**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB/A**


**AMENDMENT
      NO. 1**










(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF
                1934





FOR
      THE
      QUARTERLY PERIOD ENDED: June 30, 2007





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF
                1934





FOR
      THE
      TRANSITION PERIOD FROM _________ TO __________








Commission
      file number: 000-44971





AskMeNow,
      Inc.


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


Delaware
              71-0876952(State
                  or other jurisdiction of
              (IRS
                  Employerincorporation
                  or organization)
              Identification
                  No.)





26
      Executive Park, Suite 250


Irvine,
      California 92614


(Address
      of principal executive offices)





(949)
      861-2590


(Issuer’s
      telephone number including area code)





Not
      Applicable


(Former
      name, former address and former fiscal year, if changed since last
      report)





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





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





The
      number of shares outstanding of each of the issuer’s classes of common equity as
      of the latest practicable date: 33,304,887 shares of common stock, par value
      $.01 per share, outstanding as of August 6, 2007





Transitional
      Small Business Disclosure Format (Check One): Yes: o No: x










**EXPLANATORY
      NOTE**





This
      Amendment No. 1 to the AskMeNow, Inc. Quarterly Report on Form 10-QSB for the
      fiscal quarter ended June 30, 2007, as originally filed on August 15, 2007,
      is
      being filed in response to comments issued by the staff of the Securities and
      Exchange Commission relating to the Company’s disclosure controls and procedures
      and certain of the notes to the financial statements of the Company included
      herewith.




AskMeNow,
      Inc. and Subsidiaries





Quarterly
      Report on Form 10-QSB/A


Period
      Ended June 30, 2007





Table
      of
      Contents


PagePART
                  I. FINANCIAL INFORMATIONItem
                  1.
              Financial
                  Statements:Condensed
                  Consolidated Balance Sheets as of June 30, 2007(Unaudited)
                  and December 31, 2006
              3Condensed
                  Consolidated Statements of Operations for the Threeand
                  Six Months Ended June 30, 2007 and 2006 (Unaudited)
              4Condensed
                  Consolidated Statements of Cash Flows for the SixMonths
                  Ended June 30, 2007 and 2006 (Unaudited)
              5Notes
                  to Condensed Consolidated Financial Statements
              6Item
                  2.
              Management’s
                  Discussion and Analysis or Plan of Operation
              18Item
                  3.
              Controls
                  and Procedures
              23PART
                  II. OTHER INFORMATIONItem
                  1.
              Legal
                  Proceedings
              23Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              24Item
                  3.
              Defaults
                  Upon Senior Securities
              25Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              25Item
                  5.
              Other
                  Information
              26Item
                  6.
              Exhibits
              26SIGNATURES
              27EXHIBIT
                  INDEX
              28




-2-


**ASKMENOW,
                  INC. AND SUBSIDIARIES****Condensed
                  Consolidated Balance Sheets****June
                  30,**
              
              **December
                  31,****CURRENT
                  ASSETS**
              
              **2007**
              
              **2006****(Unaudited)****ASSETS**Cash
              
              $
              833,470
              
              $
              61,279Accounts
                  receivable, net
              
              
              2,466
              
              
              13,860Prepaid
                  expenses and other current assets
              
              
              64,911
              
              
              79,151Total
                  Currents Assets
              
              
              900,847
              
              
              154,290Property
                  and Equipment, Net
              
              
              162,043
              
              
              188,974**OTHER
                  ASSETS**License
              
              
              150,000
              
              
              150,000Debt
                  offering costs, net
              
              
              453,646
              
              
              -Other
                  assets
              
              
              50,635
              
              
              47,496**TOTAL
                  ASSETS**
              
              $
              1,717,171
              
              $
              540,760**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              742,070
              
              $
              1,099,937Accrued
                  expenses
              
              
              310,606
              
              
              326,797Notes
                  payable
              
              
              2,390,279
              
              
              -Notes
                  payable - related party
              
              
              100,000
              
              
              102,624Deferred
                  Tax Liability
              
              
              12,714
              
              
              16,786Total
                  Current Liabilities
              
              
              3,555,669
              
              
              1,546,144**STOCKHOLDERS'
                  EQUITY (DEFICIT)**Preferred
                  stock, $0.01 par value, 10,000,000 shares authorized at June 30,
                  2007and
                  December 31, 2006Series
                  A Preferred Stock, $0.01 par value, 1,500,000 shares
                  authorized,27,500
                  and 362,500 shares issued and outstanding at June 30, 2007and
                  December 31, 2006, respectively
              
              
              275,000
              
              
              3,625,000Series
                  B Preferred Stock, $0.01 par value, 1,600,000 shares
                  authorized,643,000
                  and 235,500 shares issued and outstanding at June 30, 2007and
                  December 31, 2006, respectively
              
              
              6,430,000
              
              
              2,355,000Series
                  C Preferred Stock, $0.01 par value, 400,000 shares
                  authorized,zero
                  and 400,000 shares issued and outstanding at June 30, 2007and
                  December 31, 2006, respectively
              
              
              -
              
              
              4,000Series
                  E Preferred Stock, 680 shares authorized, none issued and
                  outstanding
              
              
              -
              
              
              -Series
                  F Preferred Stock, 1,250 shares authorized, none issued and
                  outstanding
              
              
              -
              
              
              -Series
                  G Preferred Stock, 2,000 shares authorized, none issued and
                  outstanding
              
              
              -
              
              
              -Series
                  I Preferred Stock, 550 shares authorized, none issued and
                  outstanding
              
              
              -
              
              
              -Series
                  L Preferred Stock, 1,000 shares authorized, none issued and
                  outstanding
              
              
              -
              
              
              -Common
                  stock, $0.01 par value, 100,000,000 shares authorized, 33,304,887
                  and
                  28,994,887shares
                  issued and outstanding at June 30, 2007 and December 31, 2006,
                  respectively
              
              
              333,050
              
              
              289,950Class
                  B common stock, $0.01 par value, 5,000,000 authorized, none issued
                  and
                  outstanding
              
              
              -
              
              
              -Class
                  D common stock, $0.01 par value, 600,000 authorized, none issued
                  and
                  outstanding
              
              
              -
              
              
              -Additional
                  paid-in-capital
              
              
              23,748,747
              
              
              14,907,308Foreign
                  currency translation
              
              
              6,000
              
              
              1,925Accumulated
                  deficit
              
              
              (32,631,295
              )
              
              (22,188,567
              )Total
                  Stockholders' Equity (Deficit)
              
              
              (1,838,498
              )
              
              (1,005,384
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
              
              $
              1,717,171
              
              $
              540,760




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




-3-




**ASKMENOW,
                  INC. AND SUBSIDIARIES****Condensed
                  Consolidated Statements of Operations****(Unaudited)**
  **Three
                  Months Ended June 30,**
              
              **Six
                  Months Ended June 30,****2007**
              
              **2006**
              
              **2007**
              
              **2006****REVENUE**Revenue
                  from mobile services
              
              $
              4,403
              
              $
              4,958
              
              $
              10,208
              
              $
              9,0294,403
              
              
              4,958
              
              
              10,208
              
              
              9,029**COSTS
                  AND OPERATING EXPENSES**Cost
                  of revenue
              
              
              368,666
              
              
              676,578
              
              
              673,064
              
              
              896,060Research
                  and development
              
              
              24,231
              
              
              54,408
              
              
              48,462
              
              
              122,837General
                  and administrative
              
              
              381,474
              
              
              477,846
              
              
              902,779
              
              
              1,222,065Professional
                  fees
              
              
              405,549
              
              
              311,550
              
              
              1,042,798
              
              
              789,717Salaries
                  and compensation
              
              
              2,232,198
              
              
              2,040,196
              
              
              3,274,594
              
              
              2,511,920Total
                  Operating Expenses
              
              
              3,412,118
              
              
              3,560,578
              
              
              5,941,697
              
              
              5,542,599Net
                  Loss from Operations
              
              
              (3,407,715
              )
              
              (3,555,620
              )
              
              (5,931,489
              )
              
              (5,533,570
              )**OTHER
                  INCOME (EXPENSE)**Interest
                  expense
              
              
              (4,426,303
              )
              
              (141,748
              )
              
              (4,511,239
              )
              
              (260,323
              )Total
                  other expense
              
              
              (4,426,303
              )
              
              (141,748
              )
              
              (4,511,239
              )
              
              (260,323
              )Net
                  Loss before income taxes
              
              
              (7,834,018
              )
              
              (3,697,368
              )
              
              (10,442,728
              )
              
              (5,793,893
              )Income
                  taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -Net
                  Loss
              
              
              (7,834,018
              )
              
              (3,697,368
              )
              
              (10,442,728
              )
              
              (5,793,893
              )Preferred
                  stock dividends
              
              
              (167,166
              )
              
              -
              
              
              (330,084
              )
              
              -Net
                  loss applicable to common shareholders
              
              $
              (8,001,184
              )
              $
              (3,697,368
              )
              $
              (10,772,812
              )
              $
              (5,793,893
              )Basis
                  and diluted net loss per common share
              
              $
              (0.24
              )
              $
              (0.14
              )
              $
              (0.35
              )
              $
              (0.22
              )Basic
                  and diluted weighted average number ofcommon
                  shares outstanding
              
              
              33,299,887
              
              
              26,400,040
              
              
              31,005,545
              
              
              26,182,330


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




-4-




****ASKMENOW,
                  INC. AND SUBSIDIARIES******Condensed
                  Consolidated Statements of Cash Flows****(Unaudited)**
  **Six
                  Months Ended June 30,****2007**
              
              **2006****OPERATING
                  ACTIVITIES**Net
                  loss
              
              $
              (10,442,728
              )
              $
              (5,793,893
              ).Adjustments
                  to reconcile net loss to net cash used inoperating
                  activities:Depreciation
              
              
              40,465
              
              
              37,346Amortization
                  of deferred compensation
              
              
              -
              
              
              506,473Amortization
                  of debt discount
              
              
              2,390,279
              
              
              66,880Amortization
                  of debt offering costs
              
              
              1,749,326
              
              
              -Subscription
                  receivable
              
              
              1,400
              
              
              -Stock,
                  warrants and options issued for services
              
              
              3,437,701
              
              
              1,787,665Warrants
                  issued for financing fees
              
              
              337,465
              
              
              108,622Changes
                  in assets and liabilitiesAccounts
                  receivable
              
              
              11,394
              
              
              (6,615
              )Prepaid
                  expenses
              
              
              14,241
              
              
              (3,671
              )Deposits
              
              
              (3,139
              )
              
              98Accounts
                  payable
              
              
              (357,867
              )
              
              550,470Accrued
                  expenses
              
              
              (16,190
              )
              
              (41,591
              )Deferred
                  taxes
              
              
              (4,073
              )
              
              -Net
                  Cash Used In Operating Activities
              
              
              (2,841,726
              )
              
              (2,788,216
              )**INVESTING
                  ACTIVITIES**Restricted
                  Cash
              
              
              -
              
              
              (1,850,000
              )Purchase
                  of equipment
              
              
              (13,534
              )
              
              (7,185
              )Net
                  Cash Used In Investing Activities
              
              
              (13,534
              )
              
              (1,857,185
              )**FINANCING
                  ACTIVITIES**Proceeds
                  from notes payable
              
              
              3,000,000
              
              
              111,905Proceeds
                  from notes payable - related party
              
              
              -
              
              
              185,000Net
                  proceeds from issuance of preferred stock
              
              
              626,000
              
              
              4,282,400Repayment
                  of notes payable - related party
              
              
              (2,624
              )
              
              -Net
                  Cash Provided By Financing Activities
              
              
              3,623,376
              
              
              4,579,305**EXCHANGE
                  RATE GAIN (LOSS)**
              
              
              4,075
              
              
              (2,658
              )**NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              772,191
              
              
              (68,754
              )**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              61,279
              
              
              159,622**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              833,470
              
              $
              90,868**SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION:****CASH
                  PAID DURING THE PERIOD FOR:**Interest
              
              $
              243
              
              $
              65,000**NON-CASH
                  TRANSACTIONS DURING THE PERIOD FOR:**Financing
                  costs
              
              $
              2,620,937
              
              $
              0


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




-5-




ASKMENOW,
      INC. AND SUBSIDIARIES


NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      JUNE 30, 2007


(UNAUDITED)





**NOTE
      1.**  **ORGANIZATION
      AND BASIS OF PRESENTATION**




**(A)**  **Organization**





AskMeNow,
      Inc., formerly Ocean West Holding Corporation (the “Company”), was incorporated
      in Delaware in August 2000, and is a holding company and the parent company
      of
      InfoByPhone, Inc. (“InfoByPhone”). InfoByPhone provides information services and
      content through its AskMeNowTM service to mobile devices. This service allows
      mobile users to ask questions and receive answers through text messaging/SMS
      and
      email. InfoByPhone was formed as a Delaware corporation in June 2004 and was
      acquired by the Company pursuant to the reverse merger transaction discussed
      below. The Company also has a foreign wholly-owned subsidiary, AskMeNow, Inc.,
      a
      Philippine corporation formed in August 2005.





On
      June
      18, 2004, InfoByPhone consummated an agreement with InfoByPhone, LLC, an Ohio
      LLC formed in January 2004, pursuant to which InfoByPhone, LLC exchanged 100%
      of
      its member units for 1,465,000 shares or approximately 80% of the common stock
      of InfoByPhone. As a result of the agreement, the transaction was treated for
      accounting purposes as a recapitalization by the accounting acquirer,
      InfoByPhone, LLC.





On
      June
      6, 2005, pursuant to a Securities Exchange Agreement and Plan of Reorganization
      dated as of April 14, 2005, by and among the Company, InfoByPhone and the
      shareholders of InfoByPhone, the Company acquired InfoByPhone in a reverse
      merger (the “Reverse Merger”), pursuant to which InfoByPhone became a
      wholly-owned subsidiary of the Company. In connection with the Reverse Merger,
      the Company acquired all of the issued and outstanding shares of common stock
      of
      InfoByPhone and issued an aggregate 5,586,004 shares of authorized but unissued
      shares of common stock, par value $0.01, of the Company that, together with
      500,000 shares issued to Vertical Capital Partners, Inc. (n/k/a Arjent Ltd.)
      as
      a finder’s fee, constituted approximately 56% of the then outstanding capital
      stock of the Company. As
      a
      result of the agreement, the transaction was treated for accounting purposes
      as
      a recapitalization by the accounting acquirer, InfoByPhone, Inc.





The
      Company has incurred significant operating losses since its inception.
      Management expects that significant on-going operating expenditures will be
      necessary to successfully implement the Company’s business plan and develop and
      market its services. These circumstances raise substantial doubt about the
      Company’s ability to continue as a going concern. Implementation of the
      Company’s plans and its ability to continue as a going concern depend upon its
      securing substantial additional financing. During the first six months of 2007,
      the Company raised net proceeds of $626,000 through the private sale of
      unregistered, convertible preferred stock. In addition, the Company raised
      $3,000,000 through the issuance of notes payable to investors. Management’s
      plans include efforts to obtain additional capital, although no assurances
      can
      be given about the Company’s ability to obtain such capital. If the Company is
      unable to obtain adequate additional financing or generate profitable sales
      revenues, it may be unable to continue product development and other activities
      and may be forced to curtail or cease operations. The consolidated financial
      statements presented herein do not include any adjustments that might result
      from the outcome of this uncertainty.





**(B)**  **Basis
      of Presentation**





The
      condensed consolidated financial statements as of and for the periods ended
      June
      30, 2007 and 2006 included herein are unaudited. Such consolidated financial
      statements include, in the opinion of management, all adjustments necessary
      to
      present fairly the financial position and results of operations as of and for
      the periods indicated and in order to make the financial statements not
      misleading. All such adjustments are of a normal recurring nature. These interim
      results are not necessarily indicative of the results to be expected for the
      fiscal year ending December 31, 2007 or for any other period.





Certain
      information in footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States have been condensed or omitted pursuant to the rules and
      regulations of the Securities and Exchange Commission. These consolidated
      financial statements should be read in conjunction with the audited consolidated
      financial statements and the notes thereto in our Annual Report on Form 10-KSB/A
      for the year ended December 31, 2006, as filed with the SEC.





-6-


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





**(A)**  **Principles
      of Consolidation**





The
      condensed consolidated financial statements for the three and six months ended
      June 30, 2007 and 2006 include the accounts of AskMeNow, Inc. and its
      wholly-owned subsidiaries, InfoByPhone, Inc., AskMeNow, Inc., a Philippines
      corporation, and InfoByPhone, LLC.





All
      significant inter-company accounts and transactions have been eliminated in
      consolidation.





**(B)**  **Revenue
      Recognition**





The
      Company currently provides two platforms for asking questions: SMS/text
      messaging and through a downloaded application. Users are charged on a monthly
      or per question basis but are not charged for the downloaded
      application.  The
      Company recognizes revenue for all submitted questions at the time of the
      inquiry, regardless of the method used to submit the question. For advertising
      space sold, the Company will recognize revenue over the period the advertisement
      is displayed. The Company recognizes revenue when persuasive evidence of an
      arrangement exists, delivery has occurred, the sales price is fixed or
      determinable, and collectability is probable.





**(C)**  **Cash
      and Cash Equivalents**





The
      Company considers all highly liquid temporary cash investments with an original
      maturity of three months or less to be cash equivalents. As of June 30, 2007
      and
      December 31, 2006, there were no cash equivalents.





**(D)**  **Fair
      Value of Financial Instruments**





The
      carrying amounts of the Company’s financial instruments, including accounts
      receivable, accounts payable and notes payable, approximate fair value due
      to
      the relatively short period to maturity for these instruments.





**(E)**  **Concentrations
      of Risk**





During
      fiscal 2005, the Company formed its AskMeNow, Inc. subsidiary in the
      Philippines. As of June 30, 2007 and December 31, 2006, approximately 16% and
      39% of the Company’s consolidated assets were located in the Philippines,
      respectively.





The
      Company at times has cash in banks in excess of FDIC insurance limits. At June
      30, 2007, the Company had $634,250 in excess of FDIC insurance limits. **** At
      December 31, 2006 the Company had no amount in excess of FDIC insurance limits.
      At June 30, 2007, the Company had total cash of $99,220 in banks located in
      the
      Philippines. At December 31, 2006, the Company had total cash of $18,282 in
      banks located in the Philippines.





During
      the three and six months ended June 30, 2007, one customer accounted for 67%
      and
      68% of the Company’s sales, respectively. For
      the
      three and six months ended June 30, 2006, one customer accounted for 49% and
      59%
      of the Company’s sales, respectively.





**(F)**  **Use
      of Accounting Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates.





**(G)**  **Property
      and Equipment**





Property
      and equipment are stated at cost, less accumulated depreciation. Depreciation
      is
      provided using the straight-line method over the estimated useful lives of
      the
      individual assets. The estimated useful life of the computer equipment is five
      years, estimated useful life of the office furniture is seven years and the
      estimated useful life of leasehold improvements is the term of the lease or
      the
      useful life of the improvement, whichever is shorter.





**(H)**  **Advertising
      Costs**





Advertising
      costs are expensed as incurred. Total advertising costs charged to operations
      for the three months ended June 30, 2007 and 2006 were $30,596, and $89,921,
      respectively. The advertising costs for the six months ended June 30, 2007
      and
      2006 were $53,120 and $188,266, respectively.




-7-




**(I)**  **Income
      Taxes**





The
      Company accounts for income taxes under SFAS No. 109, “Accounting for Income
      Taxes”. Under SFAS No. 109, deferred tax assets and liabilities are recognized
      for the future tax consequences attributable to differences between the
      financial statement carrying amounts of existing assets and liabilities and
      their respective tax bases. Deferred tax assets and liabilities are measured
      using enacted tax rates expected to apply to taxable income in the years in
      which those temporary differences are expected to be recovered or settled.
      Under
      SFAS No. 109, the effect on deferred tax assets and liabilities of a change
      in
      tax rates is recognized in income in the period that includes the enactment
      date.





**(J)**  **Other
      Comprehensive Income**





The
      Company has adopted SFAS No. 130, “Reporting Comprehensive Income”, which
      establishes standards for the reporting and display of comprehensive income,
      its
      components and accumulated balances. The Company discloses this information
      on
      its consolidated statement of changes in stockholders’ equity
      (deficit).





**(K)**  **Foreign
      Currency Translation**





The
      functional currency of the Company is the United States Dollar. The financial
      statements of the Company’s Philippines subsidiary are translated to U.S.
      dollars using the period exchange rates as to assets and liabilities and average
      exchange rates as to revenues and expenses. Capital accounts are translated
      at
      their historical exchange rates when the capital transaction occurs. Net gains
      and losses resulting from foreign exchange translations are included in the
      statements of operations and changes in stockholders’ equity (deficit) as other
      comprehensive income (loss). As of June 30, 2007, the translation adjustment
      was
      not material.





**(L)**  **Loss
      Per Share**





The
      Company follows SFAS No. 128, “Earnings per Share” in calculating basic and
      diluted loss per share. Basic loss per common share is computed by dividing
      the
      net loss available to common shareholders by the weighted average number of
      common shares outstanding during the period. Shares
      issued and shares reacquired during the period are weighted for the portion
      of
      the period that they were outstanding. Diluted loss per share is calculated
      based on the weighted-average number of outstanding common shares plus the
      effect of dilutive common shares. Potential
      common shares issuable in connection with warrants, options and convertible
      preferred stock were not included in the computation of diluted loss per share
      for the periods presented because their inclusion is anti-dilutive. The total
      potential number of common shares issuable upon exercise or conversion of
      dilutive warrants, stock options and convertible preferred stock at June 30,
      2007 and 2006 were 60,757,999 and 16,334,043 shares, respectively.





**(M)**  **Business
      Segments**





The
      Company operates in one segment, mobile devices.





**(N)**  **Stock
      Based Compensation**





Effective
      January 1, 2006, the Company adopted the provisions of SFAS No. 123 (revised),
      “Share-Based Payment”, which replaces SFAS No. 123, “Accounting for Stock-Based
      Compensation”, and supersedes APB Opinion No. 25, “Accounting for Stock Issued
      to Employees”, and related interpretations. SFAS No. 123(R) requires
      compensation costs related to share-based payment transactions, including
      employee stock options, to be recognized in the financial statements. In
      addition, the Company adheres to the guidance set forth within SEC Staff
      Accounting Bulletin No. 107, which provides the views of the staff of the SEC
      regarding the interaction between SFAS No. 123(R) and certain SEC rules and
      regulations and provides interpretations with respect to the valuation of
      share-based payments for public companies.




In
      adopting SFAS No. 123(R), the Company applied the modified prospective approach
      to transition. Under the modified prospective approach, the provisions of SFAS
      No. 123(R) are to be applied to new awards and to awards modified, repurchased,
      or cancelled after the required effective date. Additionally, compensation
      cost
      for the portion of awards for which the requisite service has not been rendered
      that are outstanding as of the required effective date are recognized as the
      requisite service is rendered on or after the required effective date. The
      compensation costs for that portion of awards are based on the grant-date fair
      value of those awards as calculated for either recognition or pro-forma
      disclosures under SFAS No. 123.





Common
      stock, stock options and common stock warrants issued to other than employees
      or
      directors are recorded on the basis of their fair value, as required by SFAS
      No. 123(R), which is measured as of the date required by EITF
      Issue 96-18, *“Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services* .”
In
      accordance with EITF 96-18, the stock options or common stock warrants are
      valued using the Black-Scholes option pricing model on the basis of the market
      price of the underlying common stock on the “valuation date,” which for options
      and warrants related to contracts that have substantial disincentives to
      non-performance is the date of the contract, and for all other contracts is
      the
      vesting date. Expense related to the options and warrants is recognized on
      a
      straight-line basis over the shorter of the period over which services are
      to be
      received or the vesting period. Where expense must be recognized prior to a
      valuation date, the expense is computed under the Black-Scholes option pricing
      model on the basis of the market price of the underlying common stock at the
      end
      of the period, and any subsequent changes in the market price of the underlying
      common stock up through the valuation date is reflected in the expense recorded
      in the subsequent period in which that change occurs.




-8-




**(O)**  **Research
      and Development**





Research
      and development expenses include payroll, employee benefits and costs associated
      with product development. The Company has determined that technological
      feasibility for its software products is reached shortly before the products
      are
      released. Costs incurred after technological feasibility is established are
      not
      material, and accordingly, all research and development costs are expensed
      when
      incurred.





**(P)**  **Recent
      Accounting Pronouncements**





In
      September 2006, the FASB issued SFAS No. 157, “ *Fair
      Value Measurements* ”.
      The
      objective of SFAS 157 is to increase consistency and comparability in fair
      value
      measurements and to expand disclosures about fair value measurements. SFAS
      157
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS 157 applies under other accounting pronouncements
      that
      require or permit fair value measurements and does not require any new fair
      value measurements. The provisions of SFAS No. 157 are effective for fair value
      measurements made in fiscal years beginning after November 15, 2007. The
      adoption of this statement is not expected to have a material effect on the
      Company's future reported financial position or results of
      operations.





In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, “ *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      Amendment of FASB Statement No. 115* ”.
      This
      statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. Most of the provisions of SFAS No. 159 apply
      only to entities that elect the fair value option. However, the amendment to
      SFAS No. 115 “ *Accounting
      for Certain Investments in Debt and Equity Securities* ”
applies
      to all entities with available-for-sale and trading securities. SFAS No. 159
      is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
      year that begins on or before November 15, 2007, provided the entity also elects
      to apply the provision of SFAS No. 157, “ *Fair
      Value Measurements”.* The
      adoption of this statement is not expected to have a material effect on the
      Company's financial statements.





**(Q)**  **Reclassification**





Certain
      amounts in the 2006 financial statements have been reclassified to conform
      to
      the 2007 financial presentation. These reclassifications have no impact on
      net
      loss.





**NOTE
      3.**  **PROPERTY
      AND EQUIPMENT**





Property
      and equipment consisted of the following:


June
                  30,
              
              December2007
              
              31,
                  2006(unaudited)Computer
                  equipment
              
              $
              164,098
              
              $
              157,343Office
                  furniture & equip.
              
              
              91,978
              
              
              87,224Leasehold
                  improvements
              
              
              18,866
              
              
              26,184Less
                  accumulated depreciation
              
              
              (112,899
              )
              
              (81,777
              )$
              162,043
              
              $
              188,974


Depreciation
      expense for the six months ended June 30, 2007 and 2006 was $40,465 and $37,346,
      respectively.




-9-





**NOTE
      4.**  **LICENSE**





On
      November 2, 2006, the Company’s subsidiary, InfoByPhone, entered into a software
      license and services agreement with Expert System S.p.A. that grants InfoByPhone
      an exclusive worldwide perpetual license (exclusive of Italy) for the mobile
      communications industry to use the Cogito® Contact Mobile Product and the Expert
      System Technology of Text Mining for structured and unstructured databases,
      natural language query and answer capability.




The
      Company had previously signed a letter of intent on August 22, 2006 with Expert
      System that summarized the scope of the proposed agreement with regard to
      license, service and payment provisions. At the signing of the letter of intent,
      the Company paid Expert System $150,000 as a start-up phase initial payment.
      Additional payments required include payment upon integration of each content
      database with a commitment of at least ten databases in the first 150 days
      after
      signing the agreement. A license fee per single computer server is due in twelve
      monthly installments each commencing the month following the installation of
      the
      software. The on-going technical support commences upon integration of the
      tenth
      database and requires a per month fee for twelve months. Subsequent to
      completion of the twelve month start-up phase, Expert System will receive a
      percentage of the net revenue through the seventh anniversary date of the
      conclusion of the start-up phase. The term of the agreement starts upon the
      commencement date for installation and continues until the seventh anniversary
      date of the conclusion of the start-up phase. As of June 30, 2007, Expert had
      not completed the installation of the required databases and thus no
      amortization of the license was recorded during the quarter. Amortization of
      the
      license will be over the term of the agreement and commence upon integration
      of
      the database software.





**NOTE
      5.**  **PROMISSORY
      NOTES**





Beginning
      in February 2007, the Company began an issue of up to $3,000,000 in Bridge
      promissory notes to accredited investors. The Company issued $2,625,000 in
      promissory notes during the quarter ended June 30, 2007 and offered in the
      aggregate notes in the principal amount of $3,000,000, which offering closed
      May
      10, 2007. The notes bear interest at 12% per annum payable 90 days after the
      date of issuance unless extended by the Company for up to an additional 90
      days.
      The Company elected to extend the maturity date for the additional 90 days
      in
      accordance with the promissory note extension option, and as a result the notes’
interest rate increased to 14% per annum from original maturity until payment
      in
      full. As part of the Bridge offering, the Company was obligated to issue
      warrants to purchase four shares of common stock for every $1.00 principal
      amount of notes issued. An aggregate 12,000,000 common stock purchase warrants
      were issued by the Company in accordance with the fully subscribed $3,000,000
      offering. During the quarter ended June 30, 2007, the Company issued 10,500,000
      warrants to purchase common stock at $.50 per share with a term of five years
      to
      investors. The Company calculated a debt discount for the value of the warrants
      issued during the quarter ended June 30, 2007 amounting to $2,625,000, which
      will be amortized over the life of the notes. The Company recorded additional
      interest expense of $2,310,279 to reflect the amortization of the discount
      during the quarter ended June 30, 2007. For the six months ended June 30, 2007,
      the debt discount amounted to $3,000,000 and interest expense amounted to
      $2,390,279.





As
      part
      of the Bridge offering the Company offered the selling agent warrants to
      purchase 3,600,000 shares of common stock of the Company if the entire Bridge
      financing of $3,000,000 was subscribed, or a proportionately smaller number
      of
      warrants if less money was loaned. At June 30, 2007, the entire 3,600,000
      warrants to purchase common stock at $.50 per share with a term of five years
      had been issued to the selling agent. The Company calculated a debt offering
      cost asset amount for the value of the warrants issued during the quarter ended
      June 30, 2007 amounting to $1,984,836, which will be amortized over the life
      of
      the notes. The Company recorded amortization expense of $1,706,164 to reflect
      the amortization of the debt offering costs during the quarter ended June 30,
      2007. For the six months ended June 30, 2007, the debt offering cost amounted
      to
      $2,202,972 and amortization expense totaled $1,749,326. The net book value
      of
      the debt offering costs at June 30, 2007 was $453,646.




**NOTE
      6.**  **PROMISSORY
      NOTES - RELATED PARTIES**





On
      March
      1, 2006, Darryl Cohen, the Company’s Chief Executive Officer, loaned the Company
      $105,000. The bridge loan was completed on March 8, 2006 and was evidenced
      by a
      16% secured promissory note due on the earliest of the closing of a financing
      of
      $1,000,000 in debt, equity or other infusion of capital, or June 30, 2006.
      During the year ended December 31, 2006, the Company repaid principal and
      interest of $102,376 and $7,624, respectively. On May 15, 2007, the Company
      repaid the remaining outstanding principal balance of $2,624 and $243 in accrued
      interest in full.





In
      January 2006, Sandro Sordi, a director of the Company, loaned the Company
      $100,000. The loan is evidenced by a 10% subordinated promissory note due 60
      days from the date of issuance. On May 17, 2007, the Company and the note holder
      agreed to extend the due date for repayment of the principal balance and accrued
      interest until completion of the next round of equity financing. As compensation
      for the note payable extension, the note holder was granted four warrants for
      every $1 of principal and accrued interest outstanding on May 17, 2007 which
      totaled $113,041. The Company issued 452,164 warrants to Sandro Sordi,
      exercisable for five years at $.50 per share with the same registration and
      other rights granted to the bridge promissory note holders.




-10-





**NOTE
      7.**  **STOCKHOLDERS’
      DEFICIT**





**(A)**  **Common
      Stock**





In
      June,
      2007, the Company issued 5,000 shares of unregistered
      restricted common
      stock to a vendor for the purchase of a website domain name. The Company
      determined a value for the shares of $4,000 based on the fair market value
      of
      the stock at the time of the purchase. The Company recorded the entire amount
      as
      an asset on the balance sheet at June 30, 2007.





**(B)**  **Preferred
      Stock**





The
      Company’s Certificate of Incorporation as amended and restated authorizes the
      issuance of 10,000,000 shares of $.01 par value preferred stock. The Board
      of
      Directors has the power to designate the rights and preferences of the preferred
      stock and issue the preferred stock in one or more series.





*Series
      A*





On
      April
      25, 2006, the Company designated 1,500,000 shares of Series A preferred stock,
      $0.01 par value. Each share has a face value of $10.00 and a 10% dividend rate,
      or $1.00 per share payable in-kind. The Series A preferred stock ranks senior
      to
      the Company’s common stock and each share has a $10 per share liquidation
      preference. The Series A preferred stock has no voting rights as provided by
      the
      Delaware General Corporation Law and as set forth in the Company’s charter. As
      of June 30, 2007, there were 27,500 shares of Series A preferred stock issued
      and outstanding. As of June 30, 2007, accrued dividends for the quarter
      then-ended were $6,856 and cumulative dividends were $30,390 on the Series
      A
      preferred stock.





*Series
      B*





On
      July
      20, 2006, the Company designated 1,600,000 shares of Series B preferred stock,
      $0.01 par value. Each share has a face value of $10.00 and a 10% dividend rate,
      or $1.00 per share payable in-kind. The Series B preferred stock ranks senior
      to
      the common stock and
      on
      parity with the Series A preferred stock, and each
      share has a $10 per share liquidation preference. The Series B preferred stock
      is convertible into common stock at a price of $.50 per share. The Series B
      preferred stock has no voting rights except as provided by the Delaware General
      Corporation Law and
      as
      set forth in the Company’s charter. For the
      quarter ended June
      30,
      2007, there were 643,000 shares of Series B preferred stock issued and
      outstanding. As of June 30, 2007, accrued dividends for the quarter then-ended
      were $160,310 and cumulative dividends were $299,693 on the Series B preferred
      stock.





*Series
      C*





On
      September 7, 2006, the Company designated 400,000 shares of Series C preferred
      stock, $0.01 par value. The Series C preferred stock is not entitled to receive
      dividends, ranks senior to the common stock, and each share has a $.01 per
      share
      liquidation preference. The terms of the Series C preferred stock provided
      that
      such shares would automatically be converted on a one for ten basis into ten
      shares of common stock of the Company at such time as the Company’s Certificate
      of Incorporation was amended to increase the number of authorized shares of
      common stock, which occurred on December 18, 2006. On January 10, 2007, the
      Series C preferred stock was converted into 4,000,000 unregistered restricted
      common shares. The
      Series C preferred stock has no voting rights except as provided by the Delaware
      General Corporation Law. As of June 30, 2007, no shares of Series C preferred
      stock were issued or outstanding.





*Series
      E*





The
      Series E preferred stock, $0.01 par value, is redeemable at the Company’s option
      and has the same voting rights as the common stock. The redemption price shall
      equal the stated value plus unpaid dividends. The Series E preferred stock
      shall
      have a preference in liquidation over the common stock of the Company and later
      series of preferred stock. The Series E preferred stock entitles the holder
      to
      receive, on a cumulative basis, dividends at an annual rate of $45 per share,
      payable on a monthly basis. As of June 30, 2007, there were 680 shares of Series
      E preferred stock authorized, none of which were issued and
      outstanding.




-11-





*Series
      F*





The
      Series F preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the stated value plus
      unpaid dividends. The Series F preferred stock shall have a preference in
      liquidation over the common stock of the Company and later series of preferred
      stock but shall be subject to the preference in liquidation of the Series C
      and
      E preferred stock. The Series F preferred stock entitles the holder to receive,
      on a cumulative basis, dividends at an annual rate of $14 per share, payable
      on
      a monthly basis. As of June 30, 2007, there were 1,250 shares of Series F
      preferred stock authorized, none of which were issued and
      outstanding.





*Series
      G*





The
      Series G preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the stated value plus any
      unpaid dividends. The Series G preferred stock shall have a preference in
      liquidation over the common stock of the Company and later series of preferred
      stock but shall be subject to the preference in liquidation of the Series C,
      E,
      and F preferred stock. The Series G preferred stock entitles the holder to
      receive, on a cumulative basis, dividends at an annual rate of $24 per share,
      payable on a monthly basis. As of June 30, 2007, there were 2,000 shares of
      Series G preferred stock authorized, none of which were issued and
      outstanding.





*Series
      I*





The
      Series I preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the stated value plus any
      unpaid dividends. The Series I preferred stock shall have a preference in
      liquidation over the common stock of the Company and later series of preferred
      stock but shall be subject to the preference in liquidation of the Series C,
      E,
      F and G preferred stock. The Series I preferred stock entitles the holder to
      receive, on a cumulative basis, dividends at an annual rate of $15 per share,
      payable on a monthly basis. As of June 30, 2007, there were 550 shares of Series
      I preferred stock authorized, none of which were issued and
      outstanding.





*Series
      L*





The
      Series L preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the stated value plus any
      unpaid dividends. The Series L preferred stock shall have a preference in
      liquidation over the common stock of the Company but shall be subject to the
      preference in liquidation of the Series C, E, F, G, and I preferred stock.
      The
      Series L preferred stock entitles the holder to receive, on a cumulative basis,
      dividends at an annual rate of $120 per share, payable on a monthly basis.
      As of
      June 30, 2007, there were 1,000 shares of Series L preferred stock authorized,
      none of which were issued and outstanding.





*Preferred
      Stock Offerings*





Commencing
      April 25, 2006, the Company began an offering of Series A preferred stock in
      the
      form of a Unit, with each Unit consisting of (i) 5,000 shares of Series A
      preferred stock, and (ii) warrants to purchase 50,000 shares of the Company’s
      common stock, exercisable for a period of three years at a price of $0.50 per
      share. On July 20, 2006, a supplement to the private placement memorandum used
      in connection with the offering of such Units was approved, which supplement
      re-priced the offering and modified the preferred stock offered. All investors
      that had invested in the Series A private placement were offered an opportunity
      to exchange their shares of Series A preferred stock for shares of Series B
      preferred stock that were identical in all respects to the Series A shares
      except for the conversion price, which was reduced to $.50 per share. In
      addition, the number of warrants issued per Unit was increased from 50,000
      to
      100,000 warrants while the exercise price remained at $0.50 per share. **** The
      number of warrants issued to the placement agent also increased from 1,000,000
      to 2,000,000, exercisable at $.50 per share of common stock rather than $1.00
      per share (or such proportionately smaller number if less than the maximum
      offering amount was raised).





The
      Company completed the sale of an additional 13 Units amounting to $725,000
      in
      the first quarter of 2007 until the offering was closed to new investment on
      February 28, 2007. The offering closed with a total of 134 Units of the Series
      A
      and B preferred stock issued for aggregate gross proceeds of $6,705,000
      ($2,375,000 from the sale of 237,500 shares of Series A preferred stock, and
      $4,330,000 from the sale of 433,000 shares of Series B preferred stock). The
      placement agent in connection with such offering received warrants to purchase,
      with a cashless exercise feature, 1,000,000 shares of common stock of the
      Company, exercisable at $.50 per share, as well as (1) an aggregate of $707,000
      sales commissions, (2) $162,000 in non-accountable expenses, and (3) 1,200,000
      shares of common stock. During the quarter ended June 30, 2007, Series A holders
      exchanged $2,100,000 of investment for Series B shares. During the six months
      ended June 30, 2007, Series A holders exchanged $3,350,000 of investment for
      Series B shares.




-12-





In
      May
      2007, the Board of Directors of the Company approved an offer to holders of
      the
      Series A and Series B preferred stock in settlement of claims such holders
      may
      have had against the Company in connection with the Company’s bridge financing
      that closed in the second quarter of 2007. Specifically, for an 18 month period
      following completion of the preferred stock offering, the Company was prohibited
      from offering securities (including derivative securities) at less than $1.25
      per share without the consent of the investor representative appointed by the
      investors in the preferred stock offerings. The Company provided participants
      in
      the 2007 bridge financing with warrants to purchase shares of Common Stock
      at
      $.50 per share and did not obtain the investor representative’s
      approval.





As
      consideration for the waiver of any breach and as consideration for the
      termination of the $1.25 floor going forward, and with the approval of the
      investor representative, the Board approved the issuance to holders of the
      Series A Stock and Series B Stock of additional warrants to purchase 2 shares
      of
      Common Stock for each $1.00 in principal held at $.50 per share for a term
      of
      five years. Any such holder will receive the additional warrants upon such
      holder’s acceptance of the settlement offer and execution of a waiver of any
      breach or claims. In the event the settlement offer is accepted by the holders
      of at least 50% of the outstanding Series A Stock and Series B Stock, the
      Company will no longer be prohibited from offering securities (including
      derivative securities) at less than $1.25 per share, provided that any new
      securities are offered at a price at or above $.50 per share. As of June 30,
      2007, holders of 5,000 shares of Series A preferred stock and holders of 310,500
      shares of Series B preferred stock had accepted the settlement
      offer.





**(C)**  **Warrants
      Issued**





In
      May,
      2007, the Company issued warrants to purchase 452,164 shares of common stock
      to
      a director with an exercise price of $0.50 per share in exchange for his
      agreement to extend the maturity date of his promissory note with the Company.
      The Company recorded the fair market value of the warrants based on the fair
      value of each warrant estimated on the date of grant using the Black-Scholes
      option pricing model with the following weighted average assumptions used for
      grants in 2007: dividend yield of zero, expected volatility of 242%, risk-free
      interest rate of 5.07%, and expected lives of five years. The Company recorded
      $337,465 in additional interest expense for the quarter ended June 30, 2007
      in
      connection with these warrants.





As
      discussed elsewhere herein, during the three months ended June 30, 2007, the
      Company issued warrants to purchase (a) 2,100,000 shares of common stock in
      connection with the modification of the preferred stock Unit offering and
      conversion of Series A to Series B preferred stock shares, and (b) 10,500,000
      shares of common stock in connection with $2,625,000 raised in the Bridge note
      offering. The Company also issued 3,600,000 warrants for shares of common stock
      to the placement agent in the Bridge note offering.





During
      the six months ended June 30, 2007, the Company issued warrants to purchase
      (a)
      1,450,000 shares of common stock in connection with $750,000 of new
      subscriptions for preferred stock Units, (b) 3,350,000 shares of common stock
      in
      connection with the modification of the preferred stock Unit offering and
      conversion of Series A to Series B preferred stock shares, and (c) 12,000,000
      shares of common stock in connection with $3,000,000 raised in its Bridge note
      offering. The Company also issued 3,600,000 warrants for shares of common stock
      to the placement agent in the Bridge note offering.





Warrants
      outstanding at June 30, 2007 were as follows:


Warrants
                  and OptionsOutstanding
                  at beginning of year
              
              
              10,919,043Granted
              
              
              20,852,164Exercised
              
              
              --Warrants
                  at June 30, 2007
              
              
              31,771,207





**NOTE
      8. STOCK OPTION PLAN**





Effective
      January 1, 2006, the Company’s 2005 and 2006 Plans (as defined below) were
      accounted for in accordance with the recognition and measurement provisions
      of
      SFAS No. 123 (revised), “Share-Based Payment”, which replaces SFAS No. 123,
“Accounting for Stock-Based Compensation”, and supersedes APB Opinion No. 25,
“Accounting for Stock Issued to Employees”, and related interpretations. SFAS
      No. 123(R) requires compensation costs related to share-based payment
      transactions, including employee stock options, to be recognized in the
      financial statements. In addition, the Company adheres to the guidance set
      forth
      within SEC Staff Accounting Bulletin No. 107, which provides the Staff’s views
      regarding the interaction between SFAS No. 123(R) and certain SEC rules and
      regulations and provides interpretations with respect to the valuation of
      share-based payments for public companies.




-13-





Prior
      to
      January 1, 2006, the Company accounted for similar transactions in accordance
      with APB No. 25, which employed the intrinsic value method of measuring
      compensation cost. Accordingly, compensation expense was not recognized for
      fixed stock options if the exercise price of the option equaled or exceeded
      the
      fair value of the underlying stock at the grant date.





While
      SFAS No. 123 encouraged recognition of the fair value of all stock-based awards
      on the date of grant as expense over the vesting period, companies were
      permitted to continue to apply the intrinsic value-based method of accounting
      prescribed by APB No. 25 and disclose certain pro-forma amounts as if the fair
      value approach of SFAS No. 123 had been applied. In December 2002, SFAS No.
      148,
“Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment
      of FAS No. 123,” was issued, which, in addition to providing alternative methods
      of transition for a voluntary change to the fair value method of accounting
      for
      stock-based employee compensation, required more prominent pro-forma disclosures
      in both the annual and interim financial statements. The Company complied with
      these disclosure requirements for all applicable periods prior to January 1,
      2006.





In
      adopting SFAS No. 123(R), the Company applied the modified prospective approach
      to transition. Under the modified prospective approach, the provisions of SFAS
      No. 123(R) are to be applied to new awards and to awards modified, repurchased,
      or cancelled after the required effective date. Additionally, compensation
      cost
      for the portion of awards for which the requisite service has not been rendered
      that are outstanding as of the required effective date are recognized as the
      requisite service is rendered on or after the required effective date. The
      compensation costs for that portion of awards are based on the grant-date fair
      value of those awards as calculated for either recognition or pro-forma
      disclosures under SFAS No. 123.





As
      a
      result of the adoption of SFAS No. 123(R), the Company’s results for the three
      and six months ended June 30, 2007 include share-based compensation expense
      totaling $1,533,467 and $2,261,408, respectively, which has been included in
      salaries and compensation expense. No income tax benefit has been recognized
      in
      the income statement for share-based compensation arrangements as the Company
      has provided a 100% valuation allowance on its net deferred tax
      asset.





Stock
      option compensation expense in fiscal 2006 is the estimated fair value of
      options granted amortized on a straight-line basis over the requisite service
      period for the entire portion of the award.





*Accounting
      for Non-employee Awards*





The
      Company previously accounted for options granted to its non-employee consultants
      using the fair value cost in accordance with SFAS No. 123. The adoption of
      SFAS
      No. 123(R) as of January 1, 2006 has had no material impact on the accounting
      for non-employee awards.





** The
      fair
      value of options at the date of grant is estimated using the Black-Scholes
      option pricing model. The assumptions made in calculating the fair values of
      options are as follows:


For
                  thesixmonths
                  endedJune
                  30, 2007Expected
                  term (in years)
              
              
              5Expected
                  volatility
              
              
              240%
                  to 242
              %Expected
                  dividend yield
              
              
              0
              %Risk-free
                  interest rate
              
              
              4.50%
                  to 4.80
              %




There
      were 1,800,000 and zero non-employee stock option awards granted in the six
      months ended June 30, 2007 and 2006, respectively. There were 4,750,000 and
      2,470,000 employee and director stock options granted in the six months ended
      June 30, 2007 and 2006, respectively. None of the options granted during the
      first six months of 2007 to employees or non-employees were granted under the
      Company’s employee stock option plans.





*Plan
      Information*





In
      August, 2006, the 2006 Employee Stock Incentive Plan was approved and adopted
      by
      the Board of Directors, and subsequently amended in June 2007 (as amended,
      the
“2006 Plan”). The 2006 Plan became effective upon the approval of the holders of
      a majority of the Company’s common stock at the Company’s annual stockholders
      meeting held on August 1, 2007. Under the 2006 Plan, the Company may grant
      stock
      options, stock appreciation rights or restricted stock to its employees,
      officers and other key persons employed or retained by the Company and any
      non-employee director, consultant, vendor or other individual having a business
      relationship with the Company to purchase up to 10,000,000 shares of common
      stock. Options
      are granted at various times and vest over various periods. As of June 30,
      2007,
      the Company had issued a total of 1,702,000 options pursuant to the 2006
      Plan.




-14-




Under
      the
      2005 Management and Director Equity Incentive Stock Option Plan (the “2005
      Plan”), the Company may grant incentive and non-qualified stock options to its
      employees, officers, directors, and consultants to purchase up to 2,000,000
      shares of common stock. Under the 2005 Plan, the exercise price of each option
      must equal or exceed the market price of the Company’s stock on the date of
      grant, and an option’s maximum term is ten years. Options are granted at various
      times and vest over various periods. As of June 30, 2007, the Company had issued
      a total of 1,920,000 options pursuant to the 2005 Plan.





A
      summary
      of the status of the Company’s stock options as of June 30, 2007 and the changes
      during the period ended is presented below:


Weighted
                  AverageFixed
                  Options
              
              Shares
              
              Exercise
                  PriceOutstanding
                  at beginning of year
              
              
              7,722,000
              
              $
              .58Issued
                  employees & directors
              
              
              6,550,000
              
              
              .71Cancelled
              
              
              -
              
              
              -Outstanding
                  at June 30, 2007
              
              
              14,272,000
              
              $
              .64Exercisable
                  at June 30, 2007
              
              
              10,650,954Weighted
                  average exercise price ofoptions
                  granted to employeesat
                  June 30, 2007
              
              $
              .62
  WeightedNumber
              
              Average
              
              Weighted
              
              Number
              
              WeightedOutstanding
              
              Remaining
              
              Average
              
              Exercisable
              
              AverageExercise
              
              at
                  June
              
              Contractual
              
              Exercise
              
              at
                  June
              
              ExercisePrice
              
              30,
                  2007
              
              Life
              
              Price
              
              30,
                  2007
              
              Price$.50-$.85
              
              
              14,002,000
              
              
              7.5
              
              $
              0.62
              
              
              10,380,954
              
              $
              0.60$1.59-$2.00
              
              
              270,000
              
              
              5.0
              
              $
              1.73
              
              
              270,000
              
              $
              1.73





**NOTE
      9. COMMITMENTS AND CONTINGENCIES**





*Content
      Contracts*





The
      Company has entered into various service and content agreements. The agreements
      are usually effective for a period of one year and require the Company to pay
      a
      monthly fee and/or transaction fees based on usage. The content costs associated
      with these contracts are included in costs of revenues.





Future
      minimum payments are approximately as follows:


Year
                  Ended June 30,2007
              
              $
              59,4982008
              
              
              89,395$
              148,893
  *Employment
      Contracts*





In
      July
      2005, InfoByPhone Inc. entered into an employment agreement with Darryl Cohen
      for a term of three years at an annual minimum salary of $110,000, with
      additional bonuses and fringe benefits as determined by the Board of Directors.
      In April, 2006 the Company increased the President’s base salary to $250,000 per
      year and provided for an automobile allowance of $6,840 per year.




-15-





In
      May
      2007, the Board of Directors of the Company determined that in the event of
      a
      change of control as defined in Mr. Cohen’s employment agreement, which
      definition was revised to include the issuance of 25% or more of the issued
      and
      outstanding shares of the Company to one or more persons acting together as
      a
      group (with certain exceptions), all options, warrants and restricted shares
      outstanding and not then vested held by Messrs. Cohen, Sordi and Smith and
      Dennis Bergquist, financial consultant to the Company, would accelerate and
      become fully vested. In addition, each of such four individuals would be granted
      a non-qualified option or warrant granting the right to purchase that number
      of
      shares equal to the number of shares subject to all of each such individual’s
      options and warrants outstanding as of May 17, 2007, such change of controls
      options and warrants to be exercisable at the fair market value of the Common
      Stock at the time of the change of control.





On
      October 10, 2006, the Company entered into employment agreements with eight
      executives, each for a term of one year at an annual average salary of $74,450,
      with additional bonuses and fringe benefits as determined by the Board of
      Directors.





In
      May
      2007, the Board of Directors amended the employment agreements of two of these
      officers to provide for the issuance of (a) 700,000 options to the Company’s
      Director of Interactive Media, and (b) 700,000 options to the Company’s Director
      of Revenue and Content. In both cases, 500,000 options were granted at $.80
      per
      share and vested when the Company entered into an agreement with the Wikipedia
      Foundation on May 25, 2007, and 200,000 of which were granted on May 17, 2007,
      at $.75 per share, of which 50,000 vest in the sole discretion of the CEO each
      time (up to four times) a material contract is executed between the Company
      and
      a licensed third-party content provider, or an “Enterprise Contract” (as defined
      in the employment agreement, as amended) is executed.





*Financial
      Advisory Agreement*





In
      July
      2006, the Company entered into a financial advisory agreement with Arjent Ltd.
      for twenty-four months at a rate of $5,000 per month. Pursuant to an
      underwriting agreement with its financial advisor, the Company is obligated
      to
      an exclusive period of twenty-four months commencing on March 1, 2007 and ending
      on February 28, 2009. Management believes that the financial advisor has not
      performed in accordance with the agreement and has ceased to provide services
      to
      the Company. Due to this breach of the agreement, management believes that
      the
      Company has no further obligation or exclusivity with the financial
      advisor.





In
      February 2007, the Company entered into a financial advisory agreement for
      twelve months with Halpern Capital, Inc. In the event that Halpern Capital,
      Inc.
      successfully completes a securities offering with at least $25 million in gross
      proceeds, the Company has agreed to purchase additional financial services
      for a
      minimum of twelve months at a rate of $20,000 per month. The Company may cancel
      after six months for cause if the financial advisor fails to perform the duties
      specified in the agreement.





*Financial
      Consulting Agreement*





In
      January 2007, the Company entered into a financial consulting agreement for
      twelve months at a rate of $14,600 per month.





*Litigation*





The
      Company has been advised that there are 448,420 outstanding warrants to purchase
      common stock of the Company, a portion of which may still be exercisable despite
      former management’s representation and warranty that there were no outstanding
      warrants at the time of the Reverse Merger. Included in these warrants are
      300,000 claimed to be exercisable at $0.25 per share through August 15, 2007.
      The alleged holder of these warrants, a former consultant of the Company, has
      filed a lawsuit in the United States District Court for the Southern District
      of
      New York (06 CV 609) **** seeking
      specific performance of an agreement which provided for “piggyback” registration
      rights and seeking to have the Company include the 300,000 shares underlying
      the
      warrants in its then pending registration statement on Form SB-2.
      Notwithstanding the fact that the subject matter of the lawsuit is still in
      dispute, the Company has agreed to register the shares. The Company has answered
      the complaint and denied the claims. On July 16, 2007, the plaintiff filed
      an
      amended complaint. The amended complaint alleged damages of not less than
      $525,000 which the Company believes is without merit. The Company has until
      August 24, 2007 to move to have the complaint dismissed.





In
      December 2005, the Company received a claim from an attorney for Marshall
      Stewart, the former CEO of the Company. Mr. Stewart was employed by the Company
      under an employment agreement dated September 1, 2004. Mr. Stewart was to be
      compensated $180,000 per year in base salary plus bonuses through August 31,
      2007. Mr. Stewart’s claim is for a breach of contract alleged to have occurred
      in late 2004 when the Company was under the control of Consumer Direct of
      America, the Company’s then-principal shareholder (“CDA”), and for CDA’s failure
      to advise the Company’s stockholders of the sale of the company until after the
      Reverse Merger. As of June 30, 2007, the Company has not accrued any expense
      related to the claim and no further developments have occurred regarding this
      claim.




-16-





On
      May 5,
      2006, a judgment by default in the amount of $604,391 was entered in favor
      of
      IndyMacBank, F.S.B., in the Los Angeles Superior Court against the Company
      (then
      known as Ocean West Holding Corporation), former subsidiary Ocean West
      Enterprises, Inc. (“OWE”), CDA and Does 1 through 100, inclusive. The underlying
      complaint brought by the federal bank alleged a default by OWE under settlement
      agreements with the bank, which had purchased certain loans from OWE. The
      complaint did not state a cause of action against the Company. Pursuant to
      Section 13.3 of the Securities Exchange Agreement and Plan of Reorganization
      dated as of April 14, 2005, the Company gave CDA notice of a breach of the
      representations and warranties set forth in, among other things, Section 5.5
      of
      the Exchange Agreement. In addition, CDA assumed and agreed to indemnify the
      Company from any and all liabilities as of May 23, 2005, whether known or
      unknown, pursuant to the Assignment and Assumption of Liabilities Agreement
      of
      the same date. Personal service upon the Company’s registered agent was claimed,
      but the Company was never served and sought to remove the judgment. On August
      8,
      2007, the default judgment against the Company was vacated in the Los Angeles
      Superior Court on the basis that the Company had not been properly served.





The
      Company has been advised by Pioneer Credit Recovery, Inc. that the U.S.
      Department of Treasury has placed with Pioneer an account owed to it by the
      Company’s former subsidiary, OWE. The former principals of OWE did not disclose
      that they and OWE had guaranteed three HUD loans in the aggregate amount of
      $151,980. In the event a claim is made against the Company by Pioneer, the
      U.S.
      government or any agency or instrumentality thereof, or any other party, the
      Company will seek indemnification from the former principals of OWE, **** CDA,
      and
      their respective affiliates under both the Exchange Agreement and an Assignment
      and Assumption of Liabilities Agreement dated May 23, 2005 that the Company
      entered into with the former principals in connection with the Reverse Merger.
      As of June 30, 2007, the Company has not accrued any amount for this guarantee.





**NOTE
      10. SUBSEQUENT EVENTS**




***Bridge
      Loan Financing***





Beginning
      in August, 2007, the Company commenced a bridge loan offering on a
“best-efforts” no minimum basis, of up to $1 million principal amount of 12%
      Junior Promissory Notes due and payable 180 days from the date of issuance
      unless extended by the Company for up to an additional 90 days. The Company
      will
      issue warrants with an exercise price of $0.50 to purchase two shares of common
      stock for every $1.00 principal amount of notes issued. As of August 14, 2007,
      the Company had not borrowed any funds related to the $1,000,000 offering.





***Expert
      System S.p.A. Acquisition Letter of Intent***





On
      April
      12, 2007, the Company announced that it had entered into a letter of intent
      to
      acquire 100% of the capital stock of Expert System S.p.A. The Company recently
      received notice on August 10, 2007 that the letter of intent to acquire Expert
      System S.p.A. had expired, although management continues to negotiate the
      acquisition and the raising of sufficient equity capital for the transaction.





***Annual
      Meeting of Stockholders***





The
      Company held its annual meeting of stockholders at its principal executive
      offices in Irvine, California on August 1, 2007. At such meeting, the holders
      of
      the Company’s common stock (a) elected the three nominees to the Board of
      Directors, (b) approved the Second Amended and Restated Certificate of
      Incorporation of the Company that (i) increased the number of authorized shares
      of common stock of the Company from 100,000,000 shares to 300,000,000 shares,
      (ii) eliminated the Class B and Class D common stock of the Company and all
      related provisions, (iii) eliminated the Series E, Series F, Series G, Series
      I
      and Series L preferred stock of the Company and all related provisions, and
      (iv)
      eliminated the voting provisions relating to the Company’s existing Series A and
      Series B preferred stock, and (c) approved the 2006 Employee Stock Incentive
      Plan (as amended).





At
      the
      meeting, the holders of the Company’s Series A and B preferred stock were
      entitled to vote on the election of directors and the elimination of the voting
      rights of their respective series of preferred stock as set forth in the Second
      Amended and Restated Certificate of Incorporation. Because a quorum of neither
      the Series A nor Series B preferred stock existed at the meeting, no voting
      occurred on such proposals. As a result, the three nominees to the Board were
      not elected but shall remain in office until their successors are duly elected
      and qualified. In addition, the Second Amended and Restated Certificate of
      Incorporation was approved but without the elimination of the voting rights
      of
      the Series A and Series B preferred stock.




-17-





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





**Forward-Looking
      Statements**





Statements
      contained herein and elsewhere in this document that are not historical or
      current facts may constitute “forward-looking statements” within the meaning of
      the Private Securities Litigation Reform Act of 1995. Such forward-looking
      statements involve known and unknown risks, uncertainties and other factors
      that
      could cause the actual financial or operating results of the Company to be
      materially different from the historical results or from any future results
      expressed or implied by such forward-looking statements. Factors that could
      cause actual results to differ materially from those expressed or implied in
      any
      such forward-looking statements include: our ability to continue to lower our
      costs, our timely development and customers’ acceptance of our products, pricing
      pressures, rapid technological changes in the industry, increased competition,
      our ability to attract and retain qualified personnel, our ability to identify
      and successfully consummate future acquisitions, adverse changes in general
      economic conditions in the United States and internationally, and political
      and
      economic uncertainties associated with current world events. Such
      forward-looking statements are based on our best estimates of future results,
      performance and/or achievements, based on current conditions and the most recent
      results of the Company. In addition to statements which explicitly describe
      such
      risks and uncertainties, readers are urged to consider statements labeled with
      the terms “may,” “will,” “potential,” “opportunity,” “believes,” “expects,”
“intends,” “estimates,” “anticipates,” “plans” or similar expressions to be
      uncertain and forward-looking. The forward-looking statements contained herein
      are also subject generally to other risks and uncertainties that are described
      from time to time in the Company’s reports and registration statements filed
      with the Securities and Exchange Commission.





**General**





AskMeNow,
      Inc. is a holding company and parent of InfoByPhone, Inc., a Delaware
      corporation. InfoByPhone is a communications technology company that provides
      users of handheld cellular devices with access to information regardless of
      location through its AskMeNowTM Service. The service is a mobile information
      content service that enables users of any mobile device, with text messaging/SMS
      or email capability, to email or text message questions to the Company. An
      answer is then text messaged or emailed back to the consumer’s mobile device,
      usually within a matter of minutes. The Company has also developed an automated
      enterprise solution in conjunction with Expert System S.p.A., a developer of
      knowledge management tools. The automated enterprise solution, enables users
      of
      a mobile device to text message enterprise customer service-related questions
      and receive an answer through text. The Company plans to launch the enterprise
      service in the next three to six months.





The
      AskMeNow service is accessible virtually anytime and anywhere, through virtually
      every current way that wireless technology allows people to communicate via
      a
      mobile device. Using proprietary software and proprietary methods, the service
      has the research capability to answer information-based questions, including
      questions regarding current news and events, sports scores, historical
      statistics, weather, entertainment, stock quotes and market data, driving
      directions, travel schedules and availabilities, emergency disaster information,
      comparison shopping, restaurant information and reservations, directory
      assistance, and random trivia (literature, history, science, etc.). Once
      information is accessed from third party content providers, it is refined to
      a
      format suitable for easy reading on the screen of a user’s mobile device and
      emailed or text messaged back to the user.





The
      AskMeNow service was launched from beta in November 2005. The release has been
      directed primarily to cell phone users in the United States and Canada. We
      currently generate fees from user inquiries. In the future, we also expect
      to
      generate revenues through monthly or quarterly service fees generated from
      enterprise customers and revenues from advertisers utilizing our ad space to
      promote products. We also plan to generate revenues through outsourcing our
      call
      center services in the Philippines.





**Reverse
      Merger**





Effective
      June 6, 2005, pursuant to a Securities Exchange Agreement and Plan of
      Reorganization, dated as of April 14, 2005, by and among the Company,
      InfoByPhone, Inc. and the shareholders of InfoByPhone, the Company acquired
      InfoByPhone in a reverse merger (the “Reverse Merger”). In connection with the
      transaction, InfoByPhone became a wholly-owned subsidiary of the Company, as
      the
      Company acquired all of the issued and outstanding shares of common stock of
      InfoByPhone and issued an aggregate of 5,586,004 shares of authorized but
      unissued shares of common stock, par value $0.01, of the Company that, together
      with 500,000 shares issued to Vertical Capital Partners, Inc. (n/k/a Arjent
      Ltd.) as a finder’s fee, constituted approximately 56% of the then-outstanding
      capital stock of the Company.




-18-





**Critical
      Accounting Policies**





We
      have
      identified the policies outlined below as critical to our business operations
      and an understanding of our results of operations. The list is not intended
      to
      be a comprehensive list of all of our accounting policies. In many cases, the
      accounting treatment of a particular transaction is specifically dictated by
      accounting principles generally accepted in the United States, with no need
      for
      management’s judgment in their application. The impact and any associated risks
      related to these policies on our business operations is discussed throughout
      this Management’s Discussion and Analysis or Plan of Operations where such
      policies affect our reported and expected financial results. Note that our
      preparation of the financial statements in conformity with accounting principles
      generally accepted in the United States requires us to make estimates and
      assumptions that affect the reported amount of assets and liabilities,
      disclosure of contingent assets and liabilities at the date of our financial
      statements, and the reported amounts of revenue and expenses during the
      reporting period. Actual results could differ from those estimates.





There
      have been no material changes in our critical accounting policies or critical
      accounting estimates since December 31, 2006, nor have we adopted any accounting
      policy that has or will have a material impact on our consolidated financial
      statements. For further discussion of our accounting policies see Note 2 Summary
      of Significant Accounting Policies in the Notes to Condensed Consolidated
      Financial Statements included in this Quarterly Report on Form 10-QSB/A for
      the
      quarter ended June 30, 2007, as well as our Annual Report on Form 10-KSB/A
      for
      the fiscal year ended December 31, 2006.





*Revenue
      Recognition*





The
      Company currently provides two platforms for asking questions: SMS/text
      messaging and through a downloaded application. Users are charged on a monthly
      or per question basis but are not charged for the downloaded
      application.  The
      Company recognizes revenue for all submitted questions at the time of the
      inquiry, regardless of the method used to submit the question. For advertising
      space sold, the Company will recognize revenue over the period the advertisement
      is displayed. The Company recognizes revenue when persuasive evidence of an
      arrangement exists, delivery has occurred, the sales price is fixed or
      determinable, and collectability is probable.





*Research
      and Development*





Research
      and development expenses include payroll, employee benefits, and costs
      associated with product development. The Company has determined that
      technological feasibility for its software products is reached shortly before
      the products are released. Costs incurred after technological feasibility is
      established are not material, and accordingly, all research and development
      costs are expensed when incurred.





*Foreign
      Currency Translation*





The
      functional currency of the Company is the United States dollar. The financial
      statements of the Company’s Philippines subsidiary are translated to the U.S.
      dollar using the period exchange rates as to assets and liabilities and average
      exchange rates as to revenues and expenses. Capital accounts are translated
      at
      their historical exchange rates when the capital transaction occurred. As of
      June 30, 2007, the translation adjustment was ($6,000).





*Recent
      Accounting Pronouncements*





In
      September 2006, the FASB issued SFAS No. 157, “ *Fair
      Value Measurements* ”.
      The
      objective of SFAS 157 is to increase consistency and comparability in fair
      value
      measurements and to expand disclosures about fair value measurements. SFAS
      157
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS 157 applies under other accounting pronouncements
      that
      require or permit fair value measurements and does not require any new fair
      value measurements. The provisions of SFAS No. 157 are effective for fair value
      measurements made in fiscal years beginning after November 15, 2007. The
      adoption of this statement is not expected to have a material effect on the
      Company's future reported financial position or results of
      operations.





In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, “ *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      Amendment of FASB Statement No. 115* ”.
      This
      statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. Most of the provisions of SFAS No. 159 apply
      only to entities that elect the fair value option. However, the amendment to
      SFAS No. 115 “ *Accounting
      for Certain Investments in Debt and Equity Securities* ”
applies
      to all entities with available-for-sale and trading securities. SFAS No. 159
      is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
      year that begins on or before November 15, 2007, provided the entity also elects
      to apply the provision of SFAS No. 157, “ *Fair
      Value Measurements”.* The
      adoption of this statement is not expected to have a material effect on the
      Company's financial statements.




-19-





**Results
      of Operations**





The
      following discussion and analysis should be read in conjunction with our
      unaudited consolidated financial statements presented in Part I, Item 1 of
      this
      Quarterly Report and notes thereto and our audited consolidated financial
      statements and notes thereto, as well as our Management’s Discussion and
      Analysis, contained in our Annual Report on Form 10-KSB/A for the year ended
      December 31, 2006 as filed with the SEC.





**Three
      Months Ended June 30, 2007 as compared to Three Months Ended June 30,
      2006**





**Revenue** ******





Revenues
      for the three months ended June 30, 2007 were $4,403, a decrease of $555, or
      11%, over revenues of $4,958 for the three months ended June 30, 2006.





The
      decrease in revenues was due to the Company transitioning its revenue model
      to
      providing an automated enterprise solution as well as a consumer product that
      will be advertising revenue supported. During the three month period ended
      June
      30, 2007, the Company continued to generate revenue from various customers
      on a
      per use basis. In addition, the Company anticipates an increase in sales in
      the
      United States as it develops its enterprise solution customer base and expands
      its current marketing program within the next 12 months.





**Costs
      and Operating Expenses**





*Cost
      of Revenue*





Cost
      of
      revenue for the quarter ended June 30, 2007 amounted to $368,666, a decrease
      of
      $307,912, or 46%, over cost of revenue of $676,578 for the quarter ended June
      30, 2006. The decrease relates primarily to a decrease in payroll costs and
      other associated call center costs as the Company focuses its marketing and
      development efforts on its automated enterprise solution and consumer product
      mobile service offerings. The Company expects to continue to incur significant
      costs as it continues to expand its services offering. The Company’s costs of
      revenue are from its call center in the Philippines, fixed amounts paid to
      third-party content providers and its database content integration with Expert
      System S.p.A.





*Research
      and Development*





For
      the
      quarter ended June 30, 2007, our research and development expenditures were
      $24,231, a decrease of $30,177, or 55%, over expenses of $54,408 for the quarter
      ended June 30, 2006. The decrease was the result of a reduction in R&D
      payroll costs incurred by the Company. Our research and development costs
      primarily relate to product development as the Company adds new features and
      upgrades to its mobile services technology. The Company expects to incur
      additional research and development expenses as it enhances its services and
      features.





*General
      and Administrative*





General
      and administrative expenses for the quarter ended June 30, 2007 amounted to
      $381,474, a decrease of $96,372, or 20%, over general and administrative
      expenses of $477,846 for the quarter ended June 30, 2006. The decrease is
      primarily the result of a decrease in investor relations costs during the
      quarter as management worked to reduce the Company’s overhead costs. The
      Company’s primary general and administrative costs are for travel, consulting
      fees, insurance premiums, facilities and office expenses, public and/or investor
      relations services, marketing-related costs, and amortization/depreciation
      charges.





*Professional
      Fees*





Professional
      fees for the three months ended June 30, 2007 were $405,549, an increase of
      $93,999, or 30%, over professional fees of $311,550 for the three month period
      ended June 30, 2006. The increase is the result of an overall increase in
      financings, SEC filings, and agreements negotiated during the three months
      ended
      June 30, 2007. Professional fees consist of legal and accounting fees associated
      with the Company’s SEC reporting obligations and attorney fees associated with
      various contracts, litigation and agreements prepared on behalf of the Company.




*Salaries
      and Compensation*





Salaries
      and compensation expense for the three months ended June 30, 2007 increased
      by
      $192,002 to $2,232,198, or 9%, over expenses of $2,040,196 for the same period
      ended June 30, 2006. This increase is primarily related to the compensation
      expense recorded pursuant to SFAS No. 123(R) for employee stock option awards
      and other officer and director compensation.




-20-





**Other
      Income/Expense**





*Interest
      Expense*





Interest
      expense during the quarter was $4,426,303, an increase of $4,284,555 over
      interest expense of $141,748 for the same period ended June 30, 2006. The
      increase was comprised of $2,310,279 in debt discounts amortized during the
      period relating to the warrants given to the debt holders as part of the
      Company’s bridge promissory note offering, $1,705,164 in amortization of debt
      offering costs relating to warrants given to the selling agent of the Company’s
      bridge offering, and $265,593 in additional financing costs incurred in securing
      the extension of the maturity date of a related party’s promissory note.





**Net
      Loss**





The
      net
      loss for the three-month period ended June 30, 2007 before preferred dividends
      totaled $7,834,018, compared with $3,697,368 for the same period in 2006, an
      increase of $4,136,650 or 112%. The increase resulted primarily from the
      non-cash increase in interest expense related to the debt discounts on the
      bridge promissory note offering, amortization of debt offering costs and an
      increase of salary compensation recorded pursuant to SFAS No. 123(R). In
      addition, cumulative dividends on the outstanding Series A and Series B
      convertible preferred stock totaled $167,166 for the three months ended June
      30,
      2007 compared with zero for the same period in 2006. The combined net loss
      applicable to common shareholders for the three months ended June 30, 2007
      was
      $8,001,184, or $0.24 per share, on 33,299,887 weighted average common shares
      outstanding. This compared with the net loss applicable to common shareholders
      for the three-month period ended June 30, 2006 of $3,697,368, or $0.14 per
      share, on 26,400,040 weighted average common shares outstanding.





**Six
      Months Ended June 30, 2007 as compared to Six Months Ended June 30,
      2006**





**Revenue** ******





Revenues
      for the six months ended June 30, 2007 were $10,208, an increase of $1,179,
      or
      13%, over revenues of $9,029 for the six months ended June 30, 2006.





The
      increase in revenues was due to the overall increase in customer use of the
      Company’s per use AskMeNow service. The Company is transitioning its revenue
      model to providing an automated enterprise solution as well as a consumer
      product that will be advertising revenue supported. During the six month period
      ended June 30, 2007, the Company continued to generate revenue from various
      customers on a per use basis. In addition, the Company anticipates an increase
      in sales in the United States as it develops its enterprise solution customer
      base and expands its current marketing program within the next 12
      months.





**Costs
      and Operating Expenses**





*Cost
      of Revenue*





Cost
      of
      revenue for the six months ended June 30, 2007 amounted to $673,064, a decrease
      of $222,996, or 25%, over cost of revenue of $896,060 for the six months ended
      June 30, 2006. The decrease relates primarily to a reduction in payroll costs
      and other associated call center costs as the Company focuses its marketing
      and
      development efforts on its automated enterprise solution and consumer product
      mobile service offerings. The Company expects to continue to incur significant
      costs as it continues to expand its services offering. Most of the costs are
      derived from its call center in the Philippines, fixed amounts paid to
      third-party content providers and its database content integration with Expert
      System S.p.A.





*Research
      and Development*





For
      the
      six months ended June 30, 2007, our research and development expenditures were
      $48,462, a decrease of $74,375, or 61%, over expenses of $122,837 for the six
      months ended June 30, 2006. The decrease was the result of a reduction in
      R&D payroll costs incurred by the Company. Our research and development
      costs primarily relate to product development as the Company adds new features
      and upgrades to its mobile services technology. The Company expects to incur
      additional research and development expenses as it enhances its services and
      features.





*General
      and Administrative*





General
      and administrative expenses for the six months ended June 30, 2007 amounted
      to
      $902,779, a decrease of $319,286, or 26%, over general and administrative
      expenses of $1,222,065 for the six months ended June 30, 2006. The decrease
      was
      primarily the result of decreases in consulting fees of $170,000 and investor
      relations costs of $133,000 during the quarter as management worked to reduce
      the Company’s overhead costs. The Company’s primary general and administrative
      costs are for travel, consulting fees, insurance premiums, facilities and office
      expenses, public and/or investor relations services, marketing-related costs,
      and amortization/depreciation charges.




-21-





*Professional
      Fees*





Professional
      fees for the six months ended June 30, 2007 were $1,042,798, an increase of
      $253,081, or 32%, over professional fees of $789,717 for the six month period
      ended June 30, 2006. The increase is the result of an overall increase in
      financings, SEC filings, and agreements negotiated during the three months
      ended
      June 30, 2007. Professional fees consist of legal and accounting fees associated
      with the Company’s SEC reporting obligations and attorney fees associated with
      various contracts and agreements prepared on behalf of the Company.




*Salaries
      and Compensation*





Salaries
      and compensation expense for the six months ended June 30, 2007 increased by
      $762,674 to $3,274,594, or 30%, over expenses of $2,511,920 for the same period
      ended June 30, 2006. This increase is primarily related to the compensation
      expense recorded pursuant to SFAS No. 123(R) for employee stock option awards
      and other officer and director compensation.





**Other
      Income/Expense**





*Interest
      Expense*





Interest
      expense during the six months ended June 30, 2007 was $4,511,239, an increase
      of
      $4,250,916 over interest expense of $260,323 for the same period ended June
      30,
      2006. The increase was comprised of $2,310,279 in debt discounts amortized
      during the period relating to the warrants given to the debt holders as part
      of
      the Company’s bridge promissory note offering, $1,705,164 in amortization of
      debt offering costs relating to warrants given to the selling agent of the
      Company’s bridge offering, and $265,593 in additional financing costs incurred
      in securing the extension of the maturity date of a related party’s promissory
      note.





**Net
      Loss**





The
      net
      loss for the six-month period ended June 30, 2007 before preferred dividends
      totaled $10,442,728, compared with $5,793,893 for the same period in 2006,
      an
      increase of $4,648,835 or 80%. The increase resulted primarily from the non-cash
      increase in interest expense related to the debt discounts on the bridge
      promissory note offering, amortization of debt offering costs and an increase
      in
      salary compensation recorded pursuant to SFAS No. 123(R). In addition,
      cumulative dividends on the outstanding Series A and Series B convertible
      preferred stock totaled $330,084 for the six months ended June 30, 2007 compared
      with zero for the same period in 2006. The combined net loss applicable to
      common shareholders for the six months ended June 30, 2007 was $10,772,812,
      or
      $0.35 per share, on 31,005,545 weighted average common shares outstanding.
      This
      compared with the net loss applicable to common shareholders for the three-month
      period ended June 30, 2006 of $5,793,893, or $0.22 per share, on 26,182,330
      weighted average common shares outstanding.





**Liquidity
      and Capital Resources**





Product
      development, the national rollout of our service, initial sales, financial
      advisors, expansion of service offerings, call center operational staffing
      in
      the Philippines, and administrative and executive personnel are and will
      continue to be the principal basis for our cash requirements. We have provided
      operating funds for the business since its inception through private offerings
      of debt and equity to U.S. accredited and foreign investors. We will be required
      to make additional offerings in the future to support the operations of the
      business until our products and services reach profitability and are fully
      introduced into the market. We used $2,841,726 and $2,788,216 for the six months
      ended June 30, 2007 and 2006, respectively, in operating
      activities.





We
      were
      able to raise $3,626,000 in net proceeds from the sale of convertible preferred
      stock and bridge notes payable during the six months ended June 30, 2007,
      compared to $4,579,305 from the sale of convertible preferred stock and notes
      payable for the same period in 2006. The proceeds of the preferred stock and
      bridge note offerings were used to continue product development, introduce
      the
      product into the market, and pay current operational expenses. At June 30,
      2007,
      the Company had $833,470 cash on hand compared to $61,279 as of December 31,
      2006. This cash position results from the securing of additional bridge
      financing and a continuing effort to pay the Company’s operating expenses and
      best manage available cash.





Our
      operations have been, and will continue to be, dependent upon management’s
      ability to raise operating capital in the form of equity and debt. We have
      incurred significant operating losses since inception of the business. We expect
      that on-going operating expenditures will be necessary to successfully implement
      our business plan and develop, manufacture and market our products and services.
      Specifically, we anticipate that our total operating expenses will continue
      to
      increase in future periods as our sales increase. Included in these anticipated
      increases are salaries and benefits for additional employees, and increased
      marketing and advertising expenses. We also anticipate that our professional
      fees will continue to increase as we seek to raise additional capital. We
      cannot, however, at this time predict the amount of any of these increases.
      Our
      revenues are not sufficient to fund our operations for the next twelve months
      and we anticipate that we will incur losses for the foreseeable future until
      such time as we can significantly increase our revenues. Because of the early
      stage of our business, the highly competitive nature of our industry and our
      lack of sufficient working capital, it is unlikely that we will be able to
      increase our revenues in the near future to a level which will sustain our
      operations and enable us to report a profit. There can be no assurance that
      we
      will be able to obtain additional capital to meet our current operating needs
      or
      to complete licenses of technologies. If we are unable to raise sufficient
      adequate additional capital or generate profitable sales revenues, we may be
      forced to substantially curtail product development and other activities, and
      may be forced to cease operations. These factors as well as our net loss in
      2007
      to date of $10,772,812 and net cash used in operations in 2007 of $2,841,726
      raise substantial doubt about our ability to continue as a going concern.




-22-





**Off-Balance
      Sheet Arrangements**





The
      Company does not have any off-balance sheet arrangements.





**Item
      3.*****Controls
      and Procedures***





**Evaluation
      of Disclosure Controls and Procedures**





The
      Company’s chief executive officer, who is also the Company’s chief financial
      officer, has reviewed and evaluated the effectiveness of the Company’s
      disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
      promulgated under the Securities Exchange Act of 1934, as amended, the “Exchange
      Act”) as of the end of the period covered by this report. Based on that review
      and evaluation, our chief executive officer has concluded that our current
      disclosure controls and procedures, as designed and implemented, are not
      effective to ensure that such officer is provided with information related
      to
      the Company required to be disclosed in the reports filed or submitted by the
      Company under the Exchange Act and that such information is recorded, processed,
      summarized and reported within the time periods specified.





As
      part
      of the evaluation of the Company’s disclosure controls and procedures as of June
      30, 2007, management considered the impact of weaknesses in such disclosure
      controls and procedures identified by management and the Company’s auditors.
      These weaknesses were identified as follows:





a)
            The
                Company lacked sufficient accounting
                personnel;





b)
            The
                Company lacked effective controls to ensure that accounts payable
                were
                entered on a timely basis and were complete and accurate;
                and





c)
            The
                Company lacked control procedures to ensure invoices were correctly
                calculated and billed in accordance with their contracted
                amounts.





During
      the six months ended June 30, 2007, the Company instituted additional policies
      to improve its disclosure controls and procedures. These included but were
      not
      limited to the initiation of a new accounts payable software system, the hiring
      of additional accounting personnel to ensure accounts payable are entered in
      a
      timely and accurate manner, and the addition of control procedures to ensure
      that invoices are billed in accordance with the contract amounts.




**Changes
      in Internal Control over Financial Reporting**





During
      the quarter to which this report relates, there was continued improvement of
      internal controls in the timing and recording of payment for accounts payable
      amounts. This change in financial reporting has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting in future periods.





**PART
      II. Other Information**




**Item
      1.**  ***Legal
      Proceedings***





In
      the
      ordinary course of business, the Company may be involved in legal proceedings
      from time to time. As of the date of this quarterly report on Form 10-QSB,
      there
      have been no material changes to any legal proceedings against the Company
      previously reported except as discussed in Note 9 above.




-23-





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





**Unregistered
      Sales of Equity Securities**





*Common
      Stock*





In
      June,
      2007, the Company issued 5,000 shares of unregistered
      restricted common
      stock to a vendor for the purchase of a website domain name. The Company
      determined a value for the shares of $4,000 based on the fair market value
      of
      the stock at the time of the purchase. The Company recorded the entire amount
      as
      an asset on the balance sheet at June 30, 2007.





*Warrants*





In
      May,
      2007, the Company issued warrants to purchase 452,164 shares of common stock
      to
      a director with an exercise price of $0.50 per share in exchange for his
      agreement to extend the maturity date of his promissory note with the Company.
      The Company recorded the fair market value of the warrants based on the fair
      value of each warrant estimated on the date of grant using the Black-Scholes
      option pricing model with the following weighted average assumptions used for
      grants in 2007: dividend yield of zero, expected volatility of 242%, risk-free
      interest rate of 5.07%, and expected lives of five years. The Company recorded
      $337,465 in additional interest expense for the quarter ended June 30, 2007
      in
      connection with these warrants.





During
      the six months ended June 30, 2007, the Company also issued the following
      warrants related to the raising of debt and equity capital:








Warrants
                issued with new issuances of preferred stock Units
            
            
            1,450,000Warrants
                issued in conversion of Series A to Series B preferred
                stock
            
            
            3,350,000Warrants
                issued with Bridge notes payable
            
            
            12,000,000Warrants
                issued to placement agent in Bridge financing
            
            
            3,600,000Total
            
            
            20,400,000





See
      Notes
      5,6,7 and 8 to the financial statements included herein for more information
      regarding these warrant issuances.





Warrants
      issued by the Company during the quarter expire three, five or ten years from
      the date of issuance and are generally exercisable immediately upon issuance.
      The exercise price and number of shares issuable upon exercise of such warrants
      are subject to anti-dilution protection in the event the Company effects a
      subdivision or combination of its common stock or declares or pays a dividend
      or
      distribution in common stock; the warrants also provide for adjustments in
      the
      event the Company declares or pays a dividend or other distribution in other
      securities or property of the Company or is a party to a reorganization,
      reclassification, merger or similar event and the warrant holder may exercise
      the warrant, without cash payment of the exercise price. ****





The
      Company issues securities in reliance on the safe harbor and exemptions from
      registration provided under Rule 506 of Regulation D and/or Section 4(2) of
      the
      Securities Act of 1933, as amended. No advertising or general solicitation
      was
      employed in offering the securities. The offerings and sales or issuances were
      made to a limited number of persons, all of which were accredited or foreign
      investors, and transfer was restricted by the Company in accordance with the
      requirements of applicable law. In addition to representations by the
      above-referenced persons, the Company has made independent determinations that
      all of the investors were accredited or sophisticated investors, that they
      were
      capable of analyzing the merits and risks of their investment, and that they
      understood the speculative nature of their investment. Furthermore, these
      investors were provided with access to the Company’s SEC filings.





**Company
      Repurchases of Securities**





During
      the three months ended June 30, 2007, neither the Company nor any affiliated
      purchaser of the Company purchased equity securities of the
      Company.




-24-


**Item
      3.** ***Defaults
      Upon Senior Securities.***





The
      Company had been in default under the $105,000 promissory note of Darryl Cohen,
      its CEO. This default was cured by the Company during the second quarter by
      its
      payment in full of the outstanding principal balance and accrued unpaid interest
      thereon on May 15, 2007.





The
      Company was also in default under the $100,000 promissory note of Sandro Sordi,
      a director. This default was cured by the Company during the second quarter
      by
      its execution of an agreement with Mr. Sordi on May 17, 2007 to extend the
      maturity date of his note until the Company completed its next round of equity
      financing. As consideration for his agreement to extend the maturity of the
      note, the Company issued to Mr. Sordi immediately exercisable warrants to
      purchase 452,164 shares of common stock at $.50 per share with a term of five
      years.





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





The
      Company held its annual meeting of stockholders at its principal executive
      offices in Irvine, California on August 1, 2007. The holders of the common
      stock
      of the Company voted on the proposals set forth at such meeting as
      follows:





(1)  To
      elect
      three directors to serve on the Board of Directors until the next annual meeting
      of stockholders and until their successors are elected and
      qualified.


Number
                  of SharesWithholdName
                  of Nominee
              
              For
              
              AuthorityDarryl
                  Cohen
              
              
              24,336,871
              
              
              645,251Alan
                  Smith
              
              
              24,336,871
              
              
              645,251Sandro
                  Sordi
              
              
              24,270,121
              
              
              712,001




(2)  To
      approve and adopt the Second Amended and Restated Certificate of Incorporation
      that (a) increases the number of authorized shares of common stock, $.01 par
      value, of the Company from 100,000,000 shares to 300,000,000 shares, (b)
      eliminates the Class B and Class D common stock of the Company and all related
      provisions, (c) eliminates the Series E, Series F, Series G, Series I and Series
      L preferred stock of the Company and all related provisions, and (d) eliminates
      the voting provisions relating to the Company’s existing Series A and Series B
      preferred stock.


Number
                  of SharesWithholdName
                  of Nominee
              
              For
              
              AuthorityDarryl
                  Cohen
              
              
              24,336,871
              
              
              645,251Alan
                  Smith
              
              
              24,336,871
              
              
              645,251Sandro
                  Sordi
              
              
              24,270,121
              
              
              712,001





(3)  To
      approve the 2006 Employee Stock incentive Plan (as amended).





Number
                  of SharesFor
              
              
              19,554,068Against
              
              
              655,764Abstain
              
              
              44,600Broker
                  Non-Votes
              
              
              4,727,690




At
      the
      meeting, the holders of the Company’s Series A and B preferred stock were
      entitled to vote on the election of directors and the elimination of the voting
      rights of their respective series of preferred stock as set forth in the Second
      Amended and Restated Certificate of Incorporation. Because a quorum of each
      of
      the Series A and Series B preferred stock did not exist at the meeting, no
      voting occurred on such proposals. As a result, the three nominees to the Board
      were not elected but shall remain in office until their successors are duly
      elected and qualified. In addition, the Second Amended and Restated Certificate
      of Incorporation was approved but without the elimination of the voting rights
      of the Series A and Series B preferred stock.




-25-





**Item
      5.** ***Other
      Information***





None.




**Item
      6.*****Exhibits***





See
      Exhibit Index


-26-




SIGNATURES





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


AskMeNow,
              Inc.Dated:
              January 28, 2008
            By:
            /s/ Darryl
              CohenDarryl
              Cohen, Chief Executive Officer(Principal
                executive officer and
              principal
                financial officer)  -27-





**EXHIBIT
      INDEX**


ExhibitNumber
              
              Description10.1
              
              Agreement,
                  made May 25, 2007 by and between Wikimedia Foundation, Inc. and
                  the Company.10.2
              
              Form
                  of Note for Bridge II 12% junior promissory note31.1
              
              Certification
                  pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
              
              Certification
                  pursuant to 18 U.S.C. 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of
                  2002.


-28-