| Delaware                             | 75-2228828                             |
|--------------------------------------|----------------------------------------|
| (State      or other Jurisdiction of | (IRS      Employer Identification No.) |
| Incorporation      or Organization)  |                                   |

| 330 West 38 St. Suite 1602 New York, NY      10018                 | (212) 239-8210                                                |
|--------------------------------------------------------------------|---------------------------------------------------------------|
| (Address      of Principal Executive Office)  (Zip Code) | (Registrant’s      telephone number including areacode) |

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|                                                                                                   |                                                                            | Page Number                                                                            |
|--------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
| PART  1  -  FINANCIAL      INFORMATION                                   |                                                                            |                                                                                   |
|                                                                                                   |                                                                            |                                                                                   |
| Item      1   Financial      Statements                                                      |                                                                            |
|                                                                                                   |                                                                            |                                                                                   |
|        Condensed      Balance Sheets                                                              |                                                                            |
|         -      June 30, 2010 (unaudited) and December 31, 2009                               |              3 |
|                                                                                                   |                                                                            |                                                                                   |
|        Condensed      Statements of Operations                                                    |                                                                            |
|         -      Three  and six months ended June 30, 2010 and 2009      (unaudited) | 4                                                                               |
|                                                                                                   |                                                                            |                                                                                   |
|        Condensed      Statements of Cash Flows                                                    |                                                                            |
|         -      Six  months ended June 30, 2010 and 2009    (unaudited)             | 5 -      6                                                                      |
|                                                                                                   |                                                                            |                                                                                   |
|        Notes      to Condensed Financial Statements                                               | 7 -      15                                                                     |
|                                                                                                   |                                                                            |                                                                                   |
| Item      2 Management’s      Discussion and Analysis of Financial Condition                     |                                                                            |
|          and      Results of Operations                                                 |                                                                            | 16      – 17                                                                     |
|                                                                                                   |                                                                            |                                                                                   |
| Item      3. Quantitative and Qualitative Disclosures About Market    Risk                             |                                                                            | 18                                                                                     |
|                                                                                                   |                                                                            |                                                                                   |
| Item      4T.Controls and Procedures                                                                   |                                                                            |               18 |
|                                                                                                   |                                                                            |                                                                                   |
| PART      II  -  OTHER INFORMATION                                                 |                                                                            | 19      - 20                                                                           |
|                                                                                                   |                                                                            |                                                                                   |
| Item      1. Legal Proceedings                                                                         |                                                                            | —                                                                                |
|                                                                                                   |                                                                            |                                                                                   |
| Item      1A. Risk Factors                                                                             |                                                                            | —                                                                                |
|                                                                                                   |                                                                            |                                                                                   |
| Item      2.  Unregistered Sales of Equity Securities and Use of      Proceeds               |                                                                            | 20                                                                                     |
|                                                                                                   |                                                                            |                                                                                   |
| Item      3. Defaults Upon Senior Securities                                                           |                                                                            | —                                                                                |
|                                                                                                   |                                                                            |                                                                                   |
| Item      4. Submission of Matters to a Vote of Security Holders                                       |                                                                            | —                                                                                |
|                                                                                                   |                                                                            |                                                                                   |
| Item      5. Other information                                                                         |                                                                            | —                                                                                |
|                                                                                                   |                                                                            |                                                                                   |
| Item      6.  Exhibits                                                                       |                                                                            | —                                                                                |
|                                                                                                   |                                                                            |                                                                                   |
| SIGNATURES                                                                                             |                                                                            | 21-25                                                                                  |

----

|                                                                                                                           |   | June      30, 2010 (Unaudited) |          |   | December      31, 2009 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------------|--------|------------------------|--------|
| Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           |          |   |                   |   |
| Current      Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           |          |   |                   |   |
| Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                              | 5,869         |   |                   | $      | 2,518 |   |
| Accounts      receivable, net of allowance for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           |          |   |                   |   |   |   |
|    doubtful      accounts of $0                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 0             |   |                   |   | 2,000 |   |
| Prepaid      expenses and other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 67,135        |   |                   |   | 80,523 |   |
| Total      Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 73,004        |   |                   |   | 85,041 |   |
| Property      and equipment, net of accumulated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           |          |   |                   |   |   |   |
|    depreciation      of $83,115 and $85,841                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           | 20,713        |   |                   |   | 18,705 |   |
|    Website      development costs, net of accumulated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |          |   |                   |   |   |   |
|    amortization      of $8,758 and $1,813                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                           | 71,987        |   |                   |   | 19,945 |   |
| Other      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 20,679        |   |                   |   |  17,724 |   |
| Total      Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 186,383  |   |                   |   | 141,415 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |          |   |                   |   |   |   |
| Liabilities      and Stockholders’ Equity (Impairment)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |          |   |                   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |          |   |                   |   |   |   |
| Current      Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                           |          |   |                   |   |   |   |
| Accounts      payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           | 584,607       |   |                   |   | 535,618 |   |
| Obligations      to be settled in stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                           | 153,726       |   |                   |   | 132,900 |   |
| Dividends      payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | 504,970       |   |                   |   | 479,339 |   |
| Loans      and notes payable – related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 1,460,000     |   |                   |   |  990,000 |   |
| Loans      and notes payable - other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 140,000       |   |                   |   | 140,000 |   |
| Current      maturities of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 33,529        |   |                   |   | 33,529 |   |
| Total      Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 2,876,832     |   |                   |   | 2,311,386 |   |
|    Long-term      Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           | -             |   |                   |   |   |   |
| Total      Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | 2,876,832     |   |                   |   | 2,311,386 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |          |   |                   |   |   |   |
| Stockholders’      Equity (Impairment)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |          |   |                   |   |   |   |
| Preferred Stock, $0.001      par value, non-voting, 3,000,000 shares authorized;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                           |          |   |                   |   |   |   |
| 85,890      and 85,890 shares issued and outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |  86      |   |                   |   | 86 |   |
| Common      Stock, $0.0001 par value,      1,400,000,000 shares authorized;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           |          |   |                   |   |   |   |
| issued and outstanding      497,743,060 and 478,168,060 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 49,774        |   |                   |   | 47,817 |   |
| Common      Stock subscribed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | -             |   |                   |   |  500 |   |
| Additional      paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           | 45,546,918    |   |                   |   | 45,519,375 |   |
| Stock      subscription receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | -             |   |                   |   | (125,000 | ) |
| Accumulated      (deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           | (48,287,227   | )      |                   |   | (47,612,749 | ) |
| Total      Stockholders’ Equity (Impairment)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | (2,690,449    | )      |                   |   |  (2,169,971 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |          |   |                   |   |   |   |
| Total      Liabilities and Equity (Impairment)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                              | 186,383       |   |                   | $      | 141,415 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                            |   | Three      Months Ended |        |   | Six      Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|-------------|--------|-----------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                            |   | June      30,           |        |   | June      30,         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2010                    |        |   | 2009                  |   |   | 2010 |   |   | 2009 |   |
| Total      Revenues                                                                                                                                                                                                                                                                                                                                                                                             |   | $                       | 670         |   |                  |   | 20,959 |   |   | $ | 1,403 |   |   | $ | 38,844 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of Goods Sold                                                                                                                                                                                                                                                                                                                                                                                         |   |                    | 785         |   |                  |   | 2,263 |   |   |   | 785 |   |   |   | 11,497 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Gross      Profit (Loss)                                                                                                                                                                                                                                                                                                                                                                                        |   |                    | (115        | )      |                  |   | 18,696 |   |   |   | 618 |   |   |   | 27,347 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Selling      expenses                                                                                                                                                                                                                                                                                                                                                                                           |   |                    | 47,063      |   |                  |   | 12,769 |   |   |   | 72,194 |   |   |   | 101,565 |   |
| General      and administrative expenses                                                                                                                                                                                                                                                                                                                                                                        |   |                    | 268,995     |   |                  |   | 260,261 |   |   |   | 509,923 |   |   |   | 845,776 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from Operations                                                                                                                                                                                                                                                                                                                                                                                       |   |                    | (316,173    | )      |                  |   | (254,334 | ) |   |   | (581,499 | ) |   |   | (919,994 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Miscellaneous      income                                                                                                                                                                                                                                                                                                                                                                                       |   |                    | 11,377      |   |                  |   | - |   |   |   | 11,377 |   |   |   | 0 |   |
| Misc.      non-operating expenses                                                                                                                                                                                                                                                                                                                                                                               |   |                    | (3,346      | )      |                  |   | 0 |   |   |   | (6,531 | ) |   |   | 0 |   |
| Foreign      currency transaction loss                                                                                                                                                                                                                                                                                                                                                                          |   |                    | (5,585      | )      |                  |   | 0 |   |   |   | (5,585 | ) |   |   | 0 |   |
| Change      in fair value –derivative liability                                                                                                                                                                                                                                                                                                                                                           |   |                    | -           |   |                  |   | 0 |   |   |   | - |   |   |   | (77,806 | ) |
| Amortization      of deferred financing cost                                                                                                                                                                                                                                                                                                                                                                    |   |                    | -           |   |                  |   | 0 |   |   |   | - |   |   |   | (4,000 | ) |
| Gain      on extinguishment of debt                                                                                                                                                                                                                                                                                                                                                                             |   |                    | -           |   |                  |   | 32,416 |   |   |   | - |   |   |   | 32,416 |   |
|        Gain      on disposition of      assets                                                      |   |                    | -           |   |                  |   | - |   |   |   | 2,285 |   |   |   | - |   |
| Interest      income                                                                                                                                                                                                                                                                                                                                                                                            |   |                    | -           |   |                  |   | 5 |   |   |   | - |   |   |   | 5 |   |
| Interest      expense                                                                                                                                                                                                                                                                                                                                                                                           |   |                    | (39,758     | )      |                  |   | (20,623 | ) |   |   | (68,894 | ) |   |   | (635,810 | ) |
|     Total      Other Income (Expense)                                                                                                                                                                                                                                                                                                                                                       |   |                    | (37,312     | )      |                  |   | 11,798 |   |   |   | ( 67,348 | ) |   |   | (685,195 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from Operations before Provision                                                                                                                                                                                                                                                                                                                                                                      |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|      for      Income Taxes                                                                                                                                                                                                                                                                                                                                                             |   |                    | (353,485    | )      |                  |   | (242,536 | ) |   |   | (648,847 | ) |   |   | (1,605,189 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                                                                                                                                                                                                                                                                                                                                                                                 |   |                    | -           |   |                  |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      Loss                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                       | (353,485    | )      |                  | $      | (242,536 | ) |   | $ | (648,847 | ) |   | $ | (1,605,189 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      on Preferred Stock                                                                                                                                                                                                                                                                                                                                                                               |   |                    | (12,815     | )      |                  |   | (12,816 | ) |   |   | (25,631 | ) |   |   | (25,632 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      Loss applicable to                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|      Common      Shareholders                                                                                                                                                                                                                                                                                                                                                          |   | $                       | (366,300    | )      |                  | $      | (255,352 | ) |   | $ | (674,478 | ) |   | $ | (1,630,821 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      per Common Share                                                                                                                                                                                                                                                                                                                                                                                      |   | $                       | (0.001      | )      |                  | $      | (      0.001 | ) |   | $ | (0.001 | ) |   | $ | (0.004 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Average Number of                                                                                                                                                                                                                                                                                                                                                                                 |   |                    |        |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Common      Shares Outstanding                                                                                                                                                                                                                                                                                                                                                                                  |   |                    | 497,743,060 |   |                  |   | 454,099,712 |   |   |   | 494,544,563 |   |   |   | 449,635,427 |   |

----

|                                                                       |   | Six      Months Ended |     |
|----------------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                       |   | June      30,         |     |
|                                                                       |   | 2010                  |     |   |  2009 |   |
| Cash      Flows from Operating Activities                                  |   |                  |     |   |   |   |
| Net      Loss                                                              |   | $                     | (648,847 | ) |   | $ | (1,605,189 | ) |
| Adjustments      to Reconcile Net Loss                                     |   |                  |     |   |   |   |   |   |
| to      Net Cash Used by Operations                                        |   |                  |     |   |   |   |   |   |
|    Depreciation      and amortization                       |   |                  | 12,807   |   |   |   | 32,447 |   |
|    Change      in fair value – derivative liabilities |   |                  | -        |   |   |   | 77,806 |   |
|    Loss      (gain) on disposal of assets                   |   |                  | (2,285   | ) |   |   | 5,940 |   |
|    Intrinsic      value of beneficial conversion rights     |   |                  | -        |   |   |   | 600,000 |   |
| Decreases      (Increases) in Assets                                       |   |                  |     |   |   |   |   |   |
|    Accounts      receivable                                 |   |                  | 2,000    |   |   |   | 4,426 |   |
|    Prepaid      expenses                                    |   |                  | 13,388   |   |   |   | 11,272 |   |
|    Increases      (decreases) in Liabilities                |   |                  |     |   |   |   |   |   |
|    Obligations      to be settled in stock                  |   |                  | 49,826   |   |   |   | 13,000 |   |
|    Accounts      payable and accrued expenses               |   |                  | 48,989   |   |   |   | 65,376 |   |
| Net      Cash Used by Operating Activities                                 |   |                  | (524,122 | ) |   |   | (794,922 | ) |
|                                                                       |   |                  |     |   |   |   |   |   |
| Cash      Flows from Investing Activities                                  |   |                  |     |   |   |   |   |   |
| Other      assets                                                          |   |                  | (2,955   | ) |   |   | (14,500 | ) |
| Proceeds      from sale of assets                                          |   |                  | 4,520    |   |   |   | - |   |
| Cash      outlay - website development costs                               |   |                  | (58,987  | ) |   |   | - |   |
| Purchases      of property and equipment                                   |   |                  | (10,105  | ) |   |   | - |   |
| Net      Cash Used by Investing Activities                                 |   |                  | (67,527  | ) |   |   | (14,500 | ) |
|                                                                       |   |                  |     |   |   |   |   |   |
| Cash      Flows from Financing Activities                                  |   |                  |     |   |   |   |   |   |
| Proceeds      from loans and notes                                         |   |                  | 470,000  |   |   |   | 850,000 |   |
| Issuance      of common stock                                              |   |                  | 125,000  |   |   |   | - |   |
| Net      Cash Provided by Financing Activities                             |   |                  | 595,000  |   |   |   | 850,000 |   |
|                                                                       |   |                  |     |   |   |   |   |   |
| Net      Increase (Decrease) in Cash                                       |   |                  | 3,351    |   |   |   | 40,578 |   |
| Cash      at Beginning of Period                                           |   |                  | 2,518    |   |   |   | 5,000 |   |
| Cash      at End of Period                                                 |   | $                     | 5,869    |   |   | $ | 45,578 |   |

----

| NON-CASH      INVESTING AND FINANCING ACTIVITIES:                             |   |   |      |
|-------------------------------------------------------------------------------|--------|--------|-----------|
|                                                                          |   |   |      |
| Six Months Ended June 30,    2010                                             |   |   |      |
|                                                                          |   |   |      |
|                                                                          |   |   |      |
| Cashless      exercise of warrants                                            |   | $      | 1,312     |   |
|                                                                          |   |   |      |   |
| Settlement      of obligations with common stock and common stock options     |   | $      | 29,000    |   |
|                                                                          |   |   |      |   |
|                                                                          |   |   |      |   |
| Six Months Ended June 30,    2009                                             |   |   |      |   |
|                                                                          |   |   |      |   |
| Reclassification      of derivative liabilities to Additional Paid-in capital |   | $      | 3,408,618 |   |
|                                                                          |   |   |      |   |
| Foregiveness      of debt by related party                                    |   | $      | 213,570   |   |
|                                                                          |   |   |      |   |

----

----

----

ASC 350-50,Accounting for theCosts of Computer Software Developedor Obtained for 

----

|                                                                                           |   |   |  June 30,      2010 |   |   |   | December      31, 2009 |   |
|------------------------------------------------------------------------------------------------|--------|--------|--------------------------|--------|--------|--------|------------------------|--------|
|           Furniture                          |   | $      | 14,322                   |   |   | $      | 6,646                  |   |
|           Leasehold      Improvements        |   |   | 24,130                   |   |   |   | 24,131                 |   |
|           Equipment                          |   |   | 65,376                   |   |   |   | 73,770                 |   |
|                                                                                           |   |   | 103,828                  |   |   |   | 104,546                |   |
|           Less      accumulated depreciation |   |   | 83,115                   |   |   |   | 85,841                 |   |
|           Total                              |   | $      | 20,713                   |   |   | $      | 18,705                 |   |

----

|                                                                               |   |   | June      30, 2010  |   |   |   | December      31, 2009 |   |
|------------------------------------------------------------------------------------|--------|--------|--------------------------|--------|--------|--------|------------------------|--------|
|         Website      development costs     |   | $      | 80,745                   |   |   | $      | 21,758                 |   |
|         Less      accumulated amortization |   |   | 8,758                    |   |   |   | 1,813                  |   |
|         Total                              |   | $      | 71,987                   |   |   | $      | 19,945                 |   |

|                   |   | Amortization expense |   |
|------------------------|--------|----------------------|--------|
| December      31, 2010 |   | $                    | 13,457 |   |
| December      31, 2011 |   |                 | 26,915 |   |
| December      31, 2012 |   |                 | 25,102 |   |
| December      31, 2013 |   |                 | 6,513  |   |
| December      31, 2014 |   |                 | -      |   |

|                                                                                          |   |   | June30,      2010  |   |   |   | December      31, 2009 |   |
|-----------------------------------------------------------------------------------------------|--------|--------|-------------------------|--------|--------|--------|------------------------|--------|
|        Accounts      payable                               |   | $      | 217,631                 |   |   | $      | 208,792                |   |
|        Accrued      interest                               |   |   | 235,787                 |   |   |   | 170,860                |   |
|        Accrued      payroll, payroll taxes and commissions |   |   | 5,244                   |   |   |   | 15,331                 |   |
|        Accrued      professional fees                      |   |   | 123,840                 |   |   |   | 116,900                |   |
|        Miscellaneous      accruals                         |   |   | 2,105                   |   |   |   | 23,735                 |   |
|        Total                                               |   | $      | 584,607                 |   |   | $      | 535,618                |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | June      30,2010    |   |   |   |  December      31,2009 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------|--------|--------|--------|-----------------------------|--------|
|          Obligation      for warrants granted for compensation                                                                                                                                                                                                                                                                                                                                                                 |   | $      | 40,000               |   |   | $      | 20,000                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |                 |   |   |   |                        |   |
|          900,000      common shares issuable to a consultant         who      was a director of the company, for services         rendered.                                                                                                                                                                                          |   |   |   36,000        |   |   |   |   36,000               |   |
|          400,000      (2010) and 1,250,000 (2009) common        shares,      and 2,800,000 (2010) and 2,200,000 (2009)        stock      options issuable to two officers of the        Company      pursuant to their respective employment        Agreements |   |   |     62,876 |   |   |   |     67,990        |   |

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|          1,500,000      (2010) and 900,000 (2009) stock options        issuable      to one director who also serves as the        Company’s      general counsel |   |   |                          4,850 |   |   |   |                          8,910 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------|--------|--------|--------|----------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                 |   |   |                                                                             |   |   |   |                                                                             |   |
|                                                                                                                                                                                                                                                                                                 |   | $      | 153,726                                                                          |   |   | $      | 132,900                                                                          |   |

|  On      December 4, 1996, The company (Formerly Magnitude, Inc.) repurchased      500,000 shares of its common stock and retired same against issuance of a      promissory note maturing twelve months thereafter accruing interest at 5%      per annum and due December 4, 1998.  This note is overdue as of      September 30, 2005 and no demand for payment has beenmade. |   | $ | 75,000 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---|--------|--------|
|  Total                                                                                                                                                                                                                                                                                                                                                                                     |   | $ | 75,000 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | June      30, |                         |   | December      31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|------------------------------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2010          |                         |   | 2009              |   |
|        Balance      of non-converted notes outstanding.  Attempts to       locate      the holder of this note, to settle this liability, have been       unsuccessful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $             |  25,000                 |   |              | $      |  25,000 |   |
|         In      January 2008 a shareholder loaned the Company $40,000       pursuant      to which the Company issued a demand note bearing      interest      at the rate of 5% per year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |     40,000         |   |              |   |     40,000 |   |
|         In      September 2008 and December 2008 a shareholder loaned      the      Company $50,000 and $100,000, repayable under      convertible      promissory notes bearing interest at 10% per annum      and      payable on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          |       150,000 |   |              |   |       150,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          |                         |   |              |   |   |   |
|        In      January and February 2009 a shareholder loaned the        Company      $350,000 and $150,000, repayable under convertible       promissory      notes bearing interest at 10% per annum and       payable      on demand. On March 31, 2009, these notes and       $100,000      of notes listed above were amended to include an       option      for the holder to convert the debt into common stock at       $0.01      per share.  The intrinsic value of the beneficial       conversion      feature was valued at $600,000 resulting in a |   |          | 500,000                      |   |              |   | 500,000 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------|--------|--------|--------|---------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|        During      March 2009, the same shareholder loaned the Company        $50,000      under the same terms as the earlier notes issued in the       first      quarter.  The note (and the notes above) was      subsequently       amended      to include the stipulation that the shares to be issued       if      the holder elected a conversion, together with other shares       held      by this shareholder, may not result in an ownership       interest      exceeding 9.9%.     |   |   | 50,000              |   |   |   | 50,000          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|            During April, May and June 2009, the same shareholder loaned        the      Company an aggregate $250,000 under the same terms as       the      earlier notes issued in the first quarter.  All of the      notes       were      subsequently amended to include the stipulation that the       shares      to be issued if the holder elected a conversion, together       with      other shares held by this shareholder, may not result in an       ownership      interest exceeding 9.9%. |   |   | 250,000   |   |   |   | 250,000    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|            During June 2009 through December 2009, another shareholder       loaned      the Company an aggregate $640,000 under the same      terms      as the earlier investor who had extended loans during the           first two quarters in 2009 as mentioned above. In December      2009,      the Company repaid $600,000 against such notes, leaving     a      balance of $40,000 open at year-end.                                                                                                                                                                              |   |   | 40,000    |   |   |   | 40,000                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|            During January and February 2010,      a  shareholder  loaned the       Company      $150,000 under the same terms as the earlier notes      issued      in 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 150,000   |   |   |   |                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|       During      May 2010 a shareholder loaned the Company $100,000       under      the same terms as earlier notes issued in 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 100,000        |   |   |   |                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                |   |   |   |                      |   |
|           During April through June a shareholder loaned the Company      $220,000  under      the same terms as earlier notes issued in 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 220,000   |   |   |   |                      |   |
|         Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $      | 1,525,000           |   |   | $      | 1,055,000                 |   |

----

| Discounted      present value of a non-interest bearing $70,000 settlement with a former      investor of Magnitude, Inc. to be paid in 24 equal monthly payments      commencing July 1, 1997.  The imputed interest rate used to      discount the note is 8% per annum.  This obligation is in      default. |   |   |     33,529 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------|--------|
|  Total                                                                                                                                                                                                                                                                                                                         |   |   | 33,529               |   |
|      Less      current maturities                                                                                                                                                                                                                                                                          |   |   | 33,529               |   |
|      Long-term      debt, net of current maturities                                                                                                                                                                                                                                                        |   | $      | -                    |   |

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KIWIBOX.COM, INC.

 Some of theCompany’s financial instruments are notmeasured at fair value on arecurring basis but are recorded at amounts that approximate fair value due totheir liquid or short-term nature, such as cash and cash equivalents,receivables and payables.

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| (i)   | 5,000,000      common shares and 1,250,000 stock purchase warrants, exercisable during      three years at $0.05 per share, to two investors pursuant to private      placement subscriptions, resulting in the receipt by the Company of      $125,000. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Not      applicable |
|-----------------|---------------------|

| (c)   | None |
|-----------------|------|

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| (a)   | Exhibits |
|-----------------|----------|

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|                                                                      | Kiwibox.Com,    INC. |                         |
|---------------------------------------------------------------------------|----------------------|------------------------------|
|                                                                      |                 |                         |   |
| Date:   August      16, 2010      | By:                  | /s/ Craig S. Cody       |   |
|                                                                      |                 | Craig      S. Cody           |   |
|                                                                      |                 | Chief      Financial Officer |   |
|                                                                      |                 |                         |   |