**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-Q**




(Mark
      One)





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





FOR
      THE
      QUARTERLY PERIOD ENDED: March 31, 2008





o
            TRANSITION
                REPORT PURSUANT TO 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 registrant 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


(Registrant’s
      telephone number including area code)





Not
      Applicable


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





Indicate
      by c heck
      mark
      whether the registrant (1) has filed all reports required to be filed by Section
      13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
      months (or for such shorter period that the registrant was required to file
      such
      reports), and (2) has been subject to such filing requirements for the past
      90
      days.


Yes
x
      No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and smaller
      reporting company” in Rule 12b-2 of the Exchange Act.


Large
                  accelerated filer o
              Accelerated
                  filer oNon-accelerated
                  filer o (Do not check if
                  a
                  smaller company)
              Smaller
                  reporting company x





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: 68,389,191 shares of common stock, par value
      $.01 per share, outstanding as of May 20, 2008










**AskMeNow,
      Inc. and Subsidiaries**





**Quarterly
      Report on Form 10-Q**


**Period
      Ended March 31, 2008**





**Table
      of Contents**




PagePART
                I . FINANCIAL INFORMATION
            F-1Item
                1. Financial Statements
            F-1Condensed
                Consolidated Balance Sheets at March 31, 2008(Unaudited)
                and December 31, 2007
            F-1Condensed
                Consolidated Statements of Operations for the ThreeMonths
                Ended March 31, 2008 and 2007 (Unaudited)
            F-2Condensed
                Consolidated Statements of Cash Flows for the ThreeMonths
                Ended March 31, 2008 and 2007
                (Unaudited)
            F-3Notes
                to Condensed Consolidated Financial Statements
            F-4
                – F-16Item
                2. Management’s Discussion and Analysis of Financial
                Conditionand
                Results of Operations
            2Item
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            7Item
                4. Controls and Procedures
            7PART
                II . OTHER INFORMATION
            7Item
                1. Legal Proceedings
            7Item
                1A. Risk Factors
            7Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            8Item
                3. Defaults Upon Senior Securities
            9Item
                4. Submission of Matters to a Vote of Security Holders
            9Item
                5. Other Information
            10Item
                6. Exhibits
            10SIGNATURES
            11EXHIBIT
                INDEX
            12





1


**PART
        I. - FINANCIAL INFORMATION**
 
 *Item
        1. Financial Statements*
  **ASKMENOW,
        INC AND SUBSIDIARIES**
 **Condensed
        Consolidated Balance Sheets**
  
 **March
                  31,**
              
              **December
                  31,****2008**
              
              **2007****(Unaudited)****ASSETS****CURRENT
                  ASSETS**Cash
              
              $
              16,626
              
              $
              -Accounts
                  receivable, net
              
              
              3,519
              
              
              16,314Prepaid
                  expenses and other current assets
              
              
              3,612
              
              
              448,484Total
                  Currents Assets
              
              
              23,757
              
              
              464,798Property
                  and Equipment, net
              
              
              65,788
              
              
              129,994**OTHER
                  ASSETS**License,
                  net of $150,000 provision
              
              
              -
              
              
              -Other
                  assets
              
              
              48,985
              
              
              50,318**TOTAL
                  ASSETS**
              
              $
              138,530
              
              $
              645,110**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT****CURRENT
                  LIABILITIES**Bank
                  overdraft
              
              $
              -
              
              $
              1,873Accounts
                  payable
              
              
              1,420,171
              
              
              1,340,074Accrued
                  expenses
              
              
              1,278,180
              
              
              933,247Deferred
                  revenue
              
              
              5,000
              
              
              20,000Notes
                  payable
              
              
              3,231,111
              
              
              3,130,000Notes
                  payable - related party
              
              
              100,000
              
              
              100,000Deferred
                  tax liability
              
              
              41,429
              
              
              14,673Total
                  Current Liabilities
              
              
              6,075,891
              
              
              5,539,867**STOCKHOLDERS'
                  DEFICIT**Preferred
                  stock, $0.01 par value, 10,000,000 shares authorized at March 31,
                  2008 and
                  December 31, 2007Series
                  A Preferred Stock, $0.01 par value, 1,500,000 shares authorized,
                  $10 face
                  value, 16,836 and 22,458 shares issued and outstanding at March
                  31, 2008
                  and December 31, 2007, respectively
              
              
              150,000
              
              
              200,000Series
                  B Preferred Stock, $0.01 par value, 1,600,000 shares authorized,
                  $10 face
                  value, 275,241 and 295,933 shares issued and outstanding at March
                  31, 2008
                  and December 31, 2007, respectively
              
              
              2,076,121
              
              
              2,289,261Series
                  C Preferred Stock, $0.01 par value, 400,000 shares authorized,
                  zero shares
                  issued and outstanding at March 31, 2008 and December 31, 2007,
                  respectively
              
              
              -
              
              
              -Series
                  D Preferred Stock, $0.01 par value, 2,000,000 shares authorized,
                  485,000
                  and zero shares issued and outstanding at March 31, 2008 and December
                  31,
                  2007, respectively
              
              
              485,000
              
              
              -Common
                  stock, $0.01 par value, 300,000,000 shares authorized, 59,004,597 and
                  42,134,887 shares issued and outstanding at March 31, 2008 and
                  December
                  31, 2007, respectively
              
              
              590,046
              
              
              421,350Additional
                  paid-in-capital
              
              
              44,703,687
              
              
              34,808,728Deferred
                  compensation
              
              
              (434,571
              )
              
              -Foreign
                  currency translation
              
              
              632
              
              
              10,135Accumulated
                  deficit
              
              
              (53,508,276
              )
              
              (42,624,231
              )Total
                  Stockholders' Deficit
              
              
              (5,937,361
              )
              
              (4,894,757
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT**
              
              $
              138,530
              
              $
              645,110
  The
        accompanying notes are an integral part of these consolidated financial
        statements.
  F-1
 
 **ASKMENOW,
        INC AND SUBSIDIARIES**
 **Condensed
        Consolidated Statements of Operations**
 **(Unaudited)**
  
 **Three Months Ended March 31****2008**
              
              **2007****REVENUE**Revenue
                  from mobile services
              
              $
              15,529
              
              $
              5,80515,529
              
              
              5,805**COSTS
                  AND OPERATING EXPENSES**Cost
                  of revenue
              
              
              192,190
              
              
              304,398Research
                  and development
              
              
              -
              
              
              24,231General
                  and administrative
              
              
              1,109,271
              
              
              521,305Professional
                  fees
              
              
              465,988
              
              
              637,249Financing
                  costs
              
              
              7,454,715
              
              
              -Salaries
                  and compensation
              
              
              1,385,324
              
              
              1,042,396Total
                  Operating Expenses
              
              
              10,607,488
              
              
              2,529,579Net
                  Loss from Operations
              
              
              (10,591,959
              )
              
              (2,523,774
              )**OTHER
                  INCOME (EXPENSE)**Interest
                  expense
              
              
              (292,086
              )
              
              (84,936
              )Total
                  other expense
              
              
              (292,086
              )
              
              (84,936
              )Net
                  loss before income taxes
              
              
              (10,884,045
              )
              
              (2,608,710
              )Income
                  taxes
              
              
              -
              
              
              -Net
                  loss
              
              
              (10,884,045
              )
              
              (2,608,710
              )Preferred
                  stock dividends
              
              
              (79,900
              )
              
              (162,918
              )Net
                  loss applicable to common shareholders
              
              
              (10,963,945
              )
              
              (2,771,628
              )Basis
                  and diluted net loss per common share
              
              $
              (0.24
              )
              $
              (0.09
              )Basic
                  and diluted weighted average number of common shares
                  outstanding
              
              
              45,852,048
              
              
              29,932,243
 The
          accompanying notes are an integral part of these consolidated financial
          statements.
 F-2
 
 **ASKMENOW,
        INC. AND SUBSIDIARIES**
 **Condensed
        Consolidated Statements of Cash Flows**
 **(Unaudited)**
  
 **Three Months Ended March 31,****2008**
              
              **2007****OPERATING
                  ACTIVITIES**Net
                  loss from continuing operations
              
              $
              (10,884,045
              )
              $
              (2,608,710
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Depreciation
              
              
              7,980
              
              
              19,913Loss
                  on sale of fixed assets
              
              
              20,573
              
              
              -Amortization
                  of note payable discount
              
              
              101,111
              
              
              80,000Amortization
                  of debt offering costs
              
              
              -
              
              
              44,162Subscription
                  receivable
              
              
              -
              
              
              1,400Stock,
                  warrants and options issued for services
              
              
              2,330,370
              
              
              1,304,821Warrants
                  issued for antidilution claim settlement
              
              
              7,454,715
              
              
              -Changes
                  in assets and liabilitiesAccounts
                  receivable
              
              
              12,795
              
              
              4,493Prepaid
                  expenses
              
              
              25,731
              
              
              11,290Deposits
              
              
              166
              
              
              (340
              )Accounts
                  payable
              
              
              80,097
              
              
              (48,038
              )Accrued
                  expenses
              
              
              344,933
              
              
              172,494Deferred
                  revenue
              
              
              (15,000
              )
              
              -Deferred
                  taxes
              
              
              26,756
              
              
              (4,733
              )Net
                  Cash Used In Operating Activities
              
              
              (493,818
              )
              
              (1,023,248
              )**INVESTING
                  ACTIVITIES**Purchase
                  of equipment
              
              
              -
              
              
              (705
              )Proceeds
                  from sale of fixed assets
              
              
              36,820
              
              
              -Net
                  Cash Provided (Used) In Investing Activities
              
              
              36,820
              
              
              (705
              )**FINANCING
                  ACTIVITIES**Cash
                  overdraft
              
              
              (1,873
              )
              
              -Proceeds
                  from notes payable
              
              
              -
              
              
              375,000Net
                  proceeds from issuance of preferred stock
              
              
              485,000
              
              
              626,000Net
                  Cash Provided By Financing Activities
              
              
              483,127
              
              
              1,001,000**EXCHANGE
                  RATE (LOSS) GAIN**
              
              
              (9,503
              )
              
              2,839**NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              16,626
              
              
              (20,114
              )**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              -
              
              
              61,279**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              16,626
              
              $
              41,165**SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION:****NON-CASH
                  TRANSACTIONS DURING THE PERIOD FOR:**Financing
                  costs
              
              $
              7,754,715
              
              $
              298,636
 The
          accompanying notes are an integral part of these consolidated financial
          statements.
  F-3




ASKMENOW,
      INC. AND SUBSIDIARIES


NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      MARCH 31, 2008


(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
      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. Moreover, as of March 31,
      2008, the Company was in default under all of its notes payable to investors
      in
      its Bridge I senior promissory notes offering, and is currently unable to pay
      and is in default with respect to the full $3 million principal amount loaned.
      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 three months of 2008, the Company raised net proceeds of $485,000 through
      the private sale of unregistered, convertible preferred stock. 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 March 31, 2008 and 2007 included herein are unaudited. Such condensed
      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. 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, 2008 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. The Company believes
      that
      the disclosures are adequate for fair presentation and to make the information
      presented not misleading. These condensed consolidated financial statements
      should be read in conjunction with the audited consolidated financial statements
      and the notes thereto included in our Annual Report on Form 10-KSB for the
      year
      ended December 31, 2007, as filed with the SEC.




F-4




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





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





The
      condensed consolidated financial st atements
      for the three months ended March 31, 2008 and 2007 include the accounts of
      AskMeNow, Inc. and its wholly-owned subsidiaries: InfoByPhone, Inc. and
      AskMeNow, Inc., a Philippines corporation. 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 collectibility
      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 March 31, 2008 and December 31, 2007, 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
      March 31, 2008 and December 31, 2007, approximately 26% and 16% of the Company’s
      consolidated assets were located in the Philippines, respectively.





The
      Company at times has cash in banks in excess of FDIC i nsurance
      limits. At March 31, 2008 and December 31, 2007, the Company had no amount
      in
      excess of FDIC insurance limits. **** At March
      31, 2008, the Company had total cash of $10,152 in banks located in the
      Philippines. At December 31, 2007, the Company had total cash of $2,662 in
      banks
      located in the Philippines.





During
      the three months ended March 31, 2008, one customer accounted for 97% of the
      Company’s sales. For
      the
      three months ended March 31, 2007, one customer accounted for 53% of the
      Company’s sales.





**(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.




F-5




**(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. Estimated useful lives are as follows: (1) computer equipment
      – 5 years, (2) office furniture and equipment – 5 to 7 years, and (3)
      leasehold improvements – 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 March
      31,
      2008 and 2007 were zero and $22,524, respectively.




**(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).
      Comprehensive income is comprised of a gain on foreign currency translation
      of
      the Company’s Philippines subsidiary.





**(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 March 31, 2008, 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 common 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, convertible
      preferred stock and convertible notes 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, convertible
      preferred stock and convertible notes at March 31, 2008 and 2007 were
      133,061,660 and 40,221,501 shares, respectively.





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





The
      Company operates in one segment, mobile devices.




F-6




**(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 recognition
      in financial statements of compensation costs related to share-based payment
      transactions, including employee stock options. 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 statement’s required effective date. Additionally,
      compensation costs 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 such 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 recipients that are
      not
      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, 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 through the valuation date is reflected in the expense recorded in the
      subsequent period in which that change occurs.





**(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
        December 2007, the Financial Accounting Standards Board (FASB) issued SFAS
        No.160, “*Noncontrolling
        Interests in Consolidated Financial Statements – an amendment of ARB No.
        51*”.
        This
        statement improves the relevance, comparability, and transparency of the
        financial information that a reporting entity provides in its consolidated
        financial statements by establishing accounting and reporting standards that
        require; the ownership interests in subsidiaries held by parties other than
        the
        parent and the amount of consolidated net income attributable to the parent
        and
        to the noncontrolling interest be clearly identified and presented on the
        face
        of the consolidated statement of income, changes in a parent’s ownership
        interest while the parent retains its controlling financial interest in its
        subsidiary be accounted for consistently, when a subsidiary is deconsolidated,
        any retained noncontrolling equity investment in the former subsidiary be
        initially measured at fair value, entities provide sufficient disclosures
        that
        clearly identify and distinguish between the interests of the parent and
        the
        interests of the noncontrolling owners. SFAS No. 160 affects those entities
        that
        have an outstanding noncontrolling interest in one or more subsidiaries or
        that
        deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and
        interim periods within those fiscal years, beginning on or after December
        15,
        2008. Early adoption is prohibited. The adoption of this statement is not
        expected to have a material effect on the Company’s financial
        statements.




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities, an amendment of FASB Statement
      No. 133”. This statement is intended to improve transparency in financial
      reporting by requiring enhanced disclosures of an entity’s derivative
      instruments and hedging activities and their effects on the entity’s financial
      position, financial performance, and cash flows. SFAS No.
      161
      applies to all derivative instruments within the scope of SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities” as well as
      related hedged items, bifurcated derivatives, and non-derivative instruments
      that are designated and qualify as hedging instruments. Entities with
      instruments subject to SFAS No.
      161
      must provide more robust qualitative disclosures and expanded quantitative
      disclosures. SFAS
      No. 161
      is
      effective prospectively for financial statements issued for fiscal years and
      interim periods beginning after November 15, 2008, with early application
      permitted. We are currently evaluating the disclosure implications of this
      statement.


F-7





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





Property
      and equipment consisted of the following:




March 31,
              2008
            
            December 31,
              2007(unaudited)Computer
                equipment
            
            $
            59,942
            
            $
            171,809Office
                furniture and equipment
            
            
            60,366
            
            
            96,705Leasehold
                improvements
            
            
            -
            
            
            10,423Less
                accumulated depreciation
            
            
            (54,520
            )
            
            (148,943
            )$
            65,788
            
            $
            129,994





D epreciation
      expense for the three months ended March 31, 2008 and 2007 was $6,813 and
      $19,913, respectively.





**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 12
      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 12 months. Subsequent to completion
      of
      the 12 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 December 31, 2007, the Company had recorded a
      loss
      provision for the entire $150,000 license payment as the installation of the
      first database required remained incomplete. The Company and Expert System
      are
      currently in discussions regarding the completion of the database installation
      and revisions to the current license agreement. The Company anticipates
      terminating the original license agreement and entering into a new agreement
      based upon an exclusivity for specific content.




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




Notes
      payable at March 31, 2008 consist of the following:




March 31,
              2008
            
            December 31,
              2007(unaudited)Bridge
                I senior promissory notes
            
            $
            3,000,000
            
            $
            3,000,000Bridge
                II junior promissory notes
            
            
            231,111
            
            
            130,000Total
            
            $
            3,231,111
            
            $
            3,310,000





F-8





**(A)**
            **Bridge
                I 12% Senior Promissory
                Notes**





Beginning
      in February 2007, the Company began an issue of up to $3,000,000 in senior
      promissory notes to accredited investors (the “Bridge I” offering), which Bridge
      I offering was fully subscribed and closed on May 10, 2007. The notes bear
      interest at 12% per annum and are 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 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 I 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 warrants to purchase common stock at $.50 per share with
      a
      term of five years were issued by the Company in accordance with the fully
      subscribed $3,000,000 offering. The Company calculated a debt discount for
      the
      value of the warrants issued as part of the transaction in the amount of
      $3,000,000, which was amortized in full during 2007.





As
      part
      of the Bridge I offering the Company offered the selling agent warrants to
      purchase 3,600,000 shares of common stock of the Company if the entire
      $3,000,000 was subscribed, or a proportionately smaller number of warrants
      if
      less money was loaned. Upon closing of the fully subscribed offering, 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 amounting to
      $2,202,972, which was fully amortized over the life of the notes at December
      31,
      2007.





As
      of
      March 31, 2008, all of the outstanding Bridge I senior promissory notes in
      the
      aggregate principal amount of $3,000,000 had matured and remained unpaid by
      the
      Company. The Company’s failure to pay when due such notes constitutes an event
      of default under such notes and, according to the terms thereof, the Company
      is
      obligated to pay each note holder the default interest rate of two percent
      (2%)
      per month on all amounts due and owing under such notes for each month or part
      thereof beyond the extended maturity date. In the event of a default, each
      note
      holder may proceed to protect such holder’s rights in equity or by action at
      law, or both, enforce payment of the notes, and/or enforce any other legal
      or
      equitable right such holder may have.





**(B)**
            **Bridge
                II 12% Junior Convertible Promissory
                Notes**





Beginning
      in August 2007, the Company commenced an issue of up to $1,000,000 in junior
      convertible promissory notes to accredited investors (the “Bridge II” offering)
      on a “best-efforts,” no minimum basis. The notes bear interest at 12% per annum
      and are payable 270 days after the date of issuance unless extended by the
      Company for up to an additional 90 days. The promissory notes are convertible,
      at the option of the holder, into shares of the Company’s common stock at a per
      share price equal to $.50 per share. Additionally, the holder has the option
      to
      convert the note balance, upon consummation by the Company of a qualified equity
      securities offering with aggregate consideration valued at $5,000,000 or more,
      into the securities purchased at a per share price equal to the per share sale
      price paid by the investor(s) in such qualified offering. As of December 31,
      2007, the Company had closed the Bridge II offering and issued a total of
      $300,000 in Bridge II promissory notes.





As
      part
      of the Bridge II offering, the Company was obligated to issue warrants to
      purchase three shares of common stock for every $1.00 principal amount of notes
      issued. In accordance with the offering the Company issued 900,000 warrants.
      The
      Company calculated a debt discount for the value of the warrants issued as
      part
      of the transaction in an amount of $300,000, which will be amortized over the
      life of the notes. The Company recorded additional interest expense of $101,111
      to reflect the amortization of the discount during the quarter ended March
      31,
      2008 and has recorded accumulated amortization of $231,111 to date, over the
      life of the notes.




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





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 Mr. Sordi
      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 Mr. Sordi, exercisable
      for five years at $.50 per share, with the same registration and other rights
      granted to the Bridge I promissory note holders.




F-9




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





**(A)**
            **Preferred
                Stock**





The
      Company’s Second Amended and Restated Certificate of Incorporation authorizes
      the issuance of 10,000,000 shares of preferred stock, $.01 par value. 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 except as provided
      by the Delaware General Corporation Law and as set forth in the Company’s
      charter. Effective
      August 2, 2007, the Company declared a 10% dividend of one tenth of one share,
      or $1.00 per $10 face value per share, on each share of Series A preferred
      stock
      outstanding as of July 23, 2007, the record date for the dividend. Cumulative
      dividends amounted to $24,580 as of the record date and were converted into
      2,458 shares of Series A preferred stock. As of March 31, 2008, accrued and
      unpaid dividends for the quarter then-ended were $19,549.





During
      the quarter ended March 31, 2008 ,
      holders
      of an aggregate 5,000 shares of Series A preferred stock elected to exchange
      such shares for 5,000 shares of Series B preferred stock. In connection with
      such conversions the Company issued 50,000 common stock warrants exercisable
      at
      $0.50 per share. As of March 31, 2008, there were 16,836 shares of Series A
      preferred stock issued and outstanding.





*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 and is redeemable by the Company as set forth
      in the Second Amended and Restated Certificate of Incorporation. 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.  Effective
      August 2, 2007, the Company declared a 10% dividend of one tenth of one share,
      or $1.00 per $10 face value per share, on each share of Series B preferred
      stock
      outstanding as of July 23, 2007, the record date for the dividend. Cumulative
      dividends amounted to $670,070 as of the record date and were converted into
      67,007 shares of Series B preferred stock. As of March 31, 2008, accrued and
      unpaid dividends for the quarter then-ended were $353,947.





During
      the quarter ended March 31, 2008, holders of 26,314 shares of Series B preferred
      stock elected to convert their shares into an aggregate 550,999 shares of
      unregistered, restricted common stock. As
      of
      March 31,
      2008, there were 275,241 shares of Series B preferred stock issued and
      outstanding.





*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
      shares of unregistered, restricted common stock. As
      of
      March 31, 2008, no shares of Series C preferred stock were issued or
      outstanding.




F-10




*Series
      D*





On
      January 9, 2008, the Company designated 2,000,000 shares of Series D convertible
      preferred stock, $0.01 par value. Each share has a face value of $1.00 and
      a 12%
      dividend rate, payable in-kind upon conversion. The Series D preferred stock
      ranks senior to the Company’s common stock and on parity with the Series A, B
      and C preferred stock and each share has a $1.00 per share liquidation
      preference. The
      Series D preferred stock automatically converts into shares of common stock
      upon
      the earlier to occur of (i) the six-month anniversary of the closing date,
      and
      (ii) the closing of a “change of control transaction” such as a merger or sale
      of substantially all of the Company assets. The Series D applicable conversion
      value shall be the greater of (1) the weighted average price of the common
      stock
      for the 10 consecutive trading days prior to the date of conversion, less a
      40%
      discount, and (2) $0.10, subject to adjustment. The Series D preferred stock
      has
      no voting rights except as provided by the Delaware General Corporation Law and
      as
      set forth in the Company’s charter.  As of
      March 31, 2008, the Company had issued 485,000 shares of Series D preferred
      stock and received $485,000 in net proceeds. As of March 31, 2008, accrued
      dividends for the quarter then-ended were $8,193.




*Series
      A and Series B Preferred Stock Exchange Offering*





Commencing
      March 2008, the Company began an exchange offering to the Series A and Series
      B
      preferred stock holders requesting that they waive their right to a five-fold
      increase in warrants to which they were entitled pursuant to anti-dilution
      language in the warrants issued to them in the original offering, which
      anti-dilution rights were triggered by the Series D preferred stock offering.
      The holders were offered a reduced conversion rate on their preferred stock
      to
      $0.15 per share if converted before a fixed conversion date in July 2008. In
      the
      event holders elected to convert after the fixed conversion date, the Company
      will lower the conversion rate to the lesser of (i) the 10 day weighted average
      price prior to the date of conversion less a 40% discount, and (ii) $0.10 per
      share. The original exercise price of the warrants was also reduced from $0.50
      to $0.10 per share.





In
      addition, preferred holders that had previously converted their shares into
      common shares were offered a retroactive share adjustment from the original
      $0.50 conversion price to $0.15 per share, provided the shareholder could
      demonstrate that the underlying common shares had not been sold as of the date
      of the exchange offer. The effect of this adjustment would provide the investor
      approximately 2.33 additional common shares for each common share previously
      received upon conversion. As of May 16, 2008, the Company had received signed
      shareholder acceptances representing the issuance of an additional 3,033,329
      common shares in accordance with the retroactive share adjustment.





*Series
      D* *Preferred
      Stock Offering*





Commencing
      January 9, 2008, the Company began an offering of Series D convertible preferred
      stock in the form of one share of Series D convertible preferred stock for
      a purchase price of $1.00, and warrants to purchase two shares of the
      Company’s common stock for every $1.00 invested. The warrants issued as
      part of the offering are exercisable for a period of five years at $0.10 per
      share and each warrant is redeemable by the Company at a price of $0.01 at
      any
      time after the earlier of the third anniversary of the closing date and the
      date
      the common stock trades at or above $1.00 per share for 20 consecutive trading
      days. The Series D preferred stock automatically converts into shares of common
      stock upon the earlier to occur of (i) the six-month anniversary of the closing
      date, and (ii) the closing of a “change of control transaction” such as a merger
      or sale of substantially all the Company assets. The Series D applicable
      conversion value shall be the greater of (1) the weighted average price of
      the
      common stock for the 10 consecutive trading days prior to the date of
      conversion, less a 40% discount, and (2) $0.10, subject to adjustment. The
      Company completed the sale of 485,000 shares of Series D preferred
      stockduring the quarter ended March 31, 2008 for gross proceeds of
      $485,000. Warrants issued as part of the offering totaled 970,000. The offering
      was closed to new investment as of April 1, 2008.





**(B)**
            **Issuance
                of Common Stock for
                Services**





In
      January 2008, the Company issued 3,000,000 shares of unregistered restricted
      common stock to a financial advisor for financial advisory services for a 12
      month period. The Company determined a value for the shares of $300,000 based
      on
      the fair market value of the shares on the date of issuance and recorded the
      amount as a deferred
      compensation with $75,000 amortized during the quarter ended March 31,
      2008.




F-11




In
      February 2008, the Company issued 200,000 shares of unregistered restricted
      common stock to a marketing consultant for marketing services. The Company
      determined a value for the shares of $26,000 based on the fair market value
      of
      the shares on the date of issuance and recorded the amount as an administrative
      expense as of March 31, 2008.





In
      March
      2008, the Company issued 13,118,711 shares of common stock to holders of
      23,064,000 warrants upon election of their cashless exercise option. The Company
      determined a value for the shares of $131,187 based on the $0.01 par value
      of
      the common shares and recorded the amount as an adjustment to additional
      paid-in-capital during the quarter ended March 31, 2008.





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





In
      February 2008, the Company issued warrants to purchase 200,000 shares of common
      stock to a law firm with an exercise price of $0.22 per share for the firm’s
      agreement to delay collection of outstanding legal fees. 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 2008: dividend
      yield of zero, expected volatility of 268%, risk-free interest rate of 2.89%,
      and expected life of three years. The Company recorded $43,888 in additional
      professional fees for the quarter ended March 31, 2008.





In
      March
      2008, the Company issued warrants to purchase 200,000 shares of common stock
      to
      a law firm with an exercise price of $0.18 per share for the firm’s agreement to
      delay collection of outstanding legal fees. 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 2008: dividend yield of zero,
      expected volatility of 268%, risk-free interest rate of 2.61%, and expected
      life
      of three years. The Company recorded $35,908 in additional professional fees
      for
      the quarter ended March 31, 2008.





In
      March
      2008, the Company notified its Bridge I note holders of the Series D preferred
      stock offering and the issuance of warrants exercisable at $0.10 per share
      as
      part of that offering. The offering of warrants at $0.10 per share in the Series
      D offering triggered the anti-dilution provisions in the bridge note holders’
warrants, which entitled the holders to a reduced exercise price of $0.10 from
      $0.50 per share. In addition, the number of warrants was increased five times
      from 15,600,000 to 78,000,000 warrants. The Company recorded the fair market
      value of the net increase in 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 2008: dividend
      yield of zero, expected volatility of 268%, risk-free interest rate of 3.06%,
      and expected life of four years. The Company recorded $7,454,715 in additional
      financing costs for the quarter ended March 31, 2008. During the quarter ended
      March 31, 2008, 23,064,000 in warrants were exercised on a cashless basis and
      converted into 13,118,711 common shares.




As
      discussed elsewhere herein, during the three months ended March 31, 2008, the
      Company issued warrants to purchase (a) 50,000 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) 970,000
      shares of common stock in connection with $485,000 raised in the Series D
      preferred stock offering.





Warrants
      outstanding at March 31, 2008 were as follows:





Warrants
                and OptionsOutstanding
                at beginning of year
            
            
            39,523,084Granted
            
            
            63,820,000Exercised
            
            
            (23,064,000
            )Warrants
                at March 31, 2008
            
            
            80,279,084





F-12





**NOTE
      8. STOCK OPTION PLANS**





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 recognition in financial statements of compensation costs
      related to share-based payment transactions, including employee stock options.
      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.





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 statement’s required effective date. Additionally,
      compensation costs 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 such 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
      thre e
      months
      ended March 31, 2008 include share-based compensation expense of $1,104,481
      and
      $835,522, which has been included in salaries and compensation expense and
      general and administrative, respectively. 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
      assets.





Stock
      option compensation expense in fiscal 2008 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 account s
      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.




*Black-Scholes
      Option Pricing Model*




** 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 the three months
              ended
              March 31, 2008Expected
                term (in years)
            
            
            1
                to 5Expected
                volatility
            
            
            268%Expected
                dividend yield
            
            
            0%Risk-free
                interest rate
            
            
            2.67%
                to 2.89%





F-13




There
      were 8,600,000 and 1,200,000 non-employee (including non-employee director)
      stock option awards granted in the three months ended March 31, 2008 and 2007,
      respectively. There were 4,700,000 and 1,350,000 employee stock options granted
      in the three months ended March 31, 2008 and 2007, respectively. There were
      6,700,000 and zero options granted under the Company’s 2006 Plan during the
      three months ended March 31, 2008 and 2007, respectively. There were zero and
      4,000 options granted under the Company’s 2005 Plan during the three months
      ended March 31, 2008 and 2007, respectively.





*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 March 31,
      2008, the Company had issued a total of 8,285,500 options pursuant to the 2006
      Plan.




Under
      the
      2005 Management and Director Equity Incentive and Compensation 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 March 31, 2008, the Company had
      issued a total of 1,739,000 options pursuant to the 2005 Plan.





A
      summary
      of the status of the Company’s stock options as of March 31, 2008 and the
      changes during the three months then-ended is presented below:





Fixed Options
            
            Shares
            
            Weighted Average
              Exercise PriceOutstanding
                at beginning of year
            
            
            14,555,000
            
            $
            .65Issued
            
            
            13,300,000
            
            
            .16Expired
            
            
            (1,380,500
            )
            
            (.77
            )Outstanding
                at March 31, 2008
            
            
            26,474,500
            
            $
            .40Exercisable
                at March 31, 2008
            
            
            20,841,155Weighted
                average exercise price of options granted to employees at March 31,
                2008
            
            $
            .43








Exercise
              Price
            
            Number Outstanding
              at
              March 31, 2008
            
            Weighted
              Average
              Remaining
              Contractual Life
            
            Weighted
              Average
              Exercise Price
            
            Number Exercisable
              at
              March 31, 2008
            
            Weighted
              Average
              Exercise Price$0.10-$0.50
            
            
            13,300,000
            
            
            10.0
            
            $
            0.16
            
            
            9,618,751
            
            $
            0.18$0.50-$0.85
            
            
            12,974,500
            
            
            7.5
            
            $
            0.62
            
            
            11,022,404
            
            $
            0.63$1.59-$2.00
            
            
            200,000
            
            
            5.0
            
            $
            1.67
            
            
            200,000
            
            $
            1.67





F-14





**NOTE
      9. COMMITMENTS AND CONTINGENCIES**





**(A)**
            **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 cost of revenues.





Future
      minimum payments are approximately as follows:





Year
      Ended December 31,




2008
            
            $
            72,5702009
            
            
            8,475$
            81,045




**(B)**
            **Financial
                Advisory Agreements**





In
      February 2007, the Company entered into a financial advisory agreement for
      12
      months with Halpern Capital, Inc. In the event that Halpern Capital successfully
      completed a securities offering with at least $25 million in gross proceeds,
      the
      Company agreed to purchase additional financial services from Halpern for a
      minimum of 12 months at a rate of $20,000 per month. This agreement expired
      in
      February 2008.





In
      October 2007, the Company entered into a financial advisory agreement with
      Boston Financial Partners, pursuant to which the advisory firm agreed to provide
      the Company investor relations and financial consulting services. In connection
      with the agreement, the Company issued warrants to Boston Financial Partners
      to
      purchase 600,000 shares of common stock at $0.50 per share for a term of five
      years, and issued 300,000 shares of restricted, unregistered common
      stock.





In
      January 2008, the Company entered into a financial advisory agreement with
      Blue
      Sky Consultants Ltd., pursuant to which the advisory firm agreed to provide
      the
      Company business and financial advisory services for a 12 month period. In
      connection with the agreement, the Company issued 3,000,000 shares of
      unregistered restricted common stock to the advisory firm. ****





**(C)**
            **Financial
                Consulting Agreement**





In
      January 2007, the Company entered into a financial consulting agreement with
      an
      individual who agreed to provide financial consulting and services similar
      to
      those performed by a chief financial officer for 12 months at a rate of $14,600
      per month. The agreement also provided for the grant to the consultant of
      non-qualified stock options to purchase an aggregate 1 million shares of common
      stock at $0.55 per share, the closing price of the common stock on the date
      of
      grant, vesting as to 600,000 shares immediately and 100,000 shares each 90
      days
      thereafter. This agreement expired in January 2008.





**(D)**
            **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, Remsen Funding Corporation (a former
      consultant of the Company), filed a lawsuit in the United States District Court
      for the Southern District of New York (06 CV 609) **** on
      February 1, 2006 **** 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 agreed to register the shares. On July 16, 2007, the
      plaintiff filed an amended complaint, which alleges damages of not less than
      $525,000. The Company has answered the complaint and denied the claims, which
      it
      believes are without merit, and asserted various affirmative defenses. Discovery
      has commenced, and the matter is scheduled for trial in or about July 2008.
      As
      of March 31, 2008, the Company has not accrued any liability, and no further
      developments have occurred, regarding this claim.




F-15




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 March 31, 2008, the Company has not accrued any liability,
      and no further developments have occurred, regarding this claim.




On
      May 5,
      2006, a judgment by default in the amount of $604,391 was entered in favor
      of
      Indymac Bank, 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 “Exchange Agreement”),
      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 (the
“Assumption Agreement”).  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.  During the quarter ended September 30, 2007, OWE and
      the Company were named as defendants in the legal matter of Indymac Bank, F.S.B.
      vs. Ocean West Enterprises, Inc. (Case No. GC036470).  The Company served a
      cross-complaint against the plaintiffs and they have not responded. As of March
      31, 2008, the Company has not accrued any liability related to the claim.




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
      the Assumption Agreement.  As of March 31, 2008, the Company has not
      accrued any liability for this guarantee.




**NOTE
      10. SUBSEQUENT EVENTS**





**(A)         
      Bridge I Settlement Offer and Waiver**




As
      of
      March 31, 2008, the Company was in default under each of the notes issued in
      its
      Bridge I offering. The Company’s failure to pay such notes when due constitutes
      an event of default and, according to the terms thereof, the Company is
      obligated to pay each note holder the default interest rate of two percent
      (2%)
      per month on all amounts due and owing under such notes for each month or part
      thereof beyond the extended maturity date.  In the event of a default, each
      note holder may proceed to protect such holder’s rights in equity or by action
      at law, or both, enforce payment of the notes, and/or enforce any other legal
      or
      equitable right such holder may have.




The
      Company has presented the holders of the Bridge I notes an offer whereby the
      Company has requested that each holder waive any default (including any payment
      default) under such notes, extend the maturity of the notes by a 270-day period,
      and permit the notes to continue to bear interest at 12% during the requested
      extension period.  The Company also requested that the holders waive any
      right to default interest, and proposed amending the notes to permit optional
      conversion of the note balance at the holder’s option at any time into shares of
      the Company’s common stock at a conversion price of $.50 per share.  As
      consideration for the requested waivers and amendments to the Bridge I notes,
      the Company is offering warrants to purchase three shares of common stock of
      the
      Company for every $1.00 principal loaned at an exercise price of $.50 for a
      term
      of three years.   As May 16, 2008, none of the Bridge I note holders
      had accepted the current offer and the Company is in continued discussion
      regarding a settlement.




F-16




**Series
      A and Series B Preferred Stock Exchange Offering**




As
      of May
      16, 2008, the Company had received signed shareholder acceptances representing
      the issuance of an additional 3,033,329 common shares in accordance with the
      retroactive share adjustment offer.  The  Series A and B
      preferred stock holders were requested to waive their right to a five-fold
      increase in warrants to which they were entitled to pursuant
      to anti-dilution provisions in their warrants.




**Financial
        Advisory Agreement**




In
      May 2008,
      the Company entered into a financial advisory agreement with Arjent Services
      LLC
      to act as a placement agent for up to $6,000,000 in secured convertible notes
      with the actual terms and size of the offering to be determined. The private
      placement fees shall be 10% of the gross proceeds plus another 4% fee to be
      paid
      as a non-accountable expense allowance. As part of the agreement the Company
      granted the placement agent a right of first refusal for all future debt and
      equity financing required by the Company for a period of two years.


In
        addition, the Company engaged Arjent as its consultant for non-capital
        raising matters and will pay a consulting fee of $160,000 upon the later
        of
        closing of the funding or May 30, 2008 and 6,000,000 shares of common stock
        upon
        execution of the agreement.


**Series
        B Convertible Preferred Stock Conversions**
 
 In
        April
        2008, a holder of the Company’s Series B preferred stock, $0.01 par value,
        elected to convert 5,340 shares and accrued and unpaid dividends thereon
        into
        110,803 shares of unregistered common stok.
 
 **Bridge
        I Cashless Warrant Exercises**
 
 In
        April
        2008, a holder of 500,000 warrants exercised such warrants on a cashless
        basis
        and was issued 240,462 common shares.




**Item
      2. Management’s Discussion and Analysis of
      Financial Condition and Results  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., formerly Ocean West Holding Corporation, 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. Originally, the service enabled users of any mobile device, with text
      messaging/SMS or email capability, to text message or email questions or submit
      questions via downloaded application.  An answer is then  text
      messaged, emailed or delivered through the application back to the consumer’s
      mobile device, usually within a matter of minutes. We have been charging for
      use
      of our service either on a per question basis or on a flat monthly charge.
      As of
      April 5, 2008 we eliminated charges for asking questions and are commencing
      with
      a revenue model that attaches relevant advertising to responses to generate
      income. Further, our new product is only offered through SMS, WAP, and mobile
      Internet, and can be downloaded to most cell phones as an icon that provides
      an
      automatic link to our site. The Company is also developing an automated
      enterprise solution in conjunction with Expert System S.p.A., a developer of
      knowledge management tools.  The automated enterprise solution is being
      designed to enable users of a mobile device to ask customer service-related
      questions via text and receive an answer through text. The Company announced
      its
      first agreement for its enterprise-solution product in March 2008.




2




The
      AskMeNow service provides users a nearly effortless means of obtaining a concise
      answer to a wide variety of questions.  The Company is currently working to
      develop delivery of answers through a process known as SMS to WAP. The Wireless
      Application Protocol or “WAP” is an open and non-proprietary specification that
      empowers mobile users with wireless devices to easily access and interact with
      information and services. It is anticipated that the use of WAP will provide
      users with a richer experience, as answers can be shown on one screen, as
      opposed to multiple screens, and will take advantage of advertisers’ desire to
      offer more compelling advertisements that can be shown not only in text but
      in
      graphics.




The
      AskMeNow service has the capability to answer a wide array of information-based
      questions, including current news and events, sports scores, weather,
      entertainment, real time stock quotes and market data, driving directions,
      travel schedules and availabilities, comparison shopping, restaurant information
      and reservations, directory assistance, and random trivia (literature, history,
      science, etc.), so long as the information is available on the Internet at
      no
      fee to access or we are already licensed to access the data. All information
      is
      researched on the Internet or from one of our licensed content providers. Once
      information is accessed, it is refined to a format suitable for easy reading
      on
      the screen of a user’s mobile device and sent back to the user. Our content
      partners include leading companies such as Cinema-source.com, Flytecomm.com,
      W3
      Data for 411information, Hotels.com, Reuters, Maps.com, Shopping.com,
      SportsNetwork, Astrology.com, StubHub.com, Custom Weather, Distributive
      Networks, Mobile Streams, and Baseball-Reference.com. In some cases, we pay
      a
      small monthly fee for access to information; in others, the access to the
      content is free.  The Company may also develop arrangements to share in
      advertising revenue generated from responses using content from one of our
      contract partners.





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.




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 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, 2007, nor have we adopted any accounting
      policy that has or is expected to 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-Q
      for the quarter ended March 31, 2008, as well as our Annual Report on Form
      10-KSB for the fiscal year ended December 31, 2007.




3




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 collectibility 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
      March 31, 2008, the translation adjustment was $632.




Recent
      Accounting Pronouncements




In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities, an amendment of FASB Statement
      No. 133”. This statement is intended to improve transparency in financial
      reporting by requiring enhanced disclosures of an entity’s derivative
      instruments and hedging activities and their effects on the entity’s financial
      position, financial performance, and cash flows. SFAS No. 161 applies to all
      derivative instruments within the scope of SFAS No. 133, “Accounting for
      Derivative Instruments and Hedging Activities” as well as related hedged items,
      bifurcated derivatives, and non-derivative instruments that are designated
      and
      qualify as hedging instruments. Entities with instruments subject to SFAS No.
      161 must provide more robust qualitative disclosures and expanded quantitative
      disclosures. SFAS No. 161 is effective prospectively for financial statements
      issued for fiscal years and interim periods beginning after November 15,
      2008, with early application permitted. We are currently evaluating the
      disclosure implications of this statement.




Results
      of Operations




The
      following discussion and analysis should be read in conjunction with our
      unaudited condensed 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 for the year ended
      December 31, 2007 as filed with the SEC.




Three
      Months Ended March 31, 2008 as compared to Three Months Ended March 31,
      2007




**Revenue**




Revenues
      for the three months ended March 31, 2008 were $15,529, an increase of $9,724,
      or 168%, over revenues of $5,805 for the three months ended March 31, 2007.




The
      increase in our sales during the quarter ended March 31, 2008 was due to the
      Company continuing to roll out its AskMeNow service on a per use basis to new
      subscribers of SMS service.  The Company expects sales to increase in 2008
      as it has entered into a hosting service and data supply agreement with Research
      in Motion Limited, pursuant to which AskMeNow will provide the means for
      end-users of BlackBerry® products to ask questions and receive answers about
      such offerings.   In addition, in February 2008 the Company entered
      into a wireless content distribution agreement with Bell Mobility Inc. to
      distribute AskMeNow's new mobile web site on a non-exclusive basis to the
      telecommunication carrier’s customers.  The Company plans to make available
      its new AskMeNow search platform to all mobile phones during 2008 and intends
      to
      increase its revenue through advertising as the Company increases
      distribution.  In addition, the Company plans to distribute its enterprise
      product into the telecommunications industry.




4




**Costs
      and Operating Expenses**




Cost
      of
      Revenue




Cost
      of
      revenue for the quarter ended March 31, 2008 amounted to $192,190, a decrease
      of
      $112,208, or 37%, over cost of revenue of $304,398 for the quarter ended March
      31, 2007.  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 service offerings.  The Company’s costs
      of revenue primarily relate to 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.  As of the quarter ended March 31, 2008, the
      Philippines call center and all related operations ceased.




Research
      and Development




For
      the
      quarter ended March 31, 2008, our research and development expenditures were
      zero, a decrease of $24,231, over expenses of the same amount for the quarter
      ended March 31, 2007.  The decrease was the result of a reduction in
      research and development 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 March 31, 2008 amounted to
      $1,109,271, an increase of $587,966 or 113%, over general and administrative
      expenses of $521,305 for the quarter ended March 31, 2007.  The increase
      was primarily the result of non-cash common stock and option issuances to
      providers of marketing and financial consulting services during the first
      quarter of 2008.  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 March 31, 2008 were $465,988, a decrease of
      $171,261 or 27%, over professional fees of $637,249 for the three month period
      ended March 31, 2007.  The decrease is the result of an overall reduction
      in legal and accounting fees.  Professional fees consist of legal,
      financial advisory and accounting fees associated with the Company’s SEC
      reporting obligations and attorney fees associated with litigation matters
      and
      various contracts and agreements prepared on behalf of the Company.





****Financing
      Costs




Financing
      costs for the three months ended March 31, 2008 were $7,454,715, compared to
      $0
      for the three months ended March 31, 2007.  This expense is the result of
      62,400,000 additional warrants being issued to the holders of the Company’s
      senior Bridge I notes payable in accordance with the terms of the anti-dilution
      provision in their warrant agreements.  The anti-dilution language provided
      for a reduction in both the exercise price from $0.50 to $0.10 per share and
      a
      five-fold increase in the number of warrants.  This adjustment was
      triggered upon the Series D preferred share offering of warrants exercisable
      at
      $0.10 per share.




Salaries and Compensation




Salaries
      and compensation expense for the three months ended March 31, 2008 increased
      by
      $342,928 to $1,385,324, or 33%, over expenses of $1,042,396 for the same period
      ended March 31, 2007.  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.




5




Other
      Income/Expense




Interest
      Expense




Interest
      expense during the quarter was $292,086, an increase of $207,150 over interest
      expense of $84,936 for the same period ended March 31, 2007.  The increase
      was primarily the result of additional financing costs related to the Bridge
      I
      and Bridge II promissory note financings.




Net
      Loss




The
      net
      loss for the three-month period ended March 31, 2008 before preferred dividends
      totaled $10,884,045, compared with $2,608,710 for the same period in 2007,
      a
      decrease of $8,275,335 or 317%.  The increase resulted primarily from the
      $7,454,715 increase in financing costs during the first quarter of the 2008
      fiscal year. In addition, cumulative dividends on the outstanding Series A,
      Series B and Series D convertible preferred stock totaled $79,900 for the three
      months ended March 31, 2008 compared with $162,918 for the same period in
      2007.  The combined net loss applicable to common shareholders for the
      three months ended March 31, 2008 was $10,963,945, or $0.24 per share, on
      45,852,048 weighted average common shares outstanding.  This compared with
      the net loss applicable to common shareholders for the three-month period ended
      March 31, 2007 of $2,771,628, or $0.09 per share, on 29,932,243 weighted average
      common shares outstanding.




Liquidity
      and Capital Resources




Product
      development, sales and marketing, financial advisors, expansion of service
      offerings, 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 securities 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 are fully introduced
      into the market and reach profitability.  We used $493,818 and $1,023,248
      of cash for the three months ended March 31, 2008 and 2007, respectively, in
      operating activities.




We
      were
      able to raise $485,000 in net proceeds in a convertible preferred stock offering
      during the three months ended March 31, 2008, compared to $1,001,000 from the
      sale of convertible preferred stock and notes payable for the same period in
      2007.  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 March 31, 2008, the Company had
      $16,626 cash on hand compared to $0 as of December 31, 2007.  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.   The Company’s current constrained cash position
      renders the Company unable to repay the $3 million principal amount raised
      in
      its Bridge I note offering or any accrued and unpaid interest thereon.  The
      Company is currently in default under its Bridge I promissory notes and will
      remain in default until such time as the note holders extend the maturity of
      the
      notes and/or the Company obtains sufficient funds to repay the amounts due
      and
      payable.




We
      incurred zero and $705 in capital expenditures during the quarters ended March
      31, 2008 and 2007, respectively.  To the extent available, in fiscal 2008
      we intend to use approximately $100,000 of any financing proceeds for additional
      computer equipment, servers and office furnishings as our market expansion
      continues and additional staffing is required.  There are no other capital
      expenditures currently anticipated by the Company for the 2008 fiscal
      year.




Our
      operations have been, and will continue to be, dependent upon management’s
      ability to raise operating capital by offering equity and debt securities of
      the
      Company.  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.




6




Our
      revenues are not sufficient to fund our operations for the next 12 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, enterprise contracts or acceptance of our
      consumer products.  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 2008
      to date of $10,963,945 and net cash used in operations in 2008 of $493,818
      raise
      substantial doubt about our ability to continue as a going concern.




Off-Balance
      Sheet Arrangements




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




**Item
      3.****Quantitative and Qualitative Disclosures About Market
      Risk**




****Not applicable.




**Item
      4.****Controls and Procedures**




**Evaluation
      of Disclosure Controls and Procedures**




The
      Company’s chief executive officer, who is also the Company’s principal 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
      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.




Changes
      in Internal Control over Financial Reporting




During
      the quarter to which this report relates, there were no changes in internal
      control over financial reporting that materially affected, or were reasonably
      likely to materially affect, our internal control over financial
      reporting.





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-Q, there
      have been no material changes to any legal proceedings relating to the Company
      previously reported except as discussed in Note 9. Commitments and Contingencies
      – Litigation in the notes to the condensed consolidated financial statements
      included herewith.




**Item
      1A.****Risk Factors**




****During the first quarter of fiscal 2008 there were no material
      changes to the Company’s risk factors as described in the Company’s Annual
      Report on Form 10-KSB as filed with the SEC.




7




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




Unregistered
      Sales of Equity Securities




Series
      D
      Preferred Stock Offering




Commencing
      January 9, 2008, the Company began an offering of Series D convertible preferred
      stock in the form of one share of Series D preferred stock for a purchase
      price of $1.00, and warrants to purchase two shares of the Company’s common
      stock for every $1.00 invested. The
      warrants issued as part of the offering are exercisable for a period of five
      years at $0.10 per share and each warrant is redeemable by the Company at a
      price of $0.01 at any time after the earlier of the third anniversary of the
      closing date and the date the common stock trades at or above $1.00 per share
      for 20 consecutive trading days.  The Series D preferred stock
      automatically converts into shares of common stock upon the earlier to occur
      of
      (i) the six-month anniversary of the closing date, and (ii) the closing of
      a
“change of control transaction” such as a merger or sale of substantially all
      the Company assets.  The Series D applicable conversion value shall be the
      greater of (1) the weighted average price of the common stock for the 10
      consecutive trading days
      prior to the date of conversion, less a 40% discount, and (2) $0.10, subject
      to
      adjustment.  The Company completed the sale of 485,000 shares of Series D
      preferred stock during the quarter ended March 31, 2008 for gross
      proceeds of $485,000.  Warrants issued as part of the offering totaled
      970,000.  The offering was closed to new investment as of April 1,
      2008.




Common
      Stock




In
      January 2008, the Company issued 3,000,000 shares of unregistered restricted
      common stock to a financial advisor for financial advisory services for a 12
      month period.




In
      February 2008, the Company issued 200,000 shares of unregistered restricted
      common stock to a marketing consultant for marketing services.




In
      March
      2008, the Company issued 13,118,711 shares of common stock to holders of
      23,064,000 warrants upon election of their cashless exercise option.




Warrants




In
      March
      2008, the Company notified its Bridge I note holders of the Series D preferred
      stock offering and the issuance of warrants exercisable at $0.10 per share
      as
      part of that offering.  The offering of warrants at $0.10 per share in the
      Series D offering triggered the anti-dilution provisions in the bridge note
      holders’ warrants which entitled the holders to a reduced exercise price of
      $0.10 from $0.50 per share.   In addition, the number of warrants was
      increased five times from 15,600,000 to 78,000,000 warrants.   The
      Company recorded the fair market value of the net increase in 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 2008: dividend yield of zero, expected volatility
      of 268%, risk-free interest rate of 3.06%, and expected life of four
      years.  The Company recorded $7,454,715 in additional financing costs for
      the quarter ended March 31, 2008.  During the quarter ended March 31, 2008,
      23,064,000 in warrants were exercised on a cashless basis and converted into
      13,118,711 common shares.




In
      February 2008, the Company issued warrants to purchase 200,000 shares of common
      stock to a law firm with an exercise price of $0.22 per share for the firm’s
      agreement to delay collection of outstanding legal fees.    Such
      warrants are exercisable immediately with a three year term and permit cashless
      exercise.




In
      March
      2008, the Company issued warrants to purchase 200,000 shares of common stock
      to
      a law firm with an exercise price of $0.18 per share for the firm’s agreement to
      delay collection of outstanding legal fees.  Such warrants are exercisable
      immediately with a three year term and permit cashless exercise.




During
      the three months ended March 31, 2008, the Company also issued the following
      warrants related to the raising of debt and equity capital:




8




Warrants
                  issued with new issuances of Series D preferred stock
              
              
              970,000Warrants
                  issued in conversion of Series A to Series B preferred
                  stock
              
              
              50,000Total
              
              
              1,020,000




See
      Note 7 to the condensed consolidated financial statements included herein
      for more information regarding these warrant issuances.




Warrants
      issued by the Company during the quarter expire three, four or five 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.****Warrants issued in connection with the Company’s Series A and Series B
      preferred stock and Bridge I notes also contain anti-dilution protection in
      the
      event the Company issues common stock or common stock equivalents at a price
      less than the then-applicable exercise price of such warrants.




The
      Company issues securities in reliance on the safe harbor and exemptions from
      registration provided under Regulation S, 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 March 31, 2008, no purchases of equity securities of
      the
      Company were made by or on behalf of the Company or any affiliated purchaser
      of
      the Company.




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




As
      of
      March 31, 2008, all the Bridge I senior promissory notes in the aggregate
      principal amount of $3,000,000 had matured and remained unpaid by the Company;
      accrued and unpaid interest at such date amounted to $520,971.  The
      Company’s failure to pay such notes when due constitutes an event of default
      and, according to the terms thereof, the Company is obligated to pay each note
      holder the default interest rate of two percent (2%) per month on all amounts
      due and owing under such notes for each month or part thereof beyond the
      extended maturity date.  In the event of a default, each note holder may
      proceed to protect such holder’s rights in equity or by action at law, or both,
      enforce payment of the notes, and/or enforce any other legal or equitable right
      such holder may have.




The
      Company has presented the holders of the Bridge I notes an offer whereby the
      Company has requested that each holder waive any default (including any payment
      default) under such notes, extend the maturity of the notes by a 270-day period,
      and permit the notes to continue to bear interest at 12% during the requested
      extension period.  The Company also requested that the holders waive any
      right to default interest, and proposed amending the notes to permit optional
      conversion of the note balance at the holder’s option at any time into shares of
      the Company’s common stock at a conversion price of $.50 per share.  As
      consideration for the requested waivers and amendments to the Bridge I notes,
      the Company is offering warrants to purchase three shares of common stock of
      the
      Company for every $1.00 principal loaned at an exercise price of $.50 for a
      term
      of three years.  As May 16, 2008, none of the Bridge I note holders had
      accepted the current offer and the Company is in continued discussion regarding
      a settlement.





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




None.




9




**Item
      5. Other Information**




None.





**Item
      6.
Exhibits**




See Exhibit Index




10




SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.




Dated:
                  May 23, 2008
              AskMeNow,
                  Inc.By:
                  /s/ Darryl CohenDarryl
                  Cohen, Chief Executive Officer(Principal
                  executive officer andPrincipal
                  financial officer)





11





EXHIBIT
      INDEX




Exhibit
              Number
            
            Description10.1
            
            Common
                Stock Warrant to purchase 200,000 shares of common stock issued to
                White
                White & Van Etten PC10.2
            
            Common
                Stock Warrant to purchase 200,000 shares of common stock issued to
                Phillips Nizer LLP31
            
            Certification
                pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200232
            
            Certification
                pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of
                the
                Sarbanes-Oxley Act of 2002




12