UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2009

OR

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

For the transition period from ___________ to ___________.

Commission file number: 333-128415

Fund.com Inc.

(Exact name of Registrant as specified in its charter)

Delaware	30-0284778
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

14 Wall Street, 20th Floor New York, NY	10005
(Address of Principal Executive Offices)	(ZIP Code)

(212)  618-1633

(Registrant’s telephone number,

including area code)

________________________________________________________ 

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

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

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

Large Accelerated Filer		o	Accelerated Filer	o
Non-accelerated filer	(do not check if a smaller reporting company)	o	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  x   No  o

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

On May 14, 2009 there were 44,087,335 shares of the issuer's Class A common stock, par value $.001 per share, outstanding and 6,387,665 shares of the issuer’s Class B common stock, par value $.001, outstanding.

FUND.COM INC.

INDEX

		Page Number
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets
	March 31, 2009 (unaudited)	3
	Consolidated Statements of Operations (unaudited)
	Three months ended March 31, 2009 and 2008	4
	Consolidated Statements of Cash Flows (unaudited)
	Three months ended March 31, 2009 and 2008	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosure About Market Risks	23
Item 4T	Controls and Procedures	24
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1.A	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Submission of Matters to a Vote of Security Holders	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

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FUND.COM INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
	March 31, 2009			December 31, 2008
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Cash	$	25,768		$	158,083
Total current assets		25,768			158,083
Property, plant and equipment, net		1,364			122
Intangible Assets, net		9,999,500			9,999,500
Certificate of Deposit		21,388,333			21,138,333
Minority Interest		150,178			106,333
TOTAL ASSETS	$	31,565,143		$	31,402,371
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable	$	1,264,024		$	1,085,210
Accrued payroll		104,896			-
Accrued interest		18,207			-
Advances from shareholders		23,580			23,580
Notes Payable		673,500			443,000
Total current liabilities		2,084,207			1,551,790
TOTAL LIABILITIES		2,084,207			1,551,790
STOCKHOLDERS' EQUITY:
Preferred stock, 10,000,000 shares authorized, none issued and outstanding		-			-
Class A Common stock, $0.001 par value, 100,000,000 shares
authorized; 44,087,335 shares issued and outstanding		44,087			44,087
Class B Common stock, $0.001 par value, 10,000,000 shares
authorized; 6,387,665 shares issued and outstanding		6,388			6,388
Additional paid-in-capital		34,020,676			33,492,056
Accumulated deficit during the Development Stage		(4,590,215	)		(3,691,950	)
Total stockholders' equity		29,480,936			29,850,581
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	31,565,143		$	31,402,371

The accompanying notes are an integral part of these consolidated financial statements

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FUND.COM INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 AND
FOR THE PERIOD SEPTEMBER 20, 2007 (INCEPTION) THROUGH MARCH 31, 2008
	Three Months			Three Months			September 20, 2007 (Inception)
	Ended			Ended			through
	March 31, 2009			March 31, 2008			March 31, 2009
Revenue	$	10,000		$	-		$	10,000
Costs of revenue		-			-			-
Gross profit		10,000			-			10,000
Operating expense		1,202,340			731,779			6,141,666
Loss from operations before interest income and
provision for (benefit from) income tax		(1,192,340	)		(731,779	)		(6,131,666	)
Other income								1,754
Interest income		250,230			250,000			1,389,712
Income tax expense		-			-			(193	)
		250,230			250,000			1,391,273
Minority interest		43,845			18,337			150,178
Net loss		(898,265	)		(463,442	)		(4,590,215	)
Net loss per share - basic and diluted (Class A)	$	(0.08	)	$	(0.01	)	$	(0.10	)
Net loss per share - basic and diluted (Class B)	$	(0.54	)	$	(0.03	)	$	(0.72	)
Weighted average number of shares outstanding:
during the period - basic and diluted (Class A)		43,829,002			34,050,000			43,829,002
Weighted average number of shares outstanding:
during the period - basic and diluted (Class B)		6,387,665			6,387,665			6,387,665

The accompanying notes are an integral part of these consolidated financial statements

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FUND.COM INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND MARCH 2008 AND
FOR THE PERIOD SEPTEMBER 20, 2007 (INCEPTION) THROUGH MARCH 31, 2009
	Three Months			Three Months			September 20, 2007 (Inception)
	Ended			Ended			through
	March 31, 2009			March 31, 2008			March 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(898,265	)	$	(463,442	)	$	(4,590,215	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Compensation recognized under stock incentive plan		528,620			215,199			2,409,581
Changes in assets and liabilities:
Increase in accounts payable		178,814			310,891			1,264,024
Increase in accrued payroll		104,896			-			104,896
Increase in accrued interest		18,207			-			18,207
Net cash used in operating activities		(67,728	)		62,648			(793,507	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property, Plant and Equipment		(1,242	)		(122	)		(1,364	)
Minority interest		(43,845	)		(18,337	)		(150,178	)
Certificate of deposit		-			-			(20,000,000	)
Accrued interest from certificate of deposit		(250,000	)		(250,000	)		(1,388,333	)
Purchase of intangible asset		-			-			(9,999,500	)
Net cash used in  investing activities		(295,087	)		(268,459	)		(31,539,375	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock		-			5,000			31,661,570
Proceeds from Notes Payable		230,500			-			673,500
Advances from shareholders		-			-			77,150
Repayment of shareholders advances		-			(13,420	)		(53,570	)
Net cash provided by financing activities		230,500			(8,420	)		32,358,650
INCREASE (DECREASE) IN CASH		(132,315	)		(214,231	)		25,768
CASH, BEGINNING OF YEAR		158,083			605,348			-
CASH, END OF PERIOD	$	25,768		$	391,117		$	25,768
Supplemental Disclosures
Cash paid during the year for interest	$	-		$	-		$	-
Cash paid during the year for taxes	$	-		$	-		$	-
Supplemental disclosure of non-cash financing activities
Compensation recognized under stock incentive plan	$	528,620		$	215,199		$	2,409,581

The accompanying notes are an integral part of these consolidated financial statements

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 1 – ORGANIZATION

The consolidated financial statements of Fund.Com Inc. (the “Company”) include the accounts of its wholly owned subsidiaries, Fund.com Online Technologies Inc. (“FOT”), Fund.com Managed Products Inc. (“FMP”), Fund.com Capital Inc. (“FC”) and its majority owned subsidiary AdvisorShares Investments, LLC (“AdvisorShares”).  The year end for the Company and its subsidiaries is December 31.

On September 20, 2007, the Company was incorporated in the state of Delaware.  The Company is in its development stage and has not begun the process of operating this business.  The Company is still in the process of researching and developing its business and raising capital.

On September 27, 2007, FOT was incorporated in the state of Delaware. FOT is a wholly owned operating subsidiary of the Company and was established to acquire the domain name “fund.com” and other related intellectual property and assets.  The subsidiary will be responsible for operating fund.com’s internet properties.

On September 27, 2007, FMP was incorporated in the state of Delaware.  FMP is a wholly owned operating subsidiary of the Company that focuses on asset management advisory services and related products.

On September 27, 2007, FC was incorporated in the state of Delaware.  FC is a wholly owned operating subsidiary of FMP that will serve as an investment vehicle for the purposes of making active (non-passive) investments in other financial institutions, fund management companies or, in certain instances, products offered or managed by either.

On October 12, 2006, AdvisorShares was incorporated in the state of Delaware. AdvisorShares is a developer of proprietary exchange traded funds, also known as ETFs, with a focus on “actively managed” ETFs

Change of name

On January 8, 2008, the Company and its subsidiaries changed their names to the following:

To	From
Meade Technology Inc.	Fund.com Inc.
Meade Online Technologies Inc.	Fund.com Online Technologies Inc.
Meade Managed Products Inc.	Fund.com Managed Products Inc.
Meade Capital Inc.	Fund.com Capital Inc.

Interim Review Reporting

The accompanying interim unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. For further information, refer to the financial statements and footnotes thereto included in the Company’s Form 10-K annual report.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows:

Basis of Presentation

The Company has not produced any revenue from its principal business and is a development stage company as defined by the Statement of Financial Accounting Standards (SFAS) No. 7 “Accounting and Reporting by Development Stage Enterprises.”

Principles of Consolidation

The consolidated financial statements include the accounts of Fund.com Inc. and its subsidiaries.  All material intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.  These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period.  Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance with Staff Accounting Bulletin (SAB) No. 104, “Revenue Recognition in Financial Statements” which established that revenue can be recognized when persuasive evidence of an arrangement exists, the product has been shipped, all significant contractual obligations have been satisfied and collection is reasonably assured.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  Cash and cash equivalents are defined to include cash on hand and cash in the bank.

Certificate of Deposit

The Company deposited $20,000,000 into a fixed Certificate of Deposit with an interest rate of 5.00% per annum, for a term of three years.  Accrued interest of $250,000 and $250,000 has been recorded as of March 31, 2009 and 2008, respectively.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of Credit Risk

Substantially all of the Company’s capital, $20 million, has been invested in a three year non-cancellable certificate of deposit due and payable on November 8, 2010 with Global Bank of Commerce Limited (Global) , which is the parent company of one of our shareholders.  Global is an unrated bank located in Antigua. Accordingly, there is a substantial credit risk and exposure arising from this holding and concentration of assets in one institution. The financial condition of the Company is largely dependent on Global performing its obligations under the CD.  The Company believes that the $20.0 million deposit represents a significant portion of Global’s total deposits and net worth.  This deposit does not have the benefit of any governmental or third party insurance

Advertising Costs

All advertising costs are charged to expense as incurred. There was no advertising expense for the periods ended March 31, 2009 and 2008.

Research and Development

Costs are expensed as incurred.  There were no research and development expense for the periods ended March 31, 2009 and 2008.

Property and Equipment

Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon.  Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.  The range of estimated useful lives to be used to calculate depreciation for principal items of property and equipment are as follow:

Asset Category	Depreciation/ Amortization Period
Furniture and Fixture	3 Years
Office equipment	3 Years
Leasehold improvements	5 Years

Income Taxes

Deferred income taxes are recognized based on the provisions of SFAS No. 109, "Accounting for Income Taxes" ("SFAS 109") for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws

-8-

FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Earnings Per Share         

Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation.   The carrying amounts of financial instruments, including cash, accounts payable and accrued expenses approximate fair value because of the relatively short maturity of the instruments.

Accounting for the Impairment of Long-Lived Assets

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

During the fourth quarter of 2008, the Company tested the carrying value of its intangible assets for impairment.  The results of the tests indicated that the carrying value of the intangible assets was not impaired as of December 31, 2008.

Stock-Based Compensation

In October 10, 2006 FASB Staff Position (FSP) issued FSP FAS 123(R)-5 “Amendment of FASB Staff Position FAS 123(R)-1 - Classification and Measurement of Freestanding Financial Instruments Originally issued in Exchange of Employee Services under FASB Statement No. 123(R)”.  The FSP  provides  that instruments  that were  originally  issued  as  employee  compensation  and then  modified, and that modification is made to the terms of the instrument solely to reflect an equity  restructuring  that  occurs  when the  holders  are no longer employees,

-9-

FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

then no change in the recognition or the measurement (due to a change in  classification)  of those instruments  will result if both of the following conditions are met: (a). There is no increase in fair value of the award (or the ratio of intrinsic  value to the exercise price of the award is preserved,  that is, the holder is made whole), or the antidilution provision is not added to the terms of the award in  contemplation  of an equity  restructuring;  and (b). All holders of the same class of equity instruments (for example, stock options) are treated in the same manner.  The provisions in this FSP shall be applied in the first reporting period beginning January 1, 2007.  The Company does not expect the adoption of FSP FAS 123(R)-5 to have a material impact on its consolidated results of operations and financial condition.

Recent Accounting Pronouncements

Employers’ Disclosures about Postretirement Benefit Plan Assets

In December 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position on Financial Accounting Standard (“FSP FAS”) No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets.”  This FSP amends FASB Statement No. 132(R) (“SFAS No. 132(R)”), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan.

FSP FAS No. 132(R)-1 also includes a technical amendment to SFAS No. 132(R) that requires a nonpublic entity to disclose net periodic benefit cost for each annual period for which a statement of income is presented.  The required disclosures about plan assets are effective for fiscal years ending after December 15, 2009.  The technical amendment was effective upon issuance of FSP FAS No. 132(R)-1. The Company currently has no such plans and does anticipate that its adoption of SFAS No 132(R) will have an impact on its consolidated financial position and results of operations.

Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises

In December 2008, the FASB issued FSP FIN No. 48-3, “Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises.”  FSP FIN No. 48-3 defers the effective date of FIN No. 48, “Accounting for Uncertainty in Income Taxes,” for certain nonpublic enterprises as defined in SFAS No. 109, “Accounting for Income Taxes.”  However, nonpublic consolidated entities of public enterprises that apply U.S. generally accepted accounting principles (GAAP) are not eligible for the deferral.FSP FIN No. 48-3 was effective upon issuance.  The impact of adoption was not material to the Company’s consolidated financial condition or results of operations.

Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities

In December 2008, the FASB issued FSP FAS No. 140-4 and FIN No. 46(R) -8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Entities.” This FSP amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” to require public entities to provide additional disclosures about transfers of financials assets. FSP FAS No. 140-4 also amends FIN No. 46(R)-8, “Consolidation of Variable Interest Entities,” to require public enterprises, including sponsors that have a variable interest entity, to provide additional disclosures about their involvement with a variable interest entity. FSP FAS No. 140-4 also requires certain additional disclosures, in regards to variable interest entities, to provide greater transparency to financial statement users. FSP FAS No. 140-4 is effective for the first reporting period (interim or annual) ending after December 15, 2008, with early application encouraged. The Company is currently assessing the impact of FSP FAS No. 140-4 on its consolidated financial position and results of operations.

Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity’s Consolidated Subsidiary

In November 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) Issue No. 08-8, “Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity’s Consolidated Subsidiary.” EITF No. 08-8 clarifies whether a financial instrument for which the payoff to the counterparty is based, in whole or in part, on the stock of an entity’s consolidated subsidiary is indexed to the reporting entity’s own stock. EITF No. 08-8 also clarifies whether or not stock should be precluded from qualifying for the scope exception of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or from being within the scope of EITF No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” EITF No. 08-8 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company is currently assessing the impact of EITF No. 08-8 on its consolidated financial position and results of operations.

Accounting for Defensive Intangible Assets

In November 2008, the FASB issued EITF Issue No. 08-7, “Accounting for Defensive Intangible Assets.”  EITF No. 08-7 clarifies how to account for defensive intangible assets subsequent to initial measurement.  EITF No. 08-7 applies to all defensive intangible assets except for intangible assets that are used in research and development activities.  EITF No. 08-7 is effective for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  The Company is currently assessing the impact of EITF No. 08-7 on its consolidated financial position and results of operations.

Equity Method Investment Accounting Considerations

In November 2008, the FASB issued EITF Issue No. 08-6 (“EITF No. 08-6”), “Equity Method Investment Accounting Considerations.”  EITF No. 08-6 clarifies accounting for certain transactions and impairment considerations involving the equity method.  Transactions and impairment dealt with are initial measurement, decrease in investment value, and change in level

-11-

FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

of ownership or degree of influence.  EITF No. 08-6 is effective on a prospective basis for fiscal years beginning on or after December 15, 2008.  The Company is currently assessing the impact of EITF No. 08-6 on its consolidated financial position and results of operations.

Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active

In October 2008, the FASB issued FSP FAS No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active.”  This FSP clarifies the application of SFAS No. 157, “Fair Value Measurements,” in a market that is not active.  The FSP also provides examples for determining the fair value of a financial asset when the market for that financial asset is not active.  FSP FAS No. 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued.  The impact of adoption was not material to the Company’s consolidated financial condition or results of operations.

Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement

In September 2008, the FASB issued EITF Issue No. 08-5 (“EITF No. 08-5”), “Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement.”  This FSP determines an issuer’s unit of accounting for a liability issued with an inseparable third-party credit enhancement when it is measured or disclosed at fair value on a recurring basis.  FSP EITF No. 08-5 is effective on a prospective basis in the first reporting period beginning on or after December 15, 2008.  The Company is currently assessing the impact of FSP EITF No. 08-5 on its consolidated financial position and results of operations.

Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161

In September 2008, the FASB issued FSP FAS No. 133-1, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161.” This FSP amends FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” to require disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument. The FSP also amends FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” to require and additional disclosure about the current status of the payment/performance risk of a guarantee. Finally, this FSP clarifies the Board’s intent about the effective date of FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” FSP FAS No. 133-1 is effective for fiscal years ending after November 15, 2008. The Company is currently assessing the impact of FSP FAS No. 133-1 on its consolidated financial position and results of operations.

-12-

FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities

In June 2008, the FASB issued EITF Issue No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” EITF No. 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. The EITF 03-6-1 affects entities that accrue dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the award. EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of EITF 03-6-1 on its consolidated financial position and results of operations.

Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an entity's Own Stock

In June 2008, the FASB ratified EITF Issue No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity's Own Stock.”  EITF 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions.  It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation.  EITF 07-5 is effective for fiscal years beginning after December 15, 2008.  The Company currently does not have such instruments and does not anticipate that its adoption of EITF 07-5 will have an impact on its consolidated financial position and results of operations.

Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of FASB Statement No. 60”.  This statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation.  SFAS No. 163 also clarifies how SFAS No. 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities to increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises.  SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for some disclosures about the insurance enterprise’s risk-management activities of the insurance enterprise are effective for the first period (including interim periods) beginning after issuance of SFAS No. 163.  Except for those disclosures, earlier application is not permitted.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)

In May 2008, the FASB issued FSP Accounting Principles Board (“APB”) Opinion No. 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).” The FSP clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion.  The

FSP requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized.  The FSP requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations.  The FSP requires retrospective application to the terms of instruments as they existed for all periods presented.  The FSP is effective for fiscal years beginning after December 15, 2008 and early adoption is not permitted.  The Company is currently evaluating the potential impact of FSP APB 14-1 upon its consolidated financial statements.

The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles.”  SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements.  SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles".  The Company has adopted SFAS 162.

Determination of the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP FAS No. 142-3, “Determination of the Useful Life of Intangible Assets”, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under SFAS No. 142 “Goodwill and Other Intangible Assets”. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of the expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007) “Business Combinations” and other U.S. generally accepted accounting principles. The Company is currently evaluating the potential impact of FSP FAS No. 142-3 on its consolidated financial statements.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Disclosure about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, “Disclosure about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133.” This statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The Company is required to adopt SFAS No. 161 on January 1, 2009. The Company currently has not such instruments and does not anticipate that its adoption of SFAS 161 will have an impact on its consolidated financial statements.

Delay in Effective Date

In February 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of FASB Statement No. 157”. This FSP delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The impact of adoption was not material to the Company’s consolidated financial condition or results of operations.

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R) “Business Combinations.”  This Statement replaces the original SFAS No. 141.  This Statement retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting (which SFAS No. 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. The objective of SFAS No. 141(R) is to improve the relevance, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, SFAS No. 141(R) establishes principles and requirements for how the acquirer:

a.        .Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree

b.        Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase.

c.        Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its adoption of SFAS No. 141(R) will have on its consolidated results of operations and financial condition.

Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51

In December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51.”  This Statement amends the original Accounting Review Board (ARB) No. 51

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

“Consolidated Financial Statements” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008 and may not be applied before that date.  The Company is unable at this time to determine the effect that its adoption of SFAS No. 160 will have on its consolidated results of operations and financial condition.

Fair Value Option for Financial Assets and Financial Liabilities

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of SFAS No. 115,” which becomes effective for the Company on February 1, 2008, permits companies to choose to measure many financial instruments and certain other items at fair value and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument.

The election of this fair-value option did not have a material effect on its consolidated financial condition, results of operations, cash flows or disclosures.

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements.”  SFAS No. 157 provides guidance for using fair value to measure assets and liabilities.  SFAS No. 157 addresses the requests from investors for expanded disclosure about the extent to which companies’ measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and was adopted by the Company in the first quarter of fiscal year 2008. There was no material impact on the Company’s consolidated results of operations and financial condition due to the adoption of SFAS No. 157.

Accounting Changes and Error Corrections

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,” which replaces APB Opinion No. 20, "Accounting Changes," and SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28”. SFAS No. 154 provides guidance on the accounting for and reporting of accounting changes and error corrections, and it establishes retrospective application, or the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. SFAS 154 was adopted at the Company’s

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

inception and did not have a material impact on its consolidated results of operations and financial condition.

NOTE 3 – INTANGIBLE ASSET

Intellectual Property Asset:

During 2007, the Company acquired the domain name “fund.com” and other intangible assets related to intellectual property and trademarks for a total cost of $9,999,950.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 4 – EQUITY

Each share of Class A Common stock has one (1) vote per share.  Each share of Class B Common Stock has ten (10) votes per share.  The holders of Class B Common Stock have the right to convert each share of Class B Common Stock into one share of Class A Common Stock (adjusted to reflect subsequent stock splits, combinations, stock dividends and recapitalizations).

Common Shares Issued

In connection with a private placement, the Company issued 475,000 shares of its Class A common stock at $2.00 per share for total proceeds of $950,000 during 2008.  No shares were issued in the three month period ending March 31, 2009.

Stock Option Plan

On December 27, 2007, the Company adopted the Meade Technologies Inc. 2007 Incentive Compensation Plan.  Under this plan, stock options may be granted to employees, officers, consultants or others who provide services to the Company.

On December 27, 2007, 2,076,111 stock options with a purchase price of $2.30 per share were granted to officers and employees of the Company.

On March 4, 2008, 2,500,000 stock options with a purchase price of $3.50 were granted to officers, employees and a director of the Company.

On March 28, 2008, 250,000 stock options with a purchase price of $4.00 were granted to a director of the Company.

On May 16, 2008, 250,000 stock options with a purchase price of $4.00 were granted to a director of the Company.

On August 6, 2008, 653,000 stock options with a purchase price of $3.25 were granted to an officer, employee and director of the Company.

Lastly, on February 17, 2008, an officer of the company resigned. As a result 1,453,565 stock options with a purchase price of $2.30 per share were forfeited.

The Black-Scholes method option pricing model was used to estimate fair value as of the date of grant using the following assumptions:

Risk-Free	1.66% - 4.23%
Expected volatility	50%- 89%
Forfeiture rate	10%
Expected life	4 Years
Expected dividends	-

Based on the assumptions noted above, the fair market value of the options issued was valued at $8,041,681.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008

NOTE 4 – EQUITY (Continued)

Compensation expense in relation to options totaled $528,620 and $215,199 during the three months ended March 31, 2009 and 2008, respectively.

NOTE 5 – SUBSEQUENT EVENTS

Proposed Investment in National Holdings Corporation

On April 8, 2009, we entered into a definitive Securities Purchase Agreement (the “Purchase Agreement”), with National Holdings Corporation, a Delaware corporation (“NHC”) whereby the Company has agreed to provide a minimum $5 million financing to NHC (the “Financing”) after the satisfaction or waiver of a number of closing conditions set forth in the Purchase Agreement, in exchange for an aggregate of 5,000 shares of NHC to be created Series C Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”) at a purchase price of $1,000.00 per share, and warrants, exercisable at any time, and entitling the holder to purchase up to an aggregate of 25,333,333 shares of common stock of NHC (on an as-exercised basis) with an exercise price of $0.75 per share. Until such time as the Series C Convertible Preferred Stock is created and authorized, the Warrants entitle us to purchase up to an aggregate of 17,500 shares of Series C Convertible Preferred Stock at an exercise price of $1,000 per share and 2,000,000 shares of NHC common stock (on an as-exercised basis) with an exercise price of $0.75 per share. In connection with the Financing, we provided NHC with an initial investment tranche of $500,000, as evidenced by NHC’s limited recourse promissory note, dated April 8, 2009, which note shall automatically convert into shares of Series C Preferred Stock upon consummation of the Financing or, if we are unable to close the balance of the Financing by April 30, 2009, into 666,666 shares of NHC common stock also based on a $0.75 per common share price. The closing of the Financing is subject to various and customary closing conditions and was expected to close on or prior to April 30, 2009. We borrowed the $500,000 initial tranche from Global Asset Fund Limited, (“GAF”), through a loan, which is secured by a pledge of NHC’s limited recourse note and all of our rights and interests in the Purchase Agreement. On May 4, 2009, we entered into an amendment to the Purchase Agreement, pursuant to which the parties agreed to extend the outside date to close the Financing to May 29, 2009 and we agreed that if we were unable to obtain the funding to consummate the Financing by May 29, 2009, we would pay up to $200,000 in professional fees incurred by NHC in connection with the proposed transaction. We further agreed to place such amount in escrow by May 11, 2009; failing which NHC could terminate the proposed transaction at that time. However, on May 14, 2009, we entered into another amendment to the Purchase Agreement, pursuant to which: (i) the outside closing date was moved to May 22, 2009 and (ii) our obligation to place $200,000 in escrow and to pay such amount for NHC’s related professional fees was eliminated. Pursuant to this last amendment, if the Financing does not occur by May 22, 2009, the Purchase Agreement shall automatically terminate and neither party shall have any further liability to the other. On April 29, 2009, our $500,000 NHC limited recourse note was converted into 666,667 shares of NHC common stock, which are pledged as collateral to secure our $500,000 loan from GAF. The $500,000 note to GAF is now due and payable. However, with the extension of the Financing, GAF has not made a demand for payment. If GAF does demand payment prior to the new closing date, we expect that they will foreclose on the 666,667 shares of NHC common stock we received pursuant to the conversion of the Limited Recourse Note.

If we complete the $5.0 million Financing, until the earlier to occur of a “Triggering Event” (as defined) or December 31, 2009, the Series C Preferred Stock entitles the Company to vote with the common stock of NHC on all matters on which NHC common stockholders may vote, and to cast that number of votes equal to 100% of the number of shares NHC capital stock entitled to vote at such meeting, plus one vote.  A “Triggering Event” is defined as our exercise of such number of the warrants that will result in the purchase of not less than 13,333,333 shares of NHC common stock and payment by us to NHC of a minimum of $10.0 million.  We may exercise our warrants at any time to cause a “Triggering Event” to occur.  However, except in connection with a strategic acquisition that we approve, without the approval of the NHC board of directors, we may not exercise the warrants or otherwise purchase capital stock of NHC that would result in our owning more than 50% of the then outstanding NHC common stock.

Upon completion of the $5.0 million Financing, we are entitled to initially designate two representatives on the NHC board of directors, and if we cause a Triggering Event to occur on or before December 31, 2009, we may designate up to 50% of the total number of directors of NHC.   Our intention is, through the exercise of our warrants, to provide NHC with the financing necessary to enable it to make one or more strategic acquisitions in the investment banking and financial management and services businesses.  In such connection, we have a certain preferential rights to provide such financing.  However, subject to our obtaining the necessary funding, it is our intention to exercise our warrants in an amount sufficient to cause a Triggering Event to occur by not later than December 31, 2009.

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FUND.COM INC.

 (A Development Stage Company)

Notes to the Consolidated Financial Statements

For three months ending March 31, 2009 and 2008 

 NOTE 5 – SUBSEQUENT EVENTS (continued)

If we complete the $5.0 million Financing, our agreements with NHC contain certain covenants and agreements whereby our consent (or that of our designees on the NHC board of directors) is required for certain major actions by NHC and its subsidiaries.  In addition, our Chief Executive Officer, Gregory Webster would become President and CEO of the National Asset Management subsidiary of NHC, and we would participate on the merger and acquisition committee of NHC.

We are currently in negotiations with a third party investor to provide us with the funding to make the $5.0 million investment in NHC and consummate the Financing.  However, there can be no assurance that the prospective investor will provide such funding or that the Financing will be consummated on terms acceptable to us, if at all.  The closing of the Financing is subject to various and customary closing conditions and was expected to close on or about April 30, 2009; however, the parties agreed to extend the closing date to May 22, 2009 and therefore, the Financing has not yet closed.

Working Capital Loan with IP Global Investors LTD

Effective May 1, 2009, the Company entered into a $1.343 million line of credit agreement with IP Global under which the Company is permitted to receive loans of up to $1,343,000, less $723,000 of prior advances that the Company received from IP Global through April 30, 2009; provided that such additional advances are for approved corporate purposes.  In consideration for these advances, the Company: (i) agreed to pay 9% interest on all advances (including the prior advances), (ii) granted the lender the right to convert the note into our Class A Common Stock at $0.60 per share (subject to certain adjustments) and (iii) are obligated to pay certain fees to the lender.  All of the Company’s subsidiaries guaranteed payment of the note and the Company issued IP Global a lien on most of our accounts and our domain name to secure payment of the Note.  Additionally, the Company agreed to issue IP Global a warrant to purchase that number of shares of our Class A common stock equal to $1,343,000, divided by an exercise price of $0.60 per shares (subject to certain adjustments, including weighted average anti-dilution adjustments.)

On May 1, 2009, a majority of our shareholders approved – via written consent – to increase the number of shares authorized to be issued under our 2007 Stock Incentive Plan by approximately 5,000,000 shares, thereby allowing a total of 10,055,000 shares to be issued under the Plan.  At the date of this Report, 4,275,546 shares have issued pursuant to the Plan, leaving 5,724,454 available for issuance.

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

The following discussion and analysis of our financial condition and result of operations contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of the other reports we file with the Securities and Exchange Commission. Actual results may differ materially from those contained in any forward-looking statements.

The following discussion and analysis of our financial condition and result of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

Overview

In the quarter ending December 31, 2007, we completed the sale of equity securities totaling aggregate gross proceeds of $30,700,000. The proceeds were used to execute the initial phase of our business plan, which included the acquisition of certain intellectual property consisting primarily of our domain names and also funding our wholly-owned subsidiary, Fund.com Capital Inc.

We capitalized Fund.com Capital Inc. with $20,000,000 from proceeds generated from our equity placements.  On November 9, 2007, Fund.com Capital entered into a $20,000,000 certificate of deposit with an Antigua bank, the Global Bank of Commerce, which is an affiliate of one of our stockholders (GBC Wealth Management Limited).  The deposit is credited with earned interest at 5% per annum for the term of three years and is all due and payable at the end of the term.   Subject to receipt of any necessary approvals (including the approval of Global Bank of Commerce, which approval could be withheld in its sole discretion), we may seek to use all or a portion of this $20,000,000 to fund one or more control investments.

We believe that a structured product that is benchmarked to an index published by EQUITIES Magazine, would provide important statistical and investment data. We believe that this data could be useful in further developing our business plan This track record may assist Fund.com Capital Inc. in the future should Fund.com Capital Inc. seek to develop a registered investment product available for sale to third parties. No decision has been taken to develop such a product or to register same with the Securities and Exchange Commission.

Our plan of operations may also consist of licensing our content to third parties. This content may include proprietary indexes as well as service marks and trademarks. Third party product providers, like banks and asset management companies, license a range of indexes, such as the Russell 2000 from the Frank Russell Companies or the S&P 500 from Standard and Poors/McGraw Hill. We may have similar business arrangements to license indexes in return for the payment of licensing fees.

In addition to our fund product development and publishing business, our plan of operation is to invest in the further development of our websites. This will include certain capital expenditures for technology, content and database management, including certain online advertising systems and affiliate marketing systems that management believes will assist in executing our customer acquisition business plan. Our websites are anticipated to evolve over time as we introduce new content and features and generally seek to improve the customer experience and to improve the lead generating efficiency of the websites, consistent with our business plan. In addition to databases created from parties registering at our websites, we also intend to expand our access to targeted databases of investors that may be interested in our services or our advertising clients’ services. This is anticipated to include certain joint ventures currently in negotiations and certain database acquisitions. Our website was launched in March 2009 with the full planned feature set accessible at www.fund.com. On August 20, 2008 we negotiated an advertising arrangement with a third-party vendor, Investor Channel, that sells our advertising inventory to potential clients for content and sponsorship deals. We anticipate that it will cost approximately $200,000 to continue the development and enhancement of www.fund.com with new quarterly releases. Marketing costs will be approximately $250,000.

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Our other website, www.accreditedinvestor.com is in the planning phase and it is expected to cost $500,000 in development and license fees.  No release date has been established.

We have outsourced our technology to operate our online network and supporting systems on servers at a secure third-party co-location facility in the Colorado area. This third-party facility is manned, and our infrastructure and network connectivity monitored continuously, on a 24 hour a day, 365 day a year basis. This facility is powered continuously from multiple sources, including uninterruptible power supplies and emergency power generators. The vast majority of the information presented on www.fund.com, including backend databases that serve and store information, will be stored in and delivered from server farms. 

Our operating and capital requirements in connection with operations have been and will continue to be significant. Based on our current plans, we anticipate that revenues earned from lead generation will be the primary source of funds for operating activities. In addition to existing cash and cash equivalents, we may rely on bank borrowing, if available, or sales of securities to meet the basic capital and liquidity needs for the next 12 months. Additional capital may be sought to fund the development of www.fund.com and marketing efforts, which may also include bank borrowing, or a private placement of securities. However, we have no agreements for funding at this time and there can be no assurance that funding will be available if we require it.

Upon our inception we issued an aggregate of 18,700,000 (not giving effect to the 9-for-1 dividend on the Surviving Corporation’s Class A Common Stock and Class B Common Stock) shares of our common stock, par value $0.0001 per share, to seven investors, three of whom were co-founders of the Company. The shares were valued at $0.0001 per share. These shares were issued pursuant to the exemption provided by Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving a public offering. In November 2007, we issued an aggregate of 10,350,000 (not giving effect to the 9-for-1 dividend on the Surviving Corporation’s Class A Common Stock and Class B Common Stock) shares of our common stock to eight accredited investors in a private placement. The shares were valued at $2.00 per share and received gross proceeds of $20,700,000. On November 5, 2007, we sold 5,000,000 (not giving effect to the 9-for-1 dividend on the Surviving Corporation’s Class A Common Stock and Class B Common Stock) shares of our common stock and 2,500,000 (not giving effect to the 9-for-1 dividend on the Surviving Corporation’s Class A Common Stock and Class B Common Stock) shares of our Series A Preferred Stock to an accredited investor and received gross proceeds of $10,000,000. Substantially all of the proceeds of the Series A Preferred Stock transaction were used to acquire the domain name www.fund.com.

Prior to the Merger and not giving effect to the 9-for-1 dividend on the Surviving Corporation’s Class A Common Stock and Class B Common Stock, Fund.com had authorized a total 110,000,000 shares, of which 105,000,000 were authorized as common stock and 5,000,000 shares were authorized as Preferred Stock and 2,500,000 shares of the Preferred Stock were designated as Series A Preferred Stock. Following the Merger, we had authorized a total of 110,000,000 shares of common stock, par value $0.001 per share, of which 100,000,000 shares were authorized as Class A Common Stock, 10,000,000 shares were authorized as Class B Common Stock. In addition, 10,000,000 shares were authorized as Preferred Stock. Following the Merger, 43,612,335 shares of Class A Common Stock were outstanding, 6,387,665 shares of Class B Common Stock were outstanding and no shares of Preferred Stock were outstanding.

We anticipate that our cash requirements for the next 12 months for expenses related to infrastructure and business development should be approximately $1,000,000. We believe proceeds from the sale of both equity and debt instruments will be sufficient to meet presently anticipated working capital and capital expenditure requirements over the next few months. However, their can be no assurance that the sale of equity or notes will take place. To the extent that we do not generate sufficient revenues, we will be forced to reduce our expenses and/or seek additional financing. As of May 5, 2009 there were no commitments for long-term capital expenditures.

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Recent Debt Financing

For the past six months we have relied on loans and advances from IP Global Investors LTD., a privately owned intellectual property financing company, to provide us with working capital to pay our operating expenses.  Through April 30, 2009, we have borrowed an aggregate of $723,000 from this lending source.  Effective May 1, 2009, we entered into a one year $1.343 million line of credit agreement with IP Global under which we are permitted to receive loans of up to $1,343,000, less the $723,000 of prior advances, through April 30, 2009; provided, that such additional advances are for approved corporate purposes.  In consideration for these advances, we have agreed to pay 9% interest on all approved advances (including the prior loans), granted the lender the right to convert our note into shares of our Class A Common Stock at a conversion price equal to $0.60 per share (subject to certain adjustments, including weighted average anti-dilution adjustments) and are obligated to pay certain fees to the lender in certain circumstances.  Such fees include a $16,500 per month loan servicing fee which accrues and is payable on the maturity date of the note, and a CD release fee (to be paid if the lender arranges for an early payment on our CD with Global Bank of Commerce that matures November 2010 on terms satisfactory to us), payable in shares of our class A common stock determined by dividing $1,343,000 by the Conversion Price then in effect.

In addition to the note and fees, under the terms of our loan agreement, we agreed to issue to the lender a warrant to purchase that number of shares of our Class A common stock equal to $1,343,000, divided by an exercise price of $0.60 per shares (subject to certain adjustments, including weighted average anti-dilution adjustments).

Off-Balance Sheet Arrangements.

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial conditions, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Description of Property.

Our corporate headquarters are located at 14 Wall Street, 20th floor, New York, NY, 10005.  

Critical Accounting Policies

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ending December 31, 2008, which we filed with the Securities and Exchange Commission on May 7, 2009, for disclosures regarding our critical accounting policies and estimates.  The interim financial statements follow the same accounting policies and methods of computations as those for the year ended December 31, 2008.

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Results of Operations

The following table shows the results of operations of our business.

Comparison of the three months ended March 31, 2009 and 2008

Three Months Ended March 31	2009			2008
Sales	$	10,000		$	-0-
Cost of sales	$	-0-		$	-0-
Total expenses	$	1,202,340		$	731,779
Other income (expense)	$	250,230		$	250,000
Income taxes	$	-0-		$	-0-
Net income (loss)	$	(898,265	)	$	(463,442	)
Foreign currency translation adjustment	$	-0-		$	-0-
Comprehensive income (loss)	$	(898,265	)	$	(463,442	)

Results of Operations for the Three Month Periods ended March 31, 2009 and 2008

We reported a net loss of $898,265 and $463,442 for the three-month periods ending March 31, 2009 and 2008, respectively.  Until we implement our business plan, we will not have material operating revenues.

For the three-month period ending March 31, 2009, we incurred $1,202,340 in operating costs.  This amount includes $528,620 related to compensation expense for stock options, $93,143 related to legal and professional fees, $331,219 related to payroll and benefits for the officers of the Company, and $104,087 for consulting expenses.

For the three-month period ending March 31, 2008, we incurred $731,779 in operating costs.  This amount includes $215,199 related to compensation expense for stock options, $171,916 related to legal and professional fees, $119,396 related to payroll and benefits for the officers of the Company, $109,602 for consulting expenses and $57,495 related to promotional and public relations expense.

The $20 million certificate of deposit with the Global Bank of Commerce (an Antiguan bank), held by our wholly-owed subsidiary Fund.com Capital Inc., earned interest of $250,000  for each three-month period ended March 31, 2009 and 2008, respectively.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Not applicable.

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Item 4T. Controls and Procedures

I.  Disclosure Controls and Procedures.

As of the end of the period covered by this report, our management conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, the officers concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed by our company in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Commission rules and forms.

II.  Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our last fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Our subsidiary, AdvisorShares Investments, LLC is not currently involved in any legal proceedings.  However, AdvisorShares' CEO, who is separately a part owner of Arrow Investment Advisors, LLC. is currently a party to arbitration with other members of Arrow who have asserted an ownership claim regarding the CEO's ownership interest in AdvisorShares.  If the other members prevail on their claims, this could impact the amount of ownership AdvisorShares’ CEO indirectly holds in AdvisorShares.  In addition, if Arrow prevails, Arrow could assert claims that the Purchase and Contribution Agreement, pursuant to which we purchased our 60% interest in AdvisorShares, was inappropriately executed and seek to nullify the obligations associated with that agreement.

Other than as set forth herein, we are not a party to any material legal proceeding and to our knowledge no such proceeding is currently contemplated or pending.

Item 1A. Risk Factors

Not applicable.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to our security holders during the period covered by this Report.  However, on May 1, 2009, a majority of our shareholders approved – via written consent – to increase the number of shares authorized to be issued under our 2007 Stock Incentive Plan by approximately 5,000,000 shares.

Item 5. Other Information

On April 14, 2009, we filed a Current Report on Form 8-K to disclose our entry into a Securities Purchase Agreement with National Holdings, Corporation and disclosed that the closing of such transaction was to take place on April 29, 2009.  In our Annual Report on Form 10-K for the year ending December 31, 2008, we disclosed that on May 4, 2009, we entered into an amendment to the Purchase Agreement, pursuant to which the closing date was extended until May 29, 2009 and pursuant to which we agreed that if we were unable to obtain the funding to consummate the related financing by May 29, 2009, we would pay up to $200,000 in professional fees incurred by NHC in connection with the proposed transaction.  We further agreed to place such amount in escrow by May 11, 2009; failing which NHC could terminate the proposed transaction at that time.  However, on May 14, 2009, we entered into a second amendment to the Purchase Agreement, pursuant to which: (i) the outside closing date was moved to May 22, 2009 and (ii) our obligation to place $200,000 in escrow and to pay such amount for NHC's related professional fees was eliminated.  Pursuant to this last amendment, if the transaction does not occur by May 22, 2009, the Purchase Agreement shall automatically terminate and neither party shall have any further liability to the other.

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Item 6. Exhibits

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of Eastern Services Holdings, Inc. (Filed as Exhibit 3.1 to  Form 8-K, filed on January 17, 2008, incorporated by reference)
3.2	Bylaws of Fund.com. (Filed as Exhibit 3.2 to Form 8-K, filed on January17, 2008, incorporated by reference)
10.1	Amendment No. 2 to Securities Purchase Agreement dated as of May 14, 2009.
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

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

FUND.COM INC.
By:	/s/  Gregory Webster
	Gregory Webster Chief Executive Officer
	& Director
By:	/s/  Michael Hlavsa
	Michael Hlavsa Chief Financial Officer & Chief Accounting Officer

Date:  May 15, 2009

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