UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)





[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934





For
the quarterly period ended June 30, 2008





OR





[_]
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: 0-29963








FINDEX.COM,
INC.





(Exact
name of registrant as specified in its charter)








Nevada
            
            88-0379462(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      No.)620 North 129thStreet, Omaha, Nebraska
            
            68154(Address
      of principal executive offices)
            
            (Zip
      Code)





(402)
333-1900


(Registrant’s
telephone number, including area code)





N/A





(Former
name, former address and former fiscal year, if changed since last
report)





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
proceeding 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 [_]





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





Large accelerated filer [_]Accelerated
filer [_]


Non-accelerated filer [_] (Do not check if a smaller
reporting company)Smaller reporting company
[X]





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





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.  Yes [_] No
[_]





APPLICABLE
ONLY TO CORPORATE ISSUERS





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:





At August
19, 2008, the registrant had outstanding 54,072,725 shares of common stock, of
which there is only a single class.









FINDEX.COM, INC.





QUARTERLY
REPORT ON FORM 10-Q


FOR
FISCAL QUARTER ENDED JUNE 30, 2008





-
INDEX -





PagePART I - FINANCIAL INFORMATION:Item 1.    Financial
      Statements:
            F-1Balance Sheets – June 30, 2008 (unaudited) and
      December 31, 2007
            F-1Statement of Operations (unaudited) for the
      three  and six months ending June 30, 2008 and for the three and
      six months ending June 30, 2007
            F-2Statement of Cash Flows (unaudited) for the six months
      ending June 30, 2008 and for the six months ending June 30,
      2007
            F-3Notes to Unaudited Financial Statements
            F-4Item 2.    Management's Discussion and
      Analysis of Financial Condition and Results of
    Operations
            1Item
      3.    Quantitative and Qualitative Disclosures About
      Market Risk
            9Item 4T.  Controls and
      Procedures
            9PART II - OTHER INFORMATION:
            10Item
      1.    Legal Proceedings
            10Item 1A. Risk Factors
            10Item
      2.    Unregistered Sales of Equity Securities and Use
      of Proceeds
            10Item
      3.    Defaults Upon Senior
    Securities
            10Item
      4.    Submission of Matters to a Vote of Security
      Holders
            10Item
      5.    Other Information
            10Item
      6.    Exhibits
            10Signatures
            13











PART I – FINANCIAL INFORMATION





ITEM 1. FINANCIAL STATEMENTS.





Findex.com, Inc.CONDENSED
      CONSOLIDATED BALANCE SHEETS(Unaudited)June
      30, 2008
            
            
            December
      31, 2007AssetsCurrent
      assets:Cash
      and cash equivalents
            
            $
            523,751
            
            
            $
            1,134,547Accounts
      receivable, trade, net
            
            
            149,217
            
            
            
            236,301Inventories
            
            
            87,541
            
            
            
            93,852Other
      current assets
            
            
            97,000
            
            
            
            135,626Total
      current assets
            
            
            857,509
            
            
            
            1,600,326Property
      and equipment, net
            
            
            47,037
            
            
            
            56,214Intangible
      assets, net
            
            
            996,397
            
            
            
            979,011Other
      assets
            
            
            133,324
            
            
            
            92,860Total
      assets
            
            $
            2,034,267
            
            
            $
            2,728,411Liabilities
      and stockholders’ equityCurrent
      liabilities:Accounts
      payable, trade
            
            $
            654,308
            
            
            $
            627,720Accounts
      payable, related party
            
            
            75,098
            
            
            
            75,302Accrued
      royalties
            
            
            646,129
            
            
            
            587,692Derivative
      liabilities
            
            
            ---
            
            
            
            906,274Other
      current liabilities
            
            
            377,151
            
            
            
            417,903Total
      current liabilities
            
            
            1,752,686
            
            
            
            2,614,891Long-term
      debt, net
            
            
            38,050
            
            
            
            11,877Deferred
      income taxes, net
            
            
            20,825
            
            
            
            34,800Commitments
      and contingencies (Note 10)Stockholders’
      equity:Preferred
      stock, $.001 par value5,000,000
      shares authorized-0-
      and -0- shares issued and outstanding, respectively
            
            
            ---
            
            
            
            ---Common
      stock, $.001 par value120,000,000
      shares authorized,54,072,725
      and 52,250,817 shares issued and outstanding, respectively
            
            
            54,073
            
            
            
            52,251Paid-in
      capital
            
            
            7,787,780
            
            
            
            7,715,081Retained
      (deficit)
            
            
            (7,619,147
            )
            
            
            (7,700,489
            )Total
      stockholders’ equity
            
            
            222,706
            
            
            
            66,843Total
      liabilities and stockholders’ equity
            
            $
            2,034,267
            
            
            $
            2,728,411See
      accompanying notes.





F-1
 Table of Contents





Findex.com, Inc.CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)Three
      Months Ended
            
            
            Six
      Months EndedJune
      30,
            
            
            June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenues,
      net of reserves and allowances
            
            $
            520,984
            
            
            $
            602,838
            
            
            $
            1,132,515
            
            
            $
            1,758,331Cost
      of sales
            
            
            235,306
            
            
            
            281,517
            
            
            
            490,215
            
            
            
            776,875Gross
      profit
            
            
            285,678
            
            
            
            321,321
            
            
            
            642,300
            
            
            
            981,456Operating
      expenses:Sales
      and marketing
            
            
            153,382
            
            
            
            158,476
            
            
            
            341,525
            
            
            
            354,965General
      and administrative
            
            
            471,048
            
            
            
            534,427
            
            
            
            981,574
            
            
            
            1,024,294Total
      operating expenses
            
            
            624,430
            
            
            
            692,903
            
            
            
            1,323,099
            
            
            
            1,379,259Loss
      from operations
            
            
            (338,752
            )
            
            
            (371,582
            )
            
            
            (680,799
            )
            
            
            (397,803
            )Other
      income (expenses), net
            
            
            972
            
            
            
            (6,445
            )
            
            
            5,866
            
            
            
            (15,275
            )Gain
      on fair value adjustment of derivatives
            
            
            ---
            
            
            
            27,201
            
            
            
            305,620
            
            
            
            53,745Gain
      on settlement of derivative liabilities
            
            
            ---
            
            
            
            ---
            
            
            
            450,654
            
            
            
            ---Income
      (loss) before income taxes
            
            
            (337,780
            )
            
            
            (350,826
            )
            
            
            81,341
            
            
            
            (359,333
            )Income
      tax benefit
            
            
            ---
            
            
            
            7,275
            
            
            
            ---
            
            
            
            10,100Net
      income (loss)
            
            $
            (337,780
            )
            
            $
            (343,551
            )
            
            $
            81,341
            
            
            $
            (349,233
            )Net
      earnings (loss) per share:Basic
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            0.00
            
            
            $
            (0.01
            )Diluted
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            0.00
            
            
            $
            (0.01
            )Weighted
      average shares outstanding:Basic
            
            
            53,946,278
            
            
            
            49,794,498
            
            
            
            53,290,855
            
            
            
            49,791,425Diluted
            
            
            53,946,278
            
            
            
            49,794,498
            
            
            
            54,103,693
            
            
            
            49,791,425See
      accompanying notes.





F-2
 Table of Contents


Findex.com, Inc.CONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)Six
      Months Ended June 30,
              
              
              2008
              
              
              
              2007Cash
      flows from operating activities:Cash
      received from customers
              
              $
              1,186,281
              
              
              $
              1,835,864Cash
      paid to suppliers and employees
              
              
              (1,368,073)
              
              
              
              (1,580,906)Other
      operating activities, net
              
              
              11,937
              
              
              
              (11,195)Net
      cash (used) provided by operating activities
              
              
              (169,855)
              
              
              
              243,763Cash
      flows from investing activities:Software
      development costs
              
              
              (125,091)
              
              
              
              (191,451)FormTool
      purchase
              
              
              (100,000)
              
              
              
              ---Deposits
      refunded (paid)
              
              
              2,700
              
              
              
              (41,189)Other
      investing activities, net
              
              
              (51,280)
              
              
              
              (11,334)Net
      cash used by investing activities
              
              
              (273,671)
              
              
              
              (243,974)Cash
      flows from financing activities:Payment
      made for settlement of derivative liabilities
              
              
              (150,000)
              
              
              
              ---Payments
      made on long-term notes payable
              
              
              (17,270)
              
              
              
              (45,009)Net
      cash used by financing activities
              
              
              (167,270)
              
              
              
              (45,009)Net
      (decrease) increase in cash and cash equivalents
              
              
              (610,796)
              
              
              
              (45,220)Cash
      and cash equivalents, beginning of year
              
              
              1,134,547
              
              
              
              48,672Cash
      and cash equivalents, end of period
              
              $
              523,751
              
              
              $
              3,452Reconciliation
      of net loss to cash flows from operating activities:Net
      income (loss)
              
              $
              81,341
              
              
              $
              (349,233)Adjustments
      to reconcile net income (loss) to net cash (used)
      provided by operating activities:Software
      development costs amortized
              
              
              157,128
              
              
              
              160,433Depreciation
      & amortization
              
              
              224,703
              
              
              
              286,485Bad
      debts provision
              
              
              2,293
              
              
              
              17,164Noncash
      operating expenses
              
              
              34,521
              
              
              
              ---Gain
      on fair value adjustment of derivatives
              
              
              (305,620)
              
              
              
              (53,745)Gain
      on settlement of derivative liabilities
              
              
              (450,654)
              
              
              
              ---Gain
      on sale of property and equipment
              
              
              ---
              
              
              
              (551)Change
      in assets and liabilities:Decrease
      (increase) in accounts receivable
              
              
              84,791
              
              
              
              15,892Decrease
      (increase) in inventories
              
              
              6,311
              
              
              
              34,631Decrease
      in other current assets
              
              
              35,947
              
              
              
              3,569(Decrease)
      increase in accrued royalties
              
              
              58,437
              
              
              
              43,706(Decrease)
      in accounts payable
              
              
              26,384
              
              
              
              45,606(Decrease)
      increase in other liabilities
              
              
              (125,437)
              
              
              
              39,806Net
      cash (used) provided by operating activities
              
              $
              (169,855)
              
              
              $
              243,763Schedule
      of Noncash Investing and Financing Activities:Long-term
      note payable issued for FormTool purchase
              
              $
              85,934
              
              
              $
              ---Equity
      issued for FormTool purchase
              
              $
              40,000
              
              
              $
              ---See
      accompanying notes.


F-3
 Table of Contents


Findex.com, Inc.


Notes
to Condensed Consolidated Financial Statements


June
30, 2008


(Unaudited)





NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





BASIS
OF PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with Generally Accepted Accounting Principles for interim
financial information and with the instructions to Form 10-Q and Article 8 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by Generally Accepted Accounting Principles for complete
financial statements. The accompanying unaudited condensed consolidated
financial statements reflect all adjustments that, in the opinion of management,
are considered necessary for a fair presentation of the financial position,
results of operations, and cash flows for the periods presented. The results of
operations for such periods are not necessarily indicative of the results
expected for the full fiscal year or for any future period. The December 31,
2007 condensed consolidated balance sheet was derived from our audited financial
statements at that date.  The accompanying financial statements should
be read in conjunction with the audited consolidated financial statements of
Findex.com, Inc. included in our Form 10-KSB for the fiscal year ended December
31, 2007.





USE
OF ESTIMATES





The
preparation of consolidated financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and the
accompanying notes. Significant estimates used in the consolidated financial
statements include the estimates of (i) doubtful accounts, obsolete inventory,
sales returns, price protection and rebates, (ii) provision for income taxes and
realizability of the deferred tax assets, and (iii) the life and realization of
identifiable intangible assets. The amounts we will ultimately incur or recover
could differ materially from current estimates.





INVENTORY





Inventory,
including out on consignment, consists primarily of software media, manuals and
related packaging materials and is recorded at the lower of cost or market
value, determined on a first-in, first-out, and adjusted on a per-item,
basis.





ACCOUNTING
FOR LONG-LIVED ASSETS





We review
property and equipment and intangible assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability is measured by comparison of our carrying amount
to future net cash flows the assets are expected to generate. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the asset exceeds its fair market value.
Property and equipment to be disposed of are reported at the lower of the
carrying amount or fair value less costs to sell.





INTANGIBLE
ASSETS





In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142,
Goodwill and Other Intangible
Assets, intangible assets with an indefinite useful life are not
amortized. Intangible assets with a finite useful life are amortized on the
straight-line method over the estimated useful lives, generally three to ten
years.





F-4
 Table of Contents


SOFTWARE
DEVELOPMENT COSTS





In
accordance with SFAS No. 86, Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed, software development
costs are expensed as incurred until technological feasibility and marketability
has been established, generally with release of a beta version for customer
testing. Once the point of technological feasibility and marketability is
reached, direct production costs (including labor directly associated with the
development projects), indirect costs (including allocated fringe benefits,
payroll taxes, facilities costs, and management supervision), and other direct
costs (including costs of outside consultants, purchased software to be included
in the software product being developed, travel expenses, material and supplies,
and other direct costs) are capitalized until the product is available for
general release to customers. We amortize capitalized costs on a
product-by-product basis. Amortization for each period is the greater of the
amount computed using (i) the straight-line basis over the estimated product
life (generally from 12 to 18 months), or (ii) the ratio of current revenues to
total projected product revenues. Total cumulative capitalized software
development costs were $992,587, less accumulated amortization of $590,255 at
June 30, 2008.





Capitalized
software development costs are stated at the lower of amortized costs or net
realizable value. Recoverability of these capitalized costs is determined at
each balance sheet date by comparing the forecasted future revenues from the
related products, based on management’s best estimates using appropriate
assumptions and projections at the time, to the carrying amount of the
capitalized software development costs. If the carrying value is determined not
to be recoverable from future revenues, an impairment loss is recognized equal
to the amount by which the carrying amount exceeds the future revenues. To date,
no capitalized costs have been written down to net realizable
value.





SFAS No.
2, Accounting for Research and
Development Costs, established accounting and reporting standards for
research and development. In accordance with SFAS No. 2, costs we incur to
enhance our existing products after general release to the public (bug fixes)
are expensed in the period they are incurred and included in research and
development costs. Research and development costs incurred prior to
determination of technological feasibility and marketability and after general
release to the public and charged to expense were $103,955 and $60,569 for the
six months ended June 30, 2008 and 2007, respectively, included in general and
administrative expenses.





We
capitalize costs related to the development of computer software developed or
obtained for internal use in accordance with the American Institute of Certified
Public Accountants Statement of Position (“SOP”) 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. Software obtained for
internal use has generally been enterprise level business and finance software
that we customize to meet our specific operational needs. We have not sold,
leased, or licensed software developed for internal use to our customers and
have no intention of doing so in the future.





We
capitalize costs related to the development and maintenance of our website in
accordance with Financial Accounting Standard Board’s (“FASB’s”) Emerging Issues
Task Force (“EITF”) Issue No. 00-2, Accounting for Website Development
Costs. Under EITF Issue No. 00-2, costs expensed as incurred are as
follows:





▪
            planning
      the website,▪
            developing
      the applications and infrastructure until technological feasibility is
      established,▪
            developing
      graphics such as borders, background and text colors, fonts, frames, and
      buttons, and▪
            operating
      the site such as training, administration and
  maintenance.





Capitalized
costs include those incurred to:





▪
            obtain
      and register an Internet domain name,▪
            develop
      or acquire software tools necessary for the development
    work,▪
            develop
      or acquire software necessary for general website
    operations,▪
            develop
      or acquire code for web applications,▪
            develop
      or acquire (and customize) database software and software to integrate
      applications such as corporate databases and accounting systems into web
      applications,▪
            develop
      HTML web pages or templates,▪
            install
      developed applications on the web server,▪
            create
      initial hypertext links to other websites or other locations within the
      website, and▪
            test
      the website applications.





F-5
 Table of Contents


We
amortize website development costs on a straight-line basis over the estimated
life of the site, generally 36 months. Total cumulative website development
costs, included in other assets on our condensed consolidated balance sheets,
were $167,171, less accumulated amortization of $86,289 at June 30,
2008.





RESTRICTED
CASH





Restricted
cash represents cash held in reserve by our merchant banker to allow for a
potential increase in credit card charge backs from increased consumer
purchases.  Total restricted cash at June 30, 2008 included in Other
assets on the condensed consolidated balance sheets was $40,000.





REVENUE
RECOGNITION





We derive
revenues from the sale of packaged software products, product support and
multiple element arrangements that may include any combination of these items.
We recognize software revenue for software products and related services in
accordance with SOP 97-2, Software Revenue Recognition,
as modified by SOP 98-9,Modification of SOP 97-2, With Respect to Certain Transactions. We
recognize revenue when persuasive evidence of an arrangement exists (generally a
purchase order), we have delivered the product, the fee is fixed or determinable
and collectibility is probable.





In some
situations, we receive advance payments from our customers. We defer revenue
associated with these advance payments until we ship the products or offer the
support.





In
accordance with EITF Issue No. 01-9, Accounting for Consideration Given
by a Vendor to a Customer or a Reseller of the Vendor’s Product, we
generally account for cash considerations (such as sales incentives – rebates
and coupons) that we give to our customers as a reduction of revenue rather than
as an operating expense.





Product
Revenue





We
typically recognize revenue from the sale of our packaged software products when
we ship the product. We sell some of our products on consignment to a limited
number of resellers. We recognize revenue for these consignment transactions
only when the end-user sale has occurred. Revenue for software distributed
electronically via the Internet is recognized when the customer has been
provided with the access codes that allow the customer to take immediate
possession of the software on its hardware and evidence of the arrangement
exists (web order).





Some of
our software arrangements involve multiple copies or licenses of the same
program. These arrangements generally specify the number of simultaneous users
the customer may have (multi-user license), or may allow the customer to use as
many copies on as many computers as it chooses (a site license). Multi-user
arrangements, generally sold in networked environments, contain fees that vary
based on the number of users that may utilize the software simultaneously. We
recognize revenue when evidence of an order exists and upon delivery of the
authorization code to the consumer that will allow them the limited simultaneous
access. Site licenses, generally sold in non-networked environments, contain a
fixed fee that is not dependent on the number of simultaneous users. Revenue is
recognized when evidence of an order exists and the first copy is delivered to
the consumer.





Many of
our software products contain additional content that is “locked” to prevent
access until a permanent access code, or “key,” is purchased. We recognize
revenue when evidence of an order exists and the customer has been provided with
the access code that allows the customer immediate access to the additional
content. All of the programs containing additional locked content are fully
functional and the keys are necessary only to access the additional content. The
customer’s obligation to pay for the software is not contingent on delivery of
the “key” to access the additional content.





We reduce
product revenue for estimated returns and price protections that are based on
historical experience and other factors such as the volume and price mix of
products in the retail channel, trends in retailer inventory and economic trends
that might impact customer demand for our products. We also reduce product
revenue for the estimated redemption of end-user rebates on certain current
product sales. Our rebate reserves are estimated based on the terms and
conditions of the specific promotional rebate program, actual sales during the
promotion, the amount of redemptions received and historical redemption trends
by product and by type of promotional program. We did not offer any rebate
programs to our customers during the three and six months ended June 30, 2008
and 2007 and maintain a reserve for rebate claims remaining unpaid from 2000 and
2001.





F-6
 Table of Contents


Service
Revenue





We offer
several technical support plans and recognize support revenue over the life of
the plans, generally one year.





Multiple
Element Arrangements





We also
enter into certain revenue arrangements for which we are obligated to deliver
multiple products or products and services (multiple elements). For these
arrangements, which include software products, we allocate and defer revenue for
the undelivered elements based on their vendor-specific objective evidence
(“VSOE”) of fair value. VSOE is generally the price charged when that element is
sold separately.





In
situations where VSOE exists for all elements (delivered and undelivered), we
allocate the total revenue to be earned under the arrangement among the various
elements, based on their relative fair value. For transactions where VSOE exists
only for the undelivered elements, we defer the full fair value of the
undelivered elements and recognize the difference between the total arrangement
fee and the amount deferred for the undelivered items as revenue (residual
method). If VSOE does not exist for undelivered items that are services, we
recognize the entire arrangement fee ratably over the remaining service period.
If VSOE does not exist for undelivered elements that are specified products, we
defer revenue until the earlier of the delivery of all elements or the point at
which we determine VSOE for these undelivered elements.





We
recognize revenue related to the delivered products or services only if (i) the
above revenue recognition criteria are met, (ii) any undelivered products or
services are not essential to the functionality of the delivered products and
services, (iii) payment for the delivered products or services is not contingent
upon delivery of the remaining products or services, and (iv) we have an
enforceable claim to receive the amount due in the event that we do not deliver
the undelivered products or services.





Shipping
and Handling Costs





We record
the amounts we charge our customers for the shipping and handling of our
software products as product revenue and we record the related costs as cost of
sales on our condensed consolidated statements of operations.





Customer
Service and Technical Support





Customer
service and technical support costs include the costs associated with performing
order processing, answering customer inquiries by telephone and through
websites, email and other electronic means, and providing technical support
assistance to our customers. In connection with the sale of certain products, we
provide a limited amount of free technical support assistance to customers. We
do not defer the recognition of any revenue associated with sales of these
products, since the cost of providing this free technical support is
insignificant. The technical support is provided within one year after the
associated revenue is recognized and free product enhancements (bug fixes) are
minimal and infrequent. We accrue the estimated cost of providing this free
support upon product shipment and include it in cost of sales.





INCOME
TAXES





We
utilize SFAS No. 109, Accounting for Income Taxes.
SFAS No. 109 requires the use of the asset and liability method of accounting
for income taxes. Under this method, deferred income taxes are provided for the
temporary differences between the financial reporting basis and the tax basis of
our assets and liabilities. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled.





F-7
 Table of Contents


EARNINGS
PER SHARE





We follow
SFAS No. 128, Earnings Per
Share, to calculate and report basic and diluted earnings per share
(“EPS”). Basic EPS is computed by dividing income available to common
shareholders by the weighted average number of shares of common stock
outstanding for the period. Diluted EPS is computed by giving effect to all
dilutive potential shares of common stock that were outstanding during the
period. For us, dilutive potential shares of common stock consist of the
incremental shares of common stock issuable upon the exercise of stock options
and warrants for all periods, convertible notes payable and the incremental
shares of common stock issuable upon the conversion of convertible preferred
stock.





When
discontinued operations, extraordinary items, and/or the cumulative effect of an
accounting change are present, income before any of such items on a per share
basis represents the “control number” in determining whether potential shares of
common stock are dilutive or anti-dilutive. Thus, the same number of potential
shares of common stock used in computing diluted EPS for income from continuing
operations is used in calculating all other reported diluted EPS amounts. In the
case of a net loss, it is assumed that no incremental shares would be issued
because they would be anti-dilutive. In addition, certain options and warrants
are considered anti-dilutive because the exercise prices were above the average
market price during the period. Anti-dilutive shares are not included in the
computation of diluted EPS, in accordance with SFAS No. 128.





RECENT
ACCOUNTING PRONOUNCEMENTS





Noncontrolling
Interests





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of Accounting Research Bulletin
No. 51. SFAS No. 160 establishes accounting and reporting standards
for ownership interests in subsidiaries held by parties other than the parent,
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parent’s ownership interest and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal
years beginning after December 15, 2008. Management is currently evaluating
the potential impact, if any, of the adoption of SFAS No. 160 on our
consolidated financial statements.





Business
Combinations





In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations. SFAS
No. 141(R) establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS No. 141(R) also establishes disclosure
requirements to enable the evaluation of the nature and financial effects of the
business combination. SFAS No. 141(R) is effective for fiscal years beginning
after December 15, 2008. Management is currently evaluating the potential
impact, if any, of the adoption of SFAS No. 141(R) on our consolidated financial
statements.





Fair
Value Measurements





In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to
provide enhanced guidance for using fair value to measure assets and
liabilities.  The standard also expands disclosure requirements for
assets and liabilities measured at fair value, how fair value is determined, and
the effect of fair value measurements on earnings.  The standard
applies whenever other authoritative literature requires, or permits, certain
assets or liabilities to be measured at fair value, but does not expand the use
of fair value.  SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. In February 2008, the FASB issued Staff
Positions 157-1 and 157-2 which partially defer the effective date of
SFAS No. 157 for one year for certain nonfinancial assets and
liabilities and remove certain leasing transactions from its scope. Management
is currently evaluating the potential impact, if any, of the provisions of SFAS
No. 157 on its consolidated financial statements.





F-8
 Table of Contents


Derivative
Instruments





In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, to improve financial reporting about
derivative instruments and hedging activities.  The standard requires
enhanced disclosures to enable investors to better understand their effects on
an entity’s financial position, financial performance, and cash
flows.  SFAS No. 161 is effective for fiscal years and interim periods
beginning after November 15, 2008.  Management is currently evaluating
the potential impact, if any, of the provisions of SFAS No. 161





RECLASSIFICATIONS





Certain
accounts in our 2007 financial statements have been reclassified for comparative
purposes to conform with the presentation in our 2008 financial
statements.





NOTE
2 – GOING CONCERN





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with Generally Accepted Accounting Principles in the
United States applicable to a going concern. As of June 30, 2008, we had a
year-to-date net income of$81,341, and negative working
capital of $895,177 and $1,014,565, and an accumulated deficit of $7,619,147 and
$7,700,489 as of June 30, 2008 and December 31, 2007, respectively. Although
these factors raise substantial doubt as to our ability to continue as a going
concern through December 31, 2008, we have taken several actions to mitigate
against this risk. These actions include relying on the approximately $509,000
cash reserve from the sale of our Membership Plus product line and pursuing
mergers and acquisitions that will provide profitable operations and positive
operating cash flow.





NOTE
3 – INVENTORIES





At June
30, 2008, inventories consisted of the following:





Raw
      materials
            
            $
            55,664Finished
      goods
            
            
            44,277Less
      reserve for obsolete inventory
            
            
            (12,400
            )Inventories
            
            $
            87,541





NOTE
4 – PRODUCT LINE ACQUISITION





On
February 25, 2008, we acquired the FormTool software product line from ORG
Professional, LLC.  The purchase price of approximately $226,000 was
comprised as follows:





Description
            
            AmountFair
      value of common stock
            
            $
            40,000Cash
            
            
            100,000Promissory
      note
            
            
            85,934Total
            
            $
            225,934





The fair
value of our common stock was determined based on 1,000,000 restricted shares of
our common stock issued and priced at the closing price as of February 22, 2008
($0.04).  See Note 8.





The
allocation of the purchase price to the assets acquired based on their estimated
fair values was as follows:





Description
            
            AmountTrademark/Tradename
            
            $
            67,780Internet
      domain names
            
            
            33,890Customer
      list
            
            
            22,594Copyrights
            
            
            67,780Computer
      software code
            
            
            22,594Distribution
      agreements
            
            
            11,296Total
            
            $
            225,934





F-9
 Table of Contents


The
assets will be amortized over a period of years as follows:





Description
            
            Estimated
      Remaining Life (years)Trademark/Tradename/Copyrights
            
            10Internet
      domain names
            
            5Customer
      list/Computer software code
            
            3Distribution
      agreements (remaining contract term)
            
            .33





One of
our outside directors currently owns a 5% equity interest in ORG Professional,
LLC, and agreed to forego any direct personal economic benefit to which he would
otherwise be entitled, including the restricted shares of our common stock
issuable as part of the consideration.





During
the three and six months ended June 30, 2008, sales from the FormTool software
product line were approximately 1% and 2%, respectively, of our gross
sales.





NOTE
5 – RESERVES AND ALLOWANCES





At June
30, 2008, the allowance for doubtful accounts included in Accounts receivable,
trade, net, consisted of the following:





Balance
      December 31, 2007
            
            $
            2,000Bad
      debts provision (included in Other operating expenses)
            
            
            2,293Accounts
      written off
            
            
            (726
            )Collection
      of accounts previously written off
            
            
            633Balance
      June 30, 2008
            
            $
            4,200





At June
30, 2008, the reserve for obsolete inventory included in Inventories consisted
of the following:





Balance
      December 31, 2007
            
            $
            14,400Provision
      for obsolete inventory
            
            
            11,800Obsolete
      inventory written off
            
            
            (13,800
            )Balance
      June 30, 2008
            
            $
            12,400





At June
30, 2008, the reserve for sales returns included in Other current liabilities
consisted of the following:





Balance
      December 31, 2007
            
            $
            95,009Return
      provision – sales
            
            
            118,300Return
      provision – cost of sales
            
            
            (17,745
            )Returns
      processed
            
            
            (115,179
            )Balance
      June 30, 2008
            
            $
            80,385





NOTE
6 – DERIVATIVE LIABILITIES





In
November 2004, we issued two five-year warrants to purchase up to an aggregate
of 21,875,000 shares of our common stock in connection with a certain Stock
Purchase Agreement completed with a New York-based private investment
partnership on July 19, 2004. The first warrant entitled the holder to purchase
up to 10,937,500 shares of our common stock at a price of $0.18 per share, and
the second warrant entitled the holder to purchase up to 10,937,500 additional
shares of our common stock at a price of $0.60 per share. Each warrant was
subject to standard adjustment provisions and each provided for settlement in
registered shares of our common stock and may have been, at the option of the
holder, settled in a cashless, net-share settlement. These warrants were
accounted for as a liability according to the guidance of EITF 00-19 and the
fair value of each warrant was determined using the Black-Scholes valuation
method.





F-10
 Table of Contents


The
warrants were revalued at each measurement date by using parameters existing
thereon, reducing the expected term to reflect the passing of time, and using
the stock price at the measurement date. Net fair value adjustments included on
the condensed consolidated statements of operations were income adjustments of
$305,620 and $53,745 for the six months ended June 30, 2008 and 2007,
respectively.  Income adjustments generally reflect a decrease in the
market price of our common stock between measurement dates whereas expense
adjustments would generally reflect an increase in the market price of our
common stock between measurement dates.  The income adjustment
recorded for the six months ended June 30, 2008 reflects the difference between
measurement parameters that existed on March 5, 2008 and December 31,
2007.





On March
6, 2008, we entered into and consummated an agreement with the holder pursuant
to which the outstanding common stock purchase warrants held by them, which were
subject to derivative treatment, were immediately canceled in exchange for a
single cash payment in the amount of $150,000.  As a result of this
transaction, these warrants are now null and void for all purposes (See Note
8).  Pursuant to this cancellation, we recorded a gain on the
settlement of derivative liabilities in the amount of $450,654, which represents
the difference between the cash payment and the Black-Scholes calculated
liability as of March 5, 2008.  The warrant cancellation has
eliminated 21,875,000 potentially dilutive shares and eliminated the future
non-cash effects associated with the volatility of our stock price.





NOTE
7 – DEBT





At June
30, 2008, long-term debt consisted of the following:





Capital
      lease obligation payable to a corporation due November 2009 in monthly
      installments of $1,144, including interest at 11.7%. Secured by telephone
      equipment.
            
            $
            18,802Unsecured
      term note payable to a shareholder due March 2008 in monthly installments
      of $10,000, plus interest at 8%, through April 2007, and monthly
      installments of $20,000, plus interest at 8%, beginning May
      2007.
            
            
            56,000Unsecured
      term note payable to a limited liability company due February 2010 in
      monthly installments of $4,167, including simple interest at 15%. See Note
      4.
            
            
            73,330Total
      Long-term debt
            
            
            148,132Less:  Current
      maturities
            
            
            (110,082
            )Long-term
      debt, net
            
            $
            38,050


At June
30, 2008, we were current on the capital lease obligation and the unsecured term
note payable to a limited liability company.  We remain in arrears for
the final three payments of the unsecured term note payable to a
shareholder.


NOTE
8 – STOCKHOLDERS’ EQUITY





COMMON
STOCK





In
February 2008, we issued a total of 1,000,000 restricted shares of common stock
to a third party, at the closing price as of February 25, 2008 ($0.04), as part
of the acquisition of the FormTool software product line. This issuance was
valued at $40,000.





In April
2008, we committed to issue a total of 143,337 restricted shares of common stock
to three members of our management team, at the closing price as of April 14,
2008 ($0.042), in lieu of cash payment, net of appropriate tax withholdings, of
the amounts accrued for their 2007 bonus.  This issuance was valued at
$6,020.





In April
2008, we committed to issue a total of 678,571 restricted shares of common stock
to our outside directors, at the closing price as of April 14, 2008 ($0.042) in
lieu of cash payments of amounts accrued for service as members of our board
from the period of July 1, 2007 through March 31, 2008.  This issuance
was valued at $28,500.





F-11
 Table of Contents


COMMON
STOCK WARRANTS





In
February 2008, warrants to purchase up to 125,000 restricted shares of our
common stock with an exercise price of $0.148 per share expired
unexercised.





In March
2008, a warrant to purchase up to 10,937,500 shares of our common stock with an
exercise price of $0.18 per share and a warrant to purchase up to 10,937,500
shares of our common stock with an exercise price of $0.60 per share were
canceled in exchanged for a single cash payment of $150,000.  These
warrants are now null and void for all purposes as a result of this
transaction.  See Note 6.





NOTE
9 – EARNINGS PER COMMON SHARE





The
following table shows the amounts used in computing earnings per common share
and the average number of shares of dilutive potential common
stock:





For
      the Three Months Ended June 30,
            
            2008
            
            
            2007Net
      loss
            
            $
            (337,780
            )
            
            $
            (343,551
            )Preferred
      stock dividends
            
            
            ---
            
            
            
            ---Net
      loss available to common shareholders
            
            $
            (337,780
            )
            
            $
            (343,551
            )Basic
      weighted average shares outstanding
            
            
            53,946,278
            
            
            
            49,794,498Dilutive
      effect of:Stock
      options
            
            
            ---
            
            
            
            ---Warrants
            
            
            ---
            
            
            
            ---Diluted
      weighted average shares outstanding
            
            
            53,946,278
            
            
            
            49,794,498





For
      the Six Months Ended June 30,
            
            2008
            
            
            2007Net
      income (loss)
            
            $
            81,341
            
            
            $
            (349,233
            )Preferred
      stock dividends
            
            
            ---
            
            
            
            ---Net
      income (loss) available to common shareholders
            
            $
            81,341
            
            
            $
            (349,233
            )Basic
      weighted average shares outstanding
            
            
            53,290,855
            
            
            
            49,791,425Dilutive
      effect of:Stock
      options
            
            
            ---
            
            
            
            ---Warrants
            
            
            812,838
            
            
            
            ---Diluted
      weighted average shares outstanding
            
            
            54,103,693
            
            
            
            49,791,425





NOTE
10 – COMMITMENTS AND CONTINGENCIES





We are
subject to legal proceedings and claims that arise in the ordinary course of our
business. In the opinion of management, the amount of ultimate liability with
respect to these actions will not materially affect our financial statements
taken as a whole.





We
entered into a license agreement in June 1999 with Parsons Technology, Inc., a
subsidiary of TLC, a copy of which has since been assigned to Riverdeep, Inc.,
the latest licensor-assignee in a succession of assignments that have occurred
since the original agreement. The license, as we acquired it in 1999, provided
us with the right, for a term of ten years, to publish, use, distribute,
sublicense and sell, exclusively worldwide in non-secular channels and
non-exclusively in secular channels, a collection of top-selling
Christian-related software titles and content owned by Parsons
Technology.  In October 2003, we reached settlement in a dispute with
The Zondervan Corporation and TLC which extended indefinitely the term of the
software license agreement.





F-12
 Table of Contents


Our
employment agreements with our management team each contain a provision for an
annual bonus equal to 1% of our income from operations adjusted for other income
and interest expense (4% total). We accrue this bonus on a quarterly basis. Our
management team consists of the following:





Chief
      Executive Officer
            
            
            Chief
      Financial Officer
            
            
            Chief
      Technology Officer
            
            
            Vice
      President of SalesBase
      Annual Salary
            
            $
            150,000
            
            
            $
            110,000
            
            
            $
            150,000
            
            
            $
            110,000





In
addition to the bonus provisions and annual base salary, each employment
agreement provides for payment of the following for termination by reason of
disability.





Accrued
      Base Salary
            
            
            Accrued
      Management Bonus
            
            
            Vested
      Deferred Vacation CompensationIncluded
      in other current liabilities at June 30, 2008
            
            $
            23,898
            
            
            $
            ---
            
            
            $
            39,282





The
agreements also provide for severance compensation equal to the then base salary
until the later of (i) the expiration of the term of the agreement as set forth
therein or (ii) one year, when the termination is other than for cause
(including termination by reason of disability). There is no severance
compensation in the event of voluntary termination or termination for
cause.





In 2003
and 2004, we reduced our reserve for rebates payable based, in part, on our
ability to meet the financial obligation of claims carried forward from our last
rebate program in 2001. As such, we may have a legal obligation to pay rebates
in excess of the liability recorded.





We have
included content in QuickVerse, our flagship software product, under contracts
with publisher providers that have expired.  We are currently pursuing
resolution, however, there is no guarantee that we will be able to secure a new
agreement, or an extension, and should any of the publishers demand we cease and
desist including their content, the unknown potential negative impact could be
material.





Our
royalty agreements for new content generally provide for advance payments to be
made upon contract signing.  In addition, several new agreements
provide for additional advance payments to be made upon delivery of usable
content and publication.  We accrue and pay these advances when the
respective milestone is met.





We do not
collect sales taxes or other taxes with respect to shipments of most of our
goods into most states in the U.S.  Our fulfillment center and
customer service center networks, and any future expansion of those networks,
along with other aspects of our evolving business, may result in additional
sales and other tax obligations.  One or more states may seek to
impose sales or other tax collection obligations on out-of-jurisdiction
companies that engage in e-commerce.  A successful assertion by one or
more states that we should collect sales or other taxes on the sale of
merchandise or services could result in substantial tax liabilities for past
sales, decrease our ability to compete with traditional retailers, and otherwise
harm our business.





Currently,
decisions of the U.S. Supreme Court restrict the imposition of obligations to
collect state and local taxes and use taxes with respect to sales made over the
Internet.  However, a number of states, as well as the U.S. Congress,
have been considering various initiatives that could limit or supersede the
Supreme Court’s constitutional concerns and resulted in a reversal of its
current position, we could be required to collect sales and use taxes in
additional states.  The imposition by state and local governments of
various taxes upon Internet commerce could create administrative burdens for us,
put us at a competitive disadvantage if they do not impose similar obligations
on all of our online competitors and decrease our future sales.





NOTE
11 – RISKS AND UNCERTAINTIES





Our
future operating results may be affected by a number of factors. We depend upon
a number of major inventory and intellectual property suppliers. If a critical
supplier had operational problems or ceased making materials available to us,
operations could be adversely affected.





F-13
 Table of Contents


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.





Cautionary
Statement Regarding Forward-Looking Statements





Certain
statements made in this Quarterly Report on Form 10-Q are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations.
Such statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of Findex.com, Inc.
(“we”, “us”, “our” or the “Company”) to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.  The forward-looking statements included
herein are based on current expectations that involve numerous risks and
uncertainties. The Company's plans and objectives are based, in part, on
assumptions involving the continued expansion of
business.  Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company.  Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Quarterly Report will prove to be
accurate.  In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.





This
information should be read in conjunction with our unaudited condensed
consolidated financial statements and the notes thereto included in Item 1 of
Part I of this quarterly report, and our audited financial statements and the
notes thereto and our Management’s Discussion and Analysis or Plan of Operation
contained in our annual report on Form 10-KSB for the fiscal year ended December
31, 2007.





Description
of Business





We
develop, publish, market, distribute and directly sell off-the-shelf consumer
and organizational software products for PC, Macintosh®
and PDA platforms. We develop our software products through in-house initiatives
supplemented by outside developers. We market and distribute our software
products principally through direct marketing and Internet sales programs, but
also through secular and non-secular wholesale retailers.





We are in
the early stages of a defining transformative period in our development. In
recent years, we have come to be recognized as a consumer desktop software
company that serves a demographic defined largely by an interest in Christianity
and faith-based “inspirational” values. The nature of our products historically,
and the fact that our product lines have not extended materially beyond the
boundaries of this affinity group, have fostered this perception. Indeed, as the
publisher of one of the industry-leading Bible study desktop software products,
QuickVerse®,
we are known to many users of that product only as “QuickVerse”, not Findex.
While we believe that the QuickVerse®
brand is among our most valuable assets, and we greatly value the goodwill that
our reputation in this regard has engendered, we also believe that working to
expand that reputation into one which is more closely associated with providing
high quality branded software and content products generally – and ones that
extend across both consumer and business segments – will afford us significantly
greater opportunities in both the near and long term to steadily increase
revenues and earnings, and, ultimately, to enhance shareholder value. We
believe, moreover, that coupling this strategic diversification with a
commitment to an increasing reliance on a sales and distribution model through
which our products are sold on a subscription basis and can be purchased and
downloaded directly from us online will be instrumental in furthering these
financial objectives. Consequently, while we expect to continue for the
indefinite future to invest substantially in the growth and development of our
existing primary software titles and content, we also expect as we go forward to
invest substantially in not only building a significantly more diverse line of
product titles, but also in building our technology platform and infrastructure
so as to enable our evolution over time into a principally Webcentric provider
of software solutions, content, and online products.





-1-
 Table of Contents


As part
of that objective, we acquired FormTool.com and the FormTool®
line of products in February of this year. In the third quarter of 2008, we
expect to re-launch the FormTool.com website as an online marketplace for
purchasing the FormTool®
line of form creation and form filler products, and also a one-stop shop for
finding, purchasing and downloading customizable forms for a wide range of
business and consumer needs. Our model will include the ability to purchase
forms on an individual basis, in bulk packs, or on a subscription basis.
Further, and in partnership with a third party, through FormTool.com, we will
offer secure data storage for all types of documents, forms and other media on a
subscription basis. This service will allow for data backup and security as well
as remote access to critical data from anywhere via the Internet. This service
will be targeted to both the business and consumer markets.





Management
Overview





During
the second quarter of 2008, we continued to concentrate on our core product,
QuickVerse®,
and its technological features in order to meet our development schedule and our
annual upgrade release for this product line.  Our development team
worked on a number of projects which resulted in four new content collections
for our QuickVerse®
product line.  These collections include:





▪
            H.
      A. Ironside Collection with a retail price of $199.95,▪
            Timothy
      Dwight Collection with a retail price of $49.95,▪
            John
      Calvin Collection with a retail price of $49.95; and▪
            Arthur
      W. Pink Collection with a retail price of
  $49.95.





In
addition, we launched a new feature on our website, www.quickverse.com,
called the Books tab which enables our QuickVerse®
customers to purchase additional content and immediately download that content
for use within their QuickVerse®
software.  Our Books tab currently features over 180 individual books
and/or collections with a range in retail price from $4.95 to $249.95. In June
2008, we released a free downloadable version of QuickVerse®
2008, which allows new customers to get a look and feel of our QuickVerse®
product line at no charge.  Over time, we anticipate the number of
downloadable options to grow substantially as we continue to expand our
technology platform and build our infrastructure in order to become a
principally Webcentric provider of software solutions, content and online
products.  Furthermore, and although there can be no assurance, we
anticipate the annual upgrade release of QuickVerse® to take
place during the fourth quarter of 2008.





During
February 2008, we acquired FormTool.com and the FormTool®
line of products.  The FormTool®
product line offers quality, professionally designed forms for business,
accounting, construction, sales, real estate, human resources and personal
organization needs.  Although there can be no assurance, during the
third quarter of 2008, we expect to re-launch the FormTool.com website as an
online marketplace for purchasing the FormTool®
product line, as well as a “one-stop” shop for finding, purchasing and
downloading customizable forms for a wide range of business and consumer
needs.





Results of Operations for Six Months Ending June
30, 2008 and June 30, 2007





Statement
      of Operations for Six Months Ending June 30
            
            2008
            
            
            2007
            
            
            ChangeNet
      revenues
            
            $
            1,132,515
            
            
            $
            1,758,331
            
            
            $
            (625,816
            )Cost
      of sales
            
            
            (490,215
            )
            
            
            (776,875
            )
            
            
            286,660Gross
      profit
            
            $
            642,300
            
            
            $
            981,456
            
            
            $
            (339,156
            )Sales,
      marketing and general and administrative expenses
            
            
            (1,323,099
            )
            
            
            (1,379,259
            )
            
            
            56,160Loss
      from operations
            
            $
            (680,799
            )
            
            $
            (397,803
            )
            
            $
            (282,996
            )Other
      income (expenses)
            
            
            5,866
            
            
            
            (15,275
            )
            
            
            21,141Gain
      on fair value adjustment of derivatives
            
            
            305,620
            
            
            
            53,745
            
            
            
            251,875Gain
      on settlement of derivative liabilities
            
            
            450,654
            
            
            
            ---
            
            
            
            450,654Income
      (loss) before income taxes
            
            $
            81,341
            
            
            $
            (359,333
            )
            
            $
            440,674Income
      tax benefit
            
            
            ---
            
            
            
            10,100
            
            
            
            (10,100
            )Net
      income (loss)
            
            $
            81,341
            
            
            $
            (349,233
            )
            
            $
            430,574





-2-
 Table of Contents


The
differing results of operations are primarily attributable to the
following:





▪
            a
      decrease in net revenues for the six months ended June 30, 2008 partly
      attributable to the following:▪
            an
      overall net decrease in unit sales of our QuickVerse®
      product line due to a reduction in the perceived value on the part of
      customers of certain upgrades based on the relative frequency
      thereof;▪
            the
      sale of our Membership Plus®
      product line during October 2007; and▪
            the
      decreased number of product releases;▪
            a
      decrease in cost of sales for the six months ended June 30, 2008 due
      primarily to decreased direct and royalty costs; and▪
            most
      notably for the six months ended June 30, 2008:▪
            the
      recognition of a gain related to the fair value adjustment of derivatives
      up to the settlement date of March 6, 2008 due to the fluctuation of our
      stock price; and▪
            the
      recognition of a gain on settlement of derivative liabilities in relation
      to warrants issued in November 2004 and which were canceled on March 6,
      2008 in exchange for a single cash payment ($150,000) that was less than
      the calculated fair value of the derivatives on such
  date.





Our
software products are highly seasonal. More than 50% of our annual sales are
expected to occur in the five months of September through January; the five
months of April through August are generally our weakest, generating less than
30% of our annual sales.





Revenues





The
following table presents our revenues for the six months ended June 30, 2008 and
June 30, 2007 and dollar and percentage changes from the prior
year.





ChangeRevenues
      for Six Months Ending June 30
            
            2008
            
            
            %
      to Sales
            
            
            2007
            
            
            %
      to Sales
            
            
            $
            
            
            
            %Gross
      revenues
            
            $
            1,249,932
            
            
            
            100
            %
            
            $
            1,980,108
            
            
            
            100
            %
            
            $
            (730,176
            )
            
            
            37
            %Less
      estimated sales returns and allowances
            
            
            (117,417
            )
            
            
            9
            %
            
            
            (221,777
            )
            
            
            11
            %
            
            
            104,360
            
            
            
            47
            %Net
      revenues
            
            $
            1,132,515
            
            
            
            91
            %
            
            $
            1,758,331
            
            
            
            89
            %
            
            $
            (625,816
            )
            
            
            36
            %





During
each of the six months ended June 30, 2008 and 2007, our sales efforts were
focused on directly targeting end-users through telemarketing and Internet
sales.  Our decrease in gross revenues for the six months ended June
30, 2008 was primarily attributed to the sale of our Membership Plus®
product line in October 2007. By way of comparison, Membership Plus®
product revenue was approximately $511,000 from January through June
2007.  In addition, during the six months ended June 30, 2007 we
released an upgrade to our QuickVerse®
Macintosh product line and had liquidation sales of our QuickVerse®
2006 product line (Windows and Macintosh editions).  In comparison,
during the six months ended June 30, 2008 we released four new content
collections for our QuickVerse®
customers but had no new upgrade releases on our current QuickVerse®
platforms. Finally, due to increased frequency and consistency in our
development schedule, and the annual releases of our flagship product,
QuickVerse®,
upgrade sales have not been increasing at as rapid a rate as they have in
previous years.  Although there can be no assurance, we anticipate
that our revenues related to the QuickVerse®
product line will increase in the future at rates generally consistent with our
industry sector as we continue to expand the content available for our
QuickVerse®
products, develop new products for multiple platforms, offer our products at a
range of price points intended to appeal to various market sub-segments and
offer new venues to gain access to the expanded content available for our
QuickVerse®
customers.





During
the six months ended June 30, 2008, we did recognize approximately $15,000 in
revenue from the FormTool®
product line, which we acquired in February 2008.  We do anticipate
our revenues in relation to the FormTool®
product line to increase in the near-term based on our anticipated launch of the
new and enhanced FormTool.com website during the third quarter of 2008 and our
release of an upgrade to the FormTool®
desktop product line in the third quarter of 2008.





-3-
 Table of Contents


Due to
the sale of our Membership Plus®
product line, we anticipate that our reported revenues will continue to
experience a substantial decline in the near term.  However, and
although there can be no assurance, we are currently pursuing opportunities for
strategic product line acquisitions, such as FormTool®,
which we are hopeful will enable us to achieve more favorable results of
operations than we have historically achieved throughout the period in which we
owned the Membership Plus®
product line.  Our divestiture of the Membership Plus®
product line was driven by a combination of our need to raise cash and a
strategic determination to begin a long-term shift in our product lines away
from those within the faith-based vertical market and more towards those that
extend across business-to-business and consumer segments more
generally.





As a
percentage of gross revenues, our sales returns and allowances decreased for the
six months ended June 30, 2008 compared to June 30, 2007 due to the increased
stability of our products. Typically, product returns trend upward after a new
version is released as distributors and retail stores return old product in
exchange for the new version release. Due to our upcoming annual release of
QuickVerse®,
we do anticipate our sales returns and allowances to follow this upward trend
within the fourth quarter of 2008. It is our objective to release enhanced
versions of our biggest-selling products on an annual basis generally going
forward, and as a percentage of gross revenues we anticipate sales returns and
allowances to decrease over time as a result of increased stability in the
functionality of our products, decreasing reliance on retail sales and
increasing reliance on direct sales, which have historically resulted in fewer
returns, and improved planning in the timing of new product version
releases.





Cost
of Sales





The
following table presents our cost of sales for the six months ended June 30,
2008 and June 30, 2007 and dollar and percentage changes from the prior
year.





ChangeCost
      of Sales for Six Months Ending June 30
            
            2008
            
            
            %
      to Sales
            
            
            2007
            
            
            %
      to Sales
            
            
            $
            
            
            
            %Direct
      costs
            
            $
            154,123
            
            
            
            12
            %
            
            $
            267,051
            
            
            
            13
            %
            
            $
            (112,928
            )
            
            
            42
            %Less
      estimated cost of sales returns and allowances
            
            
            (17,745
            )
            
            
            1
            %
            
            
            (33,465
            )
            
            
            2
            %
            
            
            15,720
            
            
            
            47
            %Amortization
      of software development costs
            
            
            157,128
            
            
            
            13
            %
            
            
            160,433
            
            
            
            8
            %
            
            
            (3,305
            )
            
            
            2
            %Royalties
            
            
            109,485
            
            
            
            9
            %
            
            
            254,800
            
            
            
            13
            %
            
            
            (145,315
            )
            
            
            57
            %Freight-out
            
            
            54,081
            
            
            
            4
            %
            
            
            79,840
            
            
            
            4
            %
            
            
            (25,759
            )
            
            
            32
            %Fulfillment
            
            
            33,143
            
            
            
            3
            %
            
            
            48,216
            
            
            
            2
            %
            
            
            (15,073
            )
            
            
            31
            %Cost
      of sales
            
            $
            490,215
            
            
            
            39
            %
            
            $
            776,875
            
            
            
            39
            %
            
            $
            (286,660
            )
            
            
            37
            %





The
decrease in direct costs for the six months ended June 30, 2008 is predominately
attributable to the sale of Membership Plus®.  As
a percentage of gross revenues, direct costs decreased slightly and we
anticipate the same for the future as we continue to keep pace with a more
intensive development schedule than we had generally maintained in the
past.





Royalties
decreased significantly in real terms and as a percentage of gross revenues for
the six months ended June 30, 2008 due to the following:





▪
            decreased
      royalty rates on our higher end QuickVerse®
      editions (i.e. Deluxe and Platinum) through a realignment of our content
      mix in the QuickVerse®
      2008 versions and▪
            a
      change in our sales mix for the six months ended June 30, 2008 which
      resulted in more sales of our lower end QuickVerse®
      edition, QuickVerse®
      2008 Bible Suite, compared to those sales of our top of the line
      QuickVerse®
      edition, QuickVerse®2008 Platinum.





However,
our royalty accruals are expected to increase in the future in real terms as
sales to new customers increase, more development projects are implemented for
new and/or enhanced products, and as we continue to expand the content available
for our QuickVerse®
line of products. Upgrade sales will remain only subject to royalties on their
content additions.





Freight
and fulfillment costs decreased in real terms as a result of our decreased sales
volume.  We do anticipate freight costs to increase in the future as a
percentage of gross revenues due to the escalating per unit freight costs
attributable to industry-wide rising fuel costs. Furthermore, due in large part
to the establishment of our own fulfillment center in June 2007, fulfillment
costs should remain relatively stable in the future as a percentage of gross
revenues.





-4-
 Table of Contents


The
amortization recognized during the six months ended June 30, 2008 resulted
mainly from the following software releases:





▪
            QuickVerse®
      2007 (released August 2006),▪
            QuickVerse®
      2007 Mobile (released December 2006),▪
            QuickVerse®
      2007 Macintosh (released March 2007),▪
            QuickVerse®
      2008 (released November 2007) and▪
            Multiple
      new content additions for QuickVerse®
      products (released April 2007 through May
2008).





Comparatively,
during the six months ended June 30, 2007, the amortization recognized resulted
mainly from the following software releases:





▪
            QuickVerse
      2006 Macintosh (released June 2005),▪
            QuickVerse
      2006 (released September 2005),▪
            QuickVerse®
      2007 (released August 2006),▪
            Membership
      Plus®
      2007 (released October 2006),▪
            QuickVerse®
      2007 Mobile (released December 2006) and▪
            QuickVerse®
      2007 Macintosh (released March
2007).





The
shorter timeframes between our product upgrades along with the increased amount
of product releases during the fiscal year 2007 led to the increased amount of
amortization as a percentage of gross revenues for the six months ended June 30,
2008.





In the
future, our objective is to realize overall increases in revenues due to
aggressive product development and release schedules as well as the acquisitions
of new product lines. We expect an increase in real terms, therefore, despite
the sale of our Membership Plus®
product line. Furthermore, as we implement our strategy to become a principally
Webcentric provider of online products we anticipate to experience a decrease in
cost of sales, specifically direct costs, freight and fulfillment, as more of
our products will become available for download.





Software
      Development Costs For
            
            Three
      Months Ending June 30,
            
            
            Six
      Months Ending June 30,2008
            
            
            2007
            
            
            2008
            
            
            2007Beginning
      balance
            
            $
            349,847
            
            
            $
            493,981
            
            
            $
            392,172
            
            
            $
            491,695Capitalized
            
            
            119,398
            
            
            
            81,745
            
            
            
            167,288
            
            
            
            191,450Amortized
      (Cost of sales)
            
            
            (66,913
            )
            
            
            (53,014
            )
            
            
            (157,128
            )
            
            
            (160,433
            )Ending
      Balance
            
            $
            402,332
            
            
            $
            522,712
            
            
            $
            402,332
            
            
            $
            522,712Research
      and development expense (General and administrative)
            
            $
            34,917
            
            
            $
            30,988
            
            
            $
            103,955
            
            
            $
            60,569





The
overall decrease in capitalized costs for the six months ended June 30, 2008 is
a result of the sale of our Membership Plus®
product line and our development staff having been faced with greater
maintenance challenges than anticipated, primarily in the first quarter of 2008,
in connection with the new layout and engine design within the QuickVerse®
2008 product line. The maintenance challenges also led to the relative increase
in research and development expense.  Despite these challenges, during
the three months ended June 30, 2008 our development team focused their efforts
on our upcoming annual release of QuickVerse®,
as well as several new content additions for our QuickVerse®
products, and we have experienced increased efficiency in our development output
(both internal and external).





-5-
 Table of Contents


Sales,
General and Administrative





ChangeSales,
      General and Administrative Costs for Six Months Ending June
      30
            
            2008
            
            
            %
      to Sales
            
            
            2007
            
            
            %
      to Sales
            
            
            $
            
            
            
            %Selected
      expenses:Commissions
            
            $
            66,959
            
            
            
            5
            %
            
            $
            109,723
            
            
            
            6
            %
            
            $
            (42,764
            )
            
            
            39
            %Advertising
      and direct marketing
            
            
            91,515
            
            
            
            7
            %
            
            
            92,802
            
            
            
            5
            %
            
            
            (1,287
            )
            
            
            1
            %Sales
      and marketing wages, reclassified
            
            
            180,758
            
            
            
            14
            %
            
            
            135,276
            
            
            
            7
            %
            
            
            45,482
            
            
            
            34
            %Other
      sales and marketing costs
            
            
            2,293
            
            
            
            0
            %
            
            
            17,164
            
            
            
            1
            %
            
            
            (14,871
            )
            
            
            87
            %Total
      sales and marketing
            
            $
            341,525
            
            
            
            26
            %
            
            $
            354,965
            
            
            
            19
            %
            
            $
            (13,440
            )
            
            
            4
            %Personnel
      costs
            
            $
            272,060
            
            
            
            22
            %
            
            $
            354,448
            
            
            
            18
            %
            
            $
            (82,388
            )
            
            
            23
            %Amortization
      and depreciation
            
            
            224,702
            
            
            
            18
            %
            
            
            286,485
            
            
            
            14
            %
            
            
            (61,783
            )
            
            
            22
            %Research
      and development
            
            
            103,955
            
            
            
            8
            %
            
            
            60,569
            
            
            
            3
            %
            
            
            43,386
            
            
            
            72
            %Corporate
      services
            
            
            64,280
            
            
            
            5
            %
            
            
            20,000
            
            
            
            1
            %
            
            
            44,280
            
            
            
            221
            %Other
      general and administrative costs
            
            
            316,577
            
            
            
            25
            %
            
            
            302,792
            
            
            
            15
            %
            
            
            13,785
            
            
            
            5
            %Total
      general and administrative
            
            $
            981,574
            
            
            
            78
            %
            
            $
            1,024,294
            
            
            
            51
            %
            
            $
            (42,720
            )
            
            
            4
            %Total
      sales, marketing, general and administrative
            
            $
            1,323,099
            
            
            
            104
            %
            
            $
            1,379,259
            
            
            
            70
            %
            
            $
            (56,160
            )
            
            
            4
            %





For the
six months ended June 30, 2008, total sales and marketing costs slightly
decreased but increased as a percentage of gross revenues due to the overall
decrease in gross revenues.  Commissions decreased for this period as
we continue to become less dependent on a third party for telemarketing
services.  We anticipate third party commissions to further decrease
in the future as we expand our in-house direct telemarketing sales team;
however, as a consequence of expanding our in-house direct telemarketing sales
team, we anticipate our sales and marketing wages to increase in the future
periods.  Advertising and direct marketing costs remained steady;
although we anticipate advertising and direct marketing costs to increase in
future periods as we continue to enhance our product visibility online, increase
and focus more on our direct marketing efforts, and increase the scope and
frequency of our print advertising campaigns in order to maximize sales
associated with new products, product enhancements and potential new product
lines.  During the six months ended June 30, 2008, sales and marketing
wages, reclassified, increased as we began to transform our customer service
department and its representatives into our in-house direct telemarketing sales
team in late 2007.





In
addition to the decrease in total net personnel costs, gross direct salaries and
wages, before adjustments of capitalized wages and reclassifications, decreased
approximately $53,000, from approximately $661,000 for the six months ended June
30, 2007 to approximately $608,000 for the six months ended June 30, 2008. The
decrease in direct salaries and wages was a result of the departure of our
marketing manager, a customer service representative and the further reduction
in our technical support staff in relation to the sale of our Membership
Plus®
product line. We do anticipate direct salaries and wages to increase nonetheless
in the future given our continued focus on expanding our direct telemarketing
sales team, marketing staff and product development staff.





The
decrease in the amortization and depreciation expense is mainly attributable to
the decrease in amortization. The software license we acquired in 1999, from
which we derive our base intellectual property rights associated with the
products that are responsible for generating the overwhelming majority of our
revenues (the “1999 license”), is being amortized over a 10 year useful life and
will have been fully amortized by the close of the year ending December 31,
2009. Amortization expense for the six months ended June 30, 2008 and 2007
reflect the continual amortization of the 1999 license as well as the
amortization of the FormTool®
assets we acquired in February 2008. The FormTool®
assets are amortized over a period of years that range from less than one year
to ten years and calculate to approximately $3,000 of amortization expense each
month.  Due to the sale of the Membership Plus®
product line, we no longer carry on our books the net value associated with the
Membership Plus®
product in relation to the 1999 license and, as a result, we no longer had the
corresponding amortization expense as of mid-October 2007. Finally, the
amortization expense for 2007 reflects the amortization of our website,
www.quickverse.com, the most recent version of which we launched during the
second quarter of 2004.  However, the decrease in the amortization
expense for the six months ended June 30, 2008 also reflects the
discontinuation/conclusion of the amortization of our www.quickverse.com
website.





-6-
 Table of Contents


Research
and development costs include direct production costs (including labor directly
associated with the development projects), indirect costs (including allocated
fringe benefits, payroll taxes, facilities costs and management supervision),
and other direct costs (including costs of outside consultants, purchased
software to be included in the software product being developed, travel
expenses, material and supplies, and other direct costs). The increase in
software development costs related to third-party developers and direct labor
expensed as research and development reflects less capitalization of research
and development costs for the six months ended June 30, 2008. During the first
quarter of 2008, our development staff was faced with greater maintenance issues
than anticipated due to a new layout and engine design within the
QuickVerse®
2008 product line which ultimately resulted in an increase in research and
development costs expensed.  In future periods, we anticipate research
and development expenses to increase as we expand our internal development team
and add new products and product versions, platforms and product
lines.





Corporate
service fees increased for the six months ended June 30, 2008 from engaging the
services of a consultant for business development related advisory services in
March 2007.  The consultant’s contract continues through June 2008,
and we anticipate renewing the consultant’s contract for another period of six
to twelve months as well as engaging additional business development consultants
in the future.





Gain
on Fair Value Adjustment of Derivatives





In
connection with the warrants issued in November 2004, a non-cash fair value
adjustment of approximately $306,000 and $54,000 has been included in other
income for the six months ended June 30, 2008 and 2007, respectively. These
warrants were accounted for as a liability according to the guidance of EITF
00-19, Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company’s Own Stock and the guidance of EITF 00-19-2, Accounting for Registration Payment
Arrangements.  As noted above, these warrants were canceled on
March 6, 2008 and there is no recognition, therefore, of a derivative liability
on our June 30, 2008 balance sheet.  Furthermore, we will not
experience a non-cash fair value adjustment related to these warrants which
would be included in other expenses or other income beyond the date of March 6,
2008.





Gain
on Settlement of Derivative Liabilities





On March
6, 2008, we entered into and consummated an agreement with Barron Partners, LP
in which warrants issued to that entity in November 2004 were immediately
canceled in exchange for a single cash payment to Barron Partners, LP in the
amount of $150,000.  As a result of this transaction, these warrants
are now null and void for all purposes.  We recorded a one time gain
during the six months ended June 30, 2008 due to the agreement calling for a
cash payment that was less than the Black-Scholes calculated fair value of the
derivatives on such date.





Income
Tax Benefit





We did
not record an income tax provision or benefit for the six months ended June 30,
2008. Based upon available evidence, there is uncertainty regarding our ability
to realize our deferred tax assets and we have therefore recorded a full
valuation allowance against the net deferred tax assets in our condensed
consolidated financial statements. Based on our estimates for 2009 and beyond,
we believe the uncertainty regarding the ability to realize our deferred tax
assets may diminish to the point where the recognition of our deferred tax
assets may be warranted in the future. If we determine that it is more likely
than not that we will be able to realize our deferred tax assets in the future,
an adjustment to the deferred tax asset valuation allowance would be recorded in
the period when such determination is made.





For the
six months ended June 30, 2007, we recorded an income tax benefit based upon our
estimate of realization of deferred tax assets arising primarily from net
operating loss carryforwards for federal income tax purposes. We based our
estimate of realization upon a number of factors, including cumulative taxable
income from two of the prior four years and the expectation of significant
taxable income before net operating loss carryforwards for 2007.





-7-
 Table of Contents


Liquidity
And Capital Resources





Our
primary needs for liquidity and capital resources are the working capital
requirements of our continued operations, which includes the ongoing internal
development of new products, expansion and upgrade of existing products, and
marketing and sales, as well as funding for the acquisition of new product lines
and/or companies. Despite the seasonality of our main product line and although
there can be no assurance, we believe cash generated through our continuing
operations will be at least minimally sufficient to sustain our continuing
operations, albeit with very limited growth. However, our pursuit of an
aggressive growth plan, whether based on internally developed products,
licensing opportunities, or strategic product line and/or company acquisitions,
will likely require funding from outside sources or the divestiture of one or
more existing product lines (as recently occurred with respect to our Membership
Plus® product
line). Funding from outside sources may include but is not limited to the
exercise of outstanding warrants and pursuit of other financing options such as
commercial loans, common stock and/or preferred stock issuances and convertible
notes. At this time, we have no legally committed funds for future capital
expenditures.





The
divestiture of our Membership Plus® product
line in October 2007 was driven by a combination of our need to raise cash and a
strategic determination to begin a long-term shift in our product lines away
from those within the faith-based vertical market and more towards those that
extend across the business-to-business and consumer segments more
generally.  With a portion of the funds we realized from the sale of
our Membership Plus® product
line, we purchased FormTool® in
February 2008 which was our first product line acquisition outside of the
faith-based market.  Although there can be no assurance, we anticipate
acquiring additional product lines and/or companies which will either replace or
increase the revenue and free cash flow previously produced by the Membership
Plus® product
line.





Working
      Capital
            
            June
      30, 2008
            
            
            December
      31, 2007Current
      assets
            
            $
            857,509
            
            
            $
            1,600,326Current
      liabilities
            
            $
            1,752,686
            
            
            $
            2,614,891Retained
      deficit
            
            $
            7,619,147
            
            
            $
            7,700,489





While
liquidity for our day-to-day continued operations remains an ongoing concern for
us, and while there can be no continuing assurance, given the fact that a
substantial portion of our net sales – 54% of which we collected during our last
fiscal year through credit card processing transactions – are able to be
collected in a much shorter timeframe (several days) than that in which we must
generally pay our trade payables (30 days) and our accrued royalties (quarterly,
semi-annually, or annually), the situation suggested by our consistently and
significantly negative ratio of current assets to current liabilities has
historically been manageable.





Cash
      Flows for Six Months Ending June 30
            
            2008
            
            
            2007
            
            
            Change
            
            
            %Cash
      flows (used) provided by operating activities
            
            $
            (169,855
            )
            
            $
            243,763
            
            
            $
            (413,618
            )
            
            
            170
            %Cash
      flows (used) by investing activities
            
            $
            (273,671
            )
            
            $
            (243,974
            )
            
            $
            (29,697
            )
            
            
            12
            %Cash
      flows (used) by financing activities
            
            $
            (167,270
            )
            
            $
            (45,009
            )
            
            $
            (122,261
            )
            
            
            272
            %





Net cash
used by operating activities increased for the six months ended June 30, 2008
primarily due to a reduction in cash collections, from reduced net revenues, and
continued payments made to employees, content providers and
vendors.





The
increase in net cash used by investing activities for the six months ended June
30, 2008 was primarily a result of the purchase of FormTool® in
February 2008. In connection to the FormTool®
purchase, we have increased our cash use for the development and re-launch of
the FormTool.com website.  Offsetting this to some extent, however,
was the fact that, during the six months ended June 30, 2008 we capitalized
fewer costs associated with software development as compared to the six months
ended June 30, 2007 due to maintenance issues as described above as well as the
lack of development work for the Membership Plus® product
line.





The
increase in net cash used by financing activities for the six months ended June
30, 2008 was the result of our settlement payment to Barron Partners, LP in the
amount of $150,000 in exchange for the cancellation of the warrants issued in
November 2004.





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Financing





We have
not secured bank financing due to our internal financial ratios and negative
working capital position and do not expect that we will be successful in
securing any such financing unless and until our ratios in this regard improve.
However, it may be possible to secure financing on our open accounts receivable
in order to satisfy our future financing needs. Equity financing, too, remains
an option for us, though no definitive prospects have been specifically
identified.





Contractual
Liabilities





In May
2007, we secured a new operating lease with a third-party for our corporate
office facility in Omaha, Nebraska with terms extending through May 2012. We
also secured a new operating lease with a third-party for a warehouse facility
in Omaha, Nebraska with terms extending through June 2010. In accordance with
the terms of these leasehold agreements, we are responsible for all associated
taxes, insurance and utility expenses.





We lease
office space in Naperville, Illinois under an operating lease with a third-party
with terms extending through March 2009. We are responsible for all insurance
expenses associated with this lease.





At June
30, 2008, the total future minimum rental payments required under these leases
is approximately $266,000 through the year 2012.





We lease
telephone equipment under a capital lease due to expire in November 2009. The
asset and liability under the capital lease are recorded at the present value of
the minimum lease payments. The asset is depreciated over a 5 year life. Total
minimum future lease payments under capital leases as of June 30, 2008 is
approximately $19,000 through the year 2009.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.





Contractual
Obligations





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, we are not
required to provide this information.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, we are not
required to provide this information.





ITEM 4T. CONTROLS AND PROCEDURES.





Evaluation
of Disclosure Controls and Procedures





As
required by paragraph (b) of Rule 13a-15 under the Exchange Act, our principal
executive and principal financial officers are responsible for assessing the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(f) under the Exchange Act).  Accordingly, we maintain
disclosure controls and procedures designed to ensure that information required
to be disclosed in our filings under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission’s rules and forms.  Our
Chief Executive Officer and Chief Financial Officer have evaluated our
disclosure controls and procedures as of the end of the period covered by this
Quarterly Report on Form 10-Q June 30, 2008, and have determined that such
disclosure controls and procedures are effective.





Changes
in Internal Controls





There
were no changes in our internal control over financial reporting during the
fiscal quarter covered by this report that have materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.





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PART II – OTHER INFORMATION





ITEM 1. LEGAL PROCEEDINGS.





As of the
date of this quarterly report on Form 10-Q for the period ended June 30, 2008,
and to the best knowledge of our officers and directors, there were no pending
material legal proceedings to which we were a party and we were not aware that
any were contemplated.  There can be no assurance, however, that we
will not be made a party to litigation in the future.  Although we
currently maintain liability insurance coverage in an amount equal to
$5,000,000, there can be no assurance that such coverage will prove adequate to
cover all liabilities arising out of any claims that may be initiated against us
in the future. Any finding of liability imposed against us coupled with a lack
of corresponding insurance coverage is likely to have an adverse effect on our
business, our financial condition, and including liquidity and profitability,
and our results of operations.





ITEM 1A. RISK FACTORS.





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.





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





There
were no reportable events under this Item 3 during the quarterly period ended
June 30, 2008.





ITEM 3. DEFAULTS UPON SENIOR SECURITIES.





There
were no reportable events under this Item 3 during the quarterly period ended
June 30, 2008.





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





No
matters were submitted to a vote of our stockholders during the quarterly period
ended June 30, 2008.





ITEM 5. OTHER INFORMATION.





There
were no reportable events under this Item 5 during the quarterly period ended
June 30, 2008.





ITEM 6. EXHIBITS.





Exhibits
required by Item 601 of Regulation S-K.





No.
            Description
      of Exhibit2.1
            Share
      Exchange Agreement between Findex.com, Inc. and the stockholders of Reagan
      Holdings, Inc. dated March 7, 2000, incorporated by reference to Exhibit
      2.1 on Form 8-K filed March 15, 2000.3(i)(1)
            Restated
      Articles of Incorporation of Findex.com, Inc. dated June 1999 incorporated
      by reference to Exhibit 3.1 on Form 8-K filed March 15,
    2000.3(i)(2)
            Amendment
      to Articles of Incorporation of Findex.com, Inc. dated November 10, 2004
      incorporated by reference to Exhibit 3.1(ii) on Form 10-QSB filed November
      10, 2004.3(ii)
            Restated
      By-Laws of Findex.com, Inc., incorporated by reference to Exhibit 3.3 on
      Form 8-K filed March 15, 2000.10.1
            Stock
      Incentive Plan of Findex.com, Inc. dated May 7, 1999, incorporated by
      reference to Exhibit 10.1 on Form 10-KSB/A filed May 13,
    2004.10.2
            Share
      Exchange Agreement between Findex.com, Inc. and the stockholders of Reagan
      Holdings Inc., dated March 7, 2000, incorporated by reference to Exhibit
      2.1 on Form 8-K filed March 15,
2000.




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10.3
            License
      Agreement between Findex.com, Inc. and Parsons Technology, Inc. dated June
      30, 1999, incorporated by reference to Exhibit 10.3 on Form 10-KSB/A filed
      May 13, 2004.10.4
            Employment
      Agreement between Findex.com, Inc. and Steven Malone dated July 25, 2003,
      incorporated by reference to Exhibit 10.4 on Form 10-KSB/A filed May 13,
      2004.10.5
            Employment
      Agreement between Findex.com, Inc. and Kirk Rowland dated July 25, 2003,
      incorporated by reference to Exhibit 10.5 on Form 10-KSB/A filed May 13,
      2004.10.6
            Employment
      Agreement between Findex.com, Inc. and William Terrill dated June 7, 2002,
      incorporated by reference to Exhibit 10.6 on Form 10-KSB/A filed May 13,
      2004.10.7
            Restricted
      Stock Compensation Agreement between Findex.com, Inc. and John A. Kuehne
      dated July 25, 2003, incorporated by reference to Exhibit 10.7 on Form
      10-KSB/A filed May 13, 2004.10.8
            Restricted
      Stock Compensation Agreement between Findex.com, Inc. and Henry M.
      Washington dated July 25, 2003, incorporated by reference to Exhibit 10.8
      on Form 10-KSB/A filed May 13, 2004.10.9
            Restricted
      Stock Compensation Agreement between Findex.com, Inc. and William Terrill
      dated July 25, 2003, incorporated by reference to Exhibit 10.9 on Form
      10-KSB/A filed May 13, 2004.10.10
            Stock
      Purchase Agreement, including the form of warrant agreement, between
      Findex.com, Inc. and Barron Partners, LP dated July 19, 2004, incorporated
      by reference to Exhibit 10.1 on Form 8-K filed July 28,
    2004.10.11
            Amendment
      No. 1 to Stock Purchase Agreement between Findex.com, Inc. and Barron
      Partners, LP dated September 30, 2004, incorporated by reference to
      Exhibit 10.3 on Form 8-K filed October 6, 2004.10.12
            Registration
      Rights Agreement between Findex.com, Inc. and Barron Partners, LP dated
      July 26, 2004, incorporated by reference to Exhibit 10.2 on Form 8-K filed
      July 28, 2004.10.13
            Waiver
      Certificate between Findex.com, Inc. and Barron Partners, LP dated
      September 16, 2004, incorporated by reference to Exhibit 10.4 on Form 8-K
      filed October 6, 2004.10.14
            Settlement
      Agreement between Findex.com, Inc., The Zondervan Corporation, Mattel,
      Inc., TLC Multimedia, Inc., and Riverdeep, Inc. dated October 20, 2003,
      incorporated by reference to Exhibit 10.14 on Form 10-KSB/A filed December
      14, 2005.10.15
            Employment
      Agreement Extension between Findex.com, Inc and Steven Malone dated March
      31, 2006, incorporated by reference to Exhibit 10.1 on Form 8-K filed
      April 6, 2006.10.16
            Employment
      Agreement Extension between Findex.com, Inc and William Terrill dated
      March 31, 2006, incorporated by reference to Exhibit 10.2 on Form 8-K
      filed April 6, 2006.10.17
            Employment
      Agreement Extension between Findex.com, Inc and Kirk R. Rowland dated
      March 31, 2006, incorporated by reference to Exhibit 10.3 on Form 8-K
      filed April 6, 2006.10.18
            Promissory
      Note to Barron Partners, LP dated April 7, 2006, incorporated by reference
      to Exhibit 10.1 on Form 8-K filed April 13, 2006.10.19
            Share
      Exchange Agreement between Findex.com, Inc. and the stockholders of Reagan
      Holdings Inc., dated March 7, 2000, incorporated by reference to Exhibit
      2.1 on Form 8-K filed March 15, 2000.10.20
            Convertible
      Secured Promissory Note between FindEx.com, Inc. and W. Sam Chandoha,
      dated July 20, 2006, incorporated by reference to Exhibit 10.1 on Form 8-K
      filed July 26, 2006.




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10.21
            Security
      Agreement between FindEx.com, Inc. and W. Sam Chandoha, dated July 20,
      2006 incorporated by reference to Exhibit 10.2 on Form 8-K filed July 26,
      2006.10.22
            Common
      Stock Purchase Warrant between FindEx.com, Inc. and W. Sam Chandoha, dated
      July 20, 2006 incorporated by reference to Exhibit 10.3 on Form 8-K filed
      July 26, 2006.10.23
            Modification
      and Extension Agreement Between FindEx.com, Inc. and W. Sam Chandoha,
      dated September 20, 2006, incorporated by reference to Exhibit 10.1 on
      Form 8-K filed September 25,2006.10.24
            Employment
      Agreement Extension Amendment between Findex.com, Inc. and Steven Malone
      dated April 13, 2007, incorporated by reference to Exhibit 10.24 on Form
      10-KSB filed April 17, 2007.10.25
            Employment
      Agreement Extension Amendment between Findex.com, Inc. and William Terrill
      dated April 13, 2007, incorporated by reference to Exhibit 10.25 on Form
      10-KSB filed April 17, 2007.10.26
            Employment
      Agreement Extension Amendment between Findex.com, Inc. and Kirk R. Rowland
      dated April 13, 2007, incorporated by reference to Exhibit 10.26 on Form
      10-KSB filed April 17, 2007.10.27
            Asset
      Purchase Agreement between Findex.com, Inc. and ACS Technologies Group,
      Inc. dated October 18, 2007, incorporated by reference to Exhibit 10.27 on
      Form 8-K filed October 24, 2007.10.28
            Partial
      Assignment of License Agreement Among Findex.com, Inc., Riverdeep,
      Inc.,LLC and ACS Technologies Group, Inc. dated October 11, 2007,
      incorporated by reference to Exhibit 10.28 on Form 8-K filed October 24,
      2007.10.29
            Asset
      Purchase Agreement between Findex.com, Inc. and ORG Professional, LLC
      dated February 25, 2008, incorporated by reference to Exhibit 10.29 on
      Form 8-K filed on February 28, 2008.10.30
            Warrant
      Cancellation Agreement between Findex.com, Inc. and Barron Partners, L.P.
      dated March 6, 2008, incorporated by reference to Exhibit 10.30 on Form
      8-K filed on March 10, 2008.10.31
            Employment
      Agreement Extension Amendment between Findex.com, Inc. and Steven Malone
      dated April 14, 2008, incorporated by reference to Exhibit 10.31 on Form
      10-KSB filed on April 15, 2008.10.32
            Employment
      Agreement Extension Amendment between Findex.com, Inc. and William Terrill
      dated April 14, 2008, incorporated by reference to Exhibit 10.32 on Form
      10-KSB filed on April 15, 2008.10.33
            Employment
      Agreement Extension Amendment between Findex.com, Inc. and Kirk R. Rowland
      dated April 14, 2008, incorporated by reference to Exhibit 10.33 on Form
      10-KSB filed on April 15, 2008.31.1
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002 and dated August 19, 2008. FILED HEREWITH.31.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002 and dated August 19, 2008. FILED HEREWITH.32.1
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002 and dated August 19,
      2008.  FILED HEREWITH.





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Signatures





Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.





FINDEX.COM,
      INC.Date:
      August 19, 2008
            By
            /s/ Steven MaloneSteven
      MalonePresident
      and Chief Executive Officer





Date:
      August 19, 2008
            By
            /s/ Kirk R. RowlandKirk
      R. Rowland, CPAChief
      Financial Officer (Principal Financial & Accounting
      Officer)




























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