**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 JUNE 30, 2007**








Commission
      file number: 0-29963








**FINDEX.COM,
      INC.**


(Exact
      name of small business issuer as specified in its charter)








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





(402)
      333-1900


(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
      August
      17, 2007, the registrant had outstanding 51,650,817 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


**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.
            9**PART
                II - OTHER INFORMATION**ITEM
                1. Legal Proceedings.
            11ITEM
                2. Unregistered Sales of Equity Securities and
                Use of Proceeds.
            11ITEM
                3. Defaults Upon Senior
                Securities.
            11ITEM
                4. Submission of Matters to a Vote of Security
                Holders.
            11ITEM
                5. Other Information.
            12ITEM
                6. Exhibits.
            12






























Table
          of Contents


**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS.**




**Findex.com,
                  Inc.****CONDENSED
                  CONSOLIDATED BALANCE SHEETS****(Unaudited)****June
                  30, 2007**
              
              
              December
                  31, 2006**Assets**Current
                  assets:Cash
                  and cash equivalents
              
              **$**
              **3,452**
              
              $
              48,672Accounts
                  receivable, trade, net
              
              
              **284,944**
              
              
              318,000Inventories
              
              
              **110,713**
              
              
              145,344Other
                  current assets
              
              
              **231,744**
              
              
              213,162Total
                  current assets
              
              
              **630,853**
              
              
              725,178Property
                  and equipment, net
              
              
              **72,145**
              
              
              86,638Software
                  license, net
              
              
              **1,007,015**
              
              
              1,258,769Capitalized
                  software development costs, net
              
              
              **522,712**
              
              
              491,695Restricted
                  cash
              
              
              **40,000**
              
              
              ---Other
                  assets
              
              
              **494,474**
              
              
              493,565Total
                  assets
              
              **$**
              **2,767,199**
              
              $
              3,055,845**Liabilities
                  and stockholders’ equity**Current
                  liabilities:Accounts
                  payable, trade
              
              **$**
              **738,866**
              
              $
              693,260Accrued
                  royalties
              
              
              **693,469**
              
              
              649,763Derivative
                  liabilities
              
              
              **473,123**
              
              
              526,868Other
                  current liabilities
              
              
              **629,370**
              
              
              561,111Total
                  current liabilities
              
              
              **2,534,828**
              
              
              2,431,002Long-term
                  obligations
              
              
              **19,329**
              
              
              80,568Commitments
                  and contingencies (Note 9)Stockholders’
                  equity:Preferred
                  stock, $.001 par value5,000,000
                  shares authorized-0-
                  and -0- shares issued and outstanding, respectively
              
              
              **---**
              
              
              ---Common
                  stock, $.001 par value120,000,000
                  shares authorized,50,350,817
                  and 49,788,317 shares issued and outstanding, respectively
              
              
              **50,351**
              
              
              49,788Paid-in
                  capital
              
              
              **7,610,321**
              
              
              7,592,884Retained
                  (deficit)
              
              
              **(7,447,630**
              **)**
              
              (7,098,397
              )Total
                  stockholders’ equity
              
              
              **213,042**
              
              
              544,275Total
                  liabilities and stockholders’ equity
              
              **$**
              **2,767,199**
              
              $
              3,055,845*See
                  accompanying notes.*




F-1
 Table
            of Contents


**Findex.com,
                Inc.****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited)****Three
                Months Ended**
            **Six
                Months Ended****June
                30,**
            **June
                30,****2007**
            
            
            2006
            
            
            **2007**
            
            
            2006Revenues,
                net of reserves and allowances
            
            **$**
            **602,838**
            
            $
            661,279
            
            **$**
            **1,758,331**
            
            $
            1,760,070Cost
                of sales
            
            
            **281,517**
            
            
            484,918
            
            
            **776,875**
            
            
            969,386Gross
                profit
            
            
            **321,321**
            
            
            176,361
            
            
            **981,456**
            
            
            790,684Operating
                expenses:Sales
                and marketing
            
            
            **147,097**
            
            
            196,537
            
            
            **337,801**
            
            
            387,461General
                and administrative
            
            
            **392,481**
            
            
            451,296
            
            
            **737,809**
            
            
            924,682Other
                operating expenses
            
            
            **153,326**
            
            
            145,538
            
            
            **303,649**
            
            
            291,421Total
                operating expenses
            
            
            **692,904**
            
            
            793,371
            
            
            **1,379,259**
            
            
            1,603,564Loss
                from operations
            
            
            **(371,583**
            **)**
            
            (617,010
            )
            
            **(397,803**
            **)**
            
            (812,880
            )Other
                expenses, net
            
            
            **(6,445**
            **)**
            
            (8,099
            )
            
            **(15,275**
            **)**
            
            (10,031
            )Registration
                rights penalties
            
            
            **---**
            
            
            ---
            
            
            **---**
            
            
            (49,314
            )Gain
                (loss) on valuation adjustment of derivatives
            
            
            **27,201**
            
            
            1,481,411
            
            
            **53,745**
            
            
            872,539Income
                (loss) before income taxes
            
            
            **(350,827**
            **)**
            
            856,302
            
            
            **(359,333**
            **)**
            
            314Income
                tax (provision) benefit
            
            
            **7,275**
            
            
            5,356
            
            
            **10,100**
            
            
            (25,452
            )Net
                income (loss)
            
            **$**
            **(343,552**
            **)**
            $
            861,658
            
            
            **(349,233**
            **)**
            
            (25,138
            )Retained
                deficit at beginning of year
            
            **(7,098,397**
            **)**
            
            (7,752,097
            )Retained
                deficit at end of period
            
            
            **$**
            **(7,447,630**
            **)**
            $
            (7,777,235
            )Net
                income (loss) per share:Basic
            
            **$**
            **(0.01**
            **)**
            $
            0.02
            
            **$**
            **(0.01**
            **)**
            $
            0.00Diluted
            
            **$**
            **(0.01**
            **)**
            $
            0.02
            
            **$**
            **(0.01**
            **)**
            $
            0.00Weighted
                average shares outstanding:Basic
            
            
            **49,794,498**
            
            
            49,558,317
            
            
            **49,791,425**
            
            
            49,162,163Diluted
            
            
            **49,794,498**
            
            
            50,397,239
            
            
            **49,791,425**
            
            
            49,162,163*See
                accompanying notes.*


F-2
 Table
            of Contents


**Findex.com,
                Inc.****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****(Unaudited)****Six
                Months Ended June 30,**
            
            
            **2007**
            
            
            2006Cash
                flows from operating activities:Cash
                received from customers
            
            **$**
            **1,835,864**
            
            $
            1,956,573Cash
                paid to suppliers and employees
            
            
            **(1,580,906**
            **)**
            
            (1,762,323
            )Other
                operating activities, net
            
            
            **(11,195**
            **)**
            
            (2,030
            )Net
                cash provided by operating activities
            
            
            **243,763**
            
            
            192,220Cash
                flows from investing activities:Software
                development costs
            
            
            **(191,451**
            **)**
            
            (238,380
            )Deposits
                paid
            
            
            **(41,189**
            **)**
            
            ---Other
                investing activities, net
            
            
            **(11,334**
            **)**
            
            (15,653
            )Net
                cash used by investing activities
            
            
            **(243,974**
            **)**
            
            (254,033
            )Cash
                flows from financing activities:Payments
                made on long-term notes payable
            
            
            **(45,009**
            **)**
            
            (27,228
            )Net
                cash used by financing activities
            
            
            **(45,009**
            **)**
            
            (27,228
            )Net
                decrease in cash and cash equivalents
            
            
            **(45,220**
            **)**
            
            (89,041
            )Cash
                and cash equivalents, beginning of year
            
            
            **48,672**
            
            
            119,560Cash
                and cash equivalents, end of period
            
            **$**
            **3,452**
            
            $
            30,519Reconciliation
                of net loss to cash flows from operating activities:Net
                loss
            
            **$**
            **(349,233**
            **)**
            $
            (25,138
            )Adjustments
                to reconcile net loss to net cashprovided
                by operating activities:Software
                development costs amortized
            
            
            **160,433**
            
            
            457,598Gain
                on fair value adjustment of derivatives
            
            
            **(53,745**
            **)**
            
            (872,539
            )Bad
                debts provision
            
            
            **17,164**
            
            
            ---Depreciation
                & amortization
            
            
            **286,485**
            
            
            291,421Gain
                on sale of property and equipment
            
            
            **(551**
            **)**
            
            ---Noncash
                operating expenses
            
            
            **---**
            
            
            65,000Change
                in assets and liabilities:Decrease
                in accounts receivable
            
            
            **15,892**
            
            
            251,271Decrease
                in inventories
            
            
            **34,631**
            
            
            67,258Decrease
                in refundable taxes
            
            
            **2,050**
            
            
            5,764Decrease
                (increase) in prepaid expenses
            
            
            **1,519**
            
            
            (43,659
            )Increase
                in accrued royalties
            
            
            **43,706**
            
            
            9,583Increase
                in accounts payable
            
            
            **45,606**
            
            
            71,719(Decrease)
                increase in deferred taxes
            
            
            **(10,100**
            **)**
            
            25,452Increase
                (decrease) in other liabilities
            
            
            **49,906**
            
            
            (111,510
            )Net
                cash provided by operating activities
            
            **$**
            **243,763**
            
            $
            192,220*See
                accompanying notes.*


F-3
 Table
            of Contents


**Findex.com,
      Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 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 $1,906,333, less accumulated
      amortization of $1,383,621 at June 30, 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 $60,569 and $83,620 for the six months ended June 30, 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 $112,098, less accumulated amortization of $84,440 at June 30,
      2007.





**RESTRICTED
      CASH**





Restricted
      cash represents cash held in reserve by our merchant banker to allow for a
      potential increase in credit card charge backs from increased consumer
      purchases.





**REVENUE
      RECOGNITION**





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





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





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





***Product
      Revenue***





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





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





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





We
      reduce
      product revenue for estimated returns and price protections that are based
      on
      historical experience and other factors such as the volume and price mix of
      products in the retail channel, trends in retailer inventory and economic trends
      that might impact customer demand for our products. We also reduce product
      revenue for the estimated redemption of end-user rebates on certain current
      product sales. Our rebate reserves are estimated based on the terms and
      conditions of the specific promotional rebate program, actual sales during
      the
      promotion, the amount of redemptions received and historical redemption trends
      by product and by type of promotional program. We did not offer any rebate
      programs to our customers during the three and six months ended June 30, 2007
      and 2006 and maintain a reserve for rebate claims remaining unpaid from 2000
      and
      2001.





F-6
 Table
          of Contents


***Service
      Revenue***





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





***Multiple
      Element Arrangements***





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





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





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





***Shipping
      and Handling Costs***





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





***Customer
      Service and Technical Support***





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





**INCOME
      TAXES**





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





F-7
 Table
          of Contents


**EARNINGS
      PER SHARE**





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





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





**RECENT
      ACCOUNTING PRONOUNCEMENTS**





**Fair
      Value**





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* ,
      to
      provide enhanced guidance for using fair value to measure assets and
      liabilities. The standard also expands disclosure requirements for assets and
      liabilities measured at fair value, how fair value is determined, and the effect
      of fair value measurements on earnings. The standard applies whenever other
      authoritative literature requires, or permits, certain assets or liabilities
      to
      be measured at fair value, but does not expand the use of fair value. SFAS
      No.
      157 is effective for financial statements issued for fiscal years beginning
      after November 15, 2007, and interim periods within those years. Early adoption
      is permitted. We plan to adopt SFAS No. 157 as of January 1, 2008. The balance
      sheet items carried at fair value consist of derivatives and other financial
      instruments. Additionally, we use fair value concepts to test various long-lived
      assets for impairment and to initially measure assets and liabilities acquired
      in a business combination. Management is currently evaluating the impact of
      adoption on how these liabilities are currently measured.





In
      February 2007 the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities,* to
      provide companies with an option to report selected financial assets and
      liabilities at fair value. The standard’s objective is to reduce both complexity
      in accounting for financial instruments and the volatility in earnings caused
      by
      measuring related assets and liabilities differently. The standard requires
      companies to provide additional information that will help investors and other
      users of financial statements to more easily understand the effect of the
      company’s choice to use fair value on its earnings. It also requires companies
      to display the fair value of those assets and liabilities for which the company
      has chosen to use fair value on the face of the balance sheet. The new standard
      does not eliminate disclosure requirements included in other accounting
      standards, including requirements for disclosures about fair value measurements
      included in SFAS 157, *Fair
      Value Measurements* ,
      and
      SFAS 107, *Disclosures
      about Fair Value of Financial Instruments* .
      SFAS
      159 is effective for fiscal years beginning after November 15, 2007. We plan
      to
      adopt SFAS No. 159 as of January 1, 2008. We are in the process of evaluating
      this standard and therefore have not yet determined the impact that the adoption
      will have on our financial position, results of operations or cash
      flows.





**RECLASSIFICATIONS**





Certain
      accounts in our 2006 financial statements have been reclassified for comparative
      purposes to conform with the presentation in our 2007 financial
      statements.





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**NOTE
      2 - GOING CONCERN**





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with Generally Accepted Accounting Principles in the
      United States applicable to a going concern. As of June 30, 2007, we had a
      year-to-date net loss of ($349,233), and negative working capital of $1,903,975
      and $1,705,824, and an accumulated deficit of $7,447,630 and $7,098,397 as
      of
      June 30, 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 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
      June
      30, 2007, inventories consisted of the following:





Raw
                materials
            
            **$**
            **67,882**Finished
                goods
            
            
            **42,831**Inventories
            
            **$**
            **110,713**





**NOTE
      4 - RESERVES AND ALLOWANCES**





At
      June
      30, 2007, the allowance for doubtful accounts included in Accounts receivable,
      trade, net, consisted of the following:





Balance
                December 31, 2006
            
            **$**
            **11,000**Bad
                debts provision (included in Other operating expenses)
            
            
            **17,164**Accounts
                written off
            
            
            **(2,879**
            **)**Collection
                of accounts previously written off
            
            
            **715**Balance
                June 30, 2007
            
            **$**
            **26,000**





At
      June
      30, 2007, the reserve for sales returns included in Other current liabilities
      consisted of the following:





Balance
                December 31, 2006
            
            **$**
            **98,132**Return
                provision - sales
            
            
            **223,100**Return
                provision - cost of sales
            
            
            **(33,465**
            **)**Returns
                processed
            
            
            **(167,590**
            **)**Balance
                June 30, 2007
            
            **$**
            **120,177**





**NOTE
      5 - DERIVATIVE LIABILITIES**





At
      June
      30, 2007, our derivative liability consisted of the following:





Warrant
                A
            
            **$**
            **---**Warrant
                B
            
            
            **255,813**Warrant
                C
            
            
            **217,310**Derivatives
            
            **$**
            **473,123**





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 was exercisable on
      a
      cashless basis at the option of the warrant holder at a price per share of
      $0.15. This warrant was 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* . On
      May 1, 2007, this warrant expired unexercised. See Note 6.





F-9
 Table
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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
                B**
            
            
            **Warrant
                C**Expected
                term - years
            
            
            2.61
            
            
            2.61Stock
                price at June 30, 2007
            
            $
            0.03
            
            $
            0.03Expected
                dividend yield
            
            
            0
            %
            
            0
            %Expected
                stock price volatility
            
            
            212
            %
            
            212
            %Risk-free
                interest rate
            
            
            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 income
      adjustments of $27,201 and $53,745 for the three and six months ended June
      30,
      2007, respectively, and income adjustments of $1,481,411 and $872,539 for the
      three and six months ended June 30, 2006, respectively.





**NOTE
      6 - STOCKHOLDERS’ EQUITY**





**COMMON
      STOCK**





In
      June
      2007, we committed to issue a total of 562,500 restricted shares of common
      stock
      to our outside director, at the closing price as of June 29, 2007 ($0.032),
      in
      lieu of cash payments of amounts accrued for services as a member of our board
      from the period of October 1, 2006 through June 30, 2007. This issuance was
      valued at $18,000.





**COMMON
      STOCK OPTIONS**





In
      April
      2007, 50,000 vested stock options with an exercise price of $0.11, related
      to a
      former employee, expired unexercised. We did not grant any options or other
      stock-based awards to the individual for which the options expired, during
      the
      six months prior to and after the option expirations.





**COMMON
      STOCK WARRANTS**





In
      May
      2007, a warrant to purchase up to 600,000 restricted shares of our common stock
      with an exercise price of $0.15 per share expired unexercised. See Note
      5.





In
      June
      2007, a warrant to purchase up to 250,000 restricted shares of our common stock
      with an exercise price of $0.10 per share expired unexercised.





F-10
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**NOTE
      7 - INCOME TAXES**





The
      provision (benefit) for taxes on net loss for the three and six months ended
      June 30, 2007 and 2006 consisted of the following:





**Three
                Months**
            **Six
                Months****2007**
            
            
            2006
            
            
            **2007**
            
            
            2006Current:Federal
            
            **$**
            **---**
            
            $
            ---
            
            **$**
            **---**
            
            $
            ---State
            
            
            **---**
            
            
            ---
            
            
            **---**
            
            
            ---**---**
            
            
            ---
            
            
            **---**
            
            
            ---Deferred:Federal
            
            
            **(7,375**
            **)**
            
            (3,956
            )
            
            **(10,225**
            **)**
            
            27,888State
            
            
            **100**
            
            
            (1,400
            )
            
            **125**
            
            
            (2,436
            )**(7,275**
            **)**
            
            (5,356
            )
            
            **(10,100**
            **)**
            
            25,452Total
                tax provision (benefit)
            
            **$**
            **(7,275**
            **)**
            $
            (5,356
            )
            **$**
            **(10,100**
            **)**
            $
            25,452





**NOTE
      8 - EARNINGS PER COMMON SHARE**





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





**For
                the Three Months Ended June 30,**
            
            
            **2007**
            
            
            2006Net
                income (loss)
            
            $
            (343,552
            )
            $
            861,658Preferred
                stock dividends
            
            
            ---
            
            
            **---**Net
                income (loss) available to common shareholders
            
            $
            (343,552
            )
            $
            861,658Basic
                weighted average shares outstanding
            
            
            **49,794,498**
            
            
            49,558,317Dilutive
                effect of:Stock
                options
            
            
            ---
            
            
            672,554Warrants
            
            
            ---
            
            
            166,368Diluted
                weighted average shares outstanding
            
            
            **49,794,498**
            
            
            50,397,239





**For
                the Six Months Ended June 30,**
            
            
            **2007**
            
            
            2006Net
                loss
            
            $
            (349,233
            )
            $
            (25,138
            )Preferred
                stock dividends
            
            
            ---
            
            
            **---**Net
                loss available to common shareholders
            
            $
            (349,233
            )
            $
            (25,138
            )Basic
                weighted average shares outstanding
            
            
            **49,791,425**
            
            
            49,162,163Dilutive
                effect of:Stock
                options
            
            
            ---
            
            
            ---Warrants
            
            
            ---
            
            
            ---Diluted
                weighted average shares outstanding
            
            
            **49,791,425**
            
            
            49,162,163





**NOTE
      9 - 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 ($21,745
      included in Other current liabilities at June 30, 2007), bonuses ($30,542
      included in other current liabilities at June 30, 2007), and any vested deferred
      vacation compensation ($37,125 included in other current liabilities at June
      30,
      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.





F-11
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          of Contents


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
      10 - 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.





**NOTE
      11 - SUBSEQUENT EVENTS**





In
      July
      2007, we amended an agreement with a business development consultant to provide
      for additional compensation of warrants to purchase up to 2,300,000 shares
      of
      common stock at $0.032 per share. The agreement provides that warrants to
      purchase up to 1,300,000 shares of common stock vest on August 31, 2007 and
      warrants to purchase up to 1,000,000 shares of common stock vest on January
      1,
      2008.





In
      July
      2007, we entered into a stock subscription agreement with a business development
      consultant for the sale of 1,300,000 shares of common stock at a price of $0.025
      per share. We realized $32,500 from this subscription.




As
      of
      August 14, 2007, we have received a letter of interest from a potential buyer
      of
      one of our top software titles. We are currently unable to determine if the
      price is reasonable relative to its current fair value. In addition, the letter
      of interest does not provide for any legally enforceable provisions, such as
      a
      firm purchase commitment, and therefore, we have not determined the asset sale
      to be probable. SFAS No. 144, *Accounting for the Impairment or Disposal of
      Long-Lived Assets* requires all of six criteria be met before classifying a
      long-lived asset as “held for sale”. We have not classified this asset as “held
      for sale” at June 30, 2007 due to the failure of the two criteria mentioned
      above.




F-12
 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 second quarter of 2007, we continued to concentrate on our core products,
      QuickVerse ® and
      Membership Plus ® ,
      and
      their technological features in order to meet our development schedule and
      our
      annual upgrade releases for these product lines. Furthermore, we continued
      to
      focus on expanding the content available for our QuickVerse ® products. We released the following two new reference collections for
      QuickVerse ® (Windows) users:





▪
            Theological
                Dictionary of the New Testament: Abridged®,
                commonly known as “Little Kittel”, which details more than 2,300
                theologically significant New Testament words with a retail price
                of
                $59.95; and▪
            Word
                Studies in the Greek New Testament®,
                which comes in a three volume set and provides a wealth of knowledge
                and
                insight on the majority of the Greek New Testament with a retail
                price of
                $59.95.





During
      the first quarter of 2007, as part of our ongoing partnership with Thomas Nelson
      Publishers ® ,
      we
      released the Nelson Reference Collection ® for
      QuickVerse ® (Windows) users at a retail price of $129.95. In addition, we released
      QuickVerse ® 2007
      Macintosh which is available in the following three editions:





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





-1-
 Table
          of Contents


Comparatively,
      during the first six months of 2006, we released the following:




▪
            QuickVerse®2006 Macintosh Gold Edition with a retail price of
                $349.95;▪
            the
                Holman Christian Standard Bible®with a retail price of $29.95;▪
            QuickVerse®2006 Parable Edition with a retail price of $49.95; and▪
            QuickVerse®2006 Bible Suite with a retail price of
                $29.95.





Despite
      our decreased net revenues during the six months ended June 30, 2007, we were
      able to considerably decrease our total operating expenses while reducing our
      sales and marketing costs as well as 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.





***Results
      of Operations for Quarters Ending June 30, 2007 and June 30,
      2006***





**Statement
                of Operations for Six Months Ending June 30,**
            
            
            **2007**
            
            
            2006
            
            
            Change
            
            
            %Net
                revenues
            
            **$**
            **1,758,331**
            
            $
            1,760,070
            
            $
            (1,739
            )
            
            0
            %Cost
                of sales
            
            
            **776,875**
            
            
            969,386
            
            
            (192,511
            )
            
            20
            %Gross
                profit
            
            **$**
            **981,456**
            
            $
            790,684
            
            $
            190,772
            
            
            24
            %Total
                operating expenses
            
            
            **(1,379,259**
            **)**
            
            (1,603,564
            )
            
            224,305
            
            
            14
            %Loss
                from operations
            
            **$**
            **(397,803**
            **)**
            $
            (812,880
            )
            $
            415,077
            
            
            51
            %Other
                expenses
            
            
            **(15,275**
            **)**
            
            (10,031
            )
            
            (5,244
            )
            
            52
            %Registration
                rights penalties
            
            
            **---**
            
            
            (49,314
            )
            
            49,314
            
            
            100
            %Gain
                on fair value adjustment of derivatives
            
            
            **53,745**
            
            
            872,539
            
            
            (818,794
            )
            
            94
            %Income
                (loss) before income taxes
            
            **$**
            **(359,333**
            **)**
            $
            314
            
            $
            (359,647
            )
            
            114,537
            %Income
                tax (provision) benefit
            
            
            **10,100**
            
            
            (25,452
            )
            
            35,552
            
            
            140
            %Net
                loss
            
            **$**
            **(349,233**
            **)**
            $
            (25,138
            )
            $
            (324,095
            )
            
            1,289
            %





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.





Although
      our net revenues decreased slightly, our gross profit increased for the six
      months ended June 30, 2007 due to reduced cost of sales. We incurred a loss
      from
      operations of approximately $398,000 for the six months ended June 30, 2007,
      which represents an improvement of approximately $415,000 from our loss from
      operations of approximately $813,000 for the six months ended June 30, 2006.
      However, our net loss for the six months ended June 30, 2007 increased
      approximately $324,000 to a net loss of approximately $349,000 compared to
      a net
      loss of approximately $25,000 for the six months ended June 30, 2006.





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





▪
            a
                decrease in cost of sales for the six months ended June 30, 2007
                due
                primarily to decreased amortization of software development costs;▪
            a
                decrease in total operating expenses for the six months ended June
                30,
                2007 arising from decreased sales, marketing, general and administrative
                costs;▪
            a
                decrease in registration rights penalties for the six months ended
                June
                30, 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; and▪
            a
                decrease in our gain related to the fair value adjustment of derivatives
                for the six months ended June 30, 2007 due to expired warrants and
                a
                decrease in the estimated life of the remaining
                warrants.





-2-
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          of Contents


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





**Revenues
                for Six Months Ending June 30,**
            
            
            **2007**
            
            
            **%
                to Sales**
            
            
            
            2006
            
            
            %
                to Sales
            
            
            
            Change
            
            
            %Gross
                revenues
            
            **$**
            **1,980,108**
            
            
            **100**
            **%**
            
            $
            1,882,698
            
            
            100
            %
            
            $
            97,410
            
            
            5
            %Less
                reserves and allowances
            
            
            **(221,777**
            **)**
            
            **11**
            **%**
            
            
            (122,628
            )
            
            7
            %
            
            
            (99,149
            )
            
            81
            %Net
                revenues
            
            **$**
            **1,758,331**
            
            
            **89**
            **%**
            
            $
            1,760,070
            
            
            93
            %
            
            $
            (1,739
            )
            
            86
            %





Gross
      revenues increased for the six months ended June 30, 2007, which was primarily
      attributable to the liquidation sales of our QuickVerse ® 2006
      product line (Windows and Macintosh editions), 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. In addition, we continue to
      release new content each quarter for our QuickVerse ® products.





During
      each of the six months ended June 30, 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.





Our
      reserves for sales returns and allowances increased for the six months ended
      June 30, 2007, and as a percentage of gross revenues, reserves for sales returns
      and allowances also increased. 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 instance, we
      experienced an increase in sales returns and allowances for the six months
      ended
      June 30, 2007 due to Membership Plus ® 2007
      shipping in mid October 2006. Further, for the six months ended June 30, 2007,
      we increased our reserves for sales returns as we have experienced a delay
      in
      our receivable collections from our liquidation sales which could potentially
      result in increased actual returns in the future.





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.





***Cost
      of Sales***





**Cost
                of Sales for Six Months Ending June 30,**
            
            
            **2007**
            
            
            **%
                to Sales**
            
            
            
            2006
            
            
            %
                to Sales
            
            
            
            Change
            
            
            %Direct
                costs
            
            **$**
            **267,051**
            
            
            **13**
            **%**
            
            $
            254,328
            
            
            14
            %
            
            $
            12,723
            
            
            5
            %Less
                reserve for sales returns and allowances
            
            
            **(33,465**
            **)**
            
            **2**
            **%**
            
            
            (18,165
            )
            
            1
            %
            
            
            (15,300
            )
            
            84
            %Amortization
                of software development costs
            
            
            **160,433**
            
            
            **8**
            **%**
            
            
            457,598
            
            
            24
            %
            
            
            (297,165
            )
            
            65
            %Royalties
            
            
            **254,800**
            
            
            **13**
            **%**
            
            
            161,627
            
            
            9
            %
            
            
            93,173
            
            
            58
            %Freight-out
            
            
            **79,840**
            
            
            **4**
            **%**
            
            
            52,109
            
            
            3
            %
            
            
            27,731
            
            
            53
            %Fulfillment
            
            
            **48,216**
            
            
            **2**
            **%**
            
            
            61,889
            
            
            3
            %
            
            
            (13,673
            )
            
            22
            %Cost
                of sales
            
            **$**
            **776,875**
            
            
            **39**
            **%**
            
            $
            969,386
            
            
            51
            %
            
            $
            (192,511
            )
            
            20
            %





-3-
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          of Contents


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. Cost of sales decreased for the six months
      ended June 30, 2007, and decreased as a percentage of gross revenues. The
      overall decrease is predominantly attributable to decreased amortization of
      software development costs. The large amount of amortization of software
      development costs recognized during the six months ended June 30, 2006 resulted
      primarily from the continual amortization of QuickVerse ® 2006
      Macintosh (released June 2005) and QuickVerse ® 2006
      Windows (released September 2005). QuickVerse ® 2006
      Macintosh was our first product produced on the Macintosh platform; and
      therefore, the amount of capitalized development costs recognized for that
      specific development project was quite significant as compared to our
      development projects on the Windows platform.





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.





Fulfillment
      costs decreased for the six months ended June 30, 2007, which is a direct result
      of our deliberate initiatives to decrease our reliance on a third-party
      warehouse as we began operating our own fulfillment center as of June
      2007.





Freight
      costs increased for the six months ended June 30, 2007 as a direct result 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 for the
      six
      months ended June 30, 2007. as a result of the following:





▪
            A
                year over year increase in year-end liquidation sales of prior year
                editions of QuickVerse®(Windows and Macintosh editions);▪
            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 for**
            
            **Three
                Months Ended June 30,**
            **Six
                Months Ended June 30,****2007**
            
            
            2006
            
            
            **2007**
            
            
            2006Beginning
                balance
            
            **$**
            **493,981**
            
            $
            586,170
            
            **$**
            **491,695**
            
            $
            707,067Capitalized
            
            
            **81,745**
            
            
            175,149
            
            
            **191,450**
            
            
            238,380Amortized
                (Cost of sales)
            
            
            **(53,014**
            **)**
            
            (273,470
            )
            
            **(160,433**
            **)**
            
            (457,598
            )Ending
                Balance
            
            **$**
            **522,712**
            
            $
            487,849
            
            **$**
            **522,712**
            
            $
            487,849Research
                and development expense (General and administrative)
            
            **$**
            **30,988**
            
            $
            31,388
            
            **$**
            **60,569**
            
            $
            83,620





Our
      software development costs for the three and six months ended June 30, 2007
      and
      2006 are summarized in the table above. The relative decrease in capitalized
      costs reflects an increased efficiency from our development staff (including
      internal and external developers) as our development projects for the six months
      ended June 30, 2007 focused on the annual releases of QuickVerse ® ,
      Membership Plus ® and new
      content for our QuickVerse ® products. The relative decrease in amortization reflects the overall reduction
      in the number of products released during the year ended December 31, 2006
      as
      well as the amortization recognized for QuickVerse ® 2006
      Macintosh, our first product produced on the Macintosh platform, brought to
      an
      end.





-4-
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          of Contents


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.





***Sales,
      General and Administrative***





**Sales,
                General and Administrative Costs for Six Months Ending June
                30,**
            
            
            **2007**
            
            
            **%
                to Sales**
            
            
            
            2006
            
            
            %
                to Sales
            
            
            
            Change
            
            
            %***Selected
                expenses:***Commissions
            
            **$**
            **109,723**
            
            
            **6**
            **%**
            
            $
            111,096
            
            
            6
            %
            
            $
            (1,373
            )
            
            1
            %Advertising
                and direct marketing
            
            
            **92,802**
            
            
            **5**
            **%**
            
            
            94,235
            
            
            5
            %
            
            
            (1,433
            )
            
            2
            %Sales
                and marketing wages, reclassified
            
            
            **135,276**
            
            
            **7**
            **%**
            
            
            182,130
            
            
            10
            %
            
            
            (46,854
            )
            
            26
            %**Total
                sales and marketing**
            
            **$**
            **337,801**
            
            
            **17**
            **%**
            
            $
            387,461
            
            
            21
            %
            
            $
            (49,660
            )
            
            13
            %Research
                and development
            
            **$**
            **60,569**
            
            
            **3**
            **%**
            
            $
            83,620
            
            
            4
            %
            
            $
            (23,051
            )
            
            28
            %Personnel
                costs
            
            
            **354,448**
            
            
            **18**
            **%**
            
            
            409,730
            
            
            22
            %
            
            
            (55,282
            )
            
            13
            %Legal
            
            
            **25,809**
            
            
            **1**
            **%**
            
            
            57,434
            
            
            3
            %
            
            
            (31,625
            )
            
            55
            %Accounting
            
            
            **56,693**
            
            
            **3**
            **%**
            
            
            41,005
            
            
            2
            %
            
            
            15,688
            
            
            38
            %Corporate
                services
            
            
            **20,000**
            
            
            **1**
            **%**
            
            
            36,000
            
            
            2
            %
            
            
            (16,000
            )
            
            44
            %Investor
                services
            
            
            **8,125**
            
            
            **0**
            **%**
            
            
            33,750
            
            
            2
            %
            
            
            (25,625
            )
            
            76
            %Other
                general and administrative costs
            
            
            **212,165**
            
            
            **11**
            **%**
            
            
            263,143
            
            
            14
            %
            
            
            (50,978
            )
            
            19
            %**Total
                general and administrative**
            
            **$**
            **737,809**
            
            
            **37**
            **%**
            
            $
            924,682
            
            
            49
            %
            
            $
            (186,873
            )
            
            20
            %**Total
                sales, marketing, general and administrative**
            
            **$**
            **1,075,610**
            
            
            **54**
            **%**
            
            $
            1,312,143
            
            
            70
            %
            
            $
            (236,533
            )
            
            18
            %





As
      gross
      revenues increased for the six months ended June 30, 2007, total sales, general
      and administrative costs decreased. Of the total sales, marketing, general
      and
      administrative costs, sales and marketing expenses decreased for the six months
      ended June 30, 2007, which is mainly attributed to a decrease in the sales
      and
      marketing wages as a result of streamlining our CBA sales team. However, 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. Commissions and advertising and direct marketing expenses
      remained relatively stable as we continually monitor these items in relation
      to
      our gross revenues. 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.





Research
      and development costs include direct production costs (including labor directly
      associated with the development projects), indirect costs (including allocated
      fringe benefits, payroll taxes, facilities costs and management supervision),
      and other direct costs (including costs of outside consultants, purchased
      software to be included in the software product being developed, travel
      expenses, material and supplies, and other direct costs). The decrease in
      software development costs related to third-party developers and direct labor
      expensed as research and development reflects an increase in research and
      development costs that were capitalized for the six months ended June 30, 2007
      as compared to the six months ended June 30, 2006 as well as a decrease in
      the
      non-capitalized software development wages for the corresponding periods.
      Research and development expenses are expected to increase in future periods
      as
      we 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.





In
      addition to the decrease in total net personnel costs, gross direct salaries
      and
      wages, before adjustments of capitalized wages and reclassifications, decreased
      approximately $117,000, from approximately $778,000 for the six months ended
      June 30, 2006 to approximately $661,000 for the six months ended June 30, 2007.
      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. Due to a cost cutting
      initiative in late 2006, we also lost our Vice President of Sales and Marketing
      and an individual on our product development staff. Further, as a percentage
      of
      gross revenues, direct salaries and wages decreased approximately 8% from
      approximately 41% for the six months ended June 30, 2006 to approximately 33%
      for the six months ended June 30, 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.





-5-
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          of Contents


As
      a
      result of having restructured our health benefits plans in October 2006, our
      employment-related healthcare costs decreased approximately $7,000 from
      approximately $58,000 for the six months ended June 30, 2006 to approximately
      $51,000 for the six months ended June 30, 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 for the six months ended June 30, 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 increased for the six months ended June 30, 2007,
      which is attributable principally to an increased fee from our principal
      accounting firm as compared to our previous principal accounting firm as well
      as
      our recent completion of our 2006 annual audit. It is anticipated that
      accounting costs will continue at these levels as we utilize the same principal
      accounting firm on an ongoing basis and as we prepare to become fully compliant
      with Sarbanes-Oxley Section 404.





Corporate
      service fees decreased for the six months ended June 30, 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 June 2008.





Finally,
      investor services fees decreased for the six months ended June 30, 2007 as
      we
      had terminated an investor relations service agreement that initiated in April
      2006. These fees incurred from April 2006 through March 2007 were 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. Fees payable to this service provider have
      ceased.





***Registration
      Rights Penalties***





The
      results of operations for the six months ended June 30, 2006 include an increase
      in our net loss due to having accrued registration rights penalties that were
      in
      connection with a 2004 private placement transaction.





***Derivatives***





At
      June
      30, 2007, the fair value of the derivative liability associated with warrants
      issued in November 2004 was approximately $473,000. Fair value adjustments
      have
      been included in other income for the six months ended June 30, 2007 and 2006.
      If the market trading price of our stock rises, it could potentially have a
      materially adverse effect on our derivative liability.





***Amortization***





Amortization
      expenses, included in other operating expenses, decreased approximately $2,000
      from approximately $266,000 for the six months ended June 30, 2006 to
      approximately $264,000 for the six months ended June 30, 2007. 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. However, the slight
      decrease in the amortization expense for the six months ended June 30, 2007
      reflects the conclusion of the amortization of our website.





-6-
 Table
          of Contents


***Income
      Tax Benefits***




Our
      effective tax rate differs from the statutory federal rate due to the following
      differences between income and expense recognition prescribed by the Internal
      Revenue Code and Generally Accepted Accounting Principles:





▪
            Different
                methods and useful lives for depreciating property and equipment;
                and▪
            changes
                in estimates (reserves) recognized as expense for financial reporting
                but
                not deductible for income tax
                purposes.





We
      have
      recognized deferred tax assets from estimated future tax benefits related to
      the
      timing of income tax deductions primarily from the following items:





▪
            Sales
                returns and allowances;▪
            accrued
                payroll; and▪
            net
                operating loss carryforwards.





We
      have
      established a valuation allowance against the deferred tax assets based on
      our
      estimate of how much benefit we will eventually realize in future periods,
      primarily from the net operating loss carryforwards.





We
      have
      recognized deferred tax liabilities from estimated future tax liabilities
      related to the timing of income tax deductions primarily from the following
      items:





▪
            Software
                license fees; and▪
            capitalized
                software development costs.





We
      have
      reported our deferred tax assets and liabilities in a net current and a net
      non-current amount as follows:





▪
            Net
                current deferred tax asset - Federal and State (approximately $101,000
                included in other current assets);▪
            net
                non-current deferred tax asset - Federal (approximately $452,000
                included
                in other assets); and▪
            net
                non-current deferred tax liability - State (approximately $1,200
                included
                in long-term obligations).





Realization
      of our net deferred tax assets depends on generating future taxable income.





Our
      net
      income tax benefit of approximately $10,000 for the six months ended June 30,
      2007 results primarily from our anticipated utilization of net operating loss
      carryforwards, and the related effect in the valuation allowance for future
      tax
      benefits, and management’s estimate of changes to the book and tax basis
      differences of the following items from their December 31, 2006 basis
      differences:





▪
            Reserve
                for sales returns;▪
            accrued
                payroll;▪
            software
                license fees; and▪
            capitalized
                software development costs.





***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.





-7-
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          of Contents


**Working
                Capital at June 30,**
            
            
            **2007**Current
                assets
            
            **$**
            **630,853**Current
                liabilities
            
            **$**
            **2,534,828**Retained
                deficit
            
            **$**
            **7,447,630**





As
      of
      June 30, 2007, we had approximately $631,000 in current assets and approximately
      $2,535,000 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
      June 30, 2007, we had a retained deficit of approximately $7,448,000. We had
      a
      loss before income taxes of approximately $359,000 and a net loss after income
      taxes of approximately $349,000 for the six months ended June 30, 2007. For
      the
      six months ended June 30, 2007, we had a gain of approximately $54,000 from
      the
      fair value adjustment of derivatives. See “Results Of Operations” above.





**Cash
                Flows for Six Months Ended June 30,**
            
            
            **2007**
            
            
            2006
            
            
            Change
            
            
            %Cash
                flows provided by operating activities
            
            **$**
            **243,763**
            
            $
            192,220
            
            $
            51,543
            
            
            27
            %Cash
                flows (used) by investing activities
            
            **$**
            **(243,974**
            **)**
            $
            (254,033
            )
            $
            10,059
            
            
            4
            %Cash
                flows (used) by financing activities
            
            **$**
            **(45,009**
            **)**
            $
            (27,228
            )
            $
            (17,781
            )
            
            65
            %





The
      increase in net cash provided by operating activities for the six months ended
      June 30, 2007 was primarily due to a short-term relative imbalance in payments
      made to content providers and vendors as compared to receivables
      collected.





The
      decrease in net cash used by investing activities for the six months ended
      June
      30, 2007 was mainly the result of our having capitalized less costs associated
      with software development. However, during the six months ended June 30, 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.





The
      increase in net cash used by financing activities for the six months ended
      June
      30, 2007 was due to an increase in payments made on long-term notes payable.





It
      should
      be noted that due to our low available cash balance at the end of June 2007,
      normal check runs were delayed until our available cash balance increased in
      July 2007.





***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.





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***Contractual
      Liabilities***





In
      May
      2007, we secured a new operating lease with a third-party for our corporate
      office facility in Omaha, Nebraska with terms extending through May 2012. We
      also secured a new operating lease with a third-party for a warehouse facility
      in Omaha, Nebraska with terms extending through June 2010. 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
      June
      30, 2007, the future minimum rental payments required under these leases are
      as
      follows:





2007
            
            $
            45,0172008
            
            
            90,0342009
            
            
            78,9932010
            
            
            63,8832011
            
            
            54,3392012
            
            
            23,335Total
                future minimum rental payments
            
            $
            355,601





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 June 30, 2007 for each of
      the
      next three years and in the aggregate are:





2007
            
            $
            6,8632008
            
            
            13,7262009
            
            
            12,582Total
                minimum lease payments
            
            $
            33,171





**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.





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**(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 committee
      and
      provided to the 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 June 30,
      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.**





**Date
                Securities Issued**
            
            
            **Securities
                Title**
            
            
            **Issued
                to**
            
            
            **Number
                of Securities Issued**
            
            
            **Consideration**
            
            
            **Footnotes****Common
                Stock Issuances*****Issued
                for compensation to independent board of
                directors***6/29/2007
            
            
            Common
                Stock
            
            
            John
                Kuehne
            
            
            562,500
            
            $
            18,000
            
            
            (A)***Sold
                for cash*******7/14/2007
            
            
            Common
                Stock
            
            
            Gordon
                Landies
            
            
            1,300,000
            
            $
            32,500
            
            
            (B)(A)
                Consideration is calculated to be the value of the security at the
                date of
                issuance.(B)
                $32,500 ($0.025 per share) total offering price.**Common
                Stock Warrant Issuances*****Issued
                for compensation to independent
                contractor***7/9/2007
            
            
            Common
                Stock
            
            
            GL
                Ventures, LLC
            
            
            2,300,000
            
            $
            48,160
            
            
            (C)(C)
                Issued as compensation for corporate business planning, financing
                and
                merger and acquisition assistance.





We
      relied
      in each case for these unregistered sales on the private offering exemption
      of
      Section 4(2) of the Securities Act and/or the private offering safe harbor
      provision of Rule 506 of Regulation D promulgated thereunder based on the
      following factors: (i) the number of offerees or purchasers, as applicable,
      (ii)
      the absence of general solicitation, (iii) representations obtained from the
      acquirors relative to their accreditation and/or sophistication (or from offeree
      or purchaser representatives, as applicable), (iv) the provision of appropriate
      disclosure, and (v) the placement of restrictive legends on the certificates
      reflecting the securities coupled with investment representations obtained
      from
      the acquirors.





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





There
      were no reportable events under this Item 3 during the quarterly period ended
      June 30, 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 June 30, 2007.





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**ITEM
      5. OTHER INFORMATION.**




Our
      Annual Meeting of the Stockholders of Findex.com, Inc., previously scheduled
      to
      be held on September 21, 2007, has been rescheduled for November 9,
      2007.




There
      were no reportable events under this Item 5 during the quarterly period ended
      June 30, 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, 2004.3(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.




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10.12
            Registration
                Rights Agreement between Findex.com, Inc. and Barron Partners, LP
                dated
                July 26, 2004, incorporated by reference to Exhibit 10.2 on Form
                8-K filed
                July 28, 2004.10.13
            Waiver
                Certificate between Findex.com, Inc. and Barron Partners, LP dated
                September 16, 2004, incorporated by reference to Exhibit 10.4 on
                Form 8-K
                filed October 6, 2004.10.14
            Settlement
                Agreement between Findex.com, Inc., The Zondervan Corporation, Mattel,
                Inc., TLC Multimedia, Inc., and Riverdeep, Inc. dated October 20,
                2003,
                incorporated by reference to Exhibit 10.14 on Form 10-KSB/A filed
                December
                14, 2005.10.15
            Employment
                Agreement Extension between Findex.com, Inc and Steven Malone dated
                March
                31, 2006, incorporated by reference to Exhibit 10.1 on Form 8-K filed
                April 6, 2006.10.16
            Employment
                Agreement Extension between Findex.com, Inc and William Terrill dated
                March 31, 2006, incorporated by reference to Exhibit 10.2 on Form
                8-K
                filed April 6, 2006.10.17
            Employment
                Agreement Extension between Findex.com, Inc and Kirk R. Rowland dated
                March 31, 2006, incorporated by reference to Exhibit 10.3 on Form
                8-K
                filed April 6, 2006.10.18
            Promissory
                Note to Barron Partners, LP dated April 7, 2006, incorporated by
                reference
                to Exhibit 10.1 on Form 8-K filed April 13, 2006.10.19
            Share
                Exchange Agreement between Findex.com, Inc. and the stockholders
                of Reagan
                Holdings Inc., dated March 7, 2000, incorporated by reference to
                Exhibit
                2.1 on Form 8-K filed March 15, 2000.10.20
            Convertible
                Secured Promissory Note between FindEx.com, Inc. and W. Sam Chandoha,
                dated July 20, 2006, incorporated by reference to Exhibit 10.1 on
                Form 8-K
                filed July 26, 2006.10.21
            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 August 17, 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 August 17, 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 August 17,
                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 August 17,
                2007.
                FILED HEREWITH.





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**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:
                August 17, 2007
            By
            /s/
                Steven MaloneSteven
                MalonePresident
                and Chief Executive Officer





Date:
                August 17, 2007
            By
            /s/
                Kirk R. RowlandKirk
                R. Rowland, CPAChief
                Financial Officer









































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