UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549


______________





FORM
10-Q





x Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
quarterly period ended March
31, 2009




Commission
file number: 000-52490




Beyond
Commerce, Inc.


(Exact
name of registrant as specified in its charter)




Nevada
            98-0512515(State
      of incorporation or organization)
            (I.R.S.
      Employer Identification No.)





9029
South Pecos


Suite
2800


Henderson,
Nevada 89074


(Address
of principal executive offices, including zip code)





(702)
463-7000


(Registrant’s
telephone number, including area code)





SECURITIES
REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT


Title
of each class





NONE


SECURITIES
REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:


COMMON
STOCK $0.001 PAR VALUE





Indicate
by check mark whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x  No o


Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).       Yes
o  No o.


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




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




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




As of May
15, 2009, there were outstanding 44,374,148 shares of the registrant’s common
stock.








BEYOND
COMMERCE, INC.


FORM
10-Q FOR THE QUARTER ENDED


March
31, 2009





Table of
Contents




PagePART
      I. FINANCIAL INFORMATIONItem
      1.   Financial StatementsCondensed
      Consolidated Balance Sheet at March 31, 2009 (Unaudited) and December 31,
      2008
                    
                    
                    3Condensed
      Consolidated Statements of Operations for the Three Month Period ended
      March 31, 2009  & 2008 (Unaudited)
                    
                    
                    4Condensed
      Consolidated Statements of Cash Flows for the Three Month Period ended
      March 31, 2009  & 2008 (Unaudited)
                    
                    
                    5Notes
      to the Condensed Consolidated Financial Statements
    (Unaudited)
                    
                    
                    6 -
      14Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
                    
                    
                    15-18Item
      3.Quantitative and
      Qualitative Information About Market Risk
                    
                    
                    18Item4T.
      Controls and Procedures
                    
                    
                    18PART
      II. OTHER INFORMATIONItem
      1.   Legal Proceedings
                    
                    
                    19Item
      1A. Risk Factors
                    
                    
                    19Item
      2.   Unregistered Sales of Equity Securities and Use of
      Proceeds
                    
                    
                    20Item
      3.    Defaults upon Senior Securities
                    
                    
                    20Item
      4.   Submission of Matters to Vote of Security
      Holders
                    
                    
                    20Item
      5.   Other Information
                    
                    
                    20Item
      6. Exhibits
                    
                    
                    20SIGNATURES
                    
                    
                    21


-2-





PART
I - FINANCIAL INFORMATION





Item
1.   Financial Statements





BEYOND
COMMERCE


CONDENSED
CONSOLIDATED BALANCE SHEET




Unaudited
                                                                          March
      31,
                                                                          2009
                                                                        
                                                                        
                                                                        December
      31,
                                                                          2008
                                                                          as adjusted,
                                                                          (Note 15)ASSETSCurrent
      assets :Cash
                                                                        
                                                                        $
                                                                        12,490
                                                                        
                                                                        
                                                                        $
                                                                        100,086Accounts
      receivable
                                                                        
                                                                        
                                                                        1,055,410
                                                                        
                                                                        
                                                                        
                                                                        226,091Prepaid
      loan cost
                                                                        
                                                                        
                                                                        424,929
                                                                        
                                                                        
                                                                        
                                                                        562,665Prepaid
      commissions
                                                                        
                                                                        
                                                                        1,119,401
                                                                        
                                                                        
                                                                        
                                                                        260,055Other
      current assets
                                                                        
                                                                        
                                                                        87,172
                                                                        
                                                                        
                                                                        
                                                                        46,230Total
      current assets
                                                                        
                                                                        $
                                                                        2,699,402
                                                                        
                                                                        
                                                                        $
                                                                        1,195,127Property,
      Web site and computer equipment
                                                                        
                                                                        
                                                                        959,002
                                                                        
                                                                        
                                                                        
                                                                        871,180Less:
      Accumulated depreciation and amortization
                                                                        
                                                                        
                                                                        (372,137
                                                                        )
                                                                        
                                                                        
                                                                        (320,366
                                                                        )Property,
      Web site and computer equipment – net
                                                                        
                                                                        $
                                                                        586,865
                                                                        
                                                                        
                                                                        $
                                                                        550,814Other
      Assets
                                                                        
                                                                        
                                                                        81,459
                                                                        
                                                                        
                                                                        
                                                                        60,067Total
      assets
                                                                        
                                                                        $
                                                                        3,367,726
                                                                        
                                                                        
                                                                        $
                                                                        1,806,008LIABILITIES AND STOCKHOLDERS’
      DEFICITCurrent
      liabilities:Short
      term borrowings
                                                                        
                                                                        $
                                                                        3,165,603
                                                                        
                                                                        
                                                                        $
                                                                        2,400,555Accounts
      payable
                                                                        
                                                                        
                                                                        2,268,835
                                                                        
                                                                        
                                                                        
                                                                        1,490,590Accounts
      payable - related party
                                                                        
                                                                        
                                                                        -
                                                                        
                                                                        
                                                                        
                                                                        19,552Note
      derivative liability
                                                                        
                                                                        
                                                                        1,630,595
                                                                        
                                                                        
                                                                        
                                                                        3,396,935Other
      current liabilities
                                                                        
                                                                        
                                                                        2,336,589
                                                                        
                                                                        
                                                                        
                                                                        1,374,534Deferred
      Revenue
                                                                        
                                                                        
                                                                        2,697,885
                                                                        
                                                                        
                                                                        
                                                                        609,987Total
      current liabilities
                                                                        
                                                                        $
                                                                        12,099,507
                                                                        
                                                                        
                                                                        $
                                                                        9,292,153Stockholders’
      Deficit :Common
      stock, $0.001 par value, 200,000,000 and 75,000,000 shares authorized as
      of  March 31, 2009 and December 31, 2008, respectively, and
      41,355,753and 40,936,143
      issued and outstanding at March 31, 2009 and December 31, 2008,
      respectively
                                                                        
                                                                        $
                                                                        41,356
                                                                        
                                                                        
                                                                        $
                                                                        40,936Additional
      paid in capital
                                                                        
                                                                        
                                                                        12,513,136
                                                                        
                                                                        
                                                                        
                                                                        11,096,604Accumulated
      deficit
                                                                        
                                                                        
                                                                        (21,286,273
                                                                        )
                                                                        
                                                                        
                                                                        (18,623,685
                                                                        )Total
      stockholders' deficit
                                                                        
                                                                        $
                                                                        (8,731,781
                                                                        )
                                                                        
                                                                        $
                                                                        (7,486,145
                                                                        )Total
      Liabilities and Stockholders' Deficit
                                                                        
                                                                        $
                                                                        3,367,726
                                                                        
                                                                        
                                                                        $
                                                                        1,806,008





See
accompanying notes of these unaudited condensed financial
statements.


-3-





BEYOND COMMERCE,
INC.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


For
the three month period ended March 31,


Unaudited




2009
                                              
                                              
                                              2008RevenuesAdvertising
      Revenue
                                              
                                              $
                                              6,017,181
                                              
                                              
                                              $
                                              -Merchandising
      Revenue
                                              
                                              
                                              26,987
                                              
                                              
                                              
                                              760,949Total
      Revenue
                                              
                                              
                                              6,044,168
                                              
                                              
                                              
                                              760,949Operating
      expensesCost
      of advertising
                                              
                                              $
                                              5,112,536
                                              
                                              
                                              $
                                              -Cost
      of merchandising
                                              
                                              
                                              14,525
                                              
                                              
                                              
                                              820,818Selling
      general & administrative
                                              
                                              
                                              2,926,704
                                              
                                              
                                              
                                              1,646,447Selling
      general & administrative - related party
                                              
                                              
                                              23,408
                                              
                                              
                                              
                                              35,792Professional
      fees
                                              
                                              
                                              847,956
                                              
                                              
                                              
                                              269,423Professional
      fees - related party
                                              
                                              
                                              77,900
                                              
                                              
                                              
                                              23,200Depreciation
      and amortization
                                              
                                              
                                              51,771
                                              
                                              
                                              
                                              41,908Total
      costs and operating expenses
                                              
                                              $
                                              9,054,800
                                              
                                              
                                              $
                                              2,837,588Loss
      from operations
                                              
                                              
                                              (3,010,632
                                              )
                                              
                                              
                                              (2,076,639
                                              )Non-operating
      income (expense)Interest
      expense
                                              
                                              
                                              (1,418,296
                                              )
                                              
                                              
                                              (482,029
                                              )Income
      related to derivatives
                                              
                                              
                                              1,766,340
                                              
                                              
                                              
                                              -Total
      non-operating expense
                                              
                                              $
                                              348,044
                                              
                                              
                                              $
                                              (482,029
                                              )Loss
      from operations before income taxes
                                              
                                              
                                              (2,662,588
                                              )
                                              
                                              
                                              (2,558,668
                                              )Provision
      for income tax
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Net
      loss
                                              
                                              $
                                              (2,662,588
                                              )
                                              
                                              $
                                              (2,558,668
                                              )Net
      loss available to common stockholders
                                              
                                              $
                                              (2,662,588
                                              )
                                              
                                              $
                                              (2,558,668
                                              )Basic
      and diluted net loss per common share
                                              
                                              $
                                              (0.06
                                              )
                                              
                                              $
                                              (0.07
                                              )Weighted
      average shares of capital outstanding - basic
                                              
                                              
                                              41,206,905
                                              
                                              
                                              
                                              36,674,849




See
accompanying notes of these unaudited condensed financial
statements.


-4-





BEYOND
COMMERCE, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


For
the three month period ended March 31,


Unaudited




2009
                                          
                                          
                                          2008Net
      cash used in operating activities
                                          
                                          $
                                          (365,774
                                          )
                                          
                                          $
                                          (1,991,887
                                          )Cash
      flows from investing activities:Cash
      paid to purchase property and equipment
                                          
                                          
                                          (87,822
                                          )
                                          
                                          
                                          (71,655
                                          )Net
      cash used in investing activities
                                          
                                          $
                                          (87,822
                                          )
                                          
                                          $
                                          (71,655
                                          )Cash
      flows from financing activities:Issuance
      of stock - net of offering costs
                                          
                                          
                                          20,000
                                          
                                          
                                          
                                          78,400Cash
      received from short term borrowings
                                          
                                          
                                          388,000
                                          
                                          
                                          
                                          1,920,000Payment
      on short term borrowings - related party
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (25,000
                                          )Payment
      on short term borrowings
                                          
                                          
                                          (42,000
                                          )
                                          
                                          
                                          -Net
      cash provided by financing activities
                                          
                                          $
                                          366,000
                                          
                                          
                                          $
                                          1,973,400Net
      decrease in cash & cash equivalents
                                          
                                          
                                          (87,596
                                          )
                                          
                                          
                                          (90,142
                                          )Cash
      & cash equivalents, beginning balance
                                          
                                          
                                          100,086
                                          
                                          
                                          
                                          111,247Cash
      & cash equivalents, ending balance
                                          
                                          $
                                          12,490
                                          
                                          
                                          $
                                          21,105




See
accompanying notes of these unaudited condensed financial
statements.




-5-




BEYOND
COMMERCE, INC.


NOTES
TO CONDENSED FINANCIAL STATEMENTS


(Unaudited)




NOTE 1
              DESCRIPTION
      OF BUSINESS AND BASIS OF
PRESENTATION








Beyond
Commerce, Inc., formerly known as BOOMj, Inc. (the “Company”), is an Internet
company that has three interrelated business models aimed at generating revenues
primarily from Web site advertising and E-commerce transactions.  Our
initial business wasBOOMj.com,
Inc., www.BOOMj.com,
a niche portal and social networking site for Baby Boomers and Generation
Jones.  Our BOOMj.com Web site provides social, political, financial,
and lifestyle content to the Baby Boomer/Generation Jones target audience as a
platform for our advertising and E-commerce businesses. Our LocalAdLink subsidiary
operates a Web site, www.LocalAdLink.com,
and a local search directory and advertising network that brings local
advertising to geo-targeted consumers.  We are currently releasing
i-SUPPLY, www.i-SUPPLY.com,
an online storefront that offers easy to use, fully customizable E-commerce
services, and revenue solutions for any third party Web site large or small, and
hosts local ads, providing extensive reach for our proprietary advertising
partner network platform.




The
condensed consolidated financial statements and the notes thereto for the
periods ended March 31, 2009 and 2008 included herein have been prepared by
management and are unaudited. Such condensed financial statements reflect, in
the opinion of management, all adjustments necessary to present fairly the
financial position and results of operations as of and for the periods indicated
and in order to make the financial statements not misleading. All such
adjustments are of a normal recurring nature except for those described in Note
15. These interim results are not necessarily indicative of the results for any
subsequent period or for the fiscal year ending December 31, 2009.
 
 Certain
information and footnote disclosures normally included in the condensed
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been consolidated financial statements should
be read in conjunction with the audited financial statements and the notes
thereto for the fiscal year ended December 31, 2008 in the Form 10-K, filed with
the SEC on April 3, 2009.




History
of the Company




The
Company, formerly known as Reel Estate Services, Inc. (“RES”), was incorporated
in Nevada on January 12, 2006.  As of December 28, 2007, RES was a
public shell company, defined by the Securities and Exchange Commission as an
inactive, publicly quoted company with nominal assets and
liabilities.




In
December 2008, the Company changed its name from BOOMj, Inc. to Beyond Commerce,
Inc. to more accurately reflect the new structure of the Company consisting of
two operating divisions: BOOMj.com dba i-SUPPLY and
LocalAdLink.




The
Company currently maintains its corporate office in Henderson, Nevada, and has
its LocalAdLink customer service department located in Irvine,
California.




NOTE 2 - SELECTED ACCOUNTING
POLICIES




Reclassifications





Certain
comparative amounts from prior periods have been reclassified to conform to the
current year's presentation. These changes did not affect previously reported
net loss.


Employee Benefits





The
Company currently offers employees vacation benefits and recently began offering
a healthcare plan. During 2008, the Company implemented the 2008 Equity
Incentive Plan.





Recent
Accounting Pronouncements





On
January 1, 2008, the Company adopted SFAS No. 157,Fair Value Measurements
(“SFAS 157”), for financial assets and financial liabilities. SFAS 157 defines
fair value, establishes a framework for measuring fair value under GAAP, and
expands disclosures about fair value measurements. The Company does not believe
that the partial adoption of SFAS 157 has had or will have a material impact on
the Company’s financial statements. In February 2008, the FASB issued a FASB
Staff Position (“FSP”), FSP SFAS 157-2,Effective Date of FASB
Statement No. 157, to defer the effective date of SFAS 157 for
nonfinancial assets and nonfinancial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis. The FSP defers the effective date of SFAS 157 to fiscal years beginning
after November 15, 2008. The Company does not expect the adoption of FSP SFAS
157-2 to have a significant impact on the financial statements


-6-





NOTE
3 – GOING CONCERN





The
Company's financial statements are prepared using generally accepted accounting
principles, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company has limited
sales, reflected a loss of approximately $2,662,588 for the three months ended
March 31, 2009 and it will need to accelerate its business model implementation
otherwise there is a need to raise additional capital and/or obtain financing to
continue operations in 2009. The failure to realize the improvement in the
business model presents conditions that raise substantial doubt about the
Company’s ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going
concern.





Management
is taking steps to improve the business operations along with raising additional
funds to address its operating and financial cash requirements to continue
operations in the next twelve months. Management has devoted a significant
amount of time in the raising of capital from additional debt and equity
financing. However, the Company’s ability to continue as a going concern is
dependent upon raising additional funds through debt and equity financing and
generating revenue. There are no assurances the Company will receive the
necessary funding or generate revenue necessary to fund operations.





NOTE 4 - PROPERTY, WEB SITE  AND
COMPUTER EQUIPMENT





Property
and equipment at March 31, 2009 and December 31, 2008 consisted of the
following:




2009
                          
                          
                          2008Office
      and computer equipment
                          
                          $
                          274,436
                          
                          
                          $
                          186,614Web
      site
                          
                          
                          684,566
                          
                          
                          
                          684,566Total
      property, Web site and computer equipment
                          
                          
                          959,002
                          
                          
                          
                          871,180Less:
      accumulated depreciation
                          
                          
                          (372,137
                          )
                          
                          
                          (320,366
                          )$
                          586,865
                          
                          
                          $
                          550,814




Depreciation
and amortization expense for the 3 months ended March 31, 2009 was $51,771,
compared to $41,908 for the same period in 2008.




NOTE 5 - OTHER ASSETS





Other
assets consist of the following at March 31, 2009 and December 31,
2008




2009
                        
                        
                        2008Rent
      Deposits
                        
                        $
                        41,063
                        
                        
                        $
                        20,828Credit
      Card Reserve
                        
                        
                        33,387
                        
                        
                        
                        33,387Vendor
      Deposit
                        
                        
                        7,009
                        
                        
                        
                        5,852TOTAL
                        
                        $
                        81,459
                        
                        
                        $
                        60,067


-7-


NOTE
6 - ACCRUED EXPENSES





Accrued
expenses consist of the following at March 31, 2009 and December 31,
2008:





2009
                        
                        
                        2008Accrued
      interest
                        
                        
                        486,897
                        
                        
                        
                        388,783Accrued
      commission
                        
                        
                        482,681
                        
                        
                        
                        220,869Accrued
      payroll and related expenses
                        
                        
                        916,029
                        
                        
                        
                        625,997Other
                        
                        
                        450,982
                        
                        
                        
                        138,885$
                        2,336,589
                        
                        
                        $
                        1,374,534





NOTE
7 – SHORT TERM BORROWINGS





Short
term borrowing consist of the following at March 31, 2009 and December 31,
2008:





2009
                        
                        
                        2008Note
      payable to Carole Harder bearing an annual interest rate of 12%,
      unsecured, due 6/20/09
                        
                        $
                        140,000
                        
                        
                        $
                        140,000Convertible
      Promissory Notes, bearing an annual interest rate of 12%, secured, due
      7/31/09
                        
                        
                        4,025,000
                        
                        
                        
                        4,280,000Bridge
      Notes, bearing an annual interest rate 12%, unsecured, due
      6/30/09
                        
                        
                        676,500
                        
                        
                        
                        508,500Total
      principal
                        
                        $
                        4,841,500
                        
                        
                        $
                        4,928,500Less
      debt discount
                        
                        
                        1,675,897
                        
                        
                        
                        2,527,945Net
      balance
                        
                        $
                        3,165,603
                        
                        
                        $
                        2,400,555





On
January 7, 2009 and February 10, 2009 the Company raised $100,000 and $60,000
respectively in a private offering from accredited investors. The securities
sold by the Company consisted of its 12% secured convertible promissory notes
and warrants to purchase 100,000 and 60,000 shares of the Company’s common
stock, respectively at an exercise price of $1.00. The warrants were valued
using the Black–Scholes method. This resulted in a total value of $117,885
assuming a fair value per share of $1.00, risk-free interest rates ranging of
1.50% to 1.74% respectively, based on the note issuance and 100% volatility
index.  Under EITF 00-27 and APB No. 14, we allocated the proceeds
from issuance of these notes and warrants based on the proportional fair value
for each item.  Consequently, we recorded a discount of $131,894 which
is being amortized over the term of these notes using an effective periodic
interest rate of 54.46%.  A beneficial conversion discount was
recorded on these convertible notes since these notes were convertible into
shares of common stock at an effective conversion price lower than the fair
value of the common stock.  The beneficial conversion amount was
limited to the portion of the cash proceeds allocated to those convertible
notes.





On
January 30 and February 25 and March 9, 2009, three of our 12% convertible note
holders converted their notes of $50,000, $105,000 and $50,000 respectively,
into shares of common stock at a conversion rate of $0.70.  This
resulted in an issuance of 71,429, 150,000 and 71,429 shares of common stock,
respectively.  In addition the three note holders also converted their
accumulated interest on their respective notes into shares of the Company’s
common stock at a conversion rate of $0.70.  The total interest
converted was $6,283, $13,727 and $3,617 respectively and converted into 8,976,
19,609 and 5,167 of the Company’s common shares, respectively.





During
March 2009, the holders of $2,025,000 of our secured convertible promissory
notes that were scheduled to mature on March 31, 2009 agreed to extend the
maturity date to July 31, 2009.  As consideration for their agreement
to extend the maturity date, we issued three-year warrants to the note holders
granting them the right to purchase an aggregate of 600,000 shares of our common
stock, at an exercise price of $1.00 per share. The Company recorded
these warrants at a value of $149,675 which is being amortized over the term of
the loan extensions.





The
Company recorded $146,836 and $66,460 as interest expense on the above notes for
three month period ended March 31, 2009 and 2008, respectively. Also, included
in interest expense is the amortization of $1,241,090 and $279,903 of loan
origination fees and discount associated with these notes for the three months
ended March 31, 2009 and 2008 respectively.




-8-




NOTE 8 - COMMON STOCK, WARRANTS AND PAID IN
CAPITAL




Common
Stock




On
January 5, 2009, we issued 1,000 shares of common stock to an individual for
services rendered with setting up our debit card program used for paying our
sales representatives.





On
January 12, 2009 we issued 25,000 shares of common stock for cash at $0.80 per
share to an accredited investor.





On
January 30, February 25 and March 9, 2009, three of our 12% convertible note
holders converted their notes of $50,000, $105,000 and $50.000 respectively,
into shares of common stock at a conversion rate of $0.70.  This
resulted in an issuance of 71,429, 150,000 and 71,429 shares of common stock,
respectively.  In addition these three note holders also converted
their accumulated interest on their respective notes into shares of the
Company’s common stock at a conversion rate of $0.70.  The total
interest converted was $6,283, $13,727 and $3,617 respectively and converted
into 8,976, 19,609 and 5,167 of the Company’s common shares,
respectively.





In
January 2009, we issued 10,000 shares of our common stock for services provided
as a commission for assisting the Company with fund raising.





On
February 11, 2009, we issued 52,000 shares of our common stock for services
rendered in connection with our convertible bridge loans procured during the
fourth quarter 2008. This amount had been accrued for when the service was
provided in 2008.





On
February 18, 2009, we issued 5,000 shares of stock as compensation to an
employee.





Warrants





The
following is a summary of the Company’s outstanding common stock purchase
warrants:





Outstanding
                          
                          
                          Issued 3
      months
                          
                          
                          
                          
                          
                          OutstandingExercise Price
                          
                          December 31,
      2008
                          
                          
                          Ended
      March 31, 2009
                          
                          
                          Exercised
                          
                          
                          March
      31, 2009$0.01
                          
                          
                          153,920
                          (1)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          153,920
                          (1)$0.30
                          
                          
                          30,300
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          30,300$0.50
                          
                          
                          101,000
                          (1)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          101,000
                          (1)$0.70
                          
                          
                          5,087,484
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          5,087,484$0.93
                          
                          
                          4,026,646
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          4,026,646$1.00
                          
                          
                          503,247
                          
                          
                          
                          760,000
                          
                          
                          
                          -
                          
                          
                          
                          1,263,247$2.40
                          
                          
                          132,310
                          (1)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          132,310
                          (1)10,034,907
                          
                          
                          
                          760,000
                          
                          
                          
                          -
                          
                          
                          
                          10,794,907




(1)
            The outstanding warrants as of
      December 31, 2008,  include an additional 260,442 warrants
      issued to replace the warrants previously issued by BOOMj.com, Inc., which
      new warrants were issued at a rate of 2.02 shares of the Company common
      stock for each warrant share of BOOMj.com. The Company has reserved a
      sufficient number of shares of authorized common stock for issuance upon
      exercise of the outstanding
warrants.




2008
Stock Option Plan





In
September 2008, the Company's Board of Directors approved the 2008 Equity
Incentive Plan of Beyond
Commerce (the "Plan").


-9-





Stock Options
Granted





On
September 11, 2008, the Board of Directors approved the issuance of stock
options as described below in accordance with the 2008 Equity Incentive
Plan. The employee options have a cliff vesting schedule over a three year
period that vest one third after one year of service and then 4.2% per month
over the remaining twenty-four months. Options issued to non-employees for
meeting performance-based goals vest immediately.




Outstanding
                                
                                
                                Issued 3
      months
                                
                                
                                
                                
                                
                                OutstandingOption
      Group
                                
                                December 31,
      2008
                                
                                
                                Ended
      March 31, 2009
                                
                                
                                Exercised
                                
                                
                                March
      31, 2009$0.50-0.69
                                
                                
                                -
                                
                                
                                
                                882,893
                                
                                
                                
                                -
                                
                                
                                
                                882,893$0.70-0.89
                                
                                
                                470,000
                                
                                
                                
                                265,000
                                
                                
                                
                                -
                                
                                
                                
                                735,000$0.90-0.99
                                
                                
                                451,049
                                
                                
                                
                                497,441
                                
                                
                                
                                -
                                
                                
                                
                                948,490$1.00-1.25
                                
                                
                                73,271
                                
                                
                                
                                505,000
                                
                                
                                
                                -
                                
                                
                                
                                578,271$1.25-1.50
                                
                                
                                120,000
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                120,0001,114,320
                                
                                
                                
                                2,150,334
                                
                                
                                
                                -
                                
                                
                                
                                3,264,654





The
estimated fair value of the aforementioned options was calculated using the
Black-Scholes model.  Consequently, the Company recorded a share-based
compensation expense of $818,815 for the quarter ended March 31, 2009. Total
compensation costs to be recognized over the next 2.4 weighted average number of
years will be $1,192,014 for all non-vested employee options as of March 31,
2009. Expense will equal or exceed the vested amount of the
options.





Dividends





The
Company has never issued dividends.





NOTE
9 – COMMITMENTS AND CONTINGENCIES





Operating
Lease





The
Company leases certain office space, under operating leases which generally
require the Company to pay taxes, insurance and maintenance expenses related to
the leased property.  The leases for office space have lease extension
renewal options for an added two to three years at fair market rent values. The
Company believes that in the normal course of business, leases will be renewed
or replaced by other leases.  In December 2007 the Company entered
into a four year lease for 4,560 square feet in Henderson, Nevada which houses
its corporate office.


-10-





On May 1,
2008 the Company relocated its Orange County office to Irvine, California. The
Irvine lease is for a twelve month period for approximately 2,042 square feet of
office space. The lease in Irvine houses the Company’s marketing and content
employees. Total rent expense incurred by the Company, which includes the leases
above and sundry month to month rental expenditures was $52,326 and $58,683 for
the three month period ended March 31st 2009
and 2008, respectively. The Company signed an amendment to its lease in
Henderson, Nevada in February 2009, effective March 16, 2009 for an additional
5,634 square feet of office space adjacent to the current
office.  This amendment ties to the expiration of the present lease
and will expire January 31, 2012.  The Company has future minimum
lease obligations as follows:





Twelve months ending
                                      March 31,
                                    
                                    20092010
                                    
                                    $
                                    278,3282011
                                    
                                    
                                    292,2002012
                                    
                                    
                                    236,182Total
                                    
                                    $
                                    806,710




The
Company currently has outstanding $2,650,000 of short-term convertible
promissory notes that are secured by a lien on all of the Company’s
assets.
  NOTE
10 – SEGMENT REPORTING





Beyond
Commerce, Inc manages its operations through two business segments:
BOOMj.com  dba i-Supply and LocalAdLink. Each unit owns and operates
the segments under the respective names.





The
Company evaluates performance based on net operating profit. Administrative
functions such as finance, treasury, and information systems are centralized and
although they are not considered operating segments are presented below for
informative purposes. However, where applicable, portions of the administrative
function expenses are allocated between the operating segments. The operating
segments do share facilities in Henderson NV. In the event any supplies and/or
services are provided to one operating segment by the other, the transaction is
valued according to the company’s transfer policy, which approximates market
price. The costs of operating the segments are captured discretely within each
segment. The Company’s leasehold improvements, property, computer equipment,
inventory, and results of operations are captured and reported discretely within
each operating segment.





Summary
financial information for the two reportable segments as of March 31 is as
follows:





2009
                    
                    
                    2008Operations:
      BOOMj.com dba i-SupplyNet
      sales
                    
                    $
                    26,987
                    
                    
                    $
                    760,949Gross
      Margin
                    
                    
                    12,462
                    
                    
                    
                    (59,869
                    )Depreciation
                    
                    
                    (47,998
                    )
                    
                    
                    (41,908
                    )Assets
                    
                    
                    1,651,217
                    
                    
                    
                    1,112,972Capital
      Expenditures
                    
                    
                    7,642
                    
                    
                    
                    71,655Operations:
      LocalAdLinkNet
      sales
                    
                    $
                    6,017,181
                    
                    
                    
                    -Gross
      Margin
                    
                    
                    904,645
                    
                    
                    
                    -Depreciation
                    
                    
                    3,773
                    
                    
                    
                    -Assets
                    
                    
                    1,716,509
                    
                    
                    
                    -Capital
      Expenditures
                    
                    
                    80,180
                    
                    
                    
                    -Consolidated
      Operations:Net
      sales
                    
                    $
                    6,044,168
                    
                    
                    
                    760,949Gross
      Margin
                    
                    
                    917,107
                    
                    
                    
                    (59,869
                    )Other
      operating expenses
                    
                    
                    (3,875,968
                    )
                    
                    
                    (1,974,862
                    )Depreciation
                    
                    
                    (51,771
                    )
                    
                    
                    (41,908
                    )Non-operating
      income (expense)
                    
                    
                    348,044
                    
                    
                    
                    (482,029
                    )Loss
      from operations before income taxes
                    
                    
                    (2,662,588
                    )
                    
                    
                    (2,558,668
                    )Assets
                    
                    
                    3,367,726
                    
                    
                    
                    1,112,972Capital
      Expenditures
                    
                    
                    87,822
                    
                    
                    
                    71,655


-11-





NOTE
11 – NET LOSS PER SHARE OF COMMON STOCK





The
Company has adopted Financial Accounting Standards Board ("FASB") Statement
Number 128, "Earnings per Share," which requires presentation of basic and
diluted EPS on the face of the income statement for all entities with complex
capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. In the accompanying financial statements, basic loss
per share of common stock is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the
year.  Basic net loss per common share is based upon the weighted
average number of common shares outstanding during the period. Dilution is
computed by applying the treasury stock method. Under this method, options and
warrants are assumed to be exercised at the beginning of the period (or at the
time of issuance, if later), and as if funds obtained thereby were used to
purchase common stock at the average market price during the period. However,
shares associated with convertible debt, stock options and stock warrants
are not included because the inclusion would be anti-dilutive (i.e. reduce the
net loss per common share).  The total number of such stock option
warrant shares and potential shares to be issued upon conversion of debt
excluded from the diluted net loss per common share presentation was 23,630,990
and  11,667,563 at March 31, 2009 and 2008, respectively.





The above
amounts are not included in the computation of diluted earnings per share
because the effect of these instruments would be anti-dilutive (i.e., reduce the
loss per share) for the three months ended March 31, 2009. The following is a
reconciliation of the numerator and denominator of the basic and diluted
earnings per share computations for the period ended March 31, 2009 and
2008:





Numerator





Basic and
diluted net loss per share for the three months ended March 31:




Unaudited
                      
                      
                      Unaudited2009
                      
                      
                      2008Net
      loss available to common stockholders
                      
                      $
                      (2,662,588
                      )
                      
                      $
                      (2,558,668
                      )DenominatorBasic
      and diluted weighted average number of shares outstanding
                      
                      
                      41,206,905
                      
                      
                      
                      36,674,849Basic
      and diluted net loss per share
                      
                      $
                      (0.06
                      )
                      
                      $
                      (0.08
                      )





NOTE 12 - SUPPLEMENTAL
DISCLOSURES OF CASH FLOWS (not described elsewhere)




The
Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95. The Company paid $8,918
and $20,517 for the three months ended March 31, 2009 and 2008, respectively for
interest. The Company did not make any payments for income tax during the three
months ended March 31, 2009 or 2008. As of March 31, 2009 and 2008 respectively,
prepaid loan fees included $424,929 and $282,777 (net of amortization) of debt
related fees, which were paid by issuing common stock and warrants.




During
the quarter ended March 31, 2009, prepaid expenses included $16,000 of prepaid
loan and consulting fees which were paid by issuing common stock.




During
the quarter ended March 31, 2009, approximately $887,000 of expense was recorded
which was paid for by issuing options and warrants.


-12-





NOTE 13 - RELATED
PARTIES





The
Company paid Linlithgow Holdings, LLC. (an affiliate shareholder)
$77,900  in commissions and consulting fees for the three months ended
March 31, 2009 as compared to $23,200 for the same period in 2008. We also have
related party transactions with FA Corp in which the principal shareholder is a
member of our board of directors, Murray Williams.  We incurred
expenses for FA Corp of $23,408 for services rendered for the three months ended
March 31, 2009 compared to $35,792 for the three months ended March 31,
2008





NOTE 14 - SUBSEQUENT
EVENTS




During
April and the first two weeks of May 2009, Eleven of our note holders converted
the principal and interest of their convertible promissory notes into shares of
the Company common stock at a conversion rate of $.70 per
share.  Total principal converted was $1,485,000, which was converted
into 2,121,428 of the Company common stock.  Total accrued interest
converted was $172,910 into 247,400 of the Company common
stock.





During
May 2009 one of our note holders converted the principal and interest of their
convertible promissory note into shares of the Company common stock at a
conversion rate of $1.00 per share. Total principal converted was $100,000,
which amount was converted into 100,000 shares of the Company common
stock.  Total accrued interest of $4,000 was converted into 4,000 of
the Company common stock.





During
April, 2009, the Company issued a 30 day zero coupon note payable of
$550,000 for the receipt of $500,000.  This was paid in full during
May, 2009.  In addition for the receipt of funds, the company gave the
lender 500,000 options to purchase the company common stock at a price of $1.00
per share.





During
May, 2009 the Company issued a 120 day promissory note at 12% interest to an
accredited investor for $800,000.  As a condition of the note, the
company issued the lender 400,000 options to purchase the company's common stock
at a price of $1.00 per share.





During
April and the first two weeks of May 2009, the Company granted  to
some of their independent sale force and consultants 690,000 options to purchase
the Company's common stock at a price ranging from $1.00 to $1.59 per
share.





During
April and the first two weeks of  May 2009, the Company granted 67,500
options to purchase the Company's common stock to some of their employees at a
price equal to the market price on the date of issuance.





On April
29, 2009 the Company granted 229,067 shares of common stock to some of
their independent sales representatives in lieu of paying them
cash for commissions earned.





In April,
we paid $14,589 of interest to nine (9) note holders for extending their bridge
loans an additional 90 days.


-13-




NOTE 15 – CHANGE IN METHOD OF ACCOUNTING
FOR CERTAIN CONVERSION AND EXERCISE FEATURES
 
 On January 1, 2009, the Company adoptedEITF 07-5, “Determining Whether an Instrument (or
Embedded Feature) Is Indexed to an Entity's Own Stock” and changed its accounting, as
required, for valuation of convertible notes and warrants with conversion
features and/or exercise features in which either the conversion or exercise
price or the number of warrant shares issuable was determined by formula with
inputs based on the operations of the Company.  This change required
the Company to bifurcate the features from the host contracts as derivatives
under SFAS 133 “Accounting
for Derivative Instruments and Hedging Activities” by recognizing an additional liability
for the fair value assigned to those derivate features, whereas in the prior
year those convertible notes and warrants were accounted for using Emerging
Issues Task Force No. 01-6 “The Meaning of‘Indexed to a Company's Own
Stock’".  The Company engaged a
valuation specialist to provide the estimated fair value of these
features.  The new method of accounting for convertible notes and
warrants with these features requires that the Company revalue the instruments
at inception and each reporting date and to record the cumulative effect of the
changes in retained earnings into the opening period in which the standard is
adopted.
 
 We
previously accounted for our convertible notes and warrants with these features
under EITF 01-6 which treated these features as if they were indexed to the
Company’s own stock and thus did not require separate accounting treatment or
bifurcation as derivatives.
 
 Upon
implementing EITF 07-5 for all periods presented the Company recalculated and
replaced the original accounting by recognizing an additional liability for the
value of the bifurcated features.   In addition, because these
instruments are now accounted for as derivatives under SFAS 133, the Company no
longer treats the warrants issued in conjunction with the 12% Secured
Convertible Promissory Notes as Temporary Equity and instead the values assigned
are now included in Note derivative liability.
 
 The
following financial statement line items as of December 31, 2008 were affected
by the change in accounting (no proforma has been presented for the income
statement or cash flows as none of these instruments were outstanding during the
three months ended March 31, 2008):
 
 CONSOLIDATED
BALANCE SHEET
 AS OF
DECEMBER 31, 2008
 
 As
      ComputedAs
      Originally
                        
                        
                        Under
                        
                        
                        Effect
      ofReported
                        
                        
                        &
      EITF 07-5
                        
                        
                        ChangeTotal
      Assets
                        
                        $
                        1,806,008
                        
                        
                        $
                        1,806,008
                        
                        
                        $
                        -Current
      LiabilitiesShort-term
      borrowings
                        
                        
                        2,400,555
                        
                        
                        
                        2,400,555
                        
                        
                        
                        -Accounts
      payable
                        
                        
                        1,490,590
                        
                        
                        
                        1,490,590
                        
                        
                        
                        -Accounts payable – related
      party
                        
                        
                        19,552
                        
                        
                        
                        19,552
                        
                        
                        
                        -Note derivative
      liability
                        
                        
                        1,523,651
                        
                        
                        
                        3,396,935
                        
                        
                        
                        1,873,284Other current
      liabilities
                        
                        
                        1,374,534
                        
                        
                        
                        1,374,534
                        
                        
                        
                        -Deferred
      revenue
                        
                        
                        609,987
                        
                        
                        
                        609,987
                        
                        
                        
                        -Total Current
      Liabilities
                        
                        
                        7,418,869
                        
                        
                        
                        9,292,153
                        
                        
                        
                        1,873,284Commitments and
      Contingencies
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Temporary
      Equity
                        
                        
                        1,135,980
                        
                        
                        
                        -
                        
                        
                        
                        (1,135,980
                        )Stockholders’
      Deficit:Common
      stock, $0.001 par value, 200,000,000 and 75,000,000 shares authorized as
      of December 31, 2008 and 2007, respectively, and 40,936,143and 36,108,067
      issued and outstanding at December 31, 2008 and 2007,
      respectively
                        
                        
                        40,936
                        
                        
                        
                        40,936
                        
                        
                        
                        -Preferred
      stock,$.001 par value of 50,000,000 shares authorized and no shares
      issued
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Additional paid-in
      capital
                        
                        
                        11,096,604
                        
                        
                        
                        11,096,604
                        
                        
                        
                        -Accumulated
      deficit
                        
                        
                        (17,886,381
                        )
                        
                        
                        (18,623,685
                        )
                        
                        
                        (737,304
                        )Total Stockholders’
      Deficit
                        
                        
                        (6,748,841
                        )
                        
                        
                        (7,486,145
                        )
                        
                        
                        (737,304
                        )Total Liabilities and
      Stockholders' Deficit
                        
                        $
                        1,806,008
                        
                        
                        $
                        1,806,008
                        
                        
                        $
                        (1,873,284
                        )
 
 As a
result of the accounting change, accumulated deficit as of January 1, 2009,
increased from $17,886,381, as originally reported, to $18,623,685 computed
under EITF 07-5.
 -14-


Item
2. Management's Discussion and Analysis of Financial Condition





Throughout
this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” and “our
company” refer to Beyond Commerce, Inc., a Nevada corporation formerly known as
BOOMj, Inc. and Reel Estate Services, Inc. respectively and, unless otherwise
specified, also includes our two wholly-owned subsidiaries, BOOMj.com, Inc., a
Nevada corporation and LocalAdLink, Inc., a Nevada corporation.




Cautionary
Statement Regarding Forward-Looking Statements




This
Quarterly Report contains forward-looking statements, which reflect the views of
our management with respect to future events and financial performance. These
forward-looking statements are subject to a number of uncertainties and other
factors that could cause actual results to differ materially from such
statements. Forward-looking statements are identified by words such as
“anticipates,” “believes,” “estimates,” “expects,” “plans,” “projects,”
“targets” and similar expressions. Readers are cautioned not to place undue
reliance on these forward-looking statements, which are based on the information
available to management at this time and which speak only as of this date. We
undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. For a
discussion of some of the factors that may cause actual results to differ
materially from those suggested by the forward-looking statements, please read
carefully the information in the “Risk Factors” section in our Form 10-K for the
year ended December 31, 2008 and the “Risk Factors” section set forth in Item 1A
of Part II of this Report. The identification in this Quarterly Report of
factors that may affect future performance and the accuracy of forward-looking
statements is meant to be illustrative and by no means exhaustive. All
forward-looking statements should be evaluated with the understanding of their
inherent uncertainty.




Description
of Business




Beyond
Commerce, Inc. operates a Web site that targets persons in the demographic group
commonly referred to as Baby Boomers and Generation Jones. On the Company’s Web
site, www.BOOMj.com, users/members can create their very own personal profile
for use on the Company’s state-of-the-art social network platform. Our BOOMj.com
Web site provides social, political, financial and lifestyle content to the Baby
Boomer/Generation Jones target audience as a platform for our advertising and
E-commerce businesses. These users/members can upload, watch and share their
videos and other interesting information with like-minded Boomers and Generation
Jones. The Web site provides entertainment news ranging from the latest movie
reviews, fashions and diets to show times and ticket sales. The Web site also
offers a variety of e-commerce product offerings, allowing users/members of the
Web site can buy leading brand name merchandise ranging from books and CD’s
to electronics, featuring computers and flat panel screen TV’s. The Company’s
product line typically consists of approximately 2.0 million SKUs. Baby Boomers
and Generation Jones are able to shop online through the online store.
Additionally, through BOOMj.com health network Boomers and Generation Jones have
access to a collection of BOOMj.com owned and operated Web sites and multi-media
affiliates providing timely and in-depth health, fitness nutrition information,
personalized tools and resources to make the right health choices. BOOMj.com
health network connects to a vast community of leading experts and people
seeking to manage and improve their health and wellness. In September 2008, the
Company commenced the operations of a new the web site known as LocalAdLink,
which Web site the Company operates as a newly formed division of Beyond
Commerce, Inc. LocalAdLink is a local search and advertising platform that
networks high volume Web sites to allow local advertisers to increase revenues
and brand identity.




CORPORATE
HISTORY AND PLAN OF OPERATIONS





Plan
of Operations





This
company, formerly known as Reel Estate Services Inc., was incorporated in Nevada
as a development stage company on January 12, 2006 to create a web-based service
that lists properties across the globe that are available for rental and/or use
by film and television companies as filming locations. We never earned any
revenue from our former Reel Estate Services internet site, and in September
2007 prior management terminated those operations.





On
December 28, 2007 Reel Estate Services, Inc. acquired BOOMj.com, Inc. through a
reorganization (the “Reorganization”) in which it issued 34,458,067 shares of
common stock to the former shareholders of BOOMj.com, Inc. As a result of this
Reorganization, the former shareholders of BOOMj.com, Inc. acquired a majority
ownership and control over Reel Estate Services, Inc.


-15-





BOOMj.com,
Inc. is now our wholly-owned subsidiary, although from an historical perspective
it was deemed to have been the accounting acquirer in the transaction and the
survivor of the Reorganization. Accordingly, prior to December 28, 2007 the
historical financial statements of BOOMj.com, Inc. have become our historical
financial statements. Subsequent to December 28, 2007 the consolidated
operations of both entities are included in our financial statements. BOOMj.com,
Inc. itself was incorporated on November 14, 2006.




Results
of Operations




We
reported a net loss of $ 2,662,588 for the three months ended March 31, 2009
compared to net losses of $2,558,668 reported for the same period in 2008. While
reporting a net loss the Company’s LocalAdLink division continued to grow its
sales force and gross revenues.  However, at the end of February with the
spike in the volume of weekly credit card revenues generated, certain credit
card processing companies without notice to the Company, put a hold on all of
the cash being remitted to Beyond Commerce’s LocalAdLink subsidiary. This hold
was initiated under the rationale of “potential business risk.” The Company had
less than 0.25% percent in charge-backs and a total of approximately $13,000 in
claims over a six month period of time prior to this risk reassessment. 
With the stoppage of the credit card processing and the processors holding back
over $900,000 of funds due to the Company, we inadvertently had 567 checks
returned totaling over $250,000 to valued employees, commissioned sales
force and vendors.
  The
actions of the credit card processors severely negatively impacted the Company
to achieve its projected first quarter revenues and income. LocalAdLink was
offline to selling local businesses advertising for approximately 23 days during
the month of March. The negative impact of inadvertently returning 567 checks
impacted the Company’s credibility with its independent sales force. Due to the
problems of not being able to process credit cards and having to return checks,
during the last sixty days since the incident, the Company has had to rebuild
its credibility with its independent sales representatives so they would
reenergize and once again sell ads. At the time of the incident, LocalAdLink was
ramping up revenues based on its prior month’s revenues at a rate of four and a
half million per month. Obviously the sales fell well short of our planned
revenues for the month caused by the credit card processors reckless
actions.
  The
Company is currently evaluating any claims it may have against the
aforementioned credit card processing companies, as we believe that the damage
incurred by the Company from the willful negligence of the processors has caused
an undetermined financial loss to Beyond Commerce. Furthermore, the credit card
processors’ holding of revenues forced us to change processors.  This
change has resulted in increased processing fees, personal guarantees and a
mandate for the Company to reserve 10% of its revenues received daily to
mitigate potential risk of the account to the new processor.


As more
fully explained in "Operating Expenses" below, the additional loss in 2009 were
also attributable to increases in operating costs, interest from debt, the
issuance of warrants, and to the delay in certain revenue generation
activities.





Revenues





Our goal
is to generate revenues from (i) the sale of various products to our Web site
users (our e-commerce operations) and (ii) both national and local advertising
fees. Revenue for the three month period ended March 31, 2009 was $6,044,168
compared to $760,949 for the three month period ended March 31, 2009 and 2008
respectively.  Cost of sales for the three month period ended March
31, 2009 and 2008 was $5,127,061 and $820,818 respectively.  The
increases are due to revenue from the new LocalAdLink segment, which the Company
launched in November 2008.  LocalAdLink constituted $6,017,181 of
total revenue and $5,112,536 of total cost of sales.





Operating
Expenses




Selling,
general and administrative expenses, including related party expenses,
(SG&A) for the three month period ended March 31, 2009 were $2,950,112. This
is an increase of $1,267,873 in SG&A expenses from the $1,682,239 reported
for the three month period ended March 31, 2008 and is mainly attributable to
the increase in employees, programming and marketing.  The Company had
42 employees at the end of March 2008 as compared to 69 at the end of March
2009. This is an increase of $426,000. A large part of the
increase is attributable to marketing of approximately $641,000, meetings for
the LocalAdLink representatives of $243,000 and travel of $151,000 related to
LocalAdLink.
 
 Professional
fees, including related party fees, for the three month period ended March 31,
2009 were $925,856. This is an increase of $633,233 in professional fees from
the $292,623 for the three month period March 31, 2008. The largest component of
the increase in professional fees presented in the first quarter consists of
consulting and support services due to the rapid growth of activity in the
LocalAdLink division. This increase was just over $533,000. There was also an
increase in accounting fees of $92,000 due to an increase in our audit expense
and compliance expenses.  There was an increase of $63,000 for the
issuance of stock for fund raising support.  Professional fees for
marketing decreased almost $50,000 and legal expenses decreased almost $37,000
from the comparable three month period ended March 31, 2008.


Depreciation
expense for the three month period ended March 31, 2009 was $51,771. This
reflects an increase of $9,863 from the $41,908 reported for the three month
period ended March 31, 2008. This increase in expense is attributable to the
amortization of the asset additions, which consist most of hardware and software
purchased for the increase in employees.


-16-




Other
income (expense)
 
 Income
related to derivatives for the three month period ended March 31, 2009 was
$1,766,340.  These derivatives related to notes issued in the third
and fourth quarters of 2008. Therefore, there was no related expense for the
period ending March 31, 2008.




Interest
expense for the three month period ended March 31, 2009 was $1,418,296, compared
to $482,029 for the three period ended March 31, 2008. Interest expenses
includes non-cash expenses related to the value of warrants issued to investors
who invested in our convertible notes and discounts from beneficial conversion
features. Loan fees and loan discount amortization expenses of $983,942 related
to our promissory notes for the three period ended March 31,
2009.  Interest expense on the note balances accrued for the three
months ended March 31, 2009 was $146,839 as compared to $32,767 for the three
month period ended March 31, 2008.





Liquidity
and Capital Resources





Cash and
cash equivalents at March 31, 2009 were $12,490 and $100,086 at December 31,
2008. Since our business model is in the early stages of operations thus far,
the majority of our capital resources have been derived through the sale of debt
and equity securities. No assurance can be made that these operations will
continue to improve or that we will have access to capital markets in the
future, or that financing will be available on acceptable terms to satisfy our
future and on-going cash requirements that we need to implement our business
strategies. Our inability to fulfill our business plan, access the capital
markets or obtain acceptable financing could have a material adverse affect on
our results of operations and financial condition, and could severely threaten
our ability to continue as a going concern.





As shown
in the accompanying consolidated financial statements, we incurred a loss of
$2,662,588 for the three month period ended March 31, 2009 as compared to
$2,558,668 March 31, 2008. Our current liabilities exceeded our current assets
by $9,400,105 at March 31, 2009 and negative cash flow from operating activities
for the three months ended March 31, 2009 was $365,774.  Included in
current liabilities is deferred revenue of $2,697,885 and notes payable of
$3,165,603. These factors, and our inability to meet our obligations from
current operations, and the need to raise additional capital to accomplish our
objectives, create considerable doubt about our ability to continue as a going
concern.





We
currently do not have sufficient funds on hand to fund our current obligations
until we reach our projected break-even level of operations. We do not have any
bank credit lines. Accordingly, we will have to obtain additional funding in the
near future in order to continue our operations until our revenues are
sufficient to fund our operating expenses. Although we have again re-commenced
our on-line e-commerce business and now are again generating revenues from that
line of our business, and we have recently implemented a new business line in
local advertising (LocalAdLink), we do not anticipate that we will generate
sufficient cash from operations to fund our working capital needs for at least
another three months. Accordingly, we intend to continue to seek additional
financing from various sources, including from the sale of debt or equity
securities. We have not yet identified, and cannot be sure that we will be able
to obtain any additional funding from either of these sources, or that the terms
under which we may be able to obtain such funding will be beneficial to us. If
we do not obtain sufficient additional funds in the near future, we will have to
suspend some of our operations, further scale down our current and proposed
future operations or, if those actions are not sufficient, terminate our
operations.





All of
the convertible notes that we have issued in order to fund our working capital
needs mature within the next 12 months. Accordingly, in addition to having to
raise funds to continue to operate, we also will have to raise funds to repay
these convertible notes (to the extent that such notes are not converted in
shares of our common stock by the holders). As of March 31, 2009, the total
principal amount of our short-term borrowings was $4,841,500. Most of the
convertible notes that we issued are secured by a lien on certain of our assets
and/or the assets of our subsidiary. During the first six weeks of the second
quarter 2009, $1,585,000 of these notes have converted into Company common
stock. In the event that we fail to repay these remaining secured promissory
notes as they mature, we will be at risk of losing our assets through
foreclosure of our assets. Accordingly, a default under the secured convertible
notes could result in the loss of our assets and the termination of our
operations.




Management
is taking steps to raise additional funds to address its operating and financial
cash requirements to continue operations in the next twelve months.
Management has devoted a significant amount of time in the raising of capital
from additional debt and equity financing.


-17-





Operating
Activities





Net cash
used in operating activities for the three month period ended March 31, 2009 was
$365,774 compared to a use of cash of  $1,991,887 for the three month
period ended March 31, 2008. This change was mainly attributable to the increase
in our revenues and related gross margins compared to the start up of operations
incurred in 2008.





Investing
Activities





Net cash
used in investing activities for the three month period ended March 31, 2009 and
2008 was $87,822 and $71,655, respectively, representing cash expended for the
purchase of computers and office furniture and equipment.





Financing
Activities





Net cash
provided by financing activities for the three month period ended March 31, 2009
and 2008 was $366,000 and $1,973,400 respectively. The decrease in cash provided
by financing is due primarily from the decrease in debt financing during the
recent period. We received $388,000 in short-term borrowings as compared to
$1,973,400 during the three month period ended March 31, 2008.  During
the period ended March 31, 2009 we received $20,000 from the issuance of common
stock, and repaid $42,000 on a short term loan.




As a
result of the above activities, we experienced a net decrease in cash of $87,596
for the three month period ended March 31, 2009. Our ability to continue as a
going concern is dependent on our success in obtaining additional financing from
investors through the sale of our securities and continuing our stream of
revenue through LocalAdLink.





Other





As of
March 31, 2009, we had no long-term debt obligations, no
capital  lease obligations, no material  long-term purchase
obligations or other similar long-term liabilities. We are not a party to any
off-balance sheet arrangements, and we do not engage in trading activities
involving non-exchange traded contracts.





Inflation
and changing prices have had no effect on our net sales and revenues or on our
income from continuing operations





Item 3.
Quantitative and Qualitative Disclosures About Market Risk





Not
applicable.





Item
4T. Controls and Procedures





Evaluation of Disclosure Controls
and Procedures





Under the
supervision and with the participation of our senior management, including our
chief executive officer and chief financial officer, we conducted an evaluation
of the effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, as of the end of the period covered by this
quarterly report (the “Evaluation Date”). Based on this evaluation, our chief
executive officer and chief financial officer concluded as of the Evaluation
Date that our disclosure controls and procedures were effective such that the
information relating to the Company, including our consolidated subsidiaries,
required to be disclosed in our SEC reports (i) is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms, and (ii) 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.


-18-





Changes in Internal Control over
Financial Reporting





During
the three months ended March 31, 2009, there were no changes in our internal
control over financial reporting (under the Exchange Act) or in other factors
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.





Inherent
Limitations of Internal Controls





Our
management, including our chief executive officer and chief financial officer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the control. The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions. Over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.





PART
II - OTHER INFORMATION


Item
1. Legal Proceedings








The
Company is presently involved in litigation as part of its normal business
process. Management does not have reason to believe that any of these lawsuits
will have a material adverse impact on the Company.





Item
1A.  Risk Factors




There has
been no material change in the Risk Factors set forth in the “Risk Factors”
section of the Company’s Form 10-K for the year ended December 31, 2008, other
than as set forth below:








We currently have outstanding
$2,650,000 of short-term convertible promissory notes that are secured by a lien
on all of this company’s assets. Accordingly, a default under the convertible
promissory notes, or our inability to repay them when these notes become due,
could result in the foreclosure of all of our assets and the termination of our
business.





We
currently have outstanding approximately $2,650,000 of short-term, secured notes
that mature and must be repaid in full, both principal and interest, on July 31,
2009. Failure to make any payment as required under the convertible promissory
notes could result in the acceleration of the convertible promissory notes and
the foreclosure of our assets. If we are unable to repay the notes in full upon
their maturity, or if we otherwise default under our obligations to the holders
of those notes, the holders of the convertible promissory notes will have the
right to foreclose on all of our assets, which would materially and adversely
affect our ability to continue our operations and could terminate our existence.
No assurance can be given that we will be able to make all payments as required
or that we will be able to repay the convertible promissory notes.





We
will need significant additional capital, which we may be unable to
obtain.





We
currently only have sufficient cash available to continue our current operations
until July 31, 2009. Our capital requirements in connection with our expanding
commercial operations have been, and will continue to be, significant. We need
to obtain a significant amount of additional funds to fund our working capital
needs, to continue to market our Web site, to offer a broader range of products
on our e-commerce site, and to otherwise expand our business. There can be no
assurance that financing will be available in amounts or on terms acceptable to
us, if at all. If we are not able to raise additional funds in the near future,
we may have to severely reduce our operations or even terminate our
business.


-19-





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




On March
31, 2009 the Company sold 25,000 shares of its common stock and a warrant to
purchase an additional 12,500 shares of common stock at $.80 per share, for
$20,000 in cash. This resulted in additional non cash expense of $75,600. The
issuance of securities is exempt from the registration requirements of the
Securities Act, under Section 4(2) of the Act as transactions by an issuer not
involving any public offering.





Item
3. Defaults Upon Senior Securities





None




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





None.





Item
5. Other Information





None.




Item
6. Exhibits and Reports on Form 8-K




Exhibit
      No.
              
              Description
      of Document31.1
              
              Certification
      of Chief Executive Officer31.2
              
              Certification
      of Chief Financial Officer (Principal Accounting
  Officer)32.1
              
              Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002, 18 U.S.C. Section
1350.


-20-




SIGNATURES





Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on the 15th day of
May 2009.





By:
                /s/ Robert J.
      McNultyRobert
      J. McNulty, Chief Executive Officer
                  (Principal Executive
      Officer)




By:
              /s/ Mark V.
      NoffkeMark
      V. Noffke, Chief Financial Officer(Principal Financial
      Officer)


-21-