**FORM
      10-QSB**





SECURITIES
      AND EXCHANGE COMMISSION





WASHINGTON,
      DC 20549




x
              QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d)OF
                  THE SECURITIES EXCHANGE ACT OF 1934For
                  Quarter Ended March 31, 2007ORo
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d)OF
                  THE SECURITIES EXCHANGE ACT OF 1934For
                  the Transition Period from _______ to _______


Commission
      file number 33-20432





MAGNITUDE
      INFORMATION SYSTEMS, INC.


(Exact
      Name of Registrant as Specified in its Charter)




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





1250
                State Route 26, Branchburg,
            New
                Jersey 08876(Address
                of Principal Executive Office)
            (Zip
                Code)





(908)
      879-2722


(Registrant’s
      telephone number including area code)





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


Yes  x  No
o





The
      number of shares of Registrant’s Common Stock, $0.0001 par value, outstanding as
      of April 30, 2007, was 229,045,681 shares.







MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES




INDEX





Page
              NumberPART
                1 - FINANCIAL INFORMATIONItem
                1
            Financial
                Statements (unaudited)Consolidated
                Balance Sheet-
                March 31, 2007
            3Consolidated
                Statements of Operations-
                Three months ended March 31, 2007 and 2006
            4Consolidated
                Statements of Cash Flows-
                Three months ended March 31, 2007 and 2006
            5Notes
                to Consolidated Financial Statements
            6
                -
                13Item
                2
            Management’s
                Discussion and Analysis of Financial Conditionand
                Results of Operations
            14
                - 16Item
                3
            Controls
                and Procedures
            17PART
                II - OTHER INFORMATION
            18SIGNATURES
            19








2


**PART
      I - Item 1 Financial Statements**





MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


CONSOLIDATED
      BALANCE SHEET


March
      31,
      2007 (Unaudited)





AssetsCurrent
                AssetsCash
            
            $
            24,747Accounts
                receivable, net of allowance fordoubtful
                accounts of $1,900
            
            
            66Prepaid
                expenses
            
            
            20,033Total
                Current Assets
            
            
            44,846Property
                and equipment, net of accumulateddepreciation
                of $36,792
            
            
            8,713Other
                assets
            
            
            30,390Total
                Assets
            
            
            83,949Liabilities
                and Stockholders’ Equity (Impairment)Current
                LiabilitiesAccounts
                payable and accrued expenses
            
            
            548,121Obligations
                to be settled in stock
            
            
            129,000Deferred
                revenue
            
            
            100,855Dividends
                payable
            
            
            354,906Loans
                and notes payable
            
            
            581,450Derivative
                liability - warrants and options
            
            
            2,093,945Current
                maturities of long-term debt
            
            
            33,529Total
                Current Liabilities
            
            
            3,841,806Long-term
                Debt
            
            
            -Total
                Liabilities
            
            
            3,841,806Stockholders’
                Equity (Impairment)Preferred
                Stock,$0.001
                par value, non-voting, 3,000,000 shares authorized:2,500
                shares have been designated Cumulative Preferred Stock,of
                which 1 share is issued and outstanding
            
            
            0300,000
                shares have been designated Series A Convertible Preferred
                Stock,350,000
                shares have been designated Series B Convertible Preferred
                Stock,120,000
                shares have been designated Series C Convertible Preferred
                Stock,500,000
                shares have been designated Series D Convertible Preferred
                Stock,500,000
                shares have been designated Series E Convertible Preferred
                Stock,of
                which a combined total 109,857 shares are issued and
                outstanding
            
            
            110Common
                Stock,$0.0001
                par value, 300,000,000 shares authorized;issued
                and outstanding 227,379,014 shares
            
            
            22,738Additional
                paid-in capital
            
            
            33,245,178Accumulated
                (deficit)Total
                Stockholders’ Equity (Impairment)
            
            
            (3,757,857
            )Total
                Liabilities and Equity (Impairment)
            
            $
            83,949




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


3





MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


CONSOLIDATED
      STATEMENTS OF OPERATIONS


(Unaudited)





Three
                Months EndedMarch
                31,2007
            
            2006Total
                Revenues
            
            $
            3,023
            
            $
            11,075Cost
                of Goods Sold
            
            
            -
            
            
            36,365Gross
                Profit (Loss)
            
            
            3,023
            
            
            (25,290
            )Selling
                expenses
            
            
            414
            
            
            140,121Stock-based
                compensation (see below)
            
            
            142,875
            
            
            112,492Research
                and development cost
            
            
            735
            
            
            35,562General
                and administrative expenses
            
            
            317,500
            
            
            406,264Loss
                From Operations
            
            
            (458,501
            )
            
            (719,729
            )Change
                in fair value - derivative liability
            
            
            (903,493
            )
            
            (19,478
            )Interest
                expense
            
            
            (9,360
            )
            
            (107,977
            )Total
                Other Income (Expense)
            
            
            (912,853
            )
            
            (127,455
            )Loss
                Before Provision for Income Taxes
            
            
            (1,371,354
            )
            
            (847,184
            )Provision
                for Income Taxes
            
            
            -
            
            
            (1,000
            )Net
                Loss
            
            $
            (1,371,354
            )
            $
            (848,184
            )Dividends
                on Preferred Stock
            
            
            (13,737
            )
            
            (28,380
            )Net
                Loss Applicable to Common Shareholders
            
            $
            (1,385,091
            )
            $
            (876,564
            )Net
                Loss per Common Share
            
            $
            (0.006
            )
            $
            (0.006
            )Weighted
                Average Number ofCommon
                Shares Outstanding
            
            
            226,807,243
            
            
            142,715,005





All
      of
      the stock-based compensation relates to selling, general and administrative
      expenses.




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


4


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


(Unaudited)





Three Months EndedMarch
                31,2007
            
            2006Cash
                Flows from Operating ActivitiesNet
                Loss
            
            $
            (1,371,354
            )
            $
            (848,184
            )Adjustments
                to Reconcile Net Lossto
                Net Cash Used by OperationsDepreciation
                and amortization
            
            
            8,863
            
            
            37,520Securities
                issued for various expenses
            
            
            120,000
            
            
            92,384Recognition
                of expenses - deferred compensation
            
            
            -
            
            
            20,108Recognition
                of expenses - derivative liabilities
            
            
            903,493
            
            
            122,240Decreases
                (Increases) in AssetsAccounts
                receivable
            
            
            -
            
            
            241Prepaid
                expenses
            
            
            19,756
            
            
            (6,924
            )Increases
                (decreases) in LiabilitiesDeferred
                revenues
            
            
            (1,974
            )
            
            (4,776
            )Obligations
                to be settled in stock
            
            
            31,561
            
            
            -Accounts
                payable and accrued expenses
            
            
            94,095
            
            
            74,803Net
                Cash Used by Operating Activities
            
            
            (195,560
            )
            
            (512,588
            )Cash
                Flows from Investing ActivitiesPurchases
                of equipment and fixtures
            
            
            -
            
            
            (583
            )Net
                Cash Used by Investing Activities
            
            
            -
            
            
            (583
            )Cash
                Flows from Financing ActivitiesPrepayments
                on common stock subscriptions
            
            
            -
            
            
            74,000Proceeds
                from loans and notes
            
            
            139,000
            
            
            85,000Repayment
                of loans and notes
            
            
            -
            
            
            (30,000
            )Issuance
                of common and preferred stock
            
            
            -
            
            
            274,500Net
                Cash Provided by Financing Activities
            
            
            139,000
            
            
            403,500Net
                Decrease in Cash
            
            
            (56,560
            )
            
            (109,671
            )Cash
                at Beginning of Period
            
            
            81,307
            
            
            118,696Cash
                at End of Period
            
            $
            24,747
            
            $
            9,025




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


5


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





1.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature
      of
      Organization





Magnitude
      Information Systems, Inc. (the “Company”) was incorporated as a Delaware
      corporation on April 19, 1988 under the name Fortunistics, Inc. On November
      18,
      1998, the Company changed its name to Magnitude Information Systems,
      Inc.





The
      Company and Magnitude, Inc. are two separate legal entities whereby Magnitude,
      Inc. operates as a subsidiary of the Company. However, the operations of the
      combined entity are currently comprised solely of the operations of Magnitude,
      Inc. The 1% of Magnitude, Inc. not owned by the Company constitutes a minority
      interest which is valued at $0.





Business





Prior
      to
      its change in its strategic business plan in 2007, the Company’s primary product
      was an integrated suite of proprietary software modules marketed under the
      name
      ErgoEnterprise TM which
      are designed to help individual computer users and businesses increase
      productivity and reduce the risk of potentially preventable repetitive stress
      injury (RSI). These software modules can be applied individually or together
      in
      a comprehensive ergonomic and early intervention program that seeks to modify
      a
      user’s behavior by monitoring computer usage patterns over time and warning the
      user when to break a dangerous trend in repetitive usage of an input device,
      such as a keyboard or mouse. The product was developed to train people working
      on computers, monitor computer-use related activities and evaluate a user’s risk
      exposure and propensity towards injury or loss of effectiveness in connection
      with his/her day-to-day work.





During
      the latter half of fiscal year 2006, Company management concluded that the
      marketplace for the Company’s ergonomic software products was not developing,
      and would not develop to the material extent necessary in the next 12 to 24
      months, to support and sustain the Company’s sales efforts. Accordingly,
      management determined that it would be in the best interests of the Company
      and
      its shareholders to identify another business opportunity and pursue it for
      the
      benefit of our shareholders. On February 19, 2007, the Company, pursuant to
      its
      strategic plan to seek another business opportunity, signed an Agreement and
      Plan of Reorganization with the owners of a social networking website, to
      acquire their Kiwibox.com website and business, represented by Kiwibox Media,
      Inc. Pursuant
      to that certain Agreement and Plan of Reorganization, at the scheduled June
      15,
      2007 closing, Kiwibox Media, Inc.will merge with and into Magnitude Operations,
      Inc., a wholly owned subsidiary of Magnitude Information Systems, Inc., in
      a
      "reverse merger" transaction. The three (3) shareholders of Kiwibox Media,
      Inc.
      will transfer and deliver all of the outstanding stock of Kiwibox Media, Inc.
      to
      Magnitude Information Systems, Inc. and receive in exchange shares of Magnitude
      Information Systems, Inc. at closing. Also at closing and as a result of the
      merger, the separate legal existence of Magnitude Operations, Inc. will cease
      and Kiwibox Media, Inc. will be the surviving corporation of the merger and
      a
      wholly owned subsidiary of Magnitude Information Systems, Inc. Following the
      merger, Magnitude Information Systems, Inc.will change its corporate name to
      "KiwiAge Enterprises, Inc."





Basis
      of
      Presentation





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with generally accepted accounting principles for interim financial
      statements and with the instructions to Form 10-QSB and Article 10 of Regulation
      S-X. Accordingly, they do not include all of the information and disclosures
      required for annual financial statements. These financial statements should
      be
      read in conjunction with the consolidated financial statements and related
      footnotes included in the Company’s annual report on Form 10-KSB for the year
      ended December 31, 2006.


6


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES, Continued





In
      the
      opinion of the Company’s management, all adjustments (consisting of normal
      recurring accruals) necessary to present fairly the Company’s financial position
      as of March 31, 2007, the results of operations for the three months ended
      March
      31, 2007 and 2006, and the cash flows for the three months ended March 31,
      2007
      and 2006, have been included.





Principles
      of Consolidation





The
      consolidated financial statements include the accounts of Magnitude Information
      Systems, Inc. and its subsidiary, Magnitude, Inc. All significant inter-company
      balances and transactions have been eliminated.





Depreciation
      and Amortization





Property
      and equipment are recorded at cost. Depreciation on equipment, furniture and
      fixtures and leasehold improvements is computed on the straight-line method
      over
      the estimated useful lives of such assets between 3-10 years. Maintenance and
      repairs are charged to operations as incurred.





Evaluation
      of Long Lived Assets


Long-lived
      assets are assessed for recoverability on an ongoing basis. In evaluating the
      fair value and future benefits of long-lived assets, their carrying value would
      be reduced by the excess, if any, of the long-lived asset over management’s
      estimate of the anticipated undiscounted future net cash flows of the related
      long-lived asset.





Securities
      Issued for Services





The
      Company accounts for stock, stock options and stock warrants issued for services
      and compensation by employees under the fair value method. For non-employees,
      the fair market value of the Company’s stock on the date of stock issuance or
      option/grant is used. The Company determined the fair market value of the
      warrants/options issued under the Black-Scholes Pricing Model. Effective January
      1, 2006, the Company adopted the provisions of Statement of Financial Accounting
      Standards (SFAS) 123(R), SHARE-BASED PAYMENT, which establishes accounting
      for
      equity instruments exchanged for employee services. Under the provisions of
      SFAS
      123(R), share-based compensation cost is measured at the grant date, based
      on
      the fair value of the award, and is recognized as an expense over the employee's
      requisite service period (generally the vesting period of the equity grant).
      Prior to January 1, 2006, the Company accounted for share-based compensation
      to
      employees in accordance with Accounting Principles Board (APB) Opinion No.
      25,
      ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related interpretations. The
      Company also followed the disclosure requirements of SFAS 123, ACCOUNTING FOR
      STOCK-BASED COMPENSATION. The Company elected to adopt the modified prospective
      transition method as provided by SFAS 123(R) and, accordingly, financial
      statement amounts for the prior periods presented in the Form 10-QSB have not
      been restated to reflect the fair value method of expensing share-based
      compensation.





Reclassification
      of certain securities under EITF 00-19





Pursuant
      to Emerging Issues Task Force (EITF) Issue 00-19, if a company has more than
      one
      contract subject to this Issue, and partial reclassification is required, there
      may be different methods that could be used to determine which contracts, or
      portions of contracts, should be reclassified. The Company's method for
      reclassification of such contracts is reclassification of contracts with the
      latest maturity date first. The change in fair value during the first quarter
      of
      2007 resulted in a loss of $903,493 for contracts reclassified prior to the
      first quarter of 2007. There were no material reclassifications made during
      the
      current quarter.


7


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES, Continued





Income
      Taxes





The
      Company provides for income taxes based on enacted tax law and statutory tax
      rates at which items of income and expenses are expected to be settled in the
      Company’s income tax return. Certain items of revenue and expense are reported
      for Federal income tax purposes in different periods than for financial
      reporting purposes, thereby resulting in deferred income taxes. Deferred taxes
      are also recognized for operating losses that are available to offset future
      taxable income. Valuation allowances are established when necessary to reduce
      deferred tax assets to the amount expected to be realized. The Company has
      incurred net operating losses for financial-reporting and tax-reporting
      purposes. Accordingly, for Federal and state income tax purposes, the benefit
      for income taxes has been offset entirely by a valuation allowance against
      the
      related federal and state deferred tax asset.





Net
      Loss
      Per Share





Net
      loss
      per share, in accordance with the provisions of Financial Accounting Standards
      Board No. 128, “Earnings Per Share” is computed by dividing net loss by the
      weighted average number of shares of Common Stock outstanding during the period.
      Common Stock equivalents have not been included in this computation since the
      effect would be anti-dilutive.





Revenue
      Recognition





The
      Company’s revenue recognition policy for software sales is in accordance with
      Accounting Statement of Position (SOP) 97-2 “Software Revenue Recognition” and
      SOP 98-9 “Software Revenue recognition” which modifies SOP 97-2. Revenue is
      recognized at the time of licensing provided that the resulting receivable
      is
      deemed probable of collection and is fixed or determinable. Revenue from
      software maintenance contracts is recognized ratably as earned. When a sales
      contract includes multiple elements, revenues are allocated to the various
      elements based on Company-specific objective evidence of fair value, regardless
      of any separate prices for each element that may be stated within the
      contract.


.


Use
      of
      Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





2.
      GOING
      CONCERN





The
      ability of the Company to continue its operations is dependent on increasing
      sales and obtaining additional capital and financing. In their reports for
      the
      fiscal years ended December 31, 2006 and December 31, 2005, our auditors had
      expressed an opinion that, as a result of the losses incurred, there was
      substantial doubt regarding our ability to continue as a going concern. The
      accompanying financial statements do not include any adjustments that might
      be
      necessary if the Company were unable to continue as a going concern.
      Management’s plans are to continue seeking additional working capital through
      equity and debt placements with private and institutional investors.


8


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





3.
      CONCENTRATIONS OF BUSINESS AND CREDIT RISK





The
      Company maintains cash balances in a financial institution which is insured
      by
      the Federal Deposit Insurance Corporation up to $100,000. Balances in these
      accounts may, at times, exceed the federally insured limits. The Company
      provides credit in the normal course of business to customers located throughout
      the U.S. and overseas. The Company performs ongoing credit evaluations of its
      customers and maintains allowances for doubtful accounts based on factors
      surrounding the credit risk of specific customers, historical trends, and other
      information.





4.
      PREPAID EXPENSES





Prepaid
      Expenses at the end of the quarter included $19,233 prepaid insurance costs,
      with the remainder representing miscellaneous prepaid expenses.





5.
      PROPERTY AND EQUIPMENT





Property
      and equipment consist of the following at March 31, 2007:





Equipment
            
            
            45,505Less
                accumulated depreciation
            
            
            36,792Total
            
            $
            8,713





Depreciation
      expense charged to operations was $1,363 and $1,135 in the first three months
      of
      2007 and 2006, respectively.





6.
      ACCOUNTS PAYABLE AND ACCRUED EXPENSES





Accounts
      payable and accrued expenses consisted of the following at March 31,
      2007:


Accounts
                payable
            
            $
            207,264Accrued
                interest
            
            
            84,382Accrued
                salaries
            
            
            56,165Accrued
                commissions
            
            
            12,720Accrued
                professional fees
            
            
            156,855Miscellaneous
                accruals
            
            
            30,735Total
            
            $
            548,121





Accrued
      commissions are due to a consultant who was retained in the capacity of Senior
      Vice President of Business Development.


9


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





7.
      DEFERRED REVENUES





Deferred
      revenues at March 31, 2007 consist of prepaid software maintenance and support
      charges which are amortized ratably over the remaining duration of the
      underlying maintenance agreements. On April 13, 2006 the Company received a
      deposit of $100,000 from a client who also is an investor in the Company. These
      funds were paid pursuant to a contract for the purchase of a customized version
      of the Company’s software products. At March 31, 2007 the contract had not been
      filled and the revenue has been deferred.





8.
      LOANS
      PAYABLE





The
      Company and Magnitude, Inc. had borrowings under short term loan agreements
      with
      the following terms and conditions at March 31, 2007:





On
                December 4, 1996, 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 at September 30, 2005 and
                no demand
                for payment has been made.
            
            $
            75,000Non-interest
                bearing loan extended by a shareholder of the Company, due on
                demand
            
            
            25,000Non-interest
                bearing loan extended by an officer of the Company, due on
                demand
            
            
            14,000Total
            
            $
            114,000





10


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007


9.
      NOTES
      PAYABLE


At
                December 31, 1999 the Company had $1,475,000 of notes outstanding
                related
                to a June 1995 private placement offering. During 2000 the holders
                of
                $1,450,000 worth of notes agreed to accept partial repayment of
                approximately 30% of the note balances and converted the remaining
                balances into common shares or convertible preferred shares. The
                total
                amount of non-converted notes outstanding at September 30, 2006 is
                $25,000. Attempts to locate the holder of this note, to settle this
                liability, have been unsuccessful.
            
            $
            25,000In
                June and July 2006 two shareholders loaned the Company $240,000 and
                $102,450 pursuant to which the Company issued promissory notes bearing
                interest at the rate of 8% per year. The notes are repayable on
                demand.
            
            
            342,450In
                January 2007 two shareholders loaned the Company $50,000 and $50,000
                pursuant to which the Company issued ninety-day promissory notes
                bearing
                interest at the rate of 1% per month on the outstanding principal
                balance
                or 12% per year. The notes call for a loan origination fee of $5,000
                each.
                Upon maturity and provided the Company does not have a registration
                statement pending with the Securities and Exchange Commission: (a)
                the
                Company is obligated to issue 500,000 restricted common shares to
                each
                lender and (b) at the option of the lender, the outstanding principal
                balance, accrued interest and the origination fee may be converted
                into
                shares of the Company's restricted common stock at a conversion rate
                that
                is the lower of $.05 per share or the investment rate utilized in
                any
                private placement consummated with the Company any time following
                the date
                of the note through maturity.
            
            
            100,000Total
            
            $
            467,450





10.
      LONG-TERM DEBT





Long-term
      debt as of March 31, 2007 is comprised of the following:


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.
            
            
            33,529Total
            
            
            33,529Less
                current maturities
            
            
            33,529Long-term
                debt, net of current maturities
            
            $
            -





11.
      OBLIGATIONS TO BE SETTLED IN STOCK





Obligations
      to be settled in stock consisted of the following at March 31,
      2007:


Accrued
                consulting fees
            
            $
            129,000




Accrued
        consulting fees are due to two consultants for fourth quarter 2006 and first
        quarter 2007 fees payable in form of a total of 1,400,000 common shares based
        on
        consulting agreements entered into in 2006.





11


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





12.
      COMMITMENTS AND CONTINGENCIES





Stock-Based
      Compensation Agreements





In
      March
      2006, the Company entered into an agreement with a consultant providing options
      for 1,500,000 common shares, exercisable at $0.08 per share, 750,000 common
      shares for services rendered during the initial six month period of the contract
      and an additional 750,000 common shares for an extension period of six months
      (through February 2007). The Consultant is also entitled to contingent
      remuneration based on the achievement by the Company of certain profit goals.
      No
      obligation was incurred for this contingent provision in 2006 or the first
      quarter in 2007. The consultant is also contingently entitled to a fee based
      on
      proceeds that may be obtained through mergers or other business combinations,
      as
      follows: 5% of first $1,000,000 in consideration, 4% of the second $1,000,000,
      3% of the third $1,000,000, 2% of the fourth $1,000,000 and 1% of the
      consideration above $4,000,000.





During
      the second quarter in 2006 the Company’s board of directors ratified a two-year
      consulting agreement with an officer and director of the Company to provide
      specialized business advisory services and to work directly for the chief
      executive officer in connection with certain sales and marketing projects.
      The
      agreement provides for a compensation package which includes the issuance of
      (a)
      200,000 restricted common shares and an option to purchase 500,000 shares at
      the
      price of $0.15/share at the beginning of the consultancy and again after twelve
      month, and (b) 150,000 restricted shares per month during the term.





13.
      RELATED PARTY TRANSACTIONS





On
      January 2, 2007, the Company and a former employee, Steven W. Jagels settled
      a
      lawsuit commenced by Mr. Jagels against the Company based upon claims which
      included breach of his employment agreement. We agreed to make a payment of
      $20,040 to Mr. Jagels and to issue 3,000,000 common shares to him by January
      7,
      2007. We also agreed to include these shares in a registration statement and
      when declared effective by the SEC, to cause a buyer to purchase these shares
      from Mr. Jagels for $75,000 prior to February 28, 2007. Upon Mr. Jagels’ receipt
      of these proceeds, the lawsuit will be discontinued with prejudice, or if not
      consummated as agreed, the lawsuit will continue. At the time of this report,
      Mr. Jagels had received one half of the aforementioned amount, with the other
      half scheduled for transfer to Mr. Jagels during the next two weeks.





In
      January we issued warrants for 3,125,000 shares, exercisable at $0.05 per share,
      to the former president and chief executive officer, in connection with a
      settlement agreement reached during the fourth quarter in 2006





14.
      MERGER WITH KIWIBOX MEDIA INC.





On
      February 19, 2007 we signed an Agreement and Plan of Reorganization pursuant
      to
      the principal terms of which the business of Kiwibox Media Inc. will be merged
      into a newly formed wholly owned subsidiary of the Company. In exchange for
      the
      Kiwibox business, we agreed (a) to issue $1,500,000 worth of our restricted
      common shares and $500,000 worth (conversion value) of our preferred stock
      to
      the three Kiwibox owners and to pay them $300,000 cash at closing; (b) to give
      each of the three Kiwibox owners a two-year employment agreement that will
      pay
      them each a base salary of $150,000 per year and 7,500,000 stock options,
      vesting over two years with the possibility of earning cash bonuses and
      3,000,000 additional stock options each if certain business performance goals
      are reached within the two-year period.





We
      also
      have agreed to invest $3.5 million in the Kiwibox business over the course
      of
      two years and have committed to raise these funds prior to closing. The closing
      of the Kiwibox transaction is scheduled for on or about June 15, 2007 and is
      subject to occur during the second quarter in 2007 and is subject, among other
      usual due diligence contingencies, to our having raised $3.5 million in cash
      by
      closing.


12


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARY


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


MARCH
      31,
      2007





14.
      MERGER WITH KIWIBOX MEDIA INC. (continued)





At
      the
      closing of the Kiwibox Agreement, , the Company will pay the three Kiwibox
      principals an aggregate cash payment of $300,000, and will issue to them a
      number of Company common shares equivalent to an aggregate $1,500,000 in value,
      based upon the Company’s common stock “Market Price”. Market Price is the
      average price of our common stock sold during the 10 trading days preceding
      the
      Closing. The Company will also issue to them 43,610 Preferred Shares based
      upon
      their ownership of the 43,610 Kiwibox shares outstanding at the Closing, which
      shall have an aggregate conversion value of $500,000 and which shall be
      automatically convertible into newly issued restricted Company common shares,
      based upon the market price of our common shares prior to the second anniversary
      of the closing. Each of the three Kiwibox principals shall receive a two-year
      contract at the closing, paying an annual base salary of $150,000, and stock
      options to purchase 7,500,000 Company common shares at the market price. In
      addition, each may earn an annual bonus of up to $100,000 and 1,500,000 stock
      options if certain business performance goals are attained.





In
      connection with the Kiwibox acquisition, the Company is required to prepare
      and
      file a shareholder consent solicitation to seek stock holder approval to approve
      the Kiwibox acquisition, to increase the authorized common shares of the Company
      from 300,000,000 to 700,000,000 common shares and to change its name to “Kiwibox
      Enterprises, Inc.” Each of the Company and Kiwibox has made customary
      representations and warranties in the Agreement. The Company and Kiwibox have
      also agreed to customary covenants in the Agreement, including among others,
      not
      to solicit, initiate, knowingly encourage or facilitate proposals relating
      to
      alternative acquisition or sale of assets proposals.





Following
      the closing of the Kiwibox acquisition, we intend to focus our efforts on the
      further development and marketing of the Kiwibox social networking website.





13.
      SUBSEQUENT EVENTS





On
      April
      10, 2007, we entered into a certain License and Client Software Support
      Agreement with Imminent Technologies, LLC ("IMT"), pursuant to the principal
      terms of which the Company appointed IMT as a non-exclusive licensee/reseller
      for its suite of ergonomic software products (the "Software") and includes
      the
      exclusive appointment of IMT as the Company's support services provider to
      the
      Company's current customers with service contracts. The Agreement permits IMT
      to
      resell and sublicense the Software worldwide at prices determined exclusively
      by
      IMT. IMT will pay to Magnitude a royalty payment equal to 10% of the gross
      revenues in excess of $200,000 earned from the sale of the Software during
      each
      year of the Agreement. The Company agreed to pay IMT the sum of $20,000 to
      assist IMT in providing the customer support services in the commencement and
      transition period. The Agreement will automatically renew for successive
      one-year periods unless terminated by a party.





On
      April
      27, 2007, the Company closed on four 90-day loans in the aggregate amount of
      $147,000.00. The loans accrue interest at the rate of 1% per month and upon
      maturity, the Company is obligated to pay the outstanding principal balance,
      accrued interest and an origination fee of ten (10%) percent of the principal
      to
      each lender. Upon maturity and provided the Company does not have a registration
      statement pending with the Securities and Exchange Commission: (a) the Company
      is obligated to issue 500,000 restricted common shares to each $50,000 lender
      and 250,000 restricted common shares to the $25,000 lender and 220,000
      restricted common shares to the $22,000 lender, and (b) at the option of the
      lender, the outstanding principal balance, accrued interest and the origination
      fee may be converted into shares of the Company’s restricted common stock at a
      conversion rate that is the lower of $.05 per share or the investment rate
      utilized in any private placement consummated with the Company any time
      following the date of the note through maturity. The Company placed the notes
      issued to these lenders in reliance upon the exemptions from the registration
      requirements of the Securities Act of 1933, as amended (the “Securities Act”)
      provided by Regulation D and Section 4(2) of the Securities Act: the lenders
      all
      had pre-existing relationships with the Company, without any general
      solicitation involved; all of the lenders are accredited investors and all
      of
      the notes bear a restrictive legend.











13


**Item
      2.**


MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF


FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS





**Results
      of Operations**





On
      February 16, 2007, the Company’s Board of Directors unanimously approved a
      proposed reverse merger transaction and collateral transactions between the
      Company and Kiwibox, pursuant to which the Company would acquire Kiwibox
      Enterprises, Inc. and its social networking website for teenagers. On February
      19, 2007, the Company, Kiwibox Media, Inc. and the three Kiwiobox shareholders
      executed and delivered an Agreement and Plan of Reorganization which contained
      as an exhibit, the agreed upon terms and provisions of employment agreements
      for
      each of the three Kiwibox shareholders.





The
      Board
      of Directors of the Company considered the business and financial aspects of
      the
      Agreement and Plan of Reorganization (the Kiwibox Agreement”) and determined
      that the acquisition of Kiwibox was in the best interests of the Company and
      its
      shareholders.





In
      making
      its determination, the Board considered the following factors:





n
            The
                Company’s ergonomic software business had not generated sales and revenues
                sufficient to  support its continuing operations and continues to
                require the raising of additional equity capital  to fund its
                operations:





n
            The
                acquisition of Kiwibox would provide the Company and its shareholders
                with
                the opportunity to acquire and expand a product in the growing social
                networking website industry and provide the Company with, perhaps,
                a
                better platform with which to raise equity capital;





n
            The
                Kiwibox.com website was a functional platform, already generating
                some
                revenue while the two other business opportunities that the Board
                reviewed
                and considered in early 2007 would have required further development
                before they could have been launched,
                and;





n
            The
                Company was in preliminary discussions with several of its ex-employees
                about licensing its line of ergonomic software products and assuming
                all
                customer support operations, which discussions, in fact, materialized
                with
                the execution and delivery of a certain License and Client Software
                Support Agreement with Imminent Technologies, LLC ("IMT"), pursuant
                to the
                principal terms of which, the Company appointed IMT as a non-exclusive
                licensee/reseller for its suite of ergonomic software products and
                as the
                exclusive provider of support services to the Company's current customers
                with service contracts.





After
      considering all of the above factors, the Board unanimously determined that
      the
      acquisition of Kiwibox was in the best interests of the Company and its
      shareholders.





At
      the
      closing of the Kiwibox Agreement, scheduled for on or about June 15, 2007,
      the
      Company will pay the three Kiwibox principals an aggregate cash payment of
      $300,000, and will issue to them a number of Company common shares equivalent
      to
      an aggregate $1,500,000 in value, based upon the Company’s common stock “Market
      Price”. Market Price is the average price of our common stock sold during the 10
      trading days preceding the Closing. The Company will also issue to them 43,610
      Preferred Shares based upon their ownership of the 43,610 Kiwibox shares
      outstanding at the Closing, which shall have an aggregate conversion value
      of $500,000 (the “Conversion Value”), and which shall be automatically
      convertible into newly issued restricted Company common shares, based upon
      the
      market price of our common shares prior to the second anniversary of the
      closing. Each of the three Kiwibox principals shall receive a two-year contract
      at the closing, paying an annual base salary of $150,000, and stock options
      to
      purchase 7,500,000 Company common shares at the market price. In addition,
      each
      may earn an annual bonus of up to $100,000 and 1,500,000 stock options if
      certain business performance goals are attained.


14


In
        connection with the Kiwibox acquisition, the Company is required to prepare
        and
        file a shareholder consent solicitation to seek stock holder approval to
        approve
        the Kiwibox acquisition, to increase the authorized common shares of the
        Company
        from 300,000,000 to 700,000,000 common shares and to change its name to “Kiwibox
        Enterprises, Inc.” Each of the Company and Kiwibox has made customary
        representations and warranties in the Agreement, including among others,
        representations and warranties relating to the Company’s capitalization,
        compliance with laws, litigation, taxes, employee benefits and ownership
        of
        assets. The Company and Kiwibox have also agreed to customary covenants in
        the
        Agreement, including among others, not to solicit, initiate, knowingly encourage
        or facilitate proposals relating to alternative acquisition or sale of assets
        proposals.




The
      Agreement with Kiwibox contains certain principal conditions which must be
      either satisfied or waived by March 31, 2007, the scheduled closing date, which
      include that the Company has $3,500,000 in capital which the Company has
      committed in the Agreement to invest in the Kiwibox business over the 18-month
      period following the closing of the Agreement.




The
      foregoing summaries of the Kiwibox Agreement and employment agreements do not
      purport to be complete and are qualified in their entirety by references to
      the
      Kiwibox Agreement and employment agreements, copies of which are attached as,
      and included in Exhibit A to our preliminary proxy statement and amendments
      thereto filed on Schedule 14A with the U.S. Securities and Exchange Commission
      on February 28, 2007 and May 4, 2007, respectively, and incorporated herein
      by
      reference. The Agreement has been included to provide investors and security
      holders with information regarding its terms.





Following
      the closing of the Kiwibox acquisition, we intend to focus our efforts on the
      further development and marketing of the Kiwibox social networking website.





Our
      business during the first quarter was reduced to servicing a small number of
      software maintenance agreements that together yielded $3,023 in revenues. Our
      operating expenses were significantly reduced from prior periods due to a lower
      employee count and cost savings measures across the board, except that we
      incurred non-cash for “stock-based compensation” in connection with the
      settlement of claims from two former employees, resulting in the issuance of
      restricted stock and warrants (see “Related Party Transactions”). Restricted
      stock is priced at market and options and warrants grants are valued using
      the
      Black-Scholes valuation model. After deducting selling- and general and
      administrative expenses, stock-based compensation and R&D expenses totaling
      $461,524, the Company realized a loss from operations of $458,501 for the three
      months period ended March 31, 2007, compared to an operating loss of $719,729
      in
      the first quarter in 2006. Non-operating expenses consisted primarily of an
      accounting charge of $903,493 reflecting the change in fair value of outstanding
      options and warrants as a consequence of the rising market price of our common
      stock during the quarter. The period result was a net loss of $1,371,354 for
      the
      quarter, compared to a loss of $848,184 for the same period in 2006.




After
      accounting for dividend accruals on outstanding preferred stock which totaled
      $13,737, the net loss for the quarter applicable to common shareholders was
      $1,385,091 or $0.006 per share, compared to a loss of $876,564 or $0.006 per
      share for the same quarter in the previous year.





**Liquidity
      and Capital Resources**





In
      the
      absence of cash flow from operations, required working capital to finance
      ongoing operations was supplied entirely from short-term borrowings. During
      the
      quarter, the Company received $139,000 in proceeds in the form of cash.





At
      March
      31, 2007, the deficit in working capital amounted to $3,796,960 as compared
      to
      $2,553,451 at December 31, 2006. Stockholders’ equity showed an impairment of
      $3,757,857 at the end of the quarter. The negative cash flow from operations
      for
      the three months ended March 31, 2007 totaled $195,560 and was substantially
      financed by borrowings.




At
      the
      time of this submission, the Company had no bank debt. At March 31, 2007 its
      short-term liabilities, aside from trade payables and accruals, consisted of
      certain notes and loans aggregating approximately $581,450. Current liabilities
      include $354,906 unpaid dividends on outstanding preferred stock. We expect
      that
      these dividends will be paid only if and when capital surplus and cash-flow
      from
      operations are sufficient to cover the outstanding amounts without thereby
      unduly impacting the Company’s ability to continue operating and growing its
      business.





15


Current
      cash reserves and net cash flow from operations expected during the near future
      are inadequate when measured against present and anticipated future needs,
      and
      the Company’s financial situation remains precarious. In order to remedy the
      liquidity constraints management is seeking further investments in form of
      debt
      or equity capital. There can be no assurance, however, that these efforts will
      lead to the desired outcome and that the Company will be successful in obtaining
      the working capital needed to fund on-going operations. If the Company failed
      to
      do so, either by not acquiring sufficient funds, or not receiving such funds
      in
      a timely manner, management may be forced to effect further severe cut-backs
      in
      the Company’s operations.




16





**Item
      3.** CONTROLS
      AND PROCEDURES





(a)
      Evaluation of Disclosure Controls and Procedures.





As
      of the
      end of the period covered by this Form 10-QSB for the quarter ended March 31,
      2007, an evaluation was undertaken by the Company’s Chief Executive Officer and
      Chief Financial Officer of the effectiveness of the design and operation of
      the
      Company’s disclosure controls and procedures, as defined in Exchange Act Rule
      13(a)-14(c), and; based upon that evaluation, Company management, including
      the
      Chief Executive Officer and the Chief Financial Officer, has concluded that
      the
      Company’s disclosure controls and procedures were effective as of the end of the
      period covered by the subject Form 10-QSB and ensured that all material
      information required to be disclosed in the subject Form 10-QSB, was recorded,
      processed, summarized and reported as of the end of the period covered by the
      subject Form 10-QSB.





The
      Company maintains a system of internal controls designed to provide reasonable
      assurance that: (i) the Company’s transactions are properly authorized; (ii) the
      Company’s assets are protected against unauthorized or improper use, and (iii)
      the Company’s transactions are properly recorded and reported, all to permit the
      preparation of complete and accurate financial statements in conformity with
      generally accepted accounting principles.





(b)
      Changes in Internal Control over Financial Reporting





Since
      the
      date of the most recent evaluation of the Company’s internal controls by the
      Chief Executive Officer and Chief Financial Officer, there have not been any
      significant changes in the Company’s internal controls or other factors for the
      period covered by the subject Form 10-QSB that materially affected or were
      likely to materially affect the Company’s internal control over financial
      reporting.


17





**PART
      II - OTHER INFORMATION**





Item
      1  LEGAL
      PROCEEDINGS





At
      the
      time of this report, the Company is not a party in any legal proceedings.





Item
      2  UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





a)  Issuance
      of unregistered securities





During
      the quarter ended March 31, 2007, the Company issued the following unregistered
      securities:





(i)
            3,000,000
                shares of common stock and warrants for the purchase of 3,125,000
                shares,
                exercisable at $0.05 per share, to a former employee and to the former
                president and chief executive officer of the Company, in settlement
                of
                respective proceedings (see “Related Party Transactions”).





(ii)
            142,542
                shares of common stock to a former employee for commissions
                earned.  (iii)
            On January 29, 2007, the Company closed on two 90-day
              loans in the amount of $50,000.00 each. The loans accrue interest at
              the
              rate of 1% per month and upon maturity, the Company is obligated to
              pay to
              the lenders the outstanding principal balance, accrued interest and
              an
              origination fee of $5,000 to each lender. Upon maturity and provided
              the
              Company does not have a registration statement pending with the Securities
              and Exchange Commission: (a) the Company is obligated to issue 500,000
              restricted common shares to each lender and (b) at the option of the
              lender, the outstanding principal balance, accrued interest and the
              origination fee may be converted into shares of the Company's restricted
              common stock at a conversion rate that is the lower of $.05 per share
              or
              the investment rate utilized in any private placement consummated with
              the
              Company any time following the date of the note through
              maturity.  The Company relied upon the exemptions from the
              registration requirements of the Securities Act of 1933, as amended
              (the
              “Securities Act”), of Section 4(2) and Regulation D in connection with the
              issuance of the above identified securities. The Company had a
              pre-existing relationship with the recipients and no general solicitation
              was involved; each is an accredited investor and all securities issued
              contained a restrictive legend, disclosing that any transfer or other
              disposition could only be made in compliance with the registration
              requirements of the Securities Act or pursuant to exemptions
              therefrom




(b)
            Not
                applicable





(c)
            None





Item
      3  DEFAULTS
      UPON SENIOR SECURITIES





The
      Company, as of the date of this filing, is in arrears on the payment of certain
      dividends on its Series A, C, and D Senior Convertible Preferred Stock. Such
      arrears total approximately $350,000. These dividends have been accrued,
      however, the Company’s management has refrained from making payments at this
      time because of the absence of positive equity and/or surplus funds.


Item
        4  SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS


-
      None





Item
      5  OTHER
      INFORMATION





-
      None


18





Item
      6  EXHIBITS
      AND REPORTS ON FORM 8-K





(a)
            Exhibits





(3)(i)
      -
      Articles of Incorporation and Amendments thereto, incorporated herein by
      reference to Exhibits of previous filings with the Commission.





(3)(ii)
      -
      By-laws of the Company, incorporated herein by reference to Exhibits of previous
      filings with the Commission.





(31.1)
      -
      Certification of Edward Marney, Chief Executive Officer, pursuant to Section
      302
      of the Sarbanes-Oxley Act of 2002.





(31.2)
      -
      Certification of Joerg H. Klaube, Chief Financial Officer, pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.





(32.1)
      -
      Certification of Edward Marney, Chief Executive Officer, pursuant to Sections
      906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350





(32.2)
      -
      Certification of Joerg H. Klaube, Chief Financial Officer, pursuant to Sections
      906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350


(a)
              Reports on Form 8-K:




On
      February 2, 2007, the Company filed a report on Form 8-K, informing about a
      bridge financing transaction for $100,000.





On
      February 23, 2007, the Company filed a report on Form 8-K, informing about
      an
      Agreement and Plan of Reorganization entered into with Kiwibox Media Inc. on
      February 19, 2007.








19





SIGNATURES





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report on Form 10-QSB to be signed on its behalf by the
      undersigned, thereunto duly authorized.




MAGNITUDE
                INFORMATION SYSTEMS, INC.Date:
                May 11, 2007
            By:
                ___/s/
                Edward Marney___________Edward
                MarneyChief
                Executive Officer




20