**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 1934


For
      Quarter Ended September 30, 2007





OR





o  TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934


For
      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 October 31, 2007, was 263,586,672 shares.







MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES





INDEX





Page
              NumberPART
                1 - FINANCIAL INFORMATIONItem
                1 Financial Statements (unaudited)Consolidated
                Balance Sheet
              -
                September 30, 2007
            3Consolidated
                Statements of Operations
              -
                Nine months ended September 30, 2007 and 2006
            4Consolidated
                Statements of Cash Flows
              -
                Nine months ended September 30, 2007 and 2006
            5Notes
                to Consolidated Financial Statements
            6
                -
                13Item
                2 Management’s Discussion and Analysis of Financial Condition
              and
                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 SUBSIDIARIES


CONSOLIDATED
      BALANCE SHEET




Assets
              
              
              
              September
                  30, 2007Current
                  Assets
              
              
              
              (Unaudited)Cash
              $
              201,457Accounts
                  receivable, net of allowance fordoubtful
                  accounts of $1,900
              
              24,415Prepaid
                  expenses
              
              5,686Total
                  Current Assets
              
              231,558Property
                  and
                  equipment, net of accumulateddepreciation
                  of
                  $78,313
              
              12,258Deferred
                  financing
                  costs, net of accumulatedamortization
                  of
                  $433,822
              
              71,278Covenant
                  Not To
                  Compete, net of accumulatedamortization
                  of
                  $44,610
              
              15,390Goodwill
              
              1,702,591Loans
                  to former
                  principals of subsidiary
              
              286,721Other
                  assets
              
              3,224Total
                  Assets
              
              
              
              
              
              2,323,020Liabilities
                  and Stockholders’ Equity (Impairment)Current
                  LiabilitiesAccounts
                  payable
                  and accrued expenses
              
              803,247Obligations
                  to be
                  settled in stock
              
              716,290Deferred
                  revenue
              
              100,082Dividends
                  payable
              
              363,860Loans
                  and notes
                  payable
              
              739,450Derivative
                  liability - warrants and options
              
              2,164,628Current
                  maturities
                  of long-term debt
              
              33,529Total
                  Current Liabilities
              
              4,921,086Long-term
                  Debt
              
              
              
              
              
              -Total
                  Liabilities
              
              
              
              
              
              4,921,086Stockholders’
                  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,43,610
                  shares have been designated Series G Convertible Preferred
                  Stockof
                  which a combined total 129,500 shares are issued and
                  outstanding
              
              129Common
                  Stock, $0.0001 par value, 300,000,000 shares authorized;issued
                  and outstanding 263,586,672 shares
              
              26,359Additional
                  paid-in capital
              
              35,492,020Accumulated
                  (deficit)
              
              
              
              
              
              (38,116,574
              )Total
                  Stockholders’ Equity (Impairment)
              
              
              
              
              
              (2,598,066
              )Total
                  Liabilities and Equity (Impairment)
              
              
              
              
              $
              2,323,020


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


3


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF OPERATIONS


(Unaudited)


Three
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2007
              
              2006
              
              2007
              
              2006Total
                  Revenues
              
              $
              7,639
              
              $
              9,468
              
              $
              11,595
              
              $
              41,622Cost
                  of Goods
                  Sold
              
              
              -
              
              
              36,370
              
              
              -
              
              
              109,119Gross
                  Profit (Loss)
              
              
              7,639
              
              
              (26,902
              )
              
              11,595
              
              
              (67,497
              )Selling
                  expenses
              
              
              63,233
              
              
              70,984
              
              
              63,647
              
              
              381,456Stock-based
                  compensation (see below)
              
              
              270,236
              
              
              956,948
              
              
              562,236
              
              
              1,478,505Research
                  and
                  development cost
              
              
              -
              
              
              34,301
              
              
              735
              
              
              104,830General
                  and
                  administrative expenses
              
              
              386,910
              
              
              178,756
              
              
              1,118,573
              
              
              1,047,607Loss
                from Operations
              
              
              (712,740
              )
              
              (1,267,891
              )
              
              (1,733,596
              )
              
              (3,079,895
              )Other
                  Income (Expense)Misc.
                  non-operating
                  expenses
              
              
              9
              
              
              (356
              )
              
              (155
              )
              
              (5,356
              )Change
                  in fair
                  value -derivative liability
              
              
              605,265
              
              
              51,560
              
              
              (30,434
              )
              
              57,763Amortization
                  - debt
                  financing costs
              
              
              (331,783
              )
              
              -
              
              
              (535,159
              )
              
              -Interest
                  income
              
              
              1,057
              
              
              -
              
              
              1,057
              
              
              20Interest
                expense
              
              
              (24,094
              )
              
              (43,146
              )
              
              (136,897
              )
              
              (192,550
              )Total
                Other
                Income (Expense)
              
              
              250,454
              
              
              8,058
              
              
              (701,588
              )
              
              (140,123
              )Loss
                  before Provision for Income Taxes
              
              
              (462,286
              )
              
              (1,259,833
              )
              
              (2,435,184
              )
              
              (3,220,018
              )Provision
                  for
                  income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,000
              )Net
                  Loss
              
              $
              (462,286
              )
              $
              (1,259,833
              )
              $
              (2,435,184
              )
              $
              (3,221,018
              )


Dividends
                    on Preferred Stock
                
                (13,123)
                
                (12,630)
                
                (40,598)
                
                (527,894)Net
                    Loss applicable to Common Shareholders
                
                $
                (475,409
                )
                $
                (1,272,463
                )
                $
                (2,475,782
                )
                $
                (3,748,912
                )Net
                    Loss per Common Share
                
                $
                (0.002
                )
                $
                (0.007
                )
                $
                (0.011
                )
                $
                (0.023
                )Weighted
                    Average Number ofCommon
                    Shares
                    Outstanding
                
                
                247,391,177
                
                
                178,947,329
                
                
                234,680,442
                
                
                163,134,242


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 SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


(Unaudited)




Nine
                  Months EndedSeptember
                  30,2007
              
              2006Cash
                  Flows from Operating ActivitiesNet
                  Loss
              
              $
              (2,435,184
              )
              $
              (3,221,018
              )Adjustments
                  to Reconcile Net Lossto
                  Net Cash Used by OperationsDepreciation
                  and
                  amortization
              
              
              460,744
              
              
              127,158Securities
                  issued
                  for various expenses ...
              
              
              562,236
              
              
              1,299,674Change
                  in fair
                  value - derivative liabilities ...
              
              
              30,434
              
              
              (57,763
              )Accretion
                  of
                  beneficial conversion feature
              
              
              114,340
              
              
              8,000Loss
                  on disposition
                  of assets
              
              
              -
              
              
              356Recognition
                  of
                  expenses - deferred compensation
              
              
              -
              
              
              178,832Recognition
                  of
                  income - derivative liabilities
              
              
              (339,824
              )
              
              102,762Decreases
                  (Increases) in AssetsAccounts
                  receivable
              
              
              (780
              )
              
              20,267Deposits
              
              
              -
              
              
              23,400Prepaid
                  expenses
              
              
              34,103
              
              
              (204,518
              )Increases
                  (decreases) in LiabilitiesDeferred
                  revenues
              
              
              (2,747
              )
              
              83,219Obligations
                  to be
                  settled in stock
              
              
              107,193
              
              
              568,000Accounts
                  payable and accrued expenses
              
              
              266,984
              
              
              150,670Net
                  Cash Used by Operating Activities
              
              
              (862,677
              )
              
              (920,961
              )Cash
                  Flows from Investing ActivitiesBank
                  overdraft acquired - Kiwibox acquisition
              
              
              (323
              )
              
              -Purchases
                  of equipment and fixtures
              
              
              (4,850
              )
              
              (7,438
              )Net
                  Cash Used by Investing Activities
              
              
              (5,173
              )
              
              (7,438
              )Cash
                  Flows from Financing ActivitiesProceeds
                  from loans and notes
              
              
              397,000
              
              
              480,700Repayment
                  of loans and notes
              
              
              (100,000
              )
              
              (81,250
              )Proceeds
                  from subscriptions to be settled in stock
              
              
              691,000
              
              
              -Issuance
                  of common and preferred stock
              
              
              -
              
              
              724,500Net
                  Cash Provided by Financing Activities
              
              
              988,000
              
              
              1,123,950Net
                  Increase in Cash
              
              
              120,150
              
              
              195,551Cash
                  at Beginning of Period
              
              
              81,307
              
              
              118,696Cash
                  at End of Period
              
              $
              201,457
              
              $
              314,247


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





5


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES








SUPPLEMENTARY
      SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES





(a)
            The
                Company issued 540,991 shares of common stock to the holder of 7,300
                shares of Series A convertible preferred stock, against the above
                preferred shares and $17,906 accrued unpaid
                dividends.





(b)
            Pursuant
                to the terms of certain private placement subscription agreements
                and in
                accordance with the provisions ofEITF
                00-19 “Accounting for Derivative Financial Instruments Indexed to, and
                Potentially Settled in, a Company’s Own Stock”the
                Company had previously reclassified certain outstanding warrants
                and
                options as derivative liabilities, which are marked to fair value
                periodically pursuant EITF 00-19.We
                valued these options and warrants utilizing the Black-Scholes method
                of
                valuation as of the date of the Stock Purchase Agreements. For the
                three
                and nine months ended September 30, 2007, we recognized $605,265
                and
                $30,434, respectively, in accounting income based on the change in
                fair
                value of these liabilities during the
                periods.





(c)
            The
                Company issued 29,250,000 shares of common stock and 43,610 shares
                of
                Class G convertible preferred stock to the former stockholders of
                Kiwibox
                Media Inc. against all outstanding shares of that company. Such shares
                have been valued at an aggregate $1,670,000 based on the market price
                of
                the common stock and common stock underlying the preferred
                stock.





SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION


9
                  Months endedSeptember 30, 2007Interest
                  paid
              
              $
              4,083Taxes
                  paid
              
              $
              0








6


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 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 owns substantially all outstanding stock of Magnitude, inc., its
      operating subsidiary. The 1% of Magnitude, Inc. not owned by the Company
      constitutes a minority interest which is valued at $0.





On
      August
      16, 2007 the Company acquired all outstanding shares of Kiwibox Media,
      Inc.





The
      Company, Magnitude, Inc. and Kiwibox Media Inc. are separate legal entities,
      with Kiwibox Media, Inc. being a wholly owned subsidiary. The operations of
      the
      combined entity are currently comprised almost exclusively of the operations
      of
      Kiwibox Media, Inc.





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 previously marketed
      under the name ErgoEnterpriseTM .





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, in August, 2007, Kiwibox
      Media, Inc. merged with and into Magnitude Operations, Inc., a wholly owned
      subsidiary of Magnitude Information Systems, Inc., in a “reverse merger”
transaction. The three shareholders of Kiwibox Media, Inc. transferred and
      delivered all of the outstanding stock of Kiwibox Media, Inc. to Magnitude
      Operations, Inc. for cancellation **** and
      received 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. ceased and Kiwibox Media, Inc. became the surviving
      corporation of the merger and a wholly owned subsidiary of Magnitude Information
      Systems, Inc. Following the merger, Magnitude Information Systems, Inc. is
      planning to 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 quarterly report on Form 10-QSB for the
      periods ended March 31, 2007 and June 30, 2007 and its annual report on Form
      10-KSB for the year ended December 31, 2006


7


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 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 September 30, 2007, the results of operations for the three and nine
      months ended September 30, 2007 and 2006, and the cash flows for the nine months
      ended September 30, 2007 and 2006, have been included.





Principles
      of Consolidation





The
      consolidated financial statements include the accounts of Magnitude Information
      Systems, Inc. and its subsidiaries, Magnitude, Inc. and Kiwibox Media, Inc.
      All
      significant inter-company balances and transactions have been eliminated. The
      activities of the Company’s newly acquired subsidiary Kiwibox Media Inc. are
      included in the financial statements for the period from August 16, 2007 (date
      of acquisition) to September 30, 2007.





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.




8


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 2007





SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES, Continued





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 cumulative change in fair value





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.
 
 The
        Company’s revenue from its KiwiBox Media, Inc. subsidiary derives from
        advertising on the KiwiBox website. Most contracts require the Company to
        deliver the customer impressions, click-throughs or new customers, or some
        combination thereof. Accordingly, advertising revenue is estimated and
        recognized for the period in which customer impressions, click through or
        new
        customers are delivered. Licensing or hosting revenue consists of an annual
        contract with clients to provide web-site hosting and assistance.




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.


9


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 2007





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.





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.
      LOANS
      TO PRINCIPALS





Kiwibox
      Media Inc. during fiscal years 2001 to 2006 and prior to the acquisition by
      the
      Company had extended certain loans to its principals. Such loans bear interest
      at the rate of 4.58 % per year.





5.
      PROPERTY AND EQUIPMENT





Property
      and equipment consist of the following at September 30, 2007:





Furniture
                and fixtures
            
            
            2,014Equipment
            
            
            88,55790,571Less
                accumulated depreciation
            
            
            78,313Total
            
            $
            12,258





Depreciation
      expense charged to operations was $4,422 and $4,254 in the first nine months
      of
      2007 and 2006, respectively.





6.
      ACCOUNTS PAYABLE AND ACCRUED EXPENSES





Accounts
      payable and accrued expenses consisted of the following at September 30,
      2007:




Accounts
                payable
            
            $
            412,111Accrued
                interest
            
            
            114,934Accrued
                salaries
            
            
            14,469Accrued
                commissions
            
            
            10,720Accrued
                professional fees
            
            
            234,500Miscellaneous
                accruals
            
            
            16,513Total
            
            $
            803,247





10




MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 2007





6.
      ACCOUNTS PAYABLE AND ACCRUED EXPENSES (continued)





Accrued
      commissions are due to a consultant who was retained in the capacity of Senior
      Vice President of Business Development. Accrued professional fees include
      $84,000 payable in form of 775,000 restricted common shares.




7.
      DEFERRED REVENUES





Deferred
      revenues at September 30, 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 September 30, 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 September 30, 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, 2007 and
                no demand
                for payment has been made.
            
            $
            75,000Total
            
            $
            75,000





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, 2007 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.
                See “Subsequent Event” footnotebelow.
            
            
            342,450





11


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 2007





9.
      NOTES
      PAYABLE (continued)





In
                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. During the three months ended September
                30,
                2007, one of the notes was repaid.
            
            
            50,000Between
                April and June 2007 three shareholders, one of which is an outside
                director of the Company, loaned the Company an aggregate $297,000
                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 10% of the
                principal amount and the issuance of restricted common shares at
                the rate
                of ten shares per $ loaned, both payable at maturity. At the option
                of the
                lenders, 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.
            
            
            247,000Total
            
            $
            664,450





10.
      LONG-TERM DEBT





Long-term
      debt as of September 30, 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
            
            $
            —








12


MAGNITUDE
      INFORMATION SYSTEMS, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
      30, 2007





11.
      OBLIGATIONS TO BE SETTLED IN STOCK





Obligations
      to be settled in stock consisted of payments against subscriptions by accredited
      private investors, for the purchase of “Units” comprised of one common share and
      one 5-year warrant for the purchase of one share, exercisable at $0.07 per
      share, at the price of $0.05 per Unit.




Loan
        origination fees and financing costs include $470,400 loan origination fees
        payable in form of 4,470,000 restricted common shares, which cost includes
        $246,000 fees for extension of the maturity of certain notes.


12.
      COMMITMENTS AND CONTINGENCIES





Stock-Based
      Compensation Agreements




During
      the three months ended September 30, 2007, the Company issued
      2,000,000 shares of common stock valued at $118,500 to three individuals, one
      of
      who is an outside director, for services performed .




In
      exchange for the Kiwibox business, we gave 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. We recognized
      $151,736 in compensation from the stock options for the services
      performed.




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 the entire amount, however, in recognition of the fact
      that a portion was received after the February deadline, the Company and Mr.
      Jagels had agreed upon a further remuneration in the form of additional 150,000
      restricted common shares.





In
      January we issued warrants for 3,125,000 shares, exercisable at $0.05 per share,
      to the former president and chief executive officer, and in May we issued
      2,000,000 restricted common shares in connection with a settlement agreement
      reached during the fourth quarter in 2006, as amended during the second quarter
      in 2007.





14.
      MERGER WITH KIWIBOX MEDIA INC.





On
      August
      16, 2007, the Company closed on its acquisition of Kiwibox Media Inc. by means
      of a reverse merger **** with
      a
      newly formed wholly-owned subsidiary of the Company. In exchange for the Kiwibox
      business, we (a) issued 29,250,000 restricted common shares and $500,000 worth
      (conversion value) of our preferred stock to the three Kiwibox owners, and
      paid
      them $300,000 cash; (b) gave 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.




The
        following unaudited pro forma consolidated financial information presents
        the
        combined results of operations of the Company as if the KiwiBox acquisition
        had
        occurred on January 1, 2007. The unaudited pro forma consolidated financial
        information is not intended to represent or be indicative of the consolidated
        results of operations of the Company that would have been reported had the
        acquisition been completed as of the dates presented, and should not be taken
        as
        representative of the future consolidated results of operations of the Company.
        Summarized unaudited pro forma consolidated results were as
        follows:
  **Three
                  Months Ended**
              
              **Nine
                  Months Ended****September
                  30**
              
              **September
                  30****2007**
              
              **2007**Revenue
              
              $
              34,469
              
              $
              139,379Net
                  income (loss) applicable to shareholders
              
              
              (477,607
              )
              
              (2,468,889
              )Basic
                  income (loss) per share
              
              $
              
              (0.002
              )
              
              (0.009)
 
 15.
        SERIES G PREFERRED STOCK
 
 The
        Company’s Series G Preferred Stock includes authorized 50,000 shares of Senior Convertible
        Preferred Stock, $.001 par value with the following rights, privileges and
        limitations:
 
 Dividends .
        The
        holders of said shares of Series G Senior Preferred shall not be entitled
        to
        receive any dividends.
 
 Priority .
        The
        Series G Senior Preferred shall with respect to dividend rights rank junior
        to
        all classes and series of Common Stock, the Cumulative Preferred Stock, and
        the
        Series A, B, C, D, E and F Senior Convertible Preferred Stock, and, with
        respect
        to liquidation rights rank prior to all classes and series of Common Stock,
        the
        Cumulative Preferred Stock, and be on a par with the Series A, B, C, D, E
        and F
        Senior Convertible Preferred Stock.
 
 Liquidation .
        In the
        event of any liquidation, dissolution, or winding up of the affairs of the
        Corporation, whether voluntary or otherwise, after payment or provision for
        payment of the debts and other liabilities of the Corporation, the holders
        of
        the Series G Senior Preferred shall be entitled to receive, out of the remaining
        net assets of the Corporation, an amount equal to the Stated Value of each
        share
        of Series G Senior Preferred held of record by such holder, payable in cash
        or
        in shares of stock, securities or other consideration, the value of which
        stock,
        securities or other consideration shall be fixed by the Board of Directors,
        provided, however, that such remaining net assets are sufficient to cover
        all
        the before mentioned payments and also like payments to holders of Series
        A, B,
        C, D, E and F Senior Preferred, before any distribution shall be made to
        the
        holders of Common Stock or Cumulative Preferred Stock of the Corporation.
        In
        case such remaining net assets are insufficient to cover all such payments
        to
        holders of Series A, B, C, D, E and F Senior Preferred, the holders of these
        series shall receive payments on a pro rata basis.
 
 Mandatory
        Conversion .
        Upon
        the second anniversary date of that certain Agreement and Plan of
        Reorganization, by and between the Company and Kiwibox Media Inc. and the
        Kiwibox Shareholders, the 46,340 shares of Series G Preferred shares issued
        to
        the Kiwibox Shareholders and representing the only outstanding shares of
        Series
        G Preferred  shall
        be
        automatically converted into Common Stock of the Corporation in accordance
        with
        the terms set forth below. For all purposes under this Certificate, the 46,340
        Series G Preferred shares shall have an aggregate conversion value of $500,000
        (the “Conversion Value”) and shall be convertible into shares of the Common
        Stock of the Corporation, based upon the “Market Price”. The number of Common
        Shares of the Corporation to be issued in the automatic conversion shall
        be
        determined by dividing the Conversion Value of $500,000 by the Market Price
        of
        the common shares of the Corporation. The Market Price shall mean the average
        sales price of a Common Share of the Corporation during the twenty (20)
        successive trading days immediately preceding the second anniversary date
        of
        said Agreement as recorded by the Electronic Bulletin Board, over-the-counter
        stock market maintained by the NASD or such other stock market where the
        Common
        Stock of the Corporation are then traded. For example, if the Market Price
        is
        $.025 per share, then the Conversion Value would be 20,000,000 common shares
        which the Corporation would issue to the holders of the Series G Preferred,
        the
        Kiwibox Shareholders in proportion to their ownership of the 46,340 shares
        of
        the Series G Preferred Shares. For all purposes under this Certificate, the
        amount of Common Stock representing the Conversion Value shall not be less
        than
        10,000,000 Common Shares of the Corporation notwithstanding the fact that
        the
        Market Price is determined to be above $.05 per share. The Common Shares
        of the
        Corporation issuable based upon the Conversion Value shall be issued by the
        Corporation to the holders of the 46,340 shares of the Series G Preferred,
        the
        Kiwibox Shareholders, within thirty days following the second anniversary
        date
        of the above identified Agreement, in proportion to the ownership of the
        46,340
        shares of the Series G Preferred Stock.
 
 Anti-Dilution .
        In the
        event that, prior to the conversion of the Series G Senior Preferred Stock
        by
        the holder thereof into Common Stock of the Corporation, there shall occur
        any
        change in the outstanding shares of Common Stock of the Corporation by reason
        of
        the declaration of stock dividends, or through a re-capitalization resulting
        from stock splits or combinations, without the receipt by the Corporation
        of
        fair consideration therefore in the form of cash, services or property, the
        conversion ratio of the Series G Senior Preferred Stock into Common Stock
        of the
        Corporation provided for above shall be adjusted such that any holder of
        Series
        G Senior Preferred Stock converting such stock into Common Stock subsequent
        to
        such change in the outstanding shares of Common Stock of the Corporation
        shall
        be entitled to receive, upon such conversion, a number of shares of Common
        Stock
        of the Corporation representing the same percentage of common shares outstanding
        as represented by the shares that he would have received had he converted
        his
        Series G Senior Preferred Stock to Common Stock prior to such change in the
        outstanding shares of Common Stock of the Corporation.


15.
      SUBSEQUENT EVENT





On
      October 31, 2007, three noteholder/investors converted the outstanding principal
      balances and accrued interest under six Company note, representing aggregate
      debt of $402,365.73, into restricted Company securities at a conversion rate
      equal to the Company’s current “unit” investment terms. This conversion rate is
      at $.05 per unit, with each unit comprised of one restricted common share and
      one 5-year warrant, exercisable at $.07, resulting in the issue of 8,091,315
      restricted common shares and an equal number of warrants to these three
      individuals.


13
 
  **Item
        2.**


**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF**


**FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS**





**Results
      of Operations**





In
      implementing our strategy to acquire a new business and refocus our operations
      for the benefit of our shareholders, we entered into a License and Client
      Software Support Agreement with Imminent Technologies, LLC (“IMT”) on April 10,
      2007, and appointed IMT as a non-exclusive licensee/reseller for our suite
      of
      ergonomic software products. IMT, thereby, assumed virtual control of the
      ergonomic software operations and we retained certain royalty rights, all as
      disclosed in our Current Report on Form 8-K filed on April 11, 2007. Since
      that
      transaction, we have been engaged in planning for the closing of the Kiwibox
      acquisition, securing financing for its acquisition and financing as well as
      preparing for post-closing operations. Accordingly, this quarterly report for
      the third quarter shall address the Kiwibox acquisitions and our operations
      since this closing.





The
      Kiwibox Closing - August 16, 2007.





On
      August
      16, 2007, we closed our acquisition of Kiwibox Media, Inc. through a reverse
      merger between Kiwibox and our wholly owned acquisition subsidiary. As a result
      of the merger, Kiwibox became our wholly owned subsidiary. Prior to the closing,
      our management. completed the transfer of the ergonomic business to IMT and
      secured the investment commitment from Tell Capital in the amount of $ 3Million.





At
      the
      Kiwibox closing, we (1) issued an aggregate 29,250,000 restricted common shares
      to the three Kiwibox shareholders,  (2) issued an aggregate 43,610 shares
      of our Senior Convertible Series G Preferred stock to these principals, (3)
      paid
      an aggregate $150,000 in cash to these Kiwibox principals, less a $7,000
      investment banking fee paid to Southridge Investment Group, and (4) signed
      two-year employment agreements with Messrs. Lin Dai, Ivan Tumanov and Michael
      Howard, the three Kiwibox shareholders, all pursuant to the terms and provisions
      of the Agreement and Plan of Reorganization, dated February 19, 2007, and
      amendments thereto, and as most recently modified by Amendment No. 3 between
      the
      parties on August 2, 2007. The 43,610 Series G Preferred Shares issued to the
      Kiwibox principals at closing have an aggregate conversion value of $500,000
      (the “Conversion Value”), which $500,000 Conversion Value is convertible into
      our common shares by dividing it by the “Market Price” of our common stock
      during the twenty (20) successive trading days immediately preceding the second
      anniversary of the agreement.
      At the closing, the Company promised to issue 750,000 restricted common shares
      to Southridge Investment Group, LLC as part of its fee.




Pursuant
      to out agreement, at the closing, we confirmed our receipt of the first $500,000
      tranche of equity funding from Tell Capital AG, our Swiss investor, $300,000
      of
      such funding was dedicated to cover the $150,000 cash
      payment to the Kiwibox shareholders and the balance for Kiwibox operations.
      Further to our agreement, we committed to invest an aggregate $3.5 million
      of
      funds in the Kiwibox business over the approximate 18 month period following
      closing: $1.5 million to be available during the period from closing through
      October 31, 2007, an additional $1.7 million available on or before February
      1,
      2008, and a last $300,000 within 12 months of closing. Magnitude has also agreed
      to issue to the Kiwibox principals 60,000 Company common shares for each day
      any
      part of the $3.5 million investment amount is delayed and further agreed to
      provide Kiwibox with a right of rescission if a 30-day payment default is not
      cured after notice. As previously reported on our prior Form 8-K current report
      of August 2, 2007, the Swiss investment firm, Tell Capital AG and its affiliates
      subscribed to purchase an aggregate $3,000,000 of Company equity securities
      over
      the next several months. This commitment provided us with the funds to close
      the
      Kiwibox acquisition.


14


As
      of the
      date of this report, Tell Capital AG has paid us $1,660,000 of its $3 million
      subscription commitment, of which we have paid $300,000 to the three Kiwibox
      principals and $875,000 has been allocated toward our $3.5 million investment
      commitment to the Kiwibox business. Most of the scheduled subscription payments
      from Tell Capital AG have been late and, therefore our investment commitment
      payments to Kiwibox have been correspondingly late. The Kiwibox principals
      are
      due an aggregate 3,180,000 of our shares as a penalty for our late payments
      and
      we expect to issue additional penalty shares for the late payment of $625,000
      which was due on November 1, 2007. After the November 1, 2007 payment and
      assuming it is received, Tell Capital AG has indicated that it would also
      provide equity funding of $1,700,000,
      on or before February 1, 2008, and $300,000, on August 16, 2008, of which all
      funds would be dedicated to complete our $3.5 million investment commitment
      to
      the Kiwibox business.





With
      this
      its investment of $1,660,000 in subscription funds to date, Tell Capital AG
      is
      due 33,200,000 “units”, with each unit comprised of one restricted common share
      and one 5-year warrant to purchase a common share at $.07, at the subscription
      price of $.05 per unit. The Company shall file a registration statement under
      the Securities Act in the future, seeking to register for resale the unit common
      shares as well as those underlying the unit warrants.





At
      the
      Kiwibox closing, we signed and delivered employment agreements with the three
      kiwibox principals,covering a two year term and agreed to pay each Kiwibox
      Shareholder an annual base salary of $150,000. In addition, we agreed to pay
      each an annual bonus if certain business goals are met: a $100,000 bonus if
      the
      Kiwi Business has received no less than an average 215,000 “Unique Visitors”
during either the 10th,
      11th or 12th month of the first year of the term or achieved no less than
      $316,000 in gross revenues within the 12 moth period following the Closing.
      Alternatively, we agreed to pay each a $50,000 bonus if the Kiwi Business has
      received at least an average 175,000 but less than an average 215,000 “Unique
      Visitors” during either the 10th, 11th or 12th month of the first year of the
      term or at least $237,000 in gross revenues but less than $316,000 within the
      12
      moth period following the Closing. A “Unique Visitor” is a
      person
      who visits a Kiwibox website during any month during the term. For the second
      year of their employment agreements, we agreed to pay each a $100,000 bonus
      if
      the Kiwi Business has received no less than an average 550,000 Unique Visitors
      during either the 22nd, 23rd or 24th month of the second year of the term or
      attained $1,961,000 in gross revenues, or a bonus of $50,000 each if the Kiwi
      Business has received at least an average 415,000 but less than an average
      550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second
      year of the term or attained at least $1,500,000 in gross revenues but less
      than
      $1,961,000. Each Kiwibox Shareholder received a stock option to purchase up
      to
      7,500,000 shares of our common stock at an exercise price of $.05 per share
      which shall vest and be exercisable by the Kiwibox Shareholders, 50% on the
      first anniversary date of the Closing, 25% 18 months after the Closing and
      25%
      on the second anniversary of the Closing. Each was issued, as well, under the
      terms of their employment agreements, a performance stock option to purchase
      up
      to an additional 3,000,000 shares of our common stock, 1,500,000 of which
      options shall vest and be exercisable by the Kiwibox Shareholders after the
      first anniversary date of the Closing if the Kiwi Business has received no
      less
      than an average 215,000 Unique Visitors during either the 10th, 11th or
      12 th month of
      the first year of the term or achieved $316,000 in gross revenues during the
      first year, and the balance, or 1,500,000 options shall vest and be exercisable
      by the Kiwibox Shareholders after the second anniversary date of the Closing
      if
      the Kiwi Business has received at least an average 550,000 Unique Visitors
      during either the 22nd, 23rd or 24th month of the second year of the term or
      achieved $1,961,000 in gross revenues during the second year of the agreements.
      The exercise prices for these stock options is $.05 per share.








Kiwibox
      Operations





Management
      has worked toward the further development of the business surrounding the
      Kiwibox website. Initially launched in 1999, Kiwibox.com is an online social
      networking website dedicated to teen users. With approximately 1.8 million
      registered members, the Kiwibox website provides online content in several
      categories, dedicated to teens, including entertainment, fashion and games.
      Its
      management has developed a user-based contingent of conributors that submit,
      review and comment upon content and articles from all over the world, 24 hours
      a
      day, seven days a week. Kiwibox.com
      uses a “points” reward system for users, where a user may acquire elevated peer
      status and/or earn prizes which in many cases are provided by advertiser and/or
      sponsors.








In
      the
      United States alone the teenage population is approximately 34 million, as
      estimated by the US Census Bureau, and they spent over $175 billion in 2003
      according to Teenage Research Unlimited. Today’s teenagers are the first
      generation to grow up using the Internet for everything from entertainment
      and
      information, to shopping and communication. In fact, according to the Pew
      Internet and American Life Project, 83 percent of U.S. teenagers are online.
      And
      although there are a number of websites that have targeted this large
      marketplace no one site has yet to dominate it. We will strive through
      technology and content enhancements to make the Kiwibox.com website one of
      the
      most exciting teenage, multimedia sites available.


15




During
        the third
        quarter our operating expenses, aside from legal and other professional fees
        which were unusually high primarily due to the preparation for and closing
        of
        the transactions associated with the Kiwibox merger, and excluding non-cash
        expenses for stock issuances, were reduced to approximately $266,410 for
        the
        quarter. Aforementioned legal expenses totaled $120,500, and the cost of
        restricted common stock and stock options issued in connection with the closing
        of the Kiwibox acquisition, recognized as non-cash “stock-based compensation”
amounted to $270,236. Altogether, the Company realized a loss from operations
        of
        $712,740 for the three months period ended September 30, 2007. The period
        result
        was a net loss of $462,286 for the quarter, compared to a loss of $1,259,833
        for
        the same period in 2006. Restricted stock is priced at market and options
        and
        warrants grants are valued using the Black-Scholes valuation model.
  After
        accounting for dividend accruals on outstanding preferred stock which totaled
        $13,123, the net losses for the quarter and the nine months period ended
        September 30, 2007 applicable to common shareholders were $475,409 or $0.002
        and
        $2,475,782 or $0.011 per share respectively, compared to losses of $1,272,463
        or
        $0.007 per share, and $3,748,912 or $0.023 per share for the same periods
        in the
        previous year.
  **Liquidity
        and Capital Resources**
 
 With
        insignificant cash flow from operations, working capital to finance ongoing
        operations was provided entirely from equity investments. We have funded
        Kiwibox
        operations with the aggregate $875,000 we received from Tell Capital AG since
        the Kiwibox acquisition on August 16, 2007:$250,000 received during the third
        quarter, and $625,000 received on November 5, 2007. We have paid for our
        public
        company’s operations, also with equity investments: $125,000 and $50,000
        received on June 22, 2007 and July 23, 2007, respectively, from our investors;
        $
        200,000 from Tell Capital AG on August 16, 2007, and subsequent to the third
        quarter, with $250,000 received from Tell Capital AG on October 3, 2006.
        We will
        issue to all of these investors “units”, comprised of one restricted common
        share and one 5-year warrant to purchase a common share at $.07, at the
        subscription price of $.05 per unit.
 
 At
        September 30, 2007, the deficit in working capital amounted to $ 4,689,528.
        Stockholders’ equity showed an impairment of $2,598,066 at the end of the
        quarter. The negative cash flow from operations for the nine months ended
        September 30, 2007 totaled $862,677 and was substantially financed by borrowings
        and equity investments.
  At
        the
        time of this submission, the Company had no bank debt. At September 30, 2007
        its
        short-term liabilities, aside from trade payables and accruals, consisted
        of
        certain notes and loans aggregating approximately $739,450 (see, “Subsequent
        Events footnote to Financial Statements above). Current liabilities include
        $363,860 accrued 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.


Current
      cash reserves and net cash flow from operations expected during the near future
      will not be sufficient to pay for our current and anticipated future needs.
      Provided Tell Capital AG meets its outstanding commitment to provide the
      additional $1,340,000 in equity investment, $625,000 of which is dedicated
      to
      the Kiwibox business and the balance to public company operations, and further
      provided that Tell Capital AG invests an additional $3 million which it has
      indicated it would on or before February 1, 2008, we believe we will have
      sufficient cash to meet our consolidated operational needs for the next twelve
      months. If we do not receive the $625,000 from Tell Capital AG so that we can
      transfer these funds to Kiwibox on or before December 5, 2007, Kiwibox would
      have the right to rescind its merger with us. Absent the receipt of this funding
      or in the event of such rescission, our financial condition would be subject
      to
      material and adverse consequences, requiring that we immediately seek another
      business opportunity and other investments in form of debt or equity capital.
      There can be no assurance in such a case, however, that our efforts to find
      alternative business opportunity and/or funding would lead to a successful
      funding for the working capital required to finance on-going operations. If
      we
      failed in these efforts, either by not receiving the **** investment
      commitments from Tell Capital AG or an alternative source, or we do not receive
      such funds in a timely manner, our management may be forced to effect severe
      cut-backs in our 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 September
      30, 2007, an evaluation was undertaken, under the supervision and with the
      participation of the Company’s management, including 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
      pursuant to Rule 13a-15(e) of the Exchange Act; and; based upon that evaluation,
      Company management, including the Chief Executive Officer and the Chief
      Financial Officer, has concluded that the design of the Company’s disclosure
      controls and procedures are effective and ensure that all material information
      required to be disclosed by the Company in the reports that it files or submits
      under the Act, are recorded, processed, summarized and reported within the
      time
      periods specified in the Commission’s rules and forms; in addition, the
      evaluation confirmed that the Company’s disclosure controls and procedures are
      designed to ensure that the information required to be disclosed by the Company
      in the reports that it files or submits under the Act is accumulated and
      communicated to Company management, including its Chief Executive Officer and
      Chief Financial Officer, as appropriate to allow timely decisions regarding
      required disclosure.





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 Company
      management, including the Chief Executive Officer and Chief Financial Officer,
      there have not been any 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 material legal
      proceedings.





Item
      2  UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





a)
            Issuance
                of unregistered securities





During
      the quarter ended September 30, 2007, the Company issued the following
      unregistered securities:





On
      July
      23, 2007, the Company accepted subscription proceeds in the amount of $75,000
      from a shareholder/investor for 1,500,000 units, each unit of which is comprised
      of one restricted common share and one 5-year warrant to purchase a common
      share
      at an exercise price of $.07, for the subscription price of $.05 per
      unit.





On
      August
      16, 2007, in connection with its acquisition of Kiwibox Media, Inc. Magnitude
      issued an aggregate 29,250,000 restricted common shares and an aggregate 43,610
      shares of its Senior Convertible Series G Preferred stock to the three Kiwibox
      shareholders at the closing. The 43,610 Series G Preferred Shares issued to
      the
      Kiwibox principals at closing have an aggregate conversion value
      of $500,000 (the “Conversion Value”), which $500,000 Conversion Value is
      convertible into Company common shares by dividing it by the “Market Price” of
      the Company’s common stock during the twenty (20) successive trading days
      immediately preceding the second anniversary of the agreement. In addition,
      the
      Company signed two-year employment agreements with each of the three Kiwibox
      shareholders and issued to each a stock option to purchase up to 7,500,000
      shares of our common stock at an exercise price of $.05 per share which shall
      vest and be exercisable by the Kiwibox shareholders, 50% on the first
      anniversary date of the Closing, 25% 18 months after the Closing and 25% on
      the
      second anniversary of the Closing. As further provided in their employment
      agreements with the Company, each Kiwibox shareholder was also issued a
      performance stock option to purchase up to an additional 3,000,000 shares of
      Company common stock, based upon the achievement of certain business goals.
      At
      Closing, the Company promised to issue to the investment banking firm,
      Southridge Investment Group, LLC of New York, New York or to its assigns
      (“Southridge”), 750,000 newly issued restricted common shares and paid a fee to
      Southridge of $15,000.





The
      Company issued these restricted securities to the shareholder/investor, the
      three Kiwibox shareholders and to Southridge in reliance upon the exemptions
      from the registration requirements of the Securities Act provided by Regulation
      D and Section 4(2) of the Securities Act: private sales of securities not
      involving a public offering. The shareholder/investor and Southridge were
      accredited investors, had pre-existing relationships with the Company,
      acknowledged that these securities were restricted securities, non-transferable
      except pursuant to the registration requirements of the Securities Act or
      exemptions therefrom, and the certificates representing such securities bore
      restrictive legends to such effect. Similarly, the three Kiwibox principals
      who
      received the unregistered securities were represented by counsel and financial
      advisors, performed due diligence on the Company’s plan of operations and
      financial condition over an extended period of time; all of the subject
      securities issued bore restrictive legends, preventing their further sale or
      transfer other than pursuant to an effective registration statement under the
      Securities Act or pursuant to valid exemptions therefrom.













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 $363,860. 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.


18


Item
      4  SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
      HOLDERS





-
      None





Item
      5  OTHER
      INFORMATION





-
      None





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.




*
      10.25 Copy of Agreement and Plan of Reorganization,
      Dated February 19, 2007, between the Company, Kiwibox Media, Inc. and the
      kiwibox Shareholders, and Form of Employment Agreement for the Three Kiwibox
      Shareholders,


10.26
      Commitment from Tell
      Capital AG, dated July 26, 2007 and effective August 2, 2007


10.27
      Amendment No. 3 to Agreement and Plan of
      Reorganization, dated July 31, 2007 and Effective August 2, 2007.




#
      10.28
      Preliminary Employment Agreement with Paul Farris, Dated September 19,
      2007




(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





*
      Filed
      as exhibits to the Company’s Schedule 14A Definitive Proxy Statement, filed with
      the Commission on May 15, 2007.





#
      Filed
      as an exhibit to the Company’s Current Report filed with the Commission on
      September 19, 2007





(b)
            Reports
                on Form 8-K:





On
      July
      24, 2007, the Company filed a report on Form 8-K, informing about its acceptance
      of a firm commitment from a Swiss investment firm who subscribed to purchase
      an
      aggregate $3,000,000 of Company equity securities over the next several months.
      The transaction calls for the purchase of 60,000,000 “units” from the Company,
      with each unit comprised of one restricted common share and one 5-year warrant
      to purchase a common share at $.07, at the subscription price of $.05 per unit.
      The Company agreed to file a registration statement under the Securities Act
      on
      or before November 30, 2007, seeking to register for resale the unit common
      shares as well as those underlying the unit warrants.





On
      August
      20, 2007, the Company filed a report on Form 8-K, informing about the closing
      of
      the acquisition of Kiwibox Media Inc.





On
      October 5, 2007, the Company filed a current report on Form 8-K, disclosing
      its
      employment agreement with Paul Farris on September 19, 2007, and the receipt
      in
      September, 2007, of an aggregate $500,000 in investment proceeds from Tell
      Capital AG.


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: November
              19, 2007
            By:
            /s/ 
Edward
              MarneyEdward
              MarneyChief
              Executive Officer





20