**U.
      S. SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**


**QUARTERLY
        REPORT UNDER SECTION 13 OR 15(D)**
 **OF
        THE SECURITIES EXCHANGE ACT OF 1934**
 **FOR
        THE QUARTERLY PERIOD ENDED MARCH 31, 2007**





Commission
      file number: 0-29963








**FINDEX.COM,
      INC.**


(Name
      of
      small business issuer in its charter)








Nevada
            88-0379462(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                No.)11204
                Davenport Street, Suite 100, Omaha, Nebraska
            68154(Address
                of principal executive offices)
            (Zip
                Code)





(402)
      333-1900


(Issuer’s
      telephone number)





NA.





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





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 shell company (as defined in Rule
      12b-2 of the Exchange Act). **Yes
      [_] No [X]**





At
      May
      21, 2007, the registrant had outstanding 49,788,317 shares of common stock,
      of
      which there is only a single class.





Transitional
      Small Business Disclosure Format (check one): Yes __ No X




























**TABLE
      OF CONTENTS**





**Page
                Number****PART
                I - FINANCIAL INFORMATION**ITEM
                1. Financial Statements.
            F-1ITEM
                2. Management’s Discussion and Analysis or Plan of
                Operation.
            1ITEM
                3. Controls and Procedures.
            12**PART
                II - OTHER INFORMATION**ITEM
                1. Legal Proceedings.
            13ITEM
                2. Unregistered Sales of Equity Securities
                and Use of Proceeds.
            13ITEM
                3. Defaults Upon Senior
                Securities.
            13ITEM
                4. Submission of Matters to a Vote of Security
                Holders.
            13ITEM
                5. Other Information.
            13ITEM
                6. Exhibits.
            13































**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS.**





**Findex.com,
                Inc.****CONDENSED
                CONSOLIDATED BALANCE SHEETS****(Unaudited)****March
                31, 2007**
            
            
            December
                31, 2006**Assets**Current
                assets:Cash
                and cash equivalents
            
            **$**
            **54,494**
            
            $
            48,672Accounts
                receivable, trade, net
            
            
            **404,772**
            
            
            318,000Inventory
            
            
            **158,123**
            
            
            145,344Other
                current assets
            
            
            **170,482**
            
            
            213,162Total
                current assets
            
            
            **787,871**
            
            
            725,178Property
                and equipment, net
            
            
            **79,647**
            
            
            86,638Software
                license, net
            
            
            **1,132,892**
            
            
            1,258,769Capitalized
                software development costs, net
            
            
            **493,981**
            
            
            491,695Restricted
                cash
            
            
            **40,000**
            
            
            ---Other
                assets
            
            
            **489,012**
            
            
            493,565Total
                assets
            
            **$**
            **3,023,403**
            
            $
            3,055,845**Liabilities
                and stockholders’ equity**Current
                liabilities:Accounts
                payable, trade
            
            **$**
            **598,168**
            
            $
            693,260Accrued
                royalties
            
            
            **746,468**
            
            
            649,763Derivative
                liabilities
            
            
            **500,324**
            
            
            526,868Other
                current liabilities
            
            
            **618,054**
            
            
            561,111Total
                current liabilities
            
            
            **2,463,014**
            
            
            2,431,002Long-term
                obligations
            
            
            **21,795**
            
            
            80,568Commitments
                and contingencies (Note 7)Stockholders’
                equity:Common
                stock
            
            
            **49,788**
            
            
            49,788Paid-in
                capital
            
            
            **7,592,884**
            
            
            7,592,884Retained
                (deficit)
            
            
            **(7,104,078**
            **)**
            
            (7,098,397
            )Total
                stockholders’ equity
            
            
            **538,594**
            
            
            544,275Total
                liabilities and stockholders’ equity
            
            **$**
            **3,023,403**
            
            $
            3,055,845*See
                accompanying notes.*


F-1
 Table
            of Contents


**Findex.com,
                Inc.****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited)****Three
                Months Ended****March
                31,****2007**
            
            
            2006Revenues,
                net of reserves and allowances
            
            **$**
            **1,155,493**
            
            $
            1,098,791Cost
                of sales
            
            
            **495,358**
            
            
            484,468Gross
                profit
            
            
            **660,135**
            
            
            614,323Operating
                expenses:Sales
                and marketing
            
            
            **190,704**
            
            
            190,924General
                and administrative
            
            
            **345,328**
            
            
            473,386Other
                operating expenses
            
            
            **150,323**
            
            
            145,883Total
                operating expenses
            
            
            **686,355**
            
            
            810,193Loss
                from operations
            
            
            **(26,220**
            **)**
            
            (195,870
            )Other
                expenses, net
            
            
            **(8,830**
            **)**
            
            (1,932
            )Registration
                rights penalties
            
            
            **---**
            
            
            (49,314
            )Gain
                (loss) on valuation adjustment of derivatives
            
            
            **26,544**
            
            
            (608,872
            )Loss
                before income taxes
            
            
            **(8,506**
            **)**
            
            (855,988
            )Income
                tax (provision) benefit
            
            
            **2,825**
            
            
            (30,808
            )Net
                loss
            
            
            **(5,681**
            **)**
            
            (886,796
            )Retained
                deficit at beginning of year
            
            
            **(7,098,397**
            **)**
            
            (7,752,097
            )Retained
                deficit at end of period
            
            **$**
            **(7,104,078**
            **)**
            $
            (8,638,893
            )Net
                loss per share:Basic
            
            **$**
            **0.00**
            
            $
            (0.02
            )Diluted
            
            **$**
            **0.00**
            
            $
            (0.02
            )Weighted
                average shares outstanding:Basic
            
            
            **49,788,317**
            
            
            48,619,855Diluted
            
            
            **49,788,317**
            
            
            48,619,855*See
                accompanying notes.*


F-2
 Table
            of Contents




**Findex.com,
                Inc.****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****(Unaudited)****Three
                Months Ended March 31,**
            
            
            **2007**
            
            
            2006Cash
                flows from operating activities:Cash
                received from customers
            
            **$**
            **1,099,252**
            
            $
            1,138,412Cash
                paid to suppliers and employees
            
            
            **(899,692**
            **)**
            
            (1,135,406
            )Other
                operating activities, net
            
            
            **(6,996**
            **)**
            
            3,872Net
                cash provided by operating activities
            
            
            **192,564**
            
            
            6,878Cash
                flows from investing activities:Software
                development costs
            
            
            **(109,705**
            **)**
            
            (63,231
            )Deposits
                paid
            
            
            **(40,000**
            **)**
            
            ---Other
                investing activities, net
            
            
            **(4,568**
            **)**
            
            (7,342
            )Net
                cash used by investing activities
            
            
            **(154,273**
            **)**
            
            (70,573
            )Cash
                flows from financing activities:Payments
                made on long-term notes payable
            
            
            **(32,469**
            **)**
            
            (2,197
            )Net
                cash used by financing activities
            
            
            **(32,469**
            **)**
            
            (2,197
            )Net
                increase (decrease) in cash and cash equivalents
            
            
            **5,822**
            
            
            (65,892
            )Cash
                and cash equivalents, beginning of year
            
            
            **48,672**
            
            
            119,560Cash
                and cash equivalents, end of period
            
            **$**
            **54,494**
            
            $
            53,668Reconciliation
                of net loss to cash flows from operating activities:Net
                loss
            
            **$**
            **(5,681**
            **)**
            $
            (886,796
            )Adjustments
                to reconcile net loss to net cashprovided
                by operating activities:Software
                development costs amortized
            
            
            **107,419**
            
            
            184,128(Gain)
                loss on fair value adjustment of derivatives
            
            
            **(26,544**
            **)**
            
            608,872Bad
                debts provision
            
            
            **5,785**
            
            
            ---Depreciation
                & amortization
            
            
            **144,538**
            
            
            145,883Change
                in assets and liabilities:(Increase)
                decrease in accounts receivable
            
            
            **(92,557**
            **)**
            
            65,357(Increase)
                decrease in inventories
            
            
            **(12,779**
            **)**
            
            52,554Decrease
                in refundable taxes
            
            
            **---**
            
            
            5,764Decrease
                in prepaid expenses
            
            
            **42,956**
            
            
            62,241Increase
                (decrease) in accrued royalties
            
            
            **96,705**
            
            
            (19,841
            )(Decrease)
                in accounts payable
            
            
            **(95,092**
            **)**
            
            (134,771
            )Increase
                in income taxes payable
            
            
            **2,050**
            
            
            ---(Decrease)
                increase in deferred taxes
            
            
            **(2,825**
            **)**
            
            30,808Increase
                (decrease) in other liabilities
            
            
            **28,589**
            
            
            (107,321
            )Net
                cash provided by operating activities
            
            **$**
            **192,564**
            
            $
            6,878*See
                accompanying notes.*


F-3
 Table
            of Contents




**Findex.com,
      Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**March
      31, 2007**


**(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-QSB and Item 310
      of
      Regulation S-B. 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 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, 2006.





**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, 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. Our software license is amortized over a ten-year
      useful life.





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 $1,824,587, less accumulated
      amortization of $1,330,606 at March 31, 2007.





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 $29,581 and $52,232 for the three months ended March 31, 2007 and 2006,
      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 $108,582, less accumulated amortization of $79,672 at March 31,
      2007.





**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 months ended March 31, 2007 and
      2006
      and maintain a reserve for rebate claims remaining unpaid from 2000 and
      2001.





***Service
      Revenue***





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





F-6
 Table
          of Contents


***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.





**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.





F-7
 Table
          of Contents


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.





**RECLASSIFICATIONS**





Certain
      accounts in our 2006 financial statements have been reclassified for comparative
      purposes to conform with the presentation in our 2007 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 March 31, 2007, we had a
      year-to-date net loss of ($5,681), and negative working capital of $1,675,143
      and $1,705,824, and an accumulated deficit of $7,104,078 and $7,098,397 as
      of
      March 31, 2007 and December 31, 2006, respectively. Although these factors
      raise
      substantial doubt as to our ability to continue as a going concern through
      December 31, 2007, we have taken several actions to mitigate against this risk.
      These actions include potentially selling some of our intangible assets and
      pursuing mergers and acquisitions that will provide profitable operations and
      positive operating cash flow.





**NOTE
      3 - INVENTORIES**





At
      March
      31, 2007, inventories consisted of the following:





Raw
                materials
            
            **$**
            **92,000**Finished
                goods
            
            
            **66,123**Inventories
            
            **$**
            **158,123**





**NOTE
      4 - DERIVATIVES**





At
      March
      31, 2007, our derivative liability consisted of the following:





Warrant
                A
            
            **$**
            **65**Warrant
                B
            
            
            **267,003**Warrant
                C
            
            
            **233,256**Derivatives
            
            **$**
            **500,324**




In
      May
      2004, we issued a three-year warrant (Warrant A) to purchase up to 600,000
      shares of our common stock to a consultant. This warrant may be exercised on
      a
      cashless basis at the option of the warrant holder at a price per share of
      $0.15. We will receive up to $90,000 from the warrant holder upon the exercise
      of this warrant. This warrant has been 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*.
      The
      fair value of the warrant has been determined using the Black-Scholes valuation
      method with the assumptions listed in the table below. See Note
      9.




F-8
 Table
          of Contents


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 (Warrant B) entitles 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 (Warrant C) entitles 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 is subject to standard adjustment provisions and each provides
      for
      settlement in registered shares of our common stock and may, at the option
      of
      the holder, be settled in a cashless, net-share settlement. The warrant holder
      is prevented from electing a cashless exercise so long as there is in effect
      a
      registration statement covering the shares underlying these warrants. The
      maximum number of shares of our common stock to be received for each warrant
      in
      a net-share settlement would be 10,937,500 but the actual number of shares
      settled would likely be significantly less and would vary based on the last
      reported sale price (as reported by Bloomberg) of our common stock on the date
      immediately preceding the date of the exercise notice. These warrants are
      accounted for as a liability according to the guidance of EITF 00-19 and the
      fair value of each warrant has been determined using the Black-Scholes valuation
      method with the assumptions listed in the table below.





**Warrant
                A**
            ****
            
            ****
            **Warrant
                B**
            ****
            
            ****
            **Warrant
                C**Expected
                term - years
            
            
            .08
            
            
            
            2.61
            
            
            
            2.61Stock
                price at March 31, 2007
            
            $
            0.03
            
            
            $
            0.03
            
            
            $
            0.03Expected
                dividend yield
            
            
            0
            %
            
            
            0
            %
            
            
            0
            %Expected
                stock price volatility
            
            
            235
            %
            
            
            212
            %
            
            
            212
            %Risk-free
                interest rate
            
            
            4.60
            %
            
            
            4.34
            %
            
            
            4.34
            %





The
      warrants are revalued at each balance sheet date by using the parameters above,
      reducing the expected term to reflect the passing of time, and using the stock
      price at the balance sheet date. Net fair value adjustments included in other
      income and expenses on the consolidated statements of operations were an income
      adjustment of $26,544 for the three months ended March 31, 2007, and an expense
      adjustment of ($608,872) for the three months ended March 31, 2006.





**NOTE
      5 - INCOME TAXES**





The
      provision (benefit) for taxes on net loss for the three months ended March
      31,
      2007 and 2006 consisted of the following:





**2007**
            
            
            2006Current:Federal
            
            **$**
            **---**
            
            $
            ---State
            
            
            **---**
            
            
            ---**---**
            
            
            ---Deferred:Federal
            
            
            **(2,850**
            **)**
            
            31,844State
            
            
            **25**
            
            
            (1,036
            )**(2,825**
            **)**
            
            30,808Total
                tax provision (benefit)
            
            **$**
            **(2,825**
            **)**
            $
            30,808





**NOTE
      6 - 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 March 31,**
            
            
            **2007**
            
            
            2006Net
                loss
            
            **$**
            (5,681
            )
            $
            (886,796
            )Preferred
                stock dividends
            
            
            ---
            
            
            **---**Net
                loss available to common shareholders
            
            **$**
            (5,681
            )
            $
            (886,796
            )Basic
                weighted average shares outstanding
            
            
            **49,788,317**
            
            
            48,766,009Dilutive
                effect of:Convertible
                debt
            
            
            ---
            
            
            ---Stock
                options
            
            
            ---
            
            
            ---Warrants
            
            
            ---
            
            
            ---Diluted
                weighted average shares outstanding
            
            
            **49,788,317**
            
            
            48,766,009





F-9
 Table
          of Contents


**NOTE
      7 - 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.




Our
      employment agreements with our management team each contain a provision for
      an
      annual bonus equal to 1% of our income (loss) from operations adjusted for
      other
      income and interest expense (4% total). We accrue this bonus on a quarterly
      basis. Our management team consists of our Chief Executive Officer (with a
      base
      annual salary of $150,000), our Chief Financial Officer (with a base annual
      salary of $110,000), our Chief Technology Officer (with a base annual salary
      of
      $150,000) and our Vice President of Sales (with a base annual salary of
      $110,000). In addition to the bonus provisions and annual base salary, each
      employment agreement provides for payment of all accrued base salaries ($10,980
      included in Other current liabilities atMarch
      31,
      2007),
      bonuses ($30,542 included in other current liabilities atMarch
      31,
      2007),
      and
      any vested deferred vacation compensation ($35,709 included in other current
      liabilities atMarch
      31,
      2007)
      for
      termination by reason of disability. 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.





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
      8 - 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-10
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          of Contents


**NOTE
      9 - SUBSEQUENT EVENTS**





On
      April
      26, 2007, 50,000 vested stock options with an exercise price of $0.11 per share,
      related to a terminated employee, expired unexercised.





On
      May 1,
      2007, a warrant issued to a consultant to purchase up to 600,000 restricted
      shares of our common stock with an exercise price of $0.15 per share expired
      unexercised.





In
      May
      2007, we secured a 5-year lease for office space in Omaha, Nebraska. The lease
      provides for graduated rates ranging from $4,167 to $4,667 per month and
      contains one 5-year renewal option.





In
      May
      2007, we secured a 3-year lease for warehouse space in Omaha, Nebraska. The
      lease provides for a base monthly rent of $1,979 and contains one 3-year renewal
      option.








































F-11
 Table
          of Contents


**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**





***Cautionary
      Statement Regarding Forward-Looking Statements***





*This
      quarterly report on Form 10-QSB, press releases and certain information provided
      periodically in writing or verbally by our officers or our agents contain
      statements which constitute forward-looking statements. The words “may”,
“would”, “could”, “will”, “expect”, “estimate”, “anticipate”, “believe”,
“intend”, “plan”, “goal”, and similar expressions and variations thereof are
      intended to specifically identify forward-looking statements. These statements
      appear in a number of places in this Form 10-QSB and include all statements
      that
      are not statements of historical fact regarding the intent, belief or current
      expectations of us, our directors or our officers, with respect to, among other
      things (i) our liquidity and capital resources, (ii) our financing opportunities
      and plans, (iii) our ability to attract customers to generate revenues, (iv)
      competition in our business segment, (v) market and other trends affecting
      our
      future financial condition or results of operations, (vi) our growth strategy
      and operating strategy, and (vii) the declaration and/or payment of dividends.*





*Investors
      and prospective investors are cautioned that any such forward-looking statements
      are not guarantees of future performance and involve risks and uncertainties,
      and that actual results may differ materially from those projected in the
      forward-looking statements as a result of various factors. Factors that might
      cause such differences include, among others, those set forth in Part I, Item
      2
      of this quarterly report on Form 10-QSB, entitled “Management’s Discussion and
      Analysis or Plan of Operation”, and including without limitation the ”Risk
      Factors” contained in the company’s annual report on Form 10-KSB for the period
      ending December 31, 2006. Except as required by law, we undertake no obligation
      to update any of the forward-looking statements in this Form 10-QSB after the
      date of this report.*





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, 2006.





**MANAGEMENT
      OVERVIEW**





During
      the first quarter of 2007, we released an upgrade to QuickVerse ® Macintosh. QuickVerse ® 2007
      Macintosh is available in three editions and provides access to several Bible
      translations along with numerous reference titles.





The
      QuickVerse ® 2007
      Macintosh family of products includes:





▪
            QuickVerse®White Box Edition (which includes 10 Bibles and 45 reference titles,
                retail price: $59.95);▪
            QuickVerse®Black Box Edition (which includes 15 Bibles and 66 reference titles,
                retail price: $129.95); and▪
            QuickVerse®Gold Box Edition (which includes 22 Bibles and 158 reference titles,
                retail price: $349.95).




Also
      during our first quarter 2007, as part of our ongoing partnership with Thomas
      Nelson Publishers®,
      we
      released the Nelson Reference Collection®for
      QuickVerse®(Windows) users. This extensive reference collection includes Nelson’s New
      Illustrated Bible Dictionary and has a retail price of
      $129.95.




Comparatively,
      during the first quarter of 2006, we released QuickVerse ® 2006
      Parable Edition, with a suggested retail price of $49.95, and
      QuickVerse ® 2006
      Bible Suite, with a suggested retail price of $29.95.





During
      the first quarter of 2007, we were able to increase our gross revenues as well
      as decrease our total operating expenses while reducing our general and
      administrative costs. Although there can be no assurance, we anticipate that
      revenues will increase in real terms during our 2007 fiscal year based upon
      our
      development schedule for the fiscal year and the introduction of new titles
      that
      will broaden the content made available for our QuickVerse ® products.





-1-
 Table
          of Contents


***Results
      of Operations for Quarters Ending March 31, 2007 and March 31,
      2006***





**Statement
                of Operations for Three Months Ending March 31**
            
            
            **2007**
            
            
            2006
            
            
            Change
            
            
            %Net
                revenues
            
            **$**
            **1,155,493**
            
            $
            1,098,791
            
            $
            56,702
            
            
            5
            %Cost
                of sales
            
            
            **495,358**
            
            
            484,468
            
            
            10,890
            
            
            2
            %Gross
                profit
            
            **$**
            **660,135**
            
            $
            614,323
            
            $
            45,812
            
            
            7
            %Total
                operating expenses
            
            
            **(686,355**
            **)**
            
            (810,193
            )
            
            123,838
            
            
            15
            %Loss
                from operations
            
            **$**
            **(26,220**
            **)**
            $
            (195,870
            )
            $
            169,650
            
            
            87
            %Other
                expenses
            
            
            **(8,830**
            **)**
            
            (1,932
            )
            
            (6,898
            )
            
            357
            %Registration
                rights penalties
            
            
            **---**
            
            
            (49,314
            )
            
            49,314
            
            
            100
            %Gain
                (loss) on fair value adjustment of derivatives
            
            
            **26,544**
            
            
            (608,872
            )
            
            635,416
            
            
            104
            %Loss
                before income taxes
            
            **$**
            **(8,506**
            **)**
            $
            (855,988
            )
            $
            847,482
            
            
            99
            %Income
                tax (provision) benefit
            
            
            **2,825**
            
            
            (30,808
            )
            
            33,633
            
            
            109
            %Net
                loss
            
            **$**
            **(5,681**
            **)**
            $
            (886,796
            )
            $
            881,115
            
            
            99
            %





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.




Our
      net
      revenues increased approximately $57,000 from net revenues of approximately
      $1,099,000 for the three months ended March 31, 2006 to net revenues of
      approximately $1,156,000 for the three months ended March 31, 2007. Further,
      we
      incurred a net loss of approximately $6,000 for the three months ended March
      31,
      2007, which represents an improvement of approximately $881,000 from our net
      loss of approximately $887,000 for the three months ended March 31, 2006. The
      differing results of operations are primarily attributable to a gain of
      approximately $27,000 related to the fair value (non-cash) adjustment of
      derivatives for the three months ended March 31, 2007 compared to a loss of
      approximately $609,000 for the three months ended March 31, 2006, but also,
      to a
      much lesser extent, the following:


▪
            a
                decrease in total operating expenses of approximately $124,000 from
                total
                operating expenses of approximately $810,000 for the three months
                ended
                March 31, 2006 to total operating expenses of approximately $686,000
                for
                the three months ended March 31, 2007; and▪
            a
                decrease in registration rights penalties of approximately $49,000
                for the
                three months ended March 31, 2007 as our registration statement on
                Form
                SB-2, originally filed by us on November 22, 2004 was declared effective
                by the SEC on February 1, 2006.





***Revenues***





We
      derive
      revenues from the sale of packaged software products, product support and
      multiple element arrangements that may include any combination of these items.
      Revenue is recognized 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. For our packaged software
      products, we typically recognize revenue from the sale 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. Service revenue resulting from technical support plans is
      recognized over the life of the plan, which is generally one year. Revenue
      associated with advance payments from our customers is deferred until we ship
      the product or offer the support service. 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. For revenue arrangements involving multiple products or product and
      service packages, we allocate and defer revenue for the undelivered products
      or
      product and service packages based on their vendor-specific objective evidence
      of fair value, which is generally the price charged when that product or product
      and service package is sold separately.





-2-
 Table
          of Contents


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. Estimated returns are also
      based upon a percentage of total retail and direct sales. Direct sales accounted
      for approximately 53% of our 2006 fiscal year revenue. We account for cash
      considerations (such as sales incentives - rebates and coupons) that we give
      our
      customers as a reduction of revenue rather than as an operating expense. Product
      revenue is also reduced for the estimated redemption of end-user rebates on
      certain current product sales. We did not have any rebate programs during the
      three months ended March 31, 2006 and 2007, respectively.





Trends
      that our returns typically follow include (i) the seasonality of sales, and
      (ii)
      the fact that, generally, relatively higher return rates occur in connection
      with recently released title or title versions. Historically, actual returns
      have been within management’s prior estimates, however, we cannot be certain
      that any future write-offs exceeding reserves will not occur or that amounts
      written off will not have a material adverse effect on our business, our
      financial condition, including liquidity and profitability, and our results
      of
      operations. Management continually monitors and adjusts these allowances to
      take
      into account actual developments and sales results in the marketplace. In the
      past, particularly during title and title version transitions, we have had
      to
      increase price concessions to our retail customers in order to move channel
      inventory.





Product
      returns from distributors and Christian bookstores are allowed primarily in
      exchange for new products or for credit towards purchases as part of a
      stock-balancing program. These returns are subject to certain limitations
      provided for in the contract between us and the corresponding
      distributor/retailer. Under certain circumstances, including for example the
      expiration of a given contract or the discovery that a given product is
      defective, distributors and bookstores may be eligible to receive a cash refund
      if returns exceed amounts owed. Returns from sales made directly to consumers
      are accepted within 45 days of purchase and involve a cash refund. Product
      returns, price protections or price concessions that exceed our reserves could
      materially adversely affect our business and operating results and could
      increase the magnitude of quarterly fluctuations in our operating and financial
      results.





In
      general, price protection programs insure retail customers a refund of a portion
      of their purchase price to the extent the product they have purchased drops
      in
      price within a given time frame following their purchase. In general, price
      protection reduces customers’ anxieties in connection with a purchase decision
      associated with a concern that they might obtain a better price if they were
      to
      wait than if they were to act immediately. Although we have historically
      employed price protection programs in connection with many of our product
      promotions, we do not anticipate implementing a price protection program in
      the
      near future.





Software
      products are sold separately, without an obligation of future performance such
      as upgrades, enhancements or additional software products, and are sold with
      postcontract customer support services such as customer service and technical
      support assistance. In connection with the sale of certain products, we provide
      a limited amount of free technical support assistance to our 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.





Shipping
      and handling costs in connection with our software products are expensed as
      incurred and included in cost of sales.





-3-
 Table
          of Contents


**Revenues
                for Three Months Ending March 31**
            
            
            **2007**
            
            
            **%
                to Sales**
            
            
            
            2006
            
            
            %
                to Sales
            
            
            
            Change
            
            
            %Gross
                revenues
            
            **$**
            **1,270,004**
            
            
            **100**
            **%**
            
            $
            1,182,071
            
            
            100
            %
            
            $
            87,933
            
            
            7
            %Add
                rebate reserve adjustment
            
            
            **1,190**
            
            
            **0**
            **%**
            
            
            ---
            
            
            0
            %
            
            
            1,190
            
            
            0
            %Less
                reserve for sales returns and allowances
            
            
            **(115,701**
            **)**
            
            **9**
            **%**
            
            
            (83,280
            )
            
            7
            %
            
            
            (32,421
            )
            
            39
            %Net
                revenues
            
            **$**
            **1,155,493**
            
            
            **91**
            **%**
            
            $
            1,098,791
            
            
            93
            %
            
            $
            56,702
            
            
            5
            %




Gross
      revenues increased approximately $88,000 from approximately $1,182,000 for
      the
      three months ended March 31, 2006 to approximately $1,270,000 for the three
      months ended March 31, 2007. We believe that this increase was primarily
      attributable to the liquidation sales of our QuickVerse®2006
      product line, the QuickVerse®2007
      Macintosh release, as well as our Membership Plus®2007
      product line, for which pent-up demand following an eight month delay is
      believed to have significantly spurred sales. During the three months ended
      March 31, 2006 and 2007, the following products were released,
      respectively:


First
      Quarter 2006





▪
            QuickVerse®2006 Parable Edition, with a suggested retail price of $49.95;
                and▪
            QuickVerse®2006 Bible Suite, with a suggested retail price of
                $29.95.





First
      Quarter 2007





▪
            an
                enhanced version of our QuickVerse®Macintosh product, including QuickVerse®2007 Macintosh White Edition, with a suggested retail price of $59.95,
                QuickVerse®2007 Macintosh Black Edition, with a suggested retail price of $129.95
                and
                QuickVerse®2007 Macintosh Gold Edition, with a suggested retail price of $349.95;
                and▪
            the
                Nelson Reference Collection®for QuickVerse®(Windows) users, with a suggested retail price of
                $129.95.




During
      each of the three months ended March 31, 2006 and 2007, our sales efforts were
      focused on directly targeting end-users through telemarketing and Internet
      sales. However, 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, however, that our
      revenues will continue to 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, and offer our products
      at
      a range of price points intended to appeal to various market sub-segments.




Sales
        returns and allowances increased approximately $33,000 from approximately
        $83,000 for the three months ended March 31, 2006 to approximately $116,000
        for
        the three months ended March 31, 2007. As a percentage of gross revenues,
        sales
        returns and allowances also increased from approximately 7% for the three
        months
        ended March 31, 2006 to approximately 9% for the three months ended March
        31,
        2007. Typically, sales returns and allowances trend upward after a new product
        is released as distributors and retail stores return old product in exchange
        for
        the new product release. For the three months ended March 31, 2007, we
        experienced an increase in sales returns and allowances due to Membership
        Plus ® 2007
        shipping in mid October 2006. Further, sales returns and allowances for the
        three months ended March 31, 2006 reflect fewer returns of Membership
        Plus ® 2005
        (released in the first quarter 2005), presumably due to the extended timeline
        between the releases of these annual Membership Plus ® editions.
 
 We
        expect
        to release enhanced versions of our biggest-selling products on an annual
        basis
        generally going forward, and anticipate sales returns and allowances as a
        percentage of gross revenues 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.


-4-
 Table
          of Contents


***Cost
      of Sales***





**Cost
                of Sales for Three Months Ending March 31**
            
            
            **2007**
            
            
            **%
                to Sales**
            
            
            
            2006
            
            
            %
                to Sales
            
            
            
            Change
            
            
            %Direct
                costs
            
            **$**
            **138,943**
            
            
            **11**
            **%**
            
            $
            139,634
            
            
            12
            %
            
            $
            (691
            )
            
            0
            %Less
                reserve for sales returns and allowances
            
            
            **(17,265**
            **)**
            
            **1**
            **%**
            
            
            (12,420
            )
            
            1
            %
            
            
            (4,845
            )
            
            39
            %Amortization
                of software development costs
            
            
            **107,419**
            
            
            **8**
            **%**
            
            
            184,128
            
            
            16
            %
            
            
            (76,709
            )
            
            42
            %Royalties
            
            
            **182,800**
            
            
            **14**
            **%**
            
            
            106,745
            
            
            9
            %
            
            
            76,055
            
            
            71
            %Freight-out
            
            
            **55,415**
            
            
            **4**
            **%**
            
            
            30,996
            
            
            3
            %
            
            
            24,419
            
            
            79
            %Fulfillment
            
            
            **28,046**
            
            
            **2**
            **%**
            
            
            35,385
            
            
            3
            %
            
            
            (7,339
            )
            
            21
            %Cost
                of sales
            
            **$**
            **495,358**
            
            
            **39**
            **%**
            
            $
            484,468
            
            
            41
            %
            
            $
            10,890
            
            
            2
            %





Cost
      of
      sales consists primarily of direct costs, amortized software development costs,
      non-capitalized technical support wages, royalties paid to third party providers
      of intellectual property and the costs associated with reproducing, packaging,
      fulfilling and shipping our products. Exclusive of third-party royalties paid,
      our cost of sales decreased approximately $65,000 from approximately $378,000
      for the three months ended March 31, 2006 to approximately $313,000 for the
      three months ended March 31, 2007, and decreased as a percentage of gross
      revenues approximately 7% for the three months ended March 31, 2007. The overall
      decrease is predominantly attributable to decreased amortization of software
      development costs, which decreased approximately $77,000 from approximately
      $184,000 for the three months ended March 31, 2006 to approximately $107,000
      for
      the three months ended March 31, 2007. The amortization recognized during the
      three months ended March 31, 2007 resulted from several new software releases
      in
      2005, 2006 and 2007 including:





▪
            QuickVerse®2006 Macintosh (released June 2005),▪
            Sermon
                Builder®4.0 (released June 2005),▪
            QuickVerse®2006 Windows (released September 2005),▪
            Membership
                Plus®2007 (released October 2006),▪
            QuickVerse®2007 Windows (released August 2006),▪
            QuickVerse®2007 Mobile (released December 2006) and▪
            QuickVerse®2007 Macintosh (released March
                2007).





Comparatively,
      during the three months ended March 31, 2006, the amortization recognized
      resulted from:





▪
            Membership
                Plus®2005 (released February 2005),▪
            QuickVerse®2006 Macintosh (released June 2005),▪
            Sermon
                Builder®4.0 (released June 2005),▪
            QuickVerse®2006 Windows (released September 2005),▪
            QuickVerse®2006 Mobile (released October 2005) and▪
            QuickVerse®2006 Bible Suite (released March
                2006).




The
      increased number of product upgrades and product releases during the fiscal
      year
      2005 led to the increased amount of amortization for the three months ended
      March 31, 2006.


On
        a
        percentage basis, we anticipate that direct costs and manufacturing overhead
        will remain relatively stable as we continue to keep pace with a more intensive
        development schedule than we had generally maintained in the past.


-5-
 Table
          of Contents
  Fulfillment
        costs decreased approximately $7,000 from approximately $35,000 for the three
        months ended March 31, 2006 to approximately $28,000 for the three months
        ended
        March 31, 2007. This decrease is a direct result of our deliberate initiatives
        to begin the process of decreasing our reliance on a third-party warehouse
        as we
        move towards our eventual goal of operating our own fulfillment
        center.


Freight
        costs increased approximately $24,000 from approximately $31,000 for the
        three
        months ended March 31, 2006 to approximately $55,000 for the three months
        ended
        March 31, 2007. This increase resulted from the overall increase in retail
        sales, which carry higher shipping costs for us than direct and/or upgrade
        sales, coupled with escalating per unit freight costs attributable to
        industry-wide rising fuel costs.


Royalties
      accrued to third party providers of intellectual property increased
      approximately $76,000 from approximately $107,000 for the three months ended
      March 31, 2006 to approximately $183,000 for the three months ended March 31,
      2007, and increased approximately 5% as a percentage of gross revenues for
      the
      three months ended March 31, 2007. The percentage increase reflects the
      following:


▪
              A
                  year over year increase in year-end liquidation sales of prior
                  year
                  editions of QuickVerse®;▪
              an
                  overall increase in retail sales due to the release of the Membership
                  Plus®2007 product line, as well as the release of QuickVerse®2007 Macintosh; and▪
              an
                  overall decrease in upgrade sales of QuickVerse®,
                  which, based on our content license agreements, carry less burdensome
                  royalty obligations than corresponding new product editions and/or
                  versions.
 
 Our
        royalty accruals are expected to increase in the future in real terms as
        sales
        to new users 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.


Software
      development costs are expensed as incurred as research and development until
      technological feasibility and marketability have been established, at which
      time
      development costs are capitalized until the software title is available for
      general release to customers. Software development is segregated by title and
      technology platform. Once a product has been successfully released, subsequent
      revisions and upgrades are deemed to constitute development, and, accordingly,
      the costs of the revision and upgrade are capitalized. Capitalized costs are
      amortized on a product-by-product basis using the greater of (i) straight-line
      amortization over the estimated life of the product, or (ii) the ratio of
      current revenues from the product to the total projected revenue over the life
      of the product. Generally, we consider technological feasibility to have been
      established with the release of a “beta” version for testing.




Our
      software development costs for the three months ended March 31, 2007 and 2006
      are summarized in the table below. These costs, consisting primarily of direct
      and indirect labor and related overhead charges, and capitalized during the
      three months ended March 31, 2007 and 2006, were approximately $110,000 and
      approximately $63,000, respectively. Accumulated amortization of these
      development costs, included in cost of sales, totaled approximately $107,000
      and
      approximately $184,000 for the three months ended March 31, 2007 and 2006,
      respectively. The relative increase in capitalized costs reflects an increase
      in
      the number of development projects for the three months ended March 31, 2007,
      while the relative decrease in amortization reflects the overall reduction
      in
      the number of products released during the year ended December 31, 2006.




**Software
                Development Costs For Three Months Ending December
                31**
            
            
            **2007**
            
            
            2006Beginning
                balance
            
            **$**
            **491,695**
            
            $
            707,067Capitalized
            
            
            **109,705**
            
            
            63,231Amortized
                (cost of sales)
            
            
            **107,419**
            
            
            184,128Ending
                balance
            
            **$**
            **493,981**
            
            $
            586,170Research
                and development expense (General and administrative)
            
            **$**
            **29,581**
            
            $
            52,232





We
      expect
      our cost of sales in real terms to increase over time consistent with
      anticipated increases in revenues due to aggressive product development and
      release schedules.





-6-
 Table
          of Contents


***Sales,
      General and Administrative***





**Sales,
                General and Administrative Costs for Three Months Ending March
                31**
            
            
            **2007**
            
            
            **%
                to Sales**
            
            
            
            2006
            
            
            %
                to Sales
            
            
            
            Change
            
            
            %***Selected
                expenses:***Commissions
            
            **$**
            **61,186**
            
            
            **5**
            **%**
            
            $
            60,365
            
            
            5
            %
            
            $
            821
            
            
            1
            %Advertising
                and direct marketing
            
            
            **55,519**
            
            
            **4**
            **%**
            
            
            38,246
            
            
            3
            %
            
            
            17,273
            
            
            45
            %Sales
                and marketing wages, reclassified
            
            
            **73,999**
            
            
            **6**
            **%**
            
            
            92,313
            
            
            8
            %
            
            
            (18,314
            )
            
            20
            %**Total
                sales and marketing**
            
            **$**
            **190,704**
            
            
            **15**
            **%**
            
            $
            190,924
            
            
            16
            %
            
            $
            (220
            )
            
            0
            %Research
                and development
            
            
            **29,581**
            
            
            **2**
            **%**
            
            
            52,232
            
            
            4
            %
            
            
            (22,651
            )
            
            43
            %Personnel
                costs
            
            
            **164,404**
            
            
            **13**
            **%**
            
            
            216,837
            
            
            18
            %
            
            
            (52,433
            )
            
            24
            %Legal
            
            
            **5,839**
            
            
            **0**
            **%**
            
            
            24,499
            
            
            2
            %
            
            
            (18,660
            )
            
            76
            %Accounting
            
            
            **32,403**
            
            
            **3**
            **%**
            
            
            34,423
            
            
            3
            %
            
            
            (2,020
            )
            
            6
            %Rent
            
            
            **22,044**
            
            
            **2**
            **%**
            
            
            23,925
            
            
            2
            %
            
            
            (1,881
            )
            
            8
            %Telecommunications
            
            
            **6,006**
            
            
            **0**
            **%**
            
            
            10,547
            
            
            1
            %
            
            
            (4,541
            )
            
            43
            %Corporate
                services
            
            
            **5,000**
            
            
            **0**
            **%**
            
            
            18,000
            
            
            2
            %
            
            
            (13,000
            )
            
            72
            %Investor
                services
            
            
            **8,125**
            
            
            **1**
            **%**
            
            
            ---
            
            
            0
            %
            
            
            8,125
            
            
            0
            %Other
                general and administrative costs
            
            
            **71,926**
            
            
            **6**
            **%**
            
            
            92,923
            
            
            8
            %
            
            
            (20,997
            )
            
            23
            %**Total
                general and administrative**
            
            **$**
            **345,328**
            
            
            **27**
            **%**
            
            $
            473,386
            
            
            40
            %
            
            $
            (128,058
            )
            
            27
            %**Total
                sales, marketing, general and administrative**
            
            **$**
            **536,032**
            
            
            **42**
            **%**
            
            $
            664,310
            
            
            56
            %
            
            **$**
            (128,278
            )
            
            19
            %





As
      gross
      revenues increased approximately $88,000 from our three months ended March
      31,
      2006 to our three months ended March 31, 2007, total sales, general and
      administrative costs decreased approximately $128,000 from approximately
      $664,000 for the three months ended March 31, 2006 to approximately $536,000
      for
      the three months ended March 31, 2007. Of the total sales, general and
      administrative costs, sales and marketing expenses remained steady at
      approximately $191,000 for the three months ended March 31, 2006 and March
      31,
      2007. Included in sales expenses, advertising and direct marketing costs
      increased approximately $17,000 from approximately $38,000 for the three months
      ended March 31, 2006 to approximately $55,000 for the three months ended March
      31, 2007, and increased as a percentage of gross revenues from approximately
      3%
      to approximately 4% for the three months ended March 31, 2006 and 2007,
      respectively. This increase is mainly attributable to the Membership
      Plus ® 2007 and
      QuickVerse ® 2007
      Macintosh product releases. 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 and product enhancements.





Wages
      associated with our sales team and marketing team have been reclassified and
      are
      included in the total sales and marketing costs. The reclassified sales and
      marketing wages decreased approximately $18,000 from approximately $92,000
      for
      the three months ended March 31, 2006 to approximately $74,000 for the three
      months ended March 31, 2007. This decrease is attributable to the streamlining
      of our CBA sales team. We expect the sales and marketing wages to increase
      in
      future periods as we expand our in-house direct telemarketing sales team as
      well
      as our other marketing and related personnel.





-7-
 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). Software development
        costs related to third-party developers and direct labor expensed as research
        and development (see table above) amounted to approximately $52,000 for the
        three months ended March 31, 2006 compared to approximately $29,000 for the
        three months ended March 31, 2007. The decrease in 2007 reflects an increase
        in
        research and development costs that were capitalized for the three months
        ended
        March 31, 2007 as compared to the three months ended March 31, 2006. Research
        and development expenses are expected to increase in future periods as we
        continue to expand our internal development team, add new products and product
        versions, and as we continue to expand the amount of content made available
        to
        our QuickVerse®users.


The
      capitalization of direct and indirect labor and related overhead charges as
      software development costs (see “Cost of Sales” above) increased by
      approximately $30,000 from approximately $47,000 for the three months ended
      March 31, 2006 to approximately $77,000 for the three months ended March 31,
      2007. This increase reflects the increased amount of development projects for
      the three months ended March 31, 2007. It is anticipated that personnel costs
      will continue to increase in future periods as operating capital is available
      and deployed to further fund the staffing requirements of our product
      development, direct sales teams and marketing staff.





Total
      net
      personnel costs decreased approximately $52,000, from approximately $217,000
      for
      the three months ended March 31, 2006, to approximately $165,000 for the three
      months ended March 31, 2007. In addition, gross direct salaries and wages,
      before adjustment of capitalized wages and reclassifications (see prior
      paragraph), decreased approximately $32,000, from approximately $371,000 to
      approximately $339,000, over the same period. The decrease in direct salaries
      and wages was a result of streamlining our CBA sales team as well as the loss
      of
      our marketing manager. Further, as a percentage of gross revenues, direct
      salaries and wages decreased approximately 7% from approximately 34% for the
      three months ended March 31, 2006 to approximately 27% for the three months
      ended March 31, 2007. We do anticipate direct salaries and wages to increase
      in
      the future given our continued focus on expanding our direct telemarketing
      sales
      team, marketing staff and product development staff.




As
      a
      result of having restructured our health benefits plans in October 2006, our
      employment-related healthcare costs decreased approximately $7,000 from
      approximately $32,000 for the three months ended March 31, 2006 to approximately
      $25,000 for the three months ended March 31, 2007. In July 2005, we initiated
      a
      Simple IRA retirement plan for our employees and for those who participated
      we
      chose to match up to 3% of the employee’s annual gross pay. We anticipate that
      our costs related to this benefit will increase in future periods as more
      employees take advantage of the retirement plan.


Direct
        legal costs decreased approximately $19,000 for the three months ended March
        31,
        2007 as a result of our having concluded certain ongoing registration and
        related securities matters in February 2006. It is anticipated that legal
        costs
        will fluctuate in future periods in direct relation to the level of our
        capital-raising initiatives, acquisition and/or divestiture-related initiatives,
        and other transactional activity.
 
 Accounting
        and audit related expenses decreased by approximately $2,000 for the three
        months ended March 31, 2007. This increase is attributable principally to
        our
        having completed the process associated with a change in auditors which
        necessitated the concurrent engagement of two auditing firms during the
        transition period, not just one. It is anticipated that accounting costs
        will
        continue at these levels as we utilize the same principal accounting firm
        on an
        ongoing basis.
  Rent
        costs decreased approximately $2,000 for the three months ended March 31,
        2007
        as a result of periodic provisions for commercial and maintenance expenses
        in
        our lease agreements. In accordance with periodic lease escalations, rent
        cost
        will increase in the future for each of our primary office facility as well
        as
        our new warehouse facility. We believe that, over time, however, use of the
        warehouse facility will allow us to cease our dependency on a third-party
        to
        fulfill our retail product sales, which, in turn, will provide us with cost
        savings that will potentially enhance our gross margin. In addition to our
        primary office facility and our new warehouse, we also maintain a lease on
        certain office space in Naperville, Illinois.


-8-
 Table
          of Contents
  Telecommunications-related
        costs decreased approximately $5,000 for the three months ended March 31,
        2007
        as a result of qualifying for a lower rate with our local and long-distance
        carriers upon the renewal of our service agreement. In general, we anticipate
        our telecommunications-related costs to increase in the future consistent
        on a
        percentage basis with overall revenue growth.
  Corporate
        service fees decreased approximately $13,000 for the three months ended March
        31, 2007 resulting from the expiration of an independent consulting agreement.
        However, we expect consulting-related expenses to increase in future periods
        based on our having engaged the services of another independent consultant
        who
        began performing business development related advisory services for us in
        March
        2007 and who is expected to continue providing such services through February
        2008.


Finally,
      investor services fees increased approximately $8,000 for the three months
      ended
      March 31, 2007 as we entered into an investor relations service agreement in
      April 2006. These fees are related to the hiring of an investor relations firm
      and the expense for the issuance of a total of 250,000 restricted shares of
      common stock allocated over the term of the investor relations contract. We
      anticipate fees payable to this service provider to materially increase in
      future periods.




***Registration
      Rights Penalties***




Through
      March 31, 2006, and in connection with a 2004 private placement transaction,
      we
      had accrued a total of approximately $486,000 in registration rights penalties,
      $150,000 of which we had paid as of April 7, 2006, and the balance of which
      was
      reduced to a two-year promissory note. The note agreement called for monthly
      installments through May 2007 of $10,000 and $20,000 per month thereafter.
      In
      the aggregate, the accrual of, and the payments made in connection with, the
      registration rights penalties have had a material adverse effect on our
      business, our financial condition, including liquidity and profitability, and
      our results of operations. The results of operations for the three months ended
      March 31, 2006 include an increase in our net loss of approximately
      $49,000.




***Derivatives***




In
      May
      2004, we issued a three-year warrant to purchase up to 600,000 shares of our
      common stock to a consultant. This warrant may be exercised on a cashless basis
      at the option of the holder at a price per share of $0.15. In November 2004,
      we
      issued two five-year warrants to purchase an aggregate of 21,875,000 shares
      of
      our common stock in connection with a certain private placement transaction.
      The
      first warrant entitles 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 entitles
      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 is subject to standard adjustment
      provisions and each provides for settlement in registered shares of our common
      stock and may, at the option of the holder, be settled in a cashless, net-share
      settlement.


These
        warrants have been 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* .
        In
        accordance with the accounting mandate, the derivative liability associated
        with
        these warrants has been, and shall continue to be, until each is either fully
        exercised or expires, adjusted to fair value at each balance sheet date and
        is
        accordingly reassessed at each such time to determine whether the warrants
        should be classified (or reclassified, as appropriate) as a liability or
        as
        equity. Under EITF 00-19, a decrease in our stock price results in a decrease
        in
        the fair value of the derivative liability and a valuation gain to be recognized
        in our income statement whereas an increase in our stock price results in
        an
        increase in the fair value of the derivative liability and a valuation loss
        to
        be recognized in our income statement. At March 31, 2007 and 2006, the fair
        value of the derivative liability was approximately $500,000 and $2,671,000,
        respectively, and a fair value adjustment of approximately $27,000 has been
        included in other income for the three months ended March 31, 2007 and a
        fair
        value adjustment of approximately $609,000 has been included in other expenses
        for the three months ended March 31, 2006. If the market trading price of
        our
        stock rises, it could potentially have a materially adverse effect on our
        derivative liability.


-9-
 Table
          of Contents


***Amortization***




Amortization
      expenses remained steady at approximately $133,000 for the three months ended
      March 31, 2007 and 2006. 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 2007 and 2006 reflect the continual amortization of the 1999
      license, as well as the amortization of our website, www.quickverse.com, the
      most recent version of which we launched during the second quarter of 2004.




***Income
      Tax Benefits***





Our
      effective tax rate differs from the statutory federal rate due to differences
      between income and expense recognition prescribed by the Internal Revenue Code
      and Generally Accepted Accounting Principles. We utilize different methods
      and
      useful lives for depreciating property and equipment. Changes in estimates
      (reserves) are recognized as expense for financial reporting but are not
      deductible for income tax purposes.





We
      have
      recognized a net deferred tax asset whose realization depends on generating
      future taxable income. At March 31, 2007, management adjusted the amount of
      valuation allowance based on the assessment that we will produce sufficient
      income in the future to realize our net deferred tax asset. The resulting
      deferred tax liability reflects income taxes payable in future periods on the
      net deductible differences related to the 1999 license. We currently have net
      operating loss carryforwards, for federal income tax purposes, of approximately
      $9,052,000. These carryforwards are the result of income tax losses generated
      in
      2000 ($2,086,000 expiring in 2020), 2001 ($5,191,000 expiring in 2021), 2002
      ($235,000 expiring in 2022), 2005 ($956,000 expiring in 2025), and 2006
      ($584,000 expiring in 2026). We will need to achieve a minimum annual taxable
      income, before deduction of operating loss carryforwards, of approximately
      $486,000 to fully utilize the current loss carryforwards. Although there can
      be
      no assurance, we expect the deductible temporary differences (reserves) to
      reverse sometime beyond the next fiscal year.





***Liquidity
      And Capital Resources***




Our
      primary needs for liquidity and capital resources are the funding of our
      continued operations, which includes the ongoing internal development of new
      products, expansion and upgrade of existing products, and marketing and sales.
      Although there can be no assurance, we believe cash generated through our
      continuing operations will be at least minimally sufficient to sustain our
      operations, albeit with very limited growth. However, our pursuit of an
      aggressive growth plan, whether based on internally developed products or
      strategic product line acquisitions and/or licensing opportunities will likely
      require funding from outside sources or the divestiture of one or more existing
      product lines. 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 including software development.




**Working
                Capital at March 31**
            
            
            **2007**Current
                assets
            
            **$**
            **787,871**Current
                liabilities
            
            **$**
            **2,463,014**Retained
                deficit
            
            **$**
            **7,104,078**




As
      of
      March 31, 2007, we had approximately $788,000 in current assets and
      approximately $2,463,000 in current liabilities.  While liquidity remains
      an ongoing concern for us, and while there can be no continuing assurance,
      given
      the combined facts that (i) a substantial portion of our net sales - 53% 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), and (ii) our
      derivative liability is an item that does not necessitate actual cash payout,
      the situation suggested by our notably and consistently low ratio of our current
      assets to current liabilities has historically been manageable.




As
        of
        March 31, 2007, we had a retained deficit of approximately $7,104,000. We
        had a
        loss before income taxes of approximately $9,000 and a net loss after income
        taxes of approximately $6,000 for the three months ended March 31, 2007.
        For the
        three months ended March 31, 2007, we had a gain of approximately $27,000
        from
        the fair value adjustment of derivatives. See “Results Of Operations” above.


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**Cash
                Flows for Three Months Ending March 31**
            
            
            **2007**
            
            
            2006
            
            
            Change
            
            
            %Cash
                flows provided by operating activities
            
            **$**
            **192,564**
            
            $
            6,878
            
            $
            185,686
            
            
            2,700
            %Cash
                flows (used) by investing activities
            
            **$**
            **(154,273**
            **)**
            $
            (70,573
            )
            $
            (83,700
            )
            
            119
            %Cash
                flows (used) by financing activities
            
            **$**
            **(32,469**
            **)**
            $
            (2,197
            )
            $
            (30,272
            )
            
            1,378
            %




Net
      cash
      provided by operating activities was approximately $193,000 for the three months
      ended March 31, 2007, and approximately $7,000 for the three months ended March
      31, 2006. The increase was primarily due to a short-term relative imbalance
      in
      payments made to content providers as compared to receivables
      collected.


Net
        cash
        used in investing activities was approximately $154,000 for the three months
        ended March 31, 2007 and approximately $71,000 for the three months ended
        March
        31, 2006. The increase was mainly the result of our having capitalized more
        costs associated with software development. Further, during the three months
        ended March 31, 2007, our merchant banker held $40,000 cash in reserve to
        allow
        for a potential increase in credit card chargebacks from increased consumer
        purchases during the fourth quarter of 2006.


Net
      cash
      used by financing activities was approximately $32,000 for the three months
      ended March 31, 2007, and approximately $2,000 for the three months ended March
      31, 2006. The increase was due to an increase in payments made on long-term
      notes payable.





Finally,
      as a positive note, we were able to remain cash positive of approximately $6,000
      for the three months ended March 31, 2007 compared to a cash deficit of
      approximately $66,000 for the three months ended March 31, 2006, despite our
      merchant banker holding $40,000 cash in reserve to allow for a potential
      increase in credit card chargebacks from increased consumer purchases during
      the
      fourth quarter of 2006.





***Financing***





We
      have
      been unsuccessful in previous attempts to secure 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, as we have chosen this option in previous years.





***Contractual
      Liabilities***





We
      currently lease office space/warehouse facilities in Omaha, Nebraska under
      an
      operating lease with a third-party with terms extending through May 2007. We
      are
      responsible for all taxes, insurance and utility expenses associated with this
      lease. There is no lease renewal option contained in the lease. 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. We are responsible
      for
      all taxes, insurance and utility expenses associated with these two new
      operating leases.





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
      March
      31, 2007, the future minimum rental payments required under these leases are
      as
      follows:





2007
            
            $
            64,1692008
            
            
            90,0342009
            
            
            78,9932010
            
            
            63,8832011
            
            
            54,3392012
            
            
            23,335Total
                future minimum rental payments
            
            $
            374,753





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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. Minimum
      future lease payments under capital leases as of March 31, 2007 for each of
      the
      next three years and in the aggregate are:





2007
            
            $
            10,2952008
            
            
            13,7262009
            
            
            12,582Total
                minimum lease payments
            
            $
            36,603





**ITEM
      3. CONTROLS AND PROCEDURES.**





**(a)
      Formation of Disclosure Controls and Procedures Officer
      Committee**





Our
      Disclosure Controls and Procedures Officer Committee (the “Disclosure Policy
      Committee”) was formed in September 2002 and reports directly to our Chief
      Executive Officer and Chief Financial Officer. The Disclosure Policy Committee
      has implemented disclosure controls and procedures that meet the standards
      established by Rule 13a-15 of the Securities Exchange Act of 1934, as amended
      (the “Exchange Act”).





**Disclosure
      Controls and Procedures**





The
      Disclosure Policy Committee is primarily responsible for establishing and
      maintaining disclosure controls and procedures designed to ensure that the
      information required to be disclosed in our reports filed or submitted under
      the
      Exchange Act, is recorded, processed, summarized and reported in a timely manner
      as specified in the rules and forms set forth by the SEC and that the
      information required to be disclosed in our reports is accumulated and
      communicated to our management, including our principal executive and principal
      financial officers, or other persons performing similar functions, as
      appropriate to allow timely decisions regarding required
      disclosure.





**(b)
      Evaluation of Disclosure Controls and Procedures and Annual Report on Internal
      Control over Financial Reporting**





The
      Disclosure Policy Committee meets quarterly within one week of the last day
      of
      the period in which a given report is due. Members provide information that
      is
      documented in the Quarterly Control and Procedures Report for the period in
      which a quarterly 10-QSB or annual 10-KSB report is due. This report contains
      attestations and documentation in regard to the following:





▪
            the
                fact that disclosure controls and procedures have been reviewed as
                of the
                end of the period covered by a given report;▪
            any
                concerns regarding weaknesses in disclosure controls and
                procedures;▪
            any
                concerns relating to events that may require
                disclosure;▪
            any
                concerns relating to internal fraud/defalcation;▪
            potential
                material losses;▪
            new
                off-balance sheet arrangements; and▪
            material
                amounts not reflected on the general
                ledger.





The
      Quarterly Control and Procedures Report is completed, signed and presented
      to
      the CEO and CFO prior to completion of the first draft of each 10-QSB and
      10-KSB. Because material issues may occur between regularly scheduled quarterly
      meetings, this report is to be generated by the disclosure policy appropriate
      officers at any time warranted. The CEO and CFO will consult with our Disclosure
      Policy Committee to determine any action that is necessary.





Our
      CEO
      and CFO have evaluated the effectiveness of the design and operation of our
      disclosure controls and procedures (as defined in Rule 13a-15(e) under the
      Exchange Act) as of the end of the fiscal quarter covered by this quarterly
      report on Form 10-QSB. Based on this evaluation, our CEO and CFO have concluded
      that our disclosure controls and procedures are effective and designed to ensure
      that the information required to be disclosed in our reports filed or submitted
      under the Exchange Act, is recorded, processed, summarized and reported within
      the requisite time periods.


During
        the course of their evaluation our CEO and CFO did not discover any fraud
        involving management or any other personnel who play a significant role in
        our
        disclosure controls and procedures. Furthermore, because there were no
        significant deficiencies and/or material weaknesses discovered no remedial
        measures were necessary or taken during the period covered by this report
        to
        correct any such deficiencies.
 
 **(c)
        Changes in Internal Control over Financial Reporting**
 
 No
        changes in our disclosure controls and procedures, internal control over
        financial reporting or other factors have occurred during the fiscal quarter
        covered by this report that would materially affect or be reasonably likely
        to
        materially affect our disclosure controls and procedures or 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-QSB for the period ended March 31,
      2007, 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. Moreover,
      there can be no assurance that our insurance 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
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
      OF PROCEEDS.**





There
      were no reportable events under this Item 2 during the quarterly period ended
      March 31, 2007.





**ITEM
      3. DEFAULTS UPON SENIOR
      SECURITIES.**





There
      were no reportable events under this Item 3 during the quarterly period ended
      March 31, 2007.





**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 March 31, 2007.





**ITEM
      5. OTHER INFORMATION.**





Our
      Annual Meeting of the Stockholders of Findex.com, Inc., previously scheduled
      to
      be held on May 4, 2007, has been rescheduled for September 21,
      2007.





There
      were no reportable events under this Item 5 during the quarterly period ended
      March 31, 2007.





**ITEM
      6. EXHIBITS.**





**No.**
            **Description
                of Exhibit**2.1
            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.




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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, 2000.10.3
            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.




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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, 2006.10.21
            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 10.25
                on Form
                10-KSB filed April 17, 2007.31.1
            Certification
                of Findex.com, Inc. Chief Executive Officer, Steven Malone, required
                by
                Rule 13a-14(a) or Rule 15d-14(a), and dated May 21, 2007. FILED
                HEREWITH.31.2
            Certification
                of Findex.com, Inc. Chief Financial Officer, Kirk R. Rowland, required
                by
                Rule 13a-14(a) or Rule 15d-14(a), and dated May 21, 2007. FILED
                HEREWITH.32.1
            Certification
                of Findex.com, Inc. Chief Executive Officer, Steven Malone, required
                by
                Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of
                Title
                18 of the United States Code (18 U.S.C. 1350), and dated May 21,
                2007.
                FILED HEREWITH.32.2
            Certification
                of Findex.com, Inc. Chief Financial Officer, Kirk R. Rowland, required
                by
                Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of
                Title
                18 of the United States Code (18 U.S.C. 1350), and dated May 21,
                2007.
                FILED HEREWITH.





**Signatures**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**FINDEX.COM,
                INC.**Date:
                May 21, 2007
            By
            /s/
                Steven MaloneSteven
                MalonePresident
                and Chief Executive Officer





Date:
                May 21, 2007
            By
            /s/
                Kirk R. RowlandKirk
                R. Rowland, CPAChief
                Financial Officer





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