funds or consummate the Merger, that
        the
        additional funds will be adequate to continue our operations.
 
 ***Current
        and Future Creditor Claims May Negatively Affect Our Ability to Run Our Business
        Successfully***
 
 As
        of
        October 15, 2008 we had approximately $21 million in substantially past due
        debt
        and other obligations. Current and future actions of our creditors to collect
        these monies could negatively affect our ability to run our
        business.
 
 ***Even
        Though The Existing Arrangements With Yorkville Advisors (Cornell) Have Been
        Amended, There Is Still High Risk Relative To These
        Arrangements.***
 
 There
        is
        approximately $4.7 million in principal amount outstanding on the Yorkville
        Advisors (Cornell) Convertible Debentures, which are secured by all the assets of
        the
        Company. If Wherify fails to generate adequate revenue and profits, or raise
        additional capital, or close the merger with Lightyear Network Solutions,
        of
        which there is no assurance, the interest and principal payments under the Yorkville
        Advisors Debentures will not be able to be repaid on a timely basis and a failure
        to do
        so could result in Yorkville
        Advisors foreclosing on all of the Company’s assets. Wherify currently has a forbearance
        form Yorkville
        Advisors until
        November 14, 2008 to allow for the closing of our merger ****** with
        Lightyear Network Solutions and the associated recapitalization financing.
        Currently, due to the recent forbearance amendment, there is a moratorium
        on
        cash payment obligations, which expires on November 14, 2008. Thereafter,
        the
        Company is obligated to pay monthly debt service as follows:
 ·
                interest
                    monthly in arrears at the rate of 8% per annum on the outstanding
                    balance;
                    and
 
 ·
                monthly
                    repayments of principal of
                    $200,000.
 
 In
        addition, ****** Yorkville
        Advisors ,
        through
        the conversion feature of its ($4.7million) aggregate principal amount of
        the Yorkville
        Advisors Facility
        at $0.25 per share and an additional 7 million shares issuable upon exercise
        of
        warrants owned by Yorkville
        Advisors with an
        exercise price of $0.25 per share, beneficially owns approximately 27,000,000
        million shares, which, if converted, would represent
        approximately 24.3 % ownership of Wherify’s common stock. If Yorkville
        Advisors converts
        some or all of their shares it would dilute the ownership of current
        stockholders. If the proposed Merger with Lightyear is consummated, an
        additional $2.5 million of the new capital is anticipated to be used to
        restructure Wherify's secured debt with Yorkville Associates. Upon completion
        of
        the merger and financing, Wherify would retain approximately $2.5 million
        of
        secured debt with Yorkville, which would no longer be convertible into shares
        of
        Wherify
 
 9
  ***We
        Are The Product Of A Merger Of Two Development Stage Companies, Have Limited
        Revenues And Have A Limited Operating History On Which To Evaluate Our Potential
        For Future Success.***
 
 On
        July
        21, 2005, we completed a reverse triangular merger with Wherify California.
        At
        the time of the merger, and currently, Wherify and Wherify California have
        only
        limited operating histories upon which you can evaluate our business and
        prospects. You must consider the risks and uncertainties frequently encountered
        by companies in situations such as ours, including but not limited to the
        ability to grow and prosper and finance such growth. If we are unsuccessful
        in
        addressing these risks and uncertainties, our business, results of operations
        and financial condition will be materially and adversely affected.
 
 To
        date,
        sales of our products have been very limited. Our limited operating
        experience in the wireless location-based services market makes it difficult
        to
        evaluate our business. We have never achieved profitability, and we
        may not achieve profitability in the future. The uncertainty of our ability
        to
        execute on our business plan and the uncertainties regarding the acceptance
        of our products or our competition increase the risk that our value
        may decline.
 
 ***We
        Currently Lack Liquidity and Have Limited Revenues and Both Wherify and Wherify
        California Had Going-Concern Qualifications in Their Most Recent Audit
        Reports***
 
 As
        of
        June 30, 2008, we had cash and cash equivalents of approximately $50,710,
        other
        current assets of approximately $64,618 and current liabilities of approximately
        $13.0 million, excluding approximately $3.1 million in past due rent obligations
        to our former landlord .
        We also
        had a liability related to the non-current payable portion of the convertible
        debenture of approximately $5.8 million. As of October 3, 2008, we had cash
        and cash equivalents of approximately $42,000. There is a going concern
        qualification in Wherify’s audit reports for the respective fiscal years ended
        June 30, 2008, 2007 and 2006. Substantially all of our cash has been raised
        through capital raising transactions rather than operations. As we have limited
        revenues, we will need to raise additional working capital in the near future.
        There is no assurance that we will be able to raise additional working capital
        at all or on terms favorable to us. If we are unable to raise additional
        working
        capital, we will need to reduce our costs, which may require us to reduce
        operations, personnel and overhead, or discontinue operations.
 
 ***We
        Need To Raise Substantial Additional Capital, Which May Result In Substantial
        Dilution To Existing Stockholders.***
 
 In
        order
        to execute on our business plan, we need substantial additional capital.
        We are
        currently relying on the proposed merger financing to supply this additional
        capital, we may also continue raising capital through the issuance of equity
        securities. Although the exact amount we intend to raise through the merger
        financing has not yet been determined, we are contemplating an amount expected
        to be approximately $15 to 20 million. There can be no assurance that we
        will be
        able to raise sufficient additional capital at all or on terms favorable
        to our
        stockholders or us. If we issue equity securities in order to raise additional
        capital in the amounts currently contemplated, the stockholders will experience
        immediate and substantial dilution in their ownership percentage of the combined
        company. In addition, to raise the capital we need, we may need to issue
        additional shares at a discount to the then current market price. If the
        terms
        of such financing are unfavorable to us or our stockholders, the stockholders
        may experience substantial dilution in the net tangible book value of their
        stock. In addition, any new equity securities may have rights, preferences
        or
        privileges senior to those of existing holders of common stock. For example
        in
        recent months we have conducted the following financings; (1) on February
        22,
        2007, we sold a $1.2 million 10% Senior Convertible Promissory Note which
        was
        convertible into 12,000,000 shares. In connection with the issuance of the
        Note
        we issued warrants to purchase 6,000,000 shares of common stock at $.10 per
        share; (2) on April 11, 2007 and April 18, 2007 we sold an aggregate of 7,500
        shares of Series A Convertible Preferred Stock which is convertible into
        60,000,000 shares of common stock. In connection with this transaction we
        granted warrants to purchase 6,000,000 shares of common stock at an exercise
        price of $0.15 per share; (3) on August 1, 2007 and August 31, 2007 we sold
        an
        aggregate of 1,129 shares of Series B Convertible Adjustable Preferred Stock
        which is convertible into 7,056,250 shares of common stock. In connection
        with
        this transaction we granted warrants to purchase 2,469,688 shares of common
        stock at an exercise price of a minimum of $0.16 per share to a maximum of
        $0.20
        per share at the conversion. If the holder of the note and the holders of
        our
        preferred stock were to convert all of their preferred shares into common
        stock
        it would result in an increase to our outstanding stock of 79,056,250 shares,
        or
        a change of beneficial ownership of 53%, causing substantial dilution to
        our
        current common stock stockholders ,
        (4) On
        February 8, 2008, we sold our FACES software product to a private party for
        $150,000, (5) o n
        May 16,
        2008, we borrowed $43,750 under a promissory note and also issued 437,500
        five
        year warrants to the note holder exercisable at a price of $0.01, (5) on
        June 6,
        2008, we sold approximately $550,000 principal amount of its Senior Secured
        Convertible Promissory Bridge Notes (“Bridge Notes”) of the anticipated amount
        of $800,000 principal amount to accredited investors and (6) in August
        2008, **** Wherify
        sold 8,916,666 shares of Wherify’s Common Stock, resulting in net proceeds of
        approximately $261,000.
  .If
        we
        cannot raise funds on acceptable terms, we may not be able to develop or
        enhance
        our products, take advantage of future opportunities or respond to competitive
        pressures or unanticipated requirements all of which could have a material
        adverse effect on us.
 
 10
 
 ***Our
        Software Products Are Complex And May Contain Unknown Defects That Could
        Result
        In Numerous Adverse Consequences.***
 
 Complex
        software products such as those associated with our Wherifone TM and
        Springboard products often contain latent errors or defects, particularly
        when
        first introduced, or when new versions or enhancements are released. We have
        experienced errors and defects in our most recent release of the software
        associated with our Wherifone TM product,
        but do not believe these errors will have a material negative effect on the
        functionality of the Wherifone TM product.
        However, there can be no assurance that, despite testing, additional defects
        and
        errors will not be found in the current version, or in any new versions or
        enhancements of this software, any of which could result in damage to our
        reputation, the loss of sales, a diversion of our product development resources,
        and/or a delay in market acceptance, and thereby materially adversely affecting
        our business, operating results and financial condition. Furthermore, there
        can
        be no assurance that our products will meet all of the expectations and demands
        of our customers. The failure of our products to perform to customer
        expectations could give rise to warranty claims. Any of these claims, even
        if
        not meritorious, could result in costly litigation or divert management’s
        attention and resources.
 
 ***We
        Depend On Our Key Personnel To Manage Our Business Effectively In A Rapidly
        Changing Market. If We Are Unable To Retain Our Key Employees or Fail to
        Attract
        and Retain Additional Personnel, Our Business, Financial Condition And Results
        Of Operations Could Be Harmed.***
 
 Our
        future success depends to a significant degree on the skills, efforts and
        continued services of our executive officers and key engineering personnel
        who
        have critical industry experience and relationships ***.*** If
        we
        were to lose the services of one or more of our key senior management members,
        we may not be able to merge or grow our business, adversely affecting our
        business and prospects. Competition for these individuals is intense and
        there
        can be no assurance that we can attract, assimilate, or retain necessary
        personnel in the future.
 
 ***Fluctuations
        In Our Business And Operating Results May Materially And Adversely Affect
        The
        Trading Price Of Our Common Stock***
 
 We
        expect
        that our operating results will fluctuate in the future due to a number of
        factors many of which are outside of our control ***.*** These
        factors include the following:
 
 ·
              Overall
                  demand for our products;
 
 ·
              Our
                  ability to attract new customers at a steady
                  rate;
 
 ·
              The
                  rate at which we or our competitors introduce new products, the
                  rate at
                  which these products acquire market acceptance, and the cost required
                  to
                  develop these products;
 
 ·
              Technical
                  defects in our products that could delay product shipments or increase
                  the
                  costs of introducing new products;
 
 ·
              Changes
                  in the pricing of our products or those of our
                  competitors;
 
 ·
              The
                  amount and timing of capital required to complete the merger with
                  Lightyear Network Solutions;
 
 ·
              Costs
                  relating to our marketing programs and our business in general;
                  and
 
 ·
              General
                  economic conditions.
 
 Any
        of
        the foregoing factors may cause our operating expenses to be disproportionately
        high or cause our revenue and operating results to fluctuate causing our
        business, financial condition and operating results to be adversely
        affected ***.*** In
        addition, to respond to changes in our competitive environment, we may
        occasionally make certain decisions from which we may benefit in the long
        run ***.*** However,
        in the short run, such decisions could materially and adversely affect our
        quarterly results of operations and financial condition ***.*** Due
        to
        all of the foregoing factors, in some future quarter our operating results
        may
        fall below our expectations and those of our stockholders ***.*** In
        such
        event, the trading price of our common stock could be materially adversely
        affected ***.*** Further,
        we believe that period-to-period comparisons of our financial results may
        not be
        very meaningful ***.*** Accordingly,
        you should not conclude that such comparisons indicate future
        performance.
 
 11
 
 ***Our
        Markets Are Highly Competitive, And Our Failure To Compete Successfully Would
        Limit Our Ability To Sell Our Products, Attract And Retain Customers And
        Grow
        Our Business.***
 
 Competition
        in the wireless location services market is intense ***.*** In
        addition, the adoption of new technology in the communications industry likely
        will intensify the competition for improved wireless location
        technologies ***.*** The
        wireless location services market has historically been dominated by large
        companies, such as Siemens AG and LoJack Corporation ***.*** In
        addition, a number of other companies such as Verizon, Sprint, TMobile, AT&T
        ULocate, and WaveMarket ****** have
        either announced plans for new products or have commenced selling products
        that
        are similar to our wireless location products, and new competitors are emerging
        to compete with Wherify’s wireless location services products ***.*** Due
        to
        the rapidly evolving markets in which we compete, additional competitors
        with
        significant market presence and financial resources may enter those markets,
        thereby further intensifying competition ***.*** All
        competitors in the wireless location services market rely on retail distributors
        to sell their products to consumers ***.*** Additional
        competitors in this market may limit the availability or interest of retail
        distributors to carry our wireless location services product and launch it
        into
        the market ***.*** These
        issues may have an adverse impact on our ability to go to market, and as
        a
        result we may not be able to grow our business as we expect, and our ability
        to
        compete could be harmed, adversely affecting our business and
        prospects.
 
 ***Our
        Wireless Location Based Services Platform Is New And May Not Be Accepted
        In The
        Market.***
 
 We
        have
        had only a limited release of our Location
        Based Services Platform in the
        market ***.*** There
        can
        be no assurances that consumer demand will meet, or even approach, our
        expectations ***.*** In
        addition, our pricing and marketing strategies may not be successful ***.*** Lack
        of
        customer demand, a change in marketing strategy and changes to our pricing
        models could dramatically alter our financial results.
 
 ***Standards
        In Wireless Communications Industry Are In Flux, And If We Are Unable To
        Comply
        With These Industry Standards, Our Business Will Be
        Harmed.***
 
 Standards
        in the wireless communications industry are evolving ***.*** The
        emergence and broad adoption of new industry standards could require us to
        redesign our products ***.*** If
        we are
        unable to design our products to comply with these new standards, our products
        would become obsolete and consumers would instead purchase other
        standard-compliant products ***.*** As
        a
        result, our business could be harmed, and our financial condition and results
        of
        operations could be adversely affected.
 
 ***Changes
        In The Government Regulation Of Our Wireless Location Product Or Wireless
        Carriers Could Harm Our Business.***
 
 Our
        products, wireless carriers and other members of the communications industry
        are
        subject to domestic government regulation by the Federal Communications
        Commission (the FCC) and international regulatory bodies ***.*** These
        regulatory bodies could enact regulations which affect our products or the
        service providers which distribute our products, such as limiting the scope
        of
        the service providers’ market, capping fees for services provided by them or
        imposing communication technology standards which impact our
        products.
 
 ***If
        Our Distribution and Manufacturing Partner Fails To Produce Sales Of The
        Wherifone Or Fails to Build Additional Wherifones, Our Business Results Will
        Be
        Harmed.***
 
 We
        have
        recently signed a manufacturing and distribution agreement with SOS GPS to
        manufacture and sell the Wherifone worldwide ****** If
        SOS
        GPS or the product it builds is not widely accepted by the market, our business
        results could be harmed ***.*** Factors
        that may affect the market acceptance of their location products include
        price,
        reliability, performance, technological innovation/enhancements, network
        coverage, ease of use, and availability.
 
 If
        we
        fail to perform adequately on the basis of each of these factors versus
        competing products and technologies, our business results could be
        harmed.
 
 ***Under
        our agreement with SOS GPS, They Will Be Responsible For The Manufacturer
        OF Our
        Wherifone Product Through Our Current Contract Manufacturer, Jabil. If We
        Encounter Problems With This Manufacturer There Is No Assurance That We Could
        Obtain Products From Other Manufacturers Without Significant Disruptions
        To Our
        Business.***
 
 Our
        Wherifone product is manufactured to our specifications by Jabil Circuit
        Inc. If
        SOS GPS encounters problems or disagreements with Jabil it would hinder our
        ability to fill orders for our products and could substantially harm our
        business. Currently we are past due on our obligations to Jabil of approximately
        $0.954 million which SOS GPS has agreed to satisfy as a part of our agreement.
        Jabil suggested that they be prepaid to continue to manufacture and deliver
        our
        product to SOS GPS. They are in the negotiations to transfer the current
        Wherify
        liability in exchange for the rights to build future Wherifones. There is
        no
        assurance that they can do so without undue cost, expense and delay if they
        encounter problems with Jabil or any new manufacturer in the
        process.
 
 12
  ***We
        Expect To Rely Heavily On A Few Customers.***
 
 Our
        revenues in the next several years could be heavily dependent on contracts
        with
        a limited number of major market makers in each business segment. We are
        heavily
        reliant upon SOS GPS to perform under the terms of our agreement to fulfill
        any
        new order and to sell additional business. The loss of, or a significant
        reduction in, orders from these major customers could have a material adverse
        effect on our financial condition and results of operations.
 
 ***Fluctuations
        In Operating Results Could Adversely Affect The Market Price Of Our Common
        Stock.***
 
 Our
        revenues and operating results are likely to fluctuate significantly in the
        future. The timing of order placement, size of orders and satisfaction of
        contractual customer acceptance criteria, as well as order delays or deferrals
        and shipment delays and deferrals, may cause material fluctuations in
        revenue.
 
 Delays
        or
        deferrals in purchasing decisions may increase as we develop new or enhanced
        products. The current and anticipated dependence on a small number of customers
        increases the revenue impact of each customer’s actions relative to these
        factors. Our expense levels in the future will be based, in large part, on
        our
        expectations regarding future revenue, and as a result net income for any
        quarterly period in which material orders are delayed could vary
        significantly.
 
 Because
        of these and other factors, investors should not rely on quarter-to-quarter
        comparisons of our results of operations, or the pro forma financial information
        as an indication of future performance. It is possible that, in future periods,
        results of operations will differ from the estimates of public market analysts
        and investors. Such a discrepancy could cause the market price of our common
        stock to decline significantly.
 
 ***Delays,
        Disruptions Or Quality Control Problems With SOS GPS Could Result In Delays
        In
        Our Transition to a Pure Location Based Services Business And Could Adversely
        Affect Our Business.***
 
 We
        might
        experience delays, disruptions or quality control problems with the
        manufacturing operations of SOS GPS. As a result, we could incur additional
        costs that would adversely affect gross margins as we transition the business
        to
        a multi-hardware devise, multi-carrier LBS software business, which would
        negatively affect our revenues, competitive position and reputation.
        Furthermore, even if SOS GPS is able to timely deliver products to our
        customers, we may be unable to recognize revenue based on our revenue
        recognition policies. Any disruptions in the future could adversely affect
        the
        company’s revenues, gross margins and results of operations. SOS GPS may
        experience manufacturing delays and reduced manufacturing yields upon
        introducing new products to our Springboard Location Based Services
        platform.
 
 ***Rapid
        Technological Change In Our Market Could Cause Our*** ***Springboard
        Location Based Services Software Platform*** ***To
        Become Obsolete Or Require Us To Redesign It.***
 
 We
        expect
        that our markets will be characterized by rapid technological change, frequent
        new product introductions and enhancements, uncertain product life cycles,
        changing customer demands and evolving industry standards, any of which can
        render existing LBS software products obsolete. We believe that our future
        success will depend in large part on our ability to continually enhance our
        location based services platform in a timely manner and on a cost effective
        basis. As a result of the complexities inherent in our LBS software, major
        new
        product enhancements can require long development and testing periods, which
        may
        result in significant delays in the general availability of new releases
        or
        significant problems in the implementation of new releases. In addition,
        if we
        or our competitors announce or introduce new LBS software, our current or
        prospective customers may defer or cancel purchases of our products, which
        could
        materially adversely affect our business, operating results and financial
        condition. Our failure to develop successfully, on a timely and cost effective
        basis, new products or new product enhancements that respond to technological
        change, evolving industry standards or customer requirements would have a
        material adverse affect on our business, operating results and financial
        condition.
 
 **RISKS
        RELATED TO WHERIFY’S INTELLECTUAL PROPERTY**
 
 ***Our
        Success Depends On Our Ability To Protect Our Intellectual
        Property.***
 
 Our
        future success depends upon our proprietary technology. We protect our
        proprietary information through the use of patent, copyright, trademark,
        trade
        secret laws, confidentiality procedures and contractual provisions.
        Notwithstanding our efforts to protect our proprietary technology, policing
        unauthorized use or copying of our proprietary information is difficult,
        unauthorized use or copying occurs from time to time, and litigation to enforce
        intellectual property rights could result in significant costs and diversion
        of
        resources. Any patents we obtain in the future may be circumvented, challenged,
        invalidated or designed around by other companies. Despite our efforts, we
        may
        be unable to prevent third parties from infringing upon or misappropriating
        our
        intellectual property.
 
 13
  Moreover,
        the laws of some foreign jurisdictions do not afford the same degree of
        protection to our proprietary rights as do the laws of the United States,
        and
        effective trademark, copyright, and trade secret protection may not be available
        in every country in which our products are distributed. Furthermore, our
        competitors may independently develop similar technology that substantially
        limits the value of our intellectual property. Our inability to adequately
        protect our intellectual property for these or other reasons, could materially
        and adversely affect our business, financial condition and operating
        results.
 
 In
        addition, third parties may at some point claim certain aspects of our business
        infringe their intellectual property rights which could result in one or
        more of
        the following:
 
 ·
              Significant
                  litigation costs;
 
 ·
              Diversion
                  of resources, including the attention of
                  management;
 
 ·
              Our
                  agreement to pay certain royalty and/or licensing fees;
                  and
 
 ·
              Cessation
                  of our rights to use, market, or distribute such
                  technology.
 
 Any
        of
        these developments could materially and adversely affect our business, results
        of operations and financial condition. In the future, we may also need to
        file
        lawsuits to enforce our intellectual property rights, to protect our trade
        secrets, or to determine the validity and scope of the proprietary rights
        of
        others. Whether successful or unsuccessful, such litigation could result
        in
        substantial costs and diversion of resources. Such costs and diversion could
        materially and adversely affect our business, results of operations and
        financial condition.
 
 ***We
        Could Become Subject To Litigation Regarding Intellectual Property Rights,
        Which
        Could Seriously Harm Our Business And Require Us To Incur Significant
        Costs.***
 
 In
        recent
        years, there has been significant litigation in the United States involving
        patents and other intellectual property rights. Any parties asserting that
        our
        products infringe upon their proprietary rights would force us to defend
        ourselves and possibly our customers or manufacturers against the alleged
        infringement. These claims and any resulting lawsuit, if successful, could
        subject us to significant liability for damages and invalidation of proprietary
        rights. These lawsuits, regardless of their merits, would likely be
        time-consuming and expensive to resolve and would divert management time
        and
        attention. Any potential intellectual property litigation also could force
        us to
        do one or more of the following:
 
 ·
              Stop
                  selling, incorporating or using our products that use the challenged
                  intellectual property;
 
 ·
              Obtain
                  from the owner of the infringed intellectual property right a license
                  to
                  sell or use the relevant technology, which license may not be available
                  on
                  reasonable terms, or at all; or
 
 ·
              Redesign
                  those products that use such
                  technology.
 
 If
        we are
        forced to take any of the foregoing actions, our business and prospects may
        be
        seriously harmed.
 
 **RISKS
        RELATED TO CORPORATE AND STOCK MATTERS**
 
 ***Our
        Authorized Preferred Stock Exposes Stockholders To Certain
        Risks.***
 
 Our
        Certificate of Incorporation authorizes the issuance of up to 10,000,000
        shares
        of “blank check” preferred stock. On April 11, 2007 and April 18, 2007 we sold
        an aggregate of 7,500 shares of Series A Convertible Preferred Stock and
        on
        August 1, 2007 and August 31, 2007 we sold an aggregate of 1,129 shares of
        Series B Convertible Adjustable Preferred Stock, which still leaves substantial
        amounts of authorized shares of preferred stock available for future issuance.
        “Blank check” preferred stock allows the Board of Directors to divide the
        preferred stock into series, to designate each series, to fix and determine
        separately for each series any one or more relative rights and preferences
        and
        to issue shares of any series without further stockholder approval. Preferred
        stock authorized in series allows our Board of Directors to hinder or discourage
        an attempt to gain control of us by a merger, tender offer at a control premium
        price, proxy contest or otherwise. Consequently, the preferred stock could
        entrench our management. In addition, the market price of our Common Stock
        could
        be materially and adversely affected by the existence of the preferred
        stock.
 
 14
 
 ***Our
        Common Stock Has A Limited And Volatile Trading
        History.***
 
 Our
        common stock is quoted in the United States on the Over-the-Counter Electronic
        Bulletin Board (OTCBB). The number of shares traded daily has been extremely
        limited and the prices at which the Common Stock has traded has fluctuated
        widely. During the fiscal year ended June 30, 2008 the closing price reported
        on
        the OTCBB for our common stock ranged from a high of $0.20 to a low of $0.0023
        There can be no assurance as to the volume amount of or the prices at which
        the
        Common Stock will trade in the future, although they may continue to fluctuate
        in volume and price significantly. Prices and trading volume for the Common
        Stock will be determined in the marketplace and may be influenced by many
        factors, including the following:
 
 ·
              The
                  depth and liquidity of the markets for the Common
                  Stock;
 
 ·
              Investor
                  perception of us and the industry in which we operate;
                  and
 
 ·
              General
                  economic and market conditions.
 
 ***We
        Have The Obligation To Issue Additional Shares Of Common Stock In The Future,
        And Such Future Issuance May Materially Adversely Affect
        Stockholders.***
 
 Wherify
        has various obligations to issue additional shares of common stock in the
        future
        upon exercise or conversion of several of its securities, including the
        following as of September 29, 2008:
 
 ·
              Options
                  to purchase approximately 7,743,279 million shares of Common Stock
                  and
 
 ·
              Warrants
                  and convertible debentures to purchase or acquire approximately
                  51,133,018
                  million shares of Common Stock.
 
 ·
              Series
                  A Convertible Preferred Stock convertible into 60,000,000 shares
                  of common
                  stock.
 
 ·
              Series
                  B Convertible Adjustable Preferred Stock convertible into 7,056,250
                  shares
                  of common stock.
 
 The
        options, warrants, note and convertible debentures described above permit
        the
        holders acquire shares of common stock at specified prices. These prices
        may be
        less than the then current market price of our common stock. Any shares of
        common stock issued pursuant to these options, warrants or convertible
        debentures would further dilute the percentage ownership of existing
        stockholders. The terms on which we could obtain additional capital during
        the
        life of these options, warrants or convertible debentures may be adversely
        affected because of such potential dilution. Finally, we may issue additional
        shares in the future other than as listed above. There are no preemptive
        rights
        in connection with the issuance of Common Stock. Thus, the percentage ownership
        of existing stockholders may be diluted if we issue additional shares in
        the
        future. Future issuances of additional shares could cause immediate and
        substantial dilution to the net tangible book value of shares of common stock
        issued and outstanding immediately before such transaction. Any future decrease
        in the net tangible book value of such issued and outstanding shares could
        materially and adversely affect the market value of these shares.
 
 ***The
        Trading Price Of Our Common Stock Entails Additional Regulatory Requirements,
        Which May Negatively Affect Such Trading Price.***
 
 We
        are
        currently subject to the “penny stock” rules promulgated under the Securities
        Exchange Act. During the period(s) that our stock trades below $5.00 per
        share,
        as it currently does, trading in our common stock is subject to the requirements
        of the “penny stock” rules. These rules require additional disclosure by broker
        dealers in connection with any trades generally involving any non-NASDAQ
        equity
        security that has a market price of less than $5.00 per share, subject to
        certain exceptions. Such rules require the delivery, before any “penny stock”
transaction, of a disclosure schedule explaining the penny stock market and
        the
        risks associated therewith, and impose various sales practice requirements
        on
        broker dealers who sell penny stocks to persons other than established customers
        and accredited investors (generally institutions). For these types of
        transactions, the broker-dealer must determine the suitability of the penny
        stock for the purchaser and receive the purchaser’s written consent to the
        transaction before sale. The additional burdens imposed upon broker dealers
        by
        such requirements may discourage broker-dealers from effecting transactions
        in
        our common stock affected. As a consequence, the market liquidity of Wherify’s
        common stock could be severely limited by these regulatory
        requirements.
 
 15
 
 ***Stockholders
        Should Have No Expectation Of Any Dividends.***
 
 The
        holders of our common stock are entitled to receive dividends when, as and
        if
        declared by the board of directors out of funds legally available therefore.
        To
        date, we have not declared nor paid any cash dividends. The board of directors
        does not intend to declare any dividends in the foreseeable future, but instead
        intends to retain all earnings, if any, for use in our business
        operations.
 
 **Item
        3. Legal Proceedings.**
  **Hardin** ***v.
        Wherify Wireless, Inc.***
 
 I n
        June
        2008, the Company filed an appeal of an award of the Labor Commissioner for
        the
        State of California in favor of former Wherify employee Julia Hardin in the
        amount of approximately $59,000.   The appeal was filed before
        the Superior Court for the County of San Francisco, State of California. 
Management sought to overturn the award and receive a trial on the merits
        of the
        claimant’s claims to compensation.  The appeal has been dismissed without a
        decision on the merits on the grounds of lack of security, filed with the
        court,
        in favor of the claimant.  The company has offered to settle the claim
        without a response from Hardin.
 
 ***Golin/Harris
        International, Inc. v. Wherify Wireless, Inc*** *.*
 
 On
        August
        20, 2007, Golin/Harris International, a Virginia Corporation, filed suit
        against
        Wherify Wireless, Inc. a Delaware corporation, in the United States District
        Court, Los Angeles Superior Court – Central District of California. The
        complaint sought approximately $193,435 together with court awarded interest
        thereon for failure by Wherify Wireless, Inc. to pay services rendered by
        plaintiff. On March 16, 2008 Wherify received a Notice of Levy from the Superior
        Court for $243,215.
 
 ***CDW
        Corporation, Inc. v. Wherify Wireless, Inc.***
 
 On
        June
        20, 2007, CDW Corporation Inc, an Illinois Corporation, filed suit against
        Wherify Wireless, Inc., a Delaware Corporation, in the United States Circuit
        Court of Cook County Illinois, Municipal Department, First District of Illinois.
        The complaint sought approximately $26,413 plus interest and costs in accordance
        with the Illinois Statute for computer hardware sold to Wherify Wireless,
        Inc.
        On September 28, 2007 Wherify Wireless and CDW Corporation entered into a
        negotiated settlement out of court wherein Wherify will pay the settlement
        amount in monthly installments through September 2008. Wherify Wireless,
        Inc., a
        Delaware Corporation, has not been able to make these payments as agreed
        to due
        to the financial condition of the Company.
 
 ***Robert
        Half International v. Wherify Wireless, Inc.***
 
 On
        May
        18, 2007, Robert Half International filed suit against Wherify Wireless,
        Inc. a
        Delaware Corporation, in the United States Superior Court, State of California,
        San Mateo County. The Complaint was for money due for services delivered
        in the
        amount of $21,250, plus cost of $352. On October 12, 2007, Robert Half
        International and Wherify reached a settlement and mutual release wherein
        Wherify was to pay Robert Half International the settlement amount in monthly
        installments through August 15, 2008. Wherify was not able to make these
        payments. On September 5, 2008 Wherify received a Notice of Levy from the
        Superior Court of Northern California for $21,658.
 
 ***Hirose
        Electric USA, Inc. v. Wherify Wireless, Inc.***
 
 On
        May
        14, 2007, Hirose Electric USA, Inc. a Corporation filed suit against Wherify
        Wireless, Inc. a Delaware Corporation, in the United States Superior Court,
        State of California, San Mateo County. The Complaint was for money due for
        goods
        sold and delivered in the amount of $62,800, plus interest on said amount
        at the
        rate of ten percent (10%) per annum from June 1, 2006; and attorney’s fees in
        the sum of $1,000 pursuant to the provisions of Section 1717.5. of the Civil
        Code. The Company is reviewing its option in this matter.
 
 ***Kore
        Wireless Inc. v. Wherify Wireless, Inc.***
 
 On
        June
        8, 2008, Kore Wireless **Inc.** received
        a Judgment by default against Wherify Wireless, Inc. a Delaware Corporation,
        in
        the Northern California Superior Court, San Mateo for non-payment by Wherify
        Wireless Inc. in the amount of $111,442. On June 19, 2008 Wherify received
        a
        Notice of Levy from the Superior Court of Northern California.
 
 ***NuComm
        Marketing Inc. v. Wherify Wireless, Inc.***
 
 On
        February 27, 2008, NuComm received a Judgment by default against Wherify
        Wireless, Inc. a Delaware Corporation, in the Northern California Superior
        Court, San Mateo, for non-payment by Wherify Wireless Inc. in the amount
        of
        $151,961. An Abstract Judgment was granted by the Court on May 2,
        2008.
 
 16
  ***Federal
        Tax Lien.***
 
 On
        February 21, 2008, Wherify Wireless, Inc. a Delaware Corporation, had a Federal
        Tax Lien placed on it with the Secretary of State of Delaware in the amount
        of
        $56,244.
 
 ***Fixture
        Hardware Company v. Wherify Wireless, Inc.***
 
 On
        June
        19, 2007, Fixture Hardware Company, an Illinois Corporation, filed suit against
        Wherify Wireless, Inc. a Delaware Corporation, in the United States District
        Court, Northern District of Illinois, for non-payment by Wherify Wireless
        Inc.
        in the amount of $239,188.
 
 On
        August
        8, 2007, at the prove-up hearing, the Court’s judgment was entered in favor of
        the Plaintiff, Fixture Hardware Company in the amount of $239,188. On October
        12, 2007, Fixture Hardware Co. and Wherify reached a settlement and mutual
        release wherein Wherify will pay Furniture Hardware Co. the settlement amount
        in
        monthly installments through September, 2008. Wherify Wireless, Inc., a Delaware
        Corporation, has not been able to make these payments as agreed to due to
        the
        financial condition of the Company. On May 1, 2008 the Federal District Court
        ordered Wherify to liquidate a portion of the Wherifone inventory held by
        our
        Brazilian Distributor, Couri Technologies in order to satisfy the remaining
        $90,000 in the aforementioned settlement. On August 8, 2008 Fixture Hardware
        Company agreed to allow SOS GPS to sell the inventory, and that Wherify would
        pay FHC $90,000 upon receipt of the proceeds from the sale of the
        phones.
 
 ***Westport
        Office Park, LLC v. Wherify Wireless, Inc, a California
        Corporation***
 
 On
        January 5, 2007, Westport Office Park, LLC (“Westport”), filed an Entry of
        Stipulation and Agreement allowing entry of a stipulated judgment ("Judgment")
        against Wherify Wireless, Inc, a California Corporation (“Wherify California”),
        in the Superior Court of California for San Mateo County.  The judgment
        extinguished Wherify California's right to possession of certain leased premises
        that Wherify California occupied as its principal offices in favor of Westport,
        and awarded Westport approximately $1.1 million for then-outstanding amounts
        due
        and owing under the terms of the lease and certain other owed amounts.  On
        January 17, 2007, Wherify California vacated the leased premises.
 
 On
        March
        20, 2007, Westport obtained a writ of execution to enforce the judgment against
        the assets of Wherify California in the amount of $1,405,485.75.  On March
        30, 2007, Westport recorded a judgment lien with the United States Patent
        and
        Trademark Office on two patents held in name of Wherify California.  The
        specific patents are U.S. Patent Application 11/126,827 and U.S. Design Patent
        D526985.
 
 Westport
        undertook efforts to enforce its judgment against the assets of Wherify
        Delaware. Wherify Delaware is vigorously resisted these efforts. Specifically,
        Westport served a writ of execution on account funds that Wherify Delaware
        maintained at Wells Fargo Bank. On application by Wherify Delaware, the Superior
        Court ruled that the Westport judgment is limited to Wherify California only.
        In
        response to this ruling, Wherify Delaware filed a third party claim, which
        was
        upheld and the funds returned to Wherify Delaware.
  On
        March
        14, 2008 Wherify Delaware certified the insolvency of Wherify California
        and
        that it has ceased to conduct business, does not have employees and does
        not
        maintain independent financial statements. The purpose of this certification
        was
        to allow Westport to petition the escrow holder of the property to release
        full
        payment on the amount Westport was seeking from the Wherify California
        subsidiary. The results of this process are still unknown to
        Wherify.
  ***Child
        Protect Limited Liability Company. v. Firefly Communications, Inc., LG
        Electronics and Wherify Wireless, Inc*** *.*
 
 On
        August
        11, 2008, ******Child
        Protect Limited Liability Company***,***a
        New
        Jersey Corporation, filed suit against Wherify Wireless, Inc. California
        and
        codefendants in the United States District Court, New Jersey District. The
        complaint seeks unspecified damages and permanent injunction for patent
        infringement of patent $7,046,782. Wherify believes this action is without
        justification or merit.
  **Item
        4. Submission of Matters to a Vote of Security Holders.**
 
 None.
  17


**Part
      II**





**Item
      5. Market for the Registrant’s Common Equity, Related Stockholder Matters and
      Small Business Issuer Purchases of Equity Securities.**





**PRICE
      OF COMMON STOCK**


Our
      common stock is traded on the Over-the Counter Bulletin Board under the symbol
      “WFYW”.OB. As of September 29, 2008 we had approximately 484 holders of record
      of record. Presented below is the high and low bid information of our common
      stock for the periods indicated. The source of the following information is
      in
      MSN Money. These quotations reflect inter-dealer prices, without retail mark-up,
      mark-down or commission and may not represent actual transactions.





**Common
                Stock****High**
            
            **Low****Fiscal
                Year Ending June 30, 2008**First
                Quarter
            
            $
            0.20
            
            $
            0.10Second
                Quarter
            
            $
            0.15
            
            $
            0.059Third
                Quarter
            
            $
            0.12
            
            $
            0.005Fourth
                Quarter
            
            $
            0.08
            
            $
            0.002**Fiscal
                Year Ending June 30, 2007**First
                Quarter
            
            $
            0.45
            
            $
            0.35Second
                Quarter
            
            $
            0.27
            
            $
            0.21Third
                Quarter
            
            $
            0.19
            
            $
            0.14Fourth
                Quarter
            
            $
            0.21
            
            $
            0.17**Fiscal
                Year Ending June 30, 2006**First
                Quarter
            
            $
            6.14
            
            $
            2.94Second
                Quarter
            
            $
            3.34
            
            $
            1.55Third
                Quarter
            
            $
            2.27
            
            $
            1.40Fourth
                Quarter
            
            $
            2.02
            
            $
            0.65





On
      September 29, 2008, the last price of our common stock as reported on the Over-
      the Counter Bulletin Board was $0.0325 per share. Wherify has never paid
      dividends, and we have no intentions of paying cash dividends in the foreseeable
      future.





**Item
      6. Management’s Discussion and Analysis or Plan of
      Operation.**





The
      following discussion and analysis of financial condition and results of
      operations should be read in conjunction with our financial statements and
      related notes included elsewhere in this report. The discussion contains
      forward-looking statements that involve risks, uncertainties and assumptions.
      Our actual results could differ materially from those anticipated in the
      forward-looking statements as a result of certain factors discussed in “Risk
      Factors” and elsewhere in this report.





Wherify’s
      auditor included a going concern paragraph in its audit report on Wherify’s
      financial statements for each of last two fiscal years. Wherify’s auditor has
      reported that Wherify has suffered net operating losses in the last two fiscal
      years and has a significant capital deficit that raises substantial doubt about
      its ability to continue as a going concern.





**Introduction**





On
      July
      21, 2005, Wherify California, Inc. a California corporation (formerly known
      as
      Wherify Wireless, Inc.)(“Wherify California”) was merged with a special purpose
      subsidiary of Wherify, a Delaware corporation (formerly known as IQ Biometrix,
      Inc.). As a result of the merger, Wherify California became a wholly owned
      subsidiary of Wherify. Accordingly, our business operations include the business
      operations of both Wherify California and Wherify, although as discussed below,
      the former business operations of Wherify, consisting primarily the sale of
      FACES software and related services to law enforcement agencies and the security
      industry is not a significant part of the on-going business operations. The
      FACES software assets were sold in February 2008. Following is a summary of
      topics covered in this “Management Discussion and Analysis of Financial
      Conditions and Results of Operation”.





A.
            Section
                1 entitled “Merger” provides a general discussion regarding the
                merger.


B.
            Section
                2 entitled “Management’s Discussion and Analysis of Financial Condition
                and Results of Operations” provides a discussion and analysis of financial
                condition and results of operation of Wherify for the fiscal years
                ending
                June 30, 2008 and 2007.




18





C.
            Section
                3 entitled “General” includes a discussion of certain accounting policies
                and other matters of general
                applicability.





**1.**
            **Merger**





As
      noted
      above, on July 21, 2005, Wherify California was merged with a
      transitory special purpose subsidiary of Wherify, a Delaware corporation,
      and as a result Wherify California became a wholly owned subsidiary of Wherify.
      Upon the completion of the merger, shareholders of Wherify California received
      4.8021 shares of Wherify common stock for each share of Wherify California
      common or preferred stock, and Wherify California stock options were assumed
      by
      Wherify and converted into options to acquire a number of shares of Wherify
      common stock equal to the number of shares of Wherify California common stock
      underlying each such option multiplied by the exchange ratio of 4.8021. As
      a
      result, Wherify issued or reserved for the future issuance an aggregate of
      approximately 46 million shares of its common stock in consideration for all
      the
      outstanding shares, options and warrants issued by Wherify California, which
      represented approximately 78.8 % of the total number of shares of Wherify common
      stock calculated on a fully-diluted basis. Also subsequent to the merger,
      Wherify changed its name from “IQ Biometrix, Inc.” to “Wherify Wireless, Inc.”
and shortly thereafter Wherify California changed its name from “Wherify
      Wireless, Inc.” to “Wherify California, Inc.”





The
      merger was treated as a reverse merger acquisition, pursuant to which Wherify
      California was treated as the acquirer of Wherify for financial reporting
      purposes. Consequently, following the consummation of the merger, the historical
      financial statements of Wherify California serve as the principal historical
      financial statements of the combined company.





Under
      applicable accounting rules, the purchase price of the acquisition (which is
      determined on the percentage of the combined company held by the pre-merger
      Wherify stockholders and the stock price of the combined company) is allocated
      to identifiable tangible and intangible assets, and then the excess of the
      purchase price over the amounts allocated to those assets is allocated to
      goodwill. During the quarter December 31, 2005, Wherify, with the assistance
      of
      a third party, completed the purchase price allocation and concluded that the
      value of the identifiable assets was $2.2 million and the total amount of
      goodwill was $67.5 million. Following the finalization of the purchase price
      allocation, Wherify concluded that the implied fair value of goodwill was $3.2
      million resulting in an indicated impairment of $64.3 million, which was
      recorded by Wherify in the quarter ended September 30, 2005. As of June 30,
      2006, we concluded that annual test of goodwill for impairment. As a result
      we
      determined that the carrying value of the goodwill at June 30, 2006 had become
      impaired and the remaining balance was written-off.





Our
      principal business activity consists primarily of the development and sale
      of
      wireless location products and services. The former business of Wherify,
      consisting primarily of the sale of security software and services, including
      facial composite software, to law enforcement agencies and the security
      industry, is not a significant part of the ongoing business operations of the
      combined company. The FACES software assets were sold in February 2008.
      Accordingly, historical financial information relating to the former business
      of
      Wherify is expected to have an only minimal significance to the future business
      of the combined company.





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





***A.***
            ***General***





Wherify
      Wireless, Inc. (“Wherify” or the “Company”) is a pioneering developer of
      patented wireless location products and services for family safety and business
      communications. Our portfolio of intellectual property includes our proprietary
      integration of the US Government’s Global Positioning System (GPS) and wireless
      communication technologies; our patented back-end location service; the
      WherifoneTM GPS locator phone which provides real-time location information and
      lets families with pre-teens, seniors, or those with special medical needs,
      stay
      connected and in contact with each other. **** Our
      name,
      Wherify Wireless, reflects our mission and objective: verify the location of
      loved ones or possessions of value through wireless technology.





General
      and administrative expense includes general administrative, manufacturing,
      research and development, sales and marketing expenses. General administrative
      expense consists primarily of salaries and related expenses for executive,
      finance, accounting information technology, facilities and human resources
      personnel. Research and development expense consists primarily of salaries
      and
      related personnel expenses related to the design, development, testing and
      enhancement of products. Currently we are focusing attention on the development
      of our Location Based Service Software (Springboard) .
      Sales
      and marketing expenses consists primarily of salaries, commissions and related
      expenses for personnel engaged in marketing, sales and customer support, as
      well
      as costs associated with promotional activities and related travel
      expenses.




19





***B.***
            ***Liquidity
                and Capital Resources***


Wherify
      has incurred net operating losses from operations of approximately$10.7 million
      for the fiscal year ended June 30, 2008 and $17.1 million for fiscal year ended
      June 30, 2007. Net cash used for operating activities during the fiscal years
      ended June 30, 2008 and 2007 was $3.5 million and $10.0 million, respectively.
      We have accumulated deficit of $166.9 million as of June 30, 2008. These
      conditions, among others, raise questions about our ability to fund our cash
      requirements from operations in the future or to continue operations as a
      going-concern.





As
      of
      June 30, 2008, Wherify had cash and cash equivalents of approximately $50,000,
      net receivables in the amount of approximately $30,000, and other non-current
      assets for approximately $210,000. Wherify’s net cash provided by investing
      activities was mainly from the sale of the FACES software assets for
      $150,000.





We
      have
      financed our operations through private offerings of our common stock, preferred
      stock, and debt borrowings.





On
      March
      15, 2006, we filed a registration statement with the Securities and Exchange
      Commission (File No. 333-132461) to register 16.8 million shares of our common
      stock to be sold by us in a direct offering, on July 18, 2006 we were notified
      that this direct offering was effective, and on November 2, 2006 we announced
      that the direct offering was closed and that approximately 16.6 million shares
      had been sold raising approximately $4.2 million.





On
      February 22, 2007, we sold a $1.2 million 10% Senior Convertible Promissory
      Note
      which was converted into 12,000,000 shares in June 2008. In connection with
      the
      issuance of the Note we issued warrants to purchase 6,000,000 shares of common
      stock at $0.10 per share.





On
      April
      11, 2007 and April 18, 2007 we sold an aggregate of 7,500 shares of Series
      A
      Convertible Preferred Stock convertible into 60,000,000 shares of common stock.
      In connection with this transaction we granted warrants to purchase 6,000,000
      shares of common stock at a minimum exercise price of $0.16; but not greater
      than $0.20 at the conversion which, as of October 14, 2008, has not occurred.
      As
      a result of these financings Wherify received net proceeds of approximately
      $5.2
      million.





On
      August
      1, 2007 and August 31, 2007 we sold an aggregate of 1,129 shares of Series
      B
      Convertible Adjustable Preferred Stock which is convertible into 7,056,250
      shares of common stock. In connection with this transaction we granted warrants
      to purchase 2,469,688 shares of common stock at a minimum exercise price of
      $0.16; but not greater than $0.20 at the conversion which, as of October 14,
      2008, has not occurred. As a result of these financings Wherify received net
      proceeds of approximately $857,000.





On
      May
      16, 2008, we borrowed $43,750 under a promissory note. This note bears interest
      at an annual rate of 12% and is convertible into common stock at $0.01 per
      share. Wherify also issued 437,500 five year warrants to the note holder
      exercisable at a price of $0.01.





On
      June
      6, 2008 Wherify sold approximately $550,000 principal amount of its Senior
      Secured Convertible Promissory Bridge Notes (“Bridge Notes”) of the anticipated
      amount of $800,000 principal amount to accredited investors. After the placement
      agent commission of $55,000 and other placement expenses, Wherify received
      net
      cash proceeds of approximately $440,000. The Bridge Notes bear interest at
      an
      annual rate of 12.5%, commencing on the date of issuance and paid monthly.
      If
      the Bridge Notes are not paid by August 31, 2008, or if the Company extends
      the
      maturity date to September 30, 2008, the interest will be increased to an annual
      rate of 17.5%. As of June 30, 2008 the principal amount outstanding was
      approximately $570,000 and approximately $5,000 in interest.





We
      intend
      to pursue various sources of public and private financing to provide us greater
      flexibility and certainty with respect to our financing needs.





Net
      cash
      used in operating activities was $3.5 million, mainly from changes in operating
      assets caused by: increases in accounts payable and accrued charges totaling
      $0.6 million, increase in prepaid and other assets totaling $0.4 million,
      decreased in inventory value of $2.2 million; offset by operating losses of
      $10.7 million, decreased deferred revenue of $0.1 million,; offset by
      depreciation charge by $3.5 million and bad debt expense of $0.6
      million.





In
      order
      for the Company to continue operations and to properly execute the business
      model it has on hand, the Company has to raise money very quickly in order
      to
      cover its expenses and its obligations to creditors.




20





Wherify
      currently does not have any credit facility available to it. Wherify has
      financed its operations to date primarily through the issuance of shares of
      common and preferred stock and convertible debentures. There is going concern
      in
      auditors’ reports for the fiscal year ended June 30, 2007 and 2006. We continue
      in the process of locating financing sources to meet our financial needs and
      to
      provide a greater flexibility and certainty to our financing needs. Adequate
      funds may not be available on terms acceptable to us. If additional funds are
      raised through the issuance equity securities, we will need to amend our
      certificate of incorporation and increase the number of authorized shares of
      common stock. If funding is insufficient at any time in the future, we may
      be
      unable to continue the development of our products or services, take advantage
      of business opportunities or respond to competitive pressures, any of which
      could have material adverse effect on our financial position, results of
      operations and cash flows, or we may be unable to continue
      operations.





We
      do not
      have material capital leases or material commitments for capital expenditures
      but we have anticipated payments to note holders and contractual arrangements
      made to vendors and third parties for payments of services that are substantial
      thus impacting our cash position severely.





We
      expect
      operating losses and negative operating cash flows to continue for at least
      the
      next-nine to twelve months on the assumption that we continue our business
      plan
      to successfully launch our Location
      Based Service Software (Springboard) in fiscal 2009. During
      this time leading up to new product launches we expect our operating costs
      to
      increase because of expected new product launch expenses not previously incurred
      that are related to new product brand development, marketing and other
      promotional activities; targeted increases in personnel to support our critical
      new development launch activities; the expansion of our billing and collections
      infrastructure and customer support services concurrent with our growth in
      new
      product sales, strategic relationship development software developers ,and
      the
      working capital requirements needed to initially launch our Location Based
      Services Software (Springboard).





On
      August
      12, 2008, Wherify Wireless and certain of its subsidiaries, Wherify Acquisition,
      Inc., a Delaware corporation and wholly owned subsidiary of Wherify (“Merger
      Sub”), LY Holdings, LLC, a Kentucky corporation (“LY Holdings”), Lightyear
      Network Solutions, LLC, a Kentucky limited liability company (“Lightyear”) and
      certain of LY Holdings’ affiliates entered into an Agreement and Plan of Merger
      (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into
      LY Holdings (the “Merger”), with LY Holdings continuing as the surviving
      company. LY Holdings will become a subsidiary of Wherify following the Merger.
      Sherman Henderson, President and Chief Executive Officer of Lightyear, will
      serve as Chief Executive Officer of the combined entity, which will be
      headquartered in Louisville, Kentucky.





Subject
      to the terms and conditions of the Merger Agreement, at the effective time
      of
      the Merger, Wherify will be obligated to issue to the holders of outstanding
      membership interests of LY Holdings a number of shares of a newly created series
      of preferred stock (the “Merger Shares”) pursuant to an exchange ratio that is
      intended to result in LY Holdings members and LY Holdings noteholders holding
      51% of Wherify’s fully diluted outstanding common stock at the effective time of
      the Merger on an as converted basis, in exchange for all outstanding membership
      interests of LY Holdings and restructuring of existing Lightyear debt.





The
      Shares are being issued in a private placement pursuant to Section 4(2) of
      the
      Securities Act of 1933, as amended (the “Act”), and Rule 506 of Regulation D
      promulgated under the Act and are subject to restrictions on resale thereunder.
      Each Merger Share will be convertible into common stock in amount to be
      determined which is intended to result in LY Holdings members and LY Holdings
      noteholders holding 51% of Wherify’s common stock on a fully diluted basis after
      the effective time of the Merger. Holders of the Merger Shares will vote with
      the holders of Wherify’s common stock as one class, except as otherwise required
      by Delaware law, and will receive one vote per share on an as converted to
      common stock basis on all matters except for the election of members of the
      Board of Directors. Holders of Merger Shares will have 1.3 votes per share
      on an
      as converted to common stock basis on the election of members to the Board
      of
      Directors.





The
      initial Board of Directors of the combined company at the effective time of
      the
      Merger will consist of seven persons - five directors chosen by LY Holdings
      (one
      of which will be approved by Wherify), one director chosen by Wherify, and
      one
      director chosen by GPS Associates, LLC.





The
      Merger is subject to a number of closing conditions, including, but not limited
      to, (i) obtaining a minimum of $15 million in new equity capital, (ii) the
      restructuring of Wherify’s existing debt, (iii) the conversion of Wherify’s
      Series A and Series B preferred stock, (iv) the elimination of any conversion
      features currently underlying the Yorkville Associates debt, and (v) receipt
      of
      applicable regulatory approvals.





Under
      the
      agreement, $2.5 million of the new equity capital is anticipated to be used
      to
      restructure approximately $18 million of Wherify's current unsecured
      liabilities. An additional $2.5 million of the new capital is anticipated to
      be
      used to restructure Wherify's secured debt with Yorkville Associates. Upon
      completion of the merger and financing, Wherify will retain approximately $2.5
      million of secured debt with Yorkville, which shall no longer be convertible
      into shares of Wherify, in addition to approximately $17.5 million of existing
      long-term Lightyear debt. Wherify is anticipated to net approximately $6.5
      million in working capital from the financing, from which approximately $1.6
      million in termination fees from Lightyear debt will be paid.




21





The
      Merger Agreement contains customary representations and warranties by Wherify,
      Merger Sub, LY Holdings and Lightyear. The Merger Agreement also contains
      customary covenants and agreements, including with respect to the operation
      of
      the business of each of Wherify and Lightyear and their respective subsidiaries
      between signing and closing, restrictions on solicitation of proposals with
      respect to alternative transactions, governmental filings and approvals, public
      disclosures and similar matters.





The
      Merger Agreement contains certain termination rights for Wherify and LY
      Holdings, and further provides that if the Merger Agreement is terminated or
      the
      parties fail to close the transactions set forth in the Merger Agreement, except
      where the Merger Agreement is terminated or the transactions do not close
      because of a material breach of the Merger Agreement by LY Holdings, Wherify
      will be required to pay LY Holdings a termination fee of approximately
      $100,000.





As
      of
      June 30, 2008, Wherify had cash of approximately $50,000. As of October
      3, **** 2008 **,** we
      had
      cash of approximately $42,000 **.** We
      believe that our cash balance will not be adequate to continue our current
      business plan into November 2008.





We
      require additional capital in order to successfully operate our business.
      Significant additional funding will be required throughout 2008 and 2009 to
      continue operations. There is no guarantee that we will be able to obtain
      future funding, the merger will be completed or if we do obtain future
      funds they will be adequate to continue our operations.





**Results
      of Operations**





*Year
      Ended June 30, 2008 Compared to Year Ended June 30, 2007*





Net
      revenues for the year ended June 30, 2008 were $1.4 million and were primarily
      generated by Wherifone and related products of $1.3 million and $0.1 million
      for
      FACES. Net revenues for year ended June 30, 2007 was $0.9 million and were
      primarily generated by the sales of Wherifone and related products.





Operating
      expenses for the year ended June 30, 2008 were $8.1 million versus $14.5 million
      for the year ended June 30, 2007. The decrease in expenses was primarily due
      to
      the downsizing and refocusing of our business model from a hardware company
      to a
      location based services software provider.





Engineering
      and development expenses were $0.8 million for June 30, 2007 versus $1.4 million
      for year ended June 30, 2007. The decrease in expenses in the year ended 2008
      was primarily a result of costs associated with the product development of WherifoneTM in
      the
      year ended 2007.





General
      and administrative expenses for the year ended June 30, 2008 was $6.0 million
      compared to $9.6 million June 30, 2007. The decrease in expenses were caused
      by
      the following:





a)
            Decreased
                promotion and marketing expenses by approximately $1.1 million;





b)
            Decreased
                sales and marketing salaries by approximately $1.2
                million;





c)
            Decreased
                consulting and legal fees by approximately $0.7
                million;





d)
            Year
                2007 write-off of capitalized legal and audit costs related to the
                SEDA
                financing of $0.6 million;





e)
            Decreased
                customer service and stock option expense by approximately $0.6 million,
                and offset by;





f)
            Increased
                bad debt expense by approximately $0.6
                million





Amortization
      and depreciation decreased by $1.7 million due to the amortization of deferred
      financing costs related to the debt financing.





We
      evaluated the application of EITF 00-19-2 for all its financial instruments
      and
      determined that certain warrants to purchase common stock issued by Wherify
      associated with the secured convertible debentures in March 2006 no longer
      qualified to be classified as derivative liabilities. No derivative gain or
      loss
      was recorded in the fiscal year ended June 30, 2008.





Interest
      and other expense increased by approximately $1.0 million from the prior year
      period amount primarily due to costs and interest charges related to secured
      debentures of $5.0 million issued in March 2006 and for the Notes Payable issued
      in February and June 2006 for an aggregate total of $2.0 million. Interest
      expense accrued on the $2.0 million loan to-date is $482,877.




22





**3.**
            **General**





***A.***
            ***Critical
                Accounting Policies***





***Long-Lived
      Intangible Assets***





The
      Company accounts for long-lived assets under SFAS No. 144, “Accounting for the
      Impairment or Disposal of Long-Lived Assets” which requires the Company to
      review for impairment of long-lived assets whenever events or changes in
      circumstances indicate that the carrying amount of an asset might not be
      recoverable. When such an event occurs, management determines whether there
      has
      been impairment by comparing the anticipated undiscounted future net cash flows
      to the related asset’s carrying value. If an asset is considered impaired, the
      asset is written down to fair value, which is determined based on discounted
      cash flows or appraised value, depending on the nature of the
      asset.





Long-lived
      intangible assets consist of acquired customer lists and acquired software
      and
      software intellectual property, and development of new software products and
      enhancements to existing software products. Until technological feasibility
      is
      established, costs associated with software development, including costs
      associated with the acquisition of intellectual property relating to software
      development is expensed as incurred. After technological feasibility is
      established computer software costs that are then incurred are capitalized
      in
      accordance with the provisions of SFAS No. 86 “Accounting for the Costs of
      Computer Software to be Sold, Leased or Otherwise Marketed”. Amortization of
      these capitalized costs is provided using the greater of the ratio of revenues
      generated in the period over total future revenues of the product, or the
      straight-line method over the estimated market life of the related products,
      generally three years, commencing when the product becomes generally available
      to customers.





***Revenue
      Recognition***





Wherify
      adopted revenue recognition policies to comply with the guidance of Staff
      Accounting Bulletin (“SAB”) No. 104, *Revenue
      Recognition* ,
      SAB
      Topic 13, *Revenue
      Recognition,* FASB’s
      Emerging Issues Task Force (“EITF”) Issue -00-21, *Revenue
      Arrangements With Multiple Deliverables* ,
      and
      AICPA Statement of Position (“SOP”) 97-2, arrangement exists, the delivery and
      acceptance of the equipment has occurred or services have been
      rendered, the price is fixed or determinable, and the collectability of payment
      is reasonably assured. The application of this guidance requires management
      to
      exercise judgment in evaluating these factors in light of the terms and
      conditions of its customer contracts and other existing facts and circumstances
      to determine appropriate revenue recognition. Application of 97-2 requires
      determining whether a software arrangement includes multiple elements, and
      if
      so, whether vendor -specific objective evidence (VSOE) of fair value exists
      for
      those elements. Change to the elements in a software arrangement, the ability
      to
      identify VSOE for those elements, the fair value of the respective elements,
      and
      changes in a product’s estimated life cycle, could materially impact the amount
      of earned and unearned revenue, Judgment is also required to assess whether
      future releases of certain software represent new products or upgrades and
      enhancements to existing products. Applications of EITF 00-21 requires
      determining whether a revenue arrangements includes multiple revenue-generating
      activities, such as product sale and services, and if so whether allocation
      of
      the arrangement’s consideration is required to more than one unit of
      accounting.





Wherify
      has two types of revenue: hardware revenue and subscription revenue and consists
      of shipped customer orders and completed services. Hardware revenue is
      recognized at the later of shipment date or upon satisfying contractual
      requirements or obligations under the sales contract, whichever is later.
      Subscription revenue is recognized at completion of performance. Prior to
      September 2006, the Company recognized revenues primarily from the sale of
      FACES
      software and subscription. Starting in September 2006 recognized revenues are
      primarily from the sale of wireless location devices and services. Revenues
      are
      also offset with a reserve for any price refunds and consumer rebates consistent
      with the EITF Issue 01-09. *Accounting
      for Consideration Given by a Vendor to a Customer* ,
      as
      appropriate.





Hardware
      sales currently consist principally of revenues from the sale of GPS-enabled
      wireless location devices, primarily Wherify’s handsets plus accessories to new
      subscribers and to agents and other third-party distributors. The revenue and
      related expenses associated with the sale of wireless handsets and accessories
      through our indirect sales channels are recognized when the products from the
      sales channels are recognized when the products are delivered and accepted
      by
      the agent or third party distributor, as this is considered to be a separate
      earnings process from the sale of wireless services and the probability of
      collection is likely. Shipping and handling costs for wireless handsets sold
      to
      agents and to other third-party distributors are classified a s costs of
      equipment sales.





Subscription
      revenues are earned by providing to Wherify’s wireless GPS-enable location
      services network (activation revenue) and for usage of its wireless
      telecommunications system enhanced GPS-enabled locates (airtime revenue).
      Activation revenue from postpaid subscribers is billed either in advance or
      arrears and recognized ratably over the service period. Airtime revenue,
      including locates, call time, roaming revenue and long-distance revenue, is
      billed in arrears based on minutes of use and is recognized when the service
      is
      rendered. Prepaid airtime sold to subscribers and revenue collected from pay-in
      advance subscribers is recorded as deferred revenue prior to the commencement
      of
      services, and revenue is recognized when airtime is used or expires. Activation
      and airtime services provided are billed throughout the month according to
      the
      bill cycle in which a particular subscriber is placed. As a result of bill
      cycle
      cut-off times, the Company is required to make estimates for service
      revenues earned but not yet billed at the end of each month, and or advanced
      billings. Estimates for activation revenues are based upon the most current
      bill
      cycle revenues. Estimates for airtime revenues are based upon historical minutes
      of use.




23





The
      Company launched its North American wireless location services in October 2006.
      The Company’s North American subscribers’ rate plan include a feature whereby a
      subscriber’s monthly usage is automatically charged at the most advantageous
      rate plan then in effect for the minutes used. For prepaid plans, the Company
      defers revenue based on an estimate of the portion of unused minutes expected
      to
      be utilized prior to expiration. As the Company lacks historical subscriber
      usage patterns for its specialized services, the Company must apply judgment
      to
      estimate the number of unused minutes to be utilized, as well as those which
      are
      likely to expire or be forfeited. No deferral of revenue is recorded for the
      minutes expected to expire or to be forfeited, as no future performance is
      expected to be required by the Company, nor is there any obligation to refund
      or
      redeem for the value expired minutes. The balance of the deferred phone sales
      and activation fees as of December 31, 2006 and June 30, 2007 was $169,000
      and
      $76,852 respectively, and has been included in deferred revenue in the
      consolidated balance sheets. When available, revenues for enhanced services
      and
      optional features would be recognized as earned. Service revenues also include
      billings to our subscribers for Universal Service fund (USF) and other
      regulatory fees.





The
      Company has determined that the sale of wireless services through its direct
      sales channels with an accompanying handset constitutes a revenue arrangement
      with multiple deliverables in accordance with EITF No.00-21, *Accounting
      for Revenue Arrangements With Multiple Deliverables* .
      The
      Company accounts for these arrangements as separate units of accounting,
      including the wireless service and handset. Arrangement consideration received
      for the handset is recognized as equipment sales when the handset is delivered
      and accepted by the subscriber. Arrangement consideration received for the
      wireless service is recognized a service revenues when earned. As the
      non-refundable, up-front activation fee charged to the subscriber does not
      meet
      the criteria as a separate unit of accounting, the Company allocates the
      additional arrangement consideration received from the activation fee to the
      handset (then delivered item) to the extent that the aggregate handset and
      activation fee proceeds do not exceed the fair value of the handset. Any
      activation fees not allocated to the handset would be deferred upon activation
      and recognized as service revenue on a straight-line basis over the expected
      customer relationship period. The Company determined that the sale of wireless
      services through direct channels (agents) does not constitute a revenue
      arrangement with multiple deliverables. For indirect channel sales, the Company
      continues to defer non-refundable, up-front activation fees and costs to the
      extent of the related revenues in accordance with SAB No. 104, *Revenue
      Recognition* .
      These
      deferred fees and costs are amortized on a straight-line basis over the
      estimated customer relationship period, the contract period.





***Stock
      Based Compensation***





Prior
      to
      January 1, 2006, the Company accounted for stock based compensation under
      Statement of Financial Accounting Standards No. 123 Accounting for Stock-Based
      Compensation (“FAS 123”). As permitted under this standard, compensation cost
      was recognized using the intrinsic value method described in Accounting
      Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB
      25”). Effective January 1, 2006, the Company has adopted Statement of Financial
      Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“FAS 123R”)
      and applied the provisions of the Securities and Exchange Commission Staff
      Accounting Bulletin No. 107 using the modified-prospective transition method.
      Prior periods were not restated to reflect the impact of adopting the new
      standard. As a result of the adoption of FAS 123R, stock-based compensation
      expense recognized during the six months ended June 30, 2006 includes
      compensation expense for all share-based payments granted on or prior to, but
      not yet vested as of January 1, 2006, based on the grant date fair value
      estimated in accordance with the original provisions of FAS 123, and
      compensation cost for all share-based payments granted on or subsequent to
      January 1, 2006, based on the grant date fair vale estimated in accordance
      with
      the provisions of FAS 123R. . See
      Note
      15 for the Company option activities during the years ended June 30, 2008 and
      2007.





***Derivative
      Financial Instruments***





The
      Company does not use derivative instruments to hedge exposures to cash flow,
      market, or foreign currency risks. The Company evaluates all of it financial
      instruments to determine if such instruments are derivatives or contain features
      that qualify as embedded derivatives. For derivative financial instruments
      that are accounted for as liabilities, the derivative instrument is initially
      recorded at its fair value and is then re-valued at each reporting date, with
      changes in the fair value reported as charges or credits to income. For
      option-based derivative financial instruments, the Company uses the
      Black-Scholes Option-pricing Model to value the derivative instruments at
      inception and subsequent valuation dates. The classification of derivative
      instruments, including whether such instruments should be recorded as
      liabilities or as equity, is re-assessed at the end of each reporting period.
      Derivative instrument liabilities are classified in the balance sheet as current
      or non-current based on whether or not net-cash settlement of the derivative
      instrument could be required within 12 months of the balance sheet
      date.




24





***B.***
            ***Quantitative
                and Qualitative Disclosures About Market
                Risk***





Not
      applicable.





***C.***
            ***Off-Balance
                Sheet Arrangements***





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





**Item
      7. Financial Statements and Supplementary Data.**





The
      financial statements required to be filed pursuant to this Item 7 are appended
      to this Annual Report on Form 10-KSB and incorporated by reference
      herein.





**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





None.





**Item
      8A. Controls and Procedures.**





Disclosure
      Controls and Procedures





We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our Exchange Act reports is recorded,
      processed, summarized, and reported within the time periods specified in the
      Securities and Exchange Commission’s rules and forms, and that such information
      is accumulated and communicated to our management, including our Chief Executive
      Officer and Chief Accounting Officer, as appropriate, to allow timely decisions
      regarding required disclosure based on the definition of “disclosure controls
      and procedures” in Rule 13a-15(e). In designing and evaluating the disclosure
      controls and procedures, our management recognized that any controls and
      procedures, no matter how well designed and operated, can provide only
      reasonable assurance of achieving the desired control objectives, and management
      necessarily was required to apply its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures.





At
      the
      end of the period covered by this Annual Report on Form 10-KSB, we carried
      out
      an evaluation, under the supervision and with the participation of our
      management, including our Chief Executive Officer and Chief Accounting Officer,
      of the effectiveness of the design and operation of our disclosure controls
      and
      procedures. Based on the foregoing, our Chief Executive Officer and our Chief
      Accounting Officer concluded that our disclosure controls and procedures were
      not effective to ensure that all material information required to be disclosed
      in this Annual Report on Form 10-KSB has been made known to them in a timely
      fashion due to the material weaknesses noted below in our Management’s report on
      internal control over financial reporting.





Changes
      in Internal Control Over Financial Reporting





There
      was
      no change in our internal control over financial reporting that occurred during
      the fourth quarter of fiscal 2008 that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial reporting.




Management’s
      report on internal control over financial reporting .





Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting, as defined in Exchange Act Rule 13a-15(f).
      Under the supervision and with the participation of management, including our
      Chief Executive Officer and Chief Accounting Officer, we conducted an evaluation
      of the effectiveness of its internal control over financial reporting based
      on
      the framework in Internal Control — Integrated Framework issued by the Committee
      of Sponsoring Organizations of the Treadway Commission. Based on this
      evaluation, management has concluded that the Company’s internal control over
      financial reporting was not effective as of June 30, 2008.




The
      Public Company Accounting Oversight Board has defined a material weakness as
      a
“significant deficiency or combination of significant deficiencies that results
      in more than a remote likelihood that a material misstatement of the annual
      or
      interim financial statements will not be prevented or detected.”




25


During
        our assessment we noted material weaknesses in our internal control which
        related to inventory observation, expense recognition, derivative instruments
        valuation and disclosure control deficiencies related to transactions involving
        stock-based compensation and income taxes. These material weaknesses have
        been
        disclosed to our Board of Directors and Audit Committee Members. Additional
        effort is needed to fully remedy these material weaknesses and we are continuing
        our efforts to improve and strengthen our control processes and procedures.
        Due
        to financial constraints we may not be able to improve our internal controls
        over financial reporting and improve supervision of our accounting staff
        with
        respect to generally accepted accounting principles.





This
      annual report does not include an attestation report of our registered public
      accounting firm regarding internal control over financial reporting. Our
      management’s report was not subject to attestation by our registered public
      accounting firm pursuant to temporary rules of the Securities and Exchange
      Commission that permit us to provide only management’s report in this annual
      report.





**Item
      8B. Other Information.**





On
      August
      8, 2008, Wherify entered into a Securities Purchase Agreement with an accredited
      investor.





Pursuant
      to the Purchase Agreement, Wherify sold 6,666,666 shares of Wherify’s common
      stock, $0.01 par value, ("Common Stock") for $0.03 per share, resulting in
      gross
      proceeds of approximately $200,000. The placement agent earned a selling
      commission of (i) a cash payment of approximately $20,000 and (ii) a warrant
      to
      purchase 666,666 shares of Common Stock with an exercise price of $0.036. After
      placement fees and offering expenses, Wherify received net proceeds of
      $180,000.





On
      August
      15, 2008, Wherify entered into a Securities Purchase Agreement with an
      accredited investor.





Pursuant
      to the Purchase Agreement, Wherify sold 1,000,000 shares of Wherify’s Common
      Stock for $0.04 per share, resulting in gross proceeds of approximately $40,000.
      The placement agent earned a selling commission of (i) a cash payment of
      approximately $4,000 and (ii) a warrant to purchase 100,000 shares of Common
      Stock with an exercise price of $0.048. After placement fees and offering
      expenses, Wherify received net proceeds of $36,000.





On
      August
      22, 2008, Wherify entered into a Securities Purchase Agreement with an
      accredited investor.





Pursuant
      to the Purchase Agreement, Wherify sold 1,250,000 shares of Wherify’s Common
      Stock for $0.04 per share, resulting in gross proceeds of approximately $50,000.
      The placement agent earned a selling commission of (i) a cash payment of
      approximately $5,000 and (ii) a warrant to purchase 125,000 shares of Common
      Stock with an exercise price of $0.048. After placement fees and offering
      expenses, Wherify received net proceeds of $45,000.





The
      securities described above were issued to "accredited" investors, as such term
      is promulgated by the Securities and Exchange Commission ("SEC"), in reliance
      upon such investors’ representation as an "accredited investor" among other
      representations. The issuance of the securities described above were exempt
      from
      the registration requirements under the Securities Act of 1933, as amended,
      pursuant to Section 4(2) thereof and in reliance upon Rule 506 of Regulation
      D
      promulgated by the SEC.





This
      report is neither an offer to purchase, nor a solicitation of an offer to sell,
      securities. The securities offered have not been registered under the United
      States Securities Act of 1933 and may not be offered or sold in the United
      States absent registration or an applicable exemption from registration
      requirements.





26


**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters, Control Persons and Corporate
      Governance; Compliance with Section 16(a) of the Exchange
      Act.**





**Directors
      and Executive Officers**





The
      following table sets forth the names, ages and positions of our directors and
      executive officers:




**Name**
            
            **Age**
            
            **Position**Vincent
                Sheeran
            
            50
            
            Director
                and Chief Executive OfficerW.
                Douglas Hajjar (1) (2)
            
            61
            
            DirectorHugh
                Regan (2)
            
            58
            
            Director





(1)
            Our
                Audit Committee consists of Mr.Hajjar
                (Chairman).


(2)
            Our
                Compensation Committee consists of Messrs. Regan and
                Hajjar.





Each
      Director will hold office until the next annual meeting of Stockholders and
      until his successor has been elected and qualified.





***Vincent
      D. Sheeran*** ,
      has
      served as the Company’s Chief Executive Officer and Director since June 2007. ** From
      April 2002 to May 2006 Mr. Sheeran served as the President and Chief Executive
      Officer of UltraLink, Inc. where he was responsible for transforming the
      business into a well respected HRO with a growing number of services. Mr.
      Sheeran also orchestrated the successful sale of the company to Barring Private
      Equity of India. Prior to UltraLink, Mr. Sheeran worked at Epicor Software
      from
      June 1995 to September 2001 as the Senior Vice President of Worldwide Sales,
      where he was responsible for profit and loss for all international regions
      and
      directed the company’s overall sales efforts. During this period, Mr. Sheeran
      also held other senior positions at Epicor, including Senior Vice President,
      Marketing. Prior to Epicor, he held senior executive positions at several other
      growing technology firms, including Software Plus, Inc., Tesseract, and
      McCormack and Dodge. Mr. Sheeran holds a B.S in Management and Management
      Sciences from the University of South Carolina.





***W.
      Douglas Hajjar*** has
      served as a Director of the Company since June 2008. Mr. Hajjar previously
      served as a Director on the Board of the Company from November 2005 to February
      2008. Mr. Hajjar served as chairman of Wherify California from 1998 until
      July 21, 2005. Mr. Hajjar previously served as Chairman of Control Data
      Corporation and Vice Chairman of Cadence Design Systems, Inc. Mr. Hajjar
      served as Chairman and CEO of Valid Logic for 5 years, Chairman and CEO of
      Telesis Systems for 2 years, and CFO and COO of GenRad for 5 years.
      Mr. Hajjar received a Bachelor Degree from Boston College in
      1968.





**Hugh
      Regan** has
      served as a Director of the Company since June 2008. Mr. Regan serves as
      President and Chief Executive Officer of Laidlaw & Company (UK) Ltd. Mr.
      Regan also serves as Managing Member of the holder of the Series A Convertible
      Preferred Stock of the Company.





**CORPORATE
      GOVERNANCE**





The
      Company operates within a comprehensive plan of corporate governance for the
      purpose of defining responsibilities, setting high standards of professional
      and
      personal conduct and assuring compliance with such responsibilities and
      standards. In July 2002, Congress passed the Sarbanes-Oxley Act of 2002, which,
      among other things, establishes, or provides the basis for, a number of new
      corporate governance standards and disclosure requirements. The Company
      regularly monitors developments in the area of corporate
      governance.





**Board
      of Directors**





The
      Board
      of Directors consists of directors who are elected by the Company’s
      Stockholders, and is the ultimate decision-making body of the Company except
      with respect to those matters reserved to the Stockholders. The Board of
      Directors acts as an advisor and counselor to senior management and ultimately
      monitors its performance. These functions of the Board of Directors are
      fulfilled by the presence of directors who have a substantive knowledge of
      the
      Company’s business.




27





Our
      board
      of directors currently consists of the following three members: Vincent Sheeran,
      Douglas Hajjar, and Hugh Regan. Mr. Regan is an independent director as defined
      by the applicable American Stock Exchange rules. **** There
      are
      no family relationships among any of our current directors and executive
      officers. The number of authorized members of our board of directors is
      determined by resolution of our board of directors. In accordance with the
      terms
      of our amended certificate of incorporation, the authorized number of our board
      of directors is currently set at six members.





Our
      amended and restated bylaws provide that the authorized number of directors
      may
      be changed only by resolution of our board of directors. Our board of directors
      has designated an audit committee and a compensation committee, and may
      establish other committees as it deems necessary or appropriate.





**Committees
      of the Board of Directors**





The
      Board
      of Directors has two standing committees: an Audit Committee and the
      Compensation Committee.





***Audit
      Committee***





Our
      audit
      committee consists of Mr. W. Douglas Hajjar (Chairman). Mr. Hajjar joined
      the Board on June 4, 2008 and previously served as a Director to the Company
      from November 2005 to February 2008, meets the financial literacy requirements
      of applicable SEC and American Stock Exchange rules, and the Board has
      determined that Mr. Hajjar is an “audit committee financial expert” as
      defined in Item 401(e) of Regulation S-K. Mr. Hajjar is not “independent”
as that term is defined in applicable SEC and American Stock Exchange rules
      because of compensation paid to him as a consultant to the Company during the
      prior three years. Both our independent auditors and our internal financial
      personnel will regularly meet privately with and will have unrestricted access
      to our audit committee. Our audit committee operates pursuant to a written
      charter. Our audit committee charter is available on our website at
      www.wherifywireless.com.





***Compensation
      Committee***





The
      members of the Compensation Committee are Mr. W. Douglas Hajjar (Chairman),
      and
      Mr. Regan. The Board has determined that Mr. Regan is independent within the
      meaning of applicable American Stock Exchange rules. The Compensation Committee
      of the Board of Directors reviews and recommends to the Board the compensation
      and benefits of all executive officers of the Company, including the chief
      executive officer, administers the Company’s stock option plan, and establishes
      and reviews general policies relating to the compensation and benefits of the
      Company’s employees and performs such other functions regarding compensations as
      the Board may delegate. Our Compensation Committee operates pursuant to a
      written charter. Our compensation committee charter is available on our website
      at www.wherifywireless.com.





***Nominating
      Committee***





The
      Company does not have a standing nominating committee. Due to the small size
      of
      its Board, the Company does not foresee the need to establish a separate
      nominating committee. The full Board is responsible for evaluating and
      recommending individuals for election or reelection to the Board, including
      those recommendations submitted by Stockholders. Currently, the independent
      director of the Board (within the meaning of applicable American Stock Exchange
      rules) is Mr. Regan.





**SECTION
      16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
      executive officers and directors, and persons who own more than 10% of the
      Company’s Common Stock to file reports of ownership on Form 3 and changes in
      ownership on Form 4 or Form 5 with the Securities and Exchange Commission (the
      “SEC”). Such executive officers, directors and 10% Stockholders are also
      required by SEC rules to furnish the Company with copies of all Section 16(a)
      forms they file. Based solely on information provided to Wherify, Wherify
      believes that during the last fiscal year, the following reports required by
      Section 16(a) of the Exchange Act to be filed by its Directors and executive
      officers were not timely filed: **** (i) **** Jacqueline
      Nevilles, Wherify’s former Chief Financial Officer, did not timely file a Form 3
      covering 1 transaction.




28





**Item
      10. Executive Compensation.**





**EXECUTIVE
      COMPENSATION AND CERTAIN TRANSACTIONS**





**Executive
      Compensation**





The
      table
      below summarizes the total compensation paid to or earned by each of the named
      executive officers for the fiscal year ended June 30, 2008:





N**ame
                and**
              **Principal**
              **Position**
            
            **Fiscal**
              **Year**
            
            **Salary
                ($)**
            
            **Bonus
                ($)**
            
            **Stock**
              **Awards
                ($)**
              **(a)**
            
            **Option**
              **Awards**
              **($)****(a)**
            
            **Non-Equity**
              **Incentive**
              **Plan
                Compensation**
              **($)**
            
            **Nonqualified**
              **Deferred**
              **Compensation**
              **Earnings**
            
            **All**
              **Other
                Compensation**
            
            **Total
                ($)**Vincent
                Sheeran, Director and Chief Executive Officer(b) (c)
            
            
            2008
            
            $
            200,000
            
            $
            25,000
            
            
            ___
            
            $
            197,474
            
            
            ___
            
            
            ___
            
            
            ___
            
            $
            422,4742007
            
            $
            15,385
            
            
            
            
            
            
            
            $
            638,345
            
            
            
            
            
            
            
            
            
            
            $
            695,385Jacqueline
                Nevilles, former Chief Financial Officer
            
            
            2008
            
            $
            40,206
            
            
            
            
            
            ___
            
            $
            70,789
            
            
            ___
            
            
            ___
            
            
            ___
            
            $
            110,995


(a)
              Amounts
                  are calculated in accordance with the provisions of Statement of
                  Financial
                  Accounting Standards (“SFAS”) No. 123R “Share-based
                  Payment.”
 (b)
              Mr.
                  Sheeran began serving as Chief Executive Officer of the Company
                  on June 6,
                  2007.
 (c)
              On
                  a June 6, 2007 Mr. Sheeran was granted an option to purchase 4,000,000
                  shares of Wherify common stock. These options were cancelled in
                  June 2008
                  and Mr. Sheeran was granted an option to purchase 4,000,000 shares
                  of
                  Wherify common stock. The new option vests over 2 years at a rate
                  of
                  1/24thper month and has an exercise price of $0.05 per share. In the
                  event of
                  Mr. Sheeran’s termination, or resignation, after the earlier of the
                  closing of the proposed merger with Lightyear Network Solutions,
                  LLC and
                  December 31, 2008, 2,000,000 of these options shall immediately
                  vest.




***Employment
      Agreement with Vincent Sheeran***




Wherify
      entered into an employment agreement with Mr. Sheeran, dated June 6, 2007.
      Pursuant to the agreement, Mr. Sheeran is paid an annual base salary of
      $200,000, $2,000 per month for living expenses and will be eligible to receive
      a
      bonus equal to 100% of his annual salary for meeting certain milestones. Wherify
      has the option to pay up to 50% of any bonus earned by Mr. Sheeran in Wherify’s
      common stock. In addition, Mr. Sheeran was granted an option to purchase
      4,000,000 shares of Wherify common stock. The option vests over four years
      at a
      rate of 1/48 per month and has an exercise price of $0.16. Mr. Sheeran is
      entitled to all Wherify benefits including medical and dental.





29


The
      agreement also provides that in the event Mr. Sheeran is terminated without
      cause or good reason he will be entitled to one year severance payable in either
      (i) a lump sum with no continued benefits or stock vesting or (ii) a 12 month
      payout of annual salary, benefits and continued vesting of stock options. All
      vested options must be exercised within 90 days after termination or
      resignation.





On
      June
      6, 2008, the Board cancelled Mr. Sheeran’s 4,000,000 options granted in 2007 and
      Mr. Sheeran was granted a new option to purchase 4,000,000 shares of Wherify
      common stock. The new option vests over 2 years at a rate of 1/24 th per
      month and has an exercise price of $0.05 per share. In the event of Mr.
      Sheeran’s termination, or resignation, after the earlier of the closing of the
      proposed merger with Lightyear Network Solutions, LLC and December 31, 2008,
      2,000,000 of these options shall immediately vest.





In
      addition, the agreement provides that in the event of a change of control,
      all
      stock options shall immediately vest.




The
      Agreement also provides that Mr. Sheeran is entitled to one seat on Wherify’s
      Board of Directors.





**OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END**


**Option
                  Awards**
              
              **Stock
                  Awards****Name**
              
              **Number
                  of Securities Underlying Unexercised Options****(#)****Exercisable**
              
              **Number
                  of Securities Underlying Unexercised Options****(#)****Unexercisable**
              
              **Equity
                  Incentive Plan Awards: Number of Securities Underlying Unexercised
                  Unearned Options****(#)**
              
              **Option
                  Exercise Price ($)**
              
              **Option
                  Expiration Date**
              
              **Number
                  of Shares or Units of Stock That Have Not Vested
                  (#)**
              
              **Market
                  Value of Shares or Units of Stock That Have Not Vested****($)**
              
              **Equity
                  Incentive Plan Awards: Number of Unearned Shares, Units****or
                  Other****Rights
                  That Have Not Vested (#)**
              
              **Equity
                  Incentive Plan Awards: Market or Payout Value of Unearned Shares,
                  Units or
                  Other Rights That Have Not Vested**Vincent
                  Sheeran, Director and Chief Executive Officer(a)
              
              
              66,666
              
              
              3,933,334
              
              
              
              
              $
              0.05
              
              
              6/6/2018






(a)
            Mr.
                Sheeran began serving as Chief Executive Officer of the Company on
                June 6,
                2007.




30





**Compensation
      of Directors**





The
      table
      below summaries the compensation paid by the Company to our Directors for the
      fiscal year ended June 30, 2008:




Name
            
            
            
            Fees
              Earned
              or
              Paid in Cash
              ($)
            
            Stock
              Awards
              ($)(a)
            
            Option
              Awards
              ($) (a)
            
            Non-Equity
              Incentive Plan
              Compensation
              ($)
            
            Nonqualified
              Deferred
              Compensation
              Earnings
            
            All
              Other
              Compensation($)
            
            Total
              ($)Doug Hajjar(b)
            
            
            2008
            
            $
            170,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            170,0002007
            
            $
            90,000
            
            $
            190,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —Hugh
                Regan(c)
            
            
            2008
            
            $
            5,0002007
            
            
            ___
            
            
            ___
            
            
            ___
            
            
            ___
            
            
            ___
            
            
            ___
            
            
            ___Timothy
                Neher, former Director (d)
            
            
            2008
            
            $
            145,154
            
            
            ___
            
            
            ___
            
            
            ___
            
            
            ___
            
            $
            22,250
            
            $
            167,4042007
            
            
            ___
            
            $
            15,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            15,000Wade
                R. Fenn, former Director (e)
            
            
            2008
            
            $
            13,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            13,0002007
            
            $
            15,500
            
            $
            26,500
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            42,000Daniel
                McKelvey, former Director (f)
            
            
            2008
            
            $
            15,500
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            15,5002007
            
            $
            19,000
            
            $
            21,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            40,000Dr.
                Neil Morris, former Director (g)
            
            
            2008
            
            $
            15,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            15,0002007
            
            $
            36,000
            
            $
            33,000
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            $
            69,000





(a)
            Represents
                fair value as of June 30, 2008 under SFAS
                123R.





(b)
            Includes
                cash payment of $52,500.





(c)
            Mr.
                Hugh Regan was elected to the Board of Directors on June 4,
                2008.





(d)
            Includes
                $22,250 automobile allowance and $145,154 in cash
                payments.





(e)
            Includes
                cash payment of $9,750.





(f)
            Includes
                cash payment of $12,250.





(g)
            Includes
                cash payment of $11,750.




31





Upon
      appointment and their acceptance to serve on our Board, each new non-employee
      director is issued a non-statutory stock option (the “Option”) pursuant to the
      Company’s stock option plan to purchase 50,000 shares of Common Stock of the
      Company (“Shares”) at a purchase price equal to the current fair market value of
      such Shares as determined by the Board. The Option vests in equal monthly
      increments over four years so long as the non-employee director remains a member
      of the Board. Upon serving on the Board for one year and upon being appointed
      for another term, the non-employee director will receive additional options
      for
      10,000 shares which will vest ratably over 12 months. The non-employee director
      will receive additional options for 10,000 shares for each one year term of
      service with the Board thereafter.





In
      addition to the equity compensation described above, we pay each of our
      non-employee directors $3,000 per calendar quarter in which they serve on the
      Board plus an additional $2,000 per meeting for each of the first five meetings
      per year and $500 per scheduled monthly teleconference meeting they attend.
      In
      addition, we reimburse our directors for their reasonable out-of-pocket expenses
      incurred in attending meetings of our Board or committees thereof. (Ryan please
      update)





***Consulting
      Agreement with Douglas Hajjar***





Effective
      January 1, 2004, Wherify California entered into a Consulting Agreement (the
      “Initial Consulting Agreement”) with Douglas Hajjar, which was subsequently
      assumed by Wherify in connection with the merger of Wherify with Wherify
      California on July 21, 2005. Under the terms of the Initial Consulting
      Agreement, Mr. Hajjar acted as a financial advisor to the Company and the
      Company paid Mr. Hajjar a consulting fee of $10,000 per month.





In
      accordance with the terms of the Initial Consulting Agreement, in 2004 Wherify
      California issued to Mr. Hajjar an option to purchase 100,000 shares of
      Wherify California common stock (equivalent to approximately 481,000 shares
      of
      Wherify common stock) at the then fair market value. The options vest ratably
      on
      a monthly basis over a 36 month period commencing on the date of the agreement,
      but cease to vest upon termination of the agreement. All options granted
      pursuant to the Initial Consulting Agreement vest immediately upon a Change
      in
      Control.





The
      Initial Consulting Agreement also provided that upon a Change of Control during
      the term of the agreement, or within six months thereafter, in which the
      acquiring person or entity is introduced to the company by Mr. Hajjar, the
      company would pay Mr. Hajjar an acquisition fee equal to 2% of the
      aggregate consideration paid to the company’s stockholders in such
      transaction.





On
      January 13, 2006, Wherify and Mr. Hajjar entered into a new Consulting
      Agreement which supersedes and replaces the Initial Consulting Agreement entered
      into effective January 1, 2004. Under the new Consulting Agreement,
      Mr. Hajjar continues to be paid a fee of $10,000 per month for his
      assistance as a financial adviser to the Company and is entitled to
      reimbursement for out-of-pocket costs and indemnification for damages arising
      out of his services. However, he is no longer entitled to a fee in connection
      with a Change in Control transaction. The agreement is terminable by either
      party on 30 days’ notice.





Also
      on
      January 13, 2006, Wherify entered into a letter agreement with Mr. Hajjar
      setting forth certain terms of his services as a Director and Co-Chairman.
      Under
      this agreement, Mr. Hajjar agreed to direct and coordinate the Board’s
      oversight of the business and operations of the Company and the activities
      and
      performance of senior management, and to assist senior management in developing
      strategic plans for the Company and with fund raising and financing activities.
      Pursuant to the agreement, on January 13, 2006 the Company granted to
      Mr. Hajjar an option to purchase 125,000 shares of common stock at an
      exercise price equal to the closing sales price of $1.70 per share. The option
      vests in equal monthly increments over four years so long as Mr. Hajjar
      remains on the Board. The agreement further provides that for each additional
      year Mr. Hajjar serves on the Board he will receive an additional option
      for 12,500 shares of common stock with an exercise price equal to the closing
      sales price on the grant date and which vests ratably monthly over 12 months.
      Mr. Hajjar is also entitled under this agreement to a cash payment of
      $5,000 per month during which he serves on the Board.





On
      February 28, 2008, Mr. Hajjar resigned from the Board of Directors, he continued
      to assist as a consultant under the terms of the consulting
      agreement.





On
      June
      4, 2008, Mr. Hajjar was elected as a director to the Wherify Board of
      Directors.




32





**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**





**SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (EDNA,
      RYAN)**





The
      following tables set forth information as of August 2, 2008 regarding the
      beneficial ownership of common stock by (i) each Stockholder who is known by
      Wherify to own beneficially in excess of 5% of Wherify’s outstanding common
      stock; (ii) each director; (ii) the Company’s Chief Executive Officer and the
      two most highly compensated executive officers (the “Named Executive Officers”);
      and (iv) the executive officers and directors as a group.





Beneficial
      ownership is determined in accordance with the rules of the SEC. In computing
      the number of shares beneficially owned by a person or a group and the
      percentage ownership of that person or group, shares of our common stock
      issuable currently or within 60 days of August 2, 2008, upon exercise of options
      or warrants or by conversion of preferred stock or convertible debentures held
      by that person or group is deemed outstanding. These shares, however, are not
      deemed outstanding for computing the percentage ownership of any other person.
      Except as indicated by footnote, and subject to community property laws where
      applicable, the stockholders named in the table below have sole voting and
      investment power with respect to all shares of common stock shown as
      beneficially owned by them. Percentage ownership is based on 110,947,535 shares
      of common stock outstanding as of August 2, 2008, together with applicable
      options, warrants, preferred stock and convertible debentures for each
      stockholder. Unless otherwise indicated, the address of the following
      Stockholders is c/o Wherify Wireless, Inc.63 Bovet Road #521, San Mateo, CA
      94402.




***Security
      Ownership of Certain Beneficial Owners(a)***


**Shares
                  Beneficially Owned****Name
                  and Title**
              
              **Number**
              
              **Percent**Vincent
                  Sheeran, Director and Chief Executive Officer
              
              
              488,887
              (a)
              
              *Douglas
                  Hajjar, Director
              
              
              7,090,160
              (c)
              
              6.8
              %Hugh
                  Regan, Director
              
              
              [Insert holdings]All
                  officers and directors as a group
              
              
              8,030,835
              
              
              7.2
              %**Five
                  Percent Beneficial Holders of Common Stock**GPS
                  Associates, LLC.
                90
                  Park Avenue-31stFloor
                New
                  York, NY 10016
              
              
              72,000,000
              (d)
              
              39.4
              %Laidlaw
                  & Company (UK) Ltd.
                90
                  Park Avenue-31stFloor
                New
                  York, NY 10016
              
              
              13,203,125
              (e)
              
              10.6
              %Yorkville
                  Advisors (fka Cornell Capital Partners, LP)
                101
                  Hudson Street, Suite 3700
                Jersey
                  City, NJ 07303
              
              
              5,827,055
              (f)
              
              4.99
              (e)




*  Does
      not
      exceed 1% of the referenced class of securities.




(a)
              All
                  shares issuable pursuant to stock options that are, or will become,
                  exercisable within 60 days of August 2,
                  2008.


(b)
              Includes
                  1,524,951 shares issuable pursuant to stock options that are, or
                  will
                  become, exercisable within 60 days of September 11,
                  2008.


(c)
              Includes
                  500,000 to warrants that are, or will become, exercisable within
                  60 days
                  of August 2, 2008.




33




(d)
            Includes
                60,000,000 shares issuable to GPS Associates, LLC (GPS) upon conversion
                of
                Series A Preferred Stock and 12,000,000 shares issued to GPS related
                to
                the conversion of a convertible note. The Manager of GPS is GPS Management
                Company LLC (“GPS Management”). The Managing Members of GPS Management are
                Theodore V. Fowler, Hugh S. Regan, and Rob Bonaventura, each of whom
                are
                employees of Laidlaw & Company (UK) Ltd.
                (“Laidlaw”).


(e)
            Includes
                60,000 acquired shares and 13,143,125 shares upon exercise of
                warrants.




(f)
            As
                of August 2, 2008, Cornell Capital Partners beneficial ownership
                of
                Wherify common stock (including its right to acquire up to 20 million
                shares upon conversion of convertible debentures, and its right to
                acquire
                up to 7,000,000 shares upon exercise of warrants) was 4.99% taking
                into
                consideration the 4.99% ownership limitation contained in the convertible
                debentures and warrants. Without taking into consideration this 4.99%
                ownership limitation, which is waivable by Cornell Capital Partners
                on 65
                days notice, Cornell Capital Partner’s beneficial ownership would be
                approximately 24.3%.




. EQUITY
      COMPENSATION PLAN INFORMATION





**Plan Category**
            
            **Number of**
              **Securities to Be**
              **Issued Upon**
              **Exercise of**
              **Outstanding**
              **Options, Warrants**
              **and Rights (A)**
            
            **Weighted-Average**
              **Exercise Price of**
              **Outstanding**
              **Options, Warrants**
              **and Rights (B)**
            
            **Number of**
              **Securities**
              **Remaining**
              **Available for Future**
              **Issuance Under**
              **Equity**
              **Compensation Plans**
              **(Excluding**
              **Securities Reflected**
              **in Column (A))**
              **(C)**Equity
                compensation plans approved by security holders
            
            
            7,743,279
            (1)
            $
            0.11
            
            
            5,953,697
            (2)Equity
                compensation plans not approved by security holders
            
            
            —
            
            
            —
            
            
            —Total
            
            
            7,743,279
            
            $
            0.11
            
            
            5,953,697




(1)  Of
      these
      securities, 6,200,000 options, 0 options and 1,543,279 options were issued
      and
      outstanding as of June 30, 2008 pursuant to the 2004 Stock Plan, the 2001 Stock
      Plan and the 1999 Stock Option Plan, respectively.


(2)  Of
      these
      securities, 5,953,697 options, 0 options, and 0 options were available for
      issuance as of June 30, 2008 pursuant to the 2004 Stock Plan, the 2001 Stock
      Plan and the 1999 Stock Option Plan, respectively.




**Item
      12. Certain Relationships and Related Transactions.**








**CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS**





We
      employed Mr. William Hajjar as our Director of Enterprise Sales. He held
      this position in Wherify California since May 2003 to September 2007. On
      November 15, 2005 Mr. W. Douglas Hajjar was appointed to the Board of
      Directors and further was appointed to serve as the co-Chairman of the Board
      of
      Directors. William Hajjar is the son of our Director Mr. W. Douglas Hajjar.
      In Fiscal 2008, Mr. William Hajjar was compensated $53,724. As of September
      2007 Mr. William Hajjar is no longer with the Company.





We
      employ
      Mr. Matthew Neher as our Vice President of Business Development. He held
      this position in Wherify California since May 1999 to January 2008.
      Mr. Matthew Neher is the brother of our former Chairman of the Board
      Mr. Timothy J. Neher. In Fiscal 2008, Mr. Matthew Neher was
      compensated $87,500.





34




On
      January 13, 2006, Wherify and Mr. W. Douglas Hajjar entered into a
      Consulting Agreement. Under the Con sulting
      Agreement, Mr. Hajjar continues to be paid a fee of $10,000 per month for
      his assistance as a financial adviser to the Company and is entitled to
      reimbursement for out-of-pocket costs and indemnification for damages arising
      out of his services. The agreement is terminable by either party on 30 days’
notice.





Director
      Hugh Regan serves as President and Chief Executive Officer of Laidlaw &
Company (UK) Ltd. (“Laidlaw”). Laidlaw has served as Wherify’s placement agent
      in connection with the sale of certain Wherify securities during the fiscal
      years ending June 30, 2007 and June 30, 2008. In connection with Laidlaw’s
      services, Wherify has paid an aggregate of $740,000 and has issued warrants
      to
      purchase 10,143,125 shares of common stock to Laidlaw during these time periods.
      In addition, on May 15, 2008 Wherify agreed to issue warrants to purchase
      3,000,000 shares of Wherify’s common stock to Laidlaw pursuant to an Engagement
      Letter entered into between Laidlaw and Wherify.





Mr.
      Regan
      also serves as Managing Member of the holder of the Series A Convertible
      Preferred Stock.





**Conflict
      of Interest Policy**





We
      believe that all transactions with affiliates described above were made on
      terms
      no less favorable to us than could have been obtained from unaffiliated third
      parties. Our policy is to require that a majority of the independent and
      disinterested non-employee directors on the Board approve all transactions
      between Wherify and its officers, directors, principal Stockholders and their
      affiliates. Such transactions will continue to be on terms no less favorable to
      us than we could obtain from unaffiliated third parties.





All
      transactions between us and our officers, directors, principal Stockholders
      and
      their affiliates will be approved by a majority of the Board, including a
      majority of the independent and disinterested non-employee directors, or, if
      required by law, a majority of disinterested Stockholders and will continue
      to
      be on terms no less favorable to us than could be obtained from unaffiliated
      third parties.




35




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this Form 10-KSB to be signed on its behalf
      by the undersigned, thereunto duly authorized, in the City of San Mateo,
      California on October 14, 2008.





WHERIFY
                WIRELESS, INC.By:
            /s/
                Vincent SheeranVincent
                Sheeran,
              Chief
                Executive Officer





**POWER
      OF ATTORNEY**





KNOW
      ALL
      PERSONS BY THESE PRESENTS, that each person whose signature appears below
      constitutes and appoints Vincent Sheeran as his true and lawful attorney-in-fact
      and agent, with full power of substitution and resubstitution, for him in any
      and all capacities, to sign any and all amendments to this report on Form
      10-KSB, and to file the same, with all exhibits thereto and all documents in
      connection therewith, with the Securities and Exchange Commission, granting
      unto
      said attorney-in-fact and agent, full power and authority to do and perform
      each
      and every act and thing requisite and necessary to be done in and about the
      premises, as fully to all intents and purposes as he or she might or could
      do in
      person, hereby ratifying and confirming that all said attorney-in-fact and
      agent, or his substitute, may lawfully do or cause to be done by virtue
      hereof.





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.





**Name**
            
            **Title**
            
            **Date**/s/
                Vincent Sheeran
            
            Chief
                Executive Officer
              (Principal
                Executive Officer)
            
            October
                14, 2008Vincent
                Sheeran
            
            and
                Director/s/
                Douglas Hajjar
            
            Director
            
            October
                14, 2008Douglas
                Hajjar
            
            (Chairman
                of the Board)/s/
                Hugh Regan
            
            Director
            
            October
                14, 2008Hugh
                Regan/s/
                Edna Carter
            
            Chief
                Accounting Officer
            
            October
                14, 2008Edna
                Carter
            
            Controller


36


**Exhibit
      Index**





**Exhibit**
              **No.**
            
            **Description**2.1
            
            Agreement
                and Plan of Merger dated as of April 14, 2004, by and among IQ
                Biometrix, Inc., Wherify Acquisition, Inc. and Wherify Wireless,
                Inc. is
                incorporated by reference from Appendix A to the joint proxy
                statement/prospectus which is part of the Registration Statement
                on Form
                S-4/A filed on June 30, 2005.2.2
            
            Amendment
                No. 1 to Agreement and Plan of Merger dated as of August 13, 2004 by
                and among IQ Biometrix, Inc., Wherify Acquisition, Inc. and Wherify
                Wireless, Inc. is incorporated by reference from Appendix B to the
                Joint
                Proxy Statement/Prospectus which is part of the Registration Statement
                on
                Form S-4/A filed on June 30, 2005.2.3
            
            Amendment
                No. 2 to Agreement and Plan of Merger dated as of December 7, 2004 by
                and among IQ Biometrix, Inc., Wherify Acquisition, Inc. and Wherify
                Wireless, Inc. is incorporated by reference from Appendix C to the
                joint
                proxy statement/prospectus which is part of the Registration Statement
                on
                Form S-4/A filed on June 30, 2005.2.4
            
            Amendment
                No. 3 to Agreement and Plan of Merger dated as of January 13, 2005 by
                and among IQ Biometrix, Inc., Wherify Acquisition, Inc. and Wherify
                Wireless, Inc. is incorporated by reference from Appendix D to the
                joint
                proxy statement/prospectus which is part of the Registration Statement
                on
                Form S-4/A filed on June 30, 2005.2.5
            
            Amendment
                No. 4 to Agreement and Plan of Merger dated as of April 18, 2005 by
                and among IQ Biometrix, Inc., Wherify Acquisition, Inc. and Wherify
                Wireless, Inc. is incorporated by reference from Appendix E to the
                joint
                proxy statement/prospectus which is part of the Registration Statement
                on
                Form S-4/A filed on June 30, 2005.2.6
            
            Agreement
                and Plan of Merger by and among Wherify and Lightyear, dated as of
                August
                12, 2008 is incorporated herein by reference from Wherify’s Current Report
                on Form 8-K filed with the SEC on August 14, 2008.3.1
            
            Bylaws
                are incorporated herein by reference from Wherify’s Registration Statement
                on Form SB-2 (SEC File No. 333-41635) filed December 29,
                1997.3.2
            
            Amended
                and Restated Certificate of Incorporation of Wherify Wireless, Inc.
                is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 (SEC File No. 333-124027) as filed March 16,
                2006.3.3
            
            Certificate
                of Amendment of Amended and Restated Certificate of Incorporation
                of
                Wherify Wireless, Inc. +3.4
            
            Certificate
                of Correction of Wherify Wireless, Inc. +3.5
            
            Certificate
                of Designation of Series A Convertible Preferred Stock filed with
                the
                Delaware Secretary of State on April 11, 2007 is hereby incorporated
                by
                reference from Wherify’s Current Report on Form 8-K filed April 12,
                2007.3.6
            
            Certificate
                of Designation of Series B Convertible Adjustable Preferred Stock
                dated
                July 31, 2007 is hereby incorporated by reference from Wherify’s Current
                Report on Form 8-K filed August 7, 2007.4.1
            
            Specimen
                Common Stock Certificate is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 (SEC File No. 333-122710)
                filed September 13, 2005.10.01
            
            Asset
                Purchase Agreement dated February 11, 2003 by and between Special
                Equity IV, L.P. and Wherify is incorporated herein by reference from
                Wherify’s Quarterly Report on Form 10-QSB filed with the SEC on
                February 19, 2003.10.02
            
            Stock
                Purchase Agreement dated February 11, 2003 by and between Special
                Equity IV, L.P. and Wherify is incorporated herein by reference from
                Wherify’s Quarterly Report on Form 10-QSB filed with the SEC on
                February 19, 2003.10.03
            
            Warrant
                to Purchase Common Stock dated February 11, 2003 between Wherify and
                Special Equity IV, L.P. is incorporated herein by reference from
                Wherify’s
                Quarterly Report on Form 10-QSB filed with the SEC on February 19,
                2003.10.04
            
            Memorandum
                of Agreement regarding stock options dated August 1, 2002 by and
                between Wherify and William Scigliano is incorporated herein by reference
                from Wherify’s Annual Report on Form 10-KSB filed with the SEC on
                October 15, 2002.10.05
            
            Memorandum
                of Agreement regarding stock options dated August 1, 2002 by and
                between Wherify and Greg J. Micek is incorporated herein by reference
                from
                Wherify’s Annual Report on Form 10-KSB filed with the SEC on
                October 15, 2002.10.06
            
            Form
                of Warrant to Purchase Common Stock Issued to holders dated May 28,
                2003 is incorporated herein by reference from Wherify’s Registration
                Statement on Form SB-2 (SEC File No. 333-107570) filed August 1,
                2003.


37





**Exhibit**
              **No.**
            
            **Description**10.07
            
            10%
                Secured Convertible Debenture dated May 28, 2003 between Wherify and
                John J. Micek, Jr. is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 (SEC File No. 333-107570) filed
                August 1, 2003.10.08
            
            10%
                Secured Convertible Debenture dated May 28, 2003 between Wherify and
                Neil Morris is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 (SEC File No. 333-107570) filed
                August 1, 2003.10.09
            
            10%
                Secured Convertible Debenture dated May 28, 2003 between Wherify and
                Elisa Micek and Forte Capital Partners, LLC is incorporated herein
                by
                reference from Wherify’s Registration Statement on Form SB-2 (SEC File No.
                333-107570) filed August 1, 2003.10.10
            
            10%
                Secured Promissory Note between Wherify and Network Storage Systems,
                Inc.
                dated May 4, 2003 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 (SEC File No. 333-107570) filed
                August 1, 2003.10.11
            
            Security
                Agreement between Wherify the Lenders dated May 4, 2003 is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 (SEC File No. 333-107570) filed August 1,
                2003.10.12
            
            6%
                Secured Convertible Debenture dated September 18, 2003 between
                Wherify and Platinum Partners Value Arbitrage Fund is incorporated
                herein
                by reference from Wherify’s Annual Report on Form 10-KSB filed
                October 14, 2003.10.13
            
            6%
                Secured Convertible Debenture dated September 18, 2003 between
                Wherify and Platinum Partners Global Macro Fund, LP is incorporated
                herein
                by reference from Wherify’s Annual Report on Form 10-KSB filed
                October 14, 2003.10.14
            
            Warrant
                to Purchase Common Stock Issued to Platinum Partners Value Arbitrage
                Fund,
                LP 2003 is incorporated herein by reference from Wherify’s Annual Report
                on Form 10-KSB filed October 14, 2003.10.15
            
            Warrant
                to Purchase Common Stock Issued to Platinum Partners Global Macro
                Fund, LP
                2003 is incorporated herein by reference from Wherify’s Annual Report on
                Form 10-KSB filed October 14, 2003.10.16
            
            6%
                Secured Convertible Debenture dated October 30, 2003 between Wherify
                and William Ritger is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-QSB filed November 14, 2003.10.17
            
            6%
                Secured Convertible Debenture dated October 8, 2003 between Wherify
                and Jacob Engel is incorporated herein by reference from Wherify’s Annual
                Report on Form 10-QSB filed November 14, 2003.10.18
            
            Warrant
                to Purchase Common Stock Issued to William Ritger is incorporated
                herein
                by reference from Wherify’s Annual Report on Form 10-QSB filed November
                14, 2003.10.19
            
            Warrant
                to Purchase Common Stock Issued to Jacob Engel is incorporated herein
                by
                reference from Wherify’s Annual Report on Form 10-QSB filed November 14,
                2003.10.20
            
            Amendment
                to Employment Agreement between Wherify and William B. Scigliano
                dated
                April 13, 2004 is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-KSB filed October 1,
                2004.10.21
            
            Consulting
                Agreement between Wherify and Daniel P. McKelvey dated August 1, 2003
                is incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed October 1, 2004.10.22
            
            Warrant
                to Purchase Common Stock Issued to Daniel McKelvey dated August 2003
                incorporated by reference from Wherify’s Registration Statement on Form
                SB-2/A (SEC File No. 333-122710) filed on April 11,
                2005.10.23
            
            6%
                Secured Convertible Debenture dated August 18, 2004 between Wherify
                and John Micek, Jr. and Forte Capital Partners, LLC is incorporated
                herein
                by reference from Wherify’s Annual Report on Form 10-KSB filed
                October 1, 2004.10.24
            
            Warrant
                to Purchase Common Stock Issued to Forte Capital Partners, LLC dated
                July
                2004 is incorporated herein by reference from Wherify’s Annual Report on
                Form 10-KSB filed October 1,
                2004.


38





**Exhibit**
              **No.**
            
            **Description**10.25
            
            Warrant
                to Purchase Common Stock Issued to John Micek, Jr. dated July 2004
                is
                incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed October 1, 2004.10.26
            
            Amendment
                to Consulting Agreement between Wherify and Daniel McKelvey dated
                August 1, 2004 is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-KSB filed October 1,
                2004.10.27
            
            Warrant
                to Purchase Common Stock issued to Forte Capital Partners, LLC dated
                August 17, 2004 is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-KSB filed October 1,
                2004.10.28
            
            Warrant
                to Purchase Common Stock issued to John Micek, Jr. dated August 17,
                2004 is incorporated herein by reference from Wherify’s Annual Report on
                Form 10-KSB filed October 1, 2004.10.29
            
            Warrant
                to Purchase Common Stock issued to Forte Capital Partners, LLC dated
                October 13, 2004 incorporated by reference from Wherify’s
                Registration Statement on Form SB-2/A (SEC File No. 333-122710) filed
                on
                April 11, 2005.10.30
            
            Purchase
                and Registration Rights Agreement dated January 11, 2005 is
                incorporated herein by reference from Wherify’s Current Report on Form 8-K
                filed January 11, 2005.10.31
            
            Amendment
                to Consulting Agreement Between Wherify and Liviakis Financial
                Communications, Inc. dated January 1, 2005 is incorporated herein by
                reference from Wherify’s Quarterly Report on Form 10-QSB (SEC File No.
                000.24001) filed February 10, 2005.10.32
            
            2005
                Consultant Compensation plan is hereby incorporated by reference
                from
                Wherify’s Registration Statement on Form S-8 (SEC File No. 333-123145)
                filed March 4, 2005.10.33
            
            Consulting
                Agreement with Alpine Capital Partners dated January 2004 is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 filed March 28, 2005.10.34
            
            5%
                Convertible Debenture issued to Austin Lewis dated January 10, 2005
                is incorporated herein by reference from Wherify’s Registration Statement
                on Form SB-2 filed March 28, 2005.10.35
            
            Warrant
                to Purchase Common Stock Issued to Austin Lewis dated January 10,
                2005 is incorporated herein by reference from Wherify’s Registration
                Statement on Form SB-2 filed March 28, 2005.10.36
            
            5%
                Convertible Debenture issued to Briarwood Investments dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.37
            
            Warrant
                to Purchase Common Stock Issued to Briarwood Investments dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.38
            
            5%
                Convertible Debenture issued to Enable Capital Partners dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.39
            
            Warrant
                to Purchase Common Stock Issued to Enable Capital Partners dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.40
            
            5%
                Convertible Debenture issued to Forte Capital Partners LLC dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.41
            
            Warrant
                to Purchase Common Stock Issued to Forte Capital Partners LLC dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.42
            
            5%
                Convertible Debenture issued to Meadowbrook Opportunity Fund dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.


39





**Exhibit**
              **No.**
            
            **Description**10.43
            
            Warrant
                to Purchase Common Stock Issued to Meadowbrook Opportunity Fund dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.44
            
            5%
                Convertible Debenture issued to Ron Nash dated January 10, 2005 is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 filed March 28, 2005.10.45
            
            Warrant
                to Purchase Common Stock Issued to Ron Nash dated January 10, 2005 is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 filed March 28, 2005.10.46
            
            5%
                Convertible Debenture issued to Nite Capital dated January 10, 2005
                is incorporated herein by reference from Wherify’s Registration Statement
                on Form SB-2 filed March 28, 2005.10.47
            
            Warrant
                to Purchase Common Stock Issued to Nite Capital dated January 10,
                2005 is incorporated herein by reference from Wherify’s Registration
                Statement on Form SB-2 filed March 28, 2005.10.48
            
            5%
                Convertible Debenture issued to Schottenfeld Group LLC dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.49
            
            Warrant
                to Purchase Common Stock Issued to Schottenfeld Group LLC dated
                January 10, 2005 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed March 28,
                2005.10.50
            
            5%
                Convertible Debenture issued to Special Situations Private Equity
                Fund,
                L.P. dated January 10, 2005 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed March 28,
                2005.10.51
            
            Warrant
                to Purchase Common Stock Issued to Special Situations Private Equity
                Fund,
                L.P. dated January 10, 2005 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed March 28,
                2005.10.52
            
            5%
                Convertible Debenture issued to Special Situations Technology Fund,
                L.P.
                dated January 10, 2005 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed March 28,
                2005.10.53
            
            Warrant
                to Purchase Common Stock Issued to Special Situations Technology
                Fund,
                L.P. dated January 10, 2005 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed March 28,
                2005.10.54
            
            5%
                Convertible Debenture issued to Special Situations Technology Fund
                II,
                L.P. dated January 10, 2005 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed March 28,
                2005.10.55
            
            Consulting
                Agreement with Alpine Capital Partners dated January 2004 is
                incorporated by reference from Wherify’s Registration Statement on Form
                SB-2/A filed on April 11, 2005.10.56
            
            5%
                Convertible Debenture issued to Austin Lewis dated January 10, 2005
                is incorporated by reference from Wherify’s Registration Statement on Form
                SB-2/A filed on April 11, 2005.10.57
            
            Employment
                Agreement between Timothy Neher and Wherify Wireless, Inc. dated
                as of
                November 14, 2002 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed September 9,
                2005.10.58
            
            Second
                Amendment to Employment Agreement between William B. Scigliano dated
                May 19, 2005 is incorporated herein by reference from the Joint Proxy
                Statement/Prospectus on Form S-4/A filed on June 30,
                2005.


40





10.59
            
            Employment
                Agreement between Gerald Parrick and Wherify dated as of July 21,
                2005 is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2/A filed on September 9, 2005.10.60
            
            EMS
                Agreement between Wherify and CalComp Electronics Public Company
                Limited
                dated as of January 7, 2005 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed September 9,
                2005.10.61
            
            Lease
                between Westport Joint Venture and World Tracking Technologies, Inc.
                dated
                as of September 3, 1999 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 filed September 9,
                2005.10.62
            
            IQ
                Biometrix, Inc. 2004 Stock Plan is incorporated herein by reference
                from
                Wherify’s joint proxy statement/prospectus on Form S-4/A as filed on
                June 30, 2005.10.63
            
            Amended
                and Restated 1999 Stock Option Plan of Wherify Wireless, Inc. is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 filed September 9, 2005.10.64
            
            2004
                Consultant Compensation plan is hereby incorporated by reference
                from
                Wherify’s Registration Statement on Form S-8 filed February 18,
                2004.10.65
            
            Amendment
                to the 2004 Consultant Compensation plan is hereby incorporated by
                reference from Wherify’s Registration Statement on Form S-8 filed
                October 13, 2004.10.66
            
            2005
                Consultant Compensation plan is hereby incorporated by reference
                from
                Wherify’s Registration Statement on Form S-8 filed March 4,
                2005.10.67
            
            International
                Supply And Distribution Agreement between Wherify and American Network
                Computadores incorporated by reference from Wherify’s Annual Report on
                Form 10-KSB filed October  13, 2005.10.68
            
            Consulting
                Agreement between Wherify and W. Douglas Hajjar dated January 12,
                2006 is incorporated herein by reference from Wherify’s Registration
                Statement on Form SB-2 as filed March 16, 2006.10.69
            
            Letter
                Agreement between Wherify and W. Douglas Hajjar dated January 13,
                2006 is incorporated herein by reference from Wherify’s Registration
                Statement on Form SB-2 as filed March 16, 2006.10.70
            
            Employment
                Agreement with Mark E. Gitter dated January 24, 2006 is incorporated
                herein by reference from Wherify’s Registration Statement on Form SB-2 as
                filed March 16, 2006.10.71
            
            Promissory
                Note between Wherify and Stephen J. Luczo dated February 22, 2006 is
                incorporated herein by reference from Wherify’s Registration Statement on
                Form SB-2 as filed March 16, 2006.10.72
            
            Placement
                Agent Agreement between Wherify and Newbridge Securities Corporation
                dated
                March 10, 2006 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 as filed March 16,
                2006.10.73
            
            Investment
                Agreement dated as of February 9, 2006 between Wherify and Dutchess
                Private Equities Fund, L.P. is incorporated herein by reference from
                Wherify’s Current Report on Form 8-K filed February 9,
                2006.10.74
            
            Securities
                Purchase Agreement between Wherify and Cornell Capital Partners,
                LP dated
                March 10, 2006 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 as filed March 16,
                2006.10.75
            
            Standby
                Equity Distribution Agreement between Wherify and Cornell Capital
                Partners, LP dated March 10, 2006 is incorporated herein by reference
                from Wherify’s Registration Statement on Form SB-2 as filed March 16,
                2006.10.76
            
            Investor
                Registration Rights Agreement between Wherify and Cornell Capital
                Partners, LP dated March 10, 2006 is incorporated herein by reference
                from Wherify’s Registration Statement on Form SB-2 as filed March 16,
                2006.10.77
            
            Security
                Agreement between Wherify and Cornell Capital Partners, LP dated
                March 10, 2006 is incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 as filed March 16,
                2006.10.78
            
            Secured
                Convertible Debenture between Wherify and Cornell Capital Partners,
                LP
                dated March 10, 2006 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 as filed March 16,
                2006.


41





10.79
            
            Secured
                Convertible Debenture between Wherify and Cornell Capital Partners,
                LP
                dated March 14, 2006 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 as filed March 16,
                2006.10.80
            
            Pledge
                and Escrow Agreement among Wherify, Cornell Capital Partners, LP
                and David
                Gonzalez, Esq. dated March 10, 2006 is incorporated herein by
                reference from Wherify’s Registration Statement on Form SB-2 as filed
                March 16, 2006.





10.81
            
            Warrant
                to Purchase Common Stock (No. CCP-001) issued to Cornell Capital
                Partners,
                LP dated March 10, 2006 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 as filed March 16,
                2006.10.82
            
            Warrant
                to Purchase Common Stock (No. CCP-002) issued to Cornell Capital
                Partners,
                LP dated March 10, 2006 is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 as filed March 16,
                2006.10.83
            
            Amendment
                to Secured Convertible Debentures between Wherify and Cornell Capital
                Partners dated April 21, 2006 is incorporated herein by reference
                from Wherify’s Registration Statement on Form SB-2 as filed April 24,
                2006.10.84
            
            Letter
                Agreement between Wherify and Michael D. Dingman, Jr. dated March 27,
                2006 is incorporated herein by reference from Wherify’s Registration
                Statement on Form SB-2 as filed April 24, 2006.10.85
            
            Form
                of Subscription Agreement is incorporated herein by reference from
                Wherify’s Registration Statement on Form SB-2 as filed April 24,
                2006.10.86
            
            Master
                Purchase/Reseller Agreement dated March 22, 2006 between Wherify and
                Siemens AG, Communications, Wireless Module is hereby incorporated
                by
                reference to Wherify’s Quarterly Report on Form 10-QSB filed on
                May 15, 2006.10.87
            
            Promissory
                Note issued by Wherify to Stephen  J. Luczo dated June 16, 2006
                is incorporated herein by reference from Wherify’s Registration Statement
                on Form SB-2 as filed July 5, 2006.10.88
            
            Amendment
                to 2004 Stock Option Plan dated October 27, 2006 is hereby incorporated
                by
                reference from Wherify’s Current Report on Form 8-K filed November 2,
                2006.10.89
            
            Cornell
                Capital Partners Agreement Letter dated November 1, 2006 between
                Wherify
                and Cornell Capital Partners, LP is hereby incorporated by reference
                from
                Wherify’s Current Report on Form 8-K filed November 21,
                2006.10.90
            
            Letter
                from Cornell Capital Partners, dated December 29, 2006 is incorporated
                herein by reference from Wherify’s Quarterly Report on Form 10-QSB filed
                with the SEC on February 27, 2007.10.91
            
            Stipulation
                and Agreement between Wherify and Westport Office Park, LLC is
                incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed with the SEC on November 14, 2007.10.92
            
            Letter
                Agreement dated February 2, 2007 between Wherify and Cornell Capital
                Partners, LP. is incorporated herein by reference from Wherify’s Annual
                Report on Form 10-KSB filed with the SEC on November 14,
                200710.93
            
            10%
                Senior Convertible Promissory Note and Loan Agreement between Wherify
                and
                GPS Associates, LLC dated February 22, 2007 is incorporated herein
                by
                reference from Wherify’s Annual Report on Form 10-KSB filed with the SEC
                on November 14, 200710.94
            
            Securities
                Purchase and Option Agreement dated February 22, 2007 between Wherify
                and
                GPS Associates, LLC. is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-KSB filed with the SEC on November 14,
                200710.95
            
            Warrant
                to purchase Common Stock (No. BW-1) issued to GPS Associates, LLC
                dated
                February 22, 2007 is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-KSB filed with the SEC on November 14,
                200710.96
            
            Warrant
                to purchase Common Stock issued to Laidlaw & Company (UK) Ltd. dated
                February 22, 2007 is incorporated herein by reference from Wherify’s
                Annual Report on Form 10-KSB filed with the SEC on November 14,
                2007


42





10.97
            
            Sublease
                Agreement dated April 18, 2007 between Wherify and Sling Media is
                hereby
                incorporated by reference from Wherify’s Current Report on Form 8-K filed
                April 23, 2007.10.98
            
            Offer
                Letter dated June 6, 2007 between Wherify and Vincent D. Sheeran
                is
                incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed with the SEC on November 14, 200710.99
            
            Separation
                Agreement dated June 27, 2007 between Wherify and William Scigliano
                is
                incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed with the SEC on November 14, 200710.100
            
            Form
                of Subscription Agreement entered into between Wherify and the Investors
                in connection with the offering of Series B Convertible Adjustable
                Preferred Stock is incorporated herein by reference from Wherify’s Annual
                Report on Form 10-KSB filed with the SEC on November 14,
                200710.101
            
            Form
                of Registration Rights Agreement entered into between Wherify and
                the
                Investors in connection with the offering of Series B Convertible
                Adjustable Preferred Stock is incorporated herein by reference from
                Wherify’s Annual Report on Form 10-KSB filed with the SEC on November 14,
                200710.102
            
            Form
                of Warrant to purchase Common Stock issued to Investors in connection
                with
                the offering of Series B Convertible Adjustable Preferred Stock is
                incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed with the SEC on November 14,
                2007





10.103
            
            Offer
                Letter dated August 13, 2007 between Wherify and Jacqueline Nevilles
                is
                incorporated herein by reference from Wherify’s Annual Report on Form
                10-KSB filed with the SEC on November 14, 200710.104
            
            Separation
                Agreement and Mutual Release entered into between Wherify Wireless,
                Inc.
                and Timothy Neher, dated November 21, 2007, incorporated herein by
                reference from Wherify’s Current Report on Form 8-k filed with the SEC on
                November 28, 2007.10.105
            
            World
                wide License between Wherify and SOSGPS Holding, LLC.10.106
            
            Notice
                of Default from Yorkville Advisors, LLC, dated February 1, 2008,
                incorporated herein by reference from Wherify’s Current Report on Form 8-k
                filed with the SEC on February 8, 2008.10.107
            
            Forbearance
                Agreement with Yorkville Advisors, LLC, dated February 7, 2008
                incorporated herein by reference from Wherify’s Current Report on Form 8-k
                filed with the SEC on February 8, 2008.10.108
            
            Forbearance
                Agreement with Yorkville Advisors, LLC, dated May 19,
                2008.10.109
            
            Bridge
                Note and Warrant Purchase Agreement incorporated herein by reference
                from
                Wherify’s Current Report on Form 8-K filed with the SEC on June 11,
                2008.10.110
            
            Senior
                Secured Convertible Promissory Bridge Note incorporated herein by
                reference from Wherify’s Current Report on Form 8-K filed with the SEC on
                June 11, 2008.10.111
            
            Bridge
                Note Security Agreement incorporated herein by reference from Wherify’s
                Current Report on Form 8-K filed with the SEC on June 11,
                2008.10.112
            
            Bridge
                Note Intercreditor Agreement incorporated herein by reference from
                Wherify’s Current Report on Form 8-K filed with the SEC on June 11,
                2008.10.113
            
            Bridge
                Note Form of Warrant incorporated herein by reference from Wherify’s
                Current Report on Form 8-K filed with the SEC on June 11,
                2008.10.114
            
            Bridge
                Note Continuing Unconditional Guaranty incorporated herein by reference
                from Wherify’s Current Report on Form 8-K filed with the SEC on June 11,
                2008.14.1
            
            Code
                of Business Conduct and Ethics is incorporated herein by reference
                from
                Wherify’s Registration Statement on Form SB-2 filed September 13,
                2005.


43





21.1
            
            Company’s
                subsidiaries are incorporated herein by reference from Wherify’s
                Registration Statement on Form SB-2 filed September 9,
                2005.23.1
            
            Consent
                of Independent Registered Public Accounting Firm.+31.1
            
            Chief
                Executive Officer Certification of Periodic Financial Report Pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.+31.2
            
            Certification
                of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.+32.1
            
            Chief
                Executive Officer Certification  Pursuant to 18 U.S.C. Section 1350,
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.+32.2
            
            Chief
                Financial Officer Certification  Pursuant to 18 U.S.C. Section 1350,
                as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.+





+
      Filed
      herewith.


44