QUARTERLY
      REPORT




UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-QSB





(MARK
      ONE)





x QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





For
      the
      quarterly period ended June 30, 2007




o TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF


THE
      EXCHANGE ACT





For
      the
      transition period from ___ to ___





Commission
      file number: 333-5278-NY





Migo
      Software, Inc.





(Exact
      Name of small business issuer as Specified in Its Charter)





Delaware
            
            94-3334052(State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            
            (I.R.S.
                Employer Identification No.)





555
                Twin Dolphin Drive, Suite 650
              Redwood
                City, California 94065(Address
                of Principal Executive Offices)





Issuer’s
      telephone number: (650) 232-2600





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





Yes x No o




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




As
      of
      August 10, 2007, there were 105,055,613 shares of the issuer's common stock,
      $0.0001 par value per share ("Common Stock"), outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes o No x










QUARTERLY
      REPORT




TABLE
      OF
      CONTENTS





PART
                I. FINANCIAL INFORMATION
            
            3Item
                1. Financial Statements
            
            3Consolidated
                Balance Sheet - June 30, 2007 (Unaudited)
            
            3Consolidated
                Statements of Operations - Three and Six months ended June 30, 2007
                and
                2006 - Unaudited
            
            4Consolidated
                Statements of Cash Flows - Six months ended June 30, 2007 and 2006
                -
                Unaudited
            
            5Notes
                to Consolidated Financial Statements- Unaudited
            
            6Item
                2. Management's Discussion and Analysis
            
            13Item
                3. Controls and Procedures
            
            16PART
                II. OTHER INFORMATION
            
            16Item
                1. Legal Proceedings
            
            16Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            16Item
                3. Defaults Upon Senior Securities
            
            16Item
                4. Submission of Matters to a Vote of Security Holders
            
            16Item
                5. Other Information
            
            16Item
                6. Exhibits
            
            17SIGNATURES
            
            17









PART
      I.
      FINANCIAL INFORMATION





Item
      1.
      Financial Statements





MIGO
      SOFTWARE, INC. AND SUBSIDIARIES


CONSOLIDATED
      BALANCE SHEET


JUNE
      30,
      2007 (UNAUDITED)




**ASSETS*****Current
                  Assets:***Cash
                  and cash equivalents
              
              $
              446,667Short-term
                  investments
              
              
              713,925Accounts
                  receivable, net of allowance for doubtful accounts of
                  $10,000
              
              
              520,001Inventory
              
              
              105,676Other
                  current assets
              
              
              64,203Total
                  current assets
              
              
              1,850,472PROPERTY
                  AND EQUIPMENT, net of accumulated depreciation of $19,463
              
              
              39,282OTHER
                  ASSETS:Goodwill
              
              
              3,180,967Intangible
                  assets, net of accumulated amortization of $1,940,709
              
              
              5,661,628Other
                  assets
              
              
              95,695**TOTAL
                  ASSETS**
              
              $
              10,828,044**LIABILITIES
                  AND STOCKHOLDERS' EQUITY*****Current
                  Liabilities:***Accounts
                  payable
              
              $
              746,459Accrued
                  compensation
              
              
              99,915Deferred
                  revenue
              
              
              1,243,509Capitalized
                  lease obligations
              
              
              4,452Accrued
                  liabilities
              
              
              296,712Total
                  current liabilities
              
              
              2,391,047Commitments
                  and contingencies**Stockholders'
                  Equity:**Senior
                  B Convertible Preferred stock, $.0001 par value; 12,500,000 shares
                  authorized, 10,000,000 shares issued and outstanding; preference
                  upon
                  liquidation of $2,000,000
              
              
              200Junior
                  A Preferred stock, $.0001 par value; 5,000,000 shares authorized,
                  769,575
                  shares issued and outstanding; preference upon liquidation of
                  $2,600,000
              
              
              77Common
                  stock, $.0001 par value; 200,000,000 shares authorized; 102,484,342
                  shares
                  issued and outstanding
              
              
              10,248Additional
                  paid in capital in excess of par value
              
              
              56,898,323Treasury
                  Stock
              
              
              (386,400
              )Accumulated
                  Deficit
              
              
              (48,085,451
              )**Total
                  stockholders' equity**
              
              
              8,436,997**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              10,828,044




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









MIGO
      SOFTWARE, INC. AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF OPERATIONS


THREE
      AND
      SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED)




**Three
                  Months Ended**
              
              **Six
                  Months Ended**June
                  30,
              
              June
                  30,
              
              June
                  30,
              
              June
                  30,2007
              
              2006
              
              2007
              
              2006**Revenues**
              
              $
              1,313,505
              
              $
              26,387
              
              $
              2,026,016
              
              $
              67,616Cost
                  of Sales
              
              
              392,912
              
              
              148,757
              
              
              748,004
              
              
              304,801Gross
                  Profit
              
              
              920,593
              
              
              (122,370
              )
              
              1,278,012
              
              
              (237,185
              )**Operating
                  Expenses**Research
                  and development
              
              
              791,462
              
              
              425,488
              
              
              1,539,718
              
              
              785,541Sales
                  and marketing
              
              
              750,294
              
              
              279,031
              
              
              1,345,369
              
              
              541,421General
                  and administrative
              
              
              822,879
              
              
              1,333,667
              
              
              1,820,681
              
              
              2,557,868Total
                  operating expenses
              
              
              2,364,635
              
              
              2,038,186
              
              
              4,705,768
              
              
              3,884,830**Loss
                  from operations**
              
              
              (1,444,042
              )
              
              (2,160,556
              )
              
              (3,427,756
              )
              
              (4,122,015
              )**Other
                  income (expense)**Interest
                  (net)
              
              
              16,420
              
              
              55,267
              
              
              49,908
              
              
              119,179Decrease
                  in warrant liability
              
              
              —
              
              
              —
              
              
              —
              
              
              166,538Other
              
              
              (19,743
              )
              
              110,501
              
              
              (20,538
              )
              
              (172,804
              )Total
                  other income (expense)
              
              
              (3,323
              )
              
              165,768
              
              
              29,370
              
              
              112,913Loss
                  Before Income Taxes
              
              
              (1,447,365
              )
              
              (1,994,788
              )
              
              (3,398,386
              )
              
              (4,009,102
              )Provision
                  for Income Taxes
              
              
              —
              
              
              —
              
              
              —
              
              
              —**Net
                  Loss**
              
              
              (1,447,365
              )
              
              (1,994,788
              )
              
              (3,398,386
              )
              
              (4,009,102
              )Basic
                  and Diluted net loss attributable to common shareholders per
                  share
              
              $
              (0.02
              )
              $
              (0.03
              )
              $
              (0.04
              )
              $
              (0.07
              )Weighted
                  Average Shares Outstanding Basic and Diluted
              
              
              95,849,727
              
              
              66,034,389
              
              
              94,794,625
              
              
              61,171,629




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










**MIGO
      SOFTWARE, INC. AND SUBSIDIARIES**


**Consolidated
      Statements of Cash Flows**


**Six
      Months Ended June 30, 2007 and 2006 (Unaudited)**




Six
                Months Ended June 30,2007
            
            2006Cash
                Flows from Operating Activities:Net
                loss
            
            $
            (3,398,386
            )
            $
            (4,009,102
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Inventory
                write-downs
            
            
            2,572
            
            
            15,442Depreciation
                and amortization
            
            
            522,861
            
            
            283,456Amortization
                of deferred compensation
            
            
            —
            
            
            248,211Remeasurement
                of warrants to fair value
            
            
            —
            
            
            (166,538
            )Stock
                based compensation
            
            
            307,612
            
            
            1,040,867Gain
                on Settlement
            
            
            —
            
            
            (683,971
            )Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (429,084
            )
            
            10,481Inventory
            
            
            (39,236
            )
            
            313Other
                current assets
            
            
            (23,835
            )
            
            (1,422
            )Other
                assets
            
            
            39,305
            
            
            —Accounts
                payable
            
            
            254,811
            
            
            (268,466
            )Accrued
                compensation
            
            
            (135,168
            )
            
            34,385Deferred
                revenue
            
            
            563,509
            
            
            —Accrued
                liabilities
            
            
            (138,028
            )
            
            116,378Net
                cash used in operating activities
            
            
            (2,473,067
            )
            
            (3,379,966
            )Cash
                Flows from Investing Activities:Purchases
                of available-for-sale investments
            
            
            —
            
            
            (2,495,650
            )Proceeds
                from sale of available-for-sale investments
            
            
            2,440,869
            
            
            —Acquisition
                of MacroPort, Inc., net of cash acquired
            
            
            (25,160
            )
            
            —Purchase
                of equipment
            
            
            —
            
            
            (5,514
            )Net
                cash provided by (used in) investing activities
            
            
            2,415,709
            
            
            (2,501,164
            )Cash
                Flows from Financing Activities:Payment
                of equity financing costs
            
            
            (150
            )
            
            (414,952
            )Proceeds
                from sale of common stock
            
            
            250,000
            
            
            3,975,000Repayment
                of capitalized lease obligations
            
            
            (1,607
            )
            
            —Repayment
                of line of credit obligations
            
            
            (48,853
            )
            
            —Net
                cash provided by financing activities
            
            
            199,390
            
            
            3,560,048NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            142,032
            
            
            (2,321,082
            )CASH
                AND CASH EQUIVALANTS, Beginning of period
            
            
            304,635
            
            
            2,510,704CASH
                AND CASH EQUIVALENTS, End of period
            
            $
            446,667
            
            $
            189,622





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







**MIGO
      SOFTWARE, INC. AND SUBSIDIARIES**


**Consolidated
      Statements of Cash Flows**


**Six
      Months Ended June 30, 2007 and 2006 (Unaudited)**


**(Continued)**




Six
                Months Ended June 30,2007
            
            2006**Non-cash
                investing and financing activity:**Acquisition
                of MacroPort, Inc.
            
            $
            3,500,000
            
            
            —Restricted
                stock issued
            
            
            —
            
            $
            65,000Reclassification
                from temporary to permanent equity
            
            
            —
            
            
            8,715,214Reclassification
                from warrant liability to permanent equity
            
            
            —
            
            
            5,130,926Common Stock Purchase Warrant Issued to Placement
                Agent
            
            
            —
            
            
            246,970**Supplemental
                Disclosure of cash paid for :**Interest
            
            
            —
            
            
            —Income
                Taxes
            
            
            800
            
            
            800




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










Migo
      Software, Inc. and Subsidiaries


Notes
      to
      Consolidated Financial Statements (Unaudited)


Quarter
      Ended June 30, 2007





1.
      INTERIM FINANCIAL DATA AND BASIS OF PRESENTATION




The
      accompanying unaudited financial statements have been prepared by Migo Software,
      Inc. ("the Company") in accordance with accounting principles generally accepted
      in the United States of America ("US GAAP"). In the opinion of management,
      the
      accompanying unaudited financial statements contain all adjustments, consisting
      only of those of a normal recurring nature, necessary for a fair presentation
      of
      the Company's financial position, results of operations and cash flows at the
      dates and for the periods indicated. These financial statements should be read
      in conjunction with the financial statements and notes related thereto, included
      in the Annual Report on Form 10-KSB for the year ended December 31, 2006.





These
      results for the three and six month periods ended June 30, 2007 are not
      necessarily indicative of the results to be expected for other interim periods
      or the full fiscal year. The preparation of the financial statements in
      conformity with US GAAP 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.





Forward-Looking
      Statements





This
      Quarterly Report on Form 10-QSB contains forward-looking statements including,
      without limitation, statements concerning the future of the industry in which
      the Company operates, its product development plans, business strategy,
      financial estimates, continued acceptance of its products and dependence on
      significant distributors and customers. In some cases, you can identify
      forward-looking statements by terminology such as “may", "will", "should",
      "expects", "plans", "anticipates", "believes", "estimates", "predicts",
      "potential", "continue" or the negative of such terms or other comparable
      terminology. You should not place undue reliance on the forward-looking
      statements contained in this document. When considering forward-looking
      statements, you should keep in mind the risk factors and other cautionary
      statements made in this Quarterly Report on Form 10-QSB and in the Company's
      other SEC filings. Forward-looking statements, particularly those concerning
      anticipated events relating to the development, marketing and customer
      acceptance of the Company's products and the timing or magnitude of those
      events, are inherently uncertain. The risk factors and other considerations
      noted in the Company's SEC filings could cause the Company's actual results
      to
      differ significantly from those contained in any forward-looking
      statements.




2. **SUMMARY
      OF SIGNIFICANT A CCOUNTING POLICIES**




*Basis
      of Presentation* - The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States (''US GAAP"),
      which contemplate continuation of the Company as a going concern. However,
      the
      Company is subject to the risks and uncertainties associated with a new
      business, has limited sources of revenue, and has incurred significant losses
      from operations. These matters raise doubt about the Company's ability to
      continue as a going concern. From inception, the Company has never been
      profitable and has sustained substantial net losses from operations. There
      can
      be no assurance that it will ever generate sufficient revenues from its
      operating activities, or that it will achieve and sustain a profit during any
      future period, particularly if operations remain at current levels. Management
      estimates that the current funds available and on-hand along with expected
      revenues for 2007 will be adequate to fund operations throughout
      2007.





*Principles
      of Consolidation* - The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries, MacroPort, Inc., PowerHouse Acquisition LLC and
      PowerHouse Studios, Inc. All significant inter-company accounts and transactions
      have been eliminated in consolidation.




*Use
      of Estimates* - The
      preparation of financial statements in conformity with US GAAP 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 reported periods. Management bases its estimates and
      assumptions on historical experience and on various other assumptions that
      it
      believes are reasonable under the circumstances. Actual results could differ
      from those estimates. Significant estimates include the valuation of acquired
      goodwill and intangible assets, and revenue recognition.




*Cash
      and Cash Equivalents* - The
      Company considers temporary liquid investments with an original maturity of
      three months or less to be cash equivalents.








*Inventory*  ** -
      Inventory is valued at the lower of cost or market with cost determined under
      the first-in, first-out method. At June 30, 2007, inventory consisted primarily
      of packaging material and assembled boxes of retail software. The Company
      regularly evaluates its ability to realize the value of its software and
      hardware inventory based on a combination of factors, including historical
      usage
      rates, forecasted sales, product life cycles, and market acceptance of new
      products. When inventory that is obsolete or in excess of anticipated usage
      is
      identified, it is written down to realizable salvage value or an inventory
      valuation reserve is established.




*Property
      and Equipment* -
      Property and equipment are stated at cost. Depreciation is computed using the
      straight-line method over estimated useful lives of three to five years.
      Leasehold improvements are amortized over the shorter of the lease term or
      the
      estimated useful life. The Company capitalizes costs associated with acquiring
      and installing software to be used for internal purposes.




*Goodwill* -
      Goodwill represents the excess of acquisition costs over the fair value of
      tangible net assets and identifiable intangible assets of businesses acquired.
      Goodwill and certain other intangible assets deemed to have indefinite lives
      are
      not amortized. Intangible assets determined to have definite lives are amortized
      over their useful lives. Goodwill and indefinite lived intangible assets are
      subject to impairment testing annually as of December 31, or whenever events
      or
      changes in circumstances indicate that the carrying amount may not be fully
      recoverable, using the guidance and criteria described in Statement of Financial
      Accounting Standards No. 142, *Goodwill
      and Other Intangible Assets.* This
      testing compares carrying values to fair values and, when appropriate, the
      carrying value of these assets is reduced to fair value.




*Other
      Intangible Assets* - Other
      intangible assets include software technology assets (acquired as part of the
      First Person Software acquisition in 2004) and intangible assets acquired from
      StompSoft and MacroPort. Intangible assets are stated at cost. Amortization
      of
      software technology assets is computed using the revenue or straight-line
      method, whichever is greater, over an estimated useful life of five years.
      Intangible assets acquired from StompSoft and MacroPort have weighted average
      useful lives of approximately 6.5 years and 9.3 years, respectively.
      Amortization of such StompSoft and MacroPort intangible assets is computed
      using
      the straight-line method over the following estimated useful lives:





Existing
                Product/Unpatented Technology
            
            
            4
                - 10 yearsTrademarks/Trade
                Names
            
            
            10
                yearsCustomer
                Relationships
            
            
            7
                - 10 yearsNon-Compete
                Agreement
            
            
            2
                years




*Impairment
      of Long-Lived Assets* -
      Property, equipment, intangible and certain other long-lived assets are
      depreciated or amortized over their useful lives. Useful lives are based on
      management's estimates of the period that the assets will generate revenues.
      Long-lived assets are written down to fair value whenever events or changes
      indicate that the carrying amount of an asset may not be recoverable. The
      Company's policy is to review the recoverability of all long-lived assets at
      a
      minimum of once per year and record an impairment loss when the fair value
      of an
      asset does not exceed the carrying amount of the asset.




*Revenue
      Recognition* - The
      Company recognizes revenue in accordance with Statement of Accounting Position
      ("SOP") 97-2, *Software
      Revenue Recognition* , as
      amended, and Staff Accounting Bulletin ("SAB") No. 104, *Revenue
      Recognition* .




The
      Company recognizes revenue from sales through the Company's website after the
      30
      day return period has lapsed. The Company's software products are licensed
      on a
      perpetual basis. Revenue from the sale of software licenses is recognized only
      when persuasive evidence of an arrangement exists, the product has been
      delivered, the fee is fixed or determinable and collection of the resulting
      receivable is reasonably assured.


Revenue
      from direct sale contracts of the Company's products to commercial users is
      recognized based on the terms of the agreement, after the product has been
      delivered, and collection of the resulting receivable is reasonably assured.
      Revenue from distributors is recognized when the product has been sold to third
      party customers.





*Product
      Revenue* *:* Product
      revenue, including sales to retailers, resellers and distributors ("channel
      partners"), is recognized when the above criteria are met.





*Shipping
      and Handling*  *:* In
      accordance with Emerging Issues Task Force ("EITF") Issue No. 00-10, *Accounting
      for Shipping and Handling Fees and Costs* ,
      the
      Company recognizes amounts billed to customers for shipping and handling as
      revenue. Additionally, shipping and handling costs incurred by the Company
      are
      included in cost of goods sold.





*OEM
      Software Licenses* *:* The
      Company licenses software rights to manufacturers of products in related
      industries (for example, flash drives or other computer accessories) to include
      certain of its products with the manufacturer's product. The Company calls
      these combined products "OEM bundles". These OEM bundles generally require
      either the customer to pay an upfront nonrefundable fee, as in the case of
      Kingston Technology Company, or the Company receives a fee once the consumer
      uses the product and elects to purchase it over the Internet, such
      as the Company's agreement with Sandisk.








*Bad
      Debt Reserves* - The
      Company analyzes customer concentrations, customer credit-worthiness, current
      economic trends, and historical experience when evaluating the adequacy of
      the
      allowance for doubtful accounts. At June 30, 2007, management believed that
      all
      accounts receivable were collectible.





*Advertising
      Costs* - The
      Company generally expenses advertising costs as incurred. Cooperative
      advertising with the Company's channel partners is accrued when revenue is
      recognized and such amounts are included in marketing and sales expense if
      there
      is a separate identifiable benefit for which the Company can reasonably estimate
      the fair value of the benefit identified. Otherwise, they are recognized as
      a
      reduction of net revenue. The Company then reimburses the channel partner when
      qualifying claims are submitted.





*Software
      Development Costs* -
      Research and development costs, which consist primarily of software development
      costs, are expensed as incurred, and totaled $791,462 and $425,488 for the
      three
      months ending June 30, 2007 and 2006, respectively. SFAS No. 86, *Accounting
      for the Cost of Computer Software to be Sold, Leased, or Otherwise
      Marketed* ,
      provides for the capitalization of certain software development costs incurred
      after technological feasibility of the software is established or for
      development costs that have alternative future uses. Under the Company's current
      practice of developing new products, the technological feasibility of the
      underlying software is not established until substantially all product
      development is complete, which generally includes the development of a working
      model. The software development costs that have been capitalized to date have
      been insignificant.




*Basic
      and Diluted Loss Per Share* - In
      accordance with Financial Accounting Standards Board ("FASB") SFAS No. 128, *Earnings
      Per Share* , the
      basic loss per common share, which excludes dilution, is computed by dividing
      the net loss available to common shareholders by the weighted average number
      of
      common shares outstanding. Diluted loss per common share reflects the potential
      dilution that could occur if all potential common shares had been issued and
      if
      the additional common shares were dilutive. As a result of net losses for all
      periods presented, there is no difference between basic and diluted loss per
      share of common stock. Potential shares of common stock to be issued upon the
      exercise of all stock options and warrants amounted to 49,343,886 shares as
      of
      June 30, 2007.




*Comprehensive
      Loss* -
      Comprehensive loss is comprised of net loss and other comprehensive income
      (loss). Other comprehensive income (loss) includes certain changes in
      stockholders' equity that are excluded from net loss, such as unrealized gains
      and losses on marketable securities and currency translation adjustments.
      Comprehensive income (loss) for each of the periods presented equals net
      loss.




*Stock-Based
      Compensation* - In
      December 2004, the FASB issued SFAS No. 123R, *Share
      Based Payment.* SFAS No.
      123R establishes the accounting for grants of stock options and other
      transactions in which an entity exchanges its equity instruments for goods
      or
      services. It also addresses transactions in which an entity incurs liabilities
      in exchange for goods or services that are based on the fair value of the
      entity's equity instruments or that may be settled by the issuance of those
      equity instruments. SFAS No. 123R (1) revises SFAS No. 123, *Accounting
      for Stock-Based Compensation* ,
      (2)
      supersedes Accounting Principles Board ("APB") Opinion No. 25, *Accounting
      for Stock Issued to Employees* , and
      (3) establishes fair value as the measurement objective for share-based payment
      transactions. The Company adopted SFAS 123R effective January 1, 2005 in
      accordance with the standard's early adoption provisions. Prior to January
      1,
      2005, the Company's Board of Directors had not approved the granting of any
      stock options. As such, the Company decided to follow the provisions of SFAS
      No.
      123R on a prospective basis, and for the three months ended June 30, 2007 and
      2006, the Company recorded $160,500 and $546,733 respectively, of compensation
      expense related to the granting of stock options to employees. For the six
      months ended June 30, 2007 and 2006, the Company recorded $307,612 and
      $1,040,867 respectively, of compensation expense related to the granting of
      stock options to employees.





*Fair
      Value of Financial Instruments* - The
      estimated fair values for financial instruments under SFAS No. 107, *Disclosures
      about Fair Value of Financial Instruments* ,
      are
      determined at discrete points in time based on relevant market information.
      These estimates involve uncertainties and cannot be determined with precision.
      For certain of the Company's financial instruments, including certain assets,
      accounts payable, and accrued liabilities, the carrying amounts approximate
      fair
      value due to their maturities.





*Concentrations
      of Credit Risk* - Credit
      risk represents the accounting loss that would be recognized at the reporting
      date if counter parties failed completely to perform as contracted. The
      Company's product revenues are concentrated in the software industry, which
      is
      highly competitive and rapidly changing. Significant technological changes
      in
      the industry or customer requirements, or the emergence of competitive products
      with new capabilities or technologies, could adversely affect operating results.
      Concentrations of credit risk (whether on or off balance sheet) that arise
      from
      financial instruments exist for groups of customers or counter parties when
      they
      have similar economic characteristics that would cause their ability to meet
      contractual obligations to be similarly affected by changes in economic or
      other
      conditions described below.







Financial
      instruments that subject the Company to credit risk consist of cash balances
      maintained in excess of federal depository insurance limits and accounts
      receivable, which have no collateral or security. The Company maintains its
      cash
      balances with high credit quality financial institutions. At times, cash
      deposits may be in excess of Federal Deposit Insurance Corporation's limits.
      To
      date, the Company has not experienced any such losses and believes it is not
      exposed to any significant credit risk with respect to its cash
      balances.





*Financial
      Instruments* - The
      Company's financial instruments consist primarily of cash and cash equivalents
      and auction rate securities. These balances, as presented in the consolidated
      financial statements at June 30, 2007, approximate their fair
      value.





*Short-term
      Investments* - The
      Company's short-term investments consist primarily of Auction Rate Securities,
      or ARS, which represent funds available for current operations. In accordance
      with SFAS No. 115, *Accounting
      for Certain Investments in Debt and Equity Securities,* these
      short-term investments are classified as available-for-sale and are carried
      at
      cost or par value, which approximates the fair market value. These securities
      have stated maturities beyond three months but are priced and traded as
      short-term instruments.





*Income
      Taxes* - The
      Company accounts for income taxes using the asset and liability method, as
      set
      forth in SFAS No. 109, *Accounting
      for Income Taxes* ,
      wherein
      deferred tax assets and liabilities are recognized for the future tax
      consequences attributable to differences between 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 the temporary
      differences are expected to be recovered or settled. Reserves against deferred
      tax assets are provided when management cannot conclude that realization of
      such
      assets is probable.




*Recently
      Issued Accounting Pronouncements* In
      February 2006, the FASB issued SFAS No. 155, *Accounting
      for Certain Hybrid Financial Instruments,* which
      amends SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities,* and SFAS
      No. 140, *Accounting
      for the Impairment or Disposal of Long-Lived Assets* .
      Specifically, SFAS No. 155 amends SFAS No. 133 to permit fair value
      remeasurement for any hybrid financial instrument with an embedded derivative
      that otherwise would require bifurcation, provided the whole instrument is
      accounted for on a fair value basis. Additionally, SFAS No. 155 amends SFAS
      No.
      140 to allow a qualifying special purpose entity to hold a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. SFAS No. 155 applies to all financial instruments acquired
      or issued after the beginning of an entity's first fiscal year that begins
      after
      September 15, 2006, with early application allowed. The adoption of SFAS No.
      155
      is not expected to have a material impact on the Company's results of operations
      or financial position.




In
      July
      2006, the FASB issued FASB Interpretation ("FIN") No. 48, *Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement
      109* .
      FIN 48
      clarifies the accounting for uncertainty in income taxes recognized in an
      enterprise's financial statements in accordance with FASB Statement No. 109, *Accounting
      for Income Taxes* .
      FIN 48
      prescribes a comprehensive model for recognizing, measuring, presenting and
      disclosing in the financial statements tax positions taken or expected to be
      taken on a tax return.





The
      Company adopted the provisions of FIN 48 as of January 1, 2007. As of
      the date of adoption, the Company had no unrecognized income tax benefits.
      Accordingly, the annual effective tax rate will not be affected by the adoption
      of FIN 48. Unrecognized tax benefits are not expected to increase or decrease
      within the next 12 months as a result of the anticipated lapse of any applicable
      statute of limitations. Interest and penalties related to unrecognized income
      tax benefits will be accrued as interest expense and operating expense,
      respectively. The Company has not accrued interest or penalties as of the date
      of adoption because they are not applicable.





Due
      to
      the Company's history of losses, the effective tax rate for each of the three
      months and six month periods ended June 30, 2007 and 2006 was 0.0%. The
      provision for income taxes for all periods presented is primarily attributable
      to the cumulative tax net operating losses that the Company has generated in
      the
      current and prior years for which a valuation allowance has been established
      under the rules of FASB 109.





The
      Company may be audited by applicable federal and state taxing authorities in
      the
      following income tax jurisdictions in which the Company previously filed or
      expects to file income tax returns for the years indicated:




Jurisdiction
            
            Tax
                YearsFederal
            
            
            2003
                - 2006California
            
            
            2002
                - 2006










However,
      because the Company had net operating losses and credits carried forward for
      federal and California taxes, certain items attributable to closed tax years
      are
      still subject to adjustment by applicable taxing authorities through an
      adjustment to tax attributes carried forward to open years.




In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* ( SFAS
      157). SFAS 157 defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles (GAAP), and expands
      disclosures about fair value measurements. This statement does not require
      any
      new fair value measurements; however, the standard will impact how other fair
      value based GAAP is applied. SFAS 157 is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years with early adoption encouraged. The Company is
      currently assessing the impact this statement will have on its financial
      statements and results of operations.




3. MACROPORT
      ACQUISITION





On
      June
      6, 2007, the Company entered into an Agreement and Plan of Merger with
      MacroPort, Inc. (“MacroPort”) and certain of the principal stockholders of
      MacroPort under which on June 6, 2007 MacroPort merged into a newly formed,
      wholly owned acquisition subsidiary of the Company. Prior to the acquisition,
      MacroPort was a privately owned provider of mobile content management
      software.





In
      consideration for the acquisition, the Company issued 7,500,000 shares of
      its common stock and 10,000,000 shares of a newly authorized Series B
      Senior Convertible Preferred Stock. The preferred stock would be automatically
      converted into 12,500,000 shares of common stock if the closing price for the
      Company’s stock is more than $0.45 per share for ten consecutive trading days
      more than 90 days after the closing date. The Company’s common and stock (and
      the preferred stock on an if-converted basis) was valued using the average
      closing price of the Company’s common stock for the four days prior to the
      acquisition.





Up
      to an
      additional $3,000,000 of consideration may be paid depending on the revenues
      generated from the MacroPort products during the 12-month period following
      the
      closing. The additional consideration would be paid in cash or common stock
      at
      the Company’s option, except that no more than $1,000,000 may be paid in cash.
      If MacroPort revenues during the 12-month period do not meet a certain minimum
      amount, $1,000,000 of consideration is to be returned to the Company, and a
      portion of the stock issued in the acquisition is subject to a Stock Pledge
      Agreement to secure the possible return of this consideration. In accordance
      with Statement of Financial Accounting Standards No. 141, *Business
      Combinations* ,
      both
      the potential additional consideration and the potential return of consideration
      are considered to be contingent elements of the acquisition that are not
      recognized until the contingencies are resolved. Accordingly, $1,000,000 of
      common stock and preferred stock issued at the acquisition date has not
      been recognized in the allocation of the purchase price detailed
      below.





The
      acquisition was accounted for under the purchase method of accounting in
      accordance withUS GAAP. Under this method, tangible and identifiable intangible
      assets acquired and liabilities assumed are recorded at their estimated fair
      values. The excess of the purchase price, plus estimated fees and expenses
      related to the acquisition, over the fair value of net assets acquired is
      recorded as goodwill.





The
      following tables summarize the total consideration and the preliminary purchase
      price allocation as of June 6, 2007:


**Total
                  Consideration:**Common
                  stock
              
              $
              2,000,000Preferred
                  stock
              
              
              2,500,0004,500,000Less
                  contingent consideration
              
              
              (1,000,000
              )Transaction
                  costs
              
              
              28,000Total
                  purchase price
              
              $
              3,528,000
  **Preliminary
                  Purchase Price Allocation:**Net
                  Assets (Liabilities)
              
              $
              (186,000
              )Existing
                  Product/Unpatented Technology
              
              
              1,600,000In-Process
                  Technology
              
              
              60,000Customer
                  Relationships
              
              
              230,000Non-Compete
                  Agreement
              
              
              40,000Goodwill,
                  including assembled workforce
              
              
              1,784,000$
              3,528,000


The
        pro
        forma unaudited results of operations, assuming that the MacroPort acquisition
        occurred as of January 1, 2006, are as follows for the three and six months
        ended June 30, 2007 and 2006:
  Three
                    Months ended 06/30/2007
                
                Three
                    Months ended 06/30/2006Revenues
                
                $
                1,391,188
                
                $
                159,507Net
                    Loss
                
                $
                (1,598,769
                )
                $
                (2,266,932
                )Net
                    Loss Attributable to Holders of Common Shares
                
                $
                (1,598,769
                )
                $
                (2,266,932
                )Basic
                    and Diluted Net Loss Attributable to Common Stockholders per
                    Share
                
                $
                (0.02
                )
                $
                (0.03
                )Weighted
                    Average Shares Outstanding, Basic and Diluted
                
                
                101,371,705
                
                
                73,534,389
  Six
                    Months ended
                  06/30/2007
                
                Six
                    Months ended
                  06/30/2006Revenues
                
                $
                2,294,474
                
                $
                316,355Net
                    Loss
                
                $
                (3,697,407
                )
                $
                (4,529,775
                )Net
                    Loss Attributable to Holders of Common Shares
                
                $
                (3,697,407
                )
                $
                (4,529,775
                )Basic
                    and Diluted Net Loss Attributable to Common Stockholders per
                    Share
                
                $
                (0.04
                )
                $
                (0.07
                )Weighted
                    Average Shares Outstanding, Basic and Diluted
                
                
                101,300,150
                
                
                68,671,629
  The
        unaudited pro forma results of operations above are not intended to represent
        or
        be indicative of operations of the Company that would have been reported
        had the
        MacroPort acquisition been completed as of the beginning of the periods
        presented, and should not be taken as representative of any future consolidated
        results of operations of the Company. The unaudited pro forma results of
        operations do not reflect any operating efficiencies or cost savings that
        may be
        achieved with respect to the combined operations.







The
      preliminary allocation of the purchase price is based upon estimates of the
      fair
      value of the assets acquired and liabilities assumed in the acquisition. The
      total purchase price has been allocated to the assets acquired and liabilities
      assumed based on management's best estimate of fair value, with the excess
      cost
      over net tangible and identifiable intangible assets acquired being allocated
      to
      goodwill. The estimated fair values of certain intangible assets have been
      determined by the Company’s management with the assistance of a third-party
      valuation firm. The purchase price allocation is preliminary and has not been
      finalized as the transaction costs are estimated, and the Company’s management
      is reviewing the tax effects of the transaction to determine the amount, if
      any,
      of deferred tax liabilities that should be recorded. Material changes, if any,
      to the preliminary allocation summarized above will be reported once the related
      uncertainties are resolved. The final valuation may change the allocations
      of
      the purchase price to the tangible and intangible assets and liabilities.





4.
      Debt





The
      Company had no debt outstanding as of June 30, 2007.





5.
      Accrued liabilities





At
      June
      30, 2007, accrued liabilities consist principally of bonuses and royalties
      payable.





6.
      Intangible assets





Other
      intangible assets, which resulted from the June 2007 acquisition of MacroPort
      ,
      the December 2006 StompSoft acquisition, and the First Person acquisition
      completed in June 2004, consist of the following as of June 30,
      2007:


Cost
              
              Accumulated
                  Amortization
              
              NetSoftware
                  technology assets
              
              $
              2,822,337
              
              $
              1,701,971
              
              $
              1,120,366Existing
                  Product/Unpatented Technology
              
              
              2,560,000
              
              
              126,833
              
              
              2,433,167Trademarks/Trade
                  Names
              
              
              700,000
              
              
              35,000
              
              
              665,000Customer
                  Relationships
              
              
              1,430,000
              
              
              62,738
              
              
              1,367,262Non-Compete
                  Agreement
              
              
              90,000
              
              
              14,167
              
              
              75,833$
              7,602,337
              
              $
              1,940,709
              
              $
              5,661,628




Amortization
      expense related to other intangible assets amounted to $269,527 and $140,789
      for
      the three months ended June 30, 2007 and 2006, respectively. Amortization
      expense related to other intangible assets amounted to $518,793 and $280,056
      for
      the six months ended June 30, 2007 and 2006, respectively.




7.
      Related Party Transactions





None





8. Equity
      transactions





On
      September 5, 2006, the Company entered into a Common Stock and Warrant Purchase
      Agreement with Kingston Technology Group. Kingston paid $150,000 for the
      purchase of 468,750 shares of the Company's common stock and warrants to
      purchase up to 950,000 shares of its common stock. The warrants are exercisable
      at $0.23 per share, expire in September 2011, unless theretofore exercised
      and
      permit cashless exercise.








On
      May 31
      2007, the Company signed an Amendment to the License Agreement and a second
      Common Stock and Warrant Purchase Agreement with Kingston. Under the Common
      Stock and Warrant Purchase Agreement, Kingston paid $250,000 for the purchase
      of
      1,250,000 shares of the Company’s common stock and warrants to purchase up to
      250,000 shares of its common stock. The warrants are exercisable at $0.23 per
      share, expire in June 2012, unless theretofore exercised and permit cashless
      exercise.




9.
      Commitments and Contingencies





Litigation





On
      December 20, 2005, two former employees made a demand for arbitration with
      JAMS, San Francisco alleging that each claimant is entitled to severance pay
      following their resignations in February 2005. The claimants were
      employed by the Company as part of the 2004 acquisition of First
      Person Software, Inc.  In October 2006, the arbitrator ruled in favor of
      the plaintiffs. The Company accrued a $424,000 liability as a result
      of this matter for the year ended December 31, 2006, and as of August 2, 2007
      has fully satisfied this liability.





The
      Company is not aware of any additional pending litigation as of August 14,
      2007.


10.
        Subsequent Event
 
 On
        August
        10, 2007, the Company entered into a loan agreement with VenCore Solutions
        LLC
        under which VenCore will loan the Company up to $2,000,000. Of the total
        loan
        amount, $1,000,000 has been advanced at the time of the closing of the
        transaction, and the remaining $1,000,000 may be advanced, at the
        Company’s option, if the Company achieves certain minimum revenues from certain
        customers during the quarter ending September 30, 2007. The loan bears interest
        at 15% per annum, is repayable in monthly installments over three years and
        is
        secured by all of the Company's assets. In connection with the first tranche
        of
        the loan, the Company has granted to VenCore five-year warrants to purchase
        up to 812,500 shares of the Company's common stock at an exercise price of
        $.21
        per share.  Warrants for up to an additional 406,000 shares are to be
        granted for subsequent advances under the facility.










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





Migo
      Software, Inc. develops a wide range of content mobility software for
      consumers. Our goal is to provide Migo users with access to all their digital
      content, from any device, from anywhere, anytime. To accomplish this, we have
      developed and/or acquired a suite of software products that are easy to use,
      secure and are designed to improve the way information is personalized, secured,
      carried and accessed. We continually seek to improve our software, and we are
      spending substantial resources to develop enhanced versions that address our
      customer’s needs.





Our
      original flagship product,  ***MigoSync®*** , allows
      users to transform their flash drive, iPod ® ,
      PSP ® ,
      S ecure D igital®  (SD)
      memory card or
      mobile phone into a private, “portable PC” by synchronizing PC based Office
      documents, Emails, multimedia content, desktop “look and feel” and more. Users
      can simply connect their Migo-synchronized devices to any "guest" computer
      and
      be able to access their own data and work with it as if they were using their
      own PCs. When the user leaves a “guest” computer, Migo leaves no trace of the
      user's activities behind, ensuring that their data is safe and secure. When
      users return to their "home" computer, MigoSync automatically synchronizes
      the
      latest updates and changes back to the "home" computer. MigoSync unties people
      from their computers by allowing them to carry their digital lives with them
      wherever they go. MigoSync is compatible with Microsoft® Windows 2000, XP, and
      Vista TM Operating Systems.




In
      September 2006, we entered into an OEM partnership relationship with Kingston
      Technology Corporation, granting Kingston a global license to install our
      software on their line of flash memory products through December 2007. In
      December 2006, we acquired all the software titles of StompSoft, Inc., adding
      a
      wide assortment of related consumer oriented software to our product line.
      In
      June 2007, we acquired MacroPort, Inc. a company that had developed several
      software products addressing the needs of mobile phone manufacturers and other
      users of Secure Digital® (SD) memory cards. As a direct result of the MacroPort
      acquisition, in June 2007, Kingston signed an amendment to the global license,
      allowing Kingston to incorporate the MacroPort technology on their flash memory
      and Secure Digital® (SD) Cards through December 2008. Going forward, we are
      seeking additional acquisition and partnership opportunities to expand our
      product line and user base, worldwide.




**Our
      Current Software Product Line**




Migo
      products solve a number of common, significant problems for computer users,
      and
      offer a variety of management tools that give users control over the way their
      data is stored, accessed and managed. Our current categories of software
      include:




**Software
      for Mobile Phones and Removable Memory**




·
            ***Media
                Play-***Today
                there are over 150 different mobile phone screen sizes capable of
                playing
                video. Additionally, because there are also different operating systems,
                video codecs, screen sizes and processor capabilities running on
                cell
                phones, it is extremely difficult to distribute video content, such
                as
                movies and instructional videos, to a wide range of phones. Migo’s Media
                Play software solves this problem for handset manufacturers, network
                operators and content producers.





·
            ***Universal
                Loader -***Once
                content has been created, consumers often face multiple challenges
                making
                it easily play on their mobile phones. For example, consumers using
                a
                newly purchased phone must navigate through a long list of menus
                before
                launching a video, which can be very challenging. Migo’s patent pending
                Universal Loader solves these issues and creates a compelling user
                experience by auto launching and installing software in a truly “plug and
                play” manner.





·
            ***PhotoPlay-***Migo’s
                patent pending PhotoPlay technology solves the problem of copying
                images
                and video from your mobile phone, digital camera of flash memory,
                to your
                PC and uploading those files to a remote server (such as a retail
                photo
                finisher). PhotoPlay can be distributed on removable memory, downloaded
                from the Internet or bundled with PCs and other peripherals such
                as card
                readers. To date, we have signed a revenue sharing agreement with
                Shutterfly to deploy the PhotoPlay
                software.










**Software
      for Sync & Mobility**





·
            ***MigoSync***- Provides a very easy means for users to take their unique, personal
                data
                with them, without the need to bring along their laptop or link back
                to
                their office machine. MigoSync allows users to easily synchronize
                their
                emails (Microsoft® Outlook®, Outlook Express, Mozilla Thunderbird, and IBM
                Lotus Notes), web browser bookmarks and favorites (Microsoft Internet
                Explorer, Mozilla Firefox), Multimedia (photos, videos, music), Office
                documents (Microsoft PowerPoint, Excel, Word, etc) and/or various
                other
                files to a portable storage device, and then access their personal
                data on
                any other Windows-based, "guest" computer. MigoSync® is designed so that
                once it has been disconnected from a "guest" computer; no trace of
                the
                user's synced data will be left behind on the "guest"
                computer.




**Software
      for Back-up & Recovery**





·
            ***Digital
                Backup***- Hassle-free and automated backup and recovery solution that allows
                users
                to archive their multimedia and office files to local or networked
                storage
                devices as well as online.





·
            ***Digital
                Rescue***- A powerful utility for quickly and easily recovering multimedia,
                office
                or email files that have been accidentally deleted from the computer,
                USB
                flash drive, or SecureDitgital® (SD) memory
                card.




**Software
      for Security and Privacy**





·
            ***Digital
                Shedder***- Easily and securely wipes away confidential files, system history,
                deleted emails and the like to maintain a user's digital
                privacy.





·
            ***DriveWasher***- Wipes an entire hard drive clean of sensitive data to help prevent
                identity theft and protect privacy.





·
            ***Easy
                PC Transfer***-
                Simply and safely transfers contents of one PC to
                another.




**Software
      for PC Optimization**





·
            ***Registry
                Repair***-
                Fixes some of the most vexing computer problems experienced by users,
                including system lock-ups and freezes. Includes a startup optimizer
                feature that allows the user to disable unnecessary programs that
                run each
                time they boot up their Windows PC, making the startup process much
                faster.











**Market
      Channels**





To
      market
      our software, we currently have four major distribution channels; OEM
      partnerships, Smart Phone & SD Card Users, Major Retailers, and various
      e-commerce enabled websites. Below is a partial list of our customers in each
      marketing channel:





**OEM
                Agreements**
            
            **Smart
                Phone\SD Cards**
            
            **Major
                Retailers**
            
            **E
                Commerce\Web Sites**Kingston
                Technology
            
            Motorola
            
            Fry's
                Electronics
            
            www.migosoftware.comSanDisk
                Corporation
            
            Nokia
            
            CompUSA
            
            www.stompsoft.comMemorex
            
            Palm
            
            Sam's
                Club
            
            www.download.comEdge
                Tech
            
            Microsoft
            
            Office
                Depot
            
            www.U3.comMicro
                Center
            
            www.migosoftware.jpTarget
            
            www.hp.comCircuit
                City




We
      have
      also entered into distribution and reseller agreements to sell our products
      in
      Japan and are seeking other resellers outside the United States.




**Future
      R&D Efforts**





Our
      products are designed to make the computing experience easy, safe, and more
      adaptable to a user's needs. Our ongoing research and development continue
      to
      focus on increasing the scope of our product set, and the range of applications
      to which they can be applied. Our research and development expenses totaled
      $791,462 for the three months ended June 30, 2007 compared with $425,488 for
      the
      three months ended June 30, 2006, as we continued to invest heavily to create
      new versions of our software.





**Agreements
      with Kingston Technology**





On
      September 5, 2006, we entered into a License Agreement and a Common Stock and
      Warrant Purchase Agreement with Kingston Technology Corporation ("Kingston").
      Under the License Agreement, Kingston agreed to pay us $1,850,000 for global
      marketing and distribution rights to load currently available and future product
      releases of Migo's software on Kingston's flash memory products through December
      2007. The initial payment of $850,000 was received in September, 2006 and was
      recorded as deferred revenue at September 30, 2006, and is being amortized
      quarterly through December 31, 2007, and the second payment of $1,000,000 was
      received in March 2007, and is being amortized quarterly from April 1, 2007
      through December 31, 2007.





Under
      the
      Common Stock and Warrant Purchase Agreement, Kingston paid $150,000 for the
      purchase of 468,750 shares of our common stock and warrants to purchase up
      to
      950,000 shares of our common stock. The warrants are exercisable at $0.23 per
      share, expire in September 2011, unless theretofore exercised and permit
      cashless exercise.





On
      May
      31, 2007, we signed an Amendment to the License Agreement and a second Common
      Stock and Warrant Purchase Agreement with Kingston. Under the Amended License
      Agreement, Kingston agreed to pay us $250,000 for global marketing and
      distribution rights to load currently available and future product releases
      of
      MacroPort’s software on Kingston's SD and mini SD Card products through December
      2008. The license fee was paid upon signing the agreement, and was recorded
      as
      deferred revenue in June 2007, and is being amortized quarterly through December
      31, 2008.





Under
      the
      Common Stock and Warrant Purchase Agreement signed in May 2007, Kingston paid
      $250,000 for the purchase of 1,250,000 shares of our common stock and warrants
      to purchase up to 250,000 shares of our common stock. The warrants are
      exercisable at $0.23 per share, expire in June 2012, unless theretofore
      exercised and permit cashless exercise.









Financial
      Results, Liquidity and Management's Plan (Unaudited)





Three
      months ended June 30, 2007 and 2006





We reported
      revenues of $1,313,505 for the three months ended June 30, 2007 and revenues
      of
      $26,387 for the corresponding period ended June 30, 2006. The growth in revenues
      reflected several factors, including increased licensing revenues from OEM
      partners Kingston Technology and Memorex, sales of our software titles via
      major
      retailers, such as Fry’s Electronics, and sales via our on-line webstore. During
      the quarter ended June 30, 2006, sales were primarily of our software
      packaged through M-Systems, as well as limited online downloads.





Our costs
      associated with the sale of products for the three month period ended June
      30,
      2007 were $392,912 and consisted of expenses related to fees for customer
      downloads of our software, as well as packaging and shipping costs, and
      amortization of software technology of $254,812. For the period ended June
      30,
      2006, we incurred costs associated with the sale of our products of
      $148,757 of which $140,789 was for amortization of software technology.





Research
      and development expenses totaled $791,462 for the three months ended June 30,
      2007, up from $425,488 in the corresponding period in 2006, due primarily to
      our
      decision to increase expenditures to develop new products and features. Sales
      and marketing expenses increased to $750,294 for the three months ended June
      30,
      2007 from $279,031 in the three month period ended June 30, 2006 due to the
      growth of our sales force. These increases were partially offset by decreased
      general and administrative costs which declined to $822,879 for the period
      ended
      June 30, 2007 from $1,333,667 due to a variety of cost containment measures
      as
      well as lower stock based compensation expense related to stock
      options.




Six
      months ended June 30, 2007 and 2006





We reported
      revenues of $2,026,016 for the six months ended June 30, 2007 and revenues
      of
      $67,616 for the corresponding period ended June 30, 2006. The growth in revenues
      reflected several factors, including licensing revenues from Kingston Technology
      Group and Memorex, sales of our software titles via major retailers and sales
      via our on-line webstore. Except for sales of  our software packaged
      through M-Systems these other channels were not generally available to us during
      the six months ended Junde 30, 2006.





Our costs
      associated with the sale of products for the six month period ended June 30,
      2007 were $748,004 and consisted of expenses related to fees for customer
      downloads of our software, as well as packaging and shipping costs, and
      amortization of software technology of $394,079. For the period ended June
      30,
      2006, we incurred costs associated with the sale of our products of
      $304,801, of which $280,056 was for amortization of software technology.





Research
      and development expenses totaled $1,539,718 for the six months ended June 30,
      2007, up from $785,541 in the corresponding period in 2006, due primarily to
      our
      decision to increase expenditures to develop new products and features. Sales
      and marketing expenses increased to $1,345,369 for the six months ended June
      30,
      2007 from $541,421 in the period ended June 30, 2006 due to the growth of our
      sales force. These increases were partially offset by decreased general and
      administrative costs which declined to $1,820,681 for the period ended June
      30,
      2007 from $2,557,868 due to a variety of cost containment measures as well
      as
      lower stock based compensation expense related to stock
      options.




Liquidity
      and Capital Resources





At
      June
      30, 2007, we had a working capital (deficit) of $(540,575), which included
      deferred revenue of $1,243,509. For the six months ended June 30, 2007, net
      cash
      used in operating activities was $2,473,067 consisting of a net loss of
      $3,398,386, offset by non-cash chargesof $925,319.




On
        August
        10, 2007, we entered into a loan agreement with VenCore Solutions, LLC under
        which VenCore will loan to us up to $2,000,000. Of the total loan amount,
        $1,000,000 has been advanced at the time of the closing of the transaction
        and
        the remaining $1,000,000 may be advanced, at our option, if we achieve certain
        minimum revenues from certain customers during the quarter ending September
        30,
        2007. The loan bears interest at 15% per annum, is repayable in monthly
        installments over three years and is secured by all of our assets. In connection
        with the first tranche of the loan, we have granted to VenCore five-year
        warrants to purchase up to 812,500 shares of our common stock at an exercise
        price of $.21 per share. Warrants for up to an additional 406,000 shares
        are to
        be granted for subsequent advances under the facility.


Recent
      and Expected Losses





From
      inception, we have never been profitable and have sustained
      substantial net losses from operations. There can be no assurance that we
      will ever generate positive revenues from our operating activities, or
      that we will achieve and sustain a profit during any future period,
      particularly if operations remain at current levels. Failure to achieve
      significant revenues or profitability would materially and adversely
      affect our business, financial condition, and results of operations. For
      the three months ended June 30, 2007 and 2006, we incurred net pre-tax
      losses of $1,447,365 and $1,994,788, respectively.











Satisfaction
      of Current and Future Capital Requirements





No
      assurance can be given that we will be able to obtain the additional
      financing we require to continue normal operations. We cannot provide
      assurances that we will be able to develop our business to the point
      of generating net operating profits and positive cash flows from operations.
      If
      funds from these sources are not sufficient to offset operating
      expenses, we would seek to institute cost-saving measures that would not
      only reduce overhead, but also curtail operations. We cannot assure that
      such measures, if implemented, would be sufficient to offset all of our
      operating expenses. If any capital subsequently raised from the sale of
      securities is not sufficient to fund the balance of our operating expenses
      after implementing certain cost-cutting measures, we could be forced to
      discontinue certain operations or may be unable to continue as a going
      concern.





Any
      further issuances of any additional equity securities to raise capital may
      be on
      terms that are detrimental to existing stockholders. In order to meet our
      capital requirements, we may continue to offer equity securities for sale,
      and existing stockholders will experience additional dilution. Any new equity
      securities issued may have rights, preferences or privileges senior to those
      of
      holders of existing equity securities.





Item
      3.
      Controls and Procedures




**Evaluation
      of Disclosure Controls and Procedures**





As
      of the
      end of the period covered by this report, under the supervision and with the
      participation of our management, including our chief executive officer ("CEO")
      and chief financial officer ("CFO"), we evaluated the design and operation
      of
      our disclosure controls and procedures (as defined in Rules 13a-15(e) and
      15d-15(e) of the Securities Exchange Act of 1934, as amended, or the "Exchange
      Act").  Based on this evaluation, our management, including our CEO
      and CFO, has concluded that our disclosure controls and procedures are
      designed, and are effective to give reasonable assurance that the
      information we are required to disclose is recorded, processed, summarized
      and
      reported within the time periods specified in the SEC's rules and
      forms. Based upon this evaluation, the CEO and CFO concluded that our
      disclosure controls and procedures are effective in providing reasonable
      assurance that information required to be disclosed in our reports filed with
      or
      submitted to the SEC under the Exchange Act is accumulated and communicated
      to
      management, including the CEO and CFO, as appropriate to allow timely decisions
      regarding required disclosure.




Changes
      in Internal Control Over Financial Reporting





There
      were no changes in our internal control over financial reporting that occurred
      during our quarter ended June 30, 2007, that have materially affected, or are
      reasonably likely to materially affect, our internal control over financial
      reporting.





PART
      II.
      OTHER INFORMATION


Item
      1.
      Legal Proceedings




On
      December 20, 2005, two former employees of ours made a demand for
      arbitration with JAMS, San Francisco alleging that each claimant is entitled
      to
      severance pay following their resignations in February 2005. The
      claimants were employed by us as part of the 2004 acquisition of First Person
      Software, Inc.  In October 2006, the arbitrator ruled in favor of the
      plaintiffs. We accrued a $424,000 liability as a result of this matter for
      the
      year ended December 31, 2006, and we fully satisfied this liability as of
      August 2, 2007.




We
      are
      not aware of any additional pending litigation as of August 14,
      2007.




Item
      2.





Unregistered
      Sales of Equity Securities and Use of Proceeds





Under
      a
      Common Stock and Warrant Purchase Agreement dated as of May 31, 2007, Kingston
      Technology Corporation paid $250,000 for the purchase of 1,250,000 shares of
      the
      our common stock, and warrants to purchase up to 250,000 shares of our common
      stock.  The warrants are exercisable at $0.23 per share, expire in June
      2012, unless theretofore exercised and permit cashless exercise.




The
      proceeds of the sale of securities will be used for working capital and general
      corporate purposes.  We relied on Section 4(2) of the Securities Act, as
      the basis for an exemption from registering the sale of these shares of common
      stock and warrants under the Securities Act.




Item
      3.
      Defaults Upon Senior Securities


None.










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




We
      held
      our annual meeting of stockholders on June 20, 2007. The following matters
      were
      considered and voted upon at the Annual Meeting:




·
            the
                election of four persons to serve as the Board of Directors for
                a one-year term




·
            the
                approval of an amendment to our Amended and Restated Certificate
                of
                Incorporation that will allow our Board of Directors to effect a
                reverse
                stock split of our common stock, , and to grant our Board of Directors
                the
                authority, in its sole discretion, (i) to set the ratio for the reverse
                stock split at up to one-for-fifteen, or (ii) not to complete the
                reverse
                stock split;




·
            the
                approval of amendments to our 2004 Omnibus Stock Incentive Plan (the
                “Option Plan”) to: (i) increase the maximum aggregate number of shares of
                common stock available for issuance thereunder from 20,000,000 to
                30,000,000 shares and to reserve an additional 10,000,000 shares
                of our
                common stock for issuance in connection with awards granted or to
                be
                granted under the Option Plan.




The
      election of the slate of Directors and the adoption of the other matters were
      approved. The entire Board of Directors was elected at the meeting. The
      votes on the matters presented to our Stockholders were as follows:


**Director**
              
              **Votes
                  For**
              
              **Votes
                  Withheld**Kent
                  Heyman
              
              54,860,121
              
              38,301Mel
                  Lavitt
              
              54,853,881
              
              44,541Alex
                  Mashinsky
              
              54,853,881
              
              44,541Timothy
                  Wallace
              
              54,879,784
              
              18,638
  Approval
        of an amendment to our Certificate of Incorporation to authorize the Board
        of
        Directors to effect a reverse stock split:
  **Votes
                  For**
              
              **Votes
                  Against**
              
              **Votes
                  Abstaining**
              
              **Broker
                  Non-Votes**53,040,798
              
              1,819,765
              
              37,859
              
              0
  Approval
        of proposed amendments to our stock option plan:
  **Votes
                  For**
              
              **Votes
                  Against**
              
              **Votes
                  Abstaining**
              
              **Broker
                  Non-Votes**53,027,260
              
              1,857,308
              
              13,854
              
              0


Item
      5.
      Other Information





None.









Item
      6.
      Exhibits


Exhibit
              
              Description
                  Number3
                  .1
              
              Amended
                  and Restated Certificate of Incorporation, hereby incorporated
                  by
                  reference to Exhibit 3.1 of the Company's Quarterly Report of Form
                  10-QSB
                  for the quarter ended June 30, 2006, filed with the Commission
                  on August
                  10, 2006.3.2
              
              Bylaws,
                  hereby incorporated by reference to Exhibit 3.2 of the Annual Report
                  on
                  Form 10-KSB filed with the Commission on July 14, 2004.3.3
              
              Text
                  of amended provision of the Company's Bylaws, hereby incorporated
                  by
                  reference from the Company's Current Report on Form 8-K filed with
                  the
                  Commission on September 27, 2005.3.4
              
              Certificate
                  of Designations, Preferences and Rights of the Series B Senior
                  Convertible Preferred Stock, hereby  incorporated by reference to the
                  Company's Current Report on Form 8-K filed with the Commission
                  on June 12,
                  2007.10.1
              
              Agreement
                  and Plan of Merger dated as of June 6, 2007 between the Company,
                  MacroPort, Inc. and certain stockholders of MacroPort,
                  Inc.10.2
              
              Registration
                  Rights Agreement dated as of June 6, 2007 between the Company and
                  the
                  stockholders of MacroPort, Inc.31.1
              
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.31.2
              
              Certification
                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.32.1
              
              Certification
                  of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002, 18 U.S.C. 1350.32.2
              
              Certification
                  of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002, 18 U.S.C. 1350.










SIGNATURES





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




Migo
                Software, Inc.Date: August14,
              2007
            By:
            /s/ Kent
                HeymanKent
                HeymanChief
                Executive Officer
              (Principal
                Executive Officer)




Date: August14,
                2007
              By:
              /s/ Richard
                    LiebmanRichard
                    LiebmanChief
                    Financial Officer
                  (Principal
                    Financial and AccountingOfficer)