BigString CORP - FORM 10-Q - August 16, 2010

Attached files

file	filename
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - BigString CORP	f10q0610ex31i_bigstring.htm
EX-31.2 - CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - BigString CORP	f10q0610ex31ii_bigstring.htm
EX-32.2 - CERTIFICATION PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - BigString CORP	f10q0610ex32ii_bigstring.htm
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - BigString CORP	f10q0610ex32i_bigstring.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to .

Commission File Number 000-51661

BIGSTRING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		20-0297832
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

157 Broad Street, Suite 109, Red Bank, New Jersey 07701

(Address of principal executive offices) (Zip Code)

(732) 741-2840

(Registrant’s telephone number, including area code)

____________________________________________________________

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	x

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

Number of shares of Common Stock outstanding at August 13, 2010:

Common Stock, par value $0.0001 per share		84,221,575
(Class)		(Number of Shares)

Index

BIGSTRING CORPORATION

INDEX TO FORM 10-Q

		PAGE
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements		1

	Consolidated Balance Sheets (unaudited) at June 30, 2010 and December 31, 2009		2

	Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010		3

	Consolidated Statements of Stockholders’ Equity (Deficiency) (unaudited) for the Six Months Ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010		4

	Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010		5

	Notes to Unaudited Consolidated Financial Statements		6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27

Item 4.	Controls and Procedures		27

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		28

Item 1A.	Risk Factors		28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		28

Item 3.	Defaults Upon Senior Securities		28

Item 4.	(Removed and Reserved.)		28

Item 5.	Other Information		28

Item 6.	Exhibits		28

Signatures			29

Index of Exhibits			E-1

Index

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this Quarterly Report on Form 10-Q and other filings of the Registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, the efficient and uninterrupted operation of our computer and communications systems, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation and other risks identified in the Registrant’s filings with the Securities and Exchange Commission from time to time.

In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the Registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The Registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Quarterly Report on Form 10-Q.

Index

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). It is suggested that the following consolidated financial statements be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2009 of BigString Corporation (“BigString” or the “Company”).

The results of operations for the three and six months ended June 30, 2010 and 2009 are not necessarily indicative of the results of the entire fiscal year or for any other period.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(A DEVELOPMENT STAGE COMPANY)

(Unaudited)

	June 30, 2010			December 31, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	26,830		$	3,039
Accounts receivable - net of allowance of $25 and $35		2,049			4,290
Prepaid expenses and other current assets		4,600			315,291
Total current assets		33,479			322,620
Property and equipment - net		24,720			39,393
Other assets		35,653			80,817
TOTAL ASSETS	$	93,852		$	442,830

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable	$	198,623		$	231,558
Accrued expenses		226,027			437,158
Unearned revenue		2,788			1,649
Accrued interest		52,612			64,724
Short-term debt		1,070,480			504,133
Total current liabilities		1,550,530			1,239,222
Long term liabilities:
Long-term debt		-			618,473
TOTAL LIABILITIES		1,550,530			1,857,695

Stockholders' deficiency:
Preferred stock, $0.0001 par value - authorized 1,000,000 shares; issued and outstanding 79,657 and 79,657 shares, respectively		8			8
Common stock, $0.0001 par value - authorized 249,000,000 shares; issued and outstanding 81,221,575 and 63,329,761 shares, respectively		8,122			6,333
Additional paid in capital		13,968,635			13,701,687
Deficit accumulated during the development stage		(15,433,443	)		(15,122,893	)
Total stockholders' deficiency		(1,456,678	)		(1,414,865	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	93,852		$	442,830

See notes to unaudited consolidated financial statements.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(A DEVELOPMENT STAGE COMPANY)

(Unaudited)

													Period
													October 8, 2003
	For the Three Months Ended						For the Six Months Ended						(Date of Formation)
	June 30,						June 30,						Through
	2010			2009			2010			2009			June 30, 2010
Operating revenues	$	16,733		$	9,737		$	32,814		$	21,840		$	244,668
Operating expenses
Cost of revenues		11,100			18,611			24,724			44,569			589,128
Research and development		-			111,315			-			231,170			2,309,163
Sales and marketing		-			2,365			-			26,270			983,883
General and administrative		36,674			94,527			69,366			312,378			4,839,760
Amortization of intangibles		-			-			-			-			4,490,191
Impairment of assets		-			-			-			-			1,042,876
Total operating expenses		47,774			226,818			94,090			614,387			14,255,001
Loss from operations		(31,041	)		(217,081	)		(61,276	)		(592,547	)		(14,010,333	)
Other income (expense)
Interest income		9			13			29			59			72,686
Interest expense		(22,463	)		(20,775	)		(43,765	)		(40,650	)		(241,074	)
Other, net		(92,131	)		(91,058	)		(205,538	)		(182,249	)		(1,771,821	)
Total other income (expenses)		(114,585	)		(111,820	)		(249,274	)		(222,840	)		(1,940,209	)
Loss before income tax benefit		(145,626	)		(328,901	)		(310,550	)		(815,387	)		(15,950,542	)
Income tax benefit		-			-			-			-			997,099
Net loss before subsidiary adjustment		(145,626	)		(328,901	)		(310,550	)		(815,387	)		(14,953,443	)
Gain on deconsolidation of subsidiary		-			662			-			662			-
Net loss	$	(145,626	)	$	(328,239	)	$	(310,550	)	$	(814,725	)	$	(14,953,443	)

Net loss per common share calculation:
Basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.02	)
Weighted average common shares outstanding:
Basic and diluted		73,307,696			53,083,611			68,759,281			52,753,337

See notes to unaudited consolidated financial statements.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

(A DEVELOPMENT STAGE COMPANY)

(Unaudited)

				Preferred Stock						Common Stock						Additional
				No. of						No. of						Paid-In			Subscription
	Total			Shares			Amount			Shares			Amount			Capital			Receivable			Deficit

Balance, October 8, 2003	$	-			-		$	-			-		$	-		$	-		$	-		$	-
Issuance of common stock (at $.0001 per share)		-			-			-			21,210,000			2,121			(2,121	)		-			-
Contribution of capital		45,000			-			-			-			-			45,000			-			-
Sale of common stock (at $0.25 per share)		-			-			-			40,000			4			9,996			(10,000	)		-
Net loss		(29,567	)		-			-			-			-			-			-			(29,567	)
Balance, December 31, 2003		15,433			-			-			21,250,000			2,125			52,875			(10,000	)		(29,567	)
Cash received from prior sale of common stock		10,000			-			-			-			-			-			10,000			-
Sale of common stock (at $0.25 per share)		217,500			-			-			870,000			87			217,413			-			-
Issuance of common stock for services (valued at $0.21 per share)		39,251			-			-			185,000			19			39,232			-			-
Issuance of common stock for acquisition (valued at $0.24 per share)		4,800,000			-			-			20,000,000			2,000			4,798,000			-			-
Issuance of warrants for services (valued at $0.07 per share)		3,500			-			-			-			-			3,500			-			-
Net loss		(729,536	)		-			-			-			-			-			-			(729,536	)
Balance, December 31, 2004		4,356,148			-			-			42,305,000			4,231			5,111,020			-			(759,103	)
Sale of common stock (at $0.25 per share)		230,500			-			-			922,000			92			230,408			-			-
Exercise of warrants (at $0.25 per share)		11,250			-			-			45,000			4			11,246			-			-
Issuance of common stock for services (valued at $0.25 per share)		12,500			-			-			50,000			5			12,495			-			-
Sale of common stock (at $0.16 per share)		1,511,700			-			-			9,448,125			945			1,510,755			-			-
Issuance of warrants for services (valued at $0.07 per share)		179,200			-			-			-			-			179,200			-			-
Net loss		(2,102,587	)		-			-			-			-			-			-			(2,102,587	)
Balance, December 31, 2005		4,198,711			-			-			52,770,125			5,277			7,055,124			-			(2,861,690	)
Redemption of shares from stockholders (at $0.05 per share)		(400,000	)		-			-			(8,000,000	)		(800	)		(399,200	)		-			-
Issuance of common stock for consulting services (valued at $0.82 per share)		-			-			-			1,250,000			125			(125	)		-			-
Stock-based compensation expense		314,250			-			-			-			-			314,250			-			-
Issuance of warrants for consulting services (valued at $0.08, $0.18 and $0.42 per share)		36,595			-			-			-			-			36,595			-			-
Issuance of common stock for website acquisition (valued at $0.80 per share)		600,000			-			-			750,000			75			599,925			-			-
Sale of preferred stock (at $.0001 per share)		1,860,000			400,000			40			-			-			1,859,960			-			-
Dividends from allocation of proceeds for the beneficial conversion feature of preferred stock		-			-			-			-			-			480,000			-			(480,000	)
Exercise of warrants (at $0.16, $0.20 and $0.25 per share)		18,000			-			-			165,000			17			34,233			(16,250	)		-
Net loss		(3,114,225	)		-			-			-			-			-			-			(3,114,225	)
Balance, December 31, 2006		3,513,331			400,000			40			46,935,125			4,694			9,980,762			(16,250	)		(6,455,915	)
Cash received from prior exercise of warrants		16,250			-			-			-			-			-			16,250			-
Issuance of common stock for consulting services (valued at $0.50 and $0.33 per share)		-			-			-			432,000			43			(43	)		-			-
Allocation to warrants from sale of convertible promissory notes and warrants		31,320			-			-			-			-			31,320			-			-
Beneficial conversion feature of convertible promissory notes		666,648			-			-			-			-			666,648			-			-
Issuance of common stock for conversion of convertible promissory notes (at $0.18 per share)		155,000			-			-			861,111			86			154,914			-			-
Stock-based compensation expense		672,532			-			-			-			-			672,532			-			-
Issuance of warrants, net (valued at $0.10 per share)		19,094			-			-			-			-			19,094			-			-
Issuance of common stock for waiver and release (valued at $0.25 per share)		250,000			-			-			1,000,000			100			249,900			-			-
Exercise of warrants (at $0.10 per share)		150,000			-			-			1,500,001			150			149,850			-			-
Net loss		(3,949,184	)		-			-			-			-			-			-			(3,949,184	)
Balance, December 31, 2007		1,524,991			400,000			40			50,728,237			5,073			11,924,977			-			(10,405,099	)
Exercise of warrants (at $0.10 per share)		21,333			-			-			213,333			21			21,312			-			-
Issuance of common stock for conversion of convertible promissory notes (at $0.18 per share)		20,000			-			-			111,111			11			19,989			-			-
Allocation to warrants from sale of convertible promissory notes and warrants		76,176			-			-			-			-			76,176			-			-
Beneficial conversion feature of convertible promissory notes		188,740			-			-			-			-			188,740			-			-
Stock-based compensation expense		727,800			-			-			-			-			727,800			-			-
Issuance of common stock for accrued interest (at $0.15 per share)		43,757			-			-			291,713			29			43,728			-			-
Issuance of common stock for website acquisition (valued at $0.13 per share)		117,000			-			-			900,000			90			116,910			-			-
Net loss		(3,748,946	)		-			-			-			-			-			-			(3, 748,946	)
Balance, December 31, 2008		(1,029,149	)		400,000			40			52,244,394			5,224			13,119,632			-			(14,154,045	)
Stock-based compensation expense		215,708			-			-			-			-			215,708			-			-
Issuance of common stock for accrued interest (at $0.08 per share)		79,500			-			-			993,750			100			79,400			-			-
Allocation to warrants from sale of convertible promissory notes and warrants		34,992			-			-			-			-			34,992			-			-
Beneficial conversion feature of convertible promissory notes		168,000			-			-			-			-			168,000			-			-
Issuance of common stock for conversion of preferred stock		-			(320,343	)		(32	)		4,429,522			443			(411	)		-			-
Issuance of common stock for conversion of promissory notes (at $0.015 per share)		84,932			-			-			5,662,095			566			84,366			-			-
Net loss		(968,848	)		-			-			-			-			-			-			(968,848	)
Balance, December 31, 2009		(1,414,865	)		79,657			8			63,329,761			6,333			13,701,687			-			(15,122,893	)
Stock-based compensation expense		361			-			-			-			-			361			-			-
Issuance of common stock for accrued interest (at $0.015 per share)		55,876			-			-			3,725,148			372			55,504			-			-
Issuance of common stock for conversion of promissory notes (at $0.015 per share)		212,500			-			-			14,166,666			1,417			211,083			-			-
Net loss		(310,550	)		-			-			-			-			-			-			(310,550	)
Balance, June 30, 2010	$	(1,456,678	)		79,657		$	8			81,221,575		$	8,122		$	13,968,635		$	-		$	(15,433,443	)

See notes to unaudited consolidated financial statements.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(A DEVELOPMENT STAGE COMPANY)

(Unaudited)

							Period
							October 8, 2003
	For the Six Months Ended						(Date of Formation)
	June 30,						Through
	2010			2009			June 30, 2010
Cash flows from operating activities:
Net loss	$	(310,550	)	$	(814,725	)	$	(14,953,443	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization of property and equipment, intangible and other assets		59,838			65,085			5,035,334
Gain on sale of property and equipment		-			3,755			2,058
Impairment of assets		-			-			1,042,876
Accretion for beneficial conversion feature and discount on notes		160,374			143,146			1,028,788
Stock-based compensation		361			214,954			2,201,697
Other non-cash compensation		-			-			269,094
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net		2,241			9,738			(2,049	)
Decrease (increase) in prepaid expenses and other assets		310,690			(20,899	)		(400,775	)
(Decrease) increase in accounts payable		(32,935	)		(66,118	)		198,623
(Decrease) increase in accrued expenses and other liabilities		(167,367	)		148,290			454,707
Increase (decrease) in unearned revenue		1,139			(2,558	)		2,788
Net cash provided by (used in) operating activities		23,791			(319,332	)		(5,120,302	)
Cash flows from investing activities:
Purchase of property and equipment		-			-			(262,290	)
Sale of property and equipment		-			-			50,889
Acquisitions		-			-			(13,000	)
Net cash (used in) investing activities		-			-			(224,401	)
Cash flows from financing activities:
Proceeds from issuance of convertible notes and warrants		-			180,000			1,930,000
Proceeds from issuance of preferred stock, net		-			-			1,860,000
Proceeds from exercise of common stock warrants and issuance of common stock		-			-			2,231,533
Payments for redemption of notes		-			-			(250,000	)
Payments for redemption of common stock		-			-			(400,000	)
Net cash provided by financing activities		-			180,000			5,371,533
Net change in cash and cash equivalents		23,791			(139,332	)		26,830
Cash and cash equivalents - beginning of period		3,039			178,787			-
Cash and cash equivalents - end of period	$	26,830		$	39,455		$	26,830

Supplementary information:
Cash paid during the periods for:
Interest	$	-		$	-		$	9,328
Income taxes	$	-		$	-		$	-
Acquisitions	$	-		$	-		$	13,000
Details of acquisitions:
Fair value of assets acquired	$	-		$	-		$	2,790
Fair value of liabilities assumed		-			-			(5,857	)
Intangibles		-			-			5,533,067
Common stock issued to effect acquisition	$	-		$	-		$	5,517,000
Non-cash transactions during the periods for:
Conversion of promissory notes	$	-		$	-		$	259,932
Issuance of common stock for accrued interest	$	55,876		$	79,500		$	179,133
Stock-based compensation: Common stock	$	-		$	113,889		$	1,275,751
Stock-based compensation: Common stock options		361			86,028			601,416
Stock-based compensation: Common stock warrants		-			15,037			324,530
Other non-cash compensation: Issue of warrants, net		-			-			19,094
Other non-cash compensation: Issuance of common stock for waiver and release		-			-			250,000

See notes to unaudited consolidated financial statements.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009 AND THE PERIOD OCTOBER 8, 2003 (DATE OF FORMATION) THROUGH JUNE 30, 2010

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated balance sheet as of June 30, 2010, and the consolidated statements of operations, stockholders’ equity and cash flows for the periods presented herein have been prepared by BigString Corporation (“BigString” or the “Company”) and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' equity and cash flows for all periods presented have been made. The information for the consolidated balance sheet as of December 31, 2009 was derived from audited financial statements. The results of operations for the three and six months ended June 30, 2010 are not necessarily indicative of the results to be expected for the year ending December 31, 2010.

These Notes to Unaudited Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes included in BigString’s 2009 Annual Report on Form 10-K filed with the SEC on March 31, 2010.

ORGANIZATION

BigString was incorporated in the State of Delaware on October 8, 2003 under the name “Recall Mail Corporation.” The Company’s name was formally changed to “BigString Corporation” in July 2005. BigString was formed to develop technology that would allow the user of email services to have comprehensive control, security and privacy relating to the email generated by the user. In March 2004, the BigString email service was introduced to the market.

BigString Interactive, Inc. (“BigString Interactive”), incorporated in the State of New Jersey, was formed by BigString in early 2006 to develop technology relating to interactive web portals.

PeopleString Corporation (“PeopleString”), incorporated in the State of Delaware, was formed by BigString in early 2009 to develop technology relating to social networks. After purchases of PeopleString common stock by investors, BigString owns less than 30% of PeopleString’s outstanding common stock.

BigString is considered a development stage enterprise in accordance with the guidance contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities.” BigString has limited revenue to date, continues to raise capital and there is no assurance that ultimately BigString will achieve a profitable level of operations.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of BigString and its subsidiary, BigString Interactive, which is a wholly-owned subsidiary. All intercompany transactions and balances have been eliminated.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company’s significant accounting policies are summarized in Note 1 of the Company’s annual report on Form 10-K for the year ended December 31, 2009. There were no significant changes to these accounting policies during the three and six months ended June 30, 2010 and the Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

NOTE 2. GOING CONCERN

For the six months ended June 30, 2010, BigString’s unaudited consolidated financial statements reflect a net loss of $310,550, net cash provided by operations of $23,791, a working capital deficit of $1,517,051, a stockholders’ deficit accumulated during the development stage of $15,433,443 and a cumulative net loss of $14,953,443. These matters raise doubt about the ability of BigString to continue as a going concern. BigString’s unaudited consolidated financial statements do not include any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern.

The ability of BigString to continue as a going concern is dependent on BigString’s ability to further implement its business plan, raise capital and generate additional revenues. BigString can give no assurances that it will generate sufficient cash flow from operations or obtain additional financing.

The time required for BigString to become profitable is highly uncertain, and BigString can give no assurances that it will achieve or sustain profitability or generate sufficient cash flow from operations to meet planned capital expenditures, planned marketing expenditures and working capital requirements. If required, the ability to obtain additional financing from other sources also depends on many factors beyond BigString’s control, including the state of the capital markets and the prospects for BigString’s business. The necessary additional financing may not be available to BigString or may be available only on terms that would result in further dilution to the current stockholders of BigString.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the specified period and after preferred stock dividend requirements. Diluted earnings (loss) per common share is computed by dividing net earnings (loss) by the weighted average number of common shares and potential common shares outstanding during the specified period and after preferred stock dividend requirements. All potentially dilutive securities, which include convertible notes, outstanding preferred stock, warrants and options, have been excluded from the computation, as their effect is antidilutive.

NOTE 4. FAIR VALUE MEASUREMENTS

The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:

Level 1 - Observable inputs such as quoted market prices in active markets

Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3 - Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions

As of June 30, 2010, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of cash and cash equivalents. The fair value of the cash and cash equivalents is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis as Level 2 or Level 3 and there were no transfers in or out of Level 1, Level 2 or Level 3 during the three and six months ended June 30, 2010 and 2009.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of June 30, 2010 and December 31, 2009.

	Assets at Fair Value at Period End, Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Assets:	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
June 30, 2010	$	26,830	$	26,830	$	-	$	-
December 31, 2009	$	3,039	$	3,039	$	-	$	-

The Company has other financial instruments, such as receivables, accounts payable and other liabilities which have been excluded from the table above. Due to the short-term nature of these instruments, the carrying value of receivables, accounts payable and other liabilities approximate their fair values. The Company did not have any other financial instruments within the scope of the fair value disclosure requirements as of June 30, 2010.

NOTE 5. ACQUISITIONS

On July 9, 2008, BigString completed the acquisition of the website, BuddyStumbler, pursuant to an asset purchase agreement. BigString issued 900,000 shares of its common stock to the sellers. The market value of BigString’s common stock on July 9, 2008 was $0.13 per share. The purchase price of $117,000 has been allocated to intangible assets based on estimated fair value. The acquisition includes right, title and interest in domain names, customer and member lists and source code. The results of operations of the assets acquired were not material.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On December 11, 2006, BigString completed the acquisition of the website, DailyLOL, pursuant to an asset purchase agreement. The cash purchase price of $13,000 has been allocated to intangible assets based on estimated fair value. The acquisition includes right, title and interest in domain names, customer and member lists and source code. The results of operations of the assets acquired were not material.

On May 19, 2006, BigString completed the acquisition of certain assets, including two websites, from a principal of Lifeline Industries, Inc. In consideration for the assets, BigString issued 750,000 shares of BigString’s common stock. The market value of BigString’s common stock on May 19, 2006 was $0.80 per share. In conjunction with this acquisition, BigString acquired an intangible asset for $600,000 based on estimated fair value. The acquisition included right, title and interest in domain names, customer and member lists and source code. The results of operations of the assets acquired were not material. Lifeline Industries, Inc. previously entered an agreement on May 2, 2006, to provide business consultant services to BigString for three years.

On July 16, 2004, BigString completed the acquisition of Email Emissary. BigString purchased 100% of Email Emissary’s stock for 20,000,000 shares of BigString’s common stock. BigString acquired Email Emissary to consolidate its marketing and development operations. The purchase price of $4,800,000 was allocated to both tangible and intangible assets and liabilities based on estimated fair values. Approximately $4,803,000 of identifiable intangible assets (patent application, trademark and websites) arose from this transaction. Such intangible assets are being amortized on a straight-line basis over the estimated economic life of five years.

This acquisition was accounted for using the purchase method of accounting, and accordingly, the results of operations of Email Emissary has been included in BigString’s consolidated financial statements from July 16, 2004, the date of closing.

As of December 31, 2008, each of the intangible assets had been fully amortized and/or impaired.

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30, 2010		December 31, 2009
Computer equipment and internal software	$	159,313	$	159,313
Furniture and fixtures		5,721		5,721
		165,034		165,034
Less accumulated depreciation		140,314		125,641
	$	24,720	$	39,393

Depreciation expense for the three months ended June 30, 2010 and 2009 was $7,194 and $7,890. Depreciation expense for the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, was $14,674, $15,993 and $184,622, respectively.

NOTE 7. GOODWILL AND OTHER INTANGIBLES

Other intangibles consisted of a patent application and trademark, logos, source codes and websites. Amounts assigned to these intangibles were determined by management. Management considered a number of factors in determining the allocations, including an independent formal appraisal. Other intangibles were being amortized over five years.

Other intangible assets consist of the following:

	June 30, 2010			December 31, 2009
Patent application and trademark	$	4,803,067		$	4,803,067
Logos, websites and source codes		730,000			730,000
		5,533,067			5,533,067
Impairment		(1,042,876	)		(1,042,876	)
		4,490,191			4,490,191
Accumulated amortization		4,490,191			4,490,191
	$	-		$	-

Amortization expense for the three months ended June 30, 2010 and 2009 was $0 and $0. Depreciation expense for the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, was $0, $0 and $4,490,191, respectively.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other intangibles are tested annually for impairment. If events indicate that impairment could exist, a recoverability test is performed comparing future net cash flows from the asset to the carrying value of the asset. If the recoverability test indicates the asset is impaired and the asset carrying amount is greater than fair market value, an impairment charge adjusts the carrying value to fair market value.

Estimated remaining amortization expenses for intangible assets for the next five years is zero.

NOTE 8. INVESTMENTS

Equity Investment:

At March 31, 2009, BigString owned 100% of the common shares outstanding of PeopleString and the financial results of PeopleString were included in BigString’s consolidated financial statements at March 31, 2009. BigString owned 29% of PeopleString’s outstanding common stock at June 30, 2010.

For the three months ended June 30, 2010 and 2009, BigString recorded a gain of $0 and $9,989, respectively, on the deconsolidation and equity investment method of its subsidiary PeopleString, including $9,500 as an adjustment to fair market value on the date PeopleString issued shares which reduced BigString’s ownership interest so that BigString no longer had a controlling interest in PeopleString. For the six months ended June 30, 2010 and 2009, BigString recorded a gain of $0 and $9,989, respectively. For the period October 8, 2003 (Date of Formation) through June 30, 2010, BigString recorded a loss of $500. The loss is limited to BigString’s investment in PeopleString as BigString has no obligation to fund additional investments, and at June 30, 2010, the value of equity investments was $0.

Cost Method Investment:

In April 2009, BigString sold 15,000,000 shares of common stock in FindItAll, Inc. for $40,000 in a private transaction. The remaining shares of common stock in FindItAll, Inc. continue to be held at cost in Other assets on BigString’s Consolidated Balance Sheets.

NOTE 9. OTHER INCOME (EXPENSE)

Other income (expense) consists of interest income, interest expense, and other, net.

Interest income was $9 and $13 for the three months ended June 30, 2010 and 2009, respectively. Interest income was $29, $59 and $72,686 for the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, respectively.

Interest expense consists of interest on convertible debt payable on each anniversary date of the promissory notes and is included in accrued interest. Interest expense was $22,463 and $20,775 for the three months ended June 30, 2010 and 2009, respectively. Interest expense was $43,765, $40,650 and $241,074 for the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, respectively.

The components of other, net consist of gain on investments, other income, and expenses related to the convertible debenture financing, preferred stock financing, warrant and common stock financings and are as follows:

													Period
													October 8, 2003
	For the Three Months Ended						For the Six Months Ended						(Date of Formation)
	June 30,						June 30,						Through
	2010			2009			2010			2009			June 30, 2010
Gain on sale of investments	$	-		$	9,989		$	-		$	9,989		$	40,162
Other income		-			-			-			-			86,720
Amortization of debt issue costs		(19,052	)		(25,245	)		(45,164	)		(49,092	)		(360,521	)
Amortization of promissory note discount		(13,669	)		(9,846	)		(26,047	)		(18,234	)		(112,469	)
Amortization of beneficial conversion feature		(59,410	)		(65,956	)		(134,327	)		(124,912	)		(916,319	)
Other financing expenses		-			-			-			-			(509,394	)
	$	(92,131	)	$	(91,058	)	$	(205,538	)	$	(182,249	)	$	(1,771,821	)

Gain on sale of investments contains the transactions as discussed in Note 8. Other income contains the reversal of $66,079 of public relations expense and $20,641 of investor relations expense.

Debt issue costs for the June 2009, August 2008, February 2008 and May 2007 financings were $33,552, $18,977, $91,706 and $248,939, respectively, and are being amortized over the term of each note, which is 24, 5, 36 and 36 months, respectively. Amortization is accelerated for the proportion of promissory notes which are converted in a period.

Other financing expenses include $250,000 of stock-based other non-cash compensation for the fair market value of common stock issued for a waiver and release related to the debt financing in 2007.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. INCOME TAXES

BigString applies the provisions of the ASC 740, “Income Taxes.” A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Valuation allowances as of June 30, 2010 have been applied to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized as BigString may continue to incur losses.

Components of deferred income tax assets are as follows:

	June 30, 2010
	Tax Effect
Deferred tax assets - current
Benefit due to loss carryforward	$	5,233,705
Valuation allowance		(5,233,705	)
	$	-

The Company files income tax returns in all jurisdictions in which it has reason to believe it is subject to tax. The Company is subject to examination by various taxing jurisdictions. To date, there have been no examinations. Nonetheless, any tax jurisdiction may contend that a filing position claimed by the Company regarding one or more of its transactions is contrary to that jurisdiction’s laws or regulations. Significant judgment is required in determining the worldwide provisions for income taxes. In the ordinary course of business of a global business, the ultimate tax outcome is uncertain for many transactions. It is the Company’s policy to establish provisions for taxes that may become payable in future years as a result of an examination by tax authorities. The Company establishes the provisions based upon management’s assessment of exposure associated with permanent tax differences and tax credits applied to temporary difference adjustments. The tax provisions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments to those provisions.

BigString has participated in the State of New Jersey’s Corporation Business Tax Benefit Certificate Transfer program (the “Program”), which allows certain high technology and biotechnology companies to sell unused net operating loss (“NOL”) carryforwards to other New Jersey corporation business taxpayers. The Program requires that the purchaser pay at least 75% of the amount of the surrendered tax benefit. For the year ended December 31, 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, BigString recorded a net state tax benefit of $310,108 and $997,099, respectively, as a result of its sale of New Jersey state net operating losses and New Jersey state research and development credits. Since New Jersey law provides that net operating losses can be carried over for up to seven years, BigString may be able to transfer its unused New Jersey net operating losses in future years.

At December 31, 2009, BigString has available NOL carry forwards of approximately $13.4 million for federal income tax reporting purposes and $5.8 million for state income tax reporting purposes which expire in various years through 2029. The differences between book income and tax income primarily relates to amortization of intangible assets and other expenditures. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s NOL and research credit carry forwards may be limited, and, as such, BigString’s NOL carry forwards available to offset future federal taxable income may be limited. Similarly, BigString may be restricted in using its research credit carry forwards to offset future federal income tax expense.

NOTE 11. DEBT

On June 23, 2009, BigString entered into a Subscription Agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP (collectively, the “2009 Subscribers”), pursuant to which the 2009 Subscribers purchased convertible notes in the aggregate principal amount of $180,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 6,000,000 shares of BigString's common stock, resulting in net proceeds of approximately $146,500 after transaction fees of approximately $33,500. Proceeds from the financing have been used to support ongoing operations and the advancement of BigString’s technology, and fund the marketing and the development of its business. BigString accounted for the convertible notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Approximately $35,000 of the proceeds was allocated to the warrants based on fair value, and included as additional paid in capital. Due to the beneficial conversion feature of the convertible notes, $168,000 was included as additional paid in capital based on the conversion discount.

Each convertible note has a term of two years and accrues interest at a rate of 6% annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.015 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.015 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In connection with the June 23, 2009 financing, BigString paid Whalehaven Capital Fund Limited $6,000, Alpha Capital Anstalt $6,000 and Excalibur Special Opportunities LP $2,400 for finder’s fees.

As a result of this financing, the conversion price for the outstanding convertible notes and the exercise price underlying the warrants previously issued by BigString in February 2008 and May 2007 and the conversion price of the shares of outstanding Series A Preferred Stock were subject to adjustment under anti-dilution provisions. The 2007 Subscribers and 2008 Subscribers (as such terms are defined below) verbally agreed to waive anti-dilution provisions related to the number of shares of common stock underlying the warrants previously issued by BigString in February 2008 and May 2007.

On August 25, 2008, BigString entered into a financing arrangement with Dwight Lane Capital, LLC, a limited liability company in which Todd M. Ross, a former director of BigString, has an interest, and Marc W. Dutton, a former director of BigString. In connection with such financing, BigString issued promissory notes in the aggregate principal amount of $250,000 and common stock purchase warrants to purchase up to an aggregate 800,000 shares of BigString's common stock. Each note had a term of five months and accrued interest at a rate of 12% annually. The warrants have an exercise price of $0.08 per share.

BigString incurred transaction fees of approximately $19,000. BigString accounted for the convertible feature of the notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Due to the conversion rights only upon an event of default, $2,080 was included as additional paid in capital based on a weighted conversion discount. The warrants did not have a conversion discount, and accordingly, no proceeds were allocated to the warrants based on fair value, nor included as additional paid in capital.

As a result of this financing, the conversion price for the outstanding convertible notes and the exercise price and number of shares of common stock underlying the warrants previously issued by BigString in February 2008 and May 2007 and the conversion price of the shares of outstanding Series A Preferred Stock were subject to adjustment under anti-dilution provisions.

In December 2008, all amounts due under the notes issued to Dwight Lane Capital, LLC and Mr. Dutton were paid by BigString, including accrued interest of $9,328, and, as a result, the notes were cancelled.

On February 29, 2008, BigString entered into a Subscription Agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP (collectively, the “2008 Subscribers”), pursuant to which the 2008 Subscribers purchased convertible notes in the aggregate principal amount of $700,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 2,333,333 shares of BigString's common stock, resulting in net proceeds of approximately $608,000 after transaction fees of approximately $92,000. Proceeds from the financing have been used to support ongoing operations and the advancement of BigString’s technology, and fund the marketing and the development of its business. BigString accounted for the convertible notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Approximately $76,200 of the proceeds was allocated to the warrants based on fair value, and included as additional paid in capital. Due to the beneficial conversion feature of the convertible notes, $186,660 was included as additional paid in capital based on the conversion discount.

Each convertible note has a term of three years and accrues interest at a rate of 6% annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.15 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.15 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

In connection with the February 29, 2008 financing, BigString paid Gem Funding LLC $56,000 and issued a warrant to purchase 373,333 shares of BigString’s common stock to Gem Funding, LLC on February 29, 2008, which is similar to and carries the same rights as the warrants issued to the 2008 Subscribers.

As a result of this financing, the conversion price for the outstanding convertible notes and the exercise price and number of shares of common stock underlying the warrants previously issued by BigString in May 2007 and the conversion price of the shares of outstanding Series A Preferred Stock were subject to adjustment under anti-dilution provisions.

On May 1, 2007, BigString entered into a Subscription Agreement with Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear (collectively, the “2007 Subscribers”), pursuant to which the 2007 Subscribers purchased convertible notes in the aggregate principal amount of $800,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 1,777,779 shares of BigString's common stock, resulting in net proceeds of approximately $551,000 after transaction fees of approximately $249,000. BigString accounted for the convertible notes under ASC 815-15-10, and related interpretations including ASC 815-40-05. Approximately $31,300 of the proceeds was allocated to the warrants based on fair value, and included as additional paid in capital. Due to the beneficial conversion feature of the convertible notes, $666,648 was included as additional paid in capital based on the conversion discount.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Each convertible note has a term of three years and accrues interest at a rate of 6% annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of BigString’s common stock at a conversion price of $0.15 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.30 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

In connection with the May 1, 2007 financing, BigString paid Gem Funding LLC $64,000 and issued a warrant to purchase 213,333 shares of BigString’s common stock to Gem Funding LLC on May 1, 2007, which is similar to and carries the same rights as the warrants issued to the 2007 Subscribers.

On November 30, 2007, BigString and the 2007 Subscribers entered into an Agreement, Waiver and Limited Release. As part of the Agreement, Waiver and Limited Release, the 2007 Subscribers released BigString from liquidated damages relating to the outstanding convertible notes. At the date of the Agreement, Waiver and Limited Release, BigString had accrued $24,267 in liquidated damages. BigString also granted the 2007 Subscribers 1,000,000 restricted shares of BigString’s common stock. BigString recorded $250,000 of stock-based other non-cash compensation expense related to the debt issue.

For the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, $212,500, $0 and $472,431, respectively, of the convertible notes were converted resulting in 14,166,666, 0 and 20,800,983 shares, respectively, of BigString’s common stock being issued to the holders of the convertible notes. Information regarding the convertible notes outstanding at June 30, 2010 and December 31, 2009 is as follows:

	June 30, 2010			December 31, 2009
Convertible note, May 1, 2007, maturing May 1, 2010	$	405,750		$	558,250
Beneficial conversion feature		-			(51,692	)
Note Discount		-			(2,425	)
		405,750			504,133

Convertible note, February 29, 2008, maturing February 28, 2011	$	651,819		$	681,819
Beneficial conversion feature		(38,625	)		(70,705	)
Note Discount		(15,763	)		(28,855	)
		597,431			582,259

Convertible note, June 23, 2009, maturing June 23, 2011	$	150,000		$	180,000
Beneficial conversion feature		(68,445	)		(119,000	)
Note Discount		(14,256	)		(24,786	)
		67,299			36,214
	$	1,070,480		$	1,122,606

For the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, BigString issued 3,725,148, 993,750 and 5,010,611 shares, respectively, of BigString’s common stock in lieu of $55,876, $79,500 and $179,133, respectively, of accrued interest. Future accrued interest payments, which may include shares of BigString’s common stock in lieu of accrued interest, on the May 1, 2007, February 29, 2008 and June 23, 2009 convertible notes are currently estimated as follows:

	Accrued
Years Ending	Interest
December 31,	Payments
2010	$	38,676
2011		51,709
	$	90,385

On May 1, 2010, the Convertible Notes issued by BigString on May 1, 2007 to each of Alpha Capital Anstalt, Iroquois Master Fund and Whalehaven Capital Fund Limited matured. As of June 30, 2010, BigString had not repaid such Convertible Notes and was in default thereunder. As of August 16, 2010, the aggregate outstanding balance under the Convertible Notes, including principal, interest and default interest, totaled $400,065. These outstanding notes are subject to a default rate of interest of 15% per annum.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Change in Control

Management believes that a change in control of BigString may occur in the future in the event one or more of Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP converts and exercises all or substantially all of the convertible notes and warrants to purchase shares of BigString’s common stock held by it or them.

NOTE 12. COMMON STOCK

On July 18, 2005, BigString amended its Certificate of Incorporation to, among other things, (1) change its name from Recall Mail Corporation to BigString Corporation, and (2) increase the number of shares BigString is authorized to issue from 50,000,000 shares to 250,000,000 shares, consisting of 249,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. The board of directors has the authority, without action by the stockholders, to designate and issue the shares of preferred stock in one or more series and to designate the rights, preference and privileges of each series, any or all of which may be greater than the rights of BigString’s common stock. Currently, there are 79,657 shares of preferred stock outstanding.

In October 2003, the month of BigString’s formation, BigString issued 21,210,000 shares of its common stock to principals of BigString at no cost to such principals.

During 2003, BigString concluded a private placement of securities, pursuant to which it sold 40,000 shares of BigString’s common stock at a per share purchase price of $0.25. BigString received $10,000 in gross proceeds as a result of this private placement.

During 2004, BigString concluded a private placement of securities, pursuant to which it sold 870,000 shares of BigString’s common stock at a per share purchase price of $0.25. BigString received $217,500 in gross proceeds as a result of this private placement.

During 2004, BigString issued 185,000 shares of common stock valued at $0.21 per share in consideration for consulting services provided by two marketing consultants. BigString recorded consulting expense of $39,251 in connection with the issuance of these shares. Fair market value was based on most recent private placement per share purchase price and an agreed upon per share purchase price discount.

During 2004, BigString completed the acquisition of Email Emissary for 20,000,000 shares of BigString’s common stock, which had a fair market value of $4,800,000, or $0.24 per share, based on the weighted average private placement per share purchase prices in 2003 and 2004.

During 2005, BigString issued 50,000 shares of common stock valued at $0.25 per share for business advisory services. Fair market value was based on the concurrent private placement per share purchase price.

For the year ended December 31, 2005, BigString concluded several private placements pursuant to which it sold 922,000 shares of its common stock at a per share purchase price of $0.25 and 9,448,125 shares of its common stock at a per share purchase price of $0.16. As a result of these private placements, BigString received $1,742,200 in gross proceeds.

On May 2, 2006, BigString issued 1,250,000 shares of common stock in consideration for business consultant services to be provided by Lifeline Industries, Inc. The market value of BigString’s common stock at May 2, 2006 was $0.82 per share.

Additionally, in May 2006, BigString redeemed 2,000,000 shares of its common stock from each of Charles A. Handshy, Jr. and David L. Daniels, former directors of BigString, and 2,000,000 shares of its common stock from each of their spouses, June E. Handshy and Deborah K. Daniels, at a purchase price of $0.05 per share.

On February 26, 2007, BigString agreed to issue 140,000 shares of common stock to CEOcast, Inc. in consideration for investor relations services. The market value of BigString’s common stock at February 26, 2007 was $0.50 per share.

Additionally, on February 26, 2007, BigString agreed to issue 192,000 shares of common stock to Howard Greene in consideration for public relations services provided by Greene Inc. Communications. The market value of BigString’s common stock at February 26, 2007 was $0.50 per share.

On May 1, 2007, BigString issued 100,000 shares of common stock to Jonathan Bomser in consideration for online marketing services provided by CAC, Inc. The market value of BigString’s common stock at May 1, 2007 was $0.33 per share.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On November 30, 2007, BigString agreed to issue 1,000,000 shares of its common stock to the 2007 Subscribers as part of the Agreement, Waiver and Limited Release. The market value of BigString’s common stock at November 30, 2007 was $0.25 per share.

During November and December 2007, BigString issued an aggregate 861,111 shares of common stock for the conversion of convertible promissory notes totaling $155,000. The conversion price was $0.18 per share.

On February 8, 2008, BigString issued 111,111 shares of its common stock for the conversion of convertible promissory notes totaling $20,000. The conversion price was $0.18 per share.

On May 1, 2008, BigString issued 291,713 shares of its common stock for accrued interest on convertible promissory notes totaling $43,757. The conversion price was $0.15 per share.

On July 9, 2008, BigString completed the acquisition of certain assets and issued 900,000 shares of its common stock. The market value of BigString’s common stock at July 9, 2008 was $0.13 per share.

On March 2, 2009, BigString issued 525,000 shares of its common stock for accrued interest on convertible promissory notes totaling $42,000. The conversion price was $0.08 per share.

On May 1, 2009, BigString issued 468,750 shares of its common stock for accrued interest on convertible promissory notes totaling $37,500. The conversion price was $0.08 per share.

On July 1, 2009, BigString issued 4,429,522 shares of its common stock for the conversion of 320,343 shares of Series A Preferred Stock, par value $0.0001 per share.

On July 15, 2009, BigString issued 1,000,000 shares of its common stock for the conversion of convertible promissory notes totaling $15,000. The conversion price was $0.015 per share.

On July 27, 2009, BigString issued 500,000 shares of its common stock for the conversion of convertible promissory notes totaling $7,500. The conversion price was $0.015 per share.

On August 31, 2009, BigString issued 480,552 shares of its common stock for the conversion of convertible promissory notes totaling $7,208. The conversion price was $0.015 per share.

On September 30, 2009, BigString issued 2,950,000 shares of its common stock for the conversion of convertible promissory notes totaling $44,250. The conversion price was $0.015 per share.

On October 13, 2009, BigString issued 731,543 shares of its common stock for the conversion of convertible promissory notes totaling $10,973. The conversion price was $0.015 per share.

On March 5, 2010, BigString issued 2,768,555 shares of its common stock for accrued interest on convertible promissory notes totaling $41,528. The conversion price was $0.015 per share.

On April 28, 2010, BigString issued 2,000,000 shares of its common stock for the conversion of convertible promissory notes totaling $30,000. The conversion price was $0.015 per share.

On May 6, 2010, BigString issued 2,000,000 shares of its common stock for the conversion of convertible promissory notes totaling $30,000. The conversion price was $0.015 per share.

On May 21, 2010, BigString issued 4,833,333 shares of its common stock for the conversion of convertible promissory notes totaling $72,500. The conversion price was $0.015 per share.

On May 21, 2010, BigString issued 956,593 shares of its common stock for accrued interest on convertible promissory notes totaling $14,348. The conversion price was $0.015 per share.

On May 24, 2010, BigString issued 1,000,000 shares of its common stock for the conversion of convertible promissory notes totaling $15,000. The conversion price was $0.015 per share.

On May 28, 2010, BigString issued 3,000,000 shares of its common stock for the conversion of convertible promissory notes totaling $45,000. The conversion price was $0.015 per share.

On June 2, 2010, BigString issued 1,333,333 shares of its common stock for the conversion of convertible promissory notes totaling $20,000. The conversion price was $0.015 per share.

NOTE 13. PREFERRED STOCK

On May 19, 2006, BigString issued a total of 400,000 shares of Series A Preferred Stock, par value $0.0001 per share, and warrants to purchase 1,000,000 shares of its common stock to Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., for an aggregate purchase price of $2,000,000. The shares of Series A Preferred Stock are convertible under certain circumstances into shares of BigString’s common stock, and have certain dividend, voting, liquidation and conversion rights. The warrants are convertible into shares of BigString’s common stock at an exercise price per share of $1.25, as adjusted. BigString has registered the shares of common stock issuable upon conversion of the shares of Series A Preferred Stock and the shares of common stock underlying the warrants. In conjunction with this transaction, BigString incurred a fee of $140,000, which is included in additional paid in capital.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

BigString accounted for the convertible preferred stock under ASC 815-15-10, and related interpretations including ASC 815-40-05. BigString performed calculations allocating the proceeds of the Series A Preferred Stock with detachable warrants to each respective security at their fair values. The value of the warrants of $400,000 was recorded as a reduction of the Series A Preferred Stock and credited to additional paid-in-capital. The recorded discount of $480,000 resulting from allocation of proceeds to the beneficial conversion feature is analogous to a dividend and is recognized as a return to the preferred stockholders at the date of issuance of the convertible preferred stock.

On July 1, 2009, BigString issued 4,429,522 shares of its common stock for the conversion of 320,343 shares of Series A Preferred Stock, par value $0.0001 per share.

NOTE 14. SHARE-BASED COMPENSATION

Warrants:

During 2004, BigString granted warrants as payment for advisory services. The warrants provided for the purchase of 60,000 shares of BigString’s common stock at an exercise price of $0.25. Certain of these warrants were exercised in 2005, which resulted in 45,000 shares of BigString’s common stock being issued to the holders thereof. As a result of these exercises, BigString received $11,250 in gross proceeds. The remainder of these warrants was exercised in 2006, which resulted in 15,000 shares of BigString’s common stock being issued to the holder thereof. As a result of this exercise, BigString recorded a subscription receivable of $3,750. In connection with the grant of these warrants, BigString recorded an expense of $3,500 which is included in BigString’s consolidated statement of operations for the year ended December 31, 2004. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.07 per share.

On January 1, 2005, BigString granted warrants to two consultants as payment for advisory services. Each warrant provided for the purchase of 50,000 shares of BigString’s common stock at an exercise price of $0.25 per share. One of the warrants was exercised in 2006, which resulted in 50,000 shares of BigString’s common stock being issued to the holder thereof. As a result of this exercise, BigString recorded a subscription receivable of $12,500. In addition, the other warrant providing for the purchase of 50,000 shares of BigString’s common stock expired on January 1, 2007. In connection with the grant of these warrants, BigString recorded an expense of $7,400 which is included in BigString’s consolidated statements of operations for the year ended December 31, 2005. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.07 per share.

On September 23, 2005, BigString granted warrants to a consultant, as payment for advisory services. One warrant provides for the purchase of 1,246,707 shares of BigString’s common stock with a per share exercise price of $0.16, and the second warrant provides for the purchase of 1,196,838 shares of BigString’s common stock with a per share exercise price of $0.20. Each of these warrants is due to expire on September 23, 2010 and each grant is non-forfeitable. A portion of each warrant, representing 50,000 shares of common stock, was assigned to a third party. The assigned portions of the warrants were exercised in 2006, which resulted in 100,000 shares of BigString’s common stock being issued to the holder thereof. As a result of these exercises, BigString received $18,000 in gross proceeds. In connection with the grant of these warrants, BigString recorded an expense of $171,800 which is included in BigString’s consolidated statements of operations for the year ended December 31, 2005. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.07 per share.

On May 2, 2006, BigString granted warrants to purchase shares of BigString’s common stock in consideration for business consultant services to be provided by Lifeline Industries, Inc. A total of $135,300 of the deferred compensation in connection with the warrants has been expensed over a period of 36 months. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 5%; and expected life of 2 years. The weighted average fair value of these warrants was $0.42 and $0.18 per share.

On December 1, 2006, BigString granted warrants to two consultants, as payment for advisory services. Each warrant provides for the purchase of 50,000 shares of BigString’s common stock at an exercise price of $0.50 per share. Each of these warrants is due to expire on December 1, 2011. In connection with the grant of these warrants, BigString recorded an expense of $6,530 which is included in BigString’s consolidated statements of operations for the year ended December 31, 2006. The fair value of the warrants granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0%; expected volatility of 47%; risk free rate of return of 4%; and expected life of 3 years. The weighted average fair value of these warrants was $0.08 per share.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As discussed in Note 11, on May 1, 2007, BigString granted warrants to purchase up to 1,991,112 shares of BigString's common stock to the 2007 Subscribers and Gem Funding LLC. Each of the warrants has a term of five years from May 1, 2007 and was fully vested on the date of issuance. The warrants are exercisable at $0.30 per share of common stock, as adjusted. A total of $31,320 of the purchase price for the convertible notes and warrants was allocated to the warrants based on fair value.

In November 2007, BigString repriced warrants to purchase 1,713,334 shares of common stock previously issued to the 2007 Subscribers, which warrants were subsequently exercised by the 2007 Subscribers at the reduced exercise price. The exercise price of the repriced warrants was reduced from $0.30 per share to $0.10 per share. As a result of this repricing, the warrants with an exercise price of $0.30 per share were deemed cancelled and new warrants with an exercise price of $0.10 per share were deemed issued. In December 2007, five repriced warrants were exercised at the exercise price of $0.10 per share, which resulted in 1,500,001 shares of BigString’s common stock being issued to the holders thereof. As a result of these exercises, BigString received $150,000 in gross proceeds. In addition, one repriced warrant was exercised in January 2008 at the exercise price of $0.10 per share, which resulted in 213,333 shares of BigString’s common stock being issued to the holder thereof and $21,333 in gross proceeds to BigString. The fair value of the warrants deemed cancelled and deemed issued was estimated on the date of approval by the board of directors of BigString using the Black-Scholes option-pricing model with the following weighted average assumptions used: dividend yield of 0% and 0%; expected volatility of 69% and 69%; risk free rate of return of 4% and 3%; and expected life of 4 and 0 years for the deemed cancellation and deemed issue of warrants, respectively. The weighted average fair value of the deemed cancellation and deemed issue of warrants was $0.11 per share and $0.12 per share, respectively. BigString expensed the net fair value of $19,094 for the year ended December 31, 2007.

As discussed in Note 11, on February 29, 2008, BigString granted warrants to purchase up to 2,706,666 shares of BigString's common stock to the 2008 Subscribers and Gem Funding LLC. Each of the warrants has a term of five years from February 29, 2008 and was fully vested on the date of issuance. The warrants are exercisable at $0.15 per share of common stock, as adjusted. A total of $76,176 of the purchase price for the convertible notes and warrants was allocated to the warrants based on fair value. As a result of this transaction, certain warrants to purchase shares of BigString’s common stock issued to the 2007 Subscribers and Gem Funding LLC were adjusted.

As discussed in Note 11, on August 25, 2008, BigString granted warrants to purchase up to 800,000 shares of BigString's common stock to Dwight Lane Capital, LLC and Marc W. Dutton. Each of the warrants has a term of ten years from August 25, 2008 and was fully vested on the date of issuance. The warrants are exercisable at $0.08 per share of common stock. The warrants did not have a conversion discount, and accordingly, no proceeds for the convertible notes and warrants was allocated to the warrants, based on fair value, nor included as additional paid in capital. As a result of this transaction, certain warrants to purchase shares of BigString’s common stock issued to the 2007 Subscribers and 2008 Subscribers and Gem Funding LLC were adjusted.

As discussed in Note 11, on June 23, 2009, BigString granted warrants to purchase up to 6,000,000 shares of BigString's common stock to the 2009 Subscribers. Each of the warrants has a term of five years from June 23, 2009 and was fully vested on the date of issuance. The warrants are exercisable at $0.015 per share of common stock, as adjusted. A total of $34,992 of the purchase price for the convertible notes and warrants was allocated to the warrants based on fair value. As a result of this transaction, certain warrants to purchase shares of BigString’s common stock issued to the 2007 Subscribers and 2008 Subscribers and Gem Funding LLC were adjusted.

The number of warrants outstanding as of January 1, 2010 and changes to such number during the six months ended June 30, 2010 is as follows:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price		Term		Value
Warrants outstanding at January 1, 2010		16,393,545	$	0.14		3.7	$	58,500
Warrants granted		-	$	-
Warrants exercised		-	$	-
Warrants cancelled/forfeited/expired		-	$	-
Warrants outstanding at June 30, 2010		16,393,545	$	0.14		3.2	$	175,500
Warrants exercisable at June 30, 2010		16,393,545	$	0.14		3.2	$	175,500

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock prices of BigString’s common stock at the specified dates and the exercise prices for in-the-money warrants) that would have been received by the warrant holders if all in-the-money warrants had been exercised on the specified dates.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Warrants granted during the six months ended June 30, 2010 and 2009 were 0 and 11,700,000, respectively. For the period October 8, 2003 (Date of Formation) through June 30, 2010, warrants to purchase a total of 28,764,657 shares of BigString’s common stock were granted.

Warrants exercised during the six months ended June 30, 2010 and 2009 were 0 and 0, respectively. Cash received during the six months ended June 30, 2010 and 2009 from the exercise of warrants was $0 and $0, respectively. For the period October 8, 2003 (Date of Formation) through June 30, 2010, a total of 1,923,334 shares of BigString’s common stock were purchased upon the exercise of warrants.

During the six months ended June 30, 2010 and 2009, 0 and 5,700,000 warrants were cancelled, respectively. During the period October 8, 2003 (Date of Formation) through June 30, 2010, warrants to purchase a total of 50,000 shares of BigString’s common stock expired with an aggregate intrinsic value of $26,000 at the date of expiration. In addition, for the period October 8, 2003 (Date of Formation) through June 30, 2010, warrants to purchase a total of 10,397,778 shares of common stock were cancelled with an aggregate intrinsic value of $0 at the date of cancellation.

Equity Incentive Plan and Stock Options Issued to Consultant:

At the 2006 annual meeting of stockholders of BigString, the BigString Corporation 2006 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted and approved by a majority of BigString’s stockholders. Under the Equity Incentive Plan, incentive and nonqualified stock options and rights to purchase BigString’s common stock may be granted to eligible participants. Options are generally priced to be at least 100% of the fair market value of BigString’s common stock at the date of the grant. Options are generally granted for a term of five or ten years. Options granted under the Equity Incentive Plan generally vest between one and five years.

On July 11, 2006, BigString approved the grant of a non-qualified stock option to purchase 575,100 shares of BigString’s common stock to a vendor. The non-qualified stock option has a term of five years from July 11, 2006 and an exercise price of $0.32 per share. For the year ended December 31, 2006, BigString recorded a consulting expense of $47,775 in connection with the contractual relationship between Kieran Vogel and BigString related to Mr. Vogel’s participation in BigString’s OurPrisoner program. These stock options were granted outside of the Equity Incentive Plan.

On July 11, 2006, BigString granted incentive stock options to purchase 2,620,000 shares of BigString’s common stock under its Equity Incentive Plan to certain of BigString’s employees. Incentive stock options to purchase 1,450,000 shares of BigString’s common stock were granted at an exercise price of $0.32 per underlying share with 25% vesting every three months for one year, and incentive stock options to purchase 1,170,000 shares of BigString’s common stock were granted at an exercise price of $0.50 per underlying share with vesting over periods of three and four years. In addition, non-qualified stock options to purchase 600,000 shares of BigString’s common stock were granted to two non-employee directors at an exercise price of $0.50 per underlying share with vesting over a period of three years; these options were forfeited.

On September 18, 2006, BigString granted an incentive stock option to purchase 1,800,000 shares of BigString’s common stock under its Equity Incentive Plan to a new BigString officer. When vested, 400,000 shares of BigString’s common stock will be eligible for purchase at the per share price equal to $0.24; 600,000 shares of BigString’s common stock will be eligible for purchase at $0.50 per share; 400,000 shares of BigString’s common stock will be eligible for purchase at $.90 per share; and 400,000 shares of BigString’s common stock will be eligible for purchase at $1.25 per share. The incentive stock option vests quarterly over a three year period, and the shares of BigString’s common stock subject to the incentive stock option will vest in order of exercise price, with the shares with the lower exercise price vesting first.

On November 14, 2007, BigString granted incentive stock options to purchase 1,275,000 shares of BigString’s common stock under its Equity Incentive Plan to certain of BigString’s employees. Incentive stock options were granted at an exercise price of $0.18 per underlying share with 25% vesting every three months for one year. In addition, non-qualified stock options to purchase 800,000 shares of BigString’s common stock were granted to three non-employee directors at an exercise price of $0.18 per underlying share with 25% vesting every three months for one year; these options were forfeited.

On January 14, 2008, BigString granted incentive stock options to purchase 800,000 shares of BigString’s common stock under its Equity Incentive Plan to a new BigString employee. Incentive stock options were granted at an exercise price of $0.22 per underlying share with 25% vesting every three months for one year. These options were forfeited.

On April 11, 2008, BigString granted incentive stock options to purchase 2,580,000 shares of BigString’s common stock under its Equity Incentive Plan to certain of BigString’s employees. Incentive stock options were granted at an exercise price of $0.21 per underlying share with 25% vesting every three months for one year. In addition, non-qualified stock options to purchase 1,000,000 shares of BigString’s common stock were granted to two non-employee directors at an exercise price of $0.21 per underlying share with 25% vesting every three months for one year; these options were forfeited.

On October 13, 2008, BigString granted incentive stock options to purchase 300,000 shares of BigString’s common stock under its Equity Incentive Plan to a BigString employee. Incentive stock options were granted at an exercise price of $0.10 per underlying share with 25% vesting every three months for one year. These options were forfeited.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On November 17, 2008, BigString granted non-qualified stock options to purchase 300,000 shares of BigString’s common stock to a BigString vendor under a partnering arrangement. The stock options were granted at an exercise price of $0.08 per underlying share with 25% vesting every three months for one year. These stock options were granted outside of the Equity Incentive Plan.

For the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, BigString recorded stock-based option compensation expense of $361, $86,028 and $601,416, respectively. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense was recorded net of estimated forfeitures.

The number of stock options outstanding as of January 1, 2010 and changes to such number during the six months ended June 30, 2010 is as follows:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Options outstanding at January 1, 2010		9,150,100		$	0.33		4.7	$	-
Options granted		-		$	-
Options exercised		-		$	-
Options cancelled/forfeited/expired		(2,200,000	)	$	0.26
Options outstanding at June 30, 2010		6,950,100		$	0.36		3.9	$	-
Options exercisable at June 30, 2010		6,950,100		$	0.36		3.9	$	-

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock prices of BigString’s common stock at the specified dates and the exercise prices for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on the specified dates.

Options granted during the six months ended June 30, 2010 and 2009 were 0 and 0, respectively. For the period October 8, 2003 (Date of Formation) through June 30, 2010, options to purchase a total of 12,650,100 shares of BigString’s common stock were granted.

No options were exercised, and no cash received from option exercises and purchases of shares for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010. The total tax benefit attributable to options exercised in the period October 8, 2003 (Date of Formation) through June 30, 2010 was $0.

During the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, options to purchase a total of 2,200,000, 800,000, and 5,700,000 shares of BigString’s common stock, respectively, were forfeited or expired with an aggregate intrinsic value of $0 at the date of expiration.

The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model, consistent with the provisions of ASC 718. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. BigString has limited relevant historical information to support the expected exercise behavior because no exercises have taken place.

The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted in the periods presented:

Three Months Ended

Six Months Ended

June 30,

2010

2009

2010

2009

Risk-free interest rate

–

Expected volatility

–

Expected life (in years)

–

Dividend yield

–

The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of the grant. BigString estimates the volatility of its common stock at the date of the grant based on historical volatility, expected volatility and publicly traded peer companies. The expected life of stock options granted under the Equity Incentive Plan is based on management judgment, historical experience and publicly traded peer companies. BigString has no history or expectations of paying cash dividends on its common stock.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. RELATED PARTY TRANSACTIONS

After March 2009, BigString became a significant, non-majority stockholder of PeopleString. On April 2, 2009, PeopleString entered into a verbal agreement with BigString to license BigString’s messaging technology and share the cost of certain common services. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. Under the agreement, BigString provides messaging services to PeopleString users. The licensing fee was based on BigString’s experience providing services to other third parties and was determined by BigString’s management. Based on volume, BigString charges PeopleString fees that are higher in aggregate than BigString charges other third parties for outsourced messaging services. Shared services costs are quantified based on management’s estimate of the percentage of time devoted to each company; PeopleString’s management makes this estimate with a moderate amount of discretion. As of the date of these financial statements, BigString did not share services with other unrelated third parties. Payments are due quarterly.

At January 1, 2010, the shared services included hosting, insurance, rent and miscellaneous general and administrative expenses. At April 1, 2010, the shared services included miscellaneous general and administrative expenses. For the three months ended June 30, 2010 and 2009, BigString recorded expense reductions for shared expense of $3,280 and $6,108, respectively. For the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, BigString recorded expense reductions for shared expense of $26,353, $6,108 and $158,693, respectively. For the three months ended June 30, 2010 and 2009, BigString recorded revenues from licensing of $10,500 and $3,000, respectively. For the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010, BigString recorded revenues from licensing of $21,000, $3,000 and $54,000, respectively.

On December 29, 2008, BigString signed an agreement with Digital BobKat, LLC, a limited liability company wholly-owned by Robert S. DeMeulemeester, an officer and director of BigString, and his spouse, to provide business consulting services, including, but not limited to, management, product development, marketing, research, advertising and general business and administrative procedures and processes. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. Payments are due monthly. Payments are based on fair market value of the services provided, similar to the terms of a transaction with an unrelated party. Expenses for the six months ended June 30, 2010 and 2009 and the period October 8, 2003 (Date of Formation) through June 30, 2010 were $0, $24,000 and $120,436, respectively.

On June 1, 2009, BigString entered into a verbal agreement with Craig Myman, the brother of Darin M. Myman, President and Chief Executive Officer of BigString, to provide business consulting services. Expenses for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010 were $0, $2,300 and $2,300, respectively.

NOTE 16. COMMITMENTS AND CONTINGENCIES

Leases:

BigString leases its facilities which require BigString to pay certain executory costs (such as insurance and maintenance). Future minimum lease payments for operating leases are approximately as follows:

	Minimum
Years Ending	Lease
December 31,	Payments
2010	$	14,570
2011		29,140
2012		4,857
	$	48,567

Rental expense was $12,532, $11,900 and $233,341 for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, respectively.

Computer co-location, power and Internet access expense was $9,005, $23,985 and $218,632 for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, respectively.

Consulting Agreements:

On January 27, 2004, BigString entered into an agreement with Greene Inc. Communications to provide public relations services. In consideration for services performed, BigString agreed to issue to Howard Greene, the principal of Greene Inc. Communications, 140,000 shares of common stock in April, 2005 and 192,000 shares of common stock in February, 2007. Total public relation expenses, including the services of Greene Inc. Communications, were $0, $16,276 and $304,113 for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, respectively.

Index

BIGSTRING CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On May 2, 2006, BigString signed a three-year business consultant services agreement with Lifeline Industries, Inc. In consideration for the services to be performed under the agreement, BigString issued to Lifeline Industries, Inc. (1) 1,250,000 shares of common stock, (2) a fully vested, five year warrant to purchase 225,000 shares of common stock at a per share purchase price of $0.48, and (3) a fully vested, five year warrant to purchase 225,000 shares of common stock at a per share purchase price of $1.00. BigString incurred corresponding consulting expenses of $0, $128,926 and $1,160,300 for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, respectively.

On November 17, 2008, BigString signed an agreement with Bruce Van Heel to provide sales consulting services. Expenses for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010 were $0, $11,463 and $12,163, respectively.

On July 1, 2009, BigString entered into a verbal agreement with Robb Knie to provide business consulting services. Expenses for the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010 were $0, $0 and $21,000, respectively.

Marketing Affiliate Commitments:

In connection with contracts to provide email services to marketing affiliates, BigString may be obligated to make payments, which may represent a portion of net advertising and/or service revenues, to its marketing affiliates. As of the six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, these commitments were not material.

Other Commitments:

In the ordinary course of business, BigString may provide indemnification to customers, vendors, lessors, marketing affiliates, directors, officers and other parties with respect to certain matters. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and unique circumstances involved in each agreement. Historically, BigString has not incurred material costs as a result of obligation under these agreements and has not accrued any liabilities related to such agreements.

As of June 30, 2010, BigString did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other limited purposes. BigString is not exposed to financing, liquidity, market or credit risks that could arise under such relationships.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We have provided below information about BigString Corporation’s (“BigString” or the “Company”) financial condition and results of operations for the three and six months ended June 30, 2010 and 2009. This information should be read in conjunction with BigString’s unaudited consolidated financial statements for the three and six months ended June 30, 2010 and 2009, and the period October 8, 2003 (Date of Formation) through June 30, 2010, including the related notes thereto, which are included on pages 1 through 21 of this report.

Background

BigString was incorporated in the State of Delaware on October 8, 2003 under the name “Recall Mail Corporation.” The company’s name was formally changed to “BigString Corporation” in July 2005. BigString was formed to develop technology that would allow the user of email services to have comprehensive control, security and privacy relating to the email generated by the user.

BigString Interactive, Inc., incorporated in the State of New Jersey, was formed by BigString in early 2006 to develop technology relating to interactive web portals.

PeopleString Corporation (“PeopleString Corporation”), incorporated in the State of Delaware, was formed by BigString in early 2009 to develop technology relating to social networks. After purchases of PeopleString Corporation’s common stock by investors in April 2009, BigString owns less than 50% of PeopleString Corporation’s outstanding common stock.

Email Emissary, Inc., incorporated in the State of Oklahoma, was acquired by BigString in July 2004. In September 2006, all of Email Emissary’s assets, including its pending patent application, were transferred to BigString. Email Emissary was dissolved on May 17, 2007.

Development Stage Company

BigString is considered a development stage enterprise in accordance with the guidance contained in ASC 915. BigString has limited revenue to date and continues to raise capital. There is no assurance that ultimately BigString will achieve a profitable level of operations.

Overview

BigString is a technology firm with a global client base, focused on providing a superior online communications experience for its users. BigString’s goal is to make Internet communication more efficient, reliable and valuable, while protecting individual privacy and proprietary information. BigString has developed innovative messaging services that allow users to easily send, recall, erase, self-destruct and secure electronic messages.

BigString’s innovations in recallable, erasable email provide a new level of privacy and security for those who wish to protect their proprietary information and manage their digital rights. BigString serves three main email markets: free and paid email accounts for individuals, professional business email solutions, and email hosting services. BigString 3.0 email provides, at no cost to its users, advanced spam filters, virus protection and large-storage, web-based email accounts with features similar to those offered by AOL®, Yahoo®, Hotmail®, Google®, Verizon® and Comcast®. In addition to the equivalent features provided by competitors, BigString 3.0 offers erasable, recallable and self-destructing applications, non-printable and non-forwardable emails, set time or number of views (including ‘view-once’) and masquerading to protect the sender’s privacy and security. BigString 3.0 also allows a sender to view tracking reports that indicate when emails were opened by the recipient and how many times they were viewed. Senders can add, change and/or delete attachments before or after a recipient opens the email. In addition, BigString 3.0 allows senders to direct emails to disintegrate in front of their recipient’s eyes and allows senders to create, save and send self-destructing video email.

BigString’s self-destructing, instant messaging technology enables users to send instant messages (“IM”) that self-destruct after being sent. BigStringIM, available as a web version or a free plug-in for AOL’s AIM™, prevents logging, saving or screen printing to address security and privacy gaps in the large, growing instant messaging market. BigString also offers a multi-platform IM integration which allows users to sign into BigStringIM, AIM™, Yahoo™, MSN™ and Google Talk™ concurrently.

BigString’s self-destructing, Short Message Service (“SMS”) text messaging technology enables users to send text messages and pictures that self-destruct after being sent. SMS Eraser, available for BlackBerry phones, can be downloaded for a fee at www.BigString.com or one of several third-party global BlackBerry application distributors. BigString’s entry into the mobile phone messaging market expands the availability and use of BigString’s proprietary self-destructing messaging platforms.

BigString also provides hosting, private label, and co-branded solutions. Web publishers and content sites may offer BigString’s messaging services to their existing registered member base as well as all future members that register. The web publishers and content sites are responsible for marketing. BigString receives advertising revenue associated with these marketing affiliations and may also receive premium fees when registered members upgrade service. In conjunction with contracts to provide email services to marketing affiliates, BigString may be obligated to make payments, which may represent a portion of revenue, to its marketing affiliates.

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Building on the popularity of the social networking sites such as Facebook®, MySpace®, Friendster® and LinkedIn®, BigString’s social networking applications allow users to easily send and receive messages, notifications, email and videos that self-destruct on command. These rapidly growing, adjacent markets offer BigString the opportunity to leverage its capabilities in messaging and streaming audio and video to create complementary messaging applications. BigString’s development efforts are focused to address security and privacy gaps in social networking messaging applications.

In March, 2009, BigString announced the launch of the PeopleString incentive-based social network that pays users to receive regular direct mail and perform internet activities, such as email, instant messaging, video mail, online file storage, search and shopping. In addition, members generate additional revenue by creating a personal affiliate network. The service provides entrepreneurs with business tools to earn additional revenue through PeopleString. PeopleString also provides fee-based development services. PeopleString is operated by PeopleString Corporation. BigString owns less than 50% of PeopleString Corporation’s outstanding common stock.

For BigString to increase its revenue, BigString needs to establish a large customer base. A large customer base of free email and messaging services provides BigString with more opportunities to sell its premium services, which could result in increased revenue. In addition, a large customer base may allow BigString to increase its advertising rates and attract other Internet based advertising and marketing firms to advertise and form marketing affiliations with BigString, which could result in increased advertising and product fee revenues.

BigString’s marketing efforts focus on increasing brand awareness and consumer adoption of its messaging products. Promotions included email tag lines, organic search, paid search, banners, blogs, social networks, video and other viral tactics, multimedia, print, and radio. BigString has also developed product packages which may help BigString in achieving critical mass, including hosting, private label, and co-branded solutions, email marketing services and a video alliance program.

BigString currently markets to Internet users who seek to utilize the Internet as their source for email and messaging services. Generally, BigString products and services can be readily accessed through the Internet and thus from virtually anywhere where the Internet is accessible. Email users can access BigString’s English language site, www.BigString.com, on a global basis, 24 hours a day.

In December 2009, BigString received a patent from the United States Patent and Trademark Office for Universal, Recallable, Erasable, Secure and Timed Delivery Email.

Notwithstanding its progress in acquiring new members, BigString significantly reduced its marketing efforts from prior years due to financial constraints. BigString also reduced expenses in other areas, such as rent and headcount, to better position the company financially.

Certain criteria BigString reviews to measure its performance are set forth below:

●	the number of first time and repeat users of the services;

●	the number of pages of the website viewed by a user;

●	the number of free and/or paid accounts for each service;

●	the number of users of the free services who purchase one of the premium product packages;

●	the length of time between the activation of a free account and the conversion to a paid account;

●	the retention rate of customers, including the number of account closures and the number of refund requests;

●	the acquisition cost per user for each of the services;

●	the cost and effectiveness for each of the promotional efforts;

●	the revenue and effectiveness of advertisements served; and

●	the revenue, impressions, clicks and actions per user.

Critical Accounting Policies

BigString’s discussion and analysis of financial condition and results of operations are based upon BigString’s unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these unaudited consolidated financial statements requires BigString to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, BigString evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. BigString bases its estimates on historical expenses and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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BigString believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition. BigString derives revenue from online services, electronic commerce, advertising and data network services. BigString also derives revenue from marketing affiliations. BigString recognizes revenue in accordance with the guidance contained in the ASC 605, “Revenue Recognition.”

Consistent with the provisions of ASC 605-45-05, BigString generally recognizes revenue associated with its advertising and marketing affiliation programs on a gross basis due primarily to the following factors: BigString is the primary obligor; has general inventory risk; has latitude in establishing prices; has discretion in supplier selection; performs part of the service; and determines specifications.

Consistent with ASC 605-50-15, BigString accounts for cash considerations given to customers, for which it does not receive a separately identifiable benefit or cannot reasonably estimate fair value, as a reduction of revenue rather than an expense. Accordingly, any corresponding distributions to customers are recorded as a reduction of gross revenue.

BigString records its allowance for doubtful accounts based upon an assessment of various factors, including historical experience, age of the accounts receivable balances, the credit quality of customers, current economic conditions and other factors that may affect customers’ ability to pay.

Stock-Based Compensation. BigString accounts for stock-based compensation under ASC 718, “Compensation-Stock Compensation” (“ASC 718”). The compensation cost for the portion of awards is based on the grant-date fair value of those awards as calculated for either recognition or pro forma disclosures under ASC 718.

BigString has one stock-based compensation plan under which incentive and nonqualified stock options or rights to purchase stock may be granted to employees, directors and other eligible participants. BigString issues shares of its common stock, warrants to purchase common stock and non-qualified stock options to non-employees as stock-based compensation. BigString accounts for the services using the fair market value of the consideration issued.

Research and Development. BigString accounts for research and development costs in accordance with accounting pronouncements, including ASC 730, “Research and Development” and ASC 985, “Software.” BigString has determined that technological feasibility for its software products is reached shortly before the products are released. Research and development costs incurred between the establishment of technological feasibility and product release have not been material and have accordingly been expensed when incurred.

Evaluation of Long-Lived Assets. BigString reviews property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. In accordance with the guidance provided in ASC 360-15-35, “Impairment or Disposal of Long-Lived Assets,” if the carrying value of the long-lived asset exceeds the estimated future undiscounted cash flows to be generated by such asset, the asset would be adjusted to its fair value and an impairment loss would be charged to operations in the period identified.

Intangibles. ASC 350, “Goodwill and Other,” specifies the financial accounting and reporting for acquired goodwill and other indefinite life intangible assets. Goodwill and other indefinite-lived intangible assets are no longer amortized, but are reviewed for impairment at least annually.

Accounting for Derivatives. BigString evaluates its options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC 815-15-10, “Hedging and Derivatives-Embedded Derivatives” and related interpretations including ASC 815-40-05, “Hedging and Derivatives-Contracts in Entity’s Own Equity.”

Recent Accounting Pronouncements. BigString’s significant accounting policies are summarized in Note 1 of BigString’s annual report on Form 10-K for the year ended December 31, 2009. There were no significant changes to these accounting policies during the three and six months ended June 30, 2010 and BigString does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

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Results of Operations

For the Three and Six Months Ended June 30, 2010 and 2009

Net Loss. For the three months ended June 30, 2010, net loss was $145,626, as compared to a net loss of $328,239 for the three months ended June 30, 2009. The $182,613 decrease in net loss was primarily attributable to a $179,044 decrease in operating expenses primarily related to research and development and general and administrative.

For the six months ended June 30, 2010, net loss was $310,550, as compared to a net loss of $814,725 for the six months ended June 30, 2009. The $504,175 decrease in net loss was primarily attributable to a $520,297 decrease in operating expenses primarily related to research and development and general and administrative.

Revenues. For the three months ended June 30, 2010, revenues were $16,733, a $6,996 increase from revenues of $9,737 earned in the three months ended June 30, 2009. Of the revenues generated for the three months ended June 30, 2010, $13,118 was generated from product and service fees and $3,615 was generated from advertisers, as compared to $5,689 from product and service fees and $4,048 from advertisers for the three months ended June 30, 2009.

For the six months ended June 30, 2010, revenues were $32,814, a $10,974 increase from revenues of $21,840 earned in the six months ended June 30, 2009. Of the revenues generated for the six months ended June 30, 2010, $26,406 was generated from product and service fees and $6,408 was generated from advertisers, as compared to $12,883 from product and service fees and $8,958 from advertisers for the six months ended June 30, 2009.

At June 30, 2010, unearned revenue from product and service fees increased 69% to $2,788 from $1,649 at December 31, 2009.

Operating Expenses. For the three months ended June 30, 2010, operating expenses were $47,774, a $179,044 decrease from operating expenses of $226,818 incurred in the three months ended June 30, 2009.

●	Cost of revenues: Cost of revenues for the three months ended June 30, 2010 were $11,100, as compared to $18,611 for the same prior year period. The $7,511decrease in cost was primarily attributable to a reduction in hosting, staffing and associated overhead costs.

●	Research and development: Research and development expenses for the three months ended June 30, 2010 were $0, as compared to $111,315 for the same prior year period. The decrease in expenses was primarily attributable to a reduction in development staffing and associated overhead costs.

●	Sales and marketing: Sales and marketing expenses for the three months ended June 30, 2010 were $0, as compared to $2,365 for the same prior year period. The decrease in expenses was primarily attributable to decreased public relations expenses and sales consultant expenses.

●	General and administrative: General and administrative expenses for the three months ended June 30, 2010 were $36,674, as compared to $94,527 for the same prior year period. The $57,853 decrease in expenses was primarily attributable to decreased compensation expenses and professional fees.

For the six months ended June 30, 2010, operating expenses were $94,090, a $520,297 decrease from operating expenses of $614,387 incurred in the six months ended June 30, 2009.

●	Cost of revenues: Cost of revenues for the six months ended June 30, 2010 were $24,724, as compared to $44,569 for the same prior year period. The $19,845 decrease in cost was primarily attributable to a reduction in hosting, staffing and associated overhead costs.

●	Research and development: Research and development expenses for the six months ended June 30, 2010 were $0, as compared to $231,170 for the same prior year period. The decrease in expenses was primarily attributable to a reduction in development staffing and associated overhead costs.

●	Sales and marketing: Sales and marketing expenses for the six months ended June 30, 2010 were $0, as compared to $26,270 for the same prior year period. The decrease in expenses was primarily attributable to decreased public relations expenses and sales consultant expenses.

●	General and administrative: General and administrative expenses for the six months ended June 30, 2010 were $69,366, as compared to $312,378 for the same prior year period. The $243,012 decrease in expenses was primarily attributable to decreased compensation expenses and professional fees.

Other income (expense). For the three months ended June 30, 2010, other expenses were $114,585, a $2,765 increase over other expenses of $111,820 in the three months ended June 30, 2009.

●	Interest income: Interest income for the three months ended June 30, 2010 was $9, as compared to $13 for the same prior year period. The $4 decrease was primarily attributable to lower cash balances.

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●	Interest expense: Interest expense for the three months ended June 30, 2010 was $22,463, as compared to $20,775 for the same prior year period. The $1,688 increase was primarily attributable to the interest on the June 23, 2009 promissory notes.

●	Other, net: Other, net expenses for the three months ended June 30, 2010 were $92,131, as compared to $91,058 for the same prior year period. The $1,073 increase was primarily attributable to increased amortization, partially offset by the gain on sale of investments.

For the six months ended June 30, 2010, other expenses were $249,274, a $26,434 increase over other expenses of $222,840 in the six months ended June 30, 2009.

●	Interest income: Interest income for the six months ended June 30, 2010 was $29, as compared to $59 for the same prior year period. The $30 decrease was primarily attributable to lower cash balances.

●	Interest expense: Interest expense for the six months ended June 30, 2010 was $43,765, as compared to $40,650 for the same prior year period. The $3,115 increase was primarily attributable to the interest on the June 23, 2009 promissory notes.

●	Other, net: Other, net expenses for the six months ended June 30, 2010 were $205,538, as compared to $182,249 for the same prior year period. The $23,289 increase was primarily attributable to increased amortization, partially offset by the gain on sale of investments.

Income Taxes. For the three and six months ended June 30, 2010 and 2009, BigString has applied valuation allowances to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized.

●

At December 31, 2009, BigString has available net operating loss carry forwards of approximately $13.4 million for federal income tax reporting purposes and $5.8 million for state income tax reporting purposes which expire in various years through 2029. The differences between book income and tax income primarily relates to amortization of intangible assets and other expenditures. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s net operating loss and research credit carry forwards may be limited, and, as such, BigString may be restricted in using its net operating loss and research credit carry forwards to offset future federal income tax expense.

Liquidity and Capital Resources

BigString’s operating and capital requirements have exceeded its cash flow from operations as BigString has been building its business. Since inception through June 30, 2010, BigString has expended $5,344,703 for operating and investing activities, which has been primarily funded by investments of $5,371,533 from BigString’s stockholders and convertible note and warrant holders. For the six months ended June 30, 2010, BigString generated $23,791 from operating and investing activities, a change of $343,123 from the amount expended during the six months ended June 30, 2009.

BigString’s cash balance as of June 30, 2010 was $26,830, which was an increase of $23,791 from the cash balance of $3,039 as of December 31, 2009. This increase to the cash balance was primarily attributable to reduced expenses and the receipt of a receivable, partially offset by reductions in accrued expenses and payables.

Management believes BigString’s current cash balance of $26,590 at August 13, 2010 is not sufficient to fund the minimum level of operations for the next twelve months.

BigString’s unaudited consolidated financial statements beginning on page 2 have been prepared assuming BigString will continue as a going concern. As more fully explained in Note 2 to BigString’s unaudited consolidated financial statements, BigString has a working capital deficit and has incurred losses since operations commenced. BigString’s continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as BigString continues to incur losses. These uncertainties raise substantial doubt about BigString’s ability to continue as a going concern. BigString’s unaudited consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties should BigString be unable to continue as a going concern.

On April 6, 2009, BigString sold a portion of its shares in FindItAll, Inc., which BigString held as an investment, for $40,000.

On June 23, 2009, BigString entered into a financing arrangement pursuant to which the 2009 Subscribers purchased convertible notes in the aggregate principal amount of $180,000, which notes are convertible into shares of BigString’s common stock, and warrants to purchase up to 6,000,000 shares of BigString's common stock. Each convertible note has a term of two years and accrues interest at a rate of six percent annually. The holder of a convertible note shall have the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.015 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the convertible note are subject to adjustment from time to time. The warrants have an exercise price of $0.015 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

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As described herein, BigString participated in the State of New Jersey’s Program, which allows certain high technology and biotechnology companies to sell unused NOL carryforwards and research and development credits to other New Jersey corporation business taxpayers. On December 16, 2008, BigString received net proceeds of $428,137. On January 11, 2010, BigString received net proceeds of $310,108. BigString may also be able to transfer its unused New Jersey net operating losses and research and development credits in future years.

If the revenue from our operations are not adequate to allow us to pay the principal and interest on the outstanding convertible notes, and the convertible notes are not converted into shares of common stock, we will seek additional equity financing and/or debt financing. It is also possible that we will seek to borrow money from traditional lending institutions, such as banks.

We have completed significant development of our email and messaging services and in December 2009, received a patent from the United States Patent and Trademark Office for Universal, Recallable, Erasable, Secure and Timed Delivery Email.

We have also made significant adjustments to our cost structure, and are sharing common services with PeopleString Corporation, such as rent, hosting and staffing. We reduced our operating and investing cash expenditures by $484,831, or 58%, for the year ended December 31, 2009 as compared to the prior year. For the six months ended June 30, 2010, we generated $23,791 from operating and investing activities.

We expect to continue development of our messaging, email and related service offerings. We also expect sales, marketing and advertising expenses and cost of revenues to increase as we promote and grow our products and services. However, if our revenue and cash balance are insufficient to fund our operations, we will seek additional funds. There can be no assurance that such funds will be available to us or that adequate funds for our operations, whether from debt or equity financings, will be available when needed or on terms satisfactory to us. Our failure to obtain adequate additional financing may require us to delay or curtail some or all of our business efforts and could cause us to seek bankruptcy protection. Any additional equity financing may involve substantial dilution to our then-existing stockholders.

Our current officers and directors have not, as of the date of this filing, loaned any funds to BigString. There are no formal commitments or arrangements to advance or loan funds to BigString or repay any such advances or loans.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

BigString is a smaller reporting company and is therefore not required to provide this information.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2010, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

We review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

BigString is not a party to, and none of its property is the subject of, any pending legal proceedings. To BigString’s knowledge, no governmental authority is contemplating any such proceedings.

Item 1A. Risk Factors

BigString is a smaller reporting company and is therefore not required to provide this information.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

Item 4. (Removed and Reserved.)

Item 5. Other Information

None.

Item 6. Exhibits

See Index of Exhibits commencing on page E-1.

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SIGNATURES

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

	BigString Corporation
	Registrant

Dated: August 16, 2010	By:	/s/ Darin M. Myman
		Darin M. Myman
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated: August 16, 2010	By:	/s/ Robert S. DeMeulemeester
		Robert S. DeMeulemeester
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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INDEX OF EXHIBITS

Exhibit No.	Description of Exhibit
3.1.1	Certificate of Incorporation of BigString, placed into effect on October 8, 2003, incorporated by reference to Exhibit 3.1.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
3.1.2	Certificate of Amendment to the Certificate of Incorporation of BigString, placed into effect on July 19, 2005, incorporated by reference to Exhibit 3.1.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
3.1.3	Certificate of Designations of Series A Preferred Stock, par value $0.0001 per share, of BigString, incorporated by reference to Exhibit 3.1.3 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
3.2	Amended and Restated By-laws of BigString, incorporated by reference to Exhibit 3.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
4.1	Specimen certificate representing BigString’s common stock, par value $0.0001 per share, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
4.2	Form of Convertible Note, dated May 1, 2007, issued to the following persons and in the following amounts: Whalehaven Capital Fund Limited ($250,000); Alpha Capital Anstalt ($250,000); and Iroquois Master Fund Ltd. ($125,000), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on May 3, 2007.
4.3	Form of Convertible Note, dated February 29, 2008, issued to the following subscribers and in the following amounts: Whalehaven Capital Fund Limited ($250,000); Alpha Capital Anstalt ($250,000); and Excalibur Small Cap Opportunities LP ($200,000), incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on March 6, 2008.
4.4	Non-Negotiable Convertible Promissory Note, dated August 25, 2008, issued to Dwight Lane Capital, LLC ($175,000), incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on August 27, 2008.
4.5	Non-Negotiable Convertible Promissory Note, dated August 25, 2008, issued to Marc W. Dutton ($75,000), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on August 27, 2008.
4.6	Form of Convertible Note, dated June 23, 2009, issued to the following subscribers and in the following amounts: Whalehaven Capital Fund Limited ($75,000); Alpha Capital Anstalt ($75,000); and Excalibur Special Opportunities LP ($30,000), incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on June 29, 2009.
10.1	Registration Rights Agreement, dated August 10, 2005, between BigString and AJW New Millennium Offshore, Ltd., incorporated by reference to Exhibit 10.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.2	Registration Rights Agreement, dated August 10, 2005, between BigString and AJW Partners, LLC, incorporated by reference to Exhibit 10.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.3	Registration Rights Agreement, dated August 10, 2005, between BigString and AJW Qualified Partners, LLC, incorporated by reference to Exhibit 10.3 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.4	Registration Rights Agreement, dated June 17, 2005, between BigString and David Matthew Arledge, incorporated by reference to Exhibit 10.4 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.5	Registration Rights Agreement, dated June 17, 2005, between BigString and David A. Arledge, incorporated by reference to Exhibit 10.5 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.6	Registration Rights Agreement, dated July 31, 2005, between BigString and Jeffrey M. Barber and Jo Ann Barber, incorporated by reference to Exhibit 10.6 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.

E-1

Index

10.7	Registration Rights Agreement, dated June 17, 2005, between BigString and Nicholas Codispoti, incorporated by reference to Exhibit 10.7 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.8	Registration Rights Agreement, dated June 17, 2005, between BigString and Nicholas Codispoti, IRA Account, incorporated by reference to Exhibit 10.8 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.9	Registration Rights Agreement, dated June 17, 2005, between BigString and Nicholas Codispoti, President, Codispoti Foundation, incorporated by reference to Exhibit 10.9 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.10	Registration Rights Agreement, dated June 17, 2005, between BigString and Jon M. Conahan, incorporated by reference to Exhibit 10.10 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.11	Registration Rights Agreement, dated July 31, 2005, between BigString and Michael Dewhurst, incorporated by reference to Exhibit 10.11 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.12	Registration Rights Agreement, dated June 17, 2005, between BigString and Theodore Fadool, Jr., incorporated by reference to Exhibit 10.12 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005
10.13	Registration Rights Agreement, dated June 17, 2005, between BigString and Charles S. Guerrieri, incorporated by reference to Exhibit 10.13 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.14	Registration Rights Agreement, dated August 9, 2005, between BigString and James R. Kauffman and Barbara Kauffman, incorporated by reference to Exhibit 10.14 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.15	Registration Rights Agreement, dated July 31, 2005, between BigString and Joel Marcus, incorporated by reference to Exhibit 10.15 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.16	Registration Rights Agreement, dated August 10, 2005, between BigString and New Millennium Capital Partners II, LLC, incorporated by reference to Exhibit 10.16 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.17	Registration Rights Agreement, dated July 31, 2005, between BigString and Richard and Georgia Petrone, incorporated by reference to Exhibit 10.17 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.18	Registration Rights Agreement, dated July 31, 2005, between BigString and David and Kim Prado, incorporated by reference to Exhibit 10.18 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.19	Registration Rights Agreement, dated August 4, 2005, between BigString and Marc Sandusky, incorporated by reference to Exhibit 10.19 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.20	Registration Rights Agreement, dated August 6, 2005, between BigString and Shefts Family LP, incorporated by reference to Exhibit 10.20 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
10.21	Registration Rights Agreement, dated June 17, 2005, between BigString and Thomas Shields, incorporated by reference to Exhibit 10.21 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.

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Index

10.22	Agreement, dated December 1, 2005, by and among BigString and the following selling stockholders: AJW New Millennium Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC, David M. Adredge, David A. Arledge, Susan Baran, Jeffrey M. Barber and JoAnn Barber, Nicholas Codispoti, Nicholas Codispoti, IRA, Codispoti Foundation, Jon M. Conahan, Dean G. Corsones, Michael Dewhurst, Marc Dutton, Theodore Fadool, Jr., Howard Greene, Harvey M. Goldfarb, Charles S. Guerrieri, Brenda L. Herd and Glenn A. Herd, Herd Family Partnership, Ronald C. Herd and Michele Herd, Steven Hoffman, James R. Kaufman and Barbara Kaufman, Jeffrey Kay and Lisa Kay, Gerald Kotkin, Paul A. Levis PSP, Joel Marcus, Barbara A. Musco and Barrie E. Bazar, Craig Myman, New Millennium Capital Partners II, LLC, Alfred Pantaleone, Sara R. Pasquarello, Richard P. Petrone and George Petrone, David Prado and Kim Prado, Lee Rosenberg, Todd M. Ross, Marc Sandusky, Adam Schaffer, H. Joseph Sgroi, Shefts Family LP, Thomas Shields, Mark Yuko, Bradley Zelenitz and Shefts Associates, Inc., incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-KSB filed with the SEC on March 31, 2006.
10.23	Business Consultant Services Agreement by and between BigString and Shefts Associates, Inc., incorporated by reference to Exhibit 10.30 to Amendment No. 1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on October 21, 2005.
10.24	Lease between BigString, as Tenant, and Walter Zimmerer & Son, as Landlord, dated February 3, 2009, for the premises located at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701, incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K filed with the SEC on March 31, 2009.
10.25	Business Consultant Services Agreement, dated May 2, 2006, by and between BigString and Lifeline Industries, Inc., incorporated by reference to Exhibit 10.32 to the Current Report on Form 8-K filed with the SEC on May 4, 2006.
10.26	Securities Purchase Agreement, dated as of May 19, 2006, by and among BigString and Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., including Schedule 1 – Schedule of Purchasers, and Exhibit C – Form of Warrant. Upon the request of the SEC, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 2-3.2(d) – Warrants; Schedule 2-3.3 – Registration Rights; Schedule 2-3.7 – Financial Statements; Schedule 2-3.10 – Broker’s or Finder’s Fees; Schedule 2-3.11 – Litigation; Schedule 2-3.16 – Intellectual Property Claims Against the Company; Schedule 2-3.17 – Subsidiaries; Schedule 2-3.19(a) – Employee Benefit Plans; Schedule 2-3.22 – Material Changes; Exhibit A – Form of Certificate of Designations of the Series A Preferred Stock; Exhibit B – Form of Registration Rights Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion, incorporated by reference to Exhibit 10.33 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
10.27	Registration Rights Agreement, dated as of May 19, 2006, by and among BigString and Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
10.28	Asset Purchase Agreement, dated as of May 19, 2006, by and between BigString and Robb Knie. Upon the request of the SEC, BigString agrees to furnish a copy of Exhibit A – Form of Registration Rights Agreement, and Exhibit B – Investor Suitability Questionnaire, incorporated by reference to Exhibit 10.35 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
10.29	Registration Rights Agreement, dated as of May 19, 2006, by and between BigString and Robb Knie, incorporated by reference to Exhibit 10.36 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
10.30	Stock Redemption Agreement, dated May 31, 2006, by and between BigString and David L. Daniels, incorporated by reference to Exhibit 10.37 to the Registration Statement on Form SB-2 (Registration No. 333-135837) filed with the SEC on July 18, 2006.
10.31	Stock Redemption Agreement, dated May 31, 2006, by and between BigString and Deborah K. Daniels, incorporated by reference to Exhibit 10.38 to the Registration Statement on Form SB-2 (Registration No. 333-135837) filed with the SEC on July 18, 2006.
10.32	Stock Redemption Agreement, dated May 31, 2006, by and between BigString and Charles A. Handshy, Jr., incorporated by reference to Exhibit 10.39 to the Registration Statement on Form SB-2 (Registration No. 333-135837) filed with the SEC on July 18, 2006.

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Index

10.33	Stock Redemption Agreement, dated May 31, 2006, by and between BigString and June E. Handshy, incorporated by reference to Exhibit 10.40 to the Registration Statement on Form SB-2 (Registration No. 333-135837) filed with the SEC on July 18, 2006.
10.34	Letter Agreement, dated September 18, 2006, between BigString and Robert DeMeulemeester, incorporated by reference to Exhibit 10.41 to the Current Report on Form 8-K filed with the SEC on September 21, 2006.
10.35	BigString Corporation 2006 Equity Incentive Plan, incorporated by reference to Exhibit 10.42 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.
10.35.1	Form of Incentive Option Agreement (Employees), incorporated by reference to Exhibit 10.42.1 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.
10.35.2	Form of Director Option Agreement (Non-employee Directors), incorporated by reference to Exhibit 10.42.2 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.
10.36	Subscription Agreement, dated as of April 30, 2007, by and among BigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Schedule 11.1(iv) – Additional Securities to be Included in the Registration Statement; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.43 to the Current Report on Form 8-K filed with the SEC on May 3, 2007.
10.37	Agreement, Waiver and Limited Release, dated as of November 30, 2007, by and among BigString and the Releasors, incorporated by reference to Exhibit 10.37 to the Current Report on Form 8-K filed with the SEC on December 5, 2007.
10.38	Subscription Agreement, dated as of February 29, 2008, by and among BigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.43 to the Current Report on Form 8-K filed with the SEC on March 6, 2008.
10.39	Common Stock Purchase Warrant, dated August 25, 2008, issued to Dwight Lane Capital, LLC, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 27, 2009.
10.40	Common Stock Purchase Warrant, dated August 25, 2008, issued to Marc W. Dutton, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on August 27, 2009.
10.41	Subscription Agreement, dated as of June 23, 2009, by and among BigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on June 29, 2009.
31.1	Section 302 Certification of Chief Executive Officer.
31.2	Section 302 Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

E-4

BigString CORP - FORM 10-Q - August 16, 2010

Attached files

BigString CORP Reports