**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**Form
      10-QSB**





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






For the quarterly period
                ended
                March 31, 2008OR


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


For the transition period
                from__________to__________


Commission
      File No. 001-33495





**COLLEXIS
      HOLDINGS, INC.**


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





**Nevada**
            
            **20-0987069**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                Number)





**1201
      Main Street, Suite 980**


**Columbia,
      SC 29201**


(Address
      of principal executive offices)





**(803)
      727-1113**


(Issuer’s
      telephone number)





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





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





The
      number of outstanding shares of the registrant’s common stock on May 14, 2008
      was 92,793,404 .





Transitional
      Small Business Disclosure Format (Check one): o
      Yes   xNo








**COLLEXIS
      HOLDINGS, INC.**


**Form 10-QSB**


**For
      the Quarter Ended March 31, 2008**








**Table
                of Contents****Part
                I - Financial Information**
            Page
                No.Item
                1
            Financial
                Statements
            4Item
                2
            Management’s
                Discussion and Analysis or Plan of Operation
            21Risk
                Factors
            28Item
                3A(T)
            Controls
                and Procedures
            30**Part
                II - Other Information**Item
                1
            Legal
                Proceedings
            30Item
                2
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            31Item
                3
            Defaults
                Upon Senior Securities
            31Item
                4
            Submission
                of Matters to a Vote of Security Holders
            31Item
                5
            Other
                Information
            31Item
                6
            Exhibits
            32Signatures
            
            33Exhibits





2


**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





This
      report contains forward-looking statements that involve a number of risks and
      uncertainties. Although our forward-looking statements reflect the good faith
      judgment of our management, these statements can be based only on facts and
      factors of which we are currently aware. Consequently, forward-looking
      statements are inherently subject to risks and uncertainties. Actual results
      and
      outcomes may differ materially from results and outcomes discussed in the
      forward-looking statements.





Forward-looking
      statements can be identified by the use of forward-looking words such as “may,”
“will,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,” “intend,”
“could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative
      of these terms or other similar expressions. These statements include, but
      are
      not limited to, statements under the caption “Management’s Discussion and
      Analysis or Plan of Operation” as well as other sections in this report. Such
      forward-looking statements are based on our management’s current plans and
      expectations and are subject to risks, uncertainties and changes in plans that
      could cause actual results to differ materially from those anticipated in the
      forward-looking statements. You should be aware that, as a result of any of
      these factors materializing, the trading price of our common stock could
      decline, and you could lose all or part of the value of your shares of our
      common stock. These factors include, but are not limited to, the
      following:





·
            the
                availability and adequacy of capital to pay the deferred payment
                obligations we owe and to support and grow our
                business;


·
            our
                ability to integrate our European operations successfully after our
                recent
                acquisition of SyynX Solutions GmbH;


·
            our
                ability to integrate our recent acquisition of
                Lawriter;


·
            our
                ability to enhance the products and services of Lawriter’s
                Casemaker®online legal research service;


·
            our
                ability to increase participation in and generate revenues from our
                new
                BioMedExperts social networking
                website;


·
            whether
                our strategic alliance with Thomson Scientific to create a custom
                data
                mining solution for the research community will be
                successful;


·
            competition
                in our industry;


·
            changes
                in our business and growth strategy, capital improvements or development
                plans;


·
            whether
                our research and development efforts will produce software products
                that
                will be attractive to our customers and profitable to us;


·
            currency
                exchange rates; and


·
            other
                factors discussed under (a) the section of Item 2 below entitled
“Risk
                Factors” and (b) the section entitled “Risk Factors” in our transition
                report on Form 10-KSB, as amended, and in our quarterly reports on
                Form
                10-QSB filed with the SEC or discussed elsewhere in this
                report.





The
      cautionary statements made in this report are intended to apply to all related
      forward-looking statements wherever they may appear in this report.





We
      urge
      you not to place undue reliance on these forward-looking statements, which
      speak
      only as of the date of this report. We undertake no obligation to publicly
      update any forward looking-statements, whether as a result of new information,
      future events or otherwise.




3


**PART
      I - FINANCIAL INFORMATION**


**ITEM
      1.**  **FINANCIAL
      STATEMENTS**





Our
      unaudited consolidated financial statements included in this report on Form
      10-QSB are as follows:




Consolidated
                  Balance Sheet as of March 31, 2008Consolidated
                  Statements of Operations for the three and nine months ended March
                  31,
                  2008 and 2007Consolidated
                  Statements of Comprehensive Loss for the three and nine months
                  ended March
                  31, 2008 and 2007Consolidated
                  Statements of Cash Flows for the nine months ended March 31, 2008
                  and
                  2007Notes
                  to Consolidated Financial Statements


4




**Collexis
      Holdings, Inc. and Subsidiaries**


**Consolidated
      Balance Sheet**


**(Unaudited)**





**March
                31,****2008****ASSETS**Currents
                assetsCash
                and cash equivalents
            
            $
            264,505Accounts
                receivable, net of allowance for doubtful accounts of
                $216,144
            
            
            806,170Prepaid
                expenses and other current assets
            
            
            493,579Total
                current assets
            
            
            1,564,254Property
                and equipment, at cost, net of accumulated depreciation of
                $587,910
            
            
            525,673Intangibles,
                net of accumulated amortization of $597,150
            
            
            9,207,832Goodwill
            
            
            9,638,517Other
                assets
            
            
            119,077Total
                Assets
            
            $
            21,055,353**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilitiesAccounts
                payable trade
            
            $
            1,230,699Accrued
                expenses
            
            
            2,236,936Deferred
                revenue
            
            
            749,673Deferred
                tax liability, net
            
            
            58,474Current
                portion of deferred purchase price
            
            
            4,488,251Total
                current liabilities
            
            
            8,764,033Non-current
                liabilitiesDeferred
                tax liability
            
            
            1,622,239Deferred
                purchase price
            
            
            6,334,296Total
                non-current liabilities
            
            
            7,956,535Total
                liabilities
            
            
            16,720,568Stockholders’
                equityCommon
                stock, par value $0.001; authorized 277,713,000 shares;
                74,672,507****sharesissued
                and outstanding as of March 31, 2008
            
            
            74,673Additional
                paid-in capital
            
            
            24,128,024Accumulated
                other comprehensive income
            
            
            630,224Subscribed
                stock
            
            
            920,000Accumulated
                deficit
            
            
            (21,418,136
            )4,334,785Total
                Liabilities and Stockholders’ Equity
            
            $
            21,055,353





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




5





**Collexis
      Holdings, Inc. and Subsidiaries**


**Consolidated
      Statements of Operations**


**(Unaudited)**





**Three
                Months Ended**
              **March
                31,**
            
            **Nine
                Months Ended**
              **March
                31,****2008**
            
            **2007**
            
            **2008**
            
            **2007**RevenueLicense
                revenue
            
            $
            287,360
            
            $
            205,151
            
            $
            618,448
            
            $
            274,195Service
                revenue
            
            
            413,169
            
            
            287,378
            
            
            1,003,391
            
            
            1,026,883Maintenance
                & support revenue
            
            
            172,725
            
            
            82,946
            
            
            446,676
            
            
            272,532Hardware
                & hosting revenue
            
            
            45,218
            
            
            3,080
            
            
            99,568
            
            
            12,928Database
                subscription revenue
            
            
            498,383
            
            
            -
            
            
            498,383
            
            
            -Total
                revenue
            
            
            1,416,855
            
            
            578,555
            
            
            2,666,466
            
            
            1,586,538Cost
                of revenueCost
                of license revenue
            
            
            4,175
            
            
            12,809
            
            
            47,895
            
            
            12,784Cost
                of service revenue
            
            
            261,590
            
            
            226,026
            
            
            592,331
            
            
            490,320Cost
                of maintenance & support revenue
            
            
            23,938
            
            
            34,778
            
            
            232,568
            
            
            320,913Cost
                of hardware & hosting revenue
            
            
            33,011
            
            
            -
            
            
            69,710
            
            
            11,006Cost
                of database subscription revenue
            
            
            173,206
            
            
            -
            
            
            173,206
            
            
            -Total
                cost of revenue
            
            
            495,920
            
            
            273,613
            
            
            1,115,710
            
            
            835,023Gross
                profit
            
            
            920,935
            
            
            304,942
            
            
            1,550,756
            
            
            751,515Operating
                expensesGeneral
                and administrative
            
            
            2,765,879
            
            
            1,759,081
            
            
            6,199,667
            
            
            4,276,808Sales
                and marketing
            
            
            750,043
            
            
            66,882
            
            
            2,158,386
            
            
            257,615Research
                and Development
            
            
            276,302
            
            
            249,199
            
            
            1,059,930
            
            
            520,008Total
                operating expenses
            
            
            3,792,224
            
            
            2,075,162
            
            
            9,417,983
            
            
            5,054,431Operating
                loss
            
            
            (2,871,291
            )
            
            (1,770,220
            )
            
            (7,867,227
            )
            
            (4,302,916
            )Other
                income (expense)
            
            
            3,258
            
            
            -
            
            
            (5,439
            )
            
            -Loss
                before interest income (expense)
            
            
            (2,868,033
            )
            
            (1,770,220
            )
            
            (7,872,666
            )
            
            (4,302,916
            )Interest
                income (expense)
            
            
            (168,669
            )
            
            3,975
            
            
            (263,541
            )
            
            34,627Loss
                before income tax benefit
            
            
            (3,036,702
            )
            
            (1,766,245
            )
            
            (8,136,207
            )
            
            (4,268,289
            )Tax
                benefit
            
            
            80,417
            
            
            -
            
            
            212,060
            
            
            -NET
                LOSS
            
            $
            (2,956,285
            )
            $
            (1,766,245
            )
            $
            (7,924,147
            )
            $
            (4,268,289
            )Basic
                and diluted common shares outstanding
            
            
            73,076,731
            
            
            58,400,549
            
            
            66,969,780
            
            
            57,448,195Basic
                and diluted net loss per share
            
            $
            (0.04
            )
            $
            (0.03
            )
            $
            (0.12
            )
            $
            (0.07
            )








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


Certain
      prior period amounts have been reclassified to conform to current period
      presentation.




6





**Collexis
      Holdings, Inc. and Subsidiaries**


**Consolidated
      Statements of Comprehensive Loss**


**(Unaudited)**





**Three
                Months Ended**
              **March
                31,**
            
            **Nine
                Months Ended**
              **March
                31,****2008**
            
            **2007**
            
            **2008**
            
            **2007**Net
                loss
            
            $
            (2,956,285
            )
            $
            (1,766,245
            )
            $
            (7,924,147
            )
            $
            (4,268,289
            )Foreign
                currency translation adjustment
            
            
            374,160
            
            
            232,782
            
            
            604,141
            
            
            (48,136
            )Comprehensive
                loss
            
            $
            (2,582,125
            )
            $
            1,533,463
            
            $
            (7,320,006
            )
            $
            (4,316,425
            )




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




7




**Collexis
      Holdings, Inc. and Subsidiaries**


**Consolidated
      Statements of Cash Flows**


**(Unaudited)**


**Nine
                Months Ended**
              **March
                31,****2008**
            
            **2007**Cash
                flows from operating activities:Net
                loss
            
            $
            (7,924,147
            )
            $
            (4,268,289
            )Adjustments
                to reconcile net loss to net cash used in operating
                activitiesDepreciation
                and amortization
            
            
            648,953
            
            
            33,778Compensation
                paid through issuance of stock options
            
            
            533,959
            
            
            874,489Loss
                on disposition of assets
            
            
            15,183
            
            
            -Allowance
                for bad debts
            
            
            194,391
            
            
            32,160Reduction
                to deferred payment obligation for revenue earned
            
            
            (70,133
            )
            
            -Deferred
                taxes
            
            
            (156,229
            )
            
            -Changes
                in operating assets and liabilities, net of acquired
                items:Accounts
                receivable
            
            
            168,786
            
            
            659,096Prepaid
                expenses
            
            
            (250,727
            )
            
            (442,673
            )Other
                receivables
            
            
            132,815
            
            
            (26,955
            )Other
                assets & deferred charges
            
            
            -
            
            
            (504,035
            )Accounts
                payable
            
            
            764,012
            
            
            107,518Accrued
                expenses
            
            
            978,639
            
            
            386,145Deferred
                revenue
            
            
            227,966
            
            
            121,220Net
                cash used in operating activities
            
            
            (4,735,526
            )
            
            (3,027,546
            )Cash
                flows from investing activitiesAdditions
                to equipment
            
            
            (226,853
            )
            
            (102,244
            )Acquisition
                of intangible
            
            
            (105,615
            )
            
            -Acquisition
                of SyynX, net of cash acquired
            
            
            (78,128
            )
            
            -Acquisition
                of Lawriter, net of cash acquired
            
            
            (1,774,379
            )
            
            -Option
                to purchase SyynX
            
            
            -
            
            
            (937,510
            )Net
                cash used in investing activities
            
            
            (2,184,975
            )
            
            (1,039,754
            )Cash
                flows from financing activitiesRepayment
                of loan from stockholder
            
            
            (650,000
            )
            
            -Repayment
                of loan for VersusLaw
            
            
            (100,000
            )
            
            -Partial
                payment on deferred obligation - SyynX
            
            
            (2,106,331
            )
            
            -Partial
                payment on deferred obligation - Lawriter
            
            
            (497,076
            )
            
            -Fees
                paid to raise capital
            
            
            (231,298
            )
            
            -Cash
                received on stock subscriptions
            
            
            920,000
            
            
            -Cash
                received on sale of stock
            
            
            9,724,758
            
            
            4,898,263Net
                cash provided by financing activities
            
            
            7,060,053
            
            
            4,898,263Net
                increase in cash and cash equivalents
            
            
            138,552
            
            
            830,963Effect
                of exchange rate changes on cash and cash equivalents
            
            
            (61,308
            )
            
            (146,180
            )Cash
                and cash equivalents at beginning of period
            
            
            187,261
            
            
            848,972Cash
                and cash equivalents at end of period
            
            $
            264,505
            
            $
            1,533,755


Supplemental
                disclosures of cash flow information:Cash
                paid during the period forInterest
            
            $
            43,894
            
            $
            38,730Franchise
                taxes
            
            
            28,000
            
            
            -Non
                cash financing and investing activity:Deferred
                obligation on acquisition of SyynX
            
            
            8,583,352
            
            
            -Credit
                for option to acquire SyynX paid
            
            
            790,000
            )
            
            -Deferred
                obligation on acquisition of Lawriter
            
            
            6,875,000
            
            
            -Common
                stock issued to sellers of Lawriter
            
            
            500,000
            
            $
            -Common
                stock issued to VersusLaw
            
            $
            635,000
            
            $
            -





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





8


**Collexis
      Holdings, Inc. and Subsidiaries**


**Notes
      to Consolidated Financial Statements**


**(Unaudited)**


**NOTE
      1.**  **DESCRIPTION
      OF BUSINESS AND BASIS OF PRESENTATION**





Collexis
      Holdings, Inc., sometimes referred to as Collexis (and “we,” “us,” or “our”) in
      these Notes, is a global software development company headquartered in Columbia,
      South Carolina with major operations in Cincinnati, Ohio, Geldermalsen, the
      Netherlands and Cologne, Germany. Collexis develops software that supports
      the
      knowledge intensive market-building tools to search and mine large sets of
      information. The Collexis Engine 6.0 and 6.5 software enables discovery through
      identification, ordering and aggregation of ideas and concepts. Using public
      as
      well as proprietary thesauri of industry specific language, Collexis can create
      “fingerprints” of texts - such as articles, web pages, books and internal and
      external databases - that can be used in turn to find the most relevant
      information for a researcher or business professional. Collexis operates several
      subsidiaries that support its core technology sales in the government,
      enterprise and life science sectors. Collexis recently acquired an
      industry-dedicated subsidiary - Lawriter - that provides online legal research
      services to lawyers in the United States primarily through state bar
      associations. Collexis now offers the world’s first pre-populated professional
      social network for life science researchers, www.biomedexperts.com .





Technology
      Holdings, Inc., which subsequently changed its name to Collexis Holdings, Inc.,
      filed a Current Report on Form 8-K with the U.S. Securities and Exchange
      Commission (“SEC”) on February 14, 2007 to report the reverse merger whereby
      Collexis B.V., an operating company, became a wholly owned subsidiary of
      Technology Holdings, Inc., a reporting shell company. Collexis B.V., which
      was
      the acquirer in the merger for accounting purposes, had a calendar fiscal year.
      Technology Holdings, Inc., which was the acquiree in the merger for accounting
      purposes, had a fiscal year that ends on June 30. Because we adopted the
      July-June fiscal year of Technology Holdings, Inc., the consolidated financial
      statements in this report are for the third quarter of our fiscal
      year.





We
      have prepared the unaudited consolidated interim financial statements included
      in this report in accordance with accounting principles generally accepted
      in
      the United States and pursuant to the rules and regulations of the SEC,
      including Form 10-QSB and Regulation S-B. The financial information contained
      in
      this report is unaudited; however, in the opinion of management, we have
      included all adjustments necessary for a fair presentation of such financial
      information. All such adjustments are of a normal recurring nature. The results
      of operations for the nine months ended March 31, 2008 are not necessarily
      indicative of the results expected for the full year ending June 30,
      2008.





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





*Principles
      of Consolidation*





The
      consolidated financial statements include the accounts of Collexis Holdings,
      Inc. and its subsidiaries, Collexis B.V. and Collexis, Inc. (99.5% owned),
      for
      all periods presented. The accounts of SyynX Solutions GmbH, and Lawriter LLC
      are presented as of their respective purchase dates, October 19, 2007 and
      February 1, 2008, respectively. All significant intercompany accounts and
      transactions have been eliminated in consolidation.





*Fiscal
      Year End*





The
      company’s fiscal year end for financial reporting is June 30. The company’s
      fiscal year end for income tax reporting is December 31.




9


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**
  *Fair
      Value of Financial Instruments*





Statement
      of Financial Accounting Standards (“SFAS”) No. 107, “Disclosure About Fair Value
      of Financial Instruments,” requires the company to disclose, when reasonably
      attainable, the fair market values of its assets and liabilities that are deemed
      to be financial instruments. The carrying amounts and estimated fair values
      of
      the company’s financial instruments approximate their fair value due to their
      short-term nature.





*Use
      of Estimates*





The
      preparation of consolidated 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,
      liabilities, revenues and expenses and related disclosure of contingent assets
      and liabilities. Significant estimates include: the valuation of shares issued
      for services or in connection with acquisitions; the valuation of fixed assets
      and intangibles and their estimated useful lives; and contingencies. The company
      evaluates its estimates on an ongoing basis. Actual results could differ from
      those estimates under different assumptions or conditions. **





*Cash
      and Cash Equivalents, and Marketable Securities*





We
      invest our excess cash in money market funds. All highly liquid investments
      with original maturities of three months or less from date of purchase are
      classified as cash equivalents.





*Revenue
      Recognition*





We
      recognize revenue in accordance with Statement of Position 97-2, “Software
      Revenue Recognition” (“SOP 97-2”), and Statement of Position 98-9, “Modification
      of SOP 97-2, Software Revenue Recognition, With Respect to Certain
      Transactions.” We recognize revenue from non-cancelable software licenses when
      the license agreement has been signed, delivery has occurred, the fee is fixed
      or determinable and collection is probable. We recognize license revenue from
      resellers when an end user has placed an order with the reseller and the above
      revenue recognition criteria have been met with respect to the reseller. In
      multiple element arrangements, we defer the vendor-specific objective evidence
      of fair value (“VSOE”) related to the undelivered elements and recognize revenue
      on the delivered elements using the percentage-of-completion
      method.





The
      most commonly deferred elements are initial maintenance and consulting services.
      We recognize initial maintenance on a straight-line basis over the initial
      maintenance term. We determine VSOE of maintenance by using a consistent
      percentage of maintenance fee to license fee based on renewal rates. We
      recognize maintenance fees in subsequent years on a straight-line basis over
      the
      life of the applicable agreement. Maintenance contracts entitle the customer
      to
      hot-line support and all unspecified product upgrades released during the term
      of the maintenance contract. Upgrades include any and all unspecified patches
      or
      releases related to a licensed software product. Maintenance does not include
      implementation services to install these upgrades. We determine VSOE of services
      by using an average consulting rate per hour for consulting services sold
      separately, multiplied by the estimate of hours required to complete the
      consulting engagement.





Delivery
      of software generally occurs when the product (on CDs) is delivered to a common
      carrier. Occasionally, delivery occurs through electronic means whereby the
      company makes the software available to the customer through the company’s
      secure FTP (File Transfer Protocol) site. We do not offer any customers or
      resellers a right of return.




10


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**
  For
      software license, services and maintenance revenue, we assess whether the fee
      is
      fixed and determinable, we have performed the services and whether or not
      collection is probable. We assess whether the fee is fixed and determinable
      based on the payment terms associated with the transaction.





If
      a significant portion of a fee is due after the company’s normal payment terms,
      which are 30 to 90 days from invoice date, the fee is not considered fixed
      and
      determinable. In these cases, we recognize revenue as the fees become
      due.





We
      assess probability of collection based on a number of factors, including past
      transaction history with the customer and the credit-worthiness of the customer.
      We do not ask customers for collateral. If we determine that collection of
      a fee
      is not probable, we defer the fee and recognize the revenue when collection
      becomes probable, which is generally when we receive payment.





Our
      arrangements do not generally include acceptance clauses. If an arrangement
      includes an acceptance provision, however, acceptance occurs upon the earliest
      of receipt of a written customer acceptance or expiration of the acceptance
      period.





We
      bill the majority of our training and consulting services based on hourly rates.
      We generally recognize revenue as we perform these services. However, when
      an
      arrangement with a customer is based on a fixed fee or requires significant
      work
      either to alter the underlying software or to build additional complex
      interfaces to enable the software to perform as the customer requests, we
      recognize the related revenue using the percentage of completion method of
      accounting. The percentage of completion method of accounting applies to our
      custom programming services, which are generally contracted on a fixed fee
      basis. We charge anticipated losses, if any, to operations in the period that
      we
      determine such losses are probable.





We
      recognize revenues from transaction fees associated with subscription
      arrangements, which are billable on a per transaction basis, based on the actual
      number of transactions processed during the period.





In
      accordance with Emerging Issues Task Force (“EITF”) Issue No. 01-14, “Income
      Statement Characterization of Reimbursement Received for ‘Out of Pocket’
Expenses Incurred,” we classify reimbursements received for out-of-pocket
      expenses as revenue. **





*Development
      Costs*





Our
      policy is to charge the costs of software development to the year in which
      these
      costs occurred. We establish technological feasibility and completion of the
      existing core
      data
      processing engine.
      Generally, costs related to projects that reach technological feasibility upon
      completion of a working model are not capitalized, because the period between
      establishment of the working model and general availability is of short
      duration. The nature of our current development for software products is
      generally such that we can measure technological feasibility most effectively
      using the working model method, in which the time between establishment of
      a
      working model and general availability is short, which results in no costs
      that
      qualify for capitalization.




11


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**
  *Allowance
      for Doubtful Accounts*





We
      evaluate the collectability of accounts receivable based on a combination of
      factors. When we are aware of circumstances that may impair a specific
      customer’s ability to meet its financial obligations, we record a specific
      allowance against amounts due, thereby reducing the net receivable to the amount
      our management believes is probable of collection. For all other customers,
      we
      recognize allowances for doubtful accounts based on the length of time the
      receivables are outstanding, the current business environment and historical
      experience.





*Foreign
      Currency Risk*





We
      have conducted significant sales activity through our subsidiaries based in
      Geldermalsen, the Netherlands and Cologne, Germany. The majority of the sales
      activity has occurred in the Netherlands and Germany. We have experienced
      foreign exchange gains and losses to date without engaging in any hedging
      activities.





Our
      foreign operations’ functional currency is the applicable local currency
      (primarily, the Euro). Assets and liabilities for these foreign operations
      are
      translated at the exchange rate in effect at the balance sheet date, and income
      and expenses are translated at average exchange rates prevailing during the
      period. Translation gains or losses are reflected in general and administrative
      expense.





Under
      the terms of a share purchase agreement, we are required to make payments to
      the
      selling shareholders and managing directors of SyynX Solutions GmbH in three
      installments through October 2010 (see Note 3 below). Because these payment
      obligations are denominated in Euros, we face foreign exchange gains or losses
      that may have a significant impact on our net income or loss and cash
      requirements in future periods.





*Amortization
      of Intangible Assets*





Intangible
      assets are carried at cost less accumulated amortization. We amortize the
      intangible assets with finite lives using the straight-line method over the
      estimated economic lives of the assets, which is five to 10 years.





*Income
      Taxes*





Income
      taxes are accounted for under the asset and liability method. The asset and
      liability method requires that deferred tax assets be reduced by a valuation
      allowance if, based on the weight of available evidence, it is more likely
      than
      not that some portion or all of such assets will not be realized. 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 and operating
      loss and tax credit carry-forwards. 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. The effect on deferred tax assets and liabilities of a change in tax
      rates is recognized in operations in the period that includes the enactment
      date.





*Loss
      per Common Share*





Loss
      per share is computed based on weighted average number of common shares
      outstanding and excludes any potential dilution. Diluted loss per share reflects
      the potential dilution that could occur if securities or other contracts to
      issue common stock were exercised or converted into common stock or resulted
      in
      the issuance of common stock, which would then share in the earnings of the
      company.




12


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**
  We
      had 18,347,119 options outstanding at March 31, 2008 and 15,731,120 options
      outstanding at March 31, 2007 that could potentially dilute basic earnings
      per
      share in the future, but we excluded those options from the computation of
      diluted loss per share because their effect would have been
      anti-dilutive **.**





*Recently
      Issued Accounting Standards*





In
      February 2007, the
      Financial Accounting Standards Board (FASB) issued
      SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
      Liabilities.” SFAS No. 159 permits entities to choose to measure many financial
      instruments and certain other items at fair value. SFAS No. 159 is effective
      for
      fiscal years beginning after November 15, 2007. We do not expect the adoption
      of
      SFAS No. 159 to have a material effect on our consolidated financial position,
      results of operations or cash flows.





In
      December 2007, the FASB issued SFAS No. 141(R), “Business Combinations,” which
      will become effective in 2009 via prospective application to new business
      combinations. SFAS No. 141(R) requires that the acquisition method of accounting
      be applied to a broader set of business combinations, amends the definition
      of a
      business combination, provides a definition of a business, requires an acquirer
      to recognize an acquired business at its fair value at the acquisition date
      and
      requires the assets and liabilities assumed in a business combination to be
      measured and recognized at their fair values as of the acquisition date (with
      limited exceptions). We will adopt SFAS No. 141(R) in fiscal year 2009, and
      its
      effects on future periods will depend on the nature and significance of any
      acquisitions subject to SFAS No. 141(R).





In
      February 2008, the FASB issued FASB Staff Position (FSP) Financial Accounting
      Standard (FAS) 157-1, “Application of FASB Statement No. 157 to FASB Statement
      No. 13 and Its Related Interpretive Accounting Pronouncements That Address
      Leasing Transactions,” and FSP FAS 157-2, “Effective Date of FASB Statement No.
      157.” FSP FAS 157-1 removes leasing from the scope of SFAS No. 157, “Fair Value
      Measurements.” FSP FAS 157-2 delays the effective date of SFAS No. 157 from 2008
      to 2009 for all nonfinancial assets and nonfinancial liabilities, except those
      that are recognized or disclosed at fair value in the financial statements
      on a
      recurring basis (at least annually). We
      do not expect the adoption of FSP
      FAS
      157-1 to
      have a material effect on our consolidated financial position, results of
      operations or cash flows.





In
      March
      2008, the FASB issued -SFAS-
      No. 161 ,
      “Disclosures about Derivative Instruments and Hedging Activities - an amendment
      of FASB Statement No. 133.” SFAS No. 161 expands the current disclosure
      requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging
      Activities,” such that entities must now provide enhanced disclosures on a
      quarterly basis regarding how and why the entity uses derivatives; how
      derivatives and related hedged items are accounted for under SFAS No. 133 and
      how derivatives and related hedged items affect the entity’s financial position,
      performance and cash flow. Pursuant to the transition provisions of SFAS No.
      161, we will adopt SFAS No. 161 in fiscal year 2009 and will present the
      required disclosures in the prescribed format on a prospective basis. SFAS
      No.
      161will not affect our consolidated financial statements, as it is
      disclosure-only in nature.





13


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**
  **NOTE
      3.**  **ACQUISITIONS**





*SyynX
      Solutions GmbH*





On
      October 19, 2007, we entered into a Share Purchase Agreement with the
      shareholders and managing directors of SyynX Solutions GmbH (“SyynX”), for an
      aggregate cash consideration of €5,923,267, or approximately $8,488,343 at then
      current exchange rates. We are required to make these payments in installments
      over three years as follows (due to rounding of the payments to be made to
      several sellers, the reflection of a credit as noted below, and changes in
      the
      exchange rate as of March 31, 2008, the amounts below do not equal the gross
      amounts above):





**Payment
                Date**
            
            **Payment**
              **Amount**
              **in
                Euros**
            
            **Scheduled**
              **Payments
                in**
              **US
                Dollars at**
              **3-31-08
                Exchange Rates**
            
            **Remaining**
              **Payments****in**
              **US
                Dollars at**
              **3-31-08
                Exchange Rates**December
                31, 2007*
            
            €
            1,500,000
            
            $
            2,370,000
            
            $
            -October
                1, 2008
            
            
            1,485,149
            
            
            2,346,535
            
            
            2,346,535October
                1, 2009
            
            
            1,224,918
            
            
            1,935,370
            
            
            1,935,370October
                1, 2010
            
            
            1,212,871
            
            
            1,916,336
            
            
            1,916,336€
            5,422,938
            
            $
            8,568,241
            
            $
            6,198,241





*
            The
                payment amount on December 31, 2007, which we made as scheduled,
                reflected
                a €500,000 reduction in light of the termination of our right to receive
                reimbursement of the €500,000 option payment previously made by Collexis
                B.V.





The
      total of remaining payments, $6,198,241, represents the actual payment amounts
      due on their respective due dates, calculated at March 31, 2008 exchange rates.
      The calculation of deferred purchase price on our consolidated balance sheet
      at
      March 31, 2008, $5,458,077, reflects the present value of these payments
      discounted at the implied interest rate of 8%. The difference of $740,164
      represents the value of imputed interest.





The
      transaction is accounted for in accordance with SFAS No. 141, “Business
      Combinations.” The preliminary purchase price allocation, as of the purchase
      date, is as follows:




14


**Collexis
      Holdings, Inc. and Subsidiaries**


**Notes
      to Consolidated Financial Statements**


**(Unaudited)**




**Purchase
                Price:**Deferred
                purchase price
            
            $
            7,029,308Exercise
                of option
            
            
            712,550Direct
                costs of acquisition
            
            
            189,878Less
                SyynX cash on hand
            
            
            (154,036
            )Total
                purchase price
            
            $
            7,777,700





**Value
                assigned to assets and liabilities:**Assets:Accounts
                receivable
            
            $
            461,756Prepaid
                and other assets
            
            
            59,652Deferred
                tax assets
            
            
            48,005Property
                and equipment
            
            
            71,435Trade
                name (estimated useful life of five years)
            
            
            1,090,000Acquired
                technology (estimated useful life of five years)
            
            
            4,004,733Goodwill/unidentified
                intangibles
            
            
            3,918,672Liabilities:Accounts
                payable
            
            
            (21,183
            )Income
                taxes payable
            
            
            (127,876
            )Deferred
                tax liability
            
            
            (1,608,479
            )Other
                liabilities
            
            
            (119,015
            )Total
                net assets
            
            $
            7,777,700





We
      continue to evaluate and value the identifiable intangible assets and
      acquisition costs of SyynX. Therefore, this preliminary allocation is subject
      to
      refinement, as permitted for a period of 12 months from the date of
      acquisition.





In
      connection with the transactions contemplated by the SyynX share purchase
      agreement, we granted to each of the three managing directors of SyynX as a
      condition to their employment agreements an option to purchase 1,000,000 shares
      of our common stock at an exercise price of $0.75 per share. We granted options
      to purchase a total of 3,000,000 shares. The options have a term of eight years.
      The options vested or will vest as follows: options to purchase 16,666 shares
      vested on October 19, 2007; options to purchase 16,666 shares vested or will
      vest each month through August 19, 2012, and options to purchase the final
      16,706 shares will vest on September 19, 2012. Additionally, on February 15,
      2008, we granted seven former SyynX employees and one consultant the option
      to
      purchase a total of 275,000 shares of our common stock at an exercise price
      of
      $0.75 per share, under a proportionally identical vesting schedule and as called
      for under the agreement.





*Lawriter
      LLC*





On
      February 1, 2008, we acquired  Lawriter
      LLC (“Lawriter”),
      an Ohio limited liability company that provides online legal research services
      to a consortium of bar associations under the name Casemaker ® .
      We
      purchased all of the limited liability company interests in Lawriter from
      OSBA.COM LLC, an Ohio limited liability company (“OSBA”), and the Institute of
      Legal Publishing, Inc., an Ohio corporation f/k/a Lawriter Corporation
      (“Lawcorp”), for an aggregate consideration of $9,000,000, or $4,500,000 to each
      of the sellers, plus an Earnout (as defined below), if any.




15


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**
  Under
      the
      terms of the purchase agreement, at the closing:





·
            we
                made a cash payment of $1,125,000 to
                OSBA;


·
            we
                made a cash payment of $500,000 to Lawcorp;
                and


·
            we
                issued 666,666 unregistered shares of our common stock at an agreed-upon
                value of $0.75 per share, or $500,000, to Lawcorp in a private offering.





We
      also
      agreed to pay Lawcorp $500,000 on or before February 8, 2008, which obligation
      we mutually extended until, and paid on, February 27, 2008. In addition, we
      agreed to pay a total of $1,255,000 to OSBA and $3,000,000 to Lawcorp, with
      the
      remaining balance to each seller to be paid in four equal installments,
      respectively, as listed in the following table.





**Seller**
            
            **Payment
                Date**
            
            **Payment
                Amount**OSBA
            
            
            May
                1, 2008
            
            $
            313,750August
                1, 2008
            
            
            313,750November
                1, 2008
            
            
            313,750February
                1, 2009
            
            
            313,750$
            1,255,000Lawcorp
            
            
            February
                1, 2009
            
            $
            750,000February
                1, 2010
            
            
            750,000February
                1, 2011
            
            
            750,000February
                1, 2012
            
            
            750,000$
            3,000,000





With
      respect to the remaining $2,120,000 consideration due to OSBA, the Agreement
      provides that we may either:





(a)
            credit
                against the balance of that consideration the monthly fee that would
                otherwise be payable by the Ohio State Bar Association to Lawriter
                for the
                60 months following the closing (which is estimated to equal a credit
                of
                approximately $424,000 per twelve month period or $2,120,000 in total)
                or


(b)
            pay
                all or any portion of the balance directly to OSBA on a monthly basis
                for
                the 60 months following the closing, in which case the Ohio State
                Bar
                Association would resume making payments to Lawriter in the ordinary
                course of business.





As
      of March 31, 2008, we have taken a credit of $70,798 against the outstanding
      consideration for the value of the monthly fees payable to us by
      OSBA.





Under
      the
      terms of the Agreement, we also agreed to pay the Earnout (as defined below),
      if
      any, on a pro rata basis to OSBA and Lawcorp within 20 days following the end
      of
      each calendar quarterly period within the Earnout period. The Earnout
      period:




16


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**


·
            begins
                on the earlier occurrence of (a) the first day of that calendar month
                on
                which the aggregate Net Sales derived from the products and services
                that
                we acquired under the terms of the Agreement, including intellectual
                property rights related to the Casemaker database and software and
                Collexis-related technology and enhancements that we intend to offer
                to
                our customers and clients (collectively, “Legal Research Services”), have
                been at least $2,750,000 for each of the previous three consecutive
                calendar months following the closing or (b) the first day of the
                18th
                month following the closing; and


·
            ends
                on the last day of the 60th calendar month
                thereafter.





The
      term
“Net Sales” means gross revenues derived from Legal Research Services less
      returns, discounts, allowances, sales taxes and bad debt reserves, as determined
      in accordance with U.S. generally accepted accounting principles. The term
      “Earnout” means a lump sum cash payment equal to the product of (x) the Earnout
      percentage of 3.75%, or 3.9% in certain circumstances, multiplied by (y) Net
      Sales derived from Legal Research Services during each calendar quarterly period
      within the Earnout period, reduced by any payment we may be required to make
      to
      the consortium of bar associations under the terms of their respective license
      agreements with Lawriter. The aggregate of any or all Earnout payments, however,
      cannot exceed $15,000,000.





The
      total of remaining payments, $6,304,202, represents the actual payment amounts
      due on their respective due dates. The calculation of deferred purchase price
      on
      our consolidated balance sheet at March 31, 2008, $5,364,470, reflects the
      present value of these payments discounted at the implied interest rate of
      8%.
      The difference of $939,732 represents the value of imputed
      interest.





The
      transaction is accounted for in accordance with SFAS No. 141. The preliminary
      purchase price allocation, as of the purchase date, is as follows:




17


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**


**Purchase
                Price:**Deferred
                purchase price
            
            $
            5,931,679Cash
                paid, net
            
            
            1,559,623Direct
                costs of acquisition
            
            
            228,756Common
                shares issued
            
            
            500,000Total
                purchase price net of cash acquired
            
            $
            8,220,058**Value
                assigned to assets and liabilities:**Assets:Accounts
                receivable
            
            
            247,676Property
                and equipment
            
            
            104,216Acquired
                technology (estimated useful life of seven years)
            
            
            1,170,000Trade
                name (estimated useful life indefinite)
            
            
            1,090,000Customer
                contracts (estimated useful life of ten years)
            
            
            726,000Goodwill/unidentified
                intangibles
            
            
            5,275,330Liabilities:Accounts
                payable and accrued expenses
            
            
            (97,005
            )Deferred
                revenue
            
            
            (256,084
            )Accrued
                restructuring charges
            
            
            (40,075
            )Total
                net assets
            
            $
            8,220,058





We
      continue to evaluate and value the identifiable intangible assets and
      acquisition costs of Lawriter. Thus, this preliminary allocation is subject
      to
      refinement, including an increase in purchase price for the reasonably estimable
      value of the Earnout, as permitted for a period of 12 months from the date
      of
      acquisition.





*Combined
      consolidated pro forma financial information*





The
      operating results of SyynX and Lawriter are included with ours beginning October
      19, 2007 and February 1, 2008, respectively. The following pro forma information
      reflects the impact on our statements of operations had these acquisitions
      occurred on July 1, 2007 and 2006, respectively:




18


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**


**Collexis
      Holdings, Inc.**


**Consolidated
      summary pro forma data**





**Three
                months ended March 31,**
            
            **Nine
                months ended March 31,****2008**
            
            **2007**
            
            **2008**
            
            **2007**Revenue
                - as reported
            
            $
            1,416,855
            
            $
            578,555
            
            $
            2,666,466
            
            $
            1,586,538Revenue
                - pro forma
            
            
            1,666,047
            
            
            1,656,081
            
            
            4,379,800
            
            
            4,437,370Net
                loss - as reported
            
            
            (2,956,285
            )
            
            (1,766,245
            )
            
            (7,924,147
            )
            
            (4,268,289
            )Net
                loss - pro forma
            
            
            (2,929,587
            )
            
            (1,593,732
            )
            
            (8,388,060
            )
            
            (4,013,827
            )Net
                loss per share - as reported
            
            
            (0.04
            )
            
            (0.03
            )
            
            (0.12
            )
            
            (0.07
            )Net
                loss per share - pro forma
            
            $
            (0.04
            )
            $
            (0.03
            )
            $
            (0.13
            )
            $
            (0.07
            )





**NOTE
      4.**  **LICENSE
      AND PUBLISHING AGREEMENT WITH VERSUSLAW**





On
      January 18, 2008, we entered into a licensing and publishing agreement with
      VersusLaw, Inc. (“VersusLaw”), under which we acquired a non-exclusive,
      transferable license to use VersusLaw’s legal-related collection of judicial
      opinions. In exchange for the rights granted to us under the agreement, we
      paid
      to VersusLaw a licensing fee of $1,385,000, which was composed of: $100,000
      in
      cash; a secured promissory note for $650,000; and 846,666 shares of our common
      stock with an agreed value of $0.75 per share, or $635,000. The principal of
      the
      note was due on February 18, 2008. Under the terms of the agreement, if the
      note
      was not paid by that date, the outstanding principal would begin to accrue
      interest at a default rate of 18% per annum. The note is secured by our accounts
      receivables. On March 18, 2008, we paid $100,000 toward the outstanding
      principal. As of March 31, 2008, we owed $550,000 in principal and $13,000
      in
      accrued interest. We paid the principal due of $550,000 on April 14,
      2008.





The
      agreement gives us the non-exclusive right to advertise and distribute copies
      of
      the data to end users, and to permit our customers to download, print and
      electronically copy the data. The term of the license granted to us is
      perpetual, without payment of any additional licensing fees.





**NOTE
      5.**  **SALES
      OF COMMON STOCK AND OPTION GRANTS**





In
      addition to issuing shares of our common stock in the Lawriter and VersusLaw
      transactions as described above, we also issued shares of our common stock
      as
      follows:





On
      February 1, 2008, we closed the sale of 2,453,333 shares of common stock at
      $0.75 per share to a single investor in a private offering. We received gross
      proceeds from the offering of approximately $1,840,000. No placement fees were
      payable in connection with this offering. We used the proceeds to pay the
      closing cash consideration in the Lawriter acquisition described above and
      for
      working capital.





On
      February 27, 2008, we closed the sale of 1,226,667 shares of common stock at
      $0.75 per share to a single investor in a private offering. We received gross
      proceeds from the offering of approximately $920,000. No placement fees were
      payable in connection with this offering. We used the proceeds to make a
      $500,000 payment to Lawcorp in connection with the Lawriter acquisition
      described above and for working capital. Although we received the subscription
      proceeds and agreement on February 27, the shares were not issued by our
      transfer agent until April 7, which is why we reflect the offering as
      subscription proceeds on our consolidated balance sheet.




19


**Collexis
        Holdings, Inc. and Subsidiaries**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**


On
      February 15, 2008, we granted seven employees and one consultant the option
      to
      purchase a total of 275,000 shares of our common stock at an exercise price
      of
      $0.75 per share.





**NOTE
      6.**  **INTANGIBLE
      ASSETS AND GOODWILL**





As
      a result of our acquisition of SyynX, we recorded intangible assets and
      goodwill. The amortizable intangible assets include trade name and acquired
      technology, recorded at fair value with estimated useful lives of five years.
      Goodwill reflects the excess of the purchase price over the net assets acquired
      in the transaction. Goodwill is not amortized but tested for impairment annually
      under the rules prescribed by SFAS No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets.”





As
      a result of our acquisition of Lawriter, we recorded intangible assets and
      goodwill. The amortizable intangible assets include acquired technology and
      customer contracts, recorded at fair value with estimated useful lives of seven
      and 10 years, respectively. We also recorded a trade name with an indefinite
      useful life. Goodwill reflects the excess of the purchase price over the net
      assets acquired in the transaction. Neither the trade name nor goodwill are
      amortized, but are tested for impairment annually under the rules prescribed
      by
      SFAS No. 144.





**NOTE
      7.**  **SUBSEQUENT
      EVENTS**





*Private
      Offering of Common Stock Commenced in April 2008*





On
      April 7, 2008, we initiated a private offering of up to 30,000,000 shares of
      common stock at $0.15 per share ($4,500,000) to our stockholders who have
      previously purchased shares from us in private placements. The shares were
      offered principally in proportion to the number of shares each investor had
      previously purchased at $0.75 per share. As of May 14, 2008, we have received
      subscription proceeds of $2,522,976 for a total of 16,819,841 shares. We
      accepted subscription agreements for these shares on May 14 and instructed
      our
      transfer agent to issue the shares. Each investor agreed to hold the shares
      purchased in the offering for a minimum of one year. No placement fees were
      payable in connection with this offering. We have used or will use the proceeds
      of this offering to make installment payments required under the terms of our
      recent acquisitions and for working capital.





*Grant
      of Restricted Shares to New CFO*





As
      of April 7, 2008, we agreed to issue 400,000 shares of restricted stock to
      our
      new Chief Financial Officer. The restricted stock will vest annually over five
      years.





20





**ITEM
      2.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





**Overview**





*Summary
      of Our Business* .
      Collexis is a global software development company headquartered in Columbia,
      South Carolina with operations in Geldermalsen, the Netherlands, Cologne,
      Germany and Cincinnati, Ohio. We recently acquired Lawriter, the leading legal
      online research provider to the small and medium size law firm market. We now
      offer the world’s first pre-populated professional social network for life
      science researchers, www.biomedexperts.com. We develop software that supports
      knowledge intensive markets, building tools to search and mine large sets of
      information. Our Collexis Engine 6.0 and 6.5 software enables discovery through
      identification, ordering and aggregation of ideas and concepts. We generate
      our
      revenues primarily from licensing our software, providing services to the users
      of our software, maintaining and supporting our software, selling related
      hardware and hosting software on an application service provider basis.





*Acquisition
      of SyynX* .
      On October 19, 2007, we acquired our long-time software development partner,
      SyynX Solutions GmbH (“SyynX”), a privately-held software company based in
      Cologne, Germany. We agreed to purchase all of the capital stock of SyynX for
      an
      aggregate cash consideration of €5,923,267, or approximately $8,488,343 at then
      current exchange rates. We paid SyynX approximately $852,000 in the 12 months
      ended June 30, 2007 for development, customer support and related services.
      Our
      consolidated financial results reflect the financial results of SyynX beginning
      on October 19, 2007.





*Licensing
      and Publishing Agreement with VersusLaw, Inc.* On January 18, 2008, we entered into a licensing and publishing agreement with
      VersusLaw, Inc. (“VersusLaw”), under which we acquired a non-exclusive,
      transferable license to use VersusLaw’s legal-related collection of judicial
      opinions. In exchange for the rights granted to us under the agreement, we
      paid
      to VersusLaw a licensing fee of $1,385,000, which was composed of: $100,000
      in
      cash; a secured promissory note for $650,000; and 846,666 shares of our common
      stock with an agreed value of $0.75 per share, or $635,000. The principal of
      the
      note was due on February 18, 2008. We paid the note in two installments:
      $100,000 on February 18, 2008 and the remaining $550,000 on April 14, 2008.





*Acquisition
      of Lawriter LLC.* On February 1, 2008, we acquired Lawriter LLC (“Lawriter”), an Ohio limited
      liability company that provides online legal research services to a consortium
      of bar associations under the name Casemaker ® via monthly database subscription fees. We purchased all of the limited
      liability company interests in Lawriter for an aggregate consideration of
      $9,000,000, or $4,500,000 to each of the sellers, plus an Earnout, if
      any.





For
      more information about our acquisitions of SyynX and Lawriter and our license
      agreement with VersusLaw, please see Notes 3 and 4 to the consolidated unaudited
      financial statements included in Part I, Item 1, in this quarterly
      report.





*Need
      for Additional Capital* .
      We had cash and cash equivalents
      of approximately $265,000 as of March 31, 2008 and approximately $ 791,000 as of
      May 13, 2008. For the nine months ended March 31, 2008, we used a total of
      approximately $4,735,000 in cash in connection with operating activities. We
      anticipate continuing losses as we build out our platforms and develop the
      sales
      force to market our products. In addition, we must make payments totaling
      approximately $4,460,000, plus interest, in the next 12 months under the terms of the transactions
      described above. Accordingly, we will need substantial additional capital for
      these purposes as well as to pursue our growth plans, and we can give no
      assurance that we will be able to raise the additional capital we need on
      commercially acceptable terms or at all.




21




**Results
      of Operations**





**Three
      Months Ended March 31, 2008 Compared to Three Months Ended March 31,
      2007**





*Total
      Revenues* .
      Total revenues increased by $838,000, or 145%, to over $1.4 million for the
      three months ended March 31, 2008 compared to $578,000 for the three months
      ended March 31, 2007. This increase was due primarily to database subscription
      fees from Lawriter.





*License
      Revenue* .
      License revenue increased by $82,000 or 40% to $287,000 for the three months
      ended March 31, 2008 as compared to $205,000 for the three months ended March
      31, 2007. This
      increase is primarily due to an increase in sales of new licenses and
      subscriptions in the university and research markets.





*Service
      Revenue* .
      Service revenue increased by $126,000, or 44%, to $413,000 for the three months
      ended March 31, 2008 versus $287,000 for the three months ended March 31, 2007.
      This increase is due to an increase in services revenues from SyynX, partially
      offset by a minor decrease in services revenues from add-on profiles and
      libraries sold to other clients.





*Maintenance
      & Support Revenue* .
      Maintenance and support revenue increased by $90,000, or 108%, to $173,000
      for
      the three months ended March 31, 2008 as compared to $83,000 for the three
      months ended March 31, 2007. This increase is due to an increase in the number
      and value of maintenance contracts sold to new licensees.





*Hardware
      & Hosting Revenue* .
      Hardware and hosting revenue increased to $45,000 for the three months ended
      March 31, 2008 as compared to $3,000 for the three months ended March 31, 2007.
      This increase is due primarily to an increase in revenues from SyynX, as well
      as
      an increase in hosting contracts sold in the period.





*Database
      Subscription Revenue* .
      Database subscription revenues were $498,000 for the three months ended March
      31, 2008. These revenues relate to Lawriter since the date of acquisition on
      February 1, 2008.





*Cost
      of License Revenue* .
      Cost of license revenue was $4,000 for the three months ended March 31, 2008
      as
      compared to $13,000 for the three months ended March 31, 2007. Cost of license
      revenue is primarily comprised of third party fees charged on some product
      sales.





*Cost
      of Service Revenue* .
      Cost of service revenue increased $36,000, or 16%, to $262,000 for the three
      months ended March 31, 2008 versus $226,000 for the three months ended March
      31,
      2007. This
      increase was due to an increase in costs associated with SyynX, partially offset
      by an overall decrease in personnel costs associated with a reduction of our
      professional services staff and the elimination of monthly fees paid to SyynX
      prior to the acquisition.





*Cost
      of Maintenance & Support Revenue* .
      Cost of maintenance and support revenue decreased $11,000, or 31%, to $24,000
      for the three months ended March 31, 2008 versus $35,000 for the three months
      ended March 31, 2007. This decrease is due primarily to a decrease in costs
      associated with support personnel.





*Cost
      of Hardware & Hosting Revenue* .
      Cost of hardware and hosting revenue was $33,000 for the three months ended
      March 31, 2008 and is primarily due to costs related to SyynX.




22




*Cost
      of Database Subscription Revenue* .
      Cost of database subscription revenue was $173,000 for the three months ended
      March 31, 2008, and is composed primarily of data access fees and support
      costs.





*General
      & Administrative Costs* .
      General and administrative costs increased to $2.8
      million for the three months ended March 31, 2008, compared to $1.8 million for the
      three months ended March 31, 2007, an increase of
      $1
      million, or 57%. This increase is due primarily to the cumulative effect of the following
      costs:





·
            a
                $360,000 increase in depreciation and amortization expense, including
                $308,000 in amortization of intangibles related to the SyynX and
                Lawriter
                acquisitions;





·
            a
                $200,000 increase in bad debt
                expense;





·
            $187,000
                in costs related to Lawriter, including approximately $46,000 in
                cash
                compensation costs;





·
            a
                $143,000 increase in professional services and consulting fees
                generally;





·
            approximately
                $126,000 in professional and other expenses related to our SyynX,
                Lawriter
                and VersusLaw transactions;





·
            a
                $103,000 increase in professional costs related to our being a public
                company in the 2008 period;





·
            a
                $90,000 increase in cash compensation to the former SyynX managing
                directors;





·
            a
                $78,000 increase in cash compensation for personnel we hired to expand
                our
                global headquarters in Columbia, South
                Carolina





·
            a
                $63,000 increase in compensation costs for the additional SyynX personnel
                post-acquisition;





·
            a
                $50,000 increase in insurance expense, including $41,000 in director
                and
                officer insurance expense;and





·
            a
                $28,000 increase in state corporate license tax expense.





These
      increases were partially offset by:





·
            a
                $396,000 decrease in stock option compensation costs;
                and





·
            a
                $90,000 decrease in costs related to staff
                reductions.





*Sales
      & Marketing* .
      Sales and marketing costs increased substantially to $750,000 for the three
      months ended March 31, 2008 compared to $67,000 for the three months ended
      March
      31, 2007, an increase of $683,000. This increase is due primarily to the salary
      and travel costs associated with the enhanced efforts of our expanded sales
      and
      marketing team, which grew via organic changes and the SyynX and Lawriter
      acquisitions from seven full-time employees as of March 31, 2007 to 15 full-time employees and a Chief Marketing Officer as of March 31, 2008. The
      increase in sales and marketing costs in the period also reflects higher
      expenses incurred in expanding our global marketing efforts.




23




*Research
      & Development* .
      Research and development costs were $276,000 for the three months ended March
      31, 2008, compared to $249,000 for the three months ended March 31, 2007, an
      increase of $27,000. This cost is primarily due to increases in salary, travel
      and related personnel costs associated with the expansion of our operations
      and
      the continued efforts to develop our Collexis Engine 6.0 and 6.5, as well as
      an
      increase in costs related to SyynX.





*Total
      Expenses and Net Loss* .
      As a result of the above factors, as well as an increase in net interest expense
      to $173,000 primarily related to our SyynX and Lawriter deferred acquisition
      obligations, total expenses increased to $4.5 million for the three months
      ended
      March 31, 2008 compared to $2.3 million for the three months ended March 31,
      2007. Consequently, our net loss increased to $3 million for the three months
      ended March 31, 2008 versus a net loss of $1.8 million for the three months
      ended March 31, 2007.





**Nine
      Months Ended March 31, 2008 Compared to Nine Months Ended March 31,
      2007**





*Total
      Revenues* .
      Total revenues increased by $1.1 million, or 68% to over $2.7 million for the
      nine months ended March 31, 2008 compared to $1.6 million for the nine months
      ended March 31, 2007. This increase was due primarily to database subscription
      fees from Lawriter and an increase in license revenue.





*License
      Revenue* .
      License revenue increased $344,000 to $618,000 for the nine months ended March
      31, 2008 compared to $274,000 for the nine months ended March 31, 2007. This
      increase is primarily due to sales of new licenses and subscriptions in the
      university and research markets.





*Service
      Revenue* .
      Service revenue decreased $23,000 or 2% to $1 million for the nine months ended
      March 31, 2008. This
      slight decrease is due to a decrease in services revenues generated via delivery
      of add-on profiles and libraries sold to other clients, partially offset by
      an
      increase in services revenues related to SyynX .





*Maintenance
      & Support Revenue* .
      Maintenance and support revenue increased $174,000, or 64% to $447,000 for
      the
      nine months ended March 31, 2008 compared to approximately $273,000 for the
      nine
      months ended March 31, 2007. This increase is due to an increase in the number
      and value of maintenance contracts sold to new licensees.





*Hardware
      & Hosting Revenue* .
      Hardware and hosting revenue was $100,000 for the nine months ended March 31,
      2008 compared to $13,000 for the nine months ended March 31, 2007. This increase
      is due primarily to an increase in revenues related to SyynX, as well as an
      increase in hosting contracts sold in the period.





*Database
      Subscription Revenue* .
      Database subscription revenues were $498,000 for the nine months ended March
      31,
      2008. These revenues relate to Lawriter since the date of acquisition on
      February 1, 2008.





*Cost
      of License Revenue* .
      Cost of license revenue was $48,000 for the nine months ended March 31, 2008
      compared to $13,000 for the nine months ended March 31, 2007. Cost of license
      revenue is primarily comprised of third party fees charged on some of our
      product sales.





*Cost
      of Service Revenue* .
      Cost of service revenue increased $102,000, or 21%, to $592,000 for the nine
      months ended March 31, 2008 compared to $490,000 for the nine months ended
      March
      31, 2007. This
      increase was due to an increase in costs associated with SyynX, partially offset
      by an overall decrease in personnel costs associated with a reduction of our
      professional services staff and the elimination of monthly fees paid to SyynX
      prior to the acquisition.




24




*Cost
      of Maintenance & Support Revenue* .
      Cost of maintenance and support revenue decreased $88,000, or 28% to $233,000
      for the nine months ended March 31, 2008 compared to $321,000 for the nine
      months ended March 31, 2007. This
      decrease is due primarily to a decrease in costs associated with support
      personnel, partially offset by severance expense associated with staff
      reductions during the period.





*Cost
      of Hardware & Hosting Revenue* .
      Cost of hardware and hosting revenue was $70,000 for the nine months ended
      March
      31, 2008, compared to $11,000 for the nine months ended March 31, 2007. This
      increase is primarily due to an increase in costs related to SyynX.





*Cost
      of Database Subscription Revenue* .
      Cost of database subscription revenue was $173,000 for the nine months ended
      March 31, 2008, and is composed primarily of data access fees and support
      costs.





*General
      & Administrative Costs* .
      General and administrative costs increased to $ 6.2 million for the nine months ended March 31, 2008, compared to $4.3 million
      for
      the nine months ended March 31, 2007, an increase of $1.9 million, or 45%. This increase is due primarily to the cumulative effect of
      the
      following costs : ****





·
            a
                $580,000 increase in depreciation and amortization expense, including
                $308,000 in amortization of intangibles related to the SyynX and
                Lawriter
                acquisitions;





·
            a
                $540,000 increase in foreign exchange
                losses;





·
            a
                $288,000 increase in professional costs related to our being a public
                company in the 2008 period;





·
            a
                $271,000 increase in cash compensation for personnel we hired to
                expand
                our global headquarters in Columbia, South
                Carolina;





·
            $203,000
                in professional and other expenses related to our SyynX, Lawriter,
                and
                VersusLaw transactions;





·
            a
                $200,000 increase in bad debt
                expense;





·
            $187,000
                in costs related to Lawriter, including approximately $46,000 in
                cash
                compensation costs; and





·
            a
                $165,000 increase in cash compensation to the former SyynX managing
                directors.





These
      increases are partially offset by:





·
            a
                $342,000 decrease in stock option compensation costs;
                and





·
            a
                $135,000 decrease in costs related to staff
                reductions.





*Sales
      & Marketing* .
      Sales and marketing costs increased to $2.2 million for the nine months ended
      March 31, 2008 compared to $258,000 for the nine months ended March 31, 2007,
      an
      increase of $1.9 million. This increase is due primarily to the salary and
      travel costs associated with the enhanced efforts of our expanded sales and
      marketing team, which grew via organic changes and via the SyynX and Lawriter
      acquisitions from seven full-time employees as of March 31, 2007 to 15 full-time
      employees and a Chief Marketing Officer as of March 31, 2008. The increase
      in
      sales and marketing costs in the period also reflects higher expenses we
      incurred in expanding our global marketing efforts.




25




*Research
      & Development* .
      Research and development costs increased to $1.1 million for the nine months
      ended March 31, 2008, compared to $520,000 for the nine months ended March
      31,
      2007, an increase of $540,000. The increase is due to increases in salary,
      travel and related personnel costs associated with the expansion of our
      operations and the continued efforts to develop our Collexis Engine 6.0 and
      6.5,
      as well as an increase in costs related to SyynX.





*Total
      Expenses and Net Loss* .
      As a result of the above factors, as well as an increase in net interest expense
      to $299,000 primarily related to our SyynX and Lawriter deferred acquisition
      payment obligations, total expenses increased to $10.6 million for the nine
      months ended March 31, 2008 compared to $5.9 million for the nine months ended
      March 31, 2007. Consequently, our net loss increased to $7.9 million for the
      nine months ended March 31, 2008 versus a net loss of $4.3 million for the
      nine
      months ended March 31, 2007.





**Liquidity
      and Capital Resources**





As
      of March 31, 2008, we had cash and cash equivalents of approximately $265,000.
      Our working capital deficit as of March 31, 2008 was approximately $7.2 million,
      versus a working capital surplus of approximately $1.0 million at March 31,
      2007, representing an increase in working capital deficit of approximately
      $8.2
      million. As of June 30, 2007, we had a working capital deficit of approximately
      $550,000, thus our approximately $7.2 million working capital deficit as of
      March 31, 2008 represented an increase in working capital deficit of
      approximately $6.65 million during the nine months ended March 31, 2008. As
      of
      March 31, 2008, we had no outstanding indebtedness for borrowed money but owed
      approximately $11,886,000 in deferred payment obligations related to our
      acquisitions of SyynX and Lawriter and our agreement with
      VersusLaw.





During
      the nine months ended March 31, 2008, we used net cash of approximately
      $4,735,000 for operating activities, primarily for developing our Collexis
      Engine 6.0 and 6.5, building out our worldwide headquarters and adding to our
      sales and marketing staff. We used additional cash of approximately $2,185,000
      for investing activities, for the acquisition of SyynX and Lawriter, the
      acquisition of the VersusLaw license, and the purchase of capital assets related
      to the continued expansion of our facilities. During the nine months ended
      March
      31, 2008, net cash provided by financing activities was approximately
      $7,060,000. We received net cash proceeds of approximately $10,645,000 from sales of our common stock in private offerings, we used cash of $650,000
      to
      repay a series of loans obtained in June 2007 from a stockholder, and we used
      cash to make payments of approximately $2,106,000 to the selling shareholders
      of
      SyynX and $500,000 to the sellers of Lawriter.





As
      of May 13, 2008, we had cash and cash equivalents of approximately $ 791,000,
      which reflects approximately $2,523,000 of proceeds received from our latest
      private offering described under Note 7 to our consolidated unaudited financial
      statements included in Part I, Item 1 in this report. We believe our current
      cash balance, together with the additional $1,977,000 we expect to raise from
      some of our existing stockholders in our latest private offering and any funds
      generated from our operations, will be sufficient to meet our working capital
      and capital expenditure requirements for approximately three months based upon
      our estimates of funds required to operate our business during that period.
      With
      our present negative cash flows from operating activities and our current level
      of cash, we will require additional working capital:




26




·
            to
                make payments totaling approximately $4,460,000, plus interest, in
                the
                next 12 months under the terms of the SyynX, Lawriter and VersusLaw
                transactions described above;


·
            to
                fund our operations, including sales and
                marketing;


·
            to
                continue to research, develop and enhance our products,
                particularly:





§
            the
                Casemaker online legal research service we recently acquired via
                our
                acquisition of Lawriter LLC;


§
            our
                BioMedExperts social networking website; and


§
            ourother
                high-definition search and discovery
                software;





·
            to
                respond to competitive pressures and/or perceived opportunities,
                such as
                investment, acquisition and international expansion activities;
                and


·
            to
                comply with our reporting obligations as a public company.





As
      a result, we must seek additional capital to meet these needs, but we can
      provide no assurances in that regard. We can give no assurance that we will
      be
      able to raise the additional capital needed on commercially acceptable terms
      or
      at all. See “Risk Factors” below.





**Off-Balance
      Sheet Arrangements**





We
      have not entered into any transactions with unconsolidated entities in which
      we
      have financial guarantees, subordinated retained interests, derivative
      instruments or other contingent arrangements that expose us to material
      continuing risks, contingent liabilities or any other obligations under a
      variable interest in an unconsolidated entity that provides us with financing,
      liquidity, market risk or credit risk support.





**Accounting
      Policies**





For
      a summary of our significant accounting policies, please see Note 2 to the
      consolidated unaudited financial statements included in Part I, Item 1 in this
      report.





**Recent
      Accounting Pronouncements**





For
      a summary of recently issued accounting standards, please see Note 2 to the
      consolidated unaudited financial statements included in Part I, Item 1 in this
      report.




27




**RISK
      FACTORS**





In
      addition to the other information set forth in this quarterly report, you should
      carefully consider the risk factors described below as well as the risk factors
      discussed in Part I, Item 1, “Description of Business - Risk Factors,” of our
      transition report on Form 10-KSB, as amended, as of and for the six months
      ended
      June 30, 2007. These risk factors could materially affect our business,
      financial condition or future results. Additional risks and uncertainties not
      currently known to us or that we currently deem to be immaterial also may
      materially adversely affect our business, financial condition and operating
      results.





***We
      need additional capital, and it may not be available on acceptable terms, or
      at
      all. If we do not receive the additional capital we need, our financial
      condition and future prospects will suffer and our business could
      fail.***





As
      of May 13, 2008, we had cash and cash equivalents of approximately
      $791,000 .
      We
      believe our current balance of cash, cash equivalents and short-term
      investments, combined with any funds generated from our operations and from
      our
      latest private offering, will be sufficient to meet our working capital and
      capital expenditure requirements for approximately three months based upon
      our
      estimates of funds required to operate our business during that period. During
      or after that time, however, we may need to raise additional funds for the
      purposes described above in Liquidity
      and Capital Resources.





We
      cannot
      reassure our investors that if we need additional capital it will be available,
      and if so, on terms beneficial to us. Historically, we have obtained external
      financing primarily from sales of our common stock. To the extent we raise
      additional capital by issuing equity securities, our shareholders may experience
      substantial dilution (as occurred in our most recent private offering). If
      we
      are unable to obtain additional capital, we may then attempt to preserve our
      available resources by various methods, including deferring the creation or
      satisfaction of commitments, reducing expenditures on our research and
      development programs or otherwise scaling back our operations. If we are unable
      to raise additional capital or defer costs, that inability would have a material
      adverse effect on our financial position, results of operations and prospects,
      and our business could fail.





***We
      have had a history of operating losses and will likely incur future losses.
      If
      our losses continue and we are unable to achieve profitability, our stock price
      will likely suffer.***





We
      have operated at a loss since our inception. For the nine months ended March
      31,
      2008, our net loss was approximately $7.92 million. We expect that our losses
      will continue for the foreseeable future. Accordingly, we cannot assure you
      that
      we will be able to achieve or maintain profitability in the future. If we do
      not
      achieve and sustain profitability, it will likely negatively affect the market
      price of the common stock and our financial condition.





***Our
      acquisitions could result in integration difficulties, unexpected expenses,
      diversion of management’s attention and other negative
      consequences.***





Our
      growth strategy is partly based on making acquisitions. We have recently
      acquired SyynX and Lawriter, as described elsewhere in this report. We plan
      to
      continue to acquire complementary businesses, products and services if we have
      the capital resources to do so. We must integrate the technology, products
      and
      services, operations, systems and personnel of acquired businesses, including
      our recent acquisitions, with our own and attempt to grow the acquired
      businesses as part of our company. The integration of other businesses is a
      complex process and places significant demands on our management, financial,
      technical and other resources. The successful integration of businesses we
      acquire is critical to our future success, and if we are unsuccessful in
      integrating these businesses, our financial and operating performance could
      suffer. The risks and challenges associated with acquisitions
      include:




28




·
            the
                inability to centralize and consolidate our financial, operational
                and
                administrative functions with those of the businesses we
                acquire;


·
            the
                diversion of our management’s attention from other business
                concerns;


·
            our
                inability to retain and motivate key employees of an acquired
                company;


·
            our
                entrance into markets in which we have little or no prior direct
                experience, such as Lawriter;


·
            litigation,
                indemnification claims and other unforeseen claims and liabilities
                that
                may arise from the acquisition or operation of acquired
                businesses;


·
            the
                costs necessary to complete integration exceeding our expectations
                or
                outweighing some of the intended benefits of the acquisitions we
                close;


·
            the
                inability to maintain the customer relationships of an acquired business;
                and


·
            the
                costs necessary to improve or replace the operating systems, products
                and
                services of acquired businesses exceeding our
                expectations.





We
      may be unable to integrate our acquisitions with our operations on schedule
      or
      at all. For example, we may be unable to enhance the service offerings of
      Lawriter as we intend. We cannot assure you that we will not incur large
      accounting charges or other expenses in connection with any of our acquisitions
      or that our acquisitions will result in cost savings or sufficient revenues
      or
      earnings to justify our investment in, or our expenses related to, these
      acquisitions.





***We
      are in extremely competitive markets, and if we fail to compete effectively
      or
      respond to rapid technological change, our revenues and market share will be
      adversely affected.***





Our
      business environment and the search and software industries in general are
      characterized by intense competition, rapid technological changes, changes
      in
      customer requirements and emerging new market segments. Our competitors include
      many companies that are larger and more established and have substantially
      more
      resources than we do, such as Google, Yahoo, FASTsearch, Autonomy and Convera.
      In our Lawriter online legal research business, we face strong competition
      from
      Reed LexisNexis ® and Westlaw ® .
      Current and potential competitors have established or may establish cooperative
      relationships among themselves or with third parties to increase the ability
      of
      their products to address the needs of the markets that we serve. Accordingly,
      new competitors or alliances among competitors may emerge and rapidly acquire
      significant market share. Increased competition may result in price reductions,
      reduced gross margins and loss of market share, any of which could have a
      material adverse effect on our business, financial condition or results of
      operations.





For
      our strategy to succeed and to remain competitive, we must leverage our core
      technology to develop new product offerings, update existing features and add
      new components to our current products such as support for new data types and
      taxonomies for specific vertical markets. These development efforts are
      expensive, and we plan to fund these developments with our existing capital
      resources, and other sources, such as equity issuances and borrowings that
      may
      be available to us. If these developments do not generate substantial revenues,
      or we are unable to access other sources of capital on acceptable terms, our
      business and results of operations will be adversely affected. We cannot assure
      you that we will successfully develop any new products, complete them on a
      timely basis or at all, achieve market acceptance or generate significant
      revenues with them.




29




***To
      the extent our revenues are paid in foreign currencies, and currency exchange
      rates become unfavorable, we may lose some of the economic value of the revenues
      in U.S. dollar terms.***





Conducting
      business in currencies other than U.S. dollars subjects us to fluctuations
      in
      currency exchange rates. If the currency exchange rates were to change
      unfavorably, the value of net receivables we receive in foreign currencies
      and
      later convert to U.S. dollars after the unfavorable change would be diminished.
      This could have a negative impact on our reported operating
      results.




**ITEM
      3A(T).**  **CONTROLS
      AND PROCEDURES.**





Based
      on our management’s evaluation, with the participation of our Chief Executive
      Officer, Mr. William D. Kirkland, and our Chief Financial Officer, Mark Murphy,
      as of March 31, 2008, the end of the period covered by this report, our Chief
      Executive Officer and Chief Financial Officer concluded that our disclosure
      controls and procedures (as defined in Rule 13a-15(e) under the Securities
      Exchange Act of 1934, as amended, (the “Exchange Act”)) were effective to ensure
      that information required to be disclosed by us in reports that we file or
      submit under the Exchange Act are recorded, processed, summarized and reported
      within the time periods specified in the rules and forms of the SEC and is
      accumulated and communicated to our management, including our Chief Executive
      Officer and Chief Financial Officer, as appropriate to allow timely decisions
      regarding required disclosure.





There
      have been no changes in our internal control over financial reporting identified
      in the evaluation that occurred during the third quarter of fiscal year 2008
      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**





Collexis
      and its wholly-owned subsidiary Lawriter LLC (“Lawriter”) are defendants in a
      case commenced by JuriSearch Holdings LLC (“JuriSearch”), a vendor of content
      to Lawriter ,
      in the
      Superior Court for Los Angeles County, California. The case was commenced on
      April 10, 2008, and asserts claims based on breach of contract, conversion,
      and
      replevin (an act to recover goods by somebody who claims to own them).
      JuriSearch alleges that it has been damaged in an amount exceeding $500,000
      by
      Lawriter’s termination of the contract and asserted failure to return property
      belonging to JuriSearch. Lawriter believes that JuriSearch breached the contract by failing to provide
      accurate and timely data, as well as by communicating directly with Lawriter’s
      customers (the bar associations with whom Lawriter does business) concerning
      the
      contract in violation of the terms of the contract.





Collexis
      and Lawriter have filed papers in the United States District Court for the
      Central District of California to remove the suit to that court, and have filed
      an answer and counterclaim. In addition, Lawriter filed a case against
      JuriSearch on April 14, 2008 in the Court of Common Pleas of Hamilton County,
      Ohio. Lawriter’s case asserts claims against JuriSearch for defamation, tortuous
      interference with contracts, and breach of contract based on JuriSearch’s
      communications with Lawriter’s customers. We believe that JuriSearch’s claims
      are without merit and intend to defend the California lawsuit vigorously and
      prosecute the Ohio lawsuit vigorously.




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**ITEM
      2.**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





We
      have reported on Form 8-K all sales of unregistered securities that we made
      in
      the quarter ended March 31, 2008.





**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES**





None.





**ITEM
      4.**  **SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**ITEM
      5.**  **OTHER
      INFORMATION**





On
      April 7, 2008, we initiated a private offering of up to 30,000,000 shares of
      common stock at $0.15 per share ($4,500,000) to our stockholders who have
      previously purchased shares from us in private placements. The shares were
      offered principally in proportion to the number of shares each investor had
      previously purchased at $0.75 per share. As of May 14, 2008, we have received
      subscription proceeds of $2,522,976 for a total of 16,819,841 shares. We
      accepted subscription agreements for these shares on May 14 and instructed
      our
      transfer agent to issue the shares. Each investor agreed to hold the shares
      purchased in the offering for a minimum of one year.





This
      private offering is being conducted under the exemption from registration
      contained in Section 4(2) of the Securities Act of 1933. In relying on the
      exemption from registration provided by Section 4(2), we relied in part on
      the
      fact that the investors (a) acquired the securities for their own accounts,
      for
      investment only and not for distribution or resale to others; and (b) have
      represented that they are accredited investors. There was no general
      solicitation, given that the offering is being made only to a limited group
      of
      our current stockholders. No placement fees are payable in connection with
      this
      offering. The share certificates evidencing the purchased shares will be affixed
      with a legend to indicate that the shares were sold in a private offering and
      their transfer is restricted.





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**ITEM
      6.**  **EXHIBITS**





**Exhibit****No.**
            
            **Description**10.1
            
            Licensing
                and Publishing Agreement by and between Collexis Holdings, Inc. and
                VersusLaw, Inc. (incorporated by reference to Exhibit 10.1 to our
                Current
                Report on Form 8-K filed on January 25, 2008).10.2
            
            Secured
                Promissory Note by Collexis Holdings, Inc. as maker to VersusLaw,
                Inc. as
                payee (incorporated by reference to Exhibit 10.2 to our Current Report
                on
                Form 8-K filed on January 25, 2008).10.3
            
            LLC
                Interests Purchase Agreement dated February 1, 2008 by and among
                Collexis
                Holdings, Inc., Lawriter, Inc., Lawriter LLC, OSBA.COM LLC, and the
                Institute of Legal Publishing, Inc. and other ancillary parties(incorporated
                by reference to Exhibit 10.1 to our Current Report on Form 8-K filed
                on
                February 4, 2008).10.4
            
            Security
                Agreement dated February 1, 2008 by Lawriter LLC in favor of Institute
                of
                Legal Publishing, Inc.(incorporated
                by reference to Exhibit 10.2 to our Current Report on Form 8-K filed
                on
                February 4, 2008).10.5
            
            Three
                Party Escrow Agreement dated February 1, 2008 by and among Collexis
                Holdings, Inc., OSBA.COM LLC and Escrow Associates, LLC(incorporated
                by reference to Exhibit 10.3 to our Current Report on Form 8-K filed
                on
                February 4, 2008).10.6
            
            Letter
                Agreement dated February 13, 2008 between Collexis Holdings, Inc.
                and the
                Institute of Legal Publishing, Inc. related to LLC Interests Purchase
                Agreement dated February 1, 2008 by and among Collexis Holdings,
                Inc.,
                Lawriter, Inc., Lawriter LLC, OSBA.COM LLC, andthe
                Institute of Legal Publishing, Inc.and
                other ancillary parties(incorporated
                by reference to Exhibit 10.8 to our Quarterly Report on Form 10-QSB
                filed
                on February 14, 2008).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. This exhibit is not “filed” for purposes of Section 18 of the
                Securities Exchange Act of 1934 but is instead furnished as provided
                by
                applicable rules of the SEC.32.2
            
            Certification
                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002. This exhibit is not “filed” for purposes of Section 18 of the
                Securities Exchange Act of 1934 but is instead furnished as provided
                by
                applicable rules of the SEC.





32




**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.





Date:
      May
      15, 2008





**COLLEXIS
                HOLDINGS, INC.**By:
            /s/
                William D. KirklandWilliam
                D. KirklandChief
                Executive Officer(Principal
                Executive Officer)




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