**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**|X|      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE      SECURITIES**

**EXCHANGE      ACT OF 1934**

**For      the quarterly period ended September 30, 2007**

**OR**

**|      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE      SECURITIES**

**EXCHANGE      ACT OF 1934**

**For      the transition period from ________________to      ________________**

**Commission      file number: 000-28515**

**FIREPOND,      INC.**

**(Exact      name of small business issuer as specified in its charter)**

**                                               Delaware                                                                   20-3446646**

**                                 (State      or other      jurisdiction      of                                           (IRS Employer**

**                             incorporation      or      organization)                                       identification      no.)**

**205      Newbury Street, Suite 204, Framingham, MA 01701**

**--------------------------------------------------------------------------------**

**(Address      of principal executive offices)**

**(508)      820 4300**

**(Issuer's      telephone number)**

**(Former      name, former address and former fiscal year,**

**if      changed since last report)**

**__________________________**

----

**FIREPOND,      INC.**

**INDEX**

**   **
** **
**   **
** **
**   **
** **
**   **
** **
**   **
** **
**   **
** **
**   **
** **
**   **
** **
**   **
** **
**   **
** **
** **

| **PART                I. FINANCIAL INFORMATION**                                                                                                      |     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| ITEM                1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                                                                                  |     |
| Consolidated                Balance Sheet at September 30, 2007                                                                                       | 3        |
| Consolidated Statements                of Operations for the Three Months Ended September 30, 2006 and                2007                  | 4        |
| Consolidated                Statement of Stockholders' Equity for the Three Months Ended September                30,                2007             | 5        |
| Consolidated                Statement of Cash Flows for the Three Months Ended September 30, 2006                and 2007    | 6        |
| Notes                to Consolidated Financial Statements                                                                                        | 7        |
| ITEM                2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF                OPERATION                                                       | 14  |
| ITEM                3. CONTROLS AND PROCEDURES                                                                                                        | 19       |
|  **PART                II. OTHER INFORMATION**                                                                                                   |     |
|  ITEM                1. LEGAL PROCEEDINGS                                                                                                        | 20       |
|  ITEM                2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF  PROCEEDS                                                        | 20       |
| ITEM                3. DEFAULTS UPON SENIOR SECURITIES                                                                                                | 20       |
| ITEM                4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                            | 20       |
| ITEM                5. OTHER INFORMATION                                                                                                              | 20       |
| ITEM                6. EXHIBITS                                                                                                                       | 21       |

----

**Part      I. Financial Information**

**Item      1.**
**Consolidated Financial      Statements**

**FIREPOND,      INC.**

**CONSOLIDATED      BALANCE SHEET**

**September      30, 2007**

**(Unaudited)**

|   |   | **ASSETS**                                                                         |                                                        |
|--------|--------|------------------------------------------------------------------------------------|-------------------------------------------------------------|
|   |   | Current                  assets                                                    |                                                        |   |
|   |   |                                                                               | Cash                  and cash equivalents                  |   |  $     1,407,427 |
|   |   |                                                                               | Restricted                  cash                            |   |         1,009,780 |
|   |   |                                                                               | Accounts                  receivable, net                   |   |            710,654 |
|   |   |                                                                               | Other                  current assets                       |   |            116,304 |
|   |   | Total                  current assets                                              |                                                        |                                                                     3,244,165 |
|   |   | Property                  and equipment, net                                       |                                                        |              84,517 |
|   |   | Debt                  issuance costs                                               |                                                        |         1,402,653 |
|   |   | Goodwill                                                                           |                                                        |   |   |         4,772,413 |
|   |   | Deposits                  and deferred offering costs                              |                                                        |            384,094 |
|   |   |                                                                               |                                                        |   |   | **Total                  assets** |   | ** $     9,887,842** |
|   |   |                                                                               |                                                        |   |   |   |   |   |   |
|   |   | **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                          |                                                        |
|   |   | Current                  liabilities                                               |                                                        |   |
|   |   |                                                                               | Current                  portion of long-term notes payable |   |  $     3,102,479 |
|   |   |                                                                               | Accounts                  payable                           |   |            640,800 |
|   |   |                                                                               | Accrued                  liabilities                        |   |         1,404,723 |
|   |   |                                                                               | Deferred                  revenue                           |   |         1,386,355 |
|   |   | Total                  current liabilities                                         |                                                        |   |   |                                                                                     6,534,357 |
|   |   | Non-current                  deferred revenue                                      |                                                        |              39,972 |
|   |   | Long-term                  notes payable net of unamortized discount of $3,733,334 |                                                        |         1,875,495 |
|   |   | Total                  Liabilities                                                 |                                                        | **8,449,824** |
|   |   |                                                                               |                                                        |   |
|   |   | Stockholders'                  equity                                              |                                                        |   |
|   |   |                                                                               | Preferred                  stock, $0.001 par value          |   |   |
|   |   |                                                                               |                                                        | Authorized                  - 5,000,000 shares |   |   |
|   |   |                                                                               |                                                        | Issued                  and outstanding - none |   |                        - |
|   |   |                                                                               | Common                  stock, $0.001 par value             |   |   |
|   |   |                                                                               |                                                        | Authorized                  - 100,000,000 shares |   |   |
|   |   |                                                                               |                                                        | Issued                  and outstanding - 8,349,239 shares |   |                8,349 |
|   |   |                                                                               | Additional                  paid-in capital                 |   |       30,666,808 |
|   |   |                                                                               | Accumulated                  deficit                        |   |     (28,703,158) |
|   |   |                                                                               | Deferred                  compensation                      |   |          (533,981) |
|   |   |                                                                               |                                                        |   | Total                  stockholders' equity |   |         1,438,018 |
|   |   |                                                                               |                                                        |   |   |   |   |   |   |
|   |   |                                                                               |                                                        |   |   | **Total                  liabilities and stockholders' equity** |   | ** $     9,887,842** |

----

**FIREPOND,      INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**For      The Three Months Ended September 30, 2006 and 2007**

**(Unaudited)**

|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
|-------------------------------------------------------|-------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|----------|
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     | **2006**                                                                 | **2007** |
| Revenues                                              |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |
|                                                  | OnDemand                revenues                                                    |                                                                                                           |  $              315,811                                                                              |  $              549,665                        |
|                                                  | Enterprise                revenues                                                  |                                                                                                           |                  712,201                                                                   |                  616,421             |
|                                                  | Total                revenues                                                       |                                                                                                           |                                                                                                                                                                            |               1,028,012                             |               1,166,086                             |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Cost                of revenues                       |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |
|                                                  |  OnDemand                costs                                                 |                                                                                                           |                                                                                                                                                                            |                 290,001                   |                 380,676                   |
|                                                  |  Enterprises                costs                                              |                                                                                                           |                                                                                                                                                                            |                  141,673             |                    78,166  |
|                                                  |  Total                cost of revenues                                         |                                                                                                           |                  431,674                                                                   |                  458,842             |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Gross                profit                           |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                  596,338             |                  707,244            |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Operating                expenses                     |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |
|                                                  | Sales                and marketing                                                  |                                                                                                           |                  397,222                                                                   |                  554,514             |
|                                                  | General                and administrative                                           |                  959,849  |           1,013,542                                                                                                           |
|                                                  | Research                and development                                             |                  523,216  |                  470,293                                                                   |
|                                                  | Restructuring                and other special charges                              |                  (14,285) |                              - |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
|                                                  |                                                                                |                                                                                                           | Total                  operating expenses                                                                                                                                       |               1,866,002                             |               2,038,349                             |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Loss                from operations                   |                                                                                |                                                                                                           |             (1,269,664)                                                                                             |             (1,331,105)                                       |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Other                income (expense), net            |                                                                                |                                                                                                           |                                                                                                                                                                            |
| Interest                expense                       |                                                                                |                                                                                                           |                                                                                                                                                                            |             (1,834,118)                                       |             (1,314,835)                                       |
| Interest                and other income              |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                  599,675             |                    24,111 |
| Total                other income (expense), net      |             (1,234,443) |             (1,290,724)                            |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Net                Loss                               |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |  $         (2,504,107)                                                 |  $         (2,621,829) |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
| Net                loss per share - basic and diluted |                                                                                |                                                                                                           |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
|                                                  | Net                loss per share                                                   |                                                                                                           |                                                                                                                                                                            |  $                  (0.66) |  $                  (0.34) |
|                                                  |                                                                                |                                                                                                           |                                                                                                                                                                            |                                                                                                                      |                                                                                                                      |                                                                                                                     |                                                                     |     |
|                                                  | Basic                and diluted weighted average                                   |                                                                                                           |                                                                                                                                                                            |
|                                                  |                                                                                | common  shares                outstanding                                                            | 3,785,916                                                                                                                                                                       | 7,676,451                                                                                                                 |

----

**FIREPOND,      INC.**

**CONSOLIDATED      STATEMENT OF STOCKHOLDERS' EQUITY**

**For      The Three Months Ended September 30, 2007**

**(Unaudited)**

|                                       |                                                      |                                                    |                                                                                                          |                                                                                              |                                                                                                          |                                   |                                                                                              |                                                |
|--------------------------------------------|-----------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|----------------------------------------|---------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                       |                                                      |                                                    | **Common                Stock**                                                                               |                                                                                              |                                                                                                          |                                   |                                                                                              |
|                                       |                                                      |                                                    | ** Shares**                                                                                              | ** Par                Value**                                                                | **Additional                Paid in Capital**                                                                 | **Accumulated                Deficit** | **Deferred                Compensation**                                                          | ** Stockholder’s                Equity** |
|                                       |                                                      |                                                    |                                                                                                          |                                                                                              |                                                                                                          |                                   |                                                                                              |                                                |
| Balance,                June 30, 2007      |    8,224,239                               | $8,224                                                  | $29,898,183                                                                                                   | $(26,081,329)                                                                                     |  $    (976,356)                                                                      |  $   2,848,722     |
|                                       |                                                      |                                                    |                                                                                                          |                                                                                              |                                                                                                          |                                   |                                                                                              |                                                |
|                                       | Issuance                of common stock under bridge loan |         125,000 | 125                                                                                                           |                768,625 | -                                                                                                             | -                                      |                768,750 |
|                                       |                                                      |                                                    |                                                                                                          |                                                                                              |                                                                                                          |                                   |                                                                                              |                                                |
|                                       | Net                loss for the three months ended        |                                                    |                                                                                                          |                                                                                              |                                                                                                          |                                   |                                                                                              |
|                                       |                                                      | September                30, 2007                       |                   - |          -                                           |                   - |     (2,621,829)    |          442,375                                     |     (2,179,454)                 |
|                                       |                                                      |                                                    |                                                                                                          |                                                                                              |                                                                                                          |                                   |                                                                                              |                                                |
| Balance,                September 30, 2007 |    8,349,239                               | $8,349                                                  | $30,666,808                                                                                                   | $(28,703,158)                                                                                     |  $    (533,981)                                                                      |  $   1,438,018     |

----

**FIREPOND,      INC.**

**CONSOLIDATED      STATEMENT OF CASH FLOWS**

**For      The Three Months Ended September 30, 2006 and 2007**

**(Unaudited)**

|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                | **2006**                                                                        | **2007**                              |
|---------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------|
| **Cash                flows from operating activities**                                     |                                                                                                     |                                                                                                                                              |
|                                                                                        | Net                loss                                                                                  |                                                                                                                                              |                                                                                                    |  $    (2,504,107)                          |  ($2,621,829)                                                              |
|                                                                                        | Adjustments                to reconcile net loss to net cash used in operating                activities |                                                                                                                                              |                                                                                                    |
|                                                                                        |                                                                                                     | Depreciation                and amortization                                                                                                      |          1,178,598                                         |   1,060,485                                               |
|                                                                                        |                                                                                                     | Stock                based compensation expense                                                                                                   |               63,999              |      442,375                               |
|                                                                                        | Changes                in assets and liabilities                                                         |                                                                                                                                              |                                                                                                    |
|                                                                                        |                                                                                                     | Accounts                receivable                                                                                                                |          (490,317)                                         |        90,552                    |
|                                                                                        |                                                                                                     | Other                current assets                                                                                                               |             (66,146)                        |          3,856         |
|                                                                                        |                                                                                                     | Accounts                payable                                                                                                                   |           (263,781)                                   |        70,493                    |
|                                                                                        |                                                                                                     | Accrued                liabilities                                                                                                                |           (231,316)                                   |      124,220                               |
|                                                                                        |                                                                                                     | Deferred                revenue                                                                                                                   |            119,844                               |    (124,721)                                         |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
|                                                                                        |                                                                                                     |                                                                                                                                              | Net                cash used in operating activities                                                    |        (2,193,226)               |       (954,569)                                   |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
| **Cash                flows from investing activities**                                     |                                                                                                     |                                                                                                                                              |
|                                                                                        | Purchase                of property and equipment                                                        |             (14,968)                                                                  |         (30,958)                                                |
|                                                                                        | Decrease(Increase)                in restricted cash                                                     |        (2,500,000)                                                                                             |      152,810                                                                   |
|                                                                                        | Other                assets                                                                              |                                                                                                                                              |               41,767              |           (6,031) |
|                                                                                        |                                                                                                     |                                                                                                                                              | Net                cash provided by (used in) investing activities                                      |        (2,473,201)               |      115,821                                           |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
| **Cash                flows from financing activities**                                     |                                                                                                     |                                                                                                                                              |
|                                                                                        | Proceeds                from sale of stock, net of expenses                                              |          6,045,691                                                                                   |                  - |
|                                                                                        | Borrowings                under notes payable, net of repayments                                         |           (500,000)                                                                             |   1,808,672                                                                                   |
|                                                                                        | Deferred                offering costs                                                                   |                         - |    (364,614)                                                                             |
|                                                                                        | Debt                issuance costs                                                                       |             (24,973)                                                                  |      112,145                                                                   |
|                                                                                        |                                                                                                     |                                                                                                                                              | Net                cash provided by financing activities                                                |          5,520,718     |   1,556,203                                                           |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
|                                                                                        |                                                                                                     |                                                                                                                                              |  Net              increase in cash and cash equivalents                                            |                                                                |             854,291 |      717,455 |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
| **Cash                and cash equivalents, on June 30, 2006 and 2007**                     |             831,184                          |      689,972                                                                                                             |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
| **Cash                and cash equivalents, on September 30, 2006 and                2007** | ** $      1,685,475**                                                 | ** $1,407,427**                                                                                                                              |
|                                                                                        |                                                                                                     |                                                                                                                                              |                                                                                                    |                                                                |                                                                            |                                  |
| Supplemental                cash flow information:                                          |                                                                                                     |                                                                                                                                              |
|                                                                                        | Cash                interest paid during the period                                                      |                                                                                                                                              | ** $           48,667**                     | ** $  136,430**                                      |

**Non      Cash Financing and Investing Activities:**

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

**NOTE      1 – THE COMPANY**

**Description      of Business**

**Principles      of Consolidation**

**Basis      of Presentation and Continuance of Operations**

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**NOTE      3 - INCOME TAXES**

*Accounting for Uncertainty in Income Taxes*

**NOTE      4 - RECENT FINANCINGS**

**Bridge      Loan**

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

**NOTE      5 –NOTES PAYABLE**

**CAP      Financing – Notes and Warrants**

| •     | Senior                Secured Nonconvertible                Notes due 2011 in an aggregate principal amount of $50.0 million (the                “CAP Financing”), exchangeable for Senior Secured Convertible Notes due                2011 (the “Convertible Notes”), or redeemable under certain circumstances,                and which the Convertible Notes were convertible into shares of the                Company’s common stock; and |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Warrants                to acquire in the aggregate up to 6,875,000 shares of the Company’s common                stock (including warrants granted to the placement agent to acquire                625,000 shares of our common                stock).                                                                                                                                                                                                                      |

**Master      Exchange Agreement**

| •     | $45.0 million                in principal repayment of the Nonconvertible Notes, plus accrued                interest                thereon;                                                                                                                                                                             |
|---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | a                new issue of 12% Senior Secured Convertible Notes due January 2009 in                the aggregate principal amount of $5.6 million (the “New Convertible                Notes”), issued under an indenture with The Bank of New York (the “New                Indenture”); |
| •     | warrants                to purchase an aggregate of 1,214,285 shares of common stock at an                initial exercise price of $7.00 per share (the “New Warrants), exercisable                for five years, and containing customary pro-rata anti-dilution                protections; and            |
| •     | 1,500,000                fully paid shares of common stock (the “New                Shares”).                                                                                                                                                                                                                      |

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

**Financings      with Trident Growth Fund**

**NOTE      6 – OTHER MATERIAL AGREEMENTS**

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

**NOTE      7 – LITIGATION**

----

**FIREPOND, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2007**

**(Unaudited)**

**NOTE      8 - STOCKHOLDERS' EQUITY**

**Bridge      Loan**

**Stock      Options**

----

| **ITEM                2.**  |
|----------------------------------|

**MANAGEMENT'S      DISCUSSION AND ANALYSIS OR PLAN OF      OPERATION**

*Our      discussion includes forward-looking statements, which involve certain risks      and      uncertainties.  Certain statements in the “Management’s Discussion and      Analysis of Financial Condition and Results of Operations of the Company” are      forward-looking statements that involve risks and uncertainties. Words such      as      anticipates, expects, intends, plans, believes, seeks, estimates, and similar      expressions identify such forward-looking statements. The forward-looking      statements contained herein are based on current expectations and entail various      risks and uncertainties that could cause actual results to differ materially      from these expressed in such forward-looking statements. Factors that might      cause such a difference include, among other things, those set forth under“Risk      Factors”, “Overview”  and “Liquidity and Capital Resources” included      in these sections and those appearing elsewhere in this Form10-QSB. Readers      are      cautioned not to place undue reliance on these forward-looking statements,      which      reflect management’s analysis only as of the date hereof.  We assume      no obligation to update these forward-looking statements to reflect actual      results or changes in factors or assumptions affecting forward-looking      statements. Rounding of figures for presentation purposes sometimes results      in      inconsistent results for comparison purposes.  We believe these      inconsistencies to be immaterial.*

**Executive      Summary**

**Corporate      Overview**

----

**Financial      Condition**

**Results      of Operations**

***Three      Months Ended September 30, 2007 and September 30,      2006***

|                                             |   | 2006   |        | %                of |   | 2007    | %                of |
|--------------------------------------------------|--------|--------|-------------|---------------------|--------|---------|---------------------|
|                                             |   | Amount |        | Revenues            |   | Amount  | Revenues            |
| Revenues                                         |   |   |        |                |   |    |                |   |   |   |   |
| OnDemand                revenues                 |   | $      | 315,811     |                |   |    | $                   |   | 549,665 |   |   |
| Enterprise                revenues               |   |   | 712,201     |                |   |    |                |   | 616,421 |   |   |
| Total                revenues                    |   |   | 1,028,012   |                |   |    |                |   | 1,166,086 |   |   |
|  Cost                of revenues            |   |   |        |                |   |    |                |   |   |   |   |
| OnDemand                cost of revenues         |   |   | 290,001     |                |   |    |                |   | 380,676 |   |   |
| Enterprise                cost of revenues       |   |   | 141,673     |                |   |    |                |   | 78,166 |   |   |
| Total                cost of revenues            |   |   | 431,674     |                |   | 42.0    |                |   | 458,842 |   | 39.3 |
|                                             |   |   |        |                |   |    |                |   |   |   |   |
| Gross                profit                      |   |   | 596,338     |                |   | 58.0    |                |   | 707,244 |   | 60.7 |
|                                             |   |   |        |                |   |    |                |   |   |   |   |
| Operating                expenses                |   |   |        |                |   |    |                |   |   |   |   |
| Sales                and marketing               |   |   | 397,222     |                |   | 38.6    |                |   | 554,514 |   | 47.6 |
| General                and administrative        |   |   | 959,849     |                |   | 93.4    |                |   | 1,013,542 |   | 86.9 |
| Research                and development          |   |   | 523,216     |                |   | 50.9    |                |   | 470,293 |  40.3 |
| Restructuring                                    |   |   | (14,285)    |                |   | (1.4)   |                |   | - |  - |
| Total                operating expenses          |   |   | 1,866,002   |                |   | 181.5   |                |   | 2,038,349 | 174.8 |
|                                             |   |   |        |                |   |    |                |   |   |   |
| Loss                from operations              |   |   | (1,269,664) |                |   | (123.5) |                |   | (1,331,105) | (114.1)  |
|                                             |   |   |        |                |   |    |                |   |   |   |
| Other                income (expense), net       |   |   |        |                |   |    |                |   |   |   |
| Interest                expense                  |   |   | (1,834,118) |                |   | (178.4) |                |   | (1,314,835) | (112.8)  |
| Interest                and other income         |   |   | 599,675     |                |   | 58.3    |                |   | 24,111 | 2.1 |
| Total                other income (expense), net |   |   | (1,234,443) |                |   | (120.1) |                |   | (1,290,724) | (110.7) |
|                                             |   |   |        |                |   |    |                |   |   |   |
| Net                loss                          |   | $      | (2,504,107) |                |   | (243.6) |                | $ | (2,621,829) | (224.8) |

----

***Three      Months ended September 30, 2007 compared to September 30,      2006***

**Revenues**

**Cost      of Revenues**

**Operating      Expenses**

----

**Other      Income (Expense)**

**Liquidity      and Capital Resources**

----

*August      2007 Bridge Financing*

*Cash      Used in Operating Activities*

*Cash      Provided by (Used In) Investing Activities*

*Cash      Provided by (Used In) Financing Activities*

----

| **ITEM                3.** **CON****TR****OLS AND                PROCEDURES** |
|------------------------------------------------------------------------------------|

|   | (a)  Evaluation                of Disclosure Controls and                Procedures. |
|--------|------------------------------------------------------------------------------------------------|

| (b) | Management’s                responsibility for financial                statements |
|-----|------------------------------------------------------------------------------------------|

| (c) | Changes                in internal control over financial                reporting |
|-----|------------------------------------------------------------------------------------|

----

**PART      II - OTHER INFORMATION**

| **ITEM                1.** **LEG****A****L                PROCEEDINGS** |
|------------------------------------------------------------------------------|

| **ITEM                  2.** **UNREGISTE****R****ED                  SALES OF EQUITY SECURITIES AND USE OF                  PROCEEDS** |
|---------------------------------------------------------------------------------------------------------------------------------------------|

*August      2007 Bridge Financing*

| **ITEM                3.** **DEFAULTS U****PO****N                SENIOR SECURITIES** |
|--------------------------------------------------------------------------------------------|

| **ITEM                4.** **SUBMISSION OF****MA****TTERS TO A VOTE OF SECURITY                HOLDERS** |
|---------------------------------------------------------------------------------------------------------------|

----

| **ITEM                5.** **OTHER                I****NFO****RMATION** |
|------------------------------------------------------------------------------|

| **ITEM                6.** **EXHI****BI****TS** |
|------------------------------------------------------|

| 4.1                                               | Securities                Purchase Agreement, dated as of August 2, 2007, by and among the                Registrant and the Purchasers (incorporated by reference to the                Registrant’s Current Report on Form 8-K filed on August 6,                2007).                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.2                                               | Form                of Senior Secured Subordinated Note, dated as of August 2, 2007,                between                the Registrant and each respective Purchaser  (incorporated by                reference to the Registrant’s Current Report on Form 8-K filed on August                6, 2007).                                                                                                                                                                                                                                                                                                                                       |
| 4.3                                                    | Security                Agreement, dated as of August 2, 2007, between the Registrant and                Radcliffe SPC, Ltd. for and on behalf of the Class A Segregated Portfolio,                a Cayman Islands segregated portfolio company, in its capacity as                collateral agent for the holders of the Subordinated                Notes  (incorporated by reference to the Registrant’s Current                Report on Form 8-K filed on August 6, 2007).                                                                                                                                                                |
| 4.4                                                    | Supplemental                Indenture No.1, dated as of August 2, 2007, between the Registrant                and The                Bank of New York, as Trustee  (incorporated by reference to the                Registrant’s Current Report on Form 8-K filed on August 6,                2007).                                                                                                                                                                                                                                                                                                                                             |
| 4.5                                               | Intercreditor                and Subordination Agreement, dated as of August 2, 2007, between                The Bank                of New York, as collateral agent under the Indenture dated January                24,                2007, and Radcliffe SPC, Ltd. for and on behalf of the Class A                Segregated Portfolio, a Cayman Islands segregated portfolio company,                in                its capacity as collateral agent for the holders of the Subordinated                Notes  (incorporated by reference to the Registrant’s Current                Report on Form 8-K filed on August 6, 2007). |
|    31.1             |  Certification              of Principal Executive Officer pursuant to              Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                     31.2 |  Certification              of Principal Financial Officer pursuant to              Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                     32.1 |  Certifications              pursuant to 18 U.S.C. Section 1350, as              adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of              2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|  Date:               November  8, 2007 |   |   |  Firepond,              Inc. (Registrant) |
|------------------------------------------------------------|--------|--------|------------------------------------------------|
|                                                       |   |   |                                           |
| /s/ William                Santo                      |   |   | /s/                Stephen Peary               |
| William                Santo, CEO                     |   |   | Stephen                Peary,CFO               |

----