~~Closing: on or about June 15, 2007~~	14
~~Conduct of Business Following the Closing~~	15
~~Financial Statements~~	~~15-1~~
~~Selected Financial Data~~	15
~~Selected Pro-Forma Financial Data~~	15
~~Accounting Treatment~~	17
~~Managements Discussion and Analysis of Financial Condition and Results of Operations - Fiscal Year 2006~~	17
~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~	18
~~The Kiwibox Acquisition~~	19
~~The Parties to the Kiwibox Acquisition~~	19
~~The Effective Time~~	19
~~The Kiwibox Business Acquired~~	19
~~Liabilities to be Assumed~~
~~Representations and Warranties~~	19
~~Covenants~~	19
~~Closing Conditions~~	20
~~Termination~~	20
~~Business and Plan of Operation of the New Company~~	20
~~Proposal 2 -~~One – Amendment to Certificate of Incorporation ~~to Increase~~	17

~~the Number~~Proposal Two – Approval of ~~Authorized Shares of Common Stock~~Independent Registered Public Accounting Firm	21 18
~~Reasons for the Change to the Company's Common Stock~~	21
~~General Effect of the Changes to the Company's Common Stock~~	22
~~Proposal 3 - Amendment to Certificate of Incorporation to Change~~
~~the Corporate Name of the Company~~Consent Form	22
~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS~~	23
~~PRINCIPAL STOCKHOLDERS~~	24
~~DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES~~	25
~~EXECUTIVE COMPENSATION~~	26
~~CORPORATE GOVERNANCE AND CODE OF ETHICS~~	31
~~AUDIT COMMITTEE~~	31
~~COMPENSATION AND NOMINATING COMMITTEES~~	31
~~THE CONSENT PROCEDURE~~	32
~~Exhibit A: Agreement and Plan of Reorganization~~
~~Exhibit B: Amendment No. 1 to Certificate of Incorporation~~
~~Exhibit C: Amendment No. 2 to Certificate of Incorporation~~
~~Exhibit D: Company’s annual report on Form 10-KSB for the~~
~~fiscal year ended December 31, 2007~~
~~Exhibit E: Kiwibox Media, Inc.’s audited financial statements~~
~~for the fiscal year ended December 31, 2007~~

INTRODUCTION

MAGNITUDE INFORMATION SYSTEMS, INC.

1250 Route 28

Suite 309

Branchburg, New Jersey 08876

CONSENT SOLICITATION STATEMENT

FOR

THE SOLICITATION OF WRITTEN CONSENTS

~~FOR THE ACQUISITION OF KIWIBOX MEDIA, INC. AND~~

~~ADOPTION OF TWO AMENDMENTS TO THE~~

~~CERTIFICATE OF INCORPORATION~~

This Consent Solicitation Statement (the "Consent Statement") is furnished to the stockholders of MAGNITUDE INFORMATION SYSTEMS, INC., a Delaware corporation (the "Company"), by the Board of Directors in connection with the solicitation by the Company of the written consent of stockholders. The stockholders are being asked to provide their written consent for:

~~1. The approval of the Company’s acquisition of Kiwibox Media, Inc. by merger with a wholly owned subsidiary of the Company;~~

Increase the number of shares of Common Stock that the Company is authorized to issue from 700,000,000 to 1,400,000,000 shares, and.

~~2. The approval of an~~

To ratify the appointment of Rosenberg Rich Baker Berman & Company to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2009.

We will sometimes refer to Proposal 1, to increase our authorized common stock and the accompanying amendment to ~~the Company’s~~our Certificate of Incorporation, ~~increasing~~as the ~~number of shares of common stock, $.0001 par value (the “Common Stock”) which~~“Amendment”, and; to Proposal 2, the ~~Company has authority to issue from 300,000,000 to 700,000,000 shares; and~~

~~3. The approval of an amendment to the Company’s Certificate of Incorporation, changing the Company’s corporate name to “KiwiAge Enterprises, Inc.”.~~

~~A Copy~~ratification of the ~~Agreement and Plan~~appointment of ~~Reorganization, pursuant to the principal terms of which the Company will acquire Kiwibox Media, Inc. is attached as Exhibit A to this Consent Statement. We sometimes refer to~~ our ~~acquisition of Kiwibox Media, Inc. through its merger with our wholly-owned subsidiary~~auditors, as the ~~“Acquisition” or “Merger” and the agreement as the “Acquisition Agreement”~~“Appointment”. A copy of the proposed Amendment to increase the Company’s authorized common stock is attached as Exhibit B. The second Amendment to our Certificate of Incorporation, seeking shareholder approval to change the Company’s corporate name from Magnitude Information System, Inc. to “KiwiAge Enterprises, Inc.”, is attached as Exhibit C. We sometimes refer to these two proposed amendments to our Certificate of Incorporation as the “Amendments”.

A. The Company intends to distribute this Consent Statement and the accompanying Consent Card commencing on or about ~~June __, 2007,~~January 5, 2009, to the holders of record of the Common Stock as of the close of business on ~~May 7, 2007.~~December 29, 2008. This date is referred to as the "record date." Written consents of stockholders representing a majority of the outstanding shares of Common Stock at the record date are required to approve the ~~Acquisition~~Amendment and ~~the Amendments.~~Appointment. .

Only stockholders of record as of ~~May 7, 2007,~~December 29, 2008, are entitled to consent, to withhold their consent, or to revoke their consent to the ~~Amendment.~~proposals contained in this Proxy Statement. Stockholders are entitled to one vote for each outstanding share of Common Stock held at the record date. As of the ~~record date~~Record Date there were ~~____________~~[_____________] issued and outstanding shares of Common Stock.

Consents, once dated, signed, and delivered to the Company, will remain effective unless and until revoked by written notice of revocation dated, signed, and delivered to the Company at the address set forth below on or before ~~June __, 2007.~~[ ].

The ~~Acquisition~~Amendment and ~~the Amendments~~Appointment will be approved if by ~~June __, 2007,~~[ ], the Company holds unrevoked written consents of stockholders approving the ~~Acquisition~~Amendment and the ~~Amendments~~Appointment from a majority of the outstanding shares of Common Stock at the Record Date. Consequently, the withholding of consent, abstentions and the failure to deliver a Consent Card would all have the effect of a vote against the approval of the ~~Acquisition~~Amendment and to the ~~Amendments.~~Appointment. If a stockholder holds his shares in "street name" and fails to instruct his broker or nominee as to how to vote his shares, the broker or nominee may not, pursuant to applicable stock exchange rules, vote such shares and, accordingly, such shares will have the effect of a vote against the ~~Acquisition~~Amendment and ~~the Amendments.~~Appointment.

Stockholders are requested to indicate their approval ofand consent to the ~~Acquisition~~Amendment and to the ~~Amendments~~Appointment by signing and dating the Consent Card, checking each box on the Consent Card ~~which corresponds to~~for the ~~approval of the Acquisition~~Amendment and for ~~each of~~ the ~~Amendments,~~Appointment, and delivering the Consent Card to the Company's transfer agent at the address set forth below. Withholding of consent to the ~~Acquisition and to~~Amendment or the ~~Amendments,~~Appointment, or abstention with respect to ~~the approval of the Acquisition and the Amendments,~~these proposals, may be indicated by signing and dating the Consent Card, checking the box which corresponds to withholding of consent for ~~each of~~ the ~~Acquisition and Amendments~~Amendment or the Appointment or abstention with respect to the approval of each of ~~the Acquisition and Amendments,~~these proposals, respectively, and delivering the Consent Card to the Company's transfer agent at the address set forth below.

The principal executive offices of the Company are located at 1250 Route 28, Suite 309, Branchburg, New Jersey 08876, and the telephone number of the Company is (908) 927-0004.

Your written consent is important to us. Questions and answers about how to vote in this Consent Solicitation and how to revoke your written consent are set forth in this Consent Solicitation below under the heading “QUESTIONS AND ANSWERS ABOUT THE ~~ACQUISITION,~~AMENDMENT, THE ~~AMENDMENTS~~APPOINTMENT AND THIS CONSENT SOLICITATION”.

~~SUMMARY OF THE TERMS OF THE KIWIBOX ACQUISTION~~

This summary highlights selected information contained in this Consent Solicitation and the in the Agreement and Plan of Reorganization, dated as of February 19, 2007 (the “Acquisition Agreement”), among us, our wholly owned subsidiary, Magnitude Operations, Inc. ( the “Subsidiary”), Kiwibox Media, Inc. (“Kiwibox”) and the three shareholders of Kiwibox Media, Inc. (the “Kiwibox Shareholders”) concerning our acquisition of Kiwibox through its merger with our Subsidiary. To fully understand the Acquisition and for a more complete description of the terms of the Acquisition, please carefully read this Consent Statement and the Acquisition Agreement, which is attached hereto as Exhibit A, and the other documents described herein.

~~The Parties to the Acquisition (page 16)~~

~~Us, our wholly owned subsidiary, Magnitude Operations, Inc., Kiwibox Media, Inc. and the three~~ ~~(3) shareholders of Kiwibox Media, Inc.~~

~~Business to be Acquired by our Subsidiary (page 16)~~

~~All of its assets related to its Kiwibox website business.~~

~~Liabilities to be Assumed and or Paid by Us (page 16)~~

~~Certain liabilities related to the operation of the business to be~~ ~~acquired not to exceed $83,500.~~

~~Acquisition Price For Kiwibox; Stock and Cash (page 12)~~

We Estimate that we will need between 162,500,000 and 351,500,000 Common Shares to Consummate the Acquisition and the Three Employment Agreements we will sign with the Three Kiwibox Shareholders; this amount includes between 100,000,000 and 120,000,000 Common Shares we will need to privately place with an investor or investors in order to raise the minimum $3.5 million we have committed to invest in the Kiwibox website business and the approximate $2.5 million needed to pay closing expenses and fund our public company operations. These amounts of our Common Shares are issuable in the following parts of our Kiwibox Acquisition:

~~Our Common Stock Issuable in the Acquisition Agreement: Between 30,000,000 and 150,000,000 Common Shares.~~ In exchange for their ownership shares of Kiwibox, we will issue new shares to the three Kiwibox Shareholders. The amount of our common shares we will issue to them will be based upon the value of $1,500,000, divided by the “Market Price” of our publicly traded common stock. The Market Price will be the average sales price of our common stock over for the ten trading day period immediately preceding the Closing. For example, if the Market Price is determined to be $.05 per common share, then we will divide the $1,500,000 value by $.05 and issue a total 30,000,000 common shares to the Kiwibox Shareholders. Similarly, if the Market Price is determined to be $.025 per common share, then we will divide the $1,500,000 value by $.025 and we will issue 60,000,000 common shares to the Kiwibox Shareholders and 150,000,000 common shares if our Market Price falls to $.01. We have agreed that even if our Market Price is determined to be higher than $.05 per common share that we will issue no less than 30,000,000 common shares to the three Kiwibox Shareholders. The three Kiwibox Shareholders will divide our common shares between them based upon their percentage ownership of their Kiwibox shares. Holders of our common shares have the right to vote on all shareholder voting matters.

~~Our Preferred Stock, convertible into our Common Stock: Between 10,000,000 and 50,000,000 Common Shares.~~ ~~We have also agreed to issue a total 43,610 shares of our preferred stock to the three Kiwibox Shareholders.~~

~~Each share of Series E Preferred Stock will have the following terms:~~

~~Stated Value. $11.47.~~

~~No voting rights~~

~~No dividend rights.~~

~~Liquidation Preference. on par with all other classes of outstanding preferred shares to the extent of the stated value price.~~

~~No redemption rights.~~

The 43,610 Shares of Our Preferred Stock are Automatically Convertible into Shares of Our Common Stock. All 43,610 of these preferred shares shall automatically convert into shares of our common stock upon the second anniversary date of the Closing. The amount of our common shares into which these preferred shares will be converted is based upon the value of $500,000, divided by the “Market Price” of our publicly traded common stock. Our Market Price for this conversion will be the average sales price of our common stock over for the twenty trading day period immediately preceding the second anniversary date of the Closing. For example, if the Market Price is determined to be $.05 per common share, then we will divide the $500,000 value by $.05 and convert the 43,610 preferred shares into an aggregate 10,000,000 common shares. If the Market Price is determined to be $.025 per common share, then we will divide the $500,000 value by $.025 and convert the 43,610 preferred shares into an aggregate 20,000,000 common shares, and if $.01 per share, the preferred shares will convert into 50,000,000 common shares. As with our Common Stock we have agreed to issue to the Kiwibox Shareholders, we have agreed that even if our Market Price at the time is determined to be higher than $.05 per common share, the 43,610 preferred shares shall convert into no less than 10,000,000 common shares.

~~Cash Payment.~~ ~~We have agreed to pay the Kiwibox Shareholders a cash payment of $300,000 at Closing.~~

~~Tax Treatment (page 16)~~

~~Election of Directors. The right to elect, together with the holders of common stock, one member of our board of directors.~~

Protective Provisions. The consent of two of the three Kiwibox Shareholders will be required if Magnitude or Subsidiary desire (i) to undertake a material acquisition or (ii) sell all or any material portion of the business of Kiwibox during the two-year period following the closing.

~~Employment Agreements (page 13)~~

In connection with the Acquisition, we also will enter into Employment Agreements, each having identical terms and provisions, with each of the three Kiwibox Shareholders, containing the following terms:

~~A two year term.~~

~~Each shall be paid an annual base salary of $150,000 with the right to earn up to an additional $100,000 cash bonus based upon the business attaining certain goals.~~

~~Our Common Stock Issuable under the Employment Agreements: Between 22,500,000 and~~ ~~31,500,000 Common Shares~~

Each shall receive at Closing a stock option grant to purchase up to 7,500,000 shares of Magnitude common stock, vesting 50% on first anniversary date of Closing and 25% each on the 18 month and second anniversary dates of the Closing, at the exercise price equal to the public market price on the date of Closing, and a second option grant to purchase up to an additional 1,500,000 Magnitude common shares at the end of each of the two years of their employment agreements (3,000,000 shares each) if the business attains certain goals.

~~Participation in Magnitude’s medical and health insurance coverage and all employee benefit plans, with paid vacation.~~

~~Restrictive covenants against competition with the customary pledges of confidentiality.~~

~~Standard termination rights and legal claims provisions.~~

~~$6 million equity private placement (page 13)~~

Our Common Stock Issuable to potential investors in our private placement to raise the minimum $3.5 million we have committed to invest in the Kiwibox website business and to raise the approximate $2.5 million to pay for our Acquisition closing costs as well as to pay for our public company expenses and operations:: Between 100,000,000 and 120,000,000 Common Shares

Our Board of Directors has authorized us to offer to one or more of our business associates with whom we have a pre-existing relationship and who qualify as either an accredited or institutional investor between 100,000,000 and 120,000,000 shares of our common stock to raise the minimum $3.5 million we need in order to close the Kiwibox Acquisition and meet our commitment to invest these funds into the Kiwibox website business over the 18 month period following the closing and to raise the approximate $2.5 million to pay our closing costs and the public company operating expenses over the same 18 month period. We estimate our closing costs for fees due attorneys, accountants, investment bankers, finders, etc., and to pay accrued Company debts to be approximately between $1,000,000 and $1,200,000. Accordingly, if we succeed in raising the aggregate $6.0 million in our private placement, we will have the $3.5 million needed to close the Kiwibox Acquisition, and between approximately $1,300,000 and $1,500,000 to pay our estimated public company and operational expenses for the 18 month period following the closing of the Kiwibox Acquisition. We can not assure shareholders that we will succeed in raising any amount of equity funds in our private placement. If we do not succeed in raising the minimum $3.5 million necessary to close the Kiwibox Acquisition, and the approximate $2.5 million needed to pay the estimated Acquisition closing costs and fund the public company operations, such failure will have a material adverse effect on our financial condition and plan of operations and we will be required to seek to raise additional equity or debt to fund our operations.

~~Recommendation of the Company's Board of Directors and Reasons for Acquisition (page 11)~~

Vote FOR the proposal to authorize the Kiwibox Acquisition. The Board believes that the Acquisition is in the best interest of the Company because, among other things, it would provide the Company with a new business opportunity in the social network website industry.

~~Conduct of Business Following the Acquisition (page 17)~~

~~Magnitude will devote its management and resources to develop and expand the Kiwibox website business.~~

~~Conditions to Completion of the Kiwibox Acquisition, Vote Required to Authorize the Kiwibox Acquisition (page 17)~~

~~In addition to customary closing conditions,~~

~~Approval by Magnitude stockholders,~~

~~Consummation of a private placement of at least $3.5 million to meet our investment obligation to Kiwibox and an estimated additional $1.5 million for operations,~~

~~Execution of employment agreements with the three Kiwibox Shareholders,~~

~~Stockholder approval requires a majority of the consent votes entitled to be cast by stockholders in this Consent Solicitation.~~

~~The Company's Board members and executive officers, who collectively own approximately 4.3% shares of the Company's common stock have indicated that they intend to vote for the Acquisition.~~

~~Expenses (page 16)~~

Magnitude has agreed to pay up to $42,500 of legal fees, up to $17,000 of accounting fees and $15,000 of investment banking fees and 2.5% of the shares payable to the Kiwibox Shareholders pursuant to Article 3.2, on behalf of the Kiwibox Shareholders as well a spaying its own costs and fees associated with the Acquisition.

~~No Appraisal Rights (page 8)~~

~~Company stockholders do not have appraisal rights in connection with the Acquisition under Delaware law or the Company's Certificate of Incorporation or Bylaws.~~

QUESTIONS AND ANSWERS ABOUT THE ~~ACQUISITION~~AMENDMENT, THE APPOINTMENT AND ~~THE~~THIS CONSENT SOLICITATION

Following are some commonly asked questions that may be raised by stockholders and answers to each of those questions.

Why did I receive this Consent Solicitation?

This Consent Solicitation and the enclosed consent card have been sent to the Company's stockholders as of the record date for the solicitation of consents, because the Company's Board of Directors is soliciting their consent in this Consent Solicitation. This Consent Solicitation summarizes the information stockholders need to consent in an informed manner on the proposals to be considered in this Consent Solicitation. Stockholders must complete, sign and return the enclosed consent card in order to vote their shares.

What am I being asked to vote my shares for in this Consent Solicitation?

The Company's stockholders will consider and vote upon the following proposals:

·1.

~~Approval~~Increase the number of shares of Common Stock that the ~~Acquisition of Kiwibox Media, Inc. through a merger with and into our Subsidiary;~~Company is authorized to issue from 700,000,000 to 1,400,000,000 shares, and.

Amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of its common stock from 300,000,000 to 700,000,000 in order to provide the estimated number of common shares available to consummate the Acquisition; and

·2.

~~Amendment~~To ratify the appointment of Rosenberg Rich Baker Berman & Company to serve as our independent registered public accounting firm for the ~~Company’s Certificate of Incorporation, changing the Company’s corporate name to “KiwiAge Enterprises, Inc.”~~fiscal year ending December 31, 2009.

~~Why are shareholders being asked to approve the Company’s acquisition of Kiwibox Media, Inc. in this Consent Solicitation?~~

As of the Record Date, the Company had ___________________________ shares of its common stock outstanding, including common shares reserved for issuance under outstanding stock options and warrants. We estimate that we will need between 162,500,000 and 351,500,000 aggregate common shares in order:

~~to issue the $1,500,000 value worth of common shares necessary to consummate the Acquisition (between 30,000,000 and 150,000,000 shares);~~

~~to issue the common shares required under the employment agreements with the three Kiwibox shareholders (between 22,500,000 and 31,500,000 shares);~~

~~to issue the common shares into which our $500,000 value worth of preferred shares will convert on the second anniversary of the Closing (between 10,000,000 and 50,000,000 shares), and;~~

~~to issue the common shares to our potential investors in our private placement to raise $6 million of equity funds (between 100,000,000 and 120,000,000 shares).~~

Since the Company must increase its authorized common shares in order to meet its common share issuance commitments in the Kiwibox Acquisition, shareholders are required by applicable federal securities laws governing consent solicitations such as this to first approve the Kiwibox Acquisition.

What is the voting requirement to approve the ~~amendments~~Amendment to the Certificate of Incorporation?

The Amendment to increase our authorized common stock by an additional ~~400,000,000~~700,000,000 shares ~~and to change our corporate name to “KiwiAge Enterprises, Inc.”~~ will be approved if by ~~June __, 2007,~~[ ], the Company holds unrevoked written consents of stockholders approving the ~~Amendments~~Amendment from a majority of the outstanding shares of Common Stock at the Record Date. Consequently, the withholding of consent, abstentions and the failure to deliver a Consent Card would all have the effect of a vote against approval of the ~~Amendments.~~Amendment. If a stockholder holds his shares in "street name" and fails to instruct his broker or nominee as to how to vote his shares, the broker or nominee may not, pursuant to applicable stock exchange rules, vote such shares and, accordingly, such shares will have the effect of a vote against the ~~Amendments.~~Amendment.

Why is the Company seeking to increase the number of common shares it is authorized to issue?

~~Only approximately 5,000,000~~We currently have [_____________] issued and outstanding common shares, ~~of common stock have not been issued or reserved for issuance under presently~~33,153,542 outstanding stock options, 137,332,981 outstanding common stock purchase warrants, and 129,500 preferred shares which may be converted into 25,729,537 common shares. In addition, we have entered commitments to issue additional, 940,000 stock purchase warrants. We anticipate that we will issue between 162,500,000 and 351,500,000 common shares to the three Kiwibox shareholders in order to consummate the Acquisition at Closing, to meet our obligations under their employment agreements, to accommodate the conversion of our preferred stock into common shares on the second anniversary of the Closing and to provide the necessary common shares to the potential investor in our private placement. The Company will need no less than approximately 350,000,000 newlyWith only 700,000,000 authorized common shares, ~~for these purposes.~~

~~In addition,~~ the Company ~~believes that~~requires an increase in the number of authorized shares of common stock will benefit the Company by providing flexibility to issue common stock for a variety of business and financial objectives in the future without the necessity of delaying such activities for further stockholder approval. These objectives include, but are not limited to, raising additional capital for business operations, current and future employee compensation and benefits and other corporate purposes. The Company anticipates that it may be issuing shares and/or options in the near future to raise additional needed capital, and/or compensate employees and officers. However, other than in connection with the Kiwibox Acquisition and its private placement to raise the $3.5 million for the Kiwibox investment and approximately $2.5 million to pay the estimated Acquisition closing costs and to fund its continuing public company operations, the Company has no current plans to issue any of the shares that would be authorized should this proposal be approved by our stockholders.

How will the increase in the authorized common shares affect my ownership of Company common shares?

Your will not suffer any dilution in the ownership percentage of your common shares as a result of the increase in authorized common shares. However, if and when the Company does issue common shares, whether in connection with the ~~Acquisition, the~~ private placement or otherwise, these issuances will reduce your percentage ownership of the Company, and if issued for less than what you paid for your Company shares, will reduce the value of your Company shares.

~~In addition~~What is the voting requirement to ~~obtaining stockholder consent~~ratify the appointment of Rosenberg Rich Baker Berman & Company to serve as our independent registered public accounting firm for the ~~Acquisition and~~fiscal year ending December 31, 2009?

The ratification of the appointment of our accounting firm to ~~the proposed Amendments to the Company’s Certificate of Incorporation, how does~~serve as our auditors will be approved if by [ ], the Company ~~plan~~holds unrevoked written consents of stockholders approving the Appointment from a majority of the outstanding shares of Common Stock at the Record Date. Consequently, the withholding of consent, abstentions and the failure to ~~meet~~deliver a Consent Card would all have the ~~closing condition~~effect of ~~having $3.5 million~~a vote against approval of ~~equity at Closing to invest in~~ the ~~Kiwibox business?~~Appointment.

The Company is in discussions with various potential investors who are business associates of the Company and who qualify as accredited investors to raise the minimum $3.5 million to meet this condition to close the Acquisition. At this date, Magnitude has no understanding, agreement or commitment from any of these potential investors that they will invest any funds with Magnitude. In the event Magnitude has not raised the minimum $3.5 million on or before the Closing date of June 18, 2007, Kiwibox may terminate the Acquisition Agreement.

~~What business will the Company conduct after the Kiwibox Acquisition?~~

~~The Company intends to further develop and manage the social network Kiwibox website business acquired.~~

~~What happens if stockholders do not approve the Kiwibox Acquisition or if the minimum $3.5 million in equity is not raised?~~

The Kiwibox Acquisition Agreement will terminate and Magnitude will seek other business opportunities. In such an event, the Company will need immediate funds to maintain its current, reduced level of operations and if it is unable to raise such funds, its financial condition will be materially adversely affected and it may need to further limit or curtail operations.

~~If approved, when will the Kiwibox Acquisition be completed?~~

~~It is expected that the Kiwibox Acquisition will be completed as soon as possible following this Consent Solicitation.~~

~~Am I entitled to Appraisal Rights in connection with the Kiwibox Acquisition?~~

No. The holders of Company common stock or preferred stock are not entitled to appraisal rights under Delaware General Corporation Law, the Company’s Certificate of Incorporation or the Company’s Bylaws.

~~What will happen to my shares if the Kiwibox Acquisition is approved?~~

The Kiwibox Acquisition will not alter the rights, privileges or nature of the Company’s common stock or preferred stock. A stockholder who owns shares of the Company’s common stock or preferred stock immediately prior to the Kiwibox Acquisition will continue to hold the same number of shares immediately after the Acquisition.

How does the Company’s Board of Directors recommend that I vote for the proposals contained in this Consent Solicitation?

The Board of Directors recommends that you vote on the attached Consent Card (1) to approve the ~~Kiwibox Acquisition, (2) to approve the~~ increase in the Company’s authorized common shares from ~~300,000,000~~700,000,000 to ~~700,000,000~~1,400,000,000 common shares and ~~(3)~~(2) to ~~change~~ratify the ~~Company’s corporate name to “KiwiAge Enterprises, Inc.”.~~Appointment.

Who can sign the Consent Cards?

You can sign the written Consent Card attached to this document and vote your shares if our records show that you owned shares of our common stock as of ~~May 7, 2007.~~December 29, 2008. On that date, a total of ~~_____________~~[_____________] shares of common stock were outstanding and entitled to vote by written consent in this solicitation of written consent. Each stockholder is entitled to one vote for each share of common stock held by such stockholder. The enclosed Consent Card shows the number of shares you can vote.

How do I vote my shares in this Consent Solicitation?

Follow the instructions on the enclosed Consent Card to vote on each proposal to be considered in this Solicitation Statement. Sign and date the Consent Card and mail it to Securities Transfer Corporation, 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034, Attention: Proxy Department, in the enclosed envelope.

Can I change my vote after I return my Consent Card?

Yes. At any time before ~~June __, 2007,~~[ ], you can change your vote either by giving us a written notice revoking your Consent Card or by signing, dating, and returning to us a new Consent Card. We will honor the Consent Card with the latest date.

What do I do if my shares are held in “street name”?

If your shares are held in the name of your broker, a bank, or other nominee, that party should give you instructions for voting your shares.

What does it mean if I get more than one Consent Card?

It means you hold shares registered in more than one account. Sign and return all Consent Cards to ensure that all your shares are voted.

How many votes do I have?

Stockholders who owned the Company’s common shares as of the close of business on ~~May 7, 2007~~December 29, 2008 are entitled to vote on the three matters identified in this Consent Solicitation. Each common share is entitled to one vote per share.

~~What vote is required to approve three proposals?~~

~~The Kiwibox Acquisition~~

The affirmative vote of a majority of the votes entitled to be cast by the holders of the Company’s outstanding common shares on the record date is required to consummate the acquisition of Kiwibox Media, Inc. through its merger with our Company subsidiary.

~~The Amendment to the Certificate of Incorporation, increasing the authorized common shares~~

The affirmative vote of a majority of the votes entitled to be cast by the holders of the Company’s outstanding common shares on the record date is required to increase the Company’s authorized common shares from 300,000,000 to 700,000,000 common shares.

~~The Amendment to the Certificate of Incorporation, changing our corporate name~~

The affirmative vote of a majority of the votes entitled to be cast by the holders of the Company’s outstanding common shares on the record date is required to change our corporate name to “KiwiAge Enterprises, Inc.”

Members of the Company’s Board of Directors and executive officers who collectively own 9,027,929 common shares, approximately 4.3% of the outstanding shares, have indicated that they intend to vote their consent cards for (1) the Acquisition of Kiwibox, (2) for the Amendment to our Certificate of Incorporation, increasing the authorized common shares from 300,000,000 to 700,000,000 common shares and (3) for the Amendment to or Certificate of Incorporation, changing our corporate name to “KiwiAge Enterprises, Inc.”

How are votes counted?

Only signed, dated and delivered Consent Cards will be accepted and counted on ~~June __, 2007,~~[ ], approving, withholding of consent or abstention on the two ~~proposed Amendments to the Company’s Certificate of Incorporation.~~proposals contained in this Consent Solicitation. A Consent card which has been signed, dated and delivered to our transfer agent without indicating approval, withholding of consent, or abstention will constitute a consent to the ~~Amendments.~~

Amendment and to the Appointment.

Section 228 of the General Corporation Law of the State of Delaware states that, unless otherwise provided in the certificate of incorporation, any action that may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and those consents are delivered to the corporation by delivery to its registered office in Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which the proceedings of meetings of stockholders are recorded. The Company's Certificate of Incorporation contains no provision or language in any way limiting the right of stockholders of the Company to take action by written consent.

Only stockholders of record as of ~~May 7, 2007,~~December 29, 2008 are entitled to consent, to withhold their consent, or to revoke their consent, to the ~~Amendments.~~Amendment and to the Appointment. Stockholders are entitled to one vote for each outstanding share of Common Stock held at the record date. As of the record date there were ~~_______________~~[_____________] issued and outstanding shares of Common Stock.

Who pays for this ~~consent solicitation?~~Consent Solicitation?

Magnitude does. In addition to sending you these materials, some of our directors and employees may contact you by telephone, by mail, or in person. None of our directors or employees will receive any extra compensation for any such solicitation.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On January 2, 2007, the Company and a former employee, Steven W. Jagels settled a lawsuit commenced by Mr. Jagels against the Company based upon claims which included breach of his employment agreement. We agreed to make a payment of $20,040 to Mr. Jagels and to issue 3,000,000 common shares to him by January 7, 2007. We also agreed to include these shares in a registration statement and when declared effective by the SEC, to cause a buyer to purchase these shares from Mr. Jagels for $75,000 prior to February 28, 2007. At the time of this report, the law suit has been settled.

In January 2007 we issued warrants for 3,125,000 shares, exercisable at $0.05 per share, to the former president and chief executive officer, in connection with a settlement agreement reached during the fourth quarter in 2006.

In May 2007 the Company reached agreement with the former president and chief executive officer to the effect that, in return for issuance of 2,000,000 shares, he would issue a waiver with respect to the Company’s obligation for filing a registration statement for certain securities previously issued to him by the Company.

During the three and nine months periods ended September 30, 2008 one outside director of the Company who also serves as the Company’s general and securities counsel, was paid an aggregate $20,000 and $240,632, respectively, for legal services. At September 30, 2008, the Company owed this director $187,407. Another outside director was paid $30,000 during the second quarter in 2008, for business consulting services.

During the second quarter in 2008, we paid $24,000 to a major shareholder for investor relations services.

In August, 2008, we issued an aggregate 30,560,000 restricted common shares to the three Kiwibox principals pursuant to our Agreement and Plan of Reorganization, dated February 19, 2007, and subsequent amendments, as disclosed in our report and exhibit, filed on Form 8-K with the U.S. Securities and Exchange Commission on March 4, 2008.

On August 17, 2008, one of the three Kiwibox Shareholders resigned his employment. As part of this agreement, his outstanding stock options were cancelled and the consultant entered into an agreement that provided for his future services to the Company as an independent consultant for six months at $12,500 per month. On September 5, 2008, the Company reached a Settlement Agreement with the consultant whereby the Company forgave the balance of loans due from the former shareholder in the balance of $155,459 for $75,000 in cash and by offsetting of $75,000 of notes payable due to the former shareholder. The difference of $5,459 was treated as additional compensation.

Subsequent to September 30, 2008, we repaid the remaining $75,000 on the note obligation due under the amended Kiwibox acquisition agreement.

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of December 29, 2008, the record and beneficial ownership of common stock of the Company by each executive officer and director, all executive officers and directors as a group, and each person known to the Company to own beneficially, or of record, five percent or more of the outstanding shares of the Company, based upon [_____________] common shares outstanding as of December 29, 2008:

Title of Class*	Name and Address of	Amount and Nature of			Percent
(1)	Beneficial Owner	Beneficial Ownership			of Class
Common Stock	Rudolf Hauke		1,000,000	(2)		0.23	%
	Pres./CEO/Director
	Joerg Otzen		-0-			-0-
	Director
	Quentin Kelly		-0-			-0-
	Director
	Joerg Klaube		1,650,000	(3)		0.38	%
	CFO/Director
	Joseph Tomasek		3, 847, 166	(4)		0.88	%
	Director

108

Address of all persons above: c/o the Company.

All Directors and Officers as a Group:	6,497,166		1.48	%
as a Group (5 persons)

Lin Dai	23,396,176	(5)	5.36	%

Ulrich Schuerch
Tell Capital AG	52,010,000	(6)	11.39	%
Tellstrasse 21, CH-9000 St. Gallen, Switzerland

Discover Advisory Company	30,000,000	(7)	6.88	%
c/o Horymor Trust Corp. Ltd.
50 Shirley Street / P.O.Box N-341, Nassau

Monarich International, Inc.	25,000,000	(8)	5.73	%
E 53rd Street, Marbella, El Dorado, Panama

Cambridge Services Inc.	25,000,000	(9)	5.42	%
c/o TSZ Treuhandgesellschaft Sauter & Co.
Suedstr. 11, CH-8034 Zurich, Switzerland

V G Z	25,000,000	(9)	5.42	%
Freiestrasse 178, CH-8032 Zurich, Switzerland

* The Company also has issued and outstanding as of December 29, 2008, 109,857 shares of its Senior Convertible Preferred Stock, with concentrations in excess of 10% for one or more of the holders of such stock, however, none of such shares bear any voting rights.

(1) For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock which such person has the right to acquire within 60 days of December 29, 2008. For purposes of computing the percentage of outstanding shares of Common Stock held by each person or group of persons named above, any security which such person or persons has or have the right to acquire within such date is deemed to be outstanding but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnote to this table and pursuant to applicable community property laws, the Company believes based on information supplied by such persons, that the persons named in this table have sole voting and investment power with respect to all shares of Common Stock which they beneficially own.

(2) Consist of stock options.

(3) Includes 250,000 stock options.

(4) Includes 1,333,333 stock options.

(5) Does not include 10,500,000 stock options that have not vested nor does it include 17,600 convertible preferred shares

~~Proposals to Stockholders~~(6) Includes 5,000,000 warrants owned by Ulrich Schuerch who has investment and voting control of Tell Capital AG, and 22,500,000 5-year Warrants, exercisable at $.07 per Warrant.

(7) Karen Buehler has investment and voting control of Discover Advisory Company.

~~Proposal No. 1~~(8) Miguel Sanchez Lopez and Javier Rivera Fernandez have investment control of Monarich International Inc.

~~The Acquisition~~(9) Consist of ~~Kiwibox~~stock purchase warrants, exercisable at $0.05 per Warrant. Victor Sauter and Marcus Winkler have investment control, respectively, of Cambridge Services Inc. and VGZ.

~~Background of the Kiwibox Acquisition~~

During fiscal year 2006, management determined to seek a business opportunity for the Company and its shareholders. In early November, a representative of the New York investment bank, Southridge International, Inc., contacted management and a meeting was scheduled to introduce the principals of a social networking website known as Kiwibox.com. A meeting between Company management and the Kiwibox principals took place at the offices of Southridge in New York City and initial discussions exploring a potential business combination ensued.

Following a series of meetings and further negotiations, the three principals of Kiwibox and the Company signed a confidential Letter of Intent on January 5, 2007, pursuant to which the parties agreed to a proposed structure of a business combination between the two companies, agreed upon the terms of employment agreements for the three Kiwibox shareholders and to draft and execute a definitive agreement as soon as practicable.

Thereafter, Company and Kiwibox management began financial and legal due diligence reviews of each other’s business and organization. With the assistance of Kiwibox counsel, the parties began drafting the definitive agreement. On February 16, 2007, the Company’s Boartd of Directors unanimously approved the proposed transactions between the Company and Kiwibox. On February 19, 2007, the Company, Kiwibox Media, Inc. and the three Kiwiobox shareholders executed and delivered an Agreement and Plan of Reorganization which contained as an exhibit, the agreed upon terms and provisions of employment agreements for each of the three Kiwibox shareholders. DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES

The ~~Board~~names and ages of all directors and executive officers of the Company are as follows:

Name	Positions	Appointment

Rudolf Hauke, Phd	Director	July, 2008
	President, Chief Executive
	Officer

Joerg H. Klaube	Director	December, 2005
	Vice President, Secretary,
	Chief Financial Officer

Joerg Otzen, Phd	Director	July, 2008

Quentin Kelly	Director	July, 2008

Joseph J. Tomasek	Director	February, 1999

All Directors of the Company ~~considered~~hold office until the ~~business and financial aspects~~next annual meeting of the ~~Agreement~~shareholders and ~~Plan of Reorganization~~until successors have been elected and ~~determined that the Kiwibox Acquisition was in the best interests~~qualified. Executive Officers of the Company ~~and its shareholders.~~

~~In making its determination,~~are appointed by the Board ~~considered the following factors:~~

The Company’s ergonomic software business had not generated sales and revenues sufficient to support its continuing operations and continues to require the raising of additional equity capital to fund its operations:

The Acquisition of Kiwibox would provide the Company and its shareholders with the opportunity to acquire and expand a product in the growing social networking website industry and provide the Company with, perhaps, a better platform with which to raise equity capital;

The Kiwibox.com website was a functional platform, already generating some revenue while the two other business opportunities that the Board reviewed and considered in early 2007 would have required further development before they could have been launched, and;

The Company was in preliminary discussions with several of its ex-employees about licensing its line of ergonomic software products and assuming all customer support operations, which discussions, in fact, materialized with the execution and delivery of a certain License and Client Software Support Agreement with Imminent Technologies, LLC ("IMT"), pursuant to the principal terms of which, the Company appointed IMT as a non-exclusive licensee/reseller for its suite of ergonomic software products and as the exclusive provider of support services to the Company's current customers with service contracts.

~~After considering all~~ of ~~the above factors, the Board unanimously determined that the Kiwibox Acquisition was in the best interests~~Directors at meetings of the Company 's Directors and hold office until they resign or are removed from office.

Family Relationships

There are no family relationships between any of the directors or executive officers.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

The Company knows of no person, who at any time during the period from the date at which it filed its ~~shareholders.~~annual report on Form 10-KSB for the year ended December 31, 2007 to the present, was a director, officer, beneficial owner of more than ten percent of any class of equity securities of the Company (a "Reporting Person"), that failed to file on a timely basis any reports required to be furnished pursuant to Section 16(a).

EXECUTIVE COMPENSATION

2007 SUMMARY COMPENSATION TABLE

The following table sets forth certain compensation information for: (i) the person who served as the Chief Executive Officer of Magnitude during the year ended December 31, 2007, regardless of the compensation level, and (ii) certain of our other executive officers, serving as an executive officer at any time during 2007, as well as the most highly compensated employees who did not serve as executive officers during 2007. Compensation information is shown for the fiscal years ended December 31, 2007 and 2006:

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)	Non- Qualified Deferred Compensation n Earnings ($)	(1) All Other Compensation($)		Total ($)
(a)	(b)	(c)		(d)		(e)		(f)		(g)	(h)	(i)

Edward L. Marney	2007		161,538		35,000								12,884		209,422
Chief Executive	2006		86,538										5,950		92,488
Officer, President															-

Joseph J. Tomasek,	2007												127,000		127,000
Esq., Director and	2006												96,121		96,121
General Legal Counsel
Legal Fees:

Steven Gray	2007		20,000				111,000						3,481		134,481
Director	2006		30,000				107,450								137,450

Lin Dai	2007	$	57,692				472,186		376,500				91,536		844,915
Employee of
Subsidiary

Michael Howard	2007		57,692				312,286		376,500				71,037		664,516
Employee of Subsidiary

Ivan Tumanov	2007		57,692				385,528		376,500				80,426		747,147
Employee of Subsidiary

All executive officers	2007		388,764		15,000		1,281,000		683,833				386,364		2,754,961
And Employees	2006		147,914		-					-	-		8,576		156,490
As a group (2 persons)

~~Based upon the foregoing, the Company’s Board recommends a vote for the Acquisition of Kiwibox on the enclosed Consent Card.~~

If the Company fails to get the shareholder’s approval for the Kiwibox Acquisition, our subsidiary will not merge with Kiwibox Media, Inc. and the acquisition will not occur. The holders of the Company’s common stock are not entitled to appraisal rights under the Delaware General Corporation Law, the Company’s Certificate of Incorporation or its Company’s Bylaws.

Members of the Company’s Board of Directors and its officers who own an aggregate 9,027,929 common shares, representing an aggregate approximate 4.3% of the shares outstanding, intend to vote these shares in favor of the Kiwibox Acquisition.

The Board of Directors, in making its decision to pursue the Kiwibox Acquisition, did not have the financial resources with which to hire an independent investment bank or other financial institution to do a due diligence review of the Kiwibox website and business and render an opinion on the value and fairness of the acquisition price to the shareholders the Company. Company management negotiated the best terms available for the Kiwibox Acquisition and did not rely upon any third party to advise them in the negotiations. Although Kiwibox and its three shareholders were represented and continue to be represented by the investment bank of Southridge International, Inc. of New York, the Company and its Board were not, nor are they now, represented by any investment bank.

~~The Kiwibox Acquisition Price: Stock, Cash, Employment Agreements~~Explanation: Except for the employees, Michael Howard and Paul Farris, no current Company officer or employee has an employment agreement with the Company. All of the items of compensation paid to the officers, directors and employees listed in the above Summary Compensation Table are discussed in the following paragraphs, under the individual’s name.

Edward L. Marney; 2007-2006. Ed Marney joined the Company in May, 2006, becoming first our Chief Executive Officer, then our President and ~~Stock~~a director. We paid Mr. Marney a cash salary of $161,538,a bonus of $35,000 and $12,884 for healthcare insurance expenses in 2007; we paid Mr. Marney $86,538 and reimbursed $5,950 of healthcare payments to ~~Potential Investors~~him during 2006. Mr. Marney resigned as an officer and director of the Company, effective August 1, 2008.

·Joseph J. Tomasek 2007 and 2006:During fiscal years 2007 and 2006, the Company ~~Cash Payment~~paid $127,000 and $ 96,121, respectively, to Mr. Tomasek for his legal services rendered to the ~~Kiwibox Shareholders as part of the Acquisition Price:~~Company.

~~The Company will pay the Kiwibox shareholders an aggregate cash payment of $300,000 at Closing.~~

·Steven Gray 2006 and 2007.During fiscal year 2007 we paid Mr. Gray $20,000 and issued 1,850,000 restricted shares to him and an assignee, and 500,000 common stock purchase options for services rendered to the Company. We also issued 74,031 shares for interest on loans to the Company. During fiscal year 2006, we paid $30,000 and issued an aggregate 1,550,000 restricted common shares and 500,000 common stock purchase options to Mr. Gray for services rendered to the Company. During 2006, Mr. Gray assisted the Company ~~Common Stock to be Issued~~in its change of management, providing day-to-day assistance in operations, customer relations including, interviewing potential candidates for management positions and coordinating the various audit schedule and management review projects. As set forth in the column “All Other Compensation” in the above table for 2007 and 2006, we valued the restricted common shares issued in the subject years based upon their average public market trading price as ~~part~~ of the ~~Acquisition Price:~~dates we issued these shares; we valued the 500,000 options granted in 2006, based upon a formula called the Black-Scholes Model. Mr. Gray resigned as a director of the Company, effective July 18, 2008.

~~The Company will pay~~Lin Dai 2007: During fiscal year 2007 we paid Mr. Dai a salary of $57,697 and, in connection with the acquisition of Kiwibox ~~shareholders at Closing~~Media Inc. by Magnitude and in exchange against their ownership interest in Kiwibox Media Inc, paid a ~~number~~cash amount of ~~Company~~$91,536 and issued 11,804,632 restricted common shares ~~equivalent~~(listed under “Stock Awards”) and options for 7,500,000 shares, vesting over a 24-months period, exercisable at $0.057 per share. In addition to ~~an aggregate $1,500,000~~the options listed above Mr. Dai was issued performance stock options for 3,000,000 shares, further detailed below. As set forth in ~~value, based upon~~ the ~~Company’s common stock “Market Price”. Market Price is~~column “All Other Compensation” in the ~~average price of our common stock sold during~~above table for 2007, we valued the ~~10 trading days preceding the Closing. For example, if the Market Price is determined to be $.05 per common share, then we will divide the $1,500,000 value by $.05 and issue a total 30,000,000~~restricted common shares to the Kiwibox Shareholders. Similarly, if the Market Price is determined to be $.025 per common share, then we will divide the $1,500,000 value by $.025 and we will issue 60,000,000 common shares to the Kiwibox Shareholders and 150,000,000 common shares if our Market Price falls to $.01. We have agreed that even if our Market Price is determined to be higher than $.05 per common share that we will issue no less than 30,000,000 common shares to the three Kiwibox Shareholders. The three Kiwibox Shareholders will divide our common shares between themissued based upon their ~~percentage ownership of their Kiwibox shares. Holders of our common shares have the right to vote on all shareholder voting matters.~~

· ~~Company Preferred Stock to be Issued~~average public market trading price as ~~part~~ of the ~~Acquisition Price:~~dates we issued these shares; we valued the stock options based upon a formula called the Black-Scholes Model. Mr. Dai is no longer employed by the Company and resigned as a director of the Company, effective December 8, 2008.

Michael Howard 2007: During fiscal year 2007 we paid Mr. Howard a salary of $57,697 and, in connection with the acquisition of Kiwibox Media Inc. by Magnitude and in exchange against their ownership interest in Kiwibox Media Inc, paid a cash amount of $71,037 and issued 7,807,155 restricted common shares (listed under “Stock Awards”) and options for 7,500,000 shares, vesting over a 24-months period, exercisable at $0.057 per share. In addition ~~the Company will issue~~ to the ~~three Kiwibox Shareholders at~~options listed above Mr. Howard was issued performance stock options for 3,000,000 shares, further detailed below. As set forth in the ~~closing an aggregate 43,610 Shares of preferred stock that are automatically convertible into~~column “All Other Compensation” in the above table for 2007, we valued the restricted common shares ~~of Company common stock~~issued based upon ~~the second anniversary date~~their average public market trading price as of the ~~Closing. The amount of our common shares into which~~dates we issued these ~~preferred shares will be converted is~~shares; we valued the stock options based upon a formula called the value of $500,000, divided by the “Market Price” of our publicly traded common stock. Our Market Price for this conversion will be the average sales price of our common stock over for the twenty trading day period immediately preceding the second anniversary date of the Closing. For example, if the Market Price is determined to be $.05 per common share, then we will divide the $500,000 value by $.05 and convert the 43,610 preferred shares into an aggregate 10,000,000 common shares. If the Market Price is determined to be $.025 per common share, then we will divide the $500,000 value by $.025 and convert the 43,610 preferred shares into an aggregate 20,000,000 common shares, and if $.01 per share, the preferred shares will convert into 50,000,000 common shares. As with our Common Stock we have agreed to issue to the Kiwibox Shareholders, we have agreed that even if our Market Price at the time is determined to be higher than $.05 per common share, the 43,610 preferred shares shall convert into no less than 10,000,000 common shares. We will, therefore, issue aggregate common shares for these issuances ranging from an aggregate minimum 40,000,000 shares, if our Market Price is $.05 per share or higher, and possibly up to an aggregate 200,000,000 shares, if our Market Price is $.01 per share.Black-Scholes Model.

· ~~Company Cash and Stock Payments Through Employment Agreements~~

Ivan Tumanov 2007: During fiscal year 2007 we paid Mr. Tumanov a salary of $57,697 and, in connection with the acquisition of Kiwibox Media Inc. by Magnitude and in exchange against their ownership interest in Kiwibox Media Inc, paid a cash amount of $80,426 and issued 9,638,213 restricted common shares (listed under “Stock Awards”) and options for 7,500,000 shares, vesting over a 24-months period, exercisable at $0.057 per share. In addition to the options listed above Mr. Tumanov was issued performance stock options for 3,000,000 shares, further detailed below. As set forth in the column “All Other Compensation” in the above table for 2007, we valued the restricted common shares issued based upon their average public market trading price as of the dates we issued these shares; we valued the stock options based upon a formula called the Black-Scholes Model. Ivan Tumanov resigned as an employee of the Company, effective September 8, 2008, as reported in the Current Report filed with the U.S. Securities and Exchange Commission on September 24, 2008. Mr. Tumanov is no longer employed by the Company.

Employment Agreements

Lin Dai, Michael Howard and Ivan Tumanov - 2007. As part of ~~the Acquisition agreement, the Company has agreed to execute and deliver~~our acquisition of Kiwibox, on August 16, 2007, we entered into employment agreements with each these three principals of ~~the three Kiwibox Shareholders at the Closing. These employment agreements cover a term of two (2) years and pay each Kiwibox Shareholder~~Kiwibox. an annual base salary of $150,000. In addition, ~~the Company has~~we agreed to pay each an annual bonus if certain business goals are ~~met. The Company agreed to pay each~~met: a $100,000 bonus if the Kiwi Business has received no less than an average 215,000 “Unique Visitors” during either the 10th, 11th or 12th month of the first year of the term or achieved no less than $316,000 in gross revenues within the 12 moth period following the Closing. Alternatively, ~~the Company~~we agreed to pay each a $50,000 bonus if the Kiwi Business has received at least an average 175,000 but less than an average 215,000 “Unique Visitors” during either the 10th, 11th or 12th month of the first year of the term or at least $237,000 in gross revenues but less than $316,000 within the 12 moth period following the Closing. A “Unique Visitor” is a person who visits a Kiwibox website during any month during the term. For the second year of their employment agreements, ~~the Company has~~we agreed to pay each a $100,000 bonus if the Kiwi Business has received no less than an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or attained $1,961,000 in gross revenues, or a bonus of $50,000 each if the Kiwi Business has received at least an average 415,000 but less than an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or attained at least $1,500,000 in gross revenues but less than $1,961,000. Each Kiwibox Shareholder ~~will receive~~received a stock option to purchase up to 7,500,000 shares of our common stock at an exercise price ~~equal to our stock Market Price as also determined by the 20-trading day average price preceding the Closing~~of $.05 per share which shall vest and be exercisable by the Kiwibox Shareholders, 50% on the first anniversary date of the Closing, 25% 18 months after the Closing and 25% on the second anniversary of the Closing. Each ~~may also earn~~was issued, as well, under the terms of their employment agreements, a performance stock option to purchase up to an additional 3,000,000 shares of our common stock, 1,500,000 of which options shall vest and be exercisable by the Kiwibox Shareholders after the first anniversary date of the Closing if the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or ~~12th~~12th month of the first year of the term or achieved $316,000 in gross revenues during the first year, and the balance, or 1,500,000 options shall vest and be exercisable by the Kiwibox Shareholders after the second anniversary date of the Closing if the Kiwi Business has received at least an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or achieved $1,961,000 in gross revenues during the second year of the agreements. The exercise prices for these stock options ~~shall be~~is $.05 per share. Messrs. Ivan Tumanov and Lin Dai are no longer employed by the ~~average sales price of the Company’s common stock during the 20-trading days preceding the Closing.~~

Each of the three employment agreements for each of the three Kiwibox Shareholders contain identical terms and provisions and provide that each will be entitled to participation in Company’s medical and health insurance coverage and all employee benefit plans, with paid vacations. These agreements also contain restrictive covenants against competition with the customary pledges of confidentiality, termination rights and legal claims provisions. Please refer to the copy of the employment agreement attached as Exhibit E to the Kiwibox Acquisition Agreement, attached as Exhibit A to this Consent Statement.Company.

~~Kiwibox Acquisition Investment: $3,500,000 and Closing Costs/Public Company Operations: $2,500,000~~

~~The Minimum $3.5 million Kiwibox Investment~~

In order to close the Kiwibox acquisition, we must raise a minimum $3,500,000 in equity funds we have committed to invest in the Kiwibox business over the 18 month period following closing The Company’s Board of Directors has authorized a private placement of between 100,000,000 and 120,000,000 common shares in order to raise the $6 million for these purposes. Company officers and directors are in discussions with some of our business associates and shareholders who are accredited investors and with whom the Company has pre-existing business relationships in connection with the private placement. As of this date, we have no understandings, agreements or contracts with any potential investor to provide any amount of these private placement funds. If we can not raise the minimum $3.5 million in equity funds by Closing, the Kiwibox acquisition will not take place.

Paul Farris - 2007. On October 8, 2007, we hired Paul Farris as the Director of Business Development for our Kiwibox.com operations and executed a two-year employment agreement with him. We pay Mr. Farris an annual base salary of $90,000 and made two stock option grants to him for an aggregate 1,000,000 common shares: a stock option grant for 500,000 shares, exercisable at $.05 per share, vesting 1/3 each on the first, second and third anniversary dates of his employment, and; a performance stock option for a second 500,000 shares, also exercisable at $.05 per share, and vesting based upon the attainment of certain business goals: on the first anniversary date of his employment: (i) 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 645,000 Unique Visitors (defined below) during either the 10th, 11th or 12th month of the first year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 430,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term; on the second anniversary date of his employment: (i) all 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 1,650,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 1,100,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 550,000 Unique Visitors during either the l0th, 11th or 12th month of the second year of the term. The term "Unique Visitor" is a person who visits a Kiwibox website during the specific month identified above. The determination of the actual number of Unique Visitors visiting a Kiwibox website during any specific month for purposes of this section shall be calculated based upon "Google Analytics".

Stock Options :

No stock options were granted during 2008 pursuant to the Company’s 1997 Stock Option Plan and 2000 Stock Incentive Plan, to any executive officers, directors, employees or to any beneficial owners of more than 10 percent of any class of equity securities of the Company. In addition, there were no stock options or warrants exercised by any officer, director, employee or to any beneficial owners of more than 10 percent of any class of equity securities of the Company during 2008.

1997 Stock Option Plan:

The ~~$2.5 Million~~Company’s 1997 Stock Option Plan, as filed with Information Statement pursuant to ~~Pay~~Section 14(c) with the ~~Kiwibox Acquisition Costs~~Commission on July 1, 1997, and ~~Fund our Public Company Operations~~with Registration Statement on Form S-8 with the Commission on September 8, 1997, is hereby incorporated by reference.

In addition to the minimum $3.5 million we seek to raise in our private placement to fund our investment commitment to the Kiwibox business, we are seeking to raise an additional $2.5 million to pay for the Acquisition closing costs, estimated to be between $1,000,000 and $1,200,000, as well as provide funds to pay for the public company operations for the same 18 month period following closing.

We anticipate that our Acquisition closing costs, ranging between $1,000,000 and $1,200,000, will pay for the following estimated fees: attorneys’ fees ($150,000 to $200,000), accountant’s fees ($100,000 to $150,000), investment banker’s/consultants’ fees ($150,000 to $250,000), finders’ fees ($600,000). We estimate that our costs to fund certain of the operations of the public company over the 18 month period following the closing of the Kiwibox Acquisition will be approximately between $1,300,000 and $1,500,000. Following the closing of the Kiwibox Acquisition, we expect to negotiate an employment agreement with our current President and Chief Executive Officer, Edward Marney.

We have had preliminary discussions with Mr. Marney concerning his continued service to the Company following the Kiwibox Acquisition, and Mr. Marney has given the Company his commitment to do so, subject to negotiating an employment agreement satisfactory to both parties. Following the negotiation of an employment agreement with Mr. Marney, we expect him to devote all of his time to the development of the Kiwibox business. We have reached an agreement in principle with Mr. Eric Brahms, to employ him for three years as our Senior Vice President of Operations, at a base annual salary of $150,000 and we intend to finalize an employment agreement with Mr. Brahms in the near future. Mr. Brahms is currently serving as a consultant to the Company, devoting his time to the planning and development of the Kiwibox website business. Following the Kiwibox Acquisition, we intend to pay at least one-half of the cash compensation due to Edward Marney and Eric Brahms out of the $3.5 million we intend to invest in the Kiwibox business during the 18 month period following closing. We do not have employment agreements with any other persons.

Accordingly, the $1,000,000 to $1,200,000 in funds dedicated to certain of the public company expenses and operations during the 18 month period following the closing are estimated to be applied for: one-half of the salary and benefits for the Chief Executive Officer/President ($87,500 to $125,000 per year) and for our Senior Vice President of Operations, Eric Brahms ($75,000 to $87,500); full salary and benefits for our Chief Financial Officer ($125,000 to $135,000); full salary and benefits for one administrative person ($50,000 to $60,000); all audit fees for auditor ($50,000 to $75,000); all attorneys’ fees ($150,000 to $200,000); medical/insurance plan for these four persons ($25,000 to $30,000) with working capital/ miscellaneous ($104,000 to $87,500).2000 Stock Incentive Plan:

The Company’s 2000 Stock Incentive Plan, as filed with the Commission as an exhibit to the quarterly report on Form 10-QSB for the period ended March 31, 2000, is hereby incorporated by reference.

Options Granted Outside of Stock Option Plans:

On August 16, 2007, the Company ~~can not provide any assurances~~closed on its acquisition of Kiwibox Media Inc. and issued to ~~shareholders that it will be able~~each of the three Kiwibox Shareholder stock options provided for under their employment agreements. Each Kiwibox Shareholder received a stock option to ~~identify a source or sources for these equity funds or if such sources are identified, that such equity funds can be obtained~~purchase up to 7,500,000 shares of our common stock at an exercise price of $.05 per share which vests and is exercisable by the ~~Company~~Kiwibox Shareholders, 50% on ~~terms that it is currently offering: between 100,000,000~~the first anniversary date of the Closing, August 16, 2008, 25% 18 months after the Closing and ~~120,000,000~~25% on the second anniversary of the Closing. Each Kiwibox Shareholder was also issued a performance stock option to purchase up to an additional 3,000,000 shares of our common ~~shares.~~stock, 1,500,000 of which options vest and are exercisable following the first anniversary date of the Closing if the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term or achieved $316,000 in gross revenues during the first year, and the balance, or 1,500,000 options vest and are exercisable by the Kiwibox Shareholders after the second anniversary date of the Closing, provided the Kiwi Business has received at least an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or achieved $1,961,000 in gross revenues during the second year of the agreements. All of these stock options are non-qualified and are exercisable at $.05 per share.

~~Closing: on or about June 15, 2007~~We gave a 3-year stock option grant to Steven Gray, a director, to purchase 500,000 common shares at the exercise price of $.15 for services rendered to the Company during 2007.

Although originally scheduled for on or before March 31, 2007, we have agreed with Kiwibox to extend the prospective date of Closing to on or before June 15, 2007. This means that if we do not receive shareholder approval to all three of the matters discussed in this Consent Solicitation and successfully raised the minimum $3.5 million for the Kiwibox investment on or before June 15, 2007, the Kiwibox principals may terminate the Acquisition Agreement. If the Kiwibox acquisition is terminated, the Company will have to immediately raise funds to sustain its limited operations, in which case, the Company’s financial condition and plan of operations would suffer a material adverse effect, potentially requiring the Company to curtail operations.

Pursuant to the terms of his employment agreement, dated October 8, 2007, we made two stock option grants to Paul Farris for an aggregate 1,000,000 common shares: a stock option grant for 500,000 shares, exercisable at $.05 per share, vesting 1/3 each on the first, second and third anniversary dates of his employment, and; a performance stock option for a second 500,000 shares, also exercisable at $.05 per share, and vesting based upon the attainment of certain business goals: on the first anniversary date of his employment: (i) 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 645,000 Unique Visitors (defined below) during either the 10th, 11th or 12th month of the first year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the iwibox.com website has received no less than an average 430,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term; on the second anniversary date of his employment: (i) all 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 1,650,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 1,100,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 550,000 Unique Visitors during either the l0th, 11th or 12th month of the second year of the term.

On July 18, 2008, Registrant granted 5-year, non-qualified stock options to the members of its Board of Directors for past services rendered, exercisable at the fair market value of Registrant’s common stock on the date of grant. Joerg H. Klaube received an option to purchase 250,000 common shares, Edward L. Marney received a stock option to purchase 500,000 common shares, Steven L. Gray received a stock option to purchase 750,000 common shares and Joseph J. Tomasek received a stock option to purchase 1,000,000 common shares.

~~Conduct of Business Following the Closing~~

Assuming the Company obtains shareholder approval on the three matters discussed and presented in this Consent Solicitation and successfully raises the minimum $3,500,000 necessary to make the investment in Kiwibox and the $2.5 million necessary to fund the Acquisition closing costs and certain of the public company operating expenses, the Company anticipates working with the Kiwibox principals to further develop the content and market the offerings of the Kiwibox website.

~~Financial Statements and Selected Financial Data~~

~~Please see audited financial statements for the Company’s fiscal year ended December 31, 2006 contained in the Company’s annual report on Form 10-KSB attached as Exhibit D.~~

~~Selected Pro-Forma Financial Data~~

~~MAGNITUDE INFORMATION SYSTEMS, INC. PRO FORMA CONSOLIDATED BALANCE SHEET~~Outstanding Equity Awards At Fiscal Year-End Table

The following ~~unaudited pro forma combined balance sheet,~~table provides certain information regarding unexercised options to purchase common stock, stock options that have not vested, and ~~statement of operations as of~~equity-incentive plan awards outstanding at December 31, ~~2006, is based on~~2007, for each of the ~~historical financial statements~~persons covered under our Summary Compensation Table.

Name and Principal Position	Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable		Equity Incentive Plan Awards No. of Underlying Unexercised Unearned Options		Option Exercise Price		Option Expiration Date		No. of Shares or Units of Stock that have not vested		Market Value of Shares or Units of Stock that have not vested		Equity Incentive Awards, Shares, Units Or other Rights that have not vested		Equity Incentive Plan Awards: Market or Payout value of Unearned Shares,Units or other rights that have not vested
Rudolf Hauke, CEO and President		-		-		-		-		-		-		-		-		-

Joerg H. Klaube, CFO		-		-		-		-		-		-		-		-		-

Joseph J. Tomasek, Director and General Legal Counsel		-		-		-		-		-		-		-		-		-

Lin Dai Director

Michael Howard Employee of Subsidiary		0		10,500,000			$	.05	8/16/10			10,500,000

Option Exercises and Stock Vested Table: None

Pension Benefits Table: None

Nonqualified Deferred Compensation Table: None

Pre-requisites Table: None

Compensation of Directors:

We awarded stock options to the members of our Board of Directors for services rendered during fiscal years 2007 and the first half of fiscal year 2008: Joerg H. Klaube received an option to purchase 250,000 common shares, Edward L. Marney received a stock option to purchase 500,000 common shares, Steven L. Gray received a stock option to purchase 750,000 common shares and Joseph J. Tomasek received a stock option to purchase 1,000,000 common shares. Except for these stock option awards, we have not paid any compensation to any of our directors for services rendered as directors during fiscal years 2008 and 2007.

During 2007, one outside director of the Company who also serves as the Company’s general and ~~the Subsidiary and gives effect to the pro forma adjustments described herein as though the Agreement and Plan of Reorganization had been consummated at December 31, 2006.~~securities counsel, was paid an aggregate $127,000 for legal services.

CORPORATE GOVERNANCE AND CODE OF ETHICS

The ~~unaudited pro forma combined balance sheet should be read in conjunction with~~Company has always been committed to good corporate governance. In furtherance of this commitment, during 2002 the ~~notes thereto and with~~Board of Directors expanded the ~~historical financial statements~~duties of the ~~Company,~~Company’s Audit Committee by increasing the Committee's duties specifically to include responsibility and oversight of corporate governance matters and adherence to the Company’s Code of Ethics. A copy of the Corporate Code of Ethics and Conduct had been included as ~~filed in its annual~~an exhibit to the Company’s report on Form 10-KSB for the year ended December 31, ~~2006 , included~~2002.

Our Board of Directors has determined that of its current members, Joerg Otzen and Quentin Kelly are independent in ~~Exhibit D attached hereto. The unaudited pro forma combined balance sheet is~~accordance under applicable securities laws while Messrs. Rudolf Hauke, Joerg H. Klaube and Joseph J. Tomasek are not ~~necessarily indicative of the Company's combined financial position that would have been achieved had the Agreement and Plan of Reorganization been consummated at December 31, 2006.~~independent directors.

~~Unaudited Pro Forma Balance Sheet of Magnitude Information Systems, Inc.~~

~~December 31, 2006~~

Magnitude Information Systems, Inc. Kiwibox Media, Inc. Capital Raise Magnitude )1 Stock Issued to Kiwibox Stockholders )2,3

Elimination in Merger

Pro Forma Balance Sheet

Assets
Current Assets
Cash and cash equivalents $ 81,307 $ 1,322 $ 3,500,000 $ $ $ 3,582,629
Accounts receivable 66 20,568 20,634
Prepaiid expenses 39,789 39,789
Miscellaneous receivables    3,000          3,000
Total Current Assets 121,162 24,890 3,500,000 0 0 3,646,052
Property and Equipment, net 10,076 3,500 13,576
Other Assets 37,890 3,224          41,114
Total Assets $ 169,128 $ 31,614 $ 3,500,000 $ 0 $ 0 $ 3,700,742

Liabilities and Stockholders' Equity (Deficiency)
Current Liabilities
Accounts payable and accrued expenses $ 466,746 $ 26,798 $ $ $ $ 493,544
Deferred revenue 102,829 102,829
Dividends payable 341,168 341,168
Notes payable 442,450 442,450
Current maturities of long-term debt 33,529 33,529
Derivative liability for options and warrants 1,190,452 1,190,452
Other current liabilities 97,439 26,383          123,822
Total Liabilities 2,674,613 53,181 0 0 0 2,727,794

Stockholders' Equity (Deficiency)
Common stock 22,424 469 7,000 4,286 (469 ) 33,710
Treasury stock (3,236 ) 3,236 0
Preferred convertible stock 110 44 154
Additional paid-in capital 33,112,773 46,431 3,493,000 (4,330 ) (2,767 ) 36,645,107
Retained earnings (35,640,792 ) 218,598 (35,422,194 )
Stockholders' loans     (283,829 )          (283,829 )
Total Stockholders' Equity (Deficiency) (2,505,485 ) (21,567 ) 3,500,000 0 0 972,948

Total Liabilities and Stockholders' Equity (Deficiency) $ 169,128 $ 31,614 $ 3,500,000 $ 0 $ 0 $ 3,700,742

	1)	~~Assumes placement at $0.05 /share~~
	2)	~~Assumes average market price of $0.035 /share (average of ten trading days preceeding December 31, 2006) for 42,857,143 shares~~
	3)	~~Issuance of 43,610 preferred shares, par value $0.001~~

1516

Board Committees

AUDIT COMMITTEE

The Board of Directors of the Company serves as its Audit Committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002. Our Board of Directors intends to appoint an Audit Committee, the majority of whom shall be independent directors during the next fiscal year.

COMPENSATION AND NOMINATING COMMITTEES

Our board of directors intends to appoint such persons and form such committees as are required to meet the corporate governance requirements imposed by the national securities exchanges. Therefore, we intend that a majority of our directors will eventually be independent directors. Additionally, our board of directors is expected to appoint a nominating committee and a compensation committee, and to adopt charters relative to each such committee. Until further determination by the Board, the full Board of Directors will undertake the duties of the compensation committee and nominating committee.

PROPOSAL ONE

TO APPROVE AN AMENDMENT TO OUR

CERTIFICATE OF INCORPORATION, AS AMENDED,

TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK

Our board of directors proposes that our stockholders consider and approve an amendment to our Certificate of Incorporation, as amended, to increase the total number of authorized shares of our common stock from 700,000,000 to 1,400,000,000 shares.

Our company is currently authorized to issue up to 700,000,000 shares of common stock, $0.001 par value. At December 29, 2008, there were [_____________] shares of common stock outstanding, and our board of directors had reserved 33,153,542 shares of common stock for issuance upon exercise of outstanding options, 172,272,981 shares of common stock for issuance upon exercise of outstanding and to-be-issued common stock purchase warrants and 25,729,537 shares of common stock for issuance upon the conversion of our 129,500 Convertible Preferred Stock. Accordingly, at December 29, 2008, approximately [ ] shares of our common stock remained unreserved and available for future issuance.

Purposes of this Proposal

The proposed amendment would increase the number of shares of common stock that we are authorized to issue from 700,000,000 shares to 1,400,000,000 shares.

If this proposal is approved, we may use such additional shares of common stock for, among other things:

·	raising working capital;
·	providing equity incentives to employees, officers or directors;

·	establishing strategic relationships with other companies;
·	expanding our business through acquisitions and other investment opportunities;

·	paying existing and future obligations and commitments; and
·	for general corporate purposes.

~~Unaudited Pro Forma Income Statement of Magnitude Information~~ ~~Systems, Inc.~~

~~For the Year Ended December 31, 2006~~

Magnitude
Information
Systems, Inc.
Kiwibox
Media, Inc.

Pro Forma
Balance Sheet

Revenues $ 47,701 $ 107,153 $ 154,854
Cost of Sales 145,496 145,496

Gross Profit (97,795 ) 107,153 9,358

Selling, general and administrative expenses 2,035,997 149,781 2,185,778
Stock-based compensation 1,583,075     1,583,075
Loss from Operations (3,716,867 ) (42,628 ) (3,759,495 )

Other Income (Expense)
Interest Income 20 12,903 12,923
Interest expense (326,744 ) (326,744 )
Other income 294,898 294,898
Other expense (180,309 )     (180,309 )
Total Other Income (Expense) (212,135 ) 12,903 (199,232 )

Income before Income Taxes (3,929,002 ) (29,725 ) (3,958,727 )

Benefit from (Provision for) Income Tax 33,740 (600 ) 33,140

Net Loss $ (3,895,262 ) $ (30,325 ) $ (3,925,587 )

Dividends on Preferred Shares (578,464 ) (578,464 )
Net Loss applicable to Common Shareholders $ (4,473,726 ) $ (30,325 ) $ (4,504,051 )

Net Loss per Common Share $ (0.026 ) $ (0.001 ) $ (0.021 )
Weighted Average of Common Shares Outstanding 170,692,731 42,857,143 )1 213,549,874

~~Converting the 46,900 shares of Kiwibix common stock into Magnitude common stock (see Note 2 to Pro Forma Balance Sheet)~~

~~Accounting Treatment~~

The Company is taking the position that the merger of Kiwibox Media, Inc. with and into the Company’s subsidiary and the exchange of Kiwibox shares for Company shares should qualify as a tax free reorganization under section 368(a) of the Internal Revenue Code of 1986, as amended.

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations - Fiscal Year 2006.~~

We are providing the following disclosures to shareholders concerning, among other information, a discussion of our financial results of our operations for the fiscal year ended December 31, 2006. Except for our update of the “Subsequent Events -Fiscal Year 2007” paragraph below, these disclosures are also contained in our Form 10-KSB for the fiscal year ended December 31, 2006, a copy of which is attached to this Consent Statement as Exhibit D.

~~Results of Operations for the Year Ended December 31, 2006~~

~~For the year ended December 31, 2006, the Company had revenues of $47,701 compared to $189,552 in 2005. Revenues consisted almost entirely of charges for maintenance and support services.~~

Gross profits amounted to negative $97,795. Gross profits were burdened with a fixed charge for amortization of certain proprietary software assets. Such software assets underlie the Company’s products and were being amortized on a straight line over 10 years, resulting in a level charge of approximately $13,000 per month to cost-of-goods-sold. After deducting selling -, research -, and general and administrative expenses of $3,619,072 compared to the $2,448,509 recorded in 2005, the Company realized an operating loss of $3,716,867 compared to an operating loss of $2,410,670 in 2005. A large portion of such SG&A expenses is attributable to non-cash charges in connection with the valuation at market price of the underlying stock, of securities issued in connection with settlement agreements reached with a shareholder who was a former officer of the Company, and with the former president and CEO, which together amounted to $632,677. In addition, securities valued at approximately $950,000 were issued as compensation to consultants. Non-operating income and expenses included $326,744 net interest expense (including $291,762 of amortization of debt discounts due to recognition of a derivative conversion option, beneficial conversion features and detachable warrants issued with the debt), $102,762 income in connection with the change in fair value of a derivative conversion option on convertible debt, a charge of 174,954 for the impairment of software intangibles, and income of $192,136 from recording the change in fair value of derivative options and warrants reclassified as liabilities. The Company also realized a credit of $33,740 from the sale of net loss carry-forward tax credits pursuant to the New Jersey Emerging Technology and Biotechnology Financial Assistance Act. The year concluded with a net loss of $3,895,262. After accounting for dividends accrued and discounts on outstanding preferred stock which totaled $578,464 the net loss applicable to common shareholders was $4,473,726or $0.03 per share, compared to a loss of $2,341,492 or $0.02 per share for the previous year.

~~Liquidity and Capital Resources~~

In the absence of cash flow from operations, required working capital to finance ongoing operations was supplied primarily from new equity capital. The Company recorded $1,218,500 in new equity funding in the form of cash. The Company also assumed new private debt in the amount of approximately $440,000.

At December 31, 2006, the deficit in working capital amounted to $2,553,451 as compared to $1,016,230 at December 31, 2005. Stockholders’ equity showed an impairment of $2,505,485 at the end of the year, compared to an impairment of $664,381 at the beginning of the year. The negative cash flow from operations totaled $1,589,089 and was substantially financed by new debt and equity which was obtained through private placements. The new equity placements were consummated by issuance of common stock and warrants to accredited private investors in the United States. Details of such transactions can be found in the “Changes and Issuance of Securities” sections in the Company’s reports on Form 10-QSB during the year, as well as in the pertinent section of this report. During 2006, the Company had filed amendments to four previously filed registration statements on Form SB-2, all of which covered common shares directly issued as well as common shares underlying the previously issued convertible preferred stock and warrants, in connection with these and prior financing transactions. These filings were made on behalf of certain investors in the Company’s equities and proceeds of any sales of such registered securities will accrue entirely to such investors. The filings will shortly be updated with the current financial statements and forwarded to the Securities and Exchange Commission for review.

At the time of this submission, the Company had no bank debt. At December 31, 2006 its short-term liabilities, aside from trade payables and accruals, consisted of certain notes and loans aggregating approximately $442,450. Accruals include $341,168 unpaid dividends on outstanding preferred stock. Such dividends will be paid only if and when capital surplus and cash-flow from operations are sufficient to cover the outstanding amounts without thereby unduly impacting the Company’s ability to continue operating and growing its business.

Current cash reserves and net cash flow from operations expected during the near future are inadequate when measured against present and anticipated future needs. In order to remedy the resulting liquidity constraints and address any “going-concern” issues, management, during the third quarter, had drastically reduced staff and the level of on-going cash outlays for operations. In addition, management is currently negotiating with several financing sources with the goal of obtaining commitments for further investments in form of debt or equity capital, to be funded during the upcoming quarter. There can be no assurance, however, that these negotiations will lead to the desired outcome.

~~Subsequent Events - Fiscal Year 2007~~

In August and December, 2006, we negotiated a termination agreement and debt conversion agreements, respectively, with our founder, Steven Rudnik, resulting in Mr. Rudnik’s departure from the Company and the conversion of approximately $125,000 due him under the terms of a note and prior agreements into 6,250,000 common shares and 3,125,000 five-year warrants, exercisable at $.05 per share. As a result, Ed Marney assumed the role of President and management recommended to the Board of Directors That the Company seek a new business opportunity. The Board of Directors determined it was in the best interests of the Company and its shareholders to scale-down its operations and staff during the third quarter of 2006 in order to decrease overhead. During 2006 we terminated seven employees and reduced our monthly cash expenses from the level at the beginning of the year by approximately $140,000 per month to approximately $60,000 per month during the fourth quarter.

In December, 2006, an investment banker introduced the owners of a social networking website known as Kiwibox.com to management. Following a period of mutual due diligence, the parties signed an Agreement and Plan of Reorganization on February 19, 2007, pursuant to the principal terms of which the Kiwibox business, owned by the corporation Kiwibox Media, Inc., will merge with our subsidiary and we will issue to the three owners of Kiwibox common stock and preferred stock, the number of which shall be based upon an aggregate value of $2,000,000, a $300,000 cash payment at closing and delivery to each of the three Kiwibox owners a two-year employment agreement that will pay each a base salary of $150,000 and stock options to purchase 7,500,000 common shares, vesting over a two-year period, with the ability to earn additional cash and stock bonuses based upon the attainment of certain business goals. The closing of the transaction with Kiwibox is scheduled to occur on or before June 15, 2007, and is subject, among other usual due diligence contingencies, to our having raised a minimum $3.5 million in cash by closing which we have promised to invest in Kiwibox in the 18-month period following closing. See “Summary of Acquisition Merger” and other disclosures in this Consent Statement for a more detailed description of our transactions with Kiwibox and its shareholders.

~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~

~~Magnitude has made no changes in nor has had any disagreements with the its independent auditors during the last two years.~~

~~The Kiwibox Acquisition~~

~~The Parties to the Kiwibox Acquisition~~

~~The parties to the Kiwibox acquisition will be the Company, its wholly owned subsidiary, Magnitude Operations, Inc., Kiwibox Media, Inc. and the three Kiwibox shareholders.~~

~~The Effective Time~~

The Kiwibox acquisition will become effective promptly following the shareholder’s approval of the Kiwibox acquisition and the filing of the proposed Amendments to our Certificate of Incorporation, increasing our authorized common shares and changing our corporate name to KiwiAge Enterprises, Inc. with the Secretary of State, State of Delaware.

~~The Kiwibox Business Acquired~~

We are acquiring Kiwibox’s social networking website business through a merger and the Company will own all of the assets associated with Kiwibox’s business once the merger is consummated. The Kiwibox assets that we will acquire include the domain name of Kiwibox, all of its proprietary trade secrets, all of its software and methodologies and all aspects of the Kiwibox website.

~~The Agreement and Plan of Reorganization provides that the Company will assume the following liabilities of Kiwibox:~~

~~1. Kiwibox Legal Fees due Barton, Barton & Plotnik, LLP, up to $42, 500~~

~~2. Kiwibox Accounting Fees due J.H. Cohn up to $17,000~~

~~3. Kiwibox Investment Banking Fees due Southridge Investment Group, LLC of $15,000 and 2.5% of the stock transferable to the Kiwibox Shareholders pursuant to Article 3.2 hereof.~~

~~4. Up to $9,000 of Kiwibox American Express charges if related to business~~

~~Representations and Warranties~~

The Acquisition Agreement contains the customary representations and warranties by the parties, including representations and warranties regarding the following: (i) organization; (ii) authority with respect to the Acquisition Agreement; (iii) accuracy of financial statements; (iv) absence of litigation; and (v) consents and approvals and absence of violations of or conflicts with certain laws and agreements.

~~Covenants~~

The Acquisition Agreement contains customary covenants by the parties, including cooperation with the each other’s agents, full and reasonable access to documents, to operate their respective businesses in the ordinary course, not to solicit to engage in a similar transaction with any other party and during the two-year period following the closing, Magnitude covenants not to engage in any material acquisition or dispose of any material assets without the consent of at least two of the three Kiwibox Shareholders.

~~Closing Conditions~~

~~Conditions to Closing the Agreement with Kiwibox~~

~~The Acquisition Agreement is subject to the prior satisfaction or waiver of certain customary conditions and additional conditions, including:~~

~~that the respective representations and warranties of the parties contained in the Acquisition Agreement shall be true in all material respects as of the closing;~~

~~Kiwibox shall have delivered to Magnitude audited financial statements for its two fiscal years ended December 31, 2006 and 2005;~~

that the Company’s shareholders must approve the Kiwibox Acquisition and the Amendment to our Certificate of Incorporation, increasing our authorized common shares from 300,000,000 to 700,000,000 shares;

~~that Magnitude have $3,500,000 in funds available at the closing for its commitment to invest these monies into the Kiwibox business over the 18-month period following the Closing;~~

If any of the conditions to closing are not satisfied on or before June 15, 2007, the scheduled closing date, either the Company or Kiwibox may terminate the Agreement, in which case there shall be no liability or claims against any party.

~~Termination~~

~~The Acquisition Agreement may be terminated by the mutual consent of the parties, or by any party if a party breaches a covenant or fails to meet and does not waive a condition of closing.~~

~~Business and Plan of Operation of the New Company~~

Prior to the Kiwibox acquisition, the sole activities of our wholly owned subsidiary, Magnitude Operations, Inc., will have been to organize and enter into the Agreement and Plan of Reorganization. Following the Kiwibox acquisition, Magnitude Operations, Inc., into which Kiwibox Media, Inc. will have merged, will be to conduct the social networking website business previously conducted by Kiwibox Media, Inc. The Company with the three Kiwibox shareholders as new management team members, will develop and effectuate a business plan to expand the content and membership of the Kiwibox.com website.

Initially, the Kiwibox business will be funded by the $3,500,000 the Company is committed to raise as a condition to close the Kiwibox Acquisition. If these funds are raised and the Kiwibox Acquisition is consummated, Company management believes that these funds will be sufficient to sustain operations for at least the next 12 months, and probably for the first 18 months. In the event, however, that additional funds are needed, no assurances can be given that the Company will be able to find a source or sources for such additional funds or if identified, whether such funds can be obtained on terms and conditions that are favorable or even commercially reasonable.

~~PROPOSAL 2~~

~~AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE~~

~~THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK~~

The Company's Board of Directors has unanimously adopted, subject to stockholder approval, an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of the Company's Common Stock from 300,000,000 shares to 700,000,000 shares.

~~A copy of the amendment to the Company’s Certificate of Incorporation, containing the above change is appended as Exhibit B to this Consent Solicitation.~~

~~Reasons for the Change to The Company’s Common Stock~~

~~As of May 7, 2007, the Record Date, the Company had ______________________ shares of issued and outstanding Common Stock, 12,107,408 outstanding stock options, 51,290,000~~outstanding common stock purchase warrants, 93,190 preferred shares convertible into 757,198 common shares. If all the outstanding stock options, common stock purchase warrants and convertible preferred shares were exercised and/or converted by their holders an additional ______________~~common shares would be outstanding; this would represent an approximate 30%increase in our outstanding common shares.~~

In connection with the acquisition of Kiwibox and the employment agreements with the three Kiwibox Shareholders, we are committed to issue at the closing, during the between a minimum 162,500,000 and up to an estimated maximum 351,500,000 common shares and stock options:

~~Between 30,000,000 and 150,000,000 Common Shares for the Acquisition;~~

~~Between 10,000,000 and 50,000,000 Common Shares as a result of the automatic conversion of our preferred stock on the second anniversary date of the closing;~~

~~Between 22,500,000 and 31,500,000 Common Shares from exercise of stock options under their employment agreements, and;~~

Between 100,000,000 and 120,000,000 Common Shares issuable to the potential investors in our private placement, seeking to raise the minimum $3,5 million for the Kiwibox investment and the $2.5 million for the Acquisition closing costs and to fund certain public company operations.

The foregoing is only a summary of the terms and provisions of the Acquisition Agreement and the employment agreements. Shareholders should review these documents in their entirety for a full understanding of these terms and provisions, copies of which are attached and included in this Consent Statement as Exhibit A. (see “Summary of Terms of Acquisition”).

In connection with our private placement to raise the minimum $3.5 million to meet our investment commitment in connection with the Kiwibox Acquisition and the $2.5 million to pay Acquisition costs and fund certain public company operating costs, through the sale of between 100,000,000 and 120,000,000 common shares as authorized by our Board of Directors, meeting this projected share requirement would require using authorized but unissued common shares.

In addition, we believe that by increasing our authorized shares of common stock the Company will benefit by providing flexibility to issue common stock for a variety of future business and financial objectives without the necessity of delaying these actions in order to obtain further shareholder approval. These objectives include, but are not limited to raising additional equity capital for acquisitions and to provide for future compensation to officers, directors and employees and for other corporate purposes.

~~General Effect of the Changes to Our Common Stock~~Board Committees

~~Shareholders will not realize any dilution in their percentage~~AUDIT COMMITTEE

The Board of ~~ownership~~Directors of the Company orserves as its Audit Committee in ~~their voting rights~~accordance with the provisions of the Sarbanes-Oxley Act of 2002. Our Board of Directors intends to appoint an Audit Committee, the majority of whom shall be independent directors during the next fiscal year.

COMPENSATION AND NOMINATING COMMITTEES

Our board of directors intends to appoint such persons and form such committees as are required to meet the corporate governance requirements imposed by the national securities exchanges. Therefore, we intend that a ~~result~~majority of ~~shareholder approval~~our directors will eventually be independent directors. Additionally, our board of directors is expected to appoint a nominating committee and a compensation committee, and to adopt charters relative to each such committee. Until further determination by the Board, the full Board of Directors will undertake the duties of the compensation committee and nominating committee.

PROPOSAL ONE

TO APPROVE AN AMENDMENT TO OUR

CERTIFICATE OF INCORPORATION, AS AMENDED,

TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK

Our board of directors proposes that our stockholders consider and approve an amendment to our Certificate of Incorporation, as amended, to increase ~~our~~the total number of authorized common shares. However, shareholders’ ownership percentage in our Company will suffer dilution if we close the Kiwibox Acquisition and we succeed in raising the minimum $3.5 million for the Kiwibox Acquisition and the $2.5 million to pay the Acquisition costs and fund certain public company expenses through the private placementshares of our common ~~shares. Our Board has authorized us~~stock from 700,000,000 to privately place our common shares at between $.05 and $.06 per common share. Shareholders who purchased our common shares at prices above these amounts will also suffer a dilution in the value of their shares, the difference between the price a shareholder paid for his or her shares and the $.05 to $.06 private placement offering price.

In addition, the authorization of additional capital, under certain circumstances, may have an anti-takeover effect, although that is not the intent of our Board of Directors. For example, it may be possible for the Board of Directors to delay or impede a takeover or transfer of control of our Company by causing such additional authorized shares to be issued to persons or shareholders who might support our Board of Directors in opposing a takeover bid that the Board determines is not in the best interests of our Company and its shareholders. The increased authorized capital, therefore, may have the effect of discouraging unsolicited takeover bids. By potentially discouraging plans to commence unsolicited takeover bids, increasing our capital shares may reduce or eliminate any opportunities for our shareholders to sell their shares at the higher prices generally available in takeover bids or that may be available pursuant to a merger proposal. The increase in our common shares may have the effect of permitting our Board of Directors and officers to keep their positions with our Company and put them in a better position to resist any changes that shareholders may wish to take if they are dissatisfied with the performance of these management persons or if they are dissatisfied with the conduct of the Company’s business. Please be advised, however, that our Board of Directors did not unanimously approve the increase in our authorized common shares with the intent to use such a measure as a type of anti-takeover mechanism.

If our shareholders do not approve of the amendment to increase our authorized common shares, the Company will not be able to close the Kiwibox Acquisition and will not be able to raise the minimum $3.5 million investment requirement through the private placement of our common1,400,000,000 shares. If the Company is unable to both close the Kiwibox Acquisition and raise the minimum $3.5 million needed to close this transaction, its financial condition will be materially adversely affected and it may need to limit or curtail its operations.

THE BOARD OF DIRECTORS HAS ADOPTED RESOLUTIONS THAT SET FORTH THE AMENDMENT, DECLARE THE ADVISABILITY OF THE AMENDMENT, AND SUBMIT THE AMENDMENT TO THE STOCKHOLDERS FOR APPROVAL. THE BOARD RECOMMENDS APPROVAL OF THE AMENDMENT BY THE STOCKHOLDERS.

~~PROPOSAL 3~~

~~AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO CHANGE THE~~

~~COMPANY’S CORPORATE NAME TO “KIWIBOX ENTERPRISES, INC.”~~

As a result of the Company's entering the agreement to acquire Kiwibox and its recent agreement with Imminent Technologies, LLC, granting it the right to sublicense its ergonomic software products and assume all related customer support functions, resulting in a strategic change in the Company’s business, the Company believes that its new selected corporate name, KiwiAge Enterprises, Inc., will more accurately reflect the business of the Company and will generate wider name recognition in the media website development and financial communities. The Company will compete exclusively in the website social networking and media marketplace. With the surge in social networking websites, the Company's Board of Directors and management made the strategic decision to refocus the organization on this fast-growing marketplace once the opportunity presented itself to acquire the website and assets of Kiwibox.

~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS~~

~~On March 31, 2000, the Company~~Our company is currently authorized to issue up to 700,000,000 shares of common stock, $0.001 par value. At December 29, 2008, there were [_____________] shares of common stock outstanding, and its former President and Chief Executive Officer agreed to convert a current liability payable to him in the amount of $374,890 into a Company obligation, of which $100,000 was subsequently classified as due on demand, which was repaid in April 2002, with the remaining balance of $274,890 maturing July 1, 2002. On February 19, 2002, the maturity of the term portion of $274,890 was extended to July 2003, and theour board of directors had reserved 33,153,542 shares of the Company approved a change in the conversion option towards a rate of $0.10 per share. In January 2004, $175,000 was repaid and the maturity of the remaining open balance of $99,890 was extended to January, 2005. This amount has been converted into common stock ~~and warrants pursuant to a settlement agreement entered into in December 2006.~~

~~In May 2005, the Company and its former President and Chief Executive Officer agreed to convert most~~for issuance upon exercise of ~~his base salary for the remainder of the year 2005 into 1,000,000~~outstanding options, 172,272,981 shares of ~~restricted~~ common stock for issuance upon exercise of outstanding and ~~1,000,000 warrants, exercisable during three years at the price of $0.15 per share, in lieu of $100,000 cash.~~

~~In September 2005 our officers and directors surrendered for cancellation 4,507,709 stock options, 2,283,916~~to-be-issued common stock purchase warrants and ~~11,247,607~~25,729,537 shares of common ~~shares in order to provide sufficient authorized common shares to accommodate~~stock for issuance upon the ~~Company’s current private placement. We replaced the surrendered and cancelled common shares with~~conversion of our 129,500 Convertible Preferred Stock. Accordingly, at December 29, 2008, approximately [ ] shares of our ~~Series E preferred~~common stock ~~which automatically converted in March, 2006, into 11,247,607 common~~remained unreserved and available for future issuance.

Purposes of this Proposal

The proposed amendment would increase the number of shares ~~the amount~~ of common stock that we are authorized to issue from 700,000,000 shares ~~equal~~ to those surrendered. We also intend to reissue the 4,507,709 stock options and 2,283,916 warrants also surrendered for cancellation by our officers and directors with an equal amount of common shares underlying these securities. The recipients of the Series E preferred stock have waived their right to receive any dividends on their1,400,000,000 shares.

During 2006 and 2005, one outside director of the Company who also serves as the Company’s general and securities counsel, was paid an aggregate $96,121 and $131,140, respectively, for legal services.

On August 8, 2006, Steven D. Rudnik resigned from the position of Chairman of the Board of Directors of the Company. Pursuant to the principle terms of the resignation agreement, (a) his current employment agreement was terminated, (b) he resigned the position of chairman, (c) he received 6 million restricted commonIf this proposal is approved, we may use such additional shares plus cash payments totaling $60,000.00 to be paid in installments through November 1, 2006, and (d) that options and warrants for an aggregate 4,486,875 share which were previously cancelled, be re-issued upon the earlier recurrence of a recapitalization of our securities that would provide sufficient common shares to accommodate them or two years from the date of the agreement. The options and warrants will have similar terms as the original instruments (exercisable at $0.10 and $0.15, respectively), but with expiration dates as of three years from the date of re-issuance.

On December 13, 2006, the Company and Steven D. Rudnik, our former President and Chief Executive Officer signed a second settlement agreement, pursuant to the principal terms of which Mr. Rudnik exchangeda Company promissory note due him in the principal amount of approximately $100,000, a $15,000 payment due him under his resignation agreement of August 8, 2006 and certain interest payments by conversion into 6,250,000 common shares and 3,125,000 warrants, exercisable over a three year period at an exercise price of $.05 per share. The Company also agreed to reissue the previously terminated stock options and warrants on or before February 18, 2007, comprised of 1,583,333 warrants to purchase common shares at the exercise price of $.10 per share anytime during the three-year period, commencing February 18, 2007, and 2,903,542 stock options to purchase common shares at the exercise price of $.10 per share anytime during the three-year period commencing February 18, 2007. This agreement also provides Mr. Rudnik a 12-month "reset" provision that entitles him to automatically benefit from any terms that are more favorable than those set forth in the agreement, including a more favorable debt conversion rate or equity investment price, that the Registrant grants to any party over the next 12 months.

On January 2, 2007, the Company and a former employee, Steven W. Jagels settled a lawsuit commenced by Mr. Jagels against the Company based upon claims which included breach of his employment agreement. We agreed to make a payment of $20,040 to Mr. Jagels and to issue 3,000,000 common shares to him by January 7, 2007. We also agreed to include these shares in this registration statement and when it is declared effective by the SEC, to cause a buyer to purchase these shares from Mr. Jagels for $75,000 prior to February 28, 2007. Upon Mr. Jagels’ receipt of these proceeds, the lawsuit will be discontinued with prejudice, or if not consummated as agreed, the lawsuit will continue.

~~PRINCIPAL STOCKHOLDERS~~

~~The following table sets forth, as of May 7, 2007, the record and beneficial ownership~~ of common stock of the Company by each executive officer and director, all executive officers and directors as a group, and each person known to the Company to own beneficially, or of record, five percent or more of the outstanding shares of the Company:

Title Name and Address of Amount and Nature of Percent
of Class )* Beneficial Owner Beneficial Ownership (1) of Class
Common Stock
Steven L. Gray 5,614,096 (2) 2.5%
Joerg H. Klaube 1,400,000 0.6 %
Joseph J. Tomasek 2,847,166 (3) 1.1%
Edward L. Marney 0
for, among other things:

~~Address of all persons above: c/o the Company.~~

All Directors and Executive Officers 9,861,262 4.3%
as a Group (4 persons)

Michael G. Martin 13,000,000 (4) 5.7%
12 Tillman Ct, Bridgewater, NJ 08807
33 Group LLC 12,500,000 5.7 %
3589 NW 61 Circle, Boca Raton, FL 33496
Azzurri Group, LLC 12,500,000 5.7%
3589 NW 61 Circle, Boca Raton, FL 33496

)* The Company also has issued and outstanding as of November 15, 2006, 109,857 shares of its Senior Convertible Preferred Stock, with concentrations in excess of 10% for one or more of the holders of such stock, however, none of such shares bear any voting rights.

~~(1)~~·	For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock which such person has the right to acquire within 60 days of November 15, 2006. For purposes of computing the percentage of outstanding shares of Common Stock held by each person or group of persons named above, any security which such person or persons has or have the right to acquire within such date is deemed to be outstanding but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnote to this table and pursuant to applicable community property laws, the Company believes based on information supplied by such persons, that the persons named in this table have sole voting and investment power with respect to all shares of Common Stock which they beneficially own.raising working capital;
·
~~(2)~~	~~Includes stock options for 500,000 shares.~~

~~(3)~~	~~Includes warrants for 333,333 shares.~~

~~(4)~~	~~Includes stock options for 750,000 shares.~~providing equity incentives to employees, officers or directors;

~~(5)~~·	~~Includes stock options for 2,903,542 shares~~establishing strategic relationships with other companies;
·	expanding our business through acquisitions and ~~warrants for 4,708,333 shares.~~other investment opportunities;

·	paying existing and future obligations and commitments; and
·	for general corporate purposes.

2417

~~DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES~~

~~The names and ages of all directors and executive officers of the Company are as follows:~~

~~Name~~	~~Positions~~	~~Term Served (Expires)~~

~~Edward L. Marney~~	~~Director~~	~~May 5, 2006~~
	~~President, Chief Executive~~
	~~Officer~~

~~Joerg H. Klaube Sr.~~	~~Director~~	~~December 2, 2005~~
	~~Vice President, Secretary,~~
	~~Chief Financial Officer~~

~~Steven L. Gray~~	~~Director~~	~~August 30, 2006~~
	~~Chairman of the Board~~

~~Joseph J. Tomasek~~	~~Director~~	~~Feb. 11, 1999 (2006)~~

All Directors of the Company hold office until the next annual meeting of the shareholders and until successors have ben elected and qualified. Executive Officers of the Company are appointed by the Board of Directors at meetings of the Company 's Directors and hold office until they resign or are removed from office.

~~Edward L. Marney~~, Age 49 - Director, President and Chief Executive Officer. Mr. Marney joined Magnitude, Inc. in May 2006 and was appointed a director in August 2006. From 2003 to 2006, Mr. Marney was Managing Director of Triad Partners, LLC, a privately held investment company. Prior to that from 2001-2003 Mr. Marney was Vice President, Business Intelligence at Medical Manager/WebMD Corporation. Mr. Marney founded TouchPoint Software Corporation in 1994 and served as its CEO & President until its acquisition by WebMD Corporation in 2001. Prior to that Mr. Marney served in various marketing and sales roles at Medical Information Technology and Burroughs Corporation. He graduated with a B.S. from the Whittemore School of Business and Economics at the University of New Hampshire.

~~Joerg H. Klaube~~, Age 65 - Director and Chief Financial Officer, Senior Vice President. Joined Magnitude, Inc. in December 1994. From 1993 to 1994 he was Vice President Administration for Comar Technologies Inc., a computer retail firm, and from 1983 to 1993 Chief Financial Officer for Unitronix Corporation, a publicly traded software design and computer marketing firm. Prior to that, Mr. .Klaube was employed for 16 years with Siemens Corp., the US subsidiary of Siemens AG, where he served most recently as Director of Business Administration for its Telecommunications Division. He graduated from the Banking School in Berlin, Germany, and holds an MBA degree from Rutgers University.

~~Joseph J. Tomasek~~, Age 60 - Director. Mr. Tomasek was appointed a director in February 2000. He has been engaged in the private practice of corporate and securities law in his own law firm for the last ten years. Mr. Tomasek was appointed to serve as general counsel for the Company in 1999. In addition to his work with the Company, Mr. Tomasek represents several other clients in the area of corporate law.

~~Steven L. Gray~~, Age 57 - Director. Mr. Gray was elected to serve on the Board on May 18, 2000. He is a resident of Venice, Florida. For the past six years, Mr. Gray has served as the President and is a shareholder of a private Florida corporation engaged in the retail distribution of nutritional products. This corporation has a customer base in nine countries. Prior to that time, Mr. Gray ran his own real estate development company, specializing in the design and construction of multi-family housing.

~~Family Relationships~~

~~There are no family relationships between any of the directors or executive officers.~~

~~EXECUTIVE COMPENSATION~~

~~2006 SUMMARY COMPENSATION TABLE~~

The following table sets forth the cash compensation and executive capacities for the fiscal years ended December 31, 2006 and December 31, 2005, for the chief executive officer and for each executive officer whose aggregate cash remuneration exceeded $100,000, for all executive officers as a group, and for certain other most highly compensated employees:

~~(1)~~

~~Name and~~

~~Principal Position~~

~~Year~~

~~Salary~~

~~($)~~

~~Bonus~~

~~($)~~

~~Stock~~

~~Awards~~

~~($)~~

~~Option Awards~~

~~($)~~

~~Non-Equity Incentive Plan Compensation~~

~~($)~~

~~Non-Qualified Deferred Compensation Earnings~~

~~($)~~

~~All~~

~~Other~~

~~Compen~~

~~sation~~

~~($)~~

~~Total~~

~~($)~~

~~(a)~~

~~(b)~~

~~(c)~~

~~(d)~~

~~(e)~~

~~(f)~~

~~(g)~~

~~(h)~~

~~(i)~~

~~Edward L. Marney~~

~~Chief Executive~~

~~Officer,~~

~~President~~

~~2006~~

~~86,538~~

~~5,950~~

~~92,488~~

~~Steven D. Rudnik~~

~~Former Chief Executive Officer,~~

~~President~~

~~2006~~

~~2005~~

~~64,788~~

~~33,333~~

~~577,105~~

~~124.306~~

~~45,000~~

~~686,893~~

~~157,639~~

~~Mark Chroscielewski~~

~~Former Sr. Vice President~~

~~Business Development~~

~~2006~~

~~2005~~

~~82,185~~

~~125,000~~

~~12,900~~

~~82,185~~

~~137,900~~

~~Joerg H. Klaube~~

~~Sr. Vice President,~~

~~CFO~~

~~2006~~

~~2005~~

~~61,376~~

~~117,308~~

~~2,626~~

~~12,203~~

~~129,511~~

~~Steven W. Jagels~~

~~Former Sr. Vice President~~

~~Information Systems~~

~~2006~~

~~2005~~

~~61,875~~

~~108,333~~

~~61,875~~

~~13,556~~

~~121,889~~

~~Joseph J. Tomasek, Esq., Director and General Legal Counsel~~

~~Legal Fees:~~

~~2006~~

~~2005~~

~~96,121~~

~~131,140~~

~~Steven Gray~~

~~Director~~

~~2006~~

~~30,000~~

~~87,167~~

~~117,167~~

~~All executive officers~~

~~As a group (2 persons)~~

~~2006~~

~~2005~~

~~147,914~~

~~117,308~~

~~8,576~~

~~12,203~~

~~156,490~~

~~12,203~~

~~Explanation~~: No current Company officer or employee has an employment agreement with the Company. All of the items of compensation paid to the officers and directors listed in the above Summary Compensation Table are discussed in the following paragraphs, under the individual officer’s or director’s name.

~~Edward L. Marney; 2006.~~ Ed Marney joined the Company in May, 2006, becoming first our Chief Executive Officer, then our President and a director. We paid Mr. Marney a cash salary of $86,538 and reimbursed $5,950 of healthcare payments to him during 2006.

~~Steven D. Rudnik; 2006 and 2005~~. We paid our former CEO and President, Steven D. Rudnik, a cash salary of $64,788 during fiscal year 2006. On August 8, 2006, Mr. Rudnik terminated his employment agreement with us in exchange for 6,000,000 restricted common shares and aggregate cash payments of $60,000. The aggregate amount of compensation of $577,105 included in the “Stock Awards” column above, includes these 6,000,000 restricted common shares which we valued at $.04 per share, the average public market price of the Company’s common stock on the date of this settlement agreement, August 8, 2006. On December 15, 2006, the Company negotiated a second agreement with Mr. Rudnik, pursuant to which the Company exchanged (i) 6,250,000 common shares, which we valued at $.03 per share, the average public market price of the Company’s common stock on the date of the exchange agreement, December 15, 2006, (ii) 3,125,000 common stock purchase warrants, exercisable over the 3-year period commencing January 18, 2007 and exercisable at an exercise price of $.05 per common share, which we valued at $83,750 (iii) 1,583,333 common stock purchase warrants, exercisable over the 3-year period commencing January 18, 2007 and exercisable at an exercise price of $.10 per common share, which we valued at $23,592 and (iv) 2,903,542 common stock options, exercisable over the 3-year period commencing January 18, 2007 at the stock option exercise price of $.10 per common share, which we valued at $42,263, for a Company promissory note in the approximate principal amount of $100,000, approximately $10,000 of accrued interest thereunder and a $15,000 debt.

In addition, the amount of “All Other Compensation” represents cash payments of $45,000 made by the Company in connection with the August 8, 2006 settlement agreement and $3,250 paid by the Company for Mr. Rudnik’s life insurance.

During fiscal year 2005, the Company agreed to convert $100,000 of Mr. Rudnik’s cash salary into 1,000,000 restricted common shares and 1,000,000 common stock purchase warrants, exercisable over the 3-year period, commencing on June 8, 2005, and exercisable at the exercise price of $0.15 per common share. In addition, this amount includes Company payments of $21,056 for car payments and $3,250 representing payments made for Mr. Rudnik’s life insurance.

~~Mark Chroscielewski; 2006 and 2005:~~ During fiscal year 2006, the Company paid this former executive $82,185 in Salary. During 2005, we paid Mr. Chroscielewski a cash salary of $125,000 and in the column “All Other Compensation” above for 2005, we made car payments on his behalf in the aggregate amount of $4,000 and insurance premium payments of $8,900.

~~Joerg H. Klaube 2006 and 2005.~~ We paid our Chief Financial Officer a cash salary of $ 61,376 during 2006 and in the column “All Other Compensation” in the above table for 2006,life insurance premium payments on this executive’s behalf in the amount of $2,626. During fiscal year 2005, the Company paid Mr. Klaube cash salary of $117,308 and as indicated in the column “All Other Compensation” in the above table for 2005, we made life insurance premium payments on this executive’s behalf in the amount of $2,626 and car payments in the amount of $9,577.

~~Steven Jagels 2006 and 2005:~~ We paid this former executive a cash salary of $61,875 during 2006. During fiscal year 2005, the Company paid Mr. Jagels a salary of $108,333 and as indicated in the column “All Other Compensation” in the above table for 2005, we made life insurance premium payments on this executive’s behalf in the amount of $1,940 and car payments in the amount of $11,616.

~~Joseph J. Tomasek 2006 and 2005:~~ ~~During fiscal years 2006 and 2005, the Company paid $ 96,121 and $ 131,140, respectively, to Mr. Tomasek for his legal services rendered to the Company.~~

~~Steven Gray 2006.~~ During fiscal year 2006, we issued an aggregate 1,550,000 restricted common shares and 500,000 common stock purchase warrants to Mr. Gray for services rendered to the Company. During 2006, Mr. Gray assisted the Company in its change of management, providing day-to-day assistance in operations, customer relations including, interviewing potentialcandidates for management positions and coordinating the various audit schedule and management review projects. As set forth in the column “All Other Compensation” in the above table for 2006, we valued the 1,550,000 restricted common shares based upon their average public market trading price as of the dates we issued these shares to Mr. Gray, totaling $73,000 and thw 500,000 warrants at $14,450, based upon a formula called the Black Sholes Model.

~~Stock Options and Stock Option Plans:~~

No stock options or other grants were made to any eligible participants, including employees during fiscal years 2006 and 2005 pursuant to the Company’s 1997 Stock Option Plan or the Company’s 2000 Stock Incentive~~Plan.~~

~~1997 Stock Option Plan:~~

The Company’s 1997 Stock Option Plan (the “1997 Plan”), as filed with Information Statement pursuant to Section 14(c) with the Commission on July 1, 1997, and with Registration Statement on Form S-8 with the Commission on September 8, 1997, is hereby incorporated by reference.

As adopted, the 1997 Plan permits the grant of stock options to employees, directors and key consultants of the Company. It provides for the issuance of incentive stock options within the meaning of Section 422 of the Internal Revenue Code and non-qualified stock options. The 1997 Plan provides for options covering up to an aggregate 1,000,000 shares of Common Stock. The 1997 Plan was approved by the Company’s stockholders. There are no available shares of common stock under the 1997 Plan.

The 1997 Plan is administered by the Board of Directors. Each option is evidenced by a written agreement in a form approved by the Board of Directors. No options granted under the 1997 Plan are transferable by the optionee other than by will or by the laws of descent and distribution, and each option is exercisable, during the lifetime of the optionee, only by the optionee.

Under the 1997 Plan, the exercise price of an incentive stock option must be at least equal to 100% of the fair market value of the Common Stock on the date of grant (110% of the fair market value in the case of options granted to employees who hold more than ten percent of the voting power of the Company’s capital stock on the date of grant). The exercise price of a non-qualified stock option must be not less than 85% of the fair market value of the Common Stock on the date of grant. For both incentive stock options and non-qualified stock options, the exercise price must not be less than the par value of a share of the Common Stock on the date of grant. The term of any stock option is not to exceed ten years (five years in the case of an incentive stock option granted to a ten percent holder). The Board of Directors has the discretion to determine the vesting schedule and the period required for full exercisability of stock options; however, in no event can the Board of Directors shorten such period to less than six months. Upon exercise of any option granted under the 1997 Plan, the exercise price may be paid in cash, and/or such other form of payment as may be permitted under the applicable option agreement, including, without limitation, previously owned shares of Common Stock.

~~2000 Stock Incentive Plan~~

The 2000 Incentive Stock Plan (the “2000 Plan”) permits the grant of stock options, stock appreciation rights and stock grants to employees, directors and key consultants of the Company. It provides for the issuance of incentive stock options within the meaning of Section 422 of the Internal Revenue Code as well as non-qualified stock options. It also provides for the grant of stock appreciation rights, either alone or in tandem with other grants, and restricted stock grants. The 2000 Plan provides for grants covering up to an aggregate 5,000,000 shares of Common Stock. The 2000 Plan was approved by the Company’s stockholders. There are no available shares of common stock under the 2000 Plan. The 2000 Plan, as with the 1997 Plan, is administered by the Board of Directors. Each award or grant is evidenced by a written agreement in a form approved by the Board of Directors. No awards granted under the~~2000 Plan are transferable by the recipient other than by will or by the laws of descent and distribution, and each option is exercisable, during the lifetime of the recipient, only by the recipient.~~

Under the 2000 Plan, the exercise price of an incentive stock option must be at least equal to 100% of the fair market value of the Common Stock on the date of grant (110% of the fair market value in the case of options granted to employees who hold more than ten percent of the voting power of the Company’s capital stock on the date of grant). The exercise price of a non-qualified stock option may be fixed by the Board of Directors. For incentive stock options, the exercise price must not be less than the 100% of the fair market value of the Common Stock on the date of grant. The term of any stock option is not to exceed ten years (five years in the case of an incentive stock option granted to a ten percent holder). The Board of Directors has the discretion to determine the vesting schedule for any awards or grants issued as well as and the period required for full exercisability of stock options; however, in no event can the Board of Directors shorten such period to less than six months. Upon exercise of any option granted under the 2000 Plan, the exercise price may be paid in cash, and/or such other form of payment as may be permitted under the applicable award agreement, including, without limitation, previously owned shares of Common Stock.

~~Outstanding Equity Awards At Fiscal Year-End Table~~

Name and
Principal Position
Name

Number of Securities
Underlying
Unexercised
Options
Exercisable

Number of
Securities
Underlying
Unexercised
Options
Unexercisable

Equity
Incentive
Plan Awards:
Number of Underlying
Unexercised
Unearned
Options

Option
Exercise
Price

Option Expira-tion
Date

Number of
Shares or Units of
Stock That Have Not Vested)

Market
Value of Shares or Units of
Stock That Have not Vested

Equity
Incentive
Awards
Shares, Units
Or Other
Rights
That
Have Not
Vested

Equity
Incentive
Plan
Awards:
Market
Or
Payout
Value
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested

Total
($)

(j)

Edward L. Marney
Chief Executive
Officer,
President
-
-
-

Steven D. Rudnik
Former Chief Executive Officer,
President
2,903,542 - $ 0.10 1/6/10 - -

Mark Chroscielewski
Former Sr. Vice President
Business Development
- - - 8,400

Joerg H. Klaube
Sr. Vice President,
CFO
- - - 1,710

Steven W. Jagels
Former Sr. Vice President
Information Systems
250,000 - $ 0.1325 2/18/07 - - 1,940

Joseph J. Tomasek, Esq., Director and General Legal Counsel

Steven Gray
Director
500,000 $ 0.15 1/01/09

All executive officers
As a group (2 persons)
500,000 - - -

~~Compensation of Directors:~~

The Company has not paid nor does it owe any compensation to any of its Directors for their service as directors and members of the Board of Directors during the past two fiscal years of 2006 and 2005.

~~CORPORATE GOVERNANCE AND CODE OF ETHICS~~

The Company has always been committed to good corporate governance. In furtherance of this commitment, during 2002 the Board of Directors expanded the duties of the Company’s Audit Committee by increasing the Committee's duties specifically to include responsibility and oversight of corporate governance matters and adherence to the Company’s Code of Ethics. A copy of the Corporate Code of Ethics and Conduct had been included as an exhibit to the Company’s report on Form 10-KSB for the year ended December 31, 2002.

Our Board of Directors has determined that none of its current members, Edward L. Marney, Joerg H. Klaube, Joseph J. Tomasek and Steven Gray, are independent in accordance under applicable securities laws. It is the intention, however, of the Board of Directors, to identify and appoint independent directors in the current fiscal year.

Board Committees

AUDIT COMMITTEE

The Board of Directors of the Company ~~has appointed an~~serves as its Audit Committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002. The Audit Committee is currently comprised of one director, Steven. Gray, who is a financial expert with knowledge of financial statements, generally accepted accounting principles and accounting procedures and disclosure rules. Mr. Gray is not “independent” as defined in Section10A-3(b)(1)(iv)(A) of the Securities Exchange Act. Our Board of Directors intends to appoint ~~additional~~an Audit Committee, the majority of whom shall be independent ~~members to this Audit Committee.~~directors during the next fiscal year.

COMPENSATION AND NOMINATING COMMITTEES

PROPOSAL ONE

TO APPROVE AN AMENDMENT TO OUR

CERTIFICATE OF INCORPORATION, AS AMENDED,

TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK

Purposes of this Proposal

The proposed amendment would increase the number of shares of common stock that we are authorized to issue from 700,000,000 shares to 1,400,000,000 shares.

If this proposal is approved, we may use such additional shares of common stock for, among other things:

·	raising working capital;
·	providing equity incentives to employees, officers or directors;

·	establishing strategic relationships with other companies;
·	expanding our business through acquisitions and other investment opportunities;

·	paying existing and future obligations and commitments; and
·	for general corporate purposes.

3117

General Effect of the Changes to Our Common Stock

The proposed increase in the authorized number of shares of Common Stock could have a number of effects on the Company's stockholders depending upon the exact nature and circumstances of any actual issuances of authorized but unissued shares. The increase could have an anti-takeover effect, in that additional shares could be issued (within the limits imposed by applicable law) in one or more transactions that could make a change in control or takeover of the Company more difficult. For example, additional shares could be issued by the Company so as to dilute the stock ownership or voting rights of persons seeking to obtain control of the Company. Similarly, the issuance of additional shares to certain persons allied with the Company's management could have the effect of making it more difficult to remove the Company's current management by diluting the stock ownership or voting rights of persons seeking to cause such removal. The Board of Directors is not aware of any attempt, or contemplated attempt, to acquire control of the Company, and this proposal is not being presented with the intent that it be utilized as a type of anti- takeover device.

Except for the Company’s current private placement pursuant to an investment commitment received from Tell Capital AG for $1,000,000, at the “Unit” subscription price of $.025, with each Unit comprised of one restricted common share and one 5-year warrant, exercisable at $.05 per share, and as reported in our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2008, there are currently no plans, arrangements, commitments or understandings for the issuance of the additional shares of Common Stock which are proposed to be authorized:

The holders of our common stock are not entitled to preemptive rights with respect to the issuance of additional common stock or securities convertible into or exercisable for common stock. Stockholders should recognize that the issuance of additional shares of common stock might dilute the ownership and voting rights of stockholders and, depending upon the price at which the shares are issued, could be dilutive to existing stockholders and have a negative effect on the trading price of our common stock.

Required Vote and Board Recommendation

Our board of directors has declared the proposed Amendment to be advisable and in our best interests and in the best interests of our stockholders, and has approved and adopted the proposed Amendment in substantially the form attached hereto as Exhibit A, and is accordingly submitting the proposed Amendment to our stockholders for their consideration and vote. If the Amendment is approved, it will become effective upon the acceptance for filing of a Certificate of Amendment to our Certificate of Incorporation, as amended, by the Secretary of State of the State of Delaware. If our stockholders do not approve this proposal, our ability to fund our future operations through the sale of shares of our common stock may be adversely impacted.

The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote in this Consent Solicitation will be required to approve the Amendment to our Certificate of Incorporation, as amended. As a result, abstentions and broker non-votes will have the same effect as “Against” votes.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION, AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK.

PROPOSAL TWO

APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors has appointed Rosenberg Rich Baker Berman & Company, as its independent registered public accounting firm, to audit the accounts of the Company for the fiscal year ending December 31, 2009. The Board of Directors approved the reappointment of Rosenberg Rich Baker Berman & Company (which has been engaged as the Company’s independent registered public accounting firm since 2000). Rosenberg Rich Baker Berman & Company has advised the Company that neither the firm nor any of its members or associates has any direct financial interest in the Company or any of its affiliates other than as auditors. Although the selection and appointment of independent auditors is not required to be submitted to a vote of shareholders, the Directors deem it desirable to obtain the shareholders’ ratification and approval of this appointment.

The following table sets forth the aggregate fees billed by Rosenberg Rich Baker Berman & Company for the years ended December 31, 2007 and 2006 for audit and non-audit services and are categorized as Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees, which have all been pre-approved by the Board of Directors. The nature of the services provided in each such category is described following the table:

	2007		2006
Audit Fees	$	79,373	$	66,433
Audit-Related Fees		0		0
Tax Fees		5,416		5,656
All Other Fees		0		0
Total Fees	$	84,789 .00	$	72,089.00

Audit Fees – Consists of fees for professional services necessary to perform an audit or review in accordance with the Public Company Accounting Oversight Board, including services rendered for the audit of our annual financial statements (including services incurred with rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and quarterly reviews of the Company’s interim financial statements. Audit fees also include fees for services performed by Rosenberg Rich Baker Berman & Company that are closely related to the audit and in many cases could only be provided by the Company’s independent registered public accountants. Such services include the issuance of consents related to the Company’s registration statements and capital raising activities, assistance with and review of other documents filed with the Commission and accounting advice on completed transactions.

Audit-Related Fees –– Audit-related fees, which we did not incur in fiscal 2007 and 2006, relate to professional services reasonably related to the performance of audit or review of financial statements by an independent audit firm.

Tax Fees – During fiscal 2007 and 2006, Rosenberg Rich Baker Berman & Company performed certain tax compliance services.

All Other Fees – There were no professional services rendered by Rosenberg Rich Baker Berman & Company that would be classified as other fees during the years ended December 31, 2007 and 2006.

Pre-Approval Policies and Procedures - The Board of Directors, serving as the Company’s Audit Committee, has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by the independent auditor. The policy provides for pre-approval by the Board of directors of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Board must approve the permitted service before the independent auditor is engaged to perform it. The Board has delegated to Rudolf Hauke, our President and CEO, authority to approve permitted services.

In making its recommendations to ratify the appointment of Rosenberg Rich Baker Berman & Company as the Company’s independent registered public accountants for the fiscal year ending December 31, 2009, the Board has considered whether the services provided by Rosenberg Rich Baker Berman & Company are compatible with maintaining the independence of Rosenberg Rich Baker Berman & Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2 RELATING TO THE RATIFICATION OF THE APPOINTMENT OF THE AUDITORS.

THE CONSENT PROCEDURE

Only stockholders of record as of ~~May 7, 2007,~~December 29, 2008, are entitled to consent, to withhold their consent, or to revoke their consent, to the ~~Amendment.~~two Proposals contained in this Consent Solicitation. Stockholders are entitled to one vote for each outstanding share of Common Stock held at the record date. As of the record date there were ~~______________~~[_____________] issued and outstanding shares of Common Stock.

The ~~Kiwibox acquisition and the Amendments~~two Proposals contained in this Consent Solicitation will be approved if by ~~June __, 2007,~~[ , 2009], the Company holds unrevoked written consents of stockholders approving the ~~Kiwibox acquisition~~Amendment and the ~~Amendments~~Appointment from a majority of the outstanding shares of Common Stock at the Record Date. Consequently, the withholding of consent, abstentions and the failure to deliver a Consent Card would all have the effect of a vote against the approval of the ~~Kiwibox acquisition~~Amendment and approval of the ~~Amendments.~~Appointment. If a stockholder holds his shares in "street name" and fails to instruct his broker or nominee as to how to vote his shares, the broker or nominee may not, pursuant to applicable stock exchange rules, vote such shares and, accordingly, such shares will have the effect of a vote against ~~theKiwibox Acquisition~~the approval of the Amendment and approval of the ~~Amendments.~~Appointment. Stockholders are requested to indicate ~~approval of~~a vote for the ~~Kiwibox acquisition~~Amendment and the ~~Amendments~~Appointment by signing and dating the Consent Card, checking each box on the Consent Card which corresponds to the approval of ~~each of~~ the ~~Kiwibox acquisition~~Amendment and the ~~Amendments,~~Appointment, and delivering the Consent Card to the Company's transfer agent at the address set forth below. Withholding of your vote for consent to the ~~Kiwibox acquisition and~~Amendment or consent to the ~~Amendments,~~Appointment, or abstention with respect to the vote for approval of the ~~Kiwibox acquisition and the Amendments,~~Amendment or Appointment, may be indicated by signing and dating the Consent Card, checking the box which corresponds to withholding of consent for each of the proposals or abstention with respect to the approval of each of the ~~three~~two proposals, respectively, and delivering the Consent Card to the Company's transfer agent at the address set forth below.

A CONSENT CARD WHICH HAS BEEN SIGNED, DATED AND DELIVERED TO THE COMPANY'S TRANSFER AGENT WITHOUT INDICATING APPROVAL, WITHHOLDING OF CONSENT, OR ABSTENTION WILL CONSTITUTE A ~~CONSENT TO~~VOTE FOR THE ~~KIWIBOX ACQUISITION~~AMENDMENT AND TO THE ~~AMENDMENTS.~~APPOINTMENT.

Consent Cards may be delivered to the following address:

Securities Transfer Corporation

2591 Dallas Parkway, Suite 102

Frisco, Texas 75034

Attention: Proxy Department

Consent Cards should be delivered to the Company's transfer agent as soon as possible. An addressed return envelope is enclosed for this purpose, which requires no postage if mailed in the United States. Consent Cards and revocations of consents will be deemed to have been received by the Company upon actual delivery at the above address.

~~ABSENCE OF APPRAISAL RIGHTS~~

Stockholders who abstain from consenting with respect to the three proposals, who withhold consent to the proposals, or who do not deliver a Consent Card do not have the right to an appraisal of their shares of Common Stock or any similar dissenters' rights under applicable law.

EXPENSE OF CONSENT SOLICITATION

The Company will bear the entire cost of the solicitation, including the preparation, assembly, printing and mailing of this Consent Statement and any additional material furnished to stockholders. Brokerage firms and other custodians, nominees, and fiduciaries will be requested to forward the soliciting material to their principals and to obtain authorization for the execution of consents. The Company may, upon request, reimburse brokerage firms, and other custodians, nominees, and fiduciaries for their reasonable expenses in forwarding solicitation materials to their principals.

ADDITIONAL INFORMATION

The Company files reports and other information with the Securities and Exchange Commission. Copies of these documents may be obtained at the SEC's public reference room in Washington, D.C. The Company's SEC filings are also available from commercial document retrieval services or on the SEC's web site at http://www.sec.gov. Stockholders may also request a copy of the Company's financial reports filed with the SEC by contacting the Company's Secretary in writing at 1250 Route 28, Suite 309, Branchburg, New Jersey 08876 or by calling (908) 927-0004.

INCORPORATION OF DOCUMENTS BY REFERENCE

In our filings with the SEC, information is sometimes incorporated by reference. This means that we are referring you to information that we have filed separately with the SEC. The information incorporated by reference should be considered part of this Proxy Statement, except for any information superseded by information contained directly in this Proxy Statement or in any other subsequently filed document. Pursuant to the Exchange Act, we currently file annual and quarterly reports with the SEC. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed pursuant to Section 13 of the Exchange Act, includes financial statements and schedules. Our most recent quarterly report on Form 10-Q for the nine month period ended September 30, 2008, filed pursuant to Section 13 of the Exchange Act, also includes financial statements and schedules. The Company’s Form 10-K was filed with the SEC on April 15, 2008, its Form 10-Q for the quarter ended September 30, 2008 was filed with the SEC on November 18, 2008, its Form 10-Q for the quarter ended June 30, 2008 was filed with the SEC on August 18, 2008, and its Form 10-Q for the quarter ended March 31, 2008 was filed with the SEC on May 22, 2008. We are delivering to you with this Proxy Statement copies, without exhibits, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007. Exhibits to these documents are not included, but they can be viewed over the Internet at the SEC’s website at http://www.sec.gov or, if you request them in writing, we will send them to you. Requests should be submitted to Company's Secretary in writing at 1250 Route 28, Suite 309, Branchburg, New Jersey 08876 or by calling (908) 927-0004.

This Proxy Statement incorporates by reference the following documents that we have previously filed with the SEC. They contain important information about Katy and its financial condition.

•

Our Annual Report on Form 10-K for the year ended December 31, 2007.

•

Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

	•	Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.

	•	Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.


	•	Our Current Reports on Form 8-K filed January 4, 2008, February 5, 2008, February 21, 2008, March 4, 2008, March 7, 2008, May 2, 2008, June30, 2008, July 18, 2008, August 5, 2008, August 27, 2008, September 17, 2008, September 24, 2008, October 8, 2008, December 2, 2008, December 10, 2008,December 12, 2008 and December 19, 2008.

We also incorporate by reference any additional documents that we may file with the Commission under Section 13(a), 13(c), 14 or 15 (d) of the Exchange Act between the date of this Proxy Statement and the date of the Special Meeting.

We will provide, without charge, upon the written or oral request of any person to whom this Proxy Statement is delivered, by first class mail or other equally prompt means within one business day of receipt of such request, a copy of any and all information that has been incorporated by reference, without exhibits unless such exhibits are also incorporated by reference in this Proxy Statement. You may obtain a copy of these documents and any amendments thereto by written request addressed to Magnitude Information Systems, Inc., 1250 Route 28, Suite 309, Branchburg, New Jersey 08876. These documents are also included in our SEC filings, which you can access electronically at the SEC website located at http://www.sec.gov.

2009 Annual Meeting Proposals

Stockholders who wish to have proposals considered for inclusion in the proxy statement and form of proxy for our 2009 annual meeting of stockholders pursuant to Rule 14a-8 under the Exchange Act must cause their proposals to be received in writing by our Corporate Secretary at the address set forth on the first page of this proxy statement within a reasonable time before we begin to print and send our proxy materials for the 2009 annual meeting. In light of the time required to prepare our proxy materials for print and distribution, stockholder proposals should be sent to us no later than March 31, 2009. Any proposal should be addressed to our Corporate Secretary and may be included in next year’s proxy materials only if such proposal complies with our bylaws and the rules and regulations promulgated by the Securities and Exchange Commission. Nothing in this section shall be deemed to require us to include in our proxy statement or our proxy relating to any annual meeting any stockholder proposal that does not meet all of the requirements for inclusion established by the Securities and Exchange Commission.

By Order of the Board of Directors

Joerg H. Klaube, Secretary

~~May~~January __, ~~, 2007~~2009]

Branchburg, New Jersey

3322

IMPORTANT

PLEASE COMPLETE, SIGN AND DATE YOUR WRITTEN CONSENT AND PROMPTLY

RETURN IT IN THE ENCLOSED ENVELOPE

WRITTEN CONSENT OF THE STOCKHOLDERS

MAGNITUDE INFORMATION SYSTEMS, INC.

This consent is solicited by the Board of Directors. When properly executed, this consent will be voted as designated by the undersigned ~~on the reverse side.~~below. If this consent is signed, dated, and delivered to Magnitude Information Systems, Inc. with no designation by the undersigned, this consent will constitute the stockholder's consent to and approval of the ~~amendments.~~Amendment and Appointment.

~~[X]~~x PLEASE MARK AS IN THIS SAMPLE.

MARK ONLY ONE OF THE FOLLOWING THREE BOXES:

~~Approval of the Kiwibox Acquisition by the Company~~AMENDMENT TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY FROM 700,000,000 SHARES TO 1,400,000,000 SHARES.

MARK ONLY ONE OF THE FOLLOWING THREE BOXES:

o FOR

o WITHHOLD

o ABSTAIN

~~Amendment No. 1 to increase the authorized Common Stock of the Company from 300,000,000 shares to 700,000,000 shares.~~RATIFIY THE APPOINTMENT OF ROSENBERG RICH BAKER BERMAN & COMPANY AS THE COMPANY AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2009.

MARK ONLY ONE OF THE FOLLOWING THREE BOXES:

o FOR

o WITHHOLD

o ~~ABSTAIN~~

~~Amendment No. 2 to change the corporate name of the Company to “KiwiAge Enterprises, Inc.”.~~

~~MARK ONLY ONE OF THE FOLLOWING THREE BOXES:~~

o ~~FOR~~

o ~~WITHHOLD~~

o ABSTAIN

~~(Please sign and date below)~~

~~Dated:____________________,~~

~~___________________________~~

~~Signature of Stockholder(s)~~

~~___________________________~~

~~Signature of Stockholder(s)~~

Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.

~~EXHIBIT A~~

~~AGREEMENT AND PLAN OF REORGANIZATION~~

~~This AGREEMENT AND PLAN OF REORGANIZATION dated as of 19 February, 2007 (the “Agreement”), between Magnitude Information Systems, Inc~~.~~, a Delaware corporation (“Magnitude”), Kiwibox Media, Inc~~. ~~, a Delaware corporation (“Kiwibox”) and Magnitude Operations, Inc.~~~~, a~~ wholly-owned Subsidiary of Magnitude (in organization) (“Subsidiary”) and the shareholders of Kiwibox, Lin Dai, Ivan Tumanov, and Michael Howard (the “Kiwibox Shareholders”) Kiwibox. Magnitude and Subsidiary may also be referred to herein as the “Constituent Corporations” or the “Parties.”

~~WHEREAS, the Parties acknowledge and affirm the following:~~

~~Magnitude is a corporation duly organized and existing under the laws of the State of Delaware.~~

~~Kiwibox is a corporation duly organized and existing under the laws of the State of Delaware.~~

~~Subsidiary is a corporation which is 100% owned by Magnitude and is duly organized and existing under the laws of the State of Delaware.~~

	D.	~~The Delaware General Corporation Law (the “DGCL”) permits the merger of two domestic business corporations of the State of Delaware with and into each other.~~

	E.	Magnitude and Kiwibox and their respective Boards of Directors declare it advisable and to the advantage, welfare, and best interests of said corporations and their respective stockholders to merge Subsidiary with and into Kiwibox pursuant to the provisions of the DGCL upon the terms and conditions hereinafter set forth.

~~The respective Boards of Directors of Magnitude and Kiwibox have approved this Agreement; and the shareholders of Kiwibox have approved the merger.~~

~~For federal income tax purposes, it is intended that the merger qualify as a tax free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “IRC”).~~

~~ARTICLE 1~~

~~THE MERGER~~

~~1.1~~~~Merger.~~

In accordance with the provisions of this Agreement and applicable provisions of the DGCL, Subsidiary shall be merged with and into Kiwibox (the “Merger”). Following the Merger, the separate existence of Subsidiary shall cease and Kiwibox shall be, and is herein sometimes referred to as, the “Surviving Corporation.” For the purposes of this Agreement, this form of transaction may also be referred to herein as a “reverse triangular merger.”

~~1.2~~~~Filing and Effectiveness.~~

~~The Merger shall become effective when the following actions shall have been completed:~~

~~(a)~~

~~This Agreement and the Merger shall have been adopted and approved by the shareholders of Kiwibox in accordance with the requirements of the DGCL;~~

~~(b)~~

~~Magnitude shall have formed a wholly-owned subsidiary for the purposes of this Merger in accordance with the requirements of the DGCL (the “Subsidiary”);~~

~~(c)~~

~~All of the conditions precedent to the consummation of the Merger specified in this Agreement shall have been satisfied or duly waived, in writing, by the Party entitled to satisfaction thereof;~~

	~~(d)~~	As soon as practicable following the Closing, the Parties shall execute a Certificate of Merger meeting the requirements of the DGCL and file same with the Secretary of State of the State of Delaware in substantially the form attached hereto as Exhibit A; the time the Certificate of Merger is filed with the Secretary of State of the State of Delaware is the “Effective Time”; and

	~~(e)~~	The closing of the transactions described in this Agreement is herein called the “Closing.” The Parties agree that the Closing of the transactions identified in this Agreement shall take place at the offices of Joseph J. Tomasek, Esq., or at such other place as the Parties may mutually determine, on or before April 30, 2007.

~~(f)~~

The audit of the financial statements of Kiwibox for the calendar years ended December 31, 2006 and 2005 shall have been completed with all necessary data and materials delivered by Kiwibox to Magnitude.

~~1.3~~~~Effect of the Merger.~~

Upon the Effective Time, hereinafter defined, and upon the terms and subject to the conditions of this Agreement and in accordance with the DGCL, the separate existence of Subsidiary shall cease and, Kiwibox, as the Surviving Corporation,: (i) shall continue to possess all of the assets, rights, powers and property of Kiwibox and Subsidiary as constituted immediately prior to the Effective Time, and all debts, liabilities and duties of Kiwibox and Subsidiary shall become the debts, liabilities and duties of the Surviving Corporation, all as more fully provided under the applicable provisions of the DGCL.

~~ARTICLE 2~~

~~CHARTER DOCUMENTS, DIRECTORS AND OFFICERS~~

~~2.1~~~~Certificate of Incorporation: Kiwibox.~~

Attached hereto as Exhibit B and made a part hereof is a copy of the Certificate of Incorporation of Kiwibox as in effect in the State of Delaware immediately prior to the Closing; and at the Effective Time said Certificate of Incorporation shall continue in full force and effect as the Certificate of Incorporation of the Surviving Corporation until duly amended in accordance with the provisions thereof and applicable law.

~~2.2~~ ~~Subsidiary.~~

~~Attached hereto as Exhibit C and made a part hereof is a copy of the Articles of Incorporation of Subsidiary as in effect immediately prior to the Closing.~~

~~2.3~~~~Bylaws.~~

Attached hereto as Exhibit D and made a part hereof is a copy of the Bylaws of Kiwibox as in effect immediately prior to the Closing; and at the Effective Time said Bylaws shall continue in full force and effect as the Bylaws of the Surviving Corporation until duly amended in accordance with the provisions thereof and applicable law.

~~2.4~~~~Directors and Officers.~~

The directors and officers of Kiwibox immediately prior to the Closing shall be the directors and officers of the Surviving Corporation until their successors shall have been duly elected and qualified or until as otherwise provided by law, the Certificate of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.

~~2.5~~~~Employment Agreements~~

~~All Parties shall each execute the employment agreements between Magnitude and each of the three Kiwibox Shareholders, the form of which is attached hereto as Exhibit E .~~

~~ARTICLE 3~~

~~TERMS OF MERGER, PAYMENT, EXCHANGE OF STOCK AND INVESTMENT COMMITMENTS~~

~~3.1~~~~Magnitude Payment.~~

In addition to the Magnitude shares being issued in the exchange and as partial consideration therefor, Magnitude shall pay an aggregate cash payment of $300,000 to the Kiwibox Shareholders, in proportion to their respective stock ownership positions in Kiwibox at the Closing.

~~3.2~~~~Conversion of Kiwibox Shares.~~

	~~(a)~~ ~~(b)~~	Conversion of Subsidiary Common Stock. At the Effective Time, each outstanding share of the common stock no par value per share, of Subsidiary shall, by virtue of the Merger and without any action on the part of Magnitude, Subsidiary or Kiwibox, be converted into one fully paid and non-assessable share of common stock of the Surviving Corporation. Each share of the common stock, $.01 par value per share, of Kiwibox (“Kiwibox Common Stock”) issued and outstanding prior to the Effective Time shall by virtue of the Merger and without any action on the part of Magnitude, Subsidiary, Kiwibox or any holder thereof, be converted into and be exchangeable for the right to receive newly issued , fully paid and non-assessable voting common shares, par value $.0001 per share, of Magnitude ("Magnitude Shares"), based upon an exchange ratio (“Exchange Ratio”) determined in accordance with the provisions below.

	~~(c)~~	Amount of Magnitude Shares o be Exchanged: Upon the Closing, Magnitude shall issue and exchange for the Kiwibox Common Stock with the Kiwibox Shareholders an amount of Magnitude common shares valued at $1,500,000. The number of Magnitude common shares to be issued shall be determined by dividing $1,500,000 by their “Market Price”. Market Price shall mean the average sales price of a Magnitude common share for the ten (10) successive trading days immediately preceding the Closing, as recorded by the Electronic Bulletin Board, over-the-counter market. For example, if the Market Price is $.05 per share, then Magnitude shall issue 30,000,000 common shares, in exchange for the Kiwibox Common Stock with the Kiwibox Shareholders; if the Market Price is $.025 per share, then Magnitude shall issue 60,000,000 shares to the Kiwibox Shareholders, in exchange for their Kiwibox Common Stock Notwithstanding anything to the contrary implied or set forth herein and for all purposes under this Section 3.2, the Market Price shall never exceed $.05 per share, so that the amount of Magnitude common shares payable hereunder shall never be less than 30,000,000 common shares.

	~~(d)~~	~~Exchange Ratio: shall be determined by dividing the amount of the Magnitude Shares determined in accordance with Article 3.2 (c) above by the shares of outstanding Kiwibox Common Stock.~~

	~~(e)~~	At the Effective Time, each share of the Kiwibox Common Stock held by the Kiwibox immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of Merger Sub or the Company, be canceled, retired and cease to exist and no payment shall be made with respect thereto.

	~~(f)~~	No Further Ownership Rights in Kiwibox Common Stock. All Magnitude Shares issued and exchanged in accordance with the terms of this Article 3 shall be deemed to have been issued in full satisfaction of all rights pertaining to the Kiwibox Common Stock.

	~~(g)~~	~~Appraisal Rights: This executed Agreement shall constitute each of the Kiwibox Stockholders' acknowledgment to decline any appraisal rights under section 262 of DGCL.~~ By executing this Agreement, each Kiwibox Stockholder acknowledges receipt of written notice of appraisal rights and a copy of Section 262 of DGCL at least 20 days prior to the date of executing this Agreement.

~~3.3~~ ~~Magnitude Preferred~~

At the Closing, Magnitude shall issue an aggregate 43,610 shares of its Series G Preferred Stock to the Kiwibox Shareholders in proportion to their respective stock ownership positions in Kiwibox at the Closing which shares shall be subject to the automatic conversion ~~provisions more fully set forth in Section 5.5 below. A copy of the Certificate of Designations of the Series G Preferred Stock is attached as Exhibit F.~~

~~At the Closing,~~

~~3.4~~~~Status of Magnitude Preferred and Common Shares.~~

	~~(a)~~	~~The Magnitude Series G Preferred Stock~~ (Please sign and ~~Common Shares to be issued to the Kiwibox Shareholders in the reorganization~~will not be registered under the Securities Act of 1933, as amended (the "1933 Act") and may not be sold, transferred or otherwise disposed of except in compliance with the 1933 Act or pursuant to an exemption from the registration provisions thereof and the Securities Exchange Act of 1934, as amended (the "1934 Act"). date below)

	~~(b)~~	~~Each Certificate representing the Magnitude Preferred Shares and the Common Shares shall bear the following or substantially similar legend:~~ "The Shares represented by this Certificate have not been registered under the Securities Act of 1933, as amended. These Shares have been acquired for investment purposes and not with a view to distribution or resale, and may not be sold, assigned, pledged, hypothecated or otherwise transferred without an effective Registration Statement for such Shares under the Securities Act of 1933, as amended, or an opinion of counsel to the effect that registration is not required under such Act."

~~3.5~~~~Magnitude Investment and Commitment.~~

Magnitude shall invest no less than $3.5 million in accordance with the Kiwibox Business Plan and Budget attached hereto as Exhibit G. Such funds shall be maintained in a separate bank account and Magnitude shall be keep them free from the claims of creditors, secured or unsecured, and which claims arise out of transactions, past or present, that are not associated with the Kiwibox Business Plan.

~~3.6~~ ~~Kiwibox Legal Fees~~

Magnitude agrees to pay the legal fees of Barton, Barton & Plotnik, LLP, counsel for Kiwibox, at or before the Closing, provided that such counsel provide to Magnitude current weekly statements, on Friday of each week prior to the Closing, and provided further that the the maximum amount Magnitude shall pay under this Article 3.6 is ~~$42,500~~ which shall be paid by bank or certified check or wire transferred in accordance with such instructions by such counsel. Notwithstanding anything set forth herein to the contrary, Magnitude shall not be responsible for the aforesaid payment of legal fees if this Agreement is terminated by Magnitude and Kiwibox pursuant to Article 10 (a) or by Magnitude pursuant to Article 10 (b) or by Kiwibox and/or the Kiwibox Shareholders for any reason other than pursuant to Article 10(c).

~~ARTICLE 4~~

~~REPRESENTATIONS AND WARRANTIES OF KIWIBOX AND THE KIWIBOX SHAREHOLDERS~~

Kiwibox and the Kiwibox Shareholders represent and warrant to Magnitude that the statements contained in this Article 4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing as though made then and as though the Closing were substituted for the date of this Agreement throughout this Article 4, with respect to itself.

~~4.1~~~~Organization of Kiwibox.~~

~~Kiwibox is duly organized, validly existing, and in good standing under the laws of Delaware.~~

~~4.2~~~~Authorization of Transaction.~~

~~(a)~~

Kiwibox has full corporate power and authority to execute and deliver this Agreement and to perform his obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Kiwibox, enforceable in accordance with its terms and conditions. Except as expressly contemplated hereby, Kiwibox need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

~~(b)~~

The Kiwibox Shareholders, individually represent and warrant to Magnitude that: this Agreement constitutes the legal, valid and binding obligation of each of the Kiwibox Shareholders and is enforceable against each of them in accordance with the terms hereof; each of them own their respective Kiwibox Common Shares free and clear of any and all liens, claims, pledges, restrictions, obligations, security interests and encumbrances of any kind; Attached hereto as Exhibit H is an accurate and complete list of the Kiwibox Common Shares owned by each Kiwibox Shareholder; none of the Kiwibox Shareholders have issued any calls, puts, options and/or any other rights in favor of any third party whatsoever with respect to their Kiwibox Common Shares, and; none of their respective Kiwibox Common Shares are subject to any voting agreements, voting trusts, stockholder agreements and/or any other agreements, obligations or understandings.

~~4.3~~~~Non-contravention.~~

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Kiwibox is subject or any provision of its charter or bylaws; or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Kiwibox is a party or by which it is bound or to which any of its assets is subject, except for such notices or consents which have been given or obtained by Kiwibox on or prior to the Closing.

~~4.4~~~~Capitalization.~~

The authorized capital stock of Kiwibox consists of 100,000,000 shares of Common Stock, $.01 par value per share. As of the date of this Agreement, there are 43,610 shares of Common Stock issued and outstanding. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Kiwibox to issue, sell, or otherwise cause to become outstanding any of its capital stock. There is no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Kiwibox’s Common Stock. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the capital stock of Kiwibox.

~~4.5~~~~Investment.~~

The Kiwibox Shareholders are not acquiring the Preferred Shares and the Common Shares of Magnitude with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act of 1933. Kiwibox and the Kiwibox Shareholders have had access to all information concerning Magnitude and its operations which it required to make its investment decision.

~~4.6~~~~Brokers' Fees.~~

Other than their obligation (i) to transfer to Southridge Investment Group, LLC (“Southridge”), two and one-half (2.5%) percent of the Magnitude Common Stock transferable to the Kiwibox Shareholders pursuant to Article 3.2 and (ii) the obligation of each of the Kiwibox Shareholders to make arrangements with Southridge to pay $7,000 each, or as may be otherwise expressly set forth in this Agreement, Kiwibox has incurred no obligation to pay any commission, finder’s fee or other charge in connection with the transactions contemplated in this Agreement for which Magnitude could become liable or obligated. Kiwibox and the Kiwibox Shareholders, jointly and severally, will indemnify and hold Magnitude, and the Subsidiary, their respective officers, directors, employees, accountants and lawyers harmless from and against any and all liabilities and claims of any nature whatsoever arising out of or in connection with any commission, fee or charge so far as any arises by reason of services alleged to have been rendered to, or at the instance of, Kiwibox and/or the Kiwibox Shareholders. This indemnification shall survive the Closing and shall be included in the terms of indemnification set forth in Article 4.7 of this Agreement.

~~4.7~~~~Events Subsequent to Year End.~~

Since the most recent calendar-fiscal year end of Kiwibox there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of Kiwibox taken as a whole. Kiwibox and the Kiwibox Shareholders, jointly and severally, shall indemnify, defend and hold Magnitude and Subsidiary, their successors and assigns, harmless from and against any order, action, cost, claim, damage, disbursement, expense, liability, loss, deficiency, obligation, penalty, fine, assessment or settlement of any kid or nature, whether foreseeable or unforeseeable, including, but not limited to, any and all attorney’s fees, costs, and other expenses, directly or indirectly, as a result of, or upon or arising from (i) any inaccuracy or breach or non-performance of any of the representations, warranties, covenants or agreements made by Kiwibox or the Kiwibox Shareholders in or pursuant to this Agreement, (ii) any order, action, cost, claim, damage, liability or lien arising out of Kiwibox’s or Kiwibox Shareholder’s conduct before or after the Closing, (iii) any third party claims against Kiwibox or the Kiwibox Shareholders, before or after the Closing that arise from Kiwibox’s or Kiwibox Shareholder’s conduct, or (iv) any loss or liability the proximate cause of which is determined to be the result of Kiwibox’s or Kiwibox Shareholder’s negligence or failure to comply with their respective obligations under this Agreement. Magnitude and/or Subsidiary, as the case may be, their successors and assigns, shall notify Kiwibox and/or the Kiwibox Shareholders of any claim for indemnification with reasonable promptness, and Kiwibox’s or Kiwibox’s legal representatives or Kiwibox Shareholder’s or their legal representatives shall have, at their election, the right to compromise or defend any such matter involving such asserted liability of Kiwibox and/or the Kiwibox Shareholders through counsel of their own choosing, at the expense of Kiwibox and the Kiwibox Shareholders. Kiwibox and the Kiwibox Shareholders shall notify Magnitude and the Subsidiary, or their successors or assigns, in writing promptly of their intention to compromise or defend any claim and Magnitude and/or the Subsidiary, or their successors or assigns, shall cooperate with Kiwibox and the Kiwibox Shareholders, their respective counsel in compromising or defending any such claim, in accordance with Article 8 hereof. The terms of this Article 4.7 shall survive Closing.

~~4.8~~~~Undisclosed Liabilities.~~

Kiwibox has no material liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or un-accrued, whether liquidated or un-liquidated, and whether due or to become due, including any liability for taxes), except for (i) liabilities set forth on the Kiwibox Financial Statements; and (ii) liabilities which have arisen after the date of the Kiwibox Financial Statements in the ordinary course of business. As used herein, “Kiwibox Financial Statements” consist of the financial statements of Kiwibox previously delivered to Magnitude in the form attached hereto as Exhibit I.

~~4.9~~~~Legal Compliance.~~

Kiwibox has complied with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against Kiwibox alleging any failure so to comply, except where the failure to comply would not have a material adverse effect on the business, financial condition, operations, results of operations, or future prospects of Kiwibox.

~~4.10~~~~Tax Matters.~~

~~(a)~~

Kiwibox has filed all income tax returns that it has been required to file. All such income tax returns were correct and complete in all material respects. All income taxes owed by Kiwibox (whether or not shown on any income tax return) have been paid. Kiwibox is not currently the beneficiary of any extension of time within which to file any income tax return.

~~(b)~~

There is no material dispute or claim concerning any income tax liability of Kiwibox either (i) claimed or raised by any authority in writing; or (ii) as to which Kiwibox has knowledge based upon personal contact with any agent of such authority.

~~4.11~~~~Contracts.~~

The Kiwibox Financial Statements disclose all material contracts of Kiwibox. Each contract or legal obligation of Kiwibox which is to be assumed by Kiwibox in connection with the Merger is listed on Exhibit J hereto. To the extent requested, true and correct copies of such contracts have been delivered to Kiwibox for due diligence purposes.

~~4.12~~~~Environmental, Health and Safety Matters.~~

Kiwibox and its predecessors and affiliates have complied and are in compliance, in each case in all material respects, with all Environmental, Health, and Safety Requirements. As used herein “Environmental, Health & Safety Requirements” means any Environmental, Health & Safety law or regulation including air and water quality laws and regulations and other similar requirements.

~~4.13~~~~Disclosure.~~

The representations and warranties contained in this Article 4 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Article 4 not misleading.

~~4.14~~~~Financial Statements.~~

The Kiwibox Financial Statements are true and correct in all material respects, have been prepared on a consistent basis, and fairly represent the business, financial condition, assets and liabilities of Kiwibox.

~~4.15~~~~Litigation.~~

There is no claim, suit, action, proceeding or investigation pending or, to the knowledge of Kiwibox, pending against Kiwibox or any of its subsidiaries or assets which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on Kiwibox.

~~4.16~~~~Materials Required for Audit~~.

To the best of its knowledge, Kiwibox has maintained its records, data and materials related to the financial accounting of the business, and have all such data and materials immediately available, such that an audit may be completed per regulatory requirements.

~~ARTICLE 5~~

~~REPRESENTATIONS AND WARRANTIES OF MAGNITUDE~~

Magnitude represents and warrants to Kiwibox and to the Kiwibox Shareholders that the statements contained in this Article 5 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing (as though made then and as though the Closing were substituted for the date of this Agreement throughout this Article 5).

~~5.1~~~~Organization of Magnitude~~

~~Magnitude is a corporation duly organized, validly existing, and in good standing under the laws of Delaware Magnitude has two subsidiaries, Magnitude, Inc., and the Subsidiary.~~

~~5.2~~~~Authorization of Transaction.~~

Magnitude has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and no approval of Magnitude’s shareholders is required under the DGCL to consummate the Merger and other transactions contemplated in this Agreement. This Agreement constitutes the valid and legally binding obligation of Magnitude, enforceable in accordance with its terms and conditions. Except as expressly contemplated hereby, Magnitude need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

~~5.3~~~~Non-contravention.~~

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Magnitude is subject or any provision of its charter or bylaws; or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Magnitude is a party or by which it is bound or to which any of its assets is subject, except for such notices or consents which have been given or obtained by Magnitude on or prior to the Closing.

~~5.4~~~~Capitalization.~~

The authorized capital stock of Magnitude consists of 300,000,000 shares of Common Stock, $.001 par value per share, and 10,000,000 shares of Preferred Stock. As of the date of this Agreement, there were 227,379,014 shares of Common Stock and 109,857 shares of Preferred Stock, convertible into 2,423,865 common shares, are issued and outstanding. There are 12,357,408 outstanding options, and 52,273,333 outstanding warrants, and no other outstanding purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Magnitude to issue, sell, or otherwise cause to become outstanding any of its capital stock except as may be set forth in one or more of the material agreements identified in Exhibit L hereto. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Magnitude’s Common Stock. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the capital stock of Magnitude.

~~5.5~~ ~~Mandatory Conversion of Magnitude Preferred Stock~~

Upon the Closing, Magnitude shall issue 43,610 Shares of its Series G Preferred Stock (the “Preferred Stock”) to the Kiwibox Shareholders on the basis of one Common Share of the Surviving Corporation for each Kiwibox Common Share owned of record at the Effective Time. All 43,610 Shares of the Preferred Stock shall be non-transferable and shall be subject to automatic conversion upon the second anniversary of this Agreement in accordance to the terms set forth below. The Kiwibox Shareholders shall not dispose of or encumber the Preferred Shares. For all purposes under this Agreement, the 43,610 Preferred Shares shall have an aggregate conversion value of $500,000 (the “Conversion Value”), convertible into shares of the common stock of Magnitude, based upon “Market Price”. The number of Magnitude common shares to be issued in the automatic conversion shall be determined by dividing the Conversion Value of $500,000 by the Market Price of the common shares of Magnitude. Market Price shall mean the average sales price of a Magnitude common share during the twenty (20) successive trading days immediately preceding the second anniversary of this Agreement as recorded by the Electronic Bulletin Board, over-the-counter stock market maintained by the NASD or such other stock market where the common shares of Magnitude are then traded. For example, if the Market Price is $.025 per share, then the Conversion Value would be 20,000,000 Magnitude common shares which Magnitude would issue to the Kiwibox Shareholders in proportion to their ownership of the 43,610 Preferred Shares. For all purposes under this Section 6.5, the amount of shares representing the Conversion Value shall not be less than 10,000,000 common shares notwithstanding the fact that the Market Price is above $.05 per share. The Magnitude common shares issuable based upon the Conversion Value shall be issued by Magnitude to the Kiwibox Shareholders within thirty days following the second anniversary of this Agreement, in proportion to their ownership of the 43,610 Preferred Shares.

The certificate or certificates representing the 43,610 shares of Preferred Stock issued to the Kiwibox Shareholders pursuant to this Section 5.5 shall be held in escrow by counsel for Magnitude pending their automatic conversion as set forth above.

5.6~~Brokers' Fees.~~

Other than its obligation (i) to issue to Southridge Investment Group, LLC (“Southridge”), newly issued common shares in an amount equal to two and one-half (2.5%) percent of the Magnitude Common Stock transferable to the Kiwibox Shareholders pursuant to Article 3.2; (ii) to pay Southridge an investment banking fee of $15,000 on behalf of Kiwibox and the Kiwibox Shareholders, and; (iii) to execute an investment banking agreement between Magnitude and Southridge at the Closing, or as may be otherwise expressely set forth in this Agreement, Magnitude has incurred no obligation to pay any commission, finder’s fee or other charge in connection with the transactions contemplated in this Agreement for which Magnitude could become liable or obligated. Magnitude will indemnify and hold Kiwibox, and the Kiwibox Shareholders, their respective officers, directors, employees, accountants and lawyers harmless from and against any and all liabilities and claims of any nature whatsoever arising out of or in connection with any commission, fee or charge so far as any arises by reason of services alleged to have been rendered to, or at the instance of, Magnitude or Subsidiary, including any liability or claim arising from the Parties’ dealings with Southridge, as described herein. This indemnification shall survive the Closing and shall be included in the terms of indemnification set forth in Article 5.7 of this Agreement.

~~5.7~~~~Events Subsequent to Year End.~~

Since the most recent calendar-fiscal year end of Magnitude, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of Magnitude taken as a whole. Magnitude shall indemnify, defend and hold Kiwibox, Kiwibox Shareholders, their successors and assigns, harmless from and against any order, action, cost, claim, damage, disbursement, expense, liability, loss, deficiency, obligation, penalty, fine, assessment or settlement of any kid or nature, whether foreseeable or unforeseeable, including, but not limited to, any and all attorney’s fees, costs, and other expenses, directly or indirectly, as a result of, or upon or arising from (i) any inaccuracy or breach or non-performance of any of the representations, warranties, covenants or agreements made by Magnitude or Subsidiary in or pursuant to this Agreement, (ii) any order, action, cost, claim, damage, liability or lien arising out of Magnitude’s conduct before or after the Closing, (iii) any third party claims against Magnitude, Subsidiary before or after the Closing that arise from Magnitude’s conduct, or (iv) any loss or liability the proximate cause of which is determined to be the result of Magnitude’s negligence or failure to comply with its obligations under this Agreement. Kiwibox and Kiwibox’s Shareholders, their successors and assigns, shall notify Magnitude of any claim for indemnification with reasonable promptness, and Magnitude or Magnitude’s legal representatives shall have, at their election, the right to compromise or defend any such matter involving such asserted liability of Magnitude through counsel of their own choosing, at the expense of Magnitude. Magnitude shall notify Kiwibox, Kiwibox’s Shareholders, or their successors or assigns, in writing promptly of their intention to compromise or defend any claim and Kiwibox, Kiwibox’s Shareholders, or their successors or assigns, shall cooperate with Magnitude and Magnitude’s counsel in compromising or defending any such claim, in accordance with Article 8 hereof. The terms of this Article 5.7 shall survive Closing.

~~5.8~~~~Undisclosed Liabilities.~~

Magnitude has no material liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or un-accrued, whether liquidated or un-liquidated, and whether due or to become due, including any liability for taxes), except for (i) liabilities set forth on the Magnitude Financial Statements; and (ii) liabilities which have arisen after the date of the Magnitude Financial Statements in the ordinary course of business. As used herein, “Magnitude Financial Statements” consist of the financial statements of Magnitude previously delivered to Kiwibox in the form attached hereto as Exhibit K.

~~5.9~~~~Legal Compliance.~~

Magnitude has complied with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against Magnitude alleging any failure so to comply, except where the failure to comply would not have a material adverse effect on the business, financial condition, operations, results of operations, or future prospects of Magnitude.

~~5.10~~~~Tax Matters.~~

	~~(a)~~	Magnitude has filed all income tax returns that it has been required to file. All such income tax returns were correct and complete in all material respects. All income taxes owed by Magnitude (whether or not shown on any income tax return) have been paid. Magnitude is not currently the beneficiary of any extension of time within which to file any income tax return.

	~~(b)~~	There is no material dispute or claim concerning any income tax liability of Magnitude either (i) claimed or raised by any authority in writing; or (ii) as to which Magnitude has knowledge based upon personal contact with any agent of such authority.

~~5.11~~~~Contracts.~~

The Magnitude Financial Statements disclose all material contracts of Magnitude. Each contract or legal obligation of Magnitude to which Magnitude shall remain subject after the Merger is listed on Exhibit L hereto. To the extent requested, true and correct copies of such contracts have been delivered to Kiwibox for due diligence purposes.

~~5.12~~~~Environmental, Health and Safety Matters.~~

Magnitude and its predecessors and affiliates have complied and are in compliance, in each case in all material respects, with all Environmental, Health, and Safety Requirements. As used herein “Environmental, Health & Safety Requirements” means any Environmental, Health & Safety law or regulation including air and water quality laws and regulations and other similar requirements.

~~5.13~~~~Disclosure.~~

The representations and warranties contained in this Article 5 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Article 5 not misleading.

~~5.14~~~~Financial Statements.~~

The Magnitude Financial Statements are true and correct in all material respects, have been prepared on a consistent basis, and fairly represent the business, financial condition, assets and liabilities of Magnitude.

~~5.15~~~~Litigation.~~

There is no claim, suit, action, proceeding or investigation pending or, to the knowledge of Magnitude, pending against Magnitude or any of its subsidiaries or assets which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on Magnitude.

~~5.16~~~~Materials Required for Audit~~.

To the best of its knowledge, Magnitude has maintained its records, data and materials related to the financial accounting of the business, and has all such data and materials immediately available, such that an audit may be completed per regulatory requirements.

~~ARTICLE 6~~

~~REPRESENTATIONS AND WARRANTIES OF SUBSIDIARY~~

~~Magnitude represents and warrants to Kiwibox that Subsidiary has been formed solely for the purpose of this Merger and that no contract, liabilities or other obligations exist in Subsidiary.~~

~~6.1~~~~Organization of Subsidiary.~~

~~Subsidiary is a corporation duly organized, validly existing, and in good standing under the laws of Delaware and 100% owned by Magnitude.~~

~~6.2~~~~Authorization of Transaction.~~

Magnitude has full corporate power and authority to execute and deliver Subsidiary with regard to this Agreement and to perform its obligations hereunder, including shareholder approval as may be required by the DGCL.

~~6.3~~~~Non-contravention.~~

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Magnitude or Subsidiary is subject or any provision of its charter or bylaws; or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Magnitude or Subsidiary is a party or by which it is bound or to which any of its assets is subject, except for such notices or consents which have been given or obtained by Kiwibox on or prior to the Closing.

~~6.4~~~~Capitalization.~~

The authorized capital stock of Subsidiary consists of two hundred (200) shares of Common Stock, $.01 par value per share, and no shares of Preferred Stock. As of the date of the Closing, there shall be 160 shares issued and outstanding and owned by Magnitude. There are not now nor shall there be any outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Subsidiary to issue, sell, or otherwise cause to become outstanding any of its capital stock. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Subsidiary’s Common Stock. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the capital stock of Subsidiary.

~~ARTICLE 7~~

~~PRE-CLOSING COVENANTS~~

~~The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing:~~

~~7.1~~~~General.~~

Each of the Parties will use its reasonable best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Article 9 below).

~~7.2~~~~Notices and Consents.~~

Each of the Parties will give any notices to, make any filings with, and use its reasonable best efforts to obtain any and all authorizations, consents, and approvals of governments and governmental agencies in connection with the transactions contemplated hereby.

~~7.3~~~~Operation of Business.~~

Kiwibox, Magnitude, including Subsidiary, will not engage in any practice, take any action, or enter into any transaction outside the ordinary course of business, including, but not limited to declaration of dividends or distributions, redemptions, splits, recapitalizations, or similar events respecting its capital stock prior to Closing except, however, Magnitude shall prepare and file all documents necessary to increase its authorized common shares and enter into employment and consulting agreements pursuant to which it may issue its securities.

~~7.4~~~~Full Access For Due Diligence.~~

The Parties shall permit their respective representatives to have full access at all reasonable times, and in a manner so as not to interfere with their respective normal business operations, to all premises, properties, personnel, books, records (including tax records), contracts, and documents. The Parties shall treat and hold as such any Confidential Information they receive from Kiwibox, will not use any of the Confidential Information except in connection with this Agreement, and, if this Agreement is terminated for any reason whatsoever, will return to Kiwibox all tangible embodiments (and all copies) of the Confidential Information which are in their possession.

~~7.5~~~~No Shop Promises.~~

Each of Magnitude, Kiwibox and the Kiwibox Shareholders have promised to each other that they shall utilize their respective best efforts to undertake any and all measures and deliver any and all documents necessary to consummate the transactions contemplated in this Agreement. The Parties make the following covenants to each other:

(a) Except in the case that it terminates this Agreement pursuant to Article 10(c) or in the event of an automatic termination pursuant to Article 10(d), the Kiwibox Shareholders shall not solicit or seek to acquire any assets or stock of any third party, nor shall they accept any offer to purchase or exchange any assets or securities of Kiwibox from the date of this Agreement to the Closing or through the date they terminate this Agreement pursuant to the Articles set forth in this Article 10(a).

(b) Except in the case that it terminates this Agreement pursuant to Article 10(b) or in the event of an automatic termination pursuant to Article 10(d), Magnitude shall not solicit or seek to acquire any assets or stock of any third party from the date of this Agreement to the Closing or through the date it terminates this Agreement pursuant to the Articles set forth in this Article 10(b).

~~ARTICLE 8~~

~~POST-CLOSING COVENANTS~~

~~The Parties agree as follows with respect to the period following the Closing.~~

~~8.1~~~~General.~~

In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party. Kiwibox acknowledges and agrees that from and after the Closing, Magnitude will be entitled to possession of all documents, books, records (including tax records), agreements, and financial data of any sort relating to Kiwibox.

~~8.2~~~~No Material Acquisition.~~

During the two year period following the Closing, neither Magnitude nor Subsidiary shall (i) undertake a material acquisition nor (ii) sell all or any material portion of the business of Kiwibox without the prior written consent of no less than two of the three Kiwibox Shareholders.

~~8.3~~~~Litigation Support.~~

In the event and for so long as Magnitude or Kiwibox actively are contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand in connection with (i) any transaction contemplated under this Agreement; or (ii) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date involving Kiwibox, then Kiwibox and its affiliates will cooperate with Magnitude or Kiwibox in the contest or defense, make available their personnel, and provide such testimony and access to their books and records as shall be necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or defending Party.

~~ARTICLE 9~~

~~CONDITIONS TO OBLIGATION TO CLOSE~~

~~9.1~~~~Assumption of~~ ~~Kiwibox~~ ~~Liabilities by Magnitude.~~ ~~Magnitude shall pay foronly such liabilities as defined in Exhibit M hereto.~~

~~9.2~~~~Conditions to Obligation of Magnitude and Subsidiary.~~

~~The obligations of Magnitude and Subsidiary to consummate the transactions to be performed by them in connection with the Closing are subject to satisfaction of the following conditions:~~

~~(a)~~

~~the representations and warranties set forth in Article 4 above shall be true and correct in all material respects at and as of the Closing Date;~~

	~~(b)~~	~~Kiwibox shall have performed and complied with all of its covenants hereunder in all material respects through the Closing, including Article 4 hereby;~~

	~~(c)~~	no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement; (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation; or (iii) affect materially and adversely the right of Kiwibox to own its assets and to operate its businesses (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

	~~(d)~~	~~Kiwibox shall have delivered to Magnitude a certificate to the effect that each of the conditions specified above in paragraphs 9.2 (a) through (c) is satisfied in all respects;~~

~~(e)~~

all actions to be taken by Kiwibox in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to Magnitude.

	~~(f)~~	~~Kiwibox shall have delivered to Magnitude its audited financial statements for the fiscal years ended December 31, 2006 and 2005.~~

	~~(g)~~	~~Kiwibox and/or the Kiwibox Shareholders shall pay the fees and transfer the Magnitude Common Shares to Southridge in satisfaction of their commitment set forth in Article 4.6.~~

~~9.3~~ ~~Conditions to Obligation of Kiwibox and the Kiwibox Shareholders.~~

~~The obligation of Kiwibox and the Kiwibox Shareholders to consummate the transactions to be performed by them in connection with the Closing is subject to satisfaction of the following conditions:~~

~~(a)~~

~~the representationsand warranties set forth in Articles 5 and 6 above shall be true and correct in all material respects at and as of the Closing Date;~~

	~~(b)~~	~~Magnitude shall have performed and complied with all of their covenants hereunder in all material respects through the Closing;~~

	~~(c)~~	no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement; or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

~~(d)~~

~~Magnitude shall have delivered to Kiwibox a certificate to the effect that each of the conditions specified above in paragraphs 9.3 (a) through (c) is satisfied in all respects;~~

~~(e)~~

all actions to be taken by Magnitude in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to Kiwibox.

~~(f)~~

Magnitude shall have provided documentary evidence that it has the sum of $3.5 million in a bank account in satisfaction of its commitment set forth in Article 3.5, including the commitment to show that such amount is not subject to any claims of creditors of Magnitude or any of its affiliates.

~~(g)~~

~~The representations, warranties and covenants of the parties contained in Articles~~ 4, ~~5, 6, 7 and 8 of this Agreement shall survive the Closing hereunder.~~

~~(h)~~

~~Magnitude shall have paid the legal fees incurred by Kiwibox and the Kiwibox Shareholders~~ ~~in satisfaction of its commitment set forth in Article 3.6.~~

~~(i)~~

~~Magnitude shall pay the fees and issue the Magnitude Common Shares to Southridge in~~ ~~satisfaction of its commitment set forth in Article 5.6.~~

~~ARTICLE 10~~

~~TERMINATION~~

~~This Agreement may be terminated:~~

~~(a) by the mutual written consent of Magnitude and Kiwibox;~~

~~(b) by Magnitude, in the event that any of the conditions to obligation to close enumerated in Section~~ ~~9.2~~ ~~have not been satisfied or waived by Magnitude in writing at or prior to the Closing;~~

(c) by Kiwibox and the Kiwibox Shareholders, in the event that any of the conditions to obligation to close enumerated in Section 9.3 have not been satisfied or waived by Kiwibox and the Kiwibox Shareholders, in writing, at or prior to the Closing;

~~(d) automatically, in the event that the Closing has not occurred on or before April 30, 2007 unless extended by mutual agreement of the parties.~~

In the event of the termination of this Agreement in accordance with the provisions of this Article 10: this Agreement shall forthwith become null and void and there shall be no liability or obligation on the part of Magnitude, Kiwibox or the Kiwibox Shareholders or their respective officers and directors, and; the parties shall cooperate to rescind any corporate filings made with the Secretary of State, State of Delaware, if filed.

~~ARTICLE 11~~

~~MISCELLANEOUS~~

~~11.1~~~~Further Assurances~~

From time to time, as and when required by Magnitude, Kiwibox and/or the Kiwibox Shareholders shall execute and deliver on behalf of Kiwibox such deeds and other instruments, and shall take or cause to be taken by it such further and other actions, as shall be appropriate or necessary in order to vest or perfect in or conform of record the title to and possession of all the property, interests, assets, rights, privileges, immunities, powers, franchises and authority of Kiwibox and to otherwise carry out the purposes of this Agreement. The officers and directors of Kiwibox are fully authorized in the name and on behalf of Kiwibox to take any and all such action and to execute and deliver any and all such deeds and other instruments.

~~11.2~~~~Agreement~~

Executed copies of this Agreement will be on file at the principal place of business of Magnitude at 1250 Route 28, Suite 309, Branchburg, New Jersey 08876, and copies thereof will be furnished to any stockholder of a Constituent Corporation, upon request at such shareholder’s cost. Magnitude shall be responsible for all post-closing filings with any and all state and federal agencies.

~~11.3~~~~No Third-Party Beneficiaries.~~

~~This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.~~

~~11.4~~~~Entire Agreement.~~

This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, Letter of Intent, or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter hereof.

~~11.5~~~~Succession and Assignment.~~

This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the other Parties.

~~11.6~~~~Counterparts.~~

~~This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.~~

~~11.7~~~~Headings.~~

~~The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.~~

~~11.8~~~~Notices.~~

All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

	~~If to Magnitude:~~		~~Magnitude Information Systems, Inc.~~ ~~1250 Route 28~~ ~~Suite 309~~
			~~Branchburg, New Jersey 08876~~ ~~With a copy to:~~ ~~Joseph J. Tomasek, Esq.~~ ~~77 North Bridge Street~~ ~~Somerville, New Jersey 08876~~

	~~To Kiwibox:~~		~~Kiwi Media, Inc.~~
			~~330 West 38~~^th ~~Street~~
			~~Suite 1607~~ ~~New York, NY 10018~~ ~~With a copy to:~~ ~~Gary Adelman, Esq.~~ ~~Barton Barton & Plotkin, LLP~~ ~~420 Lexington Avenue, 18~~^th ~~Floor~~ ~~New York, New York 10170~~

Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

~~11.9~~~~Governing Law.~~

This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction).

~~11.10~~~~Amendments and Waivers.~~

No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

~~11.11~~~~Severability.~~

Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

~~11.12~~~~Expenses.~~

Each of the Parties will bear its own costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, except, however, Magnitude agrees to pay Kiwibox’s legal fees and consultant fees in accordance with Articles 3.6 and 5.6, respectively. Any sales tax, filing or recording fees or similar expense shall be paid by Magnitude.

~~11.13~~~~Construction.~~

The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

~~11.14~~~~Status.~~

Nothing contained in this Agreement shall cause a Party to be deemed an agent, employee, franchisee, joint venture, partner or legal representative of any other Party, and no Party shall purport to act in any such capacity for any other Party.

~~11.15~~~~Arbitration.~~

Any and all disputes arising out of or relating to this Agreement shall be resolved by arbitration. All arbitration hereunder will be conducted by the American Arbitration Association (“AAA”). If the AAA is dissolved, disbanded or becomes subject to any state or federal bankruptcy or insolvency proceeding, the parties will remain subject to binding arbitration which will be conducted by a mutually agreeable arbitral forum. The parties agree that all arbitrator(s) selected will be attorneys with at least five (5) years securities and corporate reorganization experience. The arbitrator(s) will decide if any inconsistency exists between the rules of any applicable arbitral forum and the arbitration provisions contained herein. If such inconsistency exists, the arbitration provisions contained herein will control and supersede such rules. The site of all arbitration proceedings will be in the State, City and County of New York in which AAA maintains a regional office. Any arbitration award rendered shall be final, conclusive and binding upon the Parties hereto, and a judgment thereon may be entered in any court of competent jurisdiction. Notwithstanding anything set forth in this Article 11.15 to the contrary, the Parties shall have the right to seek injunctive or similar relief in any Federal or State Court in the City and State of New York.

~~IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Merger to be signed by their respective officers thereunto duly authorized as of the date first written above.~~

~~ATTEST:~~		~~MAGNITUDE INFORMATION SYSTEMS, INC.~~


		~~By:~~
	~~Joerg H. Klaube, Secretary~~		~~Edward L. Marney, CEO and President~~

~~ATTEST:~~		~~MAGNITUDE OPERATIONS, INC.~~ ~~(In Organization)~~


		~~By:~~
	~~Joerg H. Klaube, Secretary~~		~~Edward L. Marney, CEO and President~~

~~ATTEST:~~		~~KIWIBOX MEDIA, INC.~~


		~~By:~~
	~~, Secretary~~		~~Lin Dai, President~~

~~WITNESS:~~	~~KIWIBOX SHAREHOLDERS:~~


		~~Lin Dai, Shareholder~~

~~WITNESS:~~

Dated: __________________________

	Signature of Stockholder(s)
		~~Ivan Tumanov, Shareholder~~

~~WITNESS:~~


				~~Michael Howard, Shareholder~~

~~EXHIBIT A~~

~~CERTIFICATE OF MERGER~~

~~(TO BE PROVIDED PRIOR TO CLOSING)~~

~~EXHIBIT B~~

~~CERTIFICATE OF INCORPORATION OF KIWIBOX MEDIA INC.~~

~~EXHIBIT C~~

~~ARTICLES OF INCORPORATION OF SUBSIDIARY~~

~~(TO BE PROVIDED PRIOR TO CLOSING)~~

~~EXHIBIT D~~

~~BYLAWS OF KIWIBOX MEDIA INC.~~

~~EXHIBIT E~~

~~FORM OF KIWIBOX SHAREHOLDER EMPLOYMENT AGREEMENT~~

~~EMPLOYMENT AGREEMENT~~

~~THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated January __, 2007~~

~~By and Between:~~

~~MAGNITUDE INFORMATION SYSTEMS, INC., a Delaware corporation (the "Company" or the “Employer"),~~

~~AND~~

~~___________________________, an individual having an address at~~

~~_____________________________________~~ ~~and one of three (3) shareholders of Kiwibox Media, Inc.~~ ~~("Executive")~~

~~WHEREAS, the Company desires to hire the Executive and employ him in the position of Executive Officer; and~~

~~WHEREAS, Executive has agreed to serve as the Company’s Executive Officer, pursuant to the terms and conditions set forth herein.~~

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises and the mutual covenants, agreements, representations and warranties contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and the Company hereby agree as follows:

~~ARTICLE 1~~

~~EMPLOYMENT~~

1.1 Employer hereby hires the Executive as the Executive Officer of the Company and Executive hereby affirms and accepts such positions and employment by Employer for the Term (as defined in Article 3 below), upon the terms and conditions set forth herein.

~~1.2 The Employer shall utilize its best efforts to cause its Board of Directors to appoint~~ ~~one of the three Kiwibox Shareholders~~ ~~as a member of the Employer's Board of Directors throughout the Term.~~

~~ARTICLE 2~~

~~DUTIES~~

During the Term, Executive shall serve Employer faithfully, diligently and to the best of his ability, under the direction and supervision of the Board of Directors of Employer ("Board of Directors") and shall use his best efforts to promote the interests and goodwill of Employer and any affiliates, successors, assigns, parent corporations, subsidiaries, and/or future purchasers of Employer. Executive shall render such services during the Term at Employer's principal place of business or at such other place of business as may be determined by the Board of Directors, as Employer may from time to time reasonably require of him, and shall devote all of his business time to the performance thereof. Executive shall have those duties and powers as generally pertain to each of the offices of which he holds, as the case may be, subject to the control of the Board of Directors. Employer and Executive also agree that Employer shall utilize its best efforts to have its Board of Directors appoint ~~one of the three Kiwibox Shareholders~~ ~~to be a member of the Employer's Board of Directors during the Term.~~

~~ARTICLE 3~~

~~TERM~~

The term of this Agreement (the "Term") shall commence on the date hereof (the "Effective Date"), and continue thereafter for a term of two (2) years, as may be extended or earlier terminated pursuant to the terms and conditions of this Agreement. The Term is renewable upon the agreement of the parties hereto.

~~ARTICLE 4~~

~~COMPENSATION~~

~~4.1 Salary and Equity Compensation~~

(a) In consideration of Executive's services to Employer, Employer shall pay to Executive an annual base salary (the "Base Salary") of One Hundred Fifty Thousand Dollars ($150,000.00), payable in equal installments at the end of each regular payroll accounting period as established by Employer, or in such other installments upon which the parties hereto shall mutually agree, and in accordance with Employer's usual payroll procedures, but no less frequently than monthly.

(b) In addition to the Base Salary, Employer shall pay to Executive an annual bonus, based upon the attainment of certain business goals (the “Performance Bonus”), equal to (i) $100,000 in the event the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10^th~~, 11~~^th ~~or 12~~^th month of the first year of the term or $316,000 in gross revenues within the 12 moth period following the Effective Date, or (ii) $50,000 in the event the Kiwi Business has received at least an average 175,000 but less than an average 215,000 Unique Visitors during either the 10^th~~, 11~~^th ~~or 12~~^th month of the first year of the term or at least $237,000 in gross revenues but less than $316,000 within the 12 moth period following the Effective Date, and: (x) $100,000 in the event the Kiwi Business has received no less than an average 550,000 Unique Visitors during either the 22^nd~~, 23~~^rd ~~or 24~~^th month of the second year of the term or $1,961,000 in gross revenues within the 12 moth period following the first anniversary of the Effective Date, or (ii) $50,000 in the event the Kiwi Business has received at least an average 415,000 but less than an average 550,000 Unique Visitors during either the 22^nd~~, 23~~^rd ~~or 24~~^th ~~month of the second year of the term or at least $1,500,000 in gross revenues but less than $1,961,000 within the 12 month period following the first anniversary of the Effective Date.~~

(c) In addition to the Base Salary and Executive’s right to earn the Performance Bonus, Employer shall issue to Executive a Stock Option to purchase 7,500,000 shares of the Employer's common stock, at an exercise price equal to Employer's common stock fair market value as of the date of this Agreement (the "Stock Option"). The Stock Option shall vest (i.e., become exercisable) in three installments, as follows: One half of the Stock Options shall vest on the first anniversary date of the Effective Date; an additional quarter of the Stock Option shall vest on each of the 18^th month and second anniversaries of the Effective Date. Executive must be continuously a full-time employee of the Company through the time he exercises part or all of the Stock Option, except, however, in the event this Agreement is terminated by the Executive for a Good Reason, as defined in Article 10.1 and 10.2 below, or by the Employer without Cause, as defined in Article 10.3 below, in which cases the Stock Option shall immediately and fully vest upon such termination provided further that the events surrounding any such termination have not been the subject of any claim, proceeding or lawsuit by either the Executive or the Company in which further case the Stock Option shall only vest upon final adjudication, determining that such termination was a valid termination by the Executive for Good Reason or by the Employer without Cause pursuant to the applicable above referenced articles of this Agreement. The Stock Option shall be deemed a non-qualified stock option (i.e., not an ISO).

(d) In addition to the Base Salary, the Stock Option and the Executive’s right to earn the Performance Bonus, Employer shall issue to Executive a second Stock Option to purchase 3,000,000 shares of the Employer's common stock, at an exercise price equal to the “Market Price” of the Company’s publicly traded common shares. “Market Price” means the average sales price of a Company common share for the twenty (20) successive trading days immediately preceding the Closing, as recorded by the Electronic Bulletin Board, over-the-counter market. and which shall vest based upon the attainment of certain business goals (the "Performance Stock Option"). The Performance Stock Option shall vest (i.e., become exercisable) in two installments: 1,500,000 upon the first anniversary of the Effective Date, provided that the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10^th~~, 11~~^th ~~or 12~~^th month of the first year of the term or $316,000 in gross revenues within the 12 month period following the first anniversary of the Effective Date, and; one half upon the second anniversary date of the Effective Date, provided that the Kiwi Business has received an average of at least 550,000 Unique Visitors during either the 22^nd~~, 23~~^rd ~~or 24~~^th month of the second year of the term or $1,961,000 in gross revenues within the 12 moth period following the first anniversary of the Effective Date. Executive must be continuously a full-time employee of the Company through the time he exercises part or all of the Performance Stock Option, except, however, in the event this Agreement is terminated by the Executive for a Good Reason, as defined in Article 10.1 and 10.2 below, or by the Employer without Cause, as defined in Article 10.3 below, in which cases the Performance Stock Option shall immediately and fully vest upon such termination provided further that the events surrounding any such termination have not been the subject of any claim, proceeding or lawsuit by either the Executive or the Company in which further case the Performance Stock Option shall only vest upon final adjudication, determining that such termination was a valid termination by the Executive for Good Reason or by the Employer without Cause pursuant to the applicable above referenced articles of this Agreement. The Performance Stock Option shall be deemed a non-qualified stock option (i.e., not an ISO). A “Unique Visitor” is a person who visits a Kiwibox website during any month during the term of this Agreement.

(e) Executive hereby acknowledges that the Stock Option, the performance Stock Option and the shares issuable upon the exercise thereof shall be "restricted securities" as such term is defined under Rule 144, unless and until an effective registration covering these shares takes place, promulgated under the Securities Act of 1933, as amended (the "1933 Act"); that the Executive hereby represents that he shall accept such compensation and has no present intent to distribute or transfer such securities; that such securities shall bear the appropriate restrictive legend providing that they may not be transferred except pursuant to the registration requirements of the 1933 Act or pursuant to exemptions therefrom, and; the Executive further acknowledges that he may be required to hold such securities for an indeterminable amount of time.

~~Benefits~~

4.2 Executive shall be entitled to participate in all medical and other executive benefit plans, including four (4) weeks vacation, sick leave, retirement accounts and other executive benefits provided by Employer to any of the other senior officers of the Employer on terms and conditions no less favorable than those offered to such senior officers. Such participation shall be subject to the terms of the applicable plan documents and Employer's generally applicable policies.

~~4.3 Expense Reimbursement~~

Employer shall reimburse Executive for reasonable and necessary expenses incurred by him on behalf of Employer in the performance of his duties hereunder during the Term, including any and all travel and entertainment expenses related to the Employer's business in accordance with Employer's then customary policies, provided that such expenses are adequately documented.

~~ARTICLE 5~~

~~OTHER EMPLOYMENT~~

During the Term, Executive shall devote all of his business and professional time and effort, attention, knowledge, and skill to the management, supervision and direction of Employer's business and affairs as Executive's highest professional priority. Employer shall be entitled to all benefits, profits or other remuneration arising from or incidental to all work, services and advice performed or provided by Executive. Nothing in this Agreement shall preclude Executive from:

(a) serving as a director or member of a committee of any organization or corporation involving no conflict of interest with the interests of Employer, provided that Executive must obtain the prior written approval of the independent members of the Board;

(b) serving as a consultant in his area of expertise (in areas other than in connection with the business of Employer), to government, industrial, and academic panels provided that only de minimis time shall be devoted thereto and Executive must obtain the prior written approval of the independent members of the Board of Employer and where it does not conflict with the interests of Employer, provided that such written consent shall not be unreasonably withheld, delayed or conditioned; and

(c) managing his personal investments or engaging in any other non-competing business; provided that such activities do not materially interfere with the regular performance of his duties and responsibilities under this Agreement.

~~ARTICLE 6~~

~~CONFIDENTIAL INFORMATION/INVENTIONS~~

~~Confidential Information~~

6.1 Executive shall not, in any manner, for any reasons, either directly or indirectly, divulge or communicate to any person, firm or corporation, any confidential information concerning any matters not generally known in the website industry (the "Website Industry") or otherwise made public by Employer which affects or relates to Employer's business, finances, marketing and/or operations, research, development, inventions, products, designs, plans, procedures, or other data (collectively, "Confidential Information") except in the ordinary course of business or as required by applicable law. Without regard to whether any item of Confidential Information is deemed or considered confidential, material, or important, the parties hereto stipulate that as between them, to the extent such item is not generally known in the Website Industry, such item is important, material, and confidential and affects the successful conduct of Employer's business and goodwill, and that any breach of the terms of this Section 6.1 shall be a material and incurable breach of this Agreement. Confidential Information shall not include: information in the public domain other than because of a breach of this Agreement.

~~Documents~~

6.2 Executive further agrees that all documents and materials furnished to Executive by Employer and relating to Employer's business or prospective business are and shall remain the exclusive property of Employer. Executive shall deliver all such documents and materials, and all copies thereof and extracts therefrom, to Employer upon demand therefor and in any event upon expiration or earlier termination of this Agreement.

~~Inventions and Intellectual Property~~

6.3 All ideas, inventions, and other developments or improvements conceived or reduced to practice by Executive, alone or with others, during the Term of this Agreement, whether or not during working hours, that are within the scope of the business of Employer or that relate to or result from any of Employer's work or projects or the services provided by Executive to Employer pursuant to this Agreement, shall be the exclusive property of Employer. Executive agrees to assist Employer, at Employer's expense, to obtain patents and copyrights on any such ideas, inventions, writings, and other developments, and agrees to execute all documents necessary to obtain such patents and copyrights in the name of Employer. Exhibit A attached to and incorporated by reference into this Agreement is a list of assets owned by the Kiwibox Shareholders, are not related to the business of Kiwibox Media, Inc. and which are not within the scope of this Article 6.3

~~Disclosure~~

6.4 During the Term, Executive will promptly disclose to the Board of Directors full information concerning any interest, direct or indirect, of Executive (as owner, shareholder, partner, lender or other investor, director, officer, executive, consultant or otherwise) or any member of his immediate family in any business that is reasonably known to Executive to purchase or otherwise obtain services or products from, or to sell or otherwise provide services or products to, Employer or any of their suppliers or customers.

~~ARTICLE 7~~

~~COVENANT NOT TO COMPETE~~

7.1 No Competitive Activities. Except as expressly permitted in Article 5 above, during the Term, Executive shall not engage in any activates that are competitive with the actual or prospective business of the Company, including without limitation: (a) engaging directly or indirectly in any business substantially similar to any business or activity engaged in (or proposed to be engaged in) by Employer, including and not limited to business that relates to the Website Industry; (b) engaging directly or indirectly in any business or activity competitive with any business or activity engaged in (or proposed to be engaged in) by Employer; (c) soliciting or taking away any executive, employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor of Employer, or attempting to so solicit or take away; (d) interfering with any contractual or other relationship between Employer and any executive, employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor; or (e) using, for the benefit of any person or entity other than Employer any Confidential Information of Employer.

7.2 The foregoing covenant prohibiting competitive activities shall survive the termination of this Agreement, and shall extend, and shall remain enforceable against Executive, for the period of two (2) years following the date this Agreement is terminated. In addition, during the two-year period following such expiration or earlier termination, neither Executive nor Employer shall make or permit the making of any negative statement of any kind concerning Employer or their affiliates, or their directors, officers or agents or Executive.

~~ARTICLE 8~~

~~SURVIVAL~~

Except as otherwise provided, Executive agrees that the provisions of Articles 6, 7, 8 and 9 shall survive expiration or earlier termination of this Agreement for any reasons whether voluntary or involuntary, with or without Cause, and shall remain in full force and effect thereafter.

~~ARTICLE 9~~

~~INJUNCTIVE RELIEF~~

Executive acknowledges and agrees that the covenants and obligations of Executive set forth in Articles 6 and 7 with respect to non-competition, non-solicitation, confidentiality and Employer's property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Employer irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that if Executive breaches this Agreement than Employer shall be entitled to apply for an injunction, restraining order or such other equitable relief as a court of competent jurisdiction as limited by Section 13.3 may deem necessary or appropriate to restrain Executive from committing any violation of the covenants and obligations referred to in this Article 9. Executive shall have the right to appeal from such injunction or order and to seek reconsideration. These injunctive remedies are cumulative and in addition to any other rights and remedies Employer may have at law or in equity.

~~ARTICLE 10~~

~~TERMINATION~~

~~Termination by Executive~~

10.1 Executive may terminate this Agreement for Good Reason at any time upon 30 days' written notice to Employer, provided the Good Reason has not been cured within such period of time. In addition, Executive may terminate this agreement anytime, upon providing a 60 days' written notice.

~~Good Reason~~

10.2 In this Agreement, "Good Reason" means, without Executive's prior written consent, the occurrence of any of the following events, unless Employer shall have fully cured all grounds for such termination within thirty (30) days after Executive gives notice thereof:

(i) any reduction in his then-current Salary or benefits, other than in connection with a percentage pay cut that is applicable to all senior executives and which is the same percentage for all such persons or in connection with a general reduction in benefits;

~~(ii) any material failure to timely grant, or timely honor, the Stock Option set forth in Article 4.1;~~

~~(iii) failure to pay or provide required expenses;~~

~~(iv) Any diminution in authority or responsibility to a non-executive position;~~

The written notice given for Good Reason by Executive to Employer shall specify in reasonable detail the cause for termination, and such termination notice shall not be effective until thirty (30) days after Employer's receipt of such notice, during which time Employer shall have the right to respond to Executive's notice and cure the breach or other event giving rise to the termination.

~~Termination by Employer~~

10.3 Employer may terminate its employment of Executive under this Agreement with or without Cause at any time by written notice to Executive. For purposes of this Agreement, the term Cause for termination by Employer shall be (a) a conviction of or plea of guilty or nolo contendere by Executive to a felony, or any crime involving fraud, securities laws violations, embezzlement or moral turpitude; (b) the refusal by Executive to perform his material duties and

obligations hereunder or to follow the proper instructions of the Board of Directors; (c) Executive's willful or intentional misconduct in the performance of his duties and obligations; (d) conduct that is known or that should have been known by Executive to be detrimental to the best interests of the Company, as determined by the independent members of the board; (e) if Executive or any member of his family makes any personal profit arising out of or in connection with a transaction to which Employer is a party or with which it is associated without making disclosure to and obtaining the prior written consent of the independent members of the Board; or (f) the entry by the Securities and Exchange Commission or a self-regulatory organization of a consent decree relating to a securities law violation by Executive. The written notice given hereunder by Employer to Executive shall specify that it is without Cause or if it is with Cause shall specify in reasonable detail the cause for termination. For purposes of this Agreement, "family" shall mean "immediate family" as defined in the rules of the Securities and Exchange Commission. In the case of a termination for the causes described in (a), (d) and (e) above, such termination shall be effective upon receipt of the written notice. In the case of the causes described in (b) and (c) above, such termination notice shall not be effective until thirty (30) days after Executive's receipt of such notice, during which time Executive shall have the right to respond to Employer's notice and cure (if curable) the breach or other event giving rise to the termination. In the case of termination without Cause, such termination notice shall not be effective until thirty (30) days after Executive's receipt of such notice.

~~Severance~~

10.4 Upon a termination of this Agreement with Good Reason by Executive or without cause by Employer, Employer shall pay to Executive all accrued and unpaid compensation and expense reimbursement, as of the date of such termination and the "Severance Payment." The Severance Payment shall be payable in a lump sum, subject to Employer's statutory and customary withholdings. The Severance Payment shall be paid by Employer within thirty (30) business days of the expiration of any applicable cure period. The "Severance Payment" shall equal the total amount of the Salary payable to Executive under Section 4.1 of this Agreement for a period of one (1) year.

~~Termination Upon Death~~

10.5 If Executive dies during the Term , this Agreement shall terminate, except that Executive's legal representatives shall be entitled to receive any earned but unpaid compensation or expense reimbursement due hereunder through the date of death.

~~Termination Upon Disability~~

10.6 If, during the Term , Executive suffers and continues to suffer from a "Disability" (as defined below), then Employer may terminate this Agreement by delivering to Executive ten (10) calendar days' prior written notice of termination based on such Disability, setting forth with specificity the nature of such Disability and the determination of Disability by Employer. For purposes hereof, "Disability" means "permanent and total disability" as defined in Section 22(e)(3) of the Internal Revenue Code. Upon any such termination for Disability, Executive shall be entitled to receive any earned but unpaid compensation or expense reimbursement due hereunder through the date of termination and the Severance Payment.

~~ARTICLE 11~~

~~PERSONNEL POLICIES, CONDITIONS, AND BENEFITS~~

Except as otherwise provided herein, Executive's employment shall be subject to the personnel policies and benefit plans which apply generally to Employer's Executives as the same may be interpreted, adopted, revised or deleted from time to time, during the Term of this Agreement, by Employer in its sole discretion. During the Term hereof, Executive shall be entitled to vacation during each year of the Term at the rate of four (4) weeks per year. Within 30 days after the end of each year of the Term, Employer shall elect to (a) carry over and allow Executive the right to use any accrued and unused vacation of Executive, or (ii) pay Executive for such vacation in a lump sum in accordance with its standard payroll practices. Executive shall take such vacation at a time approved in advance by the Board of Directors of Employer, which approval will not be unreasonably withheld but will take into account the staffing requirements of Employer and the need for the timely performance of Executive's responsibilities.

~~ARTICLE 12~~

~~BENEFICIARIES OF AGREEMENT~~

~~This Agreement shall inure to the benefit of the parties hereto, their respective heirs, successors and permitted assigns.~~

~~ARTICLE 13~~

~~GENERAL PROVISIONS~~

~~No Waiver~~

13.1 No failure by either party to declare a default based on any breach by the other party of any provisions of this Agreement, nor failure of such party to act quickly with regard thereto, shall be considered to be a waiver of any such breach, or of any future breach.

~~Modification~~

13.2 No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the parties to be charged therewith.

~~Submission to Jurisdiction; Consent to Service of Process.~~

13.3 Submission to Jurisdiction; Consent to Service of Process. This Agreement shall be governed in all respects, by the laws of the State of New York, including validity, interpretation and effect, without regard to principles of conflicts of law. The parties hereto irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts in the State of New Jersey or in the State of New York for any lawsuits, actions or other proceedings arising out of or related to this Agreement and agree not to commence any lawsuit, action or other proceeding except in such courts. The parties hereto further agree that service of process, summons, notice or document by mail to their addresses set forth above shall be effective service of process for any lawsuit, action or other proceeding brought against them in any such court. The parties hereto irrevocably and unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or related to this Agreement in such courts, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action or proceeding brought in any such court has been brought in an inconvenient forum.

~~Entire Agreement~~

13.4 This Agreement embodies the whole agreement between the parties hereto regarding the subject matter hereof and there are no inducements, promises, terms, conditions, or obligations made or entered into by Employer or Executive other than contained herein.

~~Severability~~

13.5 In the event a court of competent jurisdiction determines that a term or provisions contained in this Agreement is overly broad in scope, time geographical location or otherwise, the parties hereto authorize such Court to modify and reduce any such term or provision deemed overly broad in scope, time, geographic location or otherwise so that it complies with then applicable law.

~~Headings~~

~~13.6 The headings contained herein are for the convenience of reference and are not to be used in interpreting this Agreement.~~

~~Independent Legal Advice~~

~~13.7 Employer and Executive each acknowledge that he or it has obtained legal advice concerning this Agreement.~~

~~No Assignment~~

~~13.8 No party may pledge or encumber its respective interests in this Agreement nor assign any of its rights or duties under this Agreement without the prior written consent of the other party.~~

~~IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.~~


	~~EMPLOYER:~~ ~~MAGNITUDE INFORMATION SYSTEMS, INC.~~

	~~By:~~
		~~Edward Marney~~ ~~Title: President~~

		~~EXECUTIVE:~~


	~~By:~~
	~~Name:~~
		Signature of Stockholder(s)

~~Exhibit “A”~~

~~Excluded Assets~~

~~Lin Dai:~~

~~K2 Entertainment, Inc. (k2ent.com)~~

~~Climax NYC Corp (climaxnyc.com, climaxvip.com, clubviplist.com, birthdaynyc.com)~~

~~NY Lounge Group, LLC~~

~~popdish.com~~

~~lindai.com~~

~~MetroFunk Corporation (metrofunk.com)~~

~~Mike Howard~~

~~beafreethinker.com/org~~

~~stopreproducing.com/net/org~~

~~extinctionsucks.com~~

~~unusedinventory.com~~

~~chillbars.com~~

~~letstalkstory.com~~

~~weevolve.com~~

~~loveandaloha.com~~

~~entertainmentfans.com~~

~~mikespad.com~~

~~Ivan Tumanov~~

~~Projects currently in progress~~

~~Tumanov.com - personal blog and project/CV listing site.~~

Datacup.com - a web development consultancy business I run with my brother - Konstantin Sykulev. The busines model revolves around getting undergraduate students from Carnegie Mellon University connected to freelancing opportunities in NYC. I have been doing a lot of freelancing work dba Datacup, and its set to become a LLP this month.

~~Devcup.com - a project/task/todo list management system centered on the needs of freelancers/software engineers with a focus on the David Allen “Getting Things Done” methodology.~~

~~Sharedbills.com - online bill sharing/splitting site with a business plan to provide ACH/CC rent payment to enable tenants/landlords sleep better at night.~~

~~Astrofuse.com - statistics analysis site which asks a number of survey questions of the visitors and tries to correlate the gathered data to astrological signs/chinese calendar/etc.~~

~~Wurather.com - a communal opinion gathering website - visitors submit “would you rather do X or Y” questions and other visitors answer the quesitons.~~

~~Flipvine.com - a collaborative writing system in which users write a story via a “grapewine” metaphore.~~

~~Introviews.com - a site where users can submit a questionaire to mail to their friends or celebrities.~~

~~Monthlier.com - a resolution/periodic reminder web tool which also correlates profiles of users with their tendency to resolve/decide to do a particular task.~~

Glamourite.com/Glamorite.com - I am the technical lead for this site. It is a blog that strives to be educated/intelligent with respect to the glamourous opportunities that are available to New Yorkers. The audience focus is women 21+ in NYC.

~~BurgadoProductions.com - an online casting portal run by Scott Maldonado in close association with FUSE. I am the lead developer on the project and I provide strategy/technical consulting as well.~~

~~Lindai.com/Studio560.com.- I provide technical support for this site.~~

~~ClimaxVIP.com/ClimaxNYC.com/ClubVIPList.com - I provide technical support and have a maintenance obligation to improve/maintain the site.~~

~~Mikespad.com/Thisbeat.com/Stopreproducing.com/net/org/Stopoverpopulation.com/net/org/Stopatone.com/Snowbirdsoftball.com//~~

~~Snowbirdlax.com/Snowbirdlacrosse.com/Runningdrunk.com/MineEndsIn.com/LoveAndAloha.com/LetsTalkStory.com/~~

~~KravetzDesign.com/Gleaming TheCube.com/ExtinctionSucks.com/Dontbeapawn.com/Chillbars.com/~~

~~BeAFreeThinker.com/org/AutoSecurityZone.com/8Million1.com/40Fridays.com - I provide technical support for these sites.~~

~~Elizabethdodson.com/LizDodson.com - I provide technical support for this site.~~

~~Greenorati.com - I provide technical support for this site.~~

~~Erinpapa.com - I provide technical support for this site.~~

~~Bellafashionista.com - I am the technical lead for this site.~~

~~LorisDiran.com - I provide technical support for this site.~~

~~AbbeyInTheCity.com - I provide technical support for this site.~~

~~GeniusNYC.com - I provide technical support for this site.~~

~~Sykulev.com/HookahGuru.com - I provide technical support for these sites.~~

~~DasilvaMakeup.com - I provide technical support for this site.~~

~~AndreaVenezia.com - I provide technical support for this site.~~

~~Pr.Estigio.Us/SanFranster.com/ManhattanIsAnIsland.com/Kurjakovic.com/FoodMetaCritic.com - I provide technical support for these sites.~~

~~EpiphanyFitness.com/EpiphanyFitnessStudio.com - I provide technical support for this site.~~

~~BlahaFamily.com/JDavidBlaha.com/FabricAndFoam.com/FabricOnARoll.com/FabricAndFoamSales.com/CigarForum.com/MedTechPro.com - I provide technical support for these sites.~~

~~Edykema.net - I provide technical support for this site.~~

~~Efrenkel.com - I provide technical support for this site.~~

~~Ptsdkc.com/BetaSigmaPikes.org - I provide technical support for these sites.~~

~~714park.com/Roselawn10.org - I provide technical support for this site.~~

~~SuperActionGuy.com/JesseAndrews.com - I provide technical support for this site.~~

~~Shearwatersailing.com/SailNYC.com - I provide technical support for these sites, and Datacup is working on the project.~~

~~TheHeyTeam.com/Flippixxx.com/Drunkofunko.com - I provide technical support for this site.~~

~~Tubugurl.com/Tubugirl.com/SusieIhm.com - I provide technical support for this site.~~

~~Vilsi.com - I provide technical support for this site, and Datacup is working on the project.~~

~~Wendywild.com / Radioactivewendy.com - I provide technical support for this site.~~

~~Willhaddad.com - I provide technical support for this site.~~

~~Projects for which support contracts cannot be terminated:~~

~~TradeTheNews.com - an obligation exists to support code written during a long-term freelancing project for the company.~~

~~eCamp.net - an obligation exists to support code in the eCamp.net registration system, CampKR.com point of sale system and the Insight image/camp data management and uploading system.~~

~~Colspace.com - ICE Report Engine component - an obligation exists to support code written by me.~~

~~PhdUS.com/ConsumerPoweredMedia.com - an obligation exists to support the Wordpress powered corporate blog sites I developed for these sites through Colspace.~~

~~ShearwaterSailing.com - an obligation exists to support code developed by Datacup for the site.~~

~~BurgadoProductions.com - an obligation exists to support code developed for the site.~~

~~ClimaxVIP.com/ClubVIPList.com/ClimaxNYCcom - an obligation exists to support code developed for the site.~~

~~EXHIBIT F~~

~~CERTIFICATE OF DESIGNATION FOR SERIES G PREFERRED STOCK~~

~~CERTIFICATE OF POWERS, DESIGNATIONS,~~

~~PREFERENCES AND RIGHTS OF THE SHARES~~

~~OF THE PREFERRED STOCK OF~~

~~MAGNITUDE INFORMATION SYSTEMS, INC.~~

~~To Be Designated~~

~~Series G Senior Convertible Preferred Stock~~

Magnitude Information Systems, Inc., a Delaware corporation (the “Corporation”), in accordance with Section 103 of the General Corporation Law of the State of Delaware (“DGCL”), by its President, does hereby certify that during a meeting on April __, 2007, the Board of Directors of the Corporation duly adopted the following resolutions providing for the issuance of a series of Preferred Stock to be designated Series G Senior Convertible Preferred Stock, par value $.001, and to consist of 43,610 shares:

RESOLVED, that the Corporation is hereby authorized to amend its Certificate of Incorporation and to file a Certificate of Designations of Preferred Stock to provide for 43,610 shares of Series G Senior Convertible Preferred Stock, $.001 par value, Stated Value of $11.46526 (“Series G Senior Preferred”), pursuant to the terms and conditions set forth in the Certificate of Designations;

~~RESOLVED, that the rights, privileges and limitations of each share of Series G Senior Preferred shall be as follows:~~

1. ~~Issuance. The series of Preferred Stock designated as Series G Senior Preferred shall consist of 43,610 shares.~~

2. ~~Dividends. The holders of said shares of Series G Senior Preferred shall not be entitled to receive any dividends.~~

3. ~~Priority~~. The Series G Senior Preferred shall with respect to dividend rights rank junior to all classes and series of Common Stock, the Cumulative Preferred Stock, and the Series A, B, C, D, E and F Senior Convertible Preferred Stock, and, with respect to liquidation rights rank prior to all classes and series of Common Stock, the Cumulative Preferred Stock, and be on a par with the Series A, B, C, D, E and F Senior Convertible Preferred Stock.

4. ~~Voting. Except as required by the DGCL and as provided in Section (7) below, the holders of said shares of Series G Senior Preferred shall not be entitled to any voting rights.~~

5. ~~Cancellation~~. Shares of Series G Senior Preferred which have been issued and reacquired in any manner, including shares purchased or converted into Common Stock, exchanged or redeemed, shall be canceled on the books of the Corporation and shall not be considered outstanding for any purpose.

6. ~~Liquidation~~. In the event of any liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the Series G Senior Preferred shall be entitled to receive, out of the remaining net assets of the Corporation, an amount equal to the Stated Value of $11.46526 for each share of Series G Senior Preferred held of record by such holder, payable in cash or in shares of stock, securities or other consideration, the value of which stock, securities or other consideration shall be fixed by the Board of Directors, provided, however, that such remaining net assets are sufficient to cover all the before mentioned payments and also like payments to holders of Series A, B, C, D, E and F Senior Preferred, before any distribution shall be made to the holders of Common Stock or Cumulative Preferred Stock of the Corporation. In case such remaining net assets are insufficient to cover all such payments to holders of Series A, B, C, D, E and F Senior Preferred, the holders of these series shall receive payments on a pro rata basis.

7. ~~Cumulative Dividends. No cumulative dividends shall be payable on the Series G Senior Preferred Stock.~~

8. ~~Mandatory Conversion~~. Upon the second anniversary date of that certain Agreement and Plan of Reorganization, dated February 19, 2007 by and between the Corporation, Magnitude Operations, Inc., a wholly owned subsidiary of the Corporation, Kiwibox Media Inc. and the Kiwibox Shareholders, the 43,610 shares of Series G Preferred shares issued to the Kiwibox Shareholders and representing the only outstanding shares of Series G Preferred shall be automatically converted into Common Stock of the Corporation in accordance with the terms set forth below. For all purposes under this Certificate, the 43,610 Series G Preferred shares shall have an aggregate conversion value of $500,000 (the “Conversion Value”) and shall be convertible into shares of the Common Stock of the Corporation, based upon the “Market Price”. The number of Common Shares of the Corporation to be issued in the automatic conversion shall be determined by dividing the Conversion Value of $500,000 by the Market Price of the common shares of the Corporation. The Market Price shall mean the average sales price of a Common Share of the Corporation during the twenty (20) successive trading days immediately preceding the second anniversary date of said Agreement as recorded by the Electronic Bulletin Board, over-the-counter stock market maintained by the NASD or such other stock market where the Common Stock of the Corporation are then traded. For example, if the Market Price is $.025 per share, then the Conversion Value would be 20,000,000 common shares which the Corporation would issue to the holders of the Series G Preferred, the Kiwibox Shareholders in proportion to their ownership of the 43,610 shares of the Series G Preferred Shares. For all purposes under this Certificate, the amount of Common Stock representing the Conversion Value shall not be less than 10,000,000 Common Shares of the Corporation notwithstanding the fact that the Market Price is determined to be above $.05 per share. The Common Shares of the Corporation issuable based upon the Conversion Value shall be issued by the Corporation to the holders of the 43,610 shares of the Series G Preferred, the Kiwibox Shareholders, within thirty days following the second anniversary date of the above identified Agreement, in proportion to the ownership of the 43,610 shares of the Series G Preferred Stock.

9. ~~Anti-Dilution~~. In the event that, prior to the conversion of the Series G Senior Preferred Stock by the holder thereof into Common Stock of the Corporation, there shall occur any change in the outstanding shares of Common Stock of the Corporation by reason of the declaration of stock dividends, or through a re-capitalization resulting from stock splits or combinations, without the receipt by the Corporation of fair consideration therefore in the form of cash, services or property, the conversion ratio of the Series G Senior Preferred Stock into Common Stock of the Corporation provided for in Section (8) above shall be adjusted such that any holder of Series G Senior Preferred Stock converting such stock into Common Stock subsequent to such change in the outstanding shares of Common Stock of the Corporation shall be entitled to receive, upon such conversion, a number of shares of Common Stock of the Corporation representing the same percentage of common shares outstanding as represented by the shares that he would have received had he converted his Series G Senior Preferred Stock to Common Stock prior to such change in the outstanding shares of Common Stock of the Corporation.

~~IN WITNESS WHEREOF, we, the undersigned, have executed and subscribed this certificate on April __, 2007~~


			~~Edward L. Marney, President~~

~~ATTEST:~~


~~Joerg H. Klaube, Secretary~~

~~EXHIBIT G~~

~~KIWIBOX BUSINESS PLAN~~

~~KIWIBOX MEDIA EXECUTIVE SUMMARY~~

Online social networks have made numerous headlines over the past few years with their sticky web-based community features and viral growth patterns. Social networking sites such as MySpace.com and Facebook.com have reached outstanding levels of popularity and command valuations well over $1 billion. To date these sites have focused on users entering college and beyond, leaving the 13-19 demographic untapped. The teenage population, as estimated by the census bureau, topped out at 34 million in the United States while spending over $175 billion in 2003 according to Teenage Research Unlimited. Today's teenagers are the first generation to grow up using the Internet for everything from entertainment and information, to shopping and communication.

Currently, including Kiwibox.com, there are about a dozen highly ranked web sites that are directed toward the teen audience. Although there are a number of players in this market no site has yet to dominate it. We believe the reason that no lead site has emerged is that the current sites either lack valuable content, social networking features, focus on narrow topics or lack the capital to execute. Following are some examples: Alloy.com is well known for its ecommerce and catalog sales capability, but the site significantly lacks in content and social networking features; Magazine based sites such as Seventeen.com or CosmoGirl.com deliver valuable content, however are severely lacking in community/networking facilities; Sites such as Student.com offer a fair balance of content and networking, however focus only on education, heavily limiting their intended audience. Although Kiwibox.com does deliver valuable content, powerful social networking features that coalesce a broad range of teen interests, the company has lacked the capital to fully execute.

For teens, the most sought after content is entertainment related news and products. Entertainment content coupled with the ability to share this content via a social network is the combination that put MySpace.com on the map. Although MySpace attracts a teenage audience this has not been their intent and this community mix of teen/adult has demonstrated that teens need an online place of their own. Teens and their parents are demanding a site focused on “teens only” that delivers exciting entertainment based content and social networking facilities so that they may build a “teenage world” of their own.

Therefore, the social networking site that is able to capture the teenage market, and grow with them as they enter subsequent life stages, college, adult, and work, by channeling them through a series of evolving age relevant social networking sites, will ultimately play the central role in this rapidly expanding and highly valued marketplace.

Kiwibox.com intends to be the dominant online social networking site for teens. There is currently no single online brand that is synonymous with the teenage demographic, and extending online capabilities to the mobile arena represents even greater opportunities. Kiwibox.com will be the primary social networking hub delivering relevant entertainment content and products to teens. By delivering highly personalized and automated aggregation of content and features, Kiwibox.com will be the “Box that aggregates all teen content and social networks” both online and mobile.

Additionally, through replicating and/or licensing the Kiwibox technology, the company will create additional web sites that continue to deliver appropriate life stage content, retaining the teen user as they age and enter new stages where interests change and community groups evolve.

Kiwibox.com has been a leading entertainment focused online social network and has targeted female teenagers between the ages of 13 - 19 since September 1999. Kiwibox.com has built its online brand utilizing a unique “For Teens By Teens” design methodology, and since inception Kwiwbox.com has been an industry leader in adopting user generated site content. By involving the teen user in the creation, editing and moderating of content Kiwibox.com has become the online destination for over 1.8 million registered members and 150,000 unique visitors monthly. We intend to leverage our extensive knowledge of user needs and habits and re-launch an immensely more powerful Kiwibox.com site focused on both the male and female demographic. Within twelve to fifteen months of the re-launch, we project the enhanced Kiwibox.com site to deliver over 100,000 new members monthly, and produce over 50 million page views per month.

Historically the bulk of Kiwibox revenues have been generated via advertising sales and email sponsorship programs. Although these revenues will continue to expand through increased user traffic, we anticipate additional revenue streams to develop, such as contextual and search based revenue programs like Google Adwords; pre-roll and post-roll sponsorships for video content; text and/or multimedia based advertising delivered to mobile devices; premium subscription revenue for certain mobile content or services; as well as integrated online/offline brand campaigns.

After the launch of the new web site, the company will begin releasing mobile-enabled versions of Kiwibox content and features in three stages. The final result will be one of the most advanced and integrated multimedia experience for teens both online and offline. With the explosion of the mobile industry, Kiwibox plans to capture the first mover advantage in this valuable teen market.

The combined technology online and offline will provide the foundation and revenue model for the creation of subsequent “Kiwi” sites targeted at different age and interest groups yielding exponential returns.

An initial investment of $3.5 million will support the company’s development during the first 18 months. The company anticipates that approximately $1,124,000 will be used to fund research and development activities, approximately $610,000 will be used for marketing, public relations and user acquisition, $517,500 will be used for business development and administrative staff and $287,500 will be utilized for content and graphic design. The remaining $961,000 will be used to fund business and technology infrastructure cost. The foregoing amounts represent the company’s best estimate of the use of the proceeds and the amounts actually expended for each purpose may vary.

As the Kiwibox.com networking site develops, multiple exit strategies will also develop. Media companies, such as Time Warner/Universal, and technology based companies, such as Google/ Yahoo, are vying for online market share. With a targeted and loyal user base, Kiwibox will be positioned as an attractive acquisition for those firms looking to extend their reach in these online entertainment markets.

~~EXHIBIT~~ H

~~SHAREHOLDERS AND THEIR OWNERSHIP OF KIWIBOX SHARES~~

~~Lin Dai: 17,600 Kiwibox shares~~

~~Michael Howard: 11,640 Kiwibox shares~~

~~Ivan Tumanov: 14,370 Kiwibox shares~~

~~EXHIBIT I~~

~~KIWIBOX FINANCIAL STATEMENTS~~

~~(ALREADY DELIVERED)~~

~~EXHIBIT J~~

~~KIWIBOX MATERIAL CONTRACTS~~

~~EXHIBIT K~~

~~MAGNITUDE FINANCIAL STATEMENTS~~

~~FOR THE QUARTER ENDED SEPTEMBER 30, 2006 AND~~

~~FOR THE YEAR ENDED DECEMBER 31, 2005.~~

~~(ALREADY DELIVERED)~~

~~EXHIBIT L~~

~~MAGNITUDE MATERIAL CONTRACTS~~

~~(ALREADY DELIVERED)~~

~~EXHIBIT M~~

~~LIST OF KIWIBOX LIABILITIES TO BE PAID BY MAGNITUDE~~

~~1. Legal Fees of Barton, Barton & Plotnik, LLP, up to $42, 500~~

~~2. Accounting Fees of J.H. Cohn up to $17,000~~

~~3. Investment Banking Fees of Southridge Investment Group, LLC of $15,000 and 2.5% of the stock transferable to the Kiwibox Shareholders pursuant to Article 3.2 hereof.~~

~~4. Up to $9,000 of American Express charges if related to business~~

~~EXHIBIT B~~

Exhibit A

CERTIFICATE OF AMENDMENT

CERTIFICATE of INCORPORATION

MAGNITUDE INFORMATION SYSTEMS, INC.

MAGNITUDE INFORMATION SYSTEMS, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY:

FIRST: That by majority vote of the Director's of the Corporation at a duly organized meeting held on ~~February 16, 2007,~~December 4, 2008, pursuant to Section 141 of the General Corporation law of the State of Delaware (the "DGCL"),and pursuant to the written consent of shareholders of the Corporation owning a majority of the Corporation's issued and outstanding common shares solicited through a Consent Solicitation ending ~~June __, 2007,~~January 29, 2009, pursuant to Section 211 of the DGCL, for stockholders of record on ~~February 6, 2006,~~December 29, 2008, pursuant to Section 213 of the DGCL, the following resolution was duly adopted:

RESOLVED, that the Board of Directors and the shareholders of the Corporation hereby declare it advisable and in the best interests of the Corporation that Article IV of the Corporation's Certificate of Incorporation, filed with the Secretary of State, State of Delaware on April 19, 1988, as amended (the "Certificate of Incorporation") be amended to read as follows:

FOURTH: The aggregate number of shares of all classes of stock which the Corporation is authorized to Issue ~~703,000,000~~1,403,000,000 shares consisting of ~~700,000,000~~1,400,000,000 shares of Common Stock, par value $.0001 per share, and ~~3 ,000,000~~

3,000,000 shares of Preferred Stock, par value $.001 per share.

SECOND: That the above stated amendment was approved by the Board of Directors of the Corporation by majority vote pursuant to Section 141 of the DGCL and by majority vote of the shareholders of the Corporation owning a majority of the Corporation's issued and outstanding common shares on ~~April 7, 2007.~~December 29, 2008.

THIRD: That the above stated amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by ~~Edward L. Marney,~~Rudolf Hauke, a duly Authorized Officer, this __ day of ~~June,~~January, A.D. ~~2007.~~2009.

	MAGNITUDE INFORMATION SYSTEMS, INC.


	By: ~~________________________________~~ ~~Edward L. Marney,~~
		Rudolf Hauke, President and
		Chief Executive Officer

~~EXHIBIT C~~

~~CERTIFICATE OF AMENDMENT~~

~~CERTIFICATE of INCORPORATION~~

~~MAGNITUDE INFORMATION SYSTEMS, INC.~~

~~MAGNITUDE INFORMATION SYSTEMS, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY:~~

FIRST: That by majority vote of the Director's of the Corporation at a duly organized meeting held on February 16, 2007, pursuant to Section 141 of the General Corporation law of the State of Delaware (the "DGCL"),and pursuant to the written consent of shareholders of the Corporation owning a majority of the Corporation's issued and outstanding common shares solicited through a Consent Solicitation ending June __, 2007, pursuant to Section 211 of the DGCL, for stockholders of record on February 6, 2006, pursuant to Section 213 of the DGCL, the following resolution was duly adopted:

~~FIRST : That the name of the corporation shall be “KiwiAge Enterprises, Inc.”.~~

~~THIRD: That the above stated amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL.~~

~~IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by Edward L. Marney, a duly Authorized Officer, this __ day of June, A.D. 2007.~~

~~MAGNITUDE INFORMATION SYSTEMS, INC.~~

~~By: ________________________________~~

~~Edward L. Marney, President~~

~~EXHIBIT D~~

~~Company’s Annual Report on Form 10-KSB for the~~

~~Fiscal Year Ended December 31, 2007~~

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

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

For the Fiscal Year ended December 31, ~~2006~~
2007

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

For the Transition Period ~~From ________________ to ________________~~From______ to_____

Commission File No. 33-20432

MAGNITUDE INFORMATION SYSTEMS, INC.

Exact Name of Registrant as Specified in its Charter

DELAWARE		75-2228828
State or Other Jurisdiction of Incorporation or Organization		IRS Employer
~~Incorporation or Organization~~		Identification Number

~~1250 State Route 28, Ste. 309, Branchburg, New Jersey~~		~~08876~~
~~Address of Principal Executive Offices~~		1250 State Route 28, Ste. 309, Branchburg, New Jersey 08876 Address of Principal Executive Offices Zip Code

(908) 879-2722

Registrants Telephone Number, Including Area Code

Securities Registered Pursuant to Section 12(b) of the Act:

NONE

Title of Each Class		Name of Each Exchange on Which Registered
NONE		NONE

Securities Registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, par value $0.0001

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of 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 xNo o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. o

The Registrant’s revenues for the fiscal year ended December 31, ~~2006,~~2007 were ~~$47,701.~~$29,745.

Common stock, par value $.0001 per share (“Common Stock”), was the only class of voting stock of the Registrant outstanding on March ~~20, 2007.~~28, 2008. Based on the closing price of the Common Stock on the OTC Electronic Bulletin Board as reported on March ~~20, 2007,~~28, 2008, ($~~0.05)~~0.02), the aggregate market value of the ~~164,898,074~~63,685,964 shares of the Common Stock held by persons other than officers, directors and persons known to the Registrant to be the beneficial owners (as the term is defined under the rules of the Securities and Exchange Commission) of more than five percent of the Common Stock on March ~~20, 2007,~~28, 2008, was approximately ~~$8,244,904.~~$ 1,273,719. By the foregoing statements, the Registrant does not intend to imply that any of the officers, directors, or beneficial owners are affiliates of the registrant or that the aggregate market value, as computed pursuant to rules of the Securities and Exchange Commission, is in any way indicative of the amount which could be obtained for such shares of Common Stock.

As of March ~~17, 2007 227,379,014~~28, 2008, 376,242,570 shares of Common Stock, $.0001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: SEE EXHIBIT INDEX

MAGNITUDE INFORMATION SYSTEMS, INC.

CONTENTS

					Page
PART I.

		Item 1.		Business	3

Item 2.	Properties	12

Item 3.	Legal Proceedings	~~Item 2.~~		~~Properties~~	812

		~~Item 3.~~		~~Legal Proceedings~~	9

		Item 4.		Submission of Matters to a Vote of Security Holders	912

PART II.

		Item 5.		Market for Registrant's Common Equity and Related Shareholder Matters	1013

		Item 6.		~~Selected Financial Data~~	11

		~~Item 7.~~		Management’s' Discussion and Analysis of Financial Condition
	and Results of Operations		1216

		Item 8.	7.	Financial Statements and Supplementary Data	1420

		Item ~~8a.~~		~~Controls and Procedures~~	14

		~~Item 9.~~	8.	Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure		1420

Item 8A.	Management’s Annual Report on Internal Control Over Financial Reporting	20

Item 8B.	Other Information	21

PART III.

		Item ~~10.~~	9.	Directors and Executive Officers of the Registrant	1522

Item 10.	Executive Compensation	24

		Item 11.		~~Executive Compensation~~	17

		~~Item 12.~~		Security Ownership of Certain Beneficial Owners and Management	2229

		Item ~~13.~~	12.	Certain Relationships and Related Transactions	2331

Item 13.	Principal Accountant Fees and Services	31

Item 14.	Exhibits	33

		~~Item 14.~~Signatures		~~Principal Accountant Fees and Services~~	2434

~~PART IV~~
		~~Item 15.~~		~~Exhibits and Reports on Form 8-K~~	25

				~~Signatures~~	26

				Exhibit Index	2735

PART I

ITEM1:BUSINESS

~~ITEM~~Section 1.1 1:~~BUSINESS~~The Company

~~The Company~~

Magnitude Information Systems, Inc. (the “Company” ~~or “Magnitude”~~) was incorporated as a Delaware corporation on April 19, 1988 under the name Fortunistics, Inc. On ~~March 4, 1993, the Company changed its name to Whitestone Industries, Inc. On July 14, 1997, the Company changed its name to Proformix Systems, Inc., and on~~ November 18, 1998, the Company changed its name to Magnitude Information Systems, Inc. The Company owns substantially all outstanding stock of Magnitude, Inc., an operating subsidiary. The 1% of Magnitude, Inc. not owned by the Company constitutes a minority interest which is valued at $0.

On August 16, 2007 the Company acquired all outstanding shares of Kiwibox Media, Inc.

The Company, Magnitude, Inc. and Kiwibox Media Inc. are separate legal entities, with Kiwibox Media, Inc. being a wholly owned subsidiary. The operations of the combined entity are currently comprised almost exclusively of the operations of Kiwibox Media, Inc.

~~The~~Prior to the implementation of its strategic business plan in 2007, the Company’s primary product iswas an integrated suite of proprietary software modules previously marketed under the name ~~ErgoEnterprise~~Ô ~~which are designed~~ErgoEnterprise™. During the latter half of fiscal year 2006, Company management concluded that the marketplace for the Company’s ergonomic software products was not developing, and would not develop to ~~help individual computer users~~the material extent necessary in the next 12 to 24 months, to support and ~~businesses increase productivity and reduce~~sustain the ~~risk~~Company’s sales efforts. Accordingly, management determined that it would be in the best interests of potentially preventable repetitive stress injury (RSI). These software modules can be applied individually or together in a comprehensive ergonomic and early intervention program that seeks to modify a user’s behavior by monitoring computer usage patterns over time and warning the user when to break a dangerous trend in repetitive usage of an input device, such as a keyboard or mouse. The product was developed to train people working on computers, monitor computer-use related activities and evaluate a user’s risk exposure and propensity towards injury or loss of effectiveness in connection with his/her day-to-day work. Moreover, the software enables a company to not only address the issue of health risks involving employees and to minimize resulting potential liabilities, but delivers a powerful tool to increase overall productivity.

~~Background~~

~~On June 24, 1997,~~ the Company ~~entered into an acquisition agreement whereby~~and its shareholders to identify another business opportunity and pursue it acquired substantially all of the outstanding stock of Proformix, Inc., a Delaware corporation and manufacturer of ergonomic keyboarding systems. Proformix, Inc. in November 1998 changed its name to Magnitude, Inc. and is hereafter referred to as Magnitude, Inc. The business combination took the form of a reverse acquisition. The Company and Magnitude, Inc. remain as two separate legal entities whereby Magnitude, Inc. operates as a subsidiary of Magnitude Information Systems, Inc. On November 18, 1998, the Company sold Magnitude, Inc.’s hardware product line comprised of the ergonomic keyboard platform products and accessories, all related inventory and production tooling and warehousing assets, and all intellectual property rights including the Proformix name, to a Canadian company.

On February 2, 1998, the Company entered into an Agreement and Plan of Merger with Rolina Corporation, a privately held New Jersey software developing firm, and acquired the rights to certain software products, with such software products subsequently forming the basis for the ~~further development~~benefit of ~~the Company’s proprietary ErgoEnterprise~~Ô ~~software system. The operations of Magnitude Information Systems, Inc. are currently comprised solely of the operations of Magnitude, Inc.~~

~~Subsequent to December 31, 2006,~~ onour shareholders. On February 19, 2007, the ~~Company.~~Company, pursuant to its strategic plan to seek another business opportunity, signed an Agreement and Plan of Reorganization with the owners of a social networking website, to acquire their Kiwibox.com website and ~~business.~~business, represented by Kiwibox Media, Inc. Pursuant to that certain Agreement and Plan of Reorganization, in August, 2007, Kiwibox Media, Inc. merged with and into Magnitude Operations, Inc., a wholly owned subsidiary of Magnitude Information Systems, Inc., in a “reverse merger” transaction. The ~~Company~~three shareholders of Kiwibox Media, Inc. transferred and delivered all of the outstanding stock of Kiwibox Media, Inc. to Magnitude Operations, Inc. for cancellationand received in exchange shares of Magnitude Information Systems, Inc. at closing. Also at closing and as a result of the merger, the separate legal existence of Magnitude Operations, Inc. ceased and Kiwibox Media, Inc. became the surviving corporation of the merger and a wholly owned subsidiary of Magnitude Information Systems, Inc. Following the merger, Magnitude Information Systems, Inc. is ~~presently finalizing an exclusive licensing and support agreement with Imminent Technologies,~~planning to change its corporate name to “KiwiAge Enterprises, Inc.~~, licensing the rights to sell, support and further develop its ergonomic business and products. Imminent Technologies, Inc, the licensee, was organized by two former Company employees.~~”

The Company is currently subject to the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934. The Company has the authority to issue an aggregate of ~~Three~~Seven Hundred Million ~~(300,000,000)~~(700,000,000) Common Shares, par value $.0001, and Three Million (3,000,000) Preferred Shares, par value $.001, of which at December 31, ~~2006,~~2007, Two Thousand Five Hundred (2,500) were designated as Cumulative Preferred Shares, par value $.001; Three Hundred Thousand (300,000) were designated as Series A Senior Convertible Preferred Stock, par value $0.001; Three Hundred Fifty Thousand (350,000) were designated as Series B Senior Convertible Preferred Stock, par value $0.001; One Hundred Twenty Thousand (120,000) were designated as Series C Senior Convertible Preferred Stock, par value $0.001; Five Hundred Thousand (500,000) were designated as Series D Senior Convertible Preferred Stock, par value $0.001; ~~and~~ Five Hundred Thousand (500,000) were designated as Series E Senior Convertible Preferred Stock, par value ~~$0.001.~~$0.001, and Forty-Three Thousand Six Hundred Ten (43,610) were designated Series G Senior Convertible Preferred Stock

As of December 31, ~~2006,~~2007, there were outstanding ~~224,235,472~~276,709,237 Common Shares, 1 Cumulative Preferred Share, and ~~109,857~~129,500 Convertible Preferred Shares.

~~Narrative~~Item 1. Description of Business

Overview

Through our subsidiary, we own and operate “Kiwibox.com”, a social networking website for teens.Initially launched in 1999, Kiwibox.com is an online social networking website dedicated to teen users. With approximately 1.8 million registered members, the Kiwibox website provides online content in several categories, dedicated to teens, including entertainment, fashion and games. We have formed a user-based contingent of contributors that submit, review and comment upon content and articles from all over the world, 24 hours a day, seven days a week. Kiwibox.com uses a “points” reward system for users, where a user may acquire elevated peer status and/or earn prizes which in many cases are provided by advertiser and/or sponsors. We are in the final stages of re-launching our website with increased functions, etc., scheduled for release in May, 2008.”

~~Magnitude Information Systems, Inc. is a pioneer and leader~~Our Prior Ergonomic Software Business

Early in 2007, Company management determined that it would be in the ~~ergonomic productivity softwaremarket. With~~best interests of shareholders to acquire the new business opportunity presented by the Kiwibox social networking business. In making its ~~Anti-Injury~~Ô ~~software as represented by ErgoEnterprise~~Ô~~, an interactive suite of Windows~~Ô ~~software products, Magnitude has developed and delivered~~decision, management considered the first integrated systems approach to computer ergonomics. The Company’s patented proprietary software products provide business and government employers with a complete system for the evaluation and management of ergonomic and productivity risk factors with respect to the use of computers in the office environment. ErgoEnterpriseÔ ~~is designed to help employersminimize preventable Repetitive Stress Injuries (“RSI”) and enhance productivity through:~~following factors:

~~Real-time monitoring of keyboarding activities~~The Company’s ergonomic software business had not generated sales and revenues sufficient to ~~ensure proper posture and work pacing.~~support its continuing operations;

~~Pro-active dialogue~~The acquisition of Kiwibox would provide the Company and its shareholders with ~~at-risk employees, including surveys~~the opportunity to acquire and ~~training~~expand a product in the ~~best practices for wellness~~growing social networking website industry and ~~productivity.~~provide the Company with, perhaps, a better platform with which to raise equity capital;

~~Strategic profiling~~The Kiwibox.com website was a functional platform, already generating some revenue while the two other business opportunities that the Board reviewed and ~~the management of computer use throughout an organization to employ best practices and to measure health, safety, and performance results.~~considered in early 2007 would have required further development before they could have been launched, and;

~~Computer workstation assessment tools.~~On April 10, 2007, pursuant to negotiations that began earlier in the year, we entered into a License and Client Software Support Agreement with Imminent Technologies, LLC ("IMT"), pursuant to the principal terms of which, we appointed IMT as a non-exclusive licensee/reseller for our suite of ergonomic software products (the "Software"), appointing IMT as our exclusive agent to provide support services to our current customers with service contracts. The Agreement permits IMT to resell and sublicense the Software worldwide at prices determined exclusively by IMT. IMT will pay us a royalty payment equal to 10% of the gross revenues in excess of $200,000 earned from the sale of the Software during each year of the Agreement. We agreed to pay IMT $20,000 to assist IMT in providing the customer support services in the commencement and transition period. The Agreement will automatically renew for successive one-year periods unless terminated by a party.

~~We have received a patent from the U.S. Patent and Trademark Office relative to certain core inventions within the ErgoEnterprise~~Ô ~~system and we have applied for several more patents for our products.~~The Kiwibox Acquisition

On August 16, 2007, we acquired Kiwibox Media, Inc. through a reverse merger between Kiwibox and our wholly owned acquisition subsidiary. As a result of the ~~utilization of computers in~~merger, Kiwibox became our wholly owned subsidiary.

At the ~~office has increased significantly in the last decade, so has the rate of health problems believed to be related~~Kiwibox closing, we (1) issued an aggregate 30,000,000 restricted common shares to the ~~use~~three Kiwibox shareholders, (2) issued an aggregate 43,610 shares of ~~computers. Computer ergonomics focus on optimizing~~our Senior Convertible Series G Preferred stock to these principals, (3) paid an aggregate $150,000 in cash to these Kiwibox principals, less a $7,000 investment banking fee paid to Southridge Investment Group, and (4) signed two-year employment agreements with Messrs. Lin Dai, Ivan Tumanov and Michael Howard, the ~~design of technology involved in~~three Kiwibox shareholders, all pursuant to the ~~utilization of computers in the office,~~terms and also attempts to affect the manner in which people interact with computers, so as to minimize the associated health risks. A successful technology delivery system positively impacts the cost of doing business by improving the comfort, productivity, job satisfaction and safetyprovisions of the ~~computer user, while reducing~~Agreement and Plan of Reorganization, dated February 19, 2007, and amendments thereto, and as most recently modified by Amendment No. 6 between the ~~costs~~parties on February 28, 2008. The 43,610 Series G Preferred Shares issued to the Kiwibox principals at closing have an aggregate conversion value of ~~absenteeism and work related disability.~~

~~Repetitive stress injury (RSI)~~$500,000 (the “Conversion Value”), which $500,000 Conversion Value is ~~a classification of diseases caused~~convertible into our common shares by dividing it by the ~~excessive use~~“Market Price”, representing the average price of ~~joints. It is a sub-classification~~our common stock during the twenty (20) successive trading days immediately preceding the second anniversary of ~~Cumulative Trauma Disorders (CTDs). RSI accounts for a large portion~~the agreement. At the closing, the Company agreed to issue 750,000 of ~~work-related illnesses, and~~ the ~~incidence of RSI is expected~~Kiwibox shareholders’ restricted common shares to ~~grow~~Southridge Investment Group, LLC as ~~the number of people operating keyboards increases. The impact of RSI is measured not only in the pain and suffering~~part of its victims, but also in time lost from work, and medical costs. The Company’s software products are designed to help businesses deal with potentially preventable repetitive stress injuries, by real-time monitoring of keyboarding activities, pro-active dialog with at-risk employees, and strategic profiling and management of computer use throughout an organization.fee.

A study released in January 2001 by the National Academy of Sciences, originally commissioned by Congress and produced by the National Research Council, finds that work-related back, hand and wrist injuries affect about 1 million U.S. workers every year. The total cost of the resultant disorders is between $45 billion and $54 billion in compensation, lost wages and lower productivity. Increased awareness of the health risks and associated costs led the State of California several years ago implement an ergonomic regulation which directs qualifying employers to establish and maintain a program designed to minimize RSI’s. Such program shall include work-site evaluation, control of the exposures that have caused RSI’s, and training of employees. State agencies and employers in California face fines of up to $25,000 per incident for violating these regulations. The State of Washington adopted similar regulations in 2000, and other states have indicated a willingness to follow suit. The Company believes that the growing recognition of these trends will give rise to a rapidly expanding market for the Company’s products.

~~The Industry~~

The Company operates in only one business segment: the development, marketing, and licensing of risk aversion and productivity enhancement software products for the computerized workplace environment. More specifically, the Company licensed highly sophisticated and proprietary software that provides computer based training, work pacing and monitoring tools, as well as a computer workstation assessment tool.

~~Potential customers~~

As previously reported on our prior Form 8-K current report of August 2, 2007, the Swiss investment firm, Tell Capital AG, issued its commitment to subscribe to purchase an aggregate $3,000,000 of Company equity securities. This commitment provided us with the funds to close the Kiwibox acquisition.

As of the date of this report, Tell Capital AG and its assignees have invested $1,800,000. We used these subscription proceeds to pay the Kiwibox principals $150,000 due under our original agreement and to fund the Kiwibox business development and our corporate operating expenses. Most of the scheduled subscription payments from Tell Capital AG were late and we negotiated a series of six amendments and two standstill agreements with the Kiwibox principals. As a result of these amendments, we made $250,000 in cash payments to the Kiwibox principals and still owe them approximately 30,000,000 common shares and a payment against a corporate promissory note in the principal amount of $225,000 due June 15, 2008. On March 7, 2008, we closed on a private placement with 10 accredited investors and received subscription proceeds of $1,500,000. As a result, we met the last funding requirements for the ~~Company’s products are businesses~~acquisition and all conditions, including the Kiwibox right of all sizes, as well as organizations and government departments and agencies that employ many staff in computer-related functions. The software industry in general is comprised of a remarkable variety of providers, ranging from small boutique-type designers to large international corporations. The Company operated primarily in the United States of America.rescission, terminated.

~~Products, Trademarks~~

~~The Company’s primary product~~At the Kiwibox closing, we signed and delivered employment agreements with the three Kiwibox principals, covering a two year term and agreed to pay each Kiwibox Shareholder an annual base salary of $150,000. In addition, we agreed to pay each an annual bonus if certain business goals are met: a $100,000 bonus if the Kiwi Business has received no less than an average 215,000 “Unique Visitors” during either the 10th, 11th or 12th month of the first year of the term or achieved no less than $316,000 in gross revenues within the 12 moth period following the Closing. Alternatively, we agreed to pay each a $50,000 bonus if the Kiwi Business has received at least an average 175,000 but less than an average 215,000 “Unique Visitors” during either the 10th, 11th or 12th month of the first year of the term or at least $237,000 in gross revenues but less than $316,000 within the 12 moth period following the Closing. A “Unique Visitor” is a ~~suite~~person who visits a Kiwibox website during any month during the term. For the second year of ~~nine proprietary software modules marketed~~their employment agreements, we agreed to pay each a $100,000 bonus if the Kiwi Business has received no less than an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or attained $1,961,000 in gross revenues, or a bonus of $50,000 each if the Kiwi Business has received at least an average 415,000 but less than an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or attained at least $1,500,000 in gross revenues but less than $1,961,000. Each Kiwibox Shareholder received a stock option to purchase up to 7,500,000 shares of our common stock at an exercise price of $.05 per share which shall vest and be exercisable by the Kiwibox Shareholders, 50% on the first anniversary date of the Closing, 25% 18 months after the Closing and 25% on the second anniversary of the Closing. Each was issued, as well, under the ~~name ErgoEnterprise~~Ôterms of their employment agreements, a performance stock option to purchase up to an additional 3,000,000 shares of our common stock, 1,500,000 of which ~~are designed to help individual computer users~~options shall vest and ~~businesses deal with potentially preventable repetitive stress injury (RSI). The nine software modules can~~ be ~~applied individually or together in a comprehensive ergonomic and early intervention program that seeks to modify a user’s behavior~~exercisable by ~~monitoring computer usage patterns over time and warning~~ the user when to break a dangerous trend in repetitive usage of an input device, such as a keyboard or mouse. The product was developed to train people working on computers, monitor computer-use related activities and evaluate a user’s risk exposure and propensity towards injury or loss of effectiveness in connection with his/her day-to-day work. Moreover, the package enables a company to not only address the issue of health risks involving employees and to minimize resulting potential liabilities, but delivers a powerful tool to increase overall productivity.

~~The system is highly customizable for management, staff and employees. All components operate on any PC or workstation running the Microsoft Windows operating system. ErgoEnterprise~~Ô ~~was~~Kiwibox Shareholders after the first ~~suite of software solutions that combines ergonomic remediation and productivity enhancement tools. Its nine component modules are described as follows:~~

~~ErgoTutor~~™ delivers a complete office ergonomics training course directly to employees at their desktop, and provides employees with clear initial awareness training as well as follow-up training for reinforcement of previously learned materials.

~~ErgoSURE~~™ ~~is a postural assessment tool designed to allow the evaluation of employee posture while working at computers. It is an electronic version~~anniversary date of the ~~internationally accepted RULA (Rapid Upper Limb Assessment) system. This system, developed~~Closing if the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term or achieved $316,000 in gross revenues during the first year, and the balance, or 1,500,000 options shall vest and be exercisable by the Kiwibox Shareholders after the second anniversary date of the Closing if the Kiwi Business has received at least an average 550,000 Unique Visitors during either the ~~University~~22nd, 23rd or 24th month of ~~Nottingham’s Institute~~the second year of the term or achieved $1,961,000 in gross revenues during the second year of the agreements. The exercise prices for Occupational Ergonomics in the U.K., allows users to survey a broad range of computer-related work activities involving repetitive motions, allowing the user to detect - and remedy - hazardous situations and conditions.

~~ErgoSurveyor™~~these stock options is used to gather usage information from employee populations. Customized, professional quality surveys are designed to corporate specifications and gather important information that may be used to plan ergonomic and corporate business strategies. Responses to risk assessment~~surveys are gathered and compiled into a database that may be used to create comprehensive, customized reports.~~

~~UserNotes™~~is an early reporting and “Rapid Response” Intervention tool designed to give employees a way to communicate discomfort to designated staff, allowing issues to be addressed earlier - at a lower cost and a higher likelihood of success. UserNotes is consistently available to everyone in the organization at the workstation or notebook with or without Internet access.

~~ErgoSentry~~® measures rest against work in real time, tracking keyboard and mouse activity independently. ErgoSentry’s patented algorithms, designed for prevention and control of RSI risk factors, monitor computer usage patterns over time and alert the user when to take micro-breaks, avoiding high-risk trends in keyboard or mouse usage through a unique and patented empowering feedback mechanism. Users are alerted to take these micro-breaks only when risk exposure exceeds configured limits.$.05 per share.

History

Kiwibox.com was founded in 1999 by 3 students attending Carnegie Mellon University. Kiwibox.com was built as an online destination for teens, combining editorial content with interactive community features. Kiwibox.com produces a “For Teen by Teens” Online Magazine, and currently has over one-thousand (1,000) active member contributors and editors. This user generated entertainment content is managed though a proprietary Kiwibox.com editorial system that is unique to Kiwibox.com, and is highly acclaimed by the user base. Acceptance of this model was demonstrated through through exponential membership growth during the first two years of operations. This membership growth required better access to entertainment and content sources, advertisers, and business partners, thus in 2000 Kiwibox relocated from Pittsburgh to New York City. When the 2001 “dot-com” bubble burst in 2001 many Internet advertising agencies as well as Kiwibox competitors were forced out of business. In response Kiwibox.com reduced its operations and focused on maintaining and growing its membership community, while establishing itself as a highly trusted and safe teen destination.. As the Internet Advertising industry recovered over the next 6 years, Kiwibox.com steadily grew its registered membership base to 1.8 million.

Kiwibox Operations

In the United States alone the teenage population is approximately 44 million, as estimated by the US Census Bureau, and they spent over $189 billion in 2006 according to eMarketer. Spending by and on teens is projected to grow to 208 billion by 2011. To reach teens online, marketers will increasingly look to social networks. According to eMarekter, advertising on social networking websites is projected to be over $2 billion for 2008 and to grow to over $4 billion by 2011. Today’s teenagers are the first generation to grow up using the Internet for everything from entertainment and information, to shopping and communication. In fact, according to the Pew Internet and American Life Project, 83 percent of U.S. teenagers are online. And although there are a number of websites that have targeted this large marketplace no one site has yet to dominate it. We will strive through technology and content enhancements to make the Kiwibox.com website one of the most exciting teenage, multimedia sites available

Re-launch of our Website “2.0”

Kiwibox.com has been one of the pioneer web sites combining content and community features for teens. Over the past several years, new web technologies have emerged offering more flexibility and scalability for the creation and management of content, as well as a better user interface and experience. Such a collection of web technology is generally referred to as “Web 2.0 technology”. Kiwibox.com is in the process of redesigning the entire site to incorporate new software and features with a complete new interface and design. The re-launch of “Kiwibox 2.0” website is expected in April, 2008, with major improvements in the following categories:

~~EMSAnalyzer™~~Articles and Content - User generated content, supplemented by an enhanced editorial staff is ~~designed to measure, analyze~~being condensed into 5 major categories: Music, Entertainment, Games, Body & Style, Life & Love. Utilizing Kiwibox.com’s proprietary editorial system content currently contributed by 1,000 teen writers will be expanded, as will the delivery of exclusive video and ~~manage all aspects of day-to-day computer use. Raw actual data of normal, everyday use are gathered~~interactive content. through ~~ErgoSentry~~® ~~and accumulated for standard and customized reports that track, analyze and qualify how employees are using their computer stations.~~partnership agreements with major media companies.

~~Guardian™~~Community Features ~~captures metrics~~- An improved user profile will provide better social networking functionality, increasing interaction between users on ~~the frequency of keystroking~~Kiwibox.com and ~~mousing during each minute throughout the day, and optionally tracks which applications and files users access.~~other social networking website.

~~ErgoQuiz™~~Points and Rewards - To drive membership Kiwibox.com is ~~an electronic testing system used~~expanding the number of activities for its members to ~~assess ergonomic awareness~~earn points and ~~educate employees.~~rewards. Through increased partnership and sponsor programs Kiwibox.com is expanding its selection of member prizes and rewards.

~~ErgoMap™~~Games ~~offers employees state of the art ergonomic training at the desktop.~~

~~Patents~~- Kiwibox is expanding its partnerships with online game sites and ~~New Products~~

~~ErgoSentry - Patent Granted:~~

~~In May 2000 the U.S. Patent~~online game developers, and Trademark Office awarded the Company a patent which covers various innovations including a proven approach that helps computer users manage their activity to improve productivity and reduce the risk of repetitive motion injuries.

~~ErgoPal Introduced, Patent Pending:~~

New patent-pending ErgoPal software is a work pacing tool that helps users mitigate health risks and improve their productivity by gently alerting them to increases in stress and fatigue which are occurring before they realize it.

~~Studies Involving ErgoEnterprise~~Ô

~~Magnitude has conducted productivity studies using ErgoEnterprise~~Ô ~~at various client and prospect sites.~~

In July 1999, Cornell University released a study entitled “Effects of Ergonomic Management Software on Employee Performance,” a field experimental test of the effects of ErgoEnterprise on computer work activity. Professor Alan Hedge tested the effects of using Magnitude’s ergonomic work pacing software to monitor keyboard and mouse activity, and towill provide computer users with information on appropriate, discretionary rest breaks. The software also provided information on stretching exercises, appropriate postures, and appropriate workstation adjustments. The Wall Street office of a nationwide insurance brokerage firm was chosen as the test sitefresh new ways for ~~this study.~~

Data gathered in the study covered 6,195 hours of computer usage, equivalent to 800 person/days of computer use. Participants used computers an average of 5.9 hours per day, and typed over 3,949,000 keystrokes during the course of the study. Employees at the site used their computers for much of the workday. The study evaluated the performance of 21 individuals including executives, administrators, customer service specialists, underwriters, and accountants.

~~Alerting~~ users to ~~take more short rest~~compete and ~~break periods improved work accuracy,~~interact with one another, while providing our sponsors an enhanced platform to integrate their marketing message and did not impair overall keystroke and mouse usage. These study results agree with previous research. In addition, the study concluded that from an economic standpoint, the performance benefits that may accrue from using ErgoEnterprise indicate a return on investment of approximately 3 months.advertising campaigns.

~~One client, the California State Compensation Insurance Fund, conducted a survey using ErgoEnterprise in a pilot program from January 2000 - June 2000. The significant results of the study included:~~

~~A 50% reduction rate in the total number of Musculoskeletal Disorder (MSD) Claims.~~

¹	~~Hedge, A. “Effects of Ergonomic Management Software on Employee Performance.”~~ ~~Cornell Human Factors Laboratory Technical Report /SP7991~~~~, Cornell University, July 1999.~~

~~A reduction by between 20% and 80% of OSHA reported injuries.~~

~~The actual workers’ compensation savings in the pilot program was $120,000.~~

~~State Fund’s projected annual workers’ compensation cost savings was approximately $780,000.~~

~~There was a total participation of employees in Pilot Program~~

~~Employees postponed micro-breaks a maximum of nine minutes.~~

~~There was 100% employee satisfaction while using ErgoEnterprise.~~

~~Some employees used program to “warm up” prior to their beginning work~~

Potential Revenue Streams

~~In February 2001,~~Currently we generate the majority of our revenue from advertising/sponsorships. Although we anticipate average web advertising CPM (click per thousand) rates to remain steady in 2008, significant revenue growth is expected as the revitalized site is launched, and membership activity increases. New revenues, in the form of Mobile advertising will increase Kiwibox’s revenue base in 2008. Kiwibox Mobile, with an anticipated launch in Q2 2008, will include both text messaging services (SMS) and a ~~study by Cornell/Lockheed Martin titled~~ ~~Ergonomic Management Software~~Kiwibox mobile internet experience (WAP) Mobile services demand higher advertising revenue rates (CPM’s) than traditional website CPM’s, thus we expect Mobile revenues to significantly contribute to Kiwibox.com’s overall revenue stream.

Marketing Strategy

Our website is being constructed to promote safe and ~~Work Performance~~ ~~presented~~easy interactivity between the teen audience while providing a quality teen magazine. To date, we have devoted our resources to developing our teen magazine. Our new website will provide a platform for simple social interaction and connectivity among our teen members who will be able to share information and provide a portal for their social communication. The 2006 Nielsen Net Ratings have calculated that the top ten networking sites have grown approximately 47% and are expected to continue to grow at that rate for some time. The sites serve an ~~ROI analysis to quantify the potential economic impact~~estimated audience of approximately 68.8 million people, a ~~59% improvement in keystroke accuracy for the test group. Based on a combination of factors including estimated hourly employee costs which include some~~large segment of the ~~following: wages, benefits, occupied~~United States population.

We expect to spend approximately $300,000 on marketing in Q3 and Q4 of 2008, focusing on both web user acquisition as well as mobile user acquisition. Furthermore, the strategic placement of widgets and web apps on major competitor websites will further drive potential members to Kiwibox.com. Once potential new users reach Kiwibox via designated landing pages, they will be greeted with customized content, contests and features of their preference, along with points and incentives for them to join. New viral tools will be available to existing members to increase referrals and generate significant membership growth via word-of-mouth. We expect conversion and retention rate to significantly increase starting in Q3, with the goal to lower the per member acquisition cost by 50% or more by the end of 2008.

We will also pursue partnerships with smaller web sites with similar or complementary demographic and establish an affiliate network. Through co-marketing programs and revenue share advertising deals, we look to increase our brand exposure to potential members on affiliate sites, as well as further identifying potential web sites as acquisition targets.

Safety

Kiwibox.com has developed a proprietary monitoring model which assists in maintaining a safe site for our member base, combining both technology based systems and user authority interaction. Over the last 8 years our team have selected trusted long term members to become “site monitors” known on the Kiwibox.com site as “KiwiHelpers”. These KiwiHelpers utilize internal ~~floor space, pre-study hourly error costs, hourly savings per person,~~Kiwibox provided tools to remove inappropriate content as needed, guide and warn users, and continually scan the ~~annual “per seat” cost of ErgoEnterprise, the study indicated~~site for unsafe content or user activity. These helpers have an icon next to their username denoting that the breakeven/payback period is achieved in 25.1 hours of usage. Several large industrial clients already have named ErgoEnterprise “Best Practice”. The term “Best Practice” is an acknowledgementthey are a KiwiHelper, thus users who believe they are not being treated respectfully, or otherwise feel uncomfortable, may easily find and reach a KiwiHelper to gain their assistance. If a KiwiHelper deems that a ~~concept, process,~~user or ~~product is proven to produce~~site issue requires further escalation, they in turn immediately contact Kiwibox personnel, which then evaluates and resolves the ~~desired results and is applicable throughout the enterprise across organizational lines.~~issue.

~~Business Strategy~~

~~The most important prospective customers for the Company’s products are large~~Kiwibox is constantly learning new and ~~medium companies, organizations,~~improved techniques to further our tools and ~~governmental departments and agencies that have a relatively large staff working in computer-related functions. These entities not only are more cognizant~~methods, keeping Kiwibox.com one of the health risks and negative effect on productivity associated with many of the traditional tools of the computerized workplace and therefore tend to be more receptive to new remedial solutions and alternatives basedsafest social networking destinations on the ~~science of Ergonomics, but also have a significant exposure~~internet. We pride ourselves on our member involvement, and their ability to interact in ~~terms of legal liabilities if they fail to act~~an open yet safe environment, monitored by ~~addressing these potential risks. On an on-going basis, the increasing cost of workers compensation insurance creates a growing incentive to deal with the underlying causes.~~their peers.

~~Research and Development~~

~~The Company invested considerable resources in the further development of the overall ErgoEnterprise~~Ô ~~system and related product documentation and marketing collateral materials. In late summer 1997, the first official version of ErgoEnterprise~~Ô~~, Version 1.78, was released, followed by yearly upgrades since then.~~

The Company has expensed all expenditures related to the above efforts. Such expenses totaled approximately $75,998 for the year ended December 31, 2006, and $217,067 for the year ended December 31, 2005.

~~Competition~~

The ergonomic software products marketplace is served by a number of smaller software companies, none of which occupies a dominant position. For the most, these competitors market software products that address only one or a few of the task complexes covered by the Company’s products, without thereby offering a comparable breadth of function and integration in such areas as work-site evaluation, employee training and work pacing.

~~During fiscal year 2006, the Company wasnot aware of any products that compete - in terms of breadth of functionality - with the integrated software product suite that was marketed by the Company under the trade name ErgoEnterprise~~Ô.

~~Seasonality and Dependency~~

The industry segment in which the Company does business is not seasonal. The Company’s past revenues come primarily from smaller orders for pilot projects and field tests, and a limited number of individual larger orders where successfully completed pilot projects led to departmental or enterprise-wide deployment. The nature of the business does not usually involve repeat orders and therefore does not create dependency on a specific customer or group of customers. ~~Employees~~

Competition

Our primary competitors are other youth targeted online social networks, including Facebook.com, MyYearbook.com, and MySpace.com. MySpace and Facebook are widely considered the industry leaders, however, recently statistics and strategic announcements from both companies has indicated a shift in the target audience from teens and college students to a much broader and more adult demographic. We plan to distinguish ourselves by focusing on the teen users and offering superior and exclusive content for this audience.

Secondary competitors include teen content providers and entertainment bloggers such as Seventeen.com, PerezHilton.com, etc. These sites generate unique and engaging content that the teen audience enjoys and attracts a dedicated following. However, these teen content provider sites offer none or very limited social networking features. We plan on establishing partnerships and co-marketing agreements with certain strategic companies in this category, as well as utilizing our technology tools to aggregate content found on other popular teen sites.

Intellectual Property

Except for our patent covering our ErgoSentry software product, we currently do not own any other patents, trademarks, or license of any kind. However, the copyright on the Kiwibox.com web and mobile software and other related intellectual property rights are important assets. We hold the Internet domain names Kiwibox.com, Kiwibox.net, Kiwibox.org, Kiwibox.info, Kiwibox.tv, Kiwibox.us, Kiwibox.mobi, Kiwibox.cn, and Kiwibox.com.cn. Furthermore, for our mobile offerings, we hold the SMS short code 45494 (4KIWI) and related Internet domain names 4Kiwi.com, ForKiwi.com, and FourKiwi.com.

Governmental Regulations

Our Kiwibox website operations are subject to state, federal and international laws, rules and regulations that cover on-line business, privacy policies, consumer protection and product marketing. The Kiwibox website business is subject to state, federal and international laws, rules and regulations applicable to online commerce, including user privacy policies, product pricing policies, website content and general consumer protection laws. Various laws, rules and regulations have been adopted, and probably will be adopted in the future, that apply to the Internet, including available online content, privacy concerns, online marketing, “spam” and unsolicited commercial email, taxation issues, and regulations that effect and monitor the quality of products and services.

A portion of these laws, rules and regulations that concern the Internet and its uses have been only recently adopted. Courts and administrative agencies have not yet fully interpreted these legal requirements as to their application and scope. Accordingly, our Kiwibox website business is subject to the uncertainties of future interpretations and application of these legal requirements. The application and interpretation of these legal requirements or the passage of new and/or revised laws, rules and regulations could reduce the demand for Kiwibox website services, increase its operational costs, and expose it to potential liability. Any such events could have a material adverse effect upon our Kiwibox website business and financial condition. Our failure, or that of our business partners, to accurately predict and anticipate the interpretation or application of these laws, rules and regulations, whether now in force or adopted in the future, could have a detrimental impact on our operations, create negative publicity for us and expose us to potential liability.

State and federal agencies are applying consumer protection laws to regulate the on-line use, collection and dissemination of personal information and website content. These laws require us to implement programs to notify our website users of our privacy and security programs. One of the anticipated features of our new Kiwibox website, scheduled for launch in April, 2008, will permit our members to post their personal information on their membership pages and exchange this information with others. These new website networking functions require that we also provide our members with direct access to their personal information and the ability to edit, correct or delete part or all of their personal information. Consumer protection laws will require us to obtain the consent of our website users if we want to collect and use certain portions of their personal information.

The Federal Trade Commission (“FTC”) is the lead federal agency monitoring Internet websites and their content. State attorneys general have become active monitors of the Internet at the local State level. These governmental bodies may investigate or bring enforcement actions against website operators they deem in violation of applicable consumer protection laws. We believe that our Kiwibox website’s collection and dissemination of information programs, including our privacy policies, do and will continue to comply with existing laws. However, a decision by a federal or state agency that any of our Kiwibox website’s business practices do not meet applicable legal standards could result in liability and have a material adverse effect on our business and financial condition.

Employees

Currently, we have one part-time and 12 full-time employees. We expect to hire an additional 2 or 3 full-time persons during 2008.

Risks Related to Our Business

Early Stage Company; Generation of Revenues

Kiwibox can be considered an early stage company and investors can not reasonably assume that we will ever be profitable. As a early stage company, we are likely to continue to have financial difficulties for the foreseeable future. We may successfully re-develop our website operations and generate additional revenues but still be unable to achieve profitability. Kiwibox has devoted substantial funds to develop its new website, scheduled for launch in April, 2008, but investors should be aware that there can be no assurance that Kiwibox will ever achieve revenues that exceed its operational costs. We may not obtain the funding necessary to provide Kiwibox with the working capital necessary to continue to develop and market its website. Moreover, the Kiwibox.com website may not receive sufficient internet traffic to increase revenues or achieve profitability.

Doubt Raised About our Ability to Continue as a Going Concern.

Our financial statements have been presented on the basis that we will remain a going concern and that our assets will increase and that we will satisfy our liabilities in the normal course of our business. Kiwibox has had minimal revenues and has incurred operating losses during the fiscal year ended December 31, 2007. Our independent auditors have concluded, these factors create an uncertainty about our ability to continue as a going concern. Our ability to continue as a going concern is dependent, among other factors, on our continued success in raising capital.

Need for Additional Capital; Long-Term Viability of Company

Our Kiwibox website business’s future capital requirements will depend on many factors, including the degree to which teenagers use the kiwibox.com Website and the degree to which Kiwibox is able to generate revenues from users of its site. The proceeds of our recent private placement securities offerings, which most recently raised a total of $1,500,000, will not enable our Kiwibox business to achieve a profitable level of operations before additional financing becomes necessary. As we will require additional financing, there is no assurance that such funding will be available on acceptable terms, or at all. If we elect to sell equity to raise additional funds, there is no assurance that additional equity can be sold on terms favorable to the Company and to its existing shareholders, with the result that existing shareholders may incur substantial dilution. Without the necessary funding, we may be required to delay, reduce or terminate some or all of our Kiwibox website business or our efforts to obtain additional funding.

No Formal Feasibility and Market Research Plan

We have collected data and statistics concerning the potential market for the Kiwibox.com website and the costs of marketing our services. We have relied principally on the judgment and conclusions of our management, based on their respective knowledge and experiences. We have not performed any formal marketing study that confirms any absolute demand for the services we will provide on our new Kiwibox.com website, scheduled for launch in April, 2008.

Unpredictability of Future Revenues; Potential Downturns in Operating Results

Due to Kiwibox’s minimal revenues since inception and the uncertainty of revenues that may be generated through potential partners and alliances, we are currently unable to forecast our future revenues with accuracy. Our current and future operational costs are based primarily on our marketing and website development plans and our estimates of future revenues. Our potential advertising and joint marketing sales results are difficult are difficult to forecast at this stage. It will be difficult for us to realign our operational expenses should future revenue forecasts not materialize which would require that we curtail or cease certain aspects of our operations. Accordingly, if our future revenues are insufficient to fund our planned operations, such a shortfall could have an immediate adverse effect on our business, prospects, financial condition and results of operations.

We may experience cyclical downturns in our future operating results due to various factors, many of which are beyond our control. Some of the factors that could impact our operating results include: (a) our ability to attract and retain new members to our Kiwibox.com website; (b) new developments by our competitor websites; (c) advertising and product price competition; (d) our ability to develop enhancements to our website, upgrade its internet functionality and services; (e) our ability to attract and retain necessary personnel; (f) difficulties with our software or hardware equipment, including any interruptions in the development and maintenance of our internet equipment and related infrastructure systems related to our Kiwibox.com website; (g) the future impact of governmental rules, regulations and laws, and; (h) general economic conditions.

Website and Service Development Risks

The development of our new Kiwibox.com website is a highly complex technical process that has already experienced significant delays. Although scheduled to launch in April, 2008, we may experience additional problems that could further delay the public availability of our new Kiwibox.com website. Following the launch of our website, we will be required to add enhancements and services in the future to remain competitive in our teen marketplace. If we are unable to develop and introduce new services or enhancements to our website in a timely manner in response to changing market conditions or customer requirements, our business, prospects, operating results and financial condition could be materially adversely affected.

Limited Senior Management Team; Potential Problems with Expanding Personnel

We have a limited number of senior management personnel, planning, developing and managing our website business. We are in the process of expanding our website operations to accommodate potential growth in our membership and marketplace. We will experience significant pressure on our financial resources and management personnel as a result of the current expansion. In order to manage this expansion, we may be required to adopt new operating procedures, develop new advertising and marketing plans, financial controls and procedures and policies to supervise a growing employee population. We will also be required to attract, retain and properly administer the expansion of our employee population. Investors should be aware that we may not be able to adequately manage all of these new developments in our expansion, in which case our operations, business prospects, operating results and financial condition could be materially adversely affected.

Competition

Our website business in the teen marketplace is highly competitive. We can give no assurances that our website business will effectively compete with the more established teen websites currently operating in this marketplace.

Many of our competitors have significantly greater financial resources, established brand names and significantly larger membership and customer bases and we expect our competition to only intensify.

Dependence on Management

Kiwibox.com website’s success will be substantially dependent on the continued services and on the performance of our current senior management. We will also be dependent upon our ability to retain and incentivize our management team. The loss of services of any one or more of our senior management team could have a material adverse affect on our operating results, business prospects and financial condition.

Our success will be dependent, in large part, on the services of our principal officers and employees. The loss of any of these individuals could have a material adverse effect on our business or results of operations. We do not maintain “key-man” life insurance policies on the lives of our officers to compensate us in the event of their deaths.

Except for issues that require shareholder approval, investors should be aware that they will have no vote on our operations, business developments or any management issues, including expansion, website enhancements or personnel decisions. You should not invest in our company unless you understand that all business and operational decisions are made by our management.

We expect to spend significant financial and management resources in our efforts to comply with the internal control attestation provisions of Section 404 of the Sarbanes-Oxley Act of 2002 beginning with the fiscal year ended December 31, 2008

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated thereunder, our management will be required to attest to the adequacy of our internal controls and procedures in our annual report on Form 10-KSB for the year ended December 31, 2008. Our management has limited experience in complying with Section 404. In order to prepare our management and to implement additional controls and/or procedures, if necessary, to be compliant with these new legal standards, we have retained an outside accounting and financial firm to audit the internal controls and procedures we currently have in place. There is a possibility, therefore, that we will be required to make substantial changes to our internal controls in order for our management to be able to attest that our internal controls are effective as of December 31, ~~2006,~~2008. If our management is unable to attest that our internal controls are effective as of December 31, 2008, the ~~Company employed 4 persons,~~price of ~~whom two were primarily engaged~~our common stock may be adversely affected.

Creation of Brand Awareness

It will be crucial to the economic success of our Kiwibox.com website that we promote and establish brand awareness. A successful brand awareness campaign will tend to decrease our marketing expenses over time. If we are not able to adequately establish our brand in ~~sales~~our marketplace, our operating results, market growth and ~~marketing, and two in general administrative and managerial functions. The Company has no collective bargaining agreements with its employees.~~financial condition could be materially adversely affected.

~~Subsequent Events - 2007~~Potential for Defects in our Products and Services

~~During~~Our Kiwibox.com website, its functionality, product offerings and services may contain defects or problems yet undetected. Such defects or problems could delay the ~~first quarter~~launch of ~~fiscal year 2007, Company management concluded~~our new Kiwibox.com website, generate negative public comment and inhibit marketplace acceptance, any one or more of which could have a material adverse affect on our operating results and financial condition.

Penny Stock Regulation

Our common shares are subject to the “penny stock rules” that require broker-dealers who sell our shares to make specific disclosures before selling to certain persons. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risk associated therewith as well as the written consent of the purchaser of such security prior to engaging in a penny stock transaction. These penny stock restrictions will continue to apply as long as the Company’s common stock continues to trade at market prices below $5.00. Investors should be aware that the ~~marketplace for~~regulations on penny stocks may significantly restrict the Company’s ergonomic software products was not developing, and would not develop to the material extent necessary in the next 12 to 24 months, to support and sustain the Company’s sales efforts. The continuing lengthability of ~~the sales cycle was increasing, impacted by the lack~~any purchaser of our products’ acceptance in the marketplace. Although we sold our ergonomic software to a number of Fortune 500 companies, the Company’s goal to market its product line to ever increasing populations found in our corporate clients’ various business segments and divisions was not being realized. Absent an unambiguous commitment from our clients’ senior management, our ergonomic products often competed with more basic corporate needs in the recent and difficult economic climate. Accordingly, management determined that it would be in the best interests of the Company and its shareholders to identify another business opportunity and pursue it for the benefit of our shareholders. In 2006, Edward Marney became our President and Chief Executive Officer while our founder, Steven Rudnik resigned to pursue other ventures. During December, 2006, an investment banker introduced Company management to the owners of a social networking website known as Kiwibox.com. Following a period of mutual due diligence review by both parties, we signed an Agreement and Plan of Reorganization on February 19, 2007, pursuant to the principal terms of which the Kiwibox business will be merged into our subsidiary. In exchange for the Kiwibox business, we agreed

~~To issue $1,500,000 worth of our restricted common shares and $500,000 worth (conversion value) of our preferred stock to the three Kiwibox owners and to pay them $300,000 cash at closing;~~

To give each of the three Kiwibox owners a two-year employment agreement that will pay them each a base salary of $150,000 per year and 7,500,000 stock options, vesting over two years with the possibility of earning cash bonuses and 3,000,000 additional stock options each if certain business performance goals are reached within the two-year period.

We also have agreed to invest $3.5 million in the Kiwibox business over the course of eighteen months and have committed to raise these funds prior to closing. The closing of the Kiwibox transaction is scheduled to occur on or before April 30, 2007. We currently have approximately 297,000,000 common shares outstanding on a fully diluted basis. Accordingly, in addition to raising the $3.5 million, we must amend our Certificate of Incorporation to increase our authorized common shares from 300,000,000 to 600,000,000 common shares to ~~have a sufficient number of~~sell his or her Company common shares ~~necessary to close~~in the ~~Kiwibox transaction.~~market.

~~ITEM 2:~~~~PROPERTIES~~

~~On September 1, 2006,~~Absence of Dividends

We have not paid any dividends on our common stock and we are not likely to do so in the foreseeable future. We presently intend to retain earnings for use in growing our business. We may pay for some of our future expansion through debt financing, in which case lenders traditionally prohibit the payment of any such dividends. Investors should be aware, therefore, that the Company ~~entered a three year lease (which can be terminated by either party after 12 months)~~intends to re-invest any earnings back into our business for ~~approximately 850 square feet~~the foreseeable future and that they should have no expectations of ~~office space~~receiving any dividends on the common shares they may purchase.

ITEM 2. Description of Property

We maintain our principal corporate offices at 1250 Route 28, Suite 309, Branchburg, New Jersey. ~~This~~We lease ~~agreement calls for~~an approximate 850 square feet of office space pursuant to the terms of a 3-year lease we signed on September 1, 2006, which we may terminate upon notice. We pay a base rental payment of $1,103 per month plus utility/cam/property tax charges of approximately $600 per month, with nominal ~~increases after years two~~annual increases. In addition, we maintain offices for our Kiwibox operations at 330 W. 38th Street, Suite #1602, New York, New York 10018, consisting of approximately 1,600 square feet. We have a two-year lease covering these offices and ~~three.~~

~~ITEM 3:~~~~LEGAL PROCEEDINGS~~pay monthly rent of $4,189.18.

ITEM 3:LEGAL PROCEEDINGS

At the time of this report, the Company is not a party into any material legal proceedings.

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

No matters were submitted to a vote of the security holders during the fourth quarter of this fiscal period.

912

PART II

ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

(a) Market Information

The Company’s common stock currently trades on the Electronic Bulletin Board of the OTC market, under the symbol MAGY. The following table sets forth, for the calendar quarters indicated, and for the last two years, the high and low sales prices for the Company’s common stock.

OTC-BB

Low/Bid

High/Ask
2005

First Quarter $ 0.09 $ 0.16
Second Quarter 0.06 0.11
Third Quarter 0.05 0.08
Fourth Quarter 0.04 0.08
2006

First Quarter $ 0.06 $ 0.12
Second Quarter 0.05 0.09
Third Quarter 0.03 0.06
Fourth Quarter 0.03 0.04

	OTC-BB
	Low/Bid		High/Ask
2006
First Quarter	$	0.06	$	0.12
Second Quarter		0.05		0.09
Third Quarter		0.03		0.06
Fourth Quarter		0.03		0.04
2007
First Quarter	$	0.03	$	0.06
Second Quarter		0.04		0.08
Third Quarter		0.04		0.07
Fourth Quarter		0.02		0.05

(b) Shareholders

As of March ~~20, 2007,~~28, 2008, there were approximately 400 shareholders of record for the Company’s Common Stock. The number of record holders does not include shareholders whose securities are held in street names.

The Company has not declared or paid, nor has it any present intention to pay, cash dividends on its Common stock. The Company is obliged to pay cash dividends on its outstanding convertible preferred stock and, under certain circumstances, on its outstanding cumulative preferred stock. See "DESCRIPTION OF CAPITAL STOCK" - "The Series A Stock", "The Series B Stock", "The Series C Stock", "The Series D Stock" and "The Series E Stock", below.

Recent Issues of Unregistered Securities

During the fourth quarter of ~~2006~~2007 the Company ~~had~~ issued the following unregistered securities:

1. We committed to issue 2,500,000Units pursuant to a subscription agreement with an accredited investor and received subscription proceeds of $125,000 on or about July 23, 2007, as reported in our current report filed on Form 8-K on August 2, 2007. The subscription price for each Unit was $.05, with each Unit comprised of one restricted common share and one common stock purchase warrant. Each warrant is exercisable during a five year period at the exercise price of $.07 per warrant and contains a cashless exercise provision.

2. We are committed to issue an aggregate 35,700,000 Units to a Swiss based investor and its two assignees for aggregate subscription proceeds of $1,785,000: $500,000 received on or about August 16, 2007 and reported in our Form 8-K filed on August 16, 2007; $250,000 received on or about September 19, 2007 and reported in our Form 8-K filed on October 5, 2007; $250,000 received on or about October 3, 2007 and reported in our Form 8-K filed on October 5, 2007; $660,000 received on or about November 5, 2007 and reported in our Form 8-K filed on November 5, 2007; $15,000 received on or about December 28, 2007 and reported in our Form 8-K filed on December 28, 2007, and; $110,000 received on or about January 25, 2008 and reported in our Form 8-K filed on January 29, 2008. The subscription price for each Unit was $.05, with each Unit comprised of one restricted common share and one common stock purchase warrant. Each warrant is exercisable during a five year period at the exercise price of $.07 per warrant and contains a cashless exercise provision.

3. On October 31, 2007, three noteholder/investors converted the outstanding principal balances and accrued interest under six Company note, representing aggregate debt of $402,365.73, into restricted Company securities at a conversion rate equal to the Company’s then current “unit” investment terms. This conversion rate is at $.05 per unit, with each unit comprised of one restricted common share and one 5-year warrant, exercisable at $.07, resulting in the issue of 8,091,315 restricted common shares and an equal number of warrants to these three individuals.

4. We also issued the following shares of restricted common stock:

(i) ~~25,900,000~~7,289,000 shares of common stock ~~accompanied by warrants~~in return for ~~the purchase~~cancellation of ~~900,000~~promissory notes for $364,450, and 802,315 shares ~~of common stock, exercisable at $0.08/share during~~for interest accrued on such note, to three ~~years, to four~~ domestic accredited investors pursuant to private placement subscriptions under Section 4(2), Rule 506 of Regulation D and Regulation S of the Securities Act, which resulted in the receipt by the Company of $544,000 in cash, less $50,000 paid to a finder and less $19,988 assumed legal expenses;investors;

(ii) ~~2,772,860~~1,281,250 shares of common stock to ~~three~~two consultants ~~and 450,000 shares to one director of the Company as part of their remuneration~~ for services rendered.

(iii) ~~6,250,000~~3,000,000 shares of common stock ~~4,708,333 warrants, exercisable at prices between $0.05~~to two domestic investors as loan origination fees and $0.15 per share and options for 1,403,542 shares, exercisable at $0.10 per share, to the former president and CEO of the Company as part of a settlement agreement reached in December 2006. The agreement also provided, in return for the ~~issuance~~extension of the maturity of such ~~securities, the cancellation of a promissory note for $99,890 as well as the cancellation of accrued interest and other remuneration totaling $17,500.~~loans;

~~ITEM 6:~~(iv) ~~SELECTED FINANCIAL DATA~~Options for 500,000 shares, exercisable $0.05 and vesting over a three year period, to a senior manager employed by the Company.

All of the above offerings, sales and conversions were made in reliance upon the exemption from registration under Rule 506 of Regulation D promulgated under the Securities Act and/or Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act; (b) the investors were all shareholders of or prior investors in, the Company, had pre-existing relationships with the Company and the Company did not engage in any general solicitation with respect to the offerings; (c) the investors acknowledged that all securities being purchased were “restricted securities” as defined under applicable securities laws, and agreed to transfer such securities only in a transaction registered under the Securities Act or pursuant to available exemptions from such registration requirements; and (d) a legend was placed on the certificates representing each such security, disclosing that such securities are deemed restricted securities and could only be sold or otherwise transferred if registered under the Securities Act or pursuant to exemptions from such registration requirements.

Selected Financial Data

Except for historical information, the Company's reports to the Securities and Exchange Commission on Form 10-KSB and Form 10-QSB and periodic press releases, as well as other public documents and statements, contain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the statements. These risks and uncertainties include general economic and business conditions, development and market acceptance of the Company’s products, current dependence on the willingness of investors to continue to fund operations of the Company and other risks and uncertainties identified in the Company's reports to the Securities and Exchange Commission, periodic press releases, or other public documents or statements.

Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events.

The selected financial information presented below under the captions "Statement of Operations" and "Balance Sheet" for the years ended December 31, ~~2006~~2007 and ~~2005~~2006 is derived from the financial statements of the Company and should be read in conjunction with the financial statements and notes thereto.

The financial data are those of Magnitude Information Systems, Inc. including the operations of Magnitude, Inc and KiwiBox Media, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

SELECTED FINANCIAL DATA

December 31, 2006,
Balance Sheet
Total assets $ 169,128
Current liabilities 2,674,613
Long-term debt -
Working capital (2,553,451 )
Shareholders’ equity (deficit) $ (2,505,485 )

Balance Sheet		December 31, 2007
Total assets	$	3,221,336
Current liabilities		6,316,912
Long-term debt		-
Working capital (deficit)		(5,826,532	)
Shareholders’ equity (deficit)	$	(3,095,576	)

Statement of Operations								For the Year Ended December 31,
	For the Year Ended December 31,							2007			2006
	2006			2005
Statement of Operations
Total revenues	$	47,701		$	189,552		$	29,745		$	47,701
Operating income (loss)		(3,716,867	)		(2,410,670	)		(2,119,832	)		(3,716,867	)
Net (loss)		(3,895,262	)		(2,218,257	)		(3,881,652	)		(3,895,262	)
Net (loss) after dividends
On Preferred Shares		(4,473,726	)		(2,341,492	)		(3,935,133	)		(4,473,726	)

Net loss per common share	$	(0.03	)	$	(0.02	)	$	(0.02	)	$	(0.03	)
Number of shares used in computing
per share data		170,692,731			138,097,577			243,609,819			170,692,731

1115

ITEM 7:6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT PURSUANT TO "SAFE HARBOR" PROVISIONS OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934

~~Except for historical~~The information ~~the Company's reports to the Securities and Exchange Commission on Form 10-KSB and Form 10-QSB and periodic press releases, as well as other public documents and~~in this annual report contains forward-looking statements ~~contain "forward-looking statements"~~ within the meaning of ~~Section 21E of~~ the Private Securities ~~Exchange~~Litigation Reform Act of ~~1934. Forward-looking~~1995. Such Act provides a “safe harbor” for forward-looking statements ~~are subject~~ to ~~risks~~encourage companies to provide prospective information about their businesses so long as they identify these statements as forward looking and ~~uncertainties~~provide meaningful cautionary statements identifying important factors that could cause actual results to differ ~~materially~~ from the projected results. All statements other than those ~~expressed~~statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or ~~implied~~financial position are forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with the consolidated financial statements of Magnitude Information Systems, Inc., included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Background

On August 16, 2007, we closed on our acquisition of Kiwibox Media, Inc., a business that had developed a social networking website dedicated to teenagers. As a result of this acquisition, accomplished through a reverse merger, Kiwibox Media, Inc. became our wholly owned subsidiary. Prior to this acquisition, we entered into a License and Client Software Support Agreement with Imminent Technologies, LLC on April 10, 2007, licensing our prior business’ suite of ergonomic software products and thereby, effectively terminating our involvement in the ergonomic software business, all as disclosed in the current report on Form 8-K we filed on April 11, 2007.

The Kiwibox Closing - August 16, 2007.

On August 16, 2007, we closed our acquisition of Kiwibox Media, Inc. through a reverse merger between Kiwibox and our wholly owned acquisition subsidiary. As a result of the merger, Kiwibox became our wholly owned subsidiary. At the Kiwibox closing, we (1) issued an aggregate 30,000,000 restricted common shares to the three Kiwibox shareholders, (2) issued an aggregate 43,610 shares of our Senior Convertible Series G Preferred stock to these principals, (3) paid an aggregate $150,000 in cash to these Kiwibox principals, less a $7,000 investment banking fee paid to Southridge Investment Group, and (4) signed two-year employment agreements with Messrs. Lin Dai, Ivan Tumanov and Michael Howard, the three Kiwibox shareholders, all pursuant to the terms and provisions of the Agreement and Plan of Reorganization, dated February 19, 2007, and amendments thereto, and as most recently modified by Amendment No. 6 between the parties on February 28, 2008. The 43,610 Series G Preferred Shares issued to the Kiwibox principals at closing have an aggregate conversion value of $500,000 (the “Conversion Value”), which $500,000 Conversion Value is convertible into our common shares by dividing it by the ~~statements. These risks and uncertainties include general economic and business conditions, development and market acceptance~~“Market Price” of our common stock during the twenty (20) successive trading days immediately preceding the second anniversary of the ~~Company’s products,~~agreement. At the closing, the Company promised to issue 750,000 of the KiwiBox shareholders’ restricted common shares to Southridge Investment Group, LLC as part of its fee.Based upon our original Agreement and Plan of Reorganization of February 2007, we committed to invest $3.5 Million in the Kiwibox business. This commitment was based upon our communications with a Swiss based shareholder and investor in our Company, Tell Capital AG, who on July 26, 2007, sent us a commitment to invest $3 million of equity in our Company. Based upon Tell Capital’s commitment, we executed Amendment No. 3 to our original February, 2007 agreement with Kiwibox, committing to invest $3.5 million in various tranches, corresponding to the investment schedule set forth in the Tell Capital commitment, as well as agreeing to pay 60,000 restricted common shares for each day any of our scheduled investment tranches were late. Because of the delays in the receipt of the equity investments from Tell Capital, scheduled through November 1, 2007, our corresponding investment commitments to the Kiwibox business were also late. The continuing lateness of our investment commitments to the Kiwibox business resulted in further amendments to our Kiwibox agreement and required us to make a $100,000 penalty payment to the Kiwibox shareholders in 2007. The final modification to our original agreement, Amendment No. 6, executed on February 28, 2008, provided that if we raised $1.5 million in equity on or before March 7, 2008 and dedicated $700,000 of that amount to the Kiwibox business, made another penalty payment of $150,000 and delivered our corporate note in the principal amount of $225,000 to the Kiwibox shareholders, all rescission rights held by the Kiwibox shareholders and any further obligations to invest in the Kiwibox business would terminate. On March 7, 2008, we received $1.5 Million in subscription proceeds from investors, from which proceeds we dedicated $700,000 to the Kiwibox business, made the $150,000 penalty payment to the Kiwibox shareholders and delivered to them our $225,000 corporate note. Accordingly, the Kiwibox shareholders’ rights of rescission and our obligation to invest further funds in the Kiwibox business terminated. We have paid the Kiwibox shareholders $250,000 in cash, delivered to them our $225,000 corporate note, due June 15, 2008, and must issue to them approximately 30,000,000 restricted common shares resulting from the series of delays in meeting our commitments to invest funds into the Kiwibox business.

We signed and delivered two-year employment agreements with the three Kiwibox Shareholders at the closing. These employment agreements pay each Kiwibox Shareholder an annual base salary of $150,000 and an annual bonus if certain business goals are met. Each Kiwibox Shareholder received a stock option to purchase up to 7,500,000 shares of our common stock which vests over time as well as a performance stock option to purchase up to an additional 3,000,000 shares of our common stock, vesting upon the attainment of certain business goals. All of these stock options are exercisable at $.05 per share.

Plan of Operations

Since our acquisition of Kiwibox, we have been developing a new version of our website. Scheduled to launch in April, 2008, our new Kiwibox.com website contains significant enhancements over the current website. Our new website operations will include the following:

Increase in our editorial staff - we have hired additional editorial staff persons to augment and expand our approximate 1,000 volunteer teen writers to provide more coverage in our content categories of music, entertainment, games, body & style and life & love;

Enhanced Community Features - our new website will employ advanced social networking functionality that will permit increased interaction between our website and provide interface between our Kiwibox.com website and other ~~risks and uncertainties identified in the Company's reports to the Securities and Exchange Commission, periodic press releases, or other public documents or statements.~~

More Points and Rewards - we are expanding the number of activities for our members to earn points and rewards. We expect this increase, as well as the new offering of virtual prizes, will attract new members to our website.

Expansion of our Game Offerings - we are expanding our partnerships with online game sites and online game developers, providing new interactivity between our users and a better platform for sponsors to integrate their marketing message and advertising campaigns.

In addition to the above features, we expect to continue to develop and enhance our user options and interface technology on our Kiwibox.com website.

Results of Operations for the ~~Year~~Twelve Months Ended December 31, ~~2006~~2007 Compared to the Twelve Months Ended December 31, 2006.

The Company had no material revenues during 2007. Its former ergonomic software - based business had been discontinued and the acquisition of Kiwibox Media Inc. with its potentially significant revenues took place only in August 2007 and, by year-end, had not yet matured to a stage where significant revenues could be generated. For the year ended December 31, ~~2006, the Company had~~2007, total revenues ~~of $47,701~~amounted to $29,745 compared to ~~$189,552~~$47,701 in ~~2005.~~2006. Revenues consisted almost entirely of ~~charges for maintenance and support services.~~$25,493 from the Kiwibox operations.

Gross profits amounted to ~~negative $97,795. Gross~~$29,745, which equates revenues in the absence of directly attributable cost of goods sold. This contrasts to 2006 when in the course of the Company pursuing it former software business, gross profits were burdened with a fixed charge for amortization of certain proprietary software assets. ~~Such software assets underlie the Company’s products and were being amortized on a straight line over 10 years, resulting in a level charge of approximately $13,000 per month to cost-of-goods-sold.~~ After deducting selling -, research -, and general and administrative expenses of ~~$3,619,072~~$2,477,577 compared to the ~~$2,448,509~~$3,619,072 recorded in ~~2005,~~2006, the Company realized an operating loss of ~~$3,716,867~~$2,447,832 compared to an operating loss of ~~$2,410,670~~$3,716,867 in ~~2005. A large portion~~2006. $375,488 of such SG&A expenses iswere attributable to ~~non-cash charges in connection with~~ the ~~valuation at market price~~cost of funding the operations of the ~~underlying stock, of securities issued~~new Kiwibox business and $1,594,778 were incurred in ~~connection with settlement agreements reached with a shareholder who was a former officer of~~Magnitude. The decrease in these expenses from the ~~Company,~~$3,619.072 incurred in the prior year is primarily due lesser compensation expenses for salaries and ~~with the former president~~stock-based consultancy fees. These savings were achieved through staff reductions and ~~CEO, which together amounted to $632,677. In addition, securities valued at approximately $950,000 were issued as compensation to consultants. Non-operating~~lesser dependency on outside services. The major items making up non-operating income and expenses included ~~$326,744 net~~approximately $897,000 interest ~~expense (including $291,762 of~~and amortization of ~~debt discounts due~~financing expenses, mostly related to ~~recognition~~the acquisition of Kiwibox Media, Inc. During 2006, such expenses totaled approximately $327,000. In addition, we incurred a ~~derivative conversion option, beneficial conversion features and detachable warrants issued with the debt), $102,762 income~~charge of approximately $559,000 in connection with the change in fair value of a derivative ~~conversion option on convertible debt,~~liabilities, compared to a ~~charge~~gain of ~~174,954 for the impairment of software intangibles, and income of $192,136 from recording the change~~approximately $295,000 in fair value of derivative options and warrants reclassified as liabilities. The Company also realized a credit of $33,740 from the sale of net loss carry-forward tax credits pursuant to the New Jersey Emerging Technology and Biotechnology Financial Assistance Act.2006. The year concluded with a net loss of ~~$3,895,262.~~$3,881,652. After accounting for dividends accrued and discounts on outstanding preferred stock which totaled ~~$578,464~~$53,481 the net loss applicable to common shareholders was ~~$4,473,726or $0.03~~$3,935,133 or $0.02 per share, compared to a loss of ~~$2,341,492~~$4,473,726 or ~~$0.02~~$0.03 per ~~share for the previous year.~~
share.

~~Liquidity and Capital Resources~~

1217

~~At December 31, 2006,~~Liquidity and Capital Resources

We have financed our business with new debt and equity capital since our cash flow is insufficient to provide the working capital necessary to fund our operations. We recorded $1,800,000 in cash from subscriptions for new equity capital from accredited private investors during 2007. In addition, we received $472,000 from short-term loans.

Our deficit in working capital amounted to ~~$2,553,451~~$5,826,532 at December 31, 2007, as compared to ~~$1,016,230~~$2,553,451 at December 31, ~~2005.~~2006. Stockholders’ equity showed an impairment of ~~$2,505,485~~$3,095,576 at the end of the year, compared to an impairment of ~~$664,381~~$2,505,485 at the beginning of the year. The negative cash flow from operations totaled ~~$1,589,089~~$1,261,783 and was substantially financed by new debt and equity which was obtained through private placements. The new equity placements were consummated by issuance of common stock and warrants to ~~accredited private investors in the United States.~~primarily foreign investors. Details of such transactions can be found in the “Changes and Issuance of Securities” sections in the Company’s quarterly reports on ~~Form~~Forms 10-QSB during the year, as well as in the pertinent section of this report. During ~~2006,~~2007, the Company ~~had~~ filed several amendments to its four previously filed registration statements on Form SB-2, all of which covered common shares directly issued as well as common shares underlying the previously issued convertible preferred stock and warrants, in connection with ~~these and~~ prior financing transactions. These filings were made on behalf of certain investors in the Company’s equities and proceeds of any sales of such registered securities will accrue entirely to such investors. The filings will shortly be updated with the current financial statements and forwarded to the Securities and Exchange Commission for review.

~~At the time of this submission, the Company had~~We have no bank ~~debt. At December 31, 2006 its short-term liabilities,~~debt and aside from trade payables and accruals, our indebtedness at December 31, 2007, consisted of certain notes and loans aggregating approximately ~~$442,450. Accruals~~$450,000. The position “Obligations to be settled in stock” of $1,622,921 represents, the value of stock to be issued under the before mentioned equity subscriptions, and of stock to be issued to the former principals of Kiwibox Media, Inc. as well as stock to be issued to certain consultants (see Financial Footnote Item “Obligations to be Settled in Stock”). Current liabilities also include ~~$341,168~~$376,743 accrued unpaid dividends on outstanding preferred stock. Such dividends will be paid only if and when capital surplus and cash-flow from operations are sufficient to cover the outstanding amounts without thereby unduly impacting the Company’s ability to continue operating and growing its business.

~~Current~~Our current cash reserves and net cash flow from operations expected during the near future ~~are inadequate when measured against present~~will be insufficient to fund our website development, operations and ~~anticipated future needs. In order~~marketing plan over the next twelve months. We expect to remedy the resulting liquidity constraints and address any “going-concern” issues, management, during the third quarter, had drastically reduced staff and the level of on-going cash outlays for operations. In addition, management is currently negotiatingfund these requirements with ~~several financing sources with the goal of obtaining commitments for~~ further investments in form of debt or equity capital, ~~to be funded during~~targeted for the ~~upcoming quarter.~~second quarter of 2008. There can be no assurance, however, that ~~these negotiations~~we will ~~lead~~be able to identify a financing source or sources and if we do, whether the terms of such financing will be acceptable or commercially reasonable.

The major investor in our stock was Tell Capital AG and its assignees, who have invested $1,675,000 in our operations through December 31, 2007, pursuant to its commitment of July 26, 2007, to invest a total of $3 million on or before November 1, 2007. During this same period, Tell Capital AG indicated its further interest to invest a second $3 million of equity into our operations in early 2008. Because Tell Capital AG’s initial $3 million investment was not timely and due to the ~~desired outcome.~~fact that the total $3 million was not received, our commitments to fund the Kiwibox business were correspondingly late. Because of this tardiness in meeting our Kiwibox funding commitments, we paid the Kiwibox Shareholders penalty cash payments of $250,000 and delivered our promissory note for $225,000 due June 15, 2008. We also owe a penalty of approximately 30,000,000 common shares to the Kiwibox Shareholders due to the partial investment amount actually received and the delays in our receipt of these funds. Although we have received an additional $110,000 of investment from Tell Capital AG and received $1,500,000 of subscription proceeds from additional investments in 2008, we will need the approximate $3 million of additional investment in order to fund our business plan through the next 12 months. See “Subsequent Event” below.

Absent the receipt of this additional $3 million funding, our website development, results of operations and financial condition could be subject to material adverse consequences. There can be no assurance in such a case that we could find alternative funding for the working capital required to finance on-going operations. If we failed in these efforts, either by not receiving theinvestment commitments from Tell Capital AG or an alternative source, or we do not receive such funds in a timely manner, our management may be forced to effect severe cut-backs in our operations.

~~Subsequent Events - Fiscal Year 2007~~NEW ACCOUNTING PRONOUNCEMENTS

In ~~August, 2006, we negotiated a termination agreement with our founder, Steven Rudnik. As a result, Ed Marney~~2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 141 (revised 2007) Business Combinations. This Statement replaces FASB Statement No. 141, Business Combinations. This Statement requires an acquirer to recognize the assets acquired, the liabilities assumed, ~~the role of President~~ and ~~management recommended to the Board of Directors That the Company seek a new business opportunity. The Board of Directors determined it was~~any non-controlling interest in the ~~best interests~~acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the ~~Company and its shareholders to scale-down its operations and staff during~~Statement.

SFAS No. 141 (revised) is effective for business combinations for which the ~~third quarter of 2006 in order to decrease overhead. During 2006 we terminated seven employees and reduced our monthly cash expenses from the level at~~acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Management does not expect the implementation of this new standard to have a material impact on the Company's financial position, results of operations and cash flows.

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" including and amendment of FASB Statement No. 115 with respect to improvement of financial reporting of certain investments in debt and equity securities. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board's long-term measurement objectives for accounting for financial instruments.

SFAS No. 159 is effective as of the beginning of the Company's first fiscal year ~~by approximately $140,000 per month~~that begins after November 15, 2007. Management does not expect the implementation of this new standard to ~~approximately $60,000 per month during~~have a material impact on the ~~fourth quarter.~~Company's financial position, results of operations and cash flows.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements.

SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management does not expect the implementation of this new standard to have a material impact on the Company's financial position, results of operations and cash flows.

In December ~~2006,~~2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 160 Noncontrolling Interest in Consolidated Financial Statements as an ~~investment banker introduced~~amendment to ARB No. 51. This Statement is expected to improve the ~~owners~~relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a ~~social networking website known as Kiwibox.com~~subsidiary. Management does not expect the implementation of this new standard to ~~management. Following~~have a ~~period~~material impact on the Company's financial position, results of ~~mutual due diligence, the parties signed an Agreement~~operations and Plan of Reorganization on February 19, 2007, pursuant to the principal terms of which the Kiwibox business, owned by the corporation Kiwibox Media, Inc., will merge with our subsidiary and we will issue to the three owners of Kiwibox our securities of an aggregate value of $2,000,000, a $300,000 cash payment at closing and delivery to each of the three Kiwibox owners a two-year employment agreement that will pay each a base salary of $150,000 and stock options to purchase 7,500,000 common shares, vesting over a two-year period, with the ability to earn additional cash and stock bonuses based upon the attainment of certain business goals. The closing of the transaction with Kiwibox is scheduled to occur on or before April 30, 2007, and is subject, among other usual due diligence contingencies, to our having raised $3.5 million in cash by closing which we have promised to invest in Kiwibox in the two-year period following closing.flows.

1318

Subsequent Events - Fiscal Year 2008

On January 28, 2008, we received a $110,000 investment from Tell Capital AG and on March 7, 2008, an additional $1,500,000 in subscription proceeds from 10 accredited foreign and domestic investors. We committed to issue 2,200,000 units to Tell Capital AG for its investment, at the subscription price of $.05 per unit, with each unit comprised of one restricted common share and one five-year warrant, exercisable at $.07 per share. The Company committed to issue to the March 7th investors an aggregate 50,000,000 restricted common shares and 50,000,000 common stock purchase warrants at the subscription price of $.02 per common share and $.01 per warrant. The warrants are exercisable anytime during their 5 year exercise period at the exercise price of $.05 per warrant with provisions for cashless exercise. The receipt of these private offering proceeds was disclosed in our current report on Form 8-K filed on March 7, 2008.

Based upon our original Agreement and Plan of Reorganization of February 2007, we committed to invest $3.5 Million in the Kiwibox business. This commitment was based upon our communications with a Swiss based shareholder and investor in our Company, Tell Capital AG, who on July 26, 2007, sent us a commitment to invest $3 million of equity in our Company. Based upon Tell Capital’s commitment, we executed Amendment No. 3 to our original February, 2007 agreement with Kiwibox, committing to invest $3.5 million in various tranches, corresponding to the investment schedule set forth in the Tell Capital commitment, as well as agreeing to pay 60,000 restricted common shares for each day any of our scheduled investment tranches were late. Because of the delays in the receipt of the equity investments from Tell Capital, scheduled through November 1, 2007, our corresponding investment commitments to the Kiwibox business were also late. The continuing lateness of our investment commitments to the Kiwibox business resulted in further amendments to our Kiwibox agreement and required us to make a $100,000 penalty payment to the Kiwibox shareholders in 2007. The final modification to our original agreement, Amendment No. 6, executed on February 28, 2008, provided that if we raised $1.5 million in equity on or before March 7, 2008 and dedicated $700,000 of that amount to the Kiwibox business, made another penalty payment of $150,000 and delivered our corporate note in the principal amount of $225,000 to the Kiwibox shareholders, all rescission rights held by the Kiwibox shareholders and any further obligations to invest in the Kiwibox business would terminate. On March 7, 2008, we received $1.5 Million in subscription proceeds from investors, from which proceeds we dedicated $700,000 to the Kiwibox business, made the $150,000 penalty payment to the Kiwibox shareholders and delivered to them our $225,000 corporate note. Accordingly, the Kiwibox shareholders’ rights of rescission and our obligation to invest further funds in the Kiwibox business terminated. We have paid the Kiwibox shareholders $250,000 in cash, delivered to them our $225,000 corporate note, due June 15, 2008, and must issue to them approximately 30,000,000 restricted common shares resulting from the series of delays in meeting our commitments to invest funds into the Kiwibox business.

On March 20, 2008, two shareholder/investors converted their Company promissory notes, representing an aggregate indebtedness of $350,000, into an aggregate 9,333,333 restricted common shares and an equal number of common stock purchase warrants.

ITEM 87: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company's Financial Statements and Notes to Financial Statements are attached hereto as Exhibit A and incorporated herein by reference.

ITEM ~~8a:~~8. ~~CONTROLS AND PROCEDURES~~

~~Evaluation of Disclosure Controls and Procedures~~

~~(a) Evaluation of Disclosure Controls and Procedures.~~

As of December 31, 2006, the end of the period covered by this Form 10-KSB for the fiscal year ended December 31, 2006, an evaluation was undertaken by the Company's Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Exchange Act Rule 13(a)-14(c), and; based upon that evaluation, Company management, including the Chief Executive Officer and the Chief Financial Officer, has concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by the subject Form 10-KSB and ensured that all material information required to be disclosed in the subject Form 10-KSB, was recorded, processed, summarized and reported as of the end of the period covered by the subject Form 10-KSB.

The Company maintains a system of internal controls designed to provide reasonable assurance that: (i) the Company's transactions are properly authorized; (ii) the Company's assets are protected against unauthorized or improper use, and (iii) the Company's transactions are properly recorded and reported, all to permit the preparation of complete and accurate financial statements in conformity with generally accepted accounting principles.

~~(b) Changes in Internal Control over Financial Reporting~~

Since the date of the most recent evaluation of the Company's internal controls by the Chief Executive Officer and Chief Financial Officer, there have not been any changes in the Company's internal controls or other factors for the period covered by the subject Form 10-KSB that materially affected or were likely to materially affect the Company's internal control over financial reporting.

~~ITEM 9:~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in or disagreements with the Registrant’s independent auditors during the last two years.

ITEM 8A. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable laws and regulations. Our internal controls framework is based on the criteria set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of the Chief Executive Officer and the Chief Financial Officer, supported by an outside accounting firm, an assessment of the effectiveness of the small business issuer’s internal control over financial reporting as of the year ended December 31, 2007. Management determined that at December 31, 2007, the Company had a material weakness because it did not have sufficient number of personnel with adequate knowledge, experience and training of U.S. GAAP commensurate with the Company’s reporting requirements. This material weakness required the identification of adjustments during the financial statement close process that have been recorded in the Company’s consolidated financial statements. Contributing to this lack of personnel resources was the Company’s acquisition of Kiwibox Media, Inc. on August 16, 2007 and the integration of this new subsidiary’s accounting and finance functions with those of the Company. Therefore, in order to present the Company’s consolidated financial statements for the fiscal year ended December 31, 2007 in accordance with U.S. GAAP, the Company hired a controller to be stationed at our Kiwibox Media’s offices and performed additional reviews and procedures. In addition, during the first quarter of 2008 the Company retained an outside accounting firm with technical and financial reporting expertise and intends to hire an additional accountant with substantial U.S. GAAP and SEC reporting experience to remediate the lack of qualified personnel.

This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

1420

Other than described above, there have been no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2007, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

None.

PART III

ITEM ~~10:~~ 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The names of all directors and executive officers of the Company are as follows:

Name	Positions	Term Served (Expires)
~~Edward L. Marney~~	~~Director~~
	~~President, Chief Executive~~	~~May 5, 2006~~
	~~Officer~~

Edward L. Marney	Director
	President, Chief Executive Officer	May 8, 2006

Joerg H. Klaube	Director
	Sr. Vice President, Secretary, Chief Financial Officer	December 2, 2005
	~~Chief Financial Officer~~

Steven L. Gray	Director
	Chairman of the Board	August 30, 2006

Joseph J. Tomasek	Director	Feb. 11, 1999 (2006)

Edward L. Marney, Age 4950 - - Director, President and Chief Executive Officer. Mr. Marney joined Magnitude, Inc. in May 2006 and was appointed a director in August 2006. From 2003 to 2006, Mr. Marney was Managing Director of Triad Partners, LLC, a privately held investment company. Prior to that from 2001-2003 Mr. Marney was Vice President, Business Intelligence at Medical Manager/WebMD Corporation. Mr. Marney founded TouchPoint Software Corporation in 1994 and served as its CEO & President until its acquisition by WebMD Corporation in 2001. Prior to that Mr. Marney served in various marketing and sales roles at Medical Information Technology and Burroughs Corporation. He graduated with a B.S. from the Whittemore School of Business and Economics at the University of New Hampshire.

Joerg H. Klaube, Age 6566 - - Director and Chief Financial Officer, Senior Vice President. ~~Joined~~Joerg joined Magnitude, Inc. in December 1994. From 1993 to 1994 he was Vice President Administration for Comar Technologies Inc., a computer retail firm, and from 1983 to 1993 Chief Financial Officer for Unitronix Corporation, a publicly traded software design and computer marketing firm. Prior to that, Mr. .Klaube was employed for 16 years with Siemens Corp., the US subsidiary of Siemens AG, where he served most recently as Director of Business Administration for its Telecommunications Division. He graduated from the Banking School in Berlin, Germany, and holds an MBA degree from Rutgers University.

Joseph J. Tomasek, Age 6061 - - Director. Mr. Tomasek was appointed a director in February 2000. He has been engaged in the private practice of corporate and securities law in his own law firm for the last ten years. Mr. Tomasek was appointed to serve as general counsel for the Company in 1999. In addition to his work with the Company, Mr. Tomasek represents several other clients in the area of corporate law.

Steven L. Gray, Age 5758 - - Director. Mr. Gray was elected to serve on the Board on May 18, 2000. He is a resident of Venice, Florida. For the past six years, Mr. Gray has served as the President and is a shareholder of a private Florida corporation engaged in the retail distribution of nutritional products. This corporation has a customer base in nine countries. Prior to that time, Mr. Gray ran his own real estate development company, specializing in the design and construction of multi-family housing.

1522

Family Relationships

There are no family relationships between any of the directors or executive officers.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

The Company knows of no person, who at any time during the period from the date at which it filed its annual report on Form 10-KSB for the year ended December 31, ~~2004~~2006 to the present, was a director, officer, beneficial owner of more than ten percent of any class of equity securities of the Company (a "Reporting Person"), that failed to file on a timely basis any reports required to be furnished pursuant to Section 16(a).

1623

ITEM ~~11:~~10: EXECUTIVE COMPENSATION

~~2006~~2007 SUMMARY COMPENSATION TABLE

The following table sets forth certain compensation information for: (i) the ~~cash~~person who served as the Chief Executive Officer of Magnitude during the year ended December 31, 2007, regardless of the compensation level, and (ii) certain of our other executive ~~capacities~~officers, serving as an executive officer at any time during 2007, as well as the most highly compensated employees who did not serve as executive officers during 2007. Compensation information is shown for the fiscal years ended December 31, ~~2006~~2007 and December 31, 2005, for the chief executive officer and for each executive officer whose aggregate cash remuneration exceeded $100,000, for all executive officers as a group, and for certain other most highly compensated employees:2006:

(1)
Name and Principal Position (a) Year (b) Salary ($) (c) Bonus ($) (d) Stock Awards ($) (e) Option Awards ($) (f) Non-Equity Incentive Plan Compensation ($) (g) Non- Qualified Deferred Compensation Earnings ($) (h) All Other Compensation ($) (i) Total ($)
Edward L. Marney 2006 86,538 5,950 92,488
Chief Executive -
Officer, President

Steven D. Rudnik 2006 64,788 567,677 48,250 680,715
Former Chief 2005 33,333 - 100,000 - - 24,306 157,639
Executive Officer,
President

Mark Chroscielewski 2006 82,185 82,185
Former Sr. Vice 2005 125,000 - - - 12,900 137,900
President
Business Development

Joerg H. Klaube 2006 61,376 2,626 64,002
Sr. Vice President, 2005 117,308 - - - 12,203 129,511
CFO

Steven W. Jagels 2006 61,875 61,875
Former Sr. Vice 2005 108,333 - - - 13,556 121,889
President
Information Systems

Joseph J. Tomasek, 2006 96,121 96,121
Esq., Director and 2005 131,140 131,140
General Legal Counsel
Legal Fees:

Steven Gray Director 2006 30,000 107,450 137,450

All executive officers 2006 147,914 8,576 156,490
As a group (2 persons) 2005 117,308 - - - 12,203 12,203

															(1)
Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensatio n Earnings ($)		All Other Compensation($)		Total ($)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)

Edward L. Marney		2007		161,538		35,000										12,884		209,422
Chief Executive		2006		86,538												5,950		92,488
Officer, President																		-

Joseph J. Tomasek,		2007														127,000		127,000
Esq., Director and		2006														96,121		96,121
General Legal Counsel
Legal Fees:

Steven Gray		2007		20,000				111,000								3,481		134,481
Director		2006		30,000				107,450										137,450

Lin Dai		2007	$	57,692				472,186		376,500						91,536		844,915
Employee of
Subsidiary

Michael Howard		2007		57,692				312,286		376,500						71,037		664,516
Employee of Subsidiary

Ivan Tumanov		2007		57,692				385,528		376,500						80,426		747,147
Employee of Subsidiary

All executive officers		2007		388,764		15,000		1,281,000		683,833						386,364		2,754,961
And Employees		2006		147,914		-						-		-		8,576		156,490
As a group (2 persons)

Explanation: NoExcept for the employees, Lin Dai, Michael Howard, Ivan Tumanov and Paul Farris, no current Company officer or employee has an employment agreement with the Company. All of the items of compensation paid to the officers, directors and ~~directors~~employees listed in the above Summary Compensation Table are discussed in the following paragraphs, under the ~~individual officer’s or director’s~~individual’s name.

Edward L. Marney; ~~2006.~~2007-2006. Ed Marney joined the Company in May, 2006, becoming first our Chief Executive Officer, then our President and a director. We paid Mr. Marney a cash salary of $161,538,a bonus of $35,000 and $12,884 for healthcare insurance expenses in 2007; we paid Mr. Marney $86,538 and reimbursed $5,950 of healthcare payments to him during 2006.

~~Steven D. Rudnik; 2006 and 2005~~. We paid our former CEO and President, Steven D. Rudnik, a cash salary of $64,788 during fiscal year 2006. On August 8, 2006, Mr. Rudnik terminated his employment agreement with us in exchange for 6,000,000 restricted common shares and aggregate cash payments of $60,000. The aggregate amount of compensation of $567,677 included in the “Stock Awards”column above, includes these 6,000,000 restricted common shares which we valued at $.06 per share, the average public market price of the Company’s common stock on the date of this settlement agreement, August 8, 2006, plus the grant of previously cancelled warrants and options, as follows: (i) 1,583,333 common stock purchase warrants, exercisable over the 3-year period commencing January 18,Joseph J. Tomasek 2007 and exercisable at an exercise price of $.10 per common share, which we valued at $70,652 and (ii) 2,903,542 common stock options, exercisable over the 3-year period commencing January 18, 2007 at the stock option exercise price of $.10 per common share, which we valued at $137,025. In addition, the amount of “All Other Compensation” represents cash payments of $45,000 made by the Company in connection with the August 8, 2006 settlement agreement and $3,250 paid by the Company for Mr. Rudnik’s life insurance.2006:

During fiscal ~~year 2005, the Company agreed to convert $100,000 of Mr. Rudnik’s cash salary into 1,000,000 restricted common shares~~years 2007 and 1,000,000 common stock purchase warrants, exercisable over the 3-year period, commencing on June 8, 2005, and exercisable at the exercise price of $0.15 per common share. In addition, “All Other Compensation” includes Company payments of $21,056 for car payments and $3,250 representing payments made for Mr. Rudnik’s life insurance.

~~Mark Chroscielewski; 2006 and 2005:~~ ~~During fiscal year~~ 2006, the Company paid ~~this former executive $82,185 in~~

Salary. During 2005, we paid Mr. Chroscielewski a cash salary of $125,000 and in the column “All Other Compensation” above for 2005, we made car payments on his behalf in the aggregate amount of $4,000 and insurance premium payments of $8,900.

~~Joerg H. Klaube 2006 and 2005.~~ We paid our Chief Financial Officer a cash salary of $ 61,376 during 2006 and in the column “All Other Compensation” in the above table for 2006, life insurance premium payments on this executive’s behalf in the amount of $2,626. During fiscal year 2005, the Company paid Mr. Klaube cash salary of $117,308 and as indicated in the column “All Other Compensation” in the above table for 2005, we made life insurance premium payments on this executive’s behalf in the amount of $2,626 and car payments in the amount of $9,577.

~~Joseph J. Tomasek 2006 and 2005:~~ ~~During fiscal years 2006 and 2005, the Company paid $ 96,121~~$127,000 and $ ~~131,140,~~96,121, respectively, to Mr. Tomasek for his legal services rendered to the Company.

Steven Gray ~~2006.~~ 2006 and 2007.During fiscal year 2007 we paid Mr. Gray $20,000 and issued 1,850,000 restricted shares to him and an assignee, and 500,000 common stock purchase options for services rendered to the Company. We also issued 74,031 shares for interest on loans to the Company. During fiscal year 2006, we paid $30,000 and issued an aggregate 1,550,000 restricted common shares and 500,000 common stock purchase ~~warrants~~options to Mr. Gray for services rendered to the Company. During 2006, Mr. Gray assisted the Company in its change of management, providing day-to-day assistance in operations, customer relations including, interviewing potentialcandidates for management positions and coordinating the various audit schedule and management review projects. As set forth in the column “All Other Compensation” in the above table for 2007 and 2006, we valued the ~~1,550,000~~ restricted common shares issued in the subject years based upon their average public market trading price as of the dates we issued these ~~shares to Mr. Gray, totaling $93,000 and~~shares; we valued the 500,000 options ~~at $14,450,~~granted in 2006, based upon a formula called the Black-Scholes Model.

Lin Dai 2007: During fiscal year 2007 we paid Mr. Dai a salary of $57,697 and, in connection with the acquisition of Kiwibox Media Inc. by Magnitude and in exchange against their ownership interest in Kiwibox Media Inc, paid a cash amount of $91,536 and issued 11,804,632 restricted common shares (listed under “Stock Awards”) and options for 7,500,000 shares, vesting over a 24-months period, exercisable at $0.057 per share. In addition to the options listed above Mr. Dai was issued performance stock options for 3,000,000 shares, further detailed below. As set forth in the column “All Other Compensation” in the above table for 2007, we valued the restricted common shares issued based upon their average public market trading price as of the dates we issued these shares; we valued the stock options based upon a formula called the Black-Scholes Model.

Employment Agreements

Lin Dai, Michael Howard and Ivan Tumanov - 2007. As part of our acquisition of Kiwibox, on August 16, 2007, we entered into employment agreements with each these three principals of Kiwibox. an annual base salary of $150,000. In addition, we agreed to pay each an annual bonus if certain business goals are met: a $100,000 bonus if the Kiwi Business has received no less than an average 215,000 “Unique Visitors” during either the 10th, 11th or 12th month of the first year of the term or achieved no less than $316,000 in gross revenues within the 12 moth period following the Closing. Alternatively, we agreed to pay each a $50,000 bonus if the Kiwi Business has received at least an average 175,000 but less than an average 215,000 “Unique Visitors” during either the 10th, 11th or 12th month of the first year of the term or at least $237,000 in gross revenues but less than $316,000 within the 12 moth period following the Closing. A “Unique Visitor” is a person who visits a Kiwibox website during any month during the term. For the second year of their employment agreements, we agreed to pay each a $100,000 bonus if the Kiwi Business has received no less than an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or attained $1,961,000 in gross revenues, or a bonus of $50,000 each if the Kiwi Business has received at least an average 415,000 but less than an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or attained at least $1,500,000 in gross revenues but less than $1,961,000. Each Kiwibox Shareholder received a stock option to purchase up to 7,500,000 shares of our common stock at an exercise price of $.05 per share which shall vest and be exercisable by the Kiwibox Shareholders, 50% on the first anniversary date of the Closing, 25% 18 months after the Closing and 25% on the second anniversary of the Closing. Each was issued, as well, under the terms of their employment agreements, a performance stock option to purchase up to an additional 3,000,000 shares of our common stock, 1,500,000 of which options shall vest and be exercisable by the Kiwibox Shareholders after the first anniversary date of the Closing if the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term or achieved $316,000 in gross revenues during the first year, and the balance, or 1,500,000 options shall vest and be exercisable by the Kiwibox Shareholders after the second anniversary date of the Closing if the Kiwi Business has received at least an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or achieved $1,961,000 in gross revenues during the second year of the agreements. The exercise prices for these stock options is $.05 per share.

1825

Paul Farris - 2007. On October 8, 2007, we hired Paul Farris as the Director of Business Development for our Kiwibox.com operations and executed a two-year employment agreement with him. We pay Mr. Farris an annual base salary of $90,000 and made two stock option grants to him for an aggregate 1,000,000 common shares: a stock option grant for 500,000 shares, exercisable at $.05 per share, vesting 1/3 each on the first, second and third anniversary dates of his employment, and; a performance stock option for a second 500,000 shares, also exercisable at $.05 per share, and vesting based upon the attainment of certain business goals: on the first anniversary date of his employment: (i) 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 645,000 Unique Visitors (defined below) during either the 10th, 11thor 12thmonth of the first year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 430,000 Unique Visitors during either the 10th, 11th or 12thmonth of the first year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 215,000 Unique Visitors during either the 10th, 11thor 12thmonth of the first year of the term; on the second anniversary date of his employment: (i) all 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 1,650,000 Unique Visitors during either the 10th, 11th or 12thmonth of the second year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the Kiwibox.corn website has received no less than an average 1,100,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 550,000 Unique Visitors during either the l0th, 11th or 12thmonth of the second year of the term. The term "Unique Visitor" is a person who visits a Kiwibox website during the specific month identified above. The determination of the actual number of Unique Visitors visiting a Kiwibox website during any specific month for purposes of this section shall be calculated based upon "Google Analytics".

Stock Options :

~~The following table sets forth~~No stock options were granted during ~~2006~~2007 pursuant to the Company’s 1997 Stock Option Plan and 2000 Stock Incentive Plan, to any executive officers, ~~certain other~~directors, employees ~~with highest remuneration, directors, and~~or to any beneficial owners of more than 10 percent of any class of equity securities of the ~~Company:~~

	~~Number of Common~~	~~% of Total Options~~
	~~Shares Underlying~~	~~Granted to Employees~~	~~Exercise~~	~~Expiration~~
~~Name~~	~~Options Granted~~	~~and Directors in FY~~	~~Price ($/Sh.)~~	~~Date~~ .

~~There~~Company. In addition, there were no stock options ~~granted~~or warrants exercised by any officer, director, employee or to ~~employees and directors under~~ any ~~of the Company’s stock option plans during 2006.~~

~~The following table sets forth aggregated stock option and warrant exercises during 2006 by executive officers, certain other employees with highest remuneration, directors, and~~ beneficial owners of more than 10 percent of any class of equity securities of the ~~Company:~~Company during 2007.

	~~Shares~~		~~#of Shares Underlying~~	~~Value of Unexercised~~
	~~Acquired~~	~~Value~~	~~Unexercised~~	~~In-the-Money Options~~
~~Name~~	~~on Exercise (#)~~	~~Realized ($)~~	~~Options/Warrants~~	~~& Warrants at Y/E ($)~~

~~There were no stock options or warrants exercised by employee-executives or directors during 2006.~~

1997 Stock Option Plan:

The Company’s 1997 Stock Option Plan, as filed with Information Statement pursuant to Section 14(c) with the Commission on July 1, 1997, and with Registration Statement on Form S-8 with the Commission on September 8, 1997, is hereby incorporated by reference.

2000 Stock Incentive Plan:

The Company’s 2000 Stock Incentive Plan, as filed with the Commission as an exhibit to the quarterly report on Form 10-QSB for the period ended March 31, 2000, is hereby incorporated by reference.

1926

Options Granted Outside of Stock Option Plans:

On August 16, 2007, the Company closed on its acquisition of Kiwibox Media Inc. and issued to each of the three Kiwibox Shareholder stock options provided for under their employment agreements. Each Kiwibox Shareholder received a stock option to purchase up to 7,500,000 shares of our common stock at an exercise price of $.05 per share which vests and is exercisable by the Kiwibox Shareholders, 50% on the first anniversary date of the Closing, August 16, 2008, 25% 18 months after the Closing and 25% on the second anniversary of the Closing. Each Kiwibox Shareholder was also issued a performance stock option to purchase up to an additional 3,000,000 shares of our common stock, 1,500,000 of which options vest and are exercisable following the first anniversary date of the Closing if the Kiwi Business has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term or achieved $316,000 in gross revenues during the first year, and the balance, or 1,500,000 options vest and are exercisable by the Kiwibox Shareholders after the second anniversary date of the Closing, provided the Kiwi Business has received at least an average 550,000 Unique Visitors during either the 22nd, 23rd or 24th month of the second year of the term or achieved $1,961,000 in gross revenues during the second year of the agreements. All of these stock options are non-qualified and are exercisable at $.05 per share.

We gave a 3-year stock option grant to Steven Gray, a director, to purchase 500,000 common shares at the exercise price of $.15 for services rendered to the Company during 2007.

Pursuant to the terms of his employment agreement, dated October 8, 2007, we made two stock option grants to Paul Farris for an aggregate 1,000,000 common shares: a stock option grant for 500,000 shares, exercisable at $.05 per share, vesting 1/3 each on the first, second and third anniversary dates of his employment, and; a performance stock option for a second 500,000 shares, also exercisable at $.05 per share, and vesting based upon the attainment of certain business goals: on the first anniversary date of his employment: (i) 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 645,000 Unique Visitors (defined below) during either the 10th, 11th or 12th month of the first year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the iwibox.com website has received no less than an average 430,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 215,000 Unique Visitors during either the 10th, 11th or 12th month of the first year of the term; on the second anniversary date of his employment: (i) all 250,000 Performance Stock Options shall fully vest provided that a Kiwi website has received no less than an average 1,650,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term, or; (ii) 125,000 Performance Stock Options shall vest provided that the Kiwibox.corn website has received no less than an average 1,100,000 Unique Visitors during either the 10th, 11th or 12th month of the second year of the term; or (iii) 62,500 Performance Stock Options shall vest provided that the Kiwibox.com website has received no less than an average 550,000 Unique Visitors during either the l0th, 11th or 12th month of the second year of the term.

Outstanding Equity Awards At Fiscal Year-End Table

The following table provides certain information regarding unexercised options to purchase common stock, stock options that have not vested, and equity-incentive plan awards outstanding at December 31, 2007, for each of the persons covered under our Summary Compensation Table.

Name and Principal Position	Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable		Equity Incentive Plan Awards No. of Underlying Unexercised Unearned Options		Option Exercise Price		Option Expiration Date		No. of Shares or Units of Stock that have not vested		Market Value of Shares or Units of Stock that have not vested		Equity Incentive Awards, Shares, Units Or other Rights that have not vested		Equity Incentive Plan Awards: Market or Payout value of Unearned Shares,Units or other rights that have not vested
Edward L. Marney, CEO and President		-		-		-		-		-		-		-		-		-

Joerg H. Klaube, CFO		-		-		-		-		-		-		-		-		-

Joseph J. Tomasek, Director and General Legal Counsel		-		-		-		-		-		-		-		-		-

Steven Gray, Chairman of the Board		500,000 500,000		- -		- -	$ $	0.15 0.15		1/1/09 1/1/10		- -		- -		- -		- -

Lin Dai Employee of Subsidiary		0		10,500,000			$	.05		8/16/10		10,500,000

Michael Howard Employee of Subsidiary		0		10,500,000			$	.05		8/16/10		10,500,000

Ivan Tumanov Employee of Subsidiary		0		10,500,000			$	.05		8/16/10		10,500,000

~~Outstanding Equity Awards At Fiscal Year-End Table~~Option Exercises and Stock Vested Table: None

Name and
Principal
Position

Number of
Securities
Underlying
Unexercised
Options
Exercisable

Number of
Securities
Underlying
Unexercised
Options
Unexercisable

Equity
Incentive
Plan Awards
No. of
Underlying
Unexercised
Unearned
Options

Option
Exercise
Price

Option
Expiration
Date

No. of
Shares or
Units of
Stock that
have not
vested

Market
Value of
Shares or
Units of
Stock that
have not
vested

Equity
Incentive
Awards,
Shares, Units
Or other
Rights that
have not
vested

Equity
Incentive Plan Awards:
Market or Payout value of Unearned Shares,Units or other rights that have not vested

Edward L. Marney,
CEO and President
- - - - - - - - -

Steven D. Rudnik,
Former CEO and President
- 2,903,542 - $ 0.10 1/6/10 - - - -

Joerg H. Klaube,
CFO
- - - - - - - - -

Steven W. Jagels,
Former SVP - Information Systems
250,000 - - $ 0.1325 2/18/07 - - - -

Joseph J. Tomasek,
Director and General Legal Counsel
- - - - - - - - -

Steven Gray,
Chairman of the Board
500,000 - - $ 0.15 1/1/09 - - - -

All Executive Officers as a group
(2 persons)
500,000 - - - - - - - -
Pension Benefits Table: None

Nonqualified Deferred Compensation Table: None

Pre-requisites Table: None

Compensation of Directors:

We have not paid any compensation to any of our directors for services rendered as directors during fiscal years ~~2005~~2006 and ~~2006.~~2007.

During ~~2006,~~2007, one outside director of the Company who also serves as the Company’s general and securities counsel, was paid an aggregate ~~$96,121~~$127,000 for legal services.

CORPORATE GOVERNANCE AND CODE OF ETHICS

Board Committees

AUDIT COMMITTEE

The Company has appointed an Audit Committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002. The Audit Committee is currently comprised of one director, Steven. Gray, who is a financial expert with knowledge of financial statements, generally accepted accounting principles and accounting procedures and disclosure rules. Mr. Gray is not “independent” as defined in Section10A-3(b)(1)(iv)(A) of the Securities Exchange Act. Our Board of Directors intends to appoint additional independent members to this Audit Committee.

COMPENSATION AND NOMINATING COMMITTEES

ITEM ~~12:~~11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March ~~20, 2006,~~28, 2008, the record and beneficial ownership of common stock of the Company by each executive officer, director and ~~director,~~the three most highly compensated employees, all executive officers, directors and ~~directors~~the three most highly compensated employees as a group, and each person known to the Company to own beneficially, or of record, five percent or more of the outstanding shares of the Company:

Title of Class )*	Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership (1)			Percent of Class
Title of Class *									Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership (1)			Percent of Class
Common		Edward Marney		-			-			Edward Marney		-			-
Stock		Steven L. Gray		5,614,096	(2)		2.46	%		Steven L. Gray		8,272,131	(2)		2.20	%
		Joerg H. Klaube		1,400,000			0.62	%		Joerg H. Klaube		1,400,000			0.37	%
		Joseph J. Tomasek		2,847,166	(3)		1.25	%		Joseph J. Tomasek		2,847,166	(3)		0.77	%
										Lin Dai		11,804,632	(4)		3.14	%
		Address of all persons above: c/o the Company.								Michael Howard		7,807,155	(5)		2.10	%
										Ivan Tomanov		9,638,213	(6)		2.56	%
		All Directors and Executive Officers		9,861,262			4.32	%		Address of all persons above: c/o the Company.
		as a Group (4 persons)								All Directors, Executive Officers		41,769,297			11.10	%
										And the Three Most Highly
		Michael G. Martin		13,000,000	(4)		5.7	%		Compensated Employees as a Group (7 persons)
		12 Tillman Ct, Bridgewater, NJ 08807								Steven D. Rudnik		24, 272,986			6.45	%
		33 Group LLC		12,500,000			5.7	%		Tell Capital AG		27,750,000	(7)		7.38	%
		3589 NW 61 Circle, Boca Raton, FL 33496								Zurich, Switzerland
		Azzurri Group, LLC		12,500,000			5.7	%		Cambridge Services		25,000,000	(8)		6.64	%
		3589 NW 61 Circle, Boca Raton, FL 33496								Panama City, Panama
		Steven D. Rudnik		24,272,986	(5)		10.3	%		VGZ		25,000,000	(9)		6.64	%
										Zurich, Switzerland
										Monarich International, Inc.		25,000,000	(10)		6.64	%
										El Dorado, Panama
										Discover Advisory Company		30,000,000	(11)		7.97	%
										Nassau, Bahamas

~~The Company also has issued and outstanding as of March 16, 2006, 193,190~~* Based upon 376,242,570 common shares outstanding at March 28, 2008. The Company also has issued and outstanding as of March 28 2008, 129,500 shares of its Senior Convertible Preferred Stock, with concentrations in excess of 10% for one or more of the holders of such stock, however, none of such shares bear any voting rights.

(1)

For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock which such person has the right to acquire within 60 days of March ~~20, 2006.~~28 2008. For purposes of computing the percentage of outstanding shares of Common Stock held by each person or group of persons named above, any security which such person or persons has or have the right to acquire within such date is deemed to be outstanding but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnote to this table and pursuant to applicable community property laws, the Company believes based on information supplied by such persons, that the persons named in this table have sole voting and investment power with respect to all shares of Common Stock which they beneficially own.

(2)	Includes options for ~~500,000~~1,000,000 shares.

(3)	Includes warrants for 333,333 shares.

(4)	~~Includes options~~Does not include his portion of approximately 30,000,000 shares due to the three Kiwibox Shareholders for ~~750,000 shares.~~late penalties.

(5)	~~Includes warrants~~Does not include his portion of approximately 30,000,000 shares due to the three Kiwibox Shareholders for ~~4,708,333 shares and options for 2,903,542 shares.~~late penalties.

(6)	Does not include his portion of approximately 30,000,000 shares due to the three Kiwibox Shareholders for late penalties.

(7)	Includes 2,750,000 warrants owned by Ulrich Schuerch who has investment and voting control of Tell Capital AG, and 12,500,000 5-year Warrants, exercisable at $.07 per Warrant.

(8)	Represents 25,000,000 5-year warrants, exercisable at $.05 per warrant and provides for cashless exercise; Viktor Sauter has investment and voting control of Cambridge services.

(9)	Represents 25,000,000 5-year warrants, exercisable at $.05 per warrant and provides for cashless exercise; Markus Winkler has investment and voting control of VGZ.

(10)	Miguel Sanchez Lopez and Javier Rivera Fernandez have investment and voting control of Monarich International, Inc.

(11)	Karen Buehler has investment and voting control of Discover Advisory Company.

2230

ITEM ~~13:~~12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On March 31, 2000, the Company and its President and Chief Executive Officer agreed to convert a current liability payable to him in the amount of $374,890 into a Company obligation, of which $100,000 was subsequently classified as due on demand, which was repaid in April 2002, with the remaining balance of $274,890 maturing July 1, 2002. On February 19, 2002, the maturity of the term portion of $274,890 was extended to July 2003, and the board of directors of the Company approved a change in the conversion option towards a rate of $0.10 per share. In January 2004, $175,000 was repaid and the maturity of the remaining open balance of $99,890 was extended to January, 2005. This amount has been converted into common stock and warrants pursuant to a settlement agreement entered into in December 2006.

In May 2005, the Company and its President and Chief Executive Officer agreed to convert most of his base salary for the remainder of the year 2005 into 1,000,000 shares of restricted common stock and 1,000,000 warrants, exercisable during three years at the price of $0.15 per share, in lieu of $100,000 cash.

In September 2005 our officers and directors surrendered for cancellation 4,507,709 stock options, 2,283,916 common stock purchase warrants and 11,247,607 common shares in order to provide sufficient authorized common shares to accommodate the Company’s current private placement. We replaced the surrendered and cancelled common shares with shares of our Series E preferred stock which automatically converted in March, 2006, into 11,247,607 common shares, the amount of common shares equal to those surrendered. We also intend to reissue the 4,507,709 stock options and 2,283,916 warrants also surrendered for cancellation by our officers and directors with an equal amount of common shares underlying these securities. The recipients of the Series E preferred stock have waived their right to receive any dividends on their shares.

On August 8, 2006, Steven D. Rudnik resigned from the position of Chairman of the Board of Directors of the Company. Pursuant to the principle terms of the resignation agreement, (a) his current employment agreement was terminated, (b) he resigned the position of chairman, (c) he received 6 million restricted common shares plus cash payments totaling $60,000.00 to be paid in installments through November 1, 2006, and (d) that options and warrants for an aggregate 4,486,875 share which were previously cancelled, be re-issued upon the earlier recurrence of a recapitalization of our securities that would provide sufficient common shares to accommodate them or two years from the date of the agreement. The options and warrants will have similar terms as the original instruments (exercisable at $0.10 and $0.15, respectively), but with expiration dates as of three years from the date of re-issuance.

On January 2, 2007, the Company and a former employee, Steven W. Jagels settled a lawsuit commenced by Mr. Jagels against the Company based upon claims which included breach of his employment agreement. We agreed to make a payment of $20,040 to Mr. Jagels and to issue 3,000,000 common shares to him by January 7, 2007. We also agreed to include these shares in ~~this~~a registration statement and when ~~it is~~ declared effective by the SEC, to cause a buyer to purchase these shares from Mr. Jagels for $75,000 prior to February 28, 2007. ~~Upon Mr. Jagels’ receipt of these proceeds,~~The Company facilitated this payment and the lawsuit ~~will be discontinued~~was dismissed with ~~prejudice, or if not consummated as agreed, the lawsuit will continue.~~prejudice.

During 2007 and 2006, one outside director of the Company who also serves as the Company’s general and securities counsel, was paid an aggregate $127,000 and $96,121, respectively, for legal services.

ITEM 13. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

Rosenberg Rich Baker Berman & Company ("Rosenberg") billed us in the aggregate amount of ~~$66,433~~$79,373 and ~~$63,028~~$66,433 for professional services rendered for their audit of our annual financial statements and their reviews of the financial statements included in our Forms 10-KSB and 10-QSB for the years ended December 31, ~~2006~~2007 and December 31, ~~2005,~~2006, respectively.

AUDIT-RELATED FEES

Rosenberg did not bill us for, nor perform professional services rendered for assurance and related services that were reasonably related to the performance of audit or review of the Company's financial statements for the fiscal years ended December 31, ~~2006~~2007 and December 31, ~~2005.~~2006.

TAX FEES

Rosenberg billed us in the aggregate amount of ~~$5,656~~$5,416 and ~~$4,790~~$5,656 for professional services rendered for tax related services for the fiscal years ended December 31, ~~2006~~2007 and December 31, ~~2005,~~2006, respectively.

ALL OTHER FEES

The aggregate fees billed by Rosenberg for services rendered to the Company during the last two fiscal years, other than as reported above, were $0 and $0, respectively.

TRANSFER AGENT

The transfer agent for the Company is Securities Transfer Corporation, located at 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034.

ANNUAL REPORT

The Company intends to continue its practice of furnishing annual reports to its shareholders containing financial statements audited by independent certified public accountants.

2432

~~PART IV~~

ITEM ~~15:~~14: EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

The Exhibits that are filed with this report or that are incorporated by reference are set forth in the Exhibit Index attached hereto.

(b) Reports on Form 8-K

On October ~~31, 2006~~5, 2007 the Company filed a report on Form 8-K announcing the hiring of a director for business development and informing about equity investments.

On October 12, 2007 the Company filed a report on Form 8-K announcing a ~~restructuring plan~~press release informing about the launch of a new website for ~~the Company’s operations.~~its Kiwibox subsidiary.

On ~~December 26, 2006 the Company filed a report on Form 8-K informing about a settlement agreement reached with the former Chief Executive Officer.~~

~~On February 2,~~November 6, 2007 the Company filed a report on Form 8-K informing about ~~a loan~~an equity investment transaction.

On ~~February 23,~~November 28, 2007 the Company filed a report on Form 8-K announcing a press release informing about a joint marketing project with Nintendo.

On December 5, 2007 the Company filed a report on Form 8-K informing about an amendment to the Agreement and Plan of Reorganization involving the merger of its wholly owned subsidiary Magnitude Operations Inc. with Kiwibox Media Inc.

On January 4, 2008 the Company filed a report on Form 8-K informing about a further amendment to the Agreement and Plan of Reorganization involving the merger of its wholly owned subsidiary Magnitude Operations Inc. with Kiwibox Media Inc and the receipt of an equity investment.

On February 5, 2008 the Company filed a report on Form 8-K informing about the signing of a Standstill Agreement with the former principals of its wholly owned subsidiary Kiwibox Media Inc. and the receipt of an equity investment.

On February 21, 2008 the Company filed a report on Form 8-K informing about the signing of a second Standstill Agreement with the former principals of its wholly owned subsidiary Kiwibox Media Inc.

On March 4, 2008 the Company filed a report on Form 8-K informing about a further amendment to the Agreement and Plan of Reorganization involving the merger of its wholly owned subsidiary Magnitude Operations Inc. with Kiwibox Media Inc.

On March 7, 2008 the Company filed a report on Form 8-K informing about an equity investment transaction.

2533

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

MAGNITUDE INFORMATION SYSTEMS, INC.
~~By: /s/ Edward Marney~~			~~Date:~~ ~~March 30, 2007~~
~~Edward Marney~~ ~~President and Chief Executive Officer~~ ~~(Principal Executive Officer), Director~~


By: /s/ Edward L. Marney			Date:April 14, 2008
Edward L. Marney President and Chief Executive Officer (Principal Executive Officer), Director

By: /s/ Joerg H. Klaube			Date: ~~March 30, 2007~~April 14, 2008
Joerg H. Klaube Secretary, Chief Financial Officer (Principal Financial Officer) Director

In accordance with the requirements of the Securities Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name		Date


/s/ Steven L. Gray	~~March 30, 2007~~	April 14, 2008
Steven L. Gray, Chairman of the Board


/s/ Joseph J. Tomasek	~~March 30, 2007~~	April 14, 2008
Joseph J. Tomasek, Director

2634

	Page
~~INTRODUCTION~~	1
~~SUMMARY OF ACQUISITION MERGER~~	2
~~The Parties to the ACQUISITION MERGER~~	2
~~Kiwibox Business to be acquired by Subsidiary~~	2
~~Liabilities to be Assumed by Magnitude~~	2
~~Acquisition Price; Stock and Cash~~	2
~~Tax Treatment~~	3
~~Employment Agreements~~Introduction	4
~~Recommendation of~~
Questions and Answers about the ~~Company's Board and Reasons for Acquisition Merger~~Current Solicitation	5
~~Conduct of Business Following the Acquisition Merger~~	5
~~Conditions to Completion of Acquisition Merger; Votes Required to Authorize~~	5
~~Acquisition Merger~~
~~Expenses~~Certain Relationships and Related Transactions	58
~~No Appraisal Rights~~	5
~~QUESTIONS AND ANSWERS ABOUT THE ACQUISITION AND SOLICITATION~~	5
~~Why did I receive this Consent Solicitation?~~	6
~~What am I being asked to vote my shares for in the Consent Solicitation?~~	6
~~Why are stockholders being asked to approve the Company’s Acquisition of~~
~~Kiwibox?~~Principal Shareholders	68
~~Why is the Company seeking to increase the number of shares of common~~
~~stock it is authorized to issue?~~Directors, Executive Officers and Significant Employees	610
~~What is the voting requirement to approve the amendments to the Certificate~~
~~of Incorporation?~~Executive Compensation	711
~~How will the increase in authorized shares of common stock affect my~~
~~ownership~~Corporate Governance and Code of ~~Company's common stock?~~Ethics	716
~~In addition to obtaining stockholder consent to the Acquisition and to~~
~~the proposed Amendments to the Company’s Certificate of Incorporation,~~Board Committees	17

~~how does the Company plan to meet the closing condition of having~~
~~$3.5 million of equity at Closing to invest in the Kiwibox business?~~	7
~~What business will the Company conduct after the Kiwibox Acquisition?~~	8
~~What happens if stockholders do not approve the Kiwibox Acquisition or~~
~~if the minimum $3.5 million in equity is not raised?~~	8
~~If approved, when will the Kiwibox Acquisition be completed?~~	8
~~Am I entitled to Appraisal Rights in connection with the Kiwibox~~
~~Acquisition?~~	8
~~What will happen to my shares if the Kiwibox Acquisition is approved?~~	8
~~How does the Company’s Board of Directors recommend that I vote for the~~
~~proposals contained in this Consent Solicitation?~~	8
~~Who can sign the Consent Cards?~~	8
~~How do I vote my shares in this Consent Solicitation?~~	8
~~Can I change my vote after I return my Consent Card?~~	8
~~What do I do if my shares are held in “street name”?~~	9
~~What does it mean if I get more than one Consent Card?~~	9
~~How many votes do I have?~~	9
~~What vote is required to approve the three proposals?~~	9
~~-The Kiwibox Acquisition~~	9
~~The Amendment to the Certificate of Incorporation, increasing the~~
~~authorized common shares~~	9
~~The Amendment to the Certificate of Incorporation, changing our~~
~~corporate name~~	9
~~How are votes counted?~~	9
~~Who pays for this consent solicitation?~~	10
~~PROPOSALs TO STOCKHOLDERS~~	10
Proposal ~~1 - The Acquisition of Kiwibox~~	11
~~Background of the Kiwibox Acquisition~~	11
~~The Kiwibox Acquisition Price: Stock and Cash,Employment Agreements~~
~~And Stock to Potential Investors~~	12
~~Kiwibox Acquisition Investment: $3,500,000 and Closing Costs/Public~~
~~Company Operations: $2,500,000~~	13

	1.	Title of each class of securities to which transaction applies:

	2.	Aggregate number of securities to which transaction applies:

	3.	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	4.	Proposed maximum aggregate value of transaction:


	Magnitude Information Systems, Inc.			Kiwibox Media, Inc.			Capital Raise Magnitude )1		Stock Issued to Kiwibox Stockholders )2,3			Elimination in Merger			Pro Forma Balance Sheet

Assets
Current Assets
Cash and cash equivalents	$	81,307		$	1,322		$	3,500,000	$			$			$	3,582,629
Accounts receivable		66			20,568											20,634
Prepaiid expenses		39,789														39,789
Miscellaneous receivables					3,000											3,000
Total Current Assets		121,162			24,890			3,500,000		0			0			3,646,052
Property and Equipment, net		10,076			3,500											13,576
Other Assets		37,890			3,224											41,114
Total Assets	$	169,128		$	31,614		$	3,500,000	$	0		$	0		$	3,700,742

Liabilities and Stockholders' Equity (Deficiency)
Current Liabilities
Accounts payable and accrued expenses	$	466,746		$	26,798		$		$			$			$	493,544
Deferred revenue		102,829														102,829
Dividends payable		341,168														341,168
Notes payable		442,450														442,450
Current maturities of long-term debt		33,529														33,529
Derivative liability for options and warrants		1,190,452														1,190,452
Other current liabilities		97,439			26,383											123,822
Total Liabilities		2,674,613			53,181			0		0			0			2,727,794

Stockholders' Equity (Deficiency)
Common stock		22,424			469			7,000		4,286			(469	)		33,710
Treasury stock					(3,236	)							3,236			0
Preferred convertible stock		110								44						154
Additional paid-in capital		33,112,773			46,431			3,493,000		(4,330	)		(2,767	)		36,645,107
Retained earnings		(35,640,792	)		218,598											(35,422,194	)
Stockholders' loans					(283,829	)										(283,829	)
Total Stockholders' Equity (Deficiency)		(2,505,485	)		(21,567	)		3,500,000		0			0			972,948

Total Liabilities and Stockholders' Equity (Deficiency)	$	169,128		$	31,614		$	3,500,000	$	0		$	0		$	3,700,742


	Magnitude
	Information Systems, Inc.			Kiwibox Media, Inc.			Pro Forma Balance Sheet

Revenues	$	47,701		$	107,153		$	154,854
Cost of Sales		145,496						145,496

Gross Profit		(97,795	)		107,153			9,358

Selling, general and administrative expenses		2,035,997			149,781			2,185,778
Stock-based compensation		1,583,075						1,583,075
Loss from Operations		(3,716,867	)		(42,628	)		(3,759,495	)

Other Income (Expense)
Interest Income		20			12,903			12,923
Interest expense		(326,744	)					(326,744	)
Other income		294,898						294,898
Other expense		(180,309	)					(180,309	)
Total Other Income (Expense)		(212,135	)		12,903			(199,232	)

Income before Income Taxes		(3,929,002	)		(29,725	)		(3,958,727	)

Benefit from (Provision for) Income Tax		33,740			(600	)		33,140

Net Loss	$	(3,895,262	)	$	(30,325	)	$	(3,925,587	)

Dividends on Preferred Shares		(578,464	)					(578,464	)
Net Loss applicable to Common Shareholders	$	(4,473,726	)	$	(30,325	)	$	(4,504,051	)

Net Loss per Common Share	$	(0.026	)	$	(0.001	)	$	(0.021	)
Weighted Average of Common Shares Outstanding		170,692,731			42,857,143	)1		213,549,874

Title	Name and Address of	Amount and Nature of	Percent
of Class )*	Beneficial Owner	Beneficial Ownership (1)	of Class
Common Stock
	Steven L. Gray	5,614,096 (2)	2.5%
	Joerg H. Klaube	1,400,000	0.6 %
	Joseph J. Tomasek	2,847,166 (3)	1.1%
	Edward L. Marney	0

All Directors and Executive Officers		9,861,262	4.3%
as a Group (4 persons)

	Michael G. Martin	13,000,000 (4)	5.7%
	12 Tillman Ct, Bridgewater, NJ 08807
	33 Group LLC	12,500,000	5.7 %
	3589 NW 61 Circle, Boca Raton, FL 33496
	Azzurri Group, LLC	12,500,000	5.7%
	3589 NW 61 Circle, Boca Raton, FL 33496

Name and Principal Position Name	Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable	Equity Incentive Plan Awards: Number of Underlying Unexercised Unearned Options		Option Exercise Price		Option Expira-tion Date		Number of Shares or Units of Stock That Have Not Vested)		Market Value of Shares or Units of Stock That Have not Vested		Equity Incentive Awards Shares, Units Or Other Rights That Have Not Vested		Equity Incentive Plan Awards: Market Or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested		Total ($) (j)
Edward L. Marney Chief Executive Officer, President															-		- -

Steven D. Rudnik Former Chief Executive Officer, President		2,903,542			-	$	0.10		1/6/10		-		-

Mark Chroscielewski Former Sr. Vice President Business Development					-						-		-		8,400

Joerg H. Klaube Sr. Vice President, CFO					-						-		-		1,710

Steven W. Jagels Former Sr. Vice President Information Systems		250,000			-	$	0.1325		2/18/07		-		-		1,940

Joseph J. Tomasek, Esq., Director and General Legal Counsel

Steven Gray Director		500,000				$	0.15		1/01/09

All executive officers As a group (2 persons)		500,000			-						-		-

	December 31, 2006,
Balance Sheet
Total assets	$	169,128
Current liabilities		2,674,613
Long-term debt		-
Working capital		(2,553,451	)
Shareholders’ equity (deficit)	$	(2,505,485	)

														(1)
Name and Principal Position (a)	Year (b)		Salary ($) (c)		Bonus ($) (d)		Stock Awards ($) (e)		Option Awards ($) (f)	Non-Equity Incentive Plan Compensation ($) (g)		Non- Qualified Deferred Compensation Earnings ($) (h)		All Other Compensation ($) (i)		Total ($)
Edward L. Marney		2006		86,538											5,950		92,488
Chief Executive																	-
Officer, President

Steven D. Rudnik		2006		64,788				567,677							48,250		680,715
Former Chief		2005		33,333		-		100,000			-		-		24,306		157,639
Executive Officer,
President

Mark Chroscielewski		2006		82,185													82,185
Former Sr. Vice		2005		125,000		-					-		-		12,900		137,900
President
Business Development

Joerg H. Klaube		2006		61,376											2,626		64,002
Sr. Vice President,		2005		117,308		-					-		-		12,203		129,511
CFO

Steven W. Jagels		2006		61,875													61,875
Former Sr. Vice		2005		108,333		-					-		-		13,556		121,889
President
Information Systems

Joseph J. Tomasek,		2006													96,121		96,121
Esq., Director and		2005													131,140		131,140
General Legal Counsel
Legal Fees:

Steven Gray Director		2006		30,000				107,450									137,450

All executive officers		2006		147,914											8,576		156,490
As a group (2 persons)		2005		117,308		-					-		-		12,203		12,203

~~(A)~~		~~Restated Financial Statements and Notes to Financial Statements~~

(3) (i)		Articles of Incorporation and Amendments thereto, incorporated herein by reference to Exhibits of previous filings with the Commission.

(3) (ii)		Bylaws of the Company, incorporated herein by reference to Exhibits of previous filings with the Commission.

10.1*		Resignation Agreement dated July 21, 1999, between J. Swon and B. Deichl and the Company, incorporated herein by reference to the Exhibit of Form S-8 filed with the Commission on August 3, 1999.

~~(21)~~10.2*		Resignation Agreement dated January 28, 2000, between M. Martin and the Company, incorporated herein by reference to the Exhibit of Form S-8 filed with the Commission on January 31, 2000.

10.3*		Employment Agreement, dated April 15, 1996 between the Company and Joerg Klaube, incorporated herein by reference and previously filed as an Exhibit to the Company's Form 10-KSB for the fiscal year ended December 31, 1997 with the Commission.

10.4*		Employment Agreement, dated July 1, 1999 between the Company and John C. Duncan.

10.5*		Termination Agreement, dated as of August 1, 2001, by and between the Company and Torneaux Fund, Ltd.

10.6*		Contract by and between Lockheed Martin and the Company, dated December 21, 2000.

10.7*		Employment Agreement, dated April 15, 2002 between the Company and Steven D. Rudnik.

10.8*		Employment Agreement, dated February 15, 2002 between the Company and Mark Fuller.

10.9*		Employment Agreement, dated April 15, 2002 between the Company and Joerg Klaube.

10.10*		Employment Agreement, dated April 15, 200 between the Company and Steven Jagels

10.11* *		Brokerage Placement Assistance Agreement, Dated January 2, 2004, between the Company and vFinance Investments, Inc.

10.12 *		Consulting Agreement, dated December 1, 2003, by and between the Company and Alan Cohen.

10.13 *		Consulting Agreement, dated February 12, 2003, by and between Jackson-Hewitt Investment Services, Inc. and the Company.

10.14 *		Consulting Agreement, dated September 25, 2003, by and Between James W. Morton and the Company.

10.15 *		Consulting Agreement, dated September 15, 2003, by and between Premium Strategy Partners AG and the Company.

10.16 *		Consulting Agreement, dated September 25, 2003, by and between Ulrich Schuerch and the Company.

10.17 *		Consulting Agreement, dated December 1, 2003, by and between Murray Zaroff and the Company.

10.18 *		Consulting Agreement, dated November 28, 2003, by and between The Research Works Inc. and the Company.

10.19 *		Stock Purchase Agreement, dated August 18, 2006, by and between 33 Group, LLC and the Company.

10.20 *		Stock Purchase Agreement, dated August 18, 2006, by and between Azzurri Group, LLC and the Company.

10.21 *		Form of Company Warrant to be issued in connection with the Stock Purchase Agreements, Exhibits 10.19 and 10.20, respectively.

10.22 *		Settlement Agreement, dated August 8, 2006, between the Company and Steven D. Rudnik.

10.23 *		Settlement Agreement, dated December 13, 2006, between the Company and Steven D. Rudnik.

10.24 *		Settlement Agreement, dated January 2, 2007, between the Company And Steven W. Jagels.

10.25*		Copy of Agreement and Plan of Reorganization, Dated February 19, 2007, between the Company, Kiwibox Media, Inc. and the Kiwibox Shareholders, and Form of Employment Agreement for the Three Kiwibox Shareholders,

10.26*		Preliminary Employment Agreement with Paul Farris

10.27*		Commitment from Tell Capital AG, dated July 26, 2007 and effective August 2, 2007

10.27*		Amendment No. 3 to Agreement and Plan of Reorganization, dated July 31, 2007 and Effective August 2, 2007

10.28*		Preliminary Employment Agreement with Paul Farris, Dated September 19, 2007

10.29*		Amendment No. 4 to Agreement and Plan of Reorganization, dated as of December 3, 2007.

10.30*		Amendment No. 5 to Agreement and Plan of Reorganization, dated as of December 31, 2007.

10.31*		Standstill Letter Agreement, dated as of January 30, 2008.

10.32*		Standstill Letter Agreement, dated as of February 11, 2008.

10.33*		Amendment No. 6 to Agreement and Plan of Reorganization, dated as of February 28, 2008.

21.		Subsidiaries of the Company:

		(i) Magnitude, Inc. ~~is a corporation~~and Kiwibox Media, Inc. are corporations formed under the laws of the State of Delaware and isand are the ~~name~~names under which ~~it conducts~~they conduct business.


~~(23)~~		~~Independent Auditors’ Consent - attached to Exhibit A.~~

~~(31.1)~~31.1		Certification of Edward Marney, Chief Executive Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

~~(31.2)~~31.2		Certification of Joerg H. Klaube, Chief Financial Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

~~(99.1)~~32.1		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

(a)		The Company’s Quarterly Reports on Form 10-QSB for the periods ended March 31, ~~2006,~~2007, June 30, ~~2006,~~2007, and September 30, ~~2006.~~ 2007.

(b)		All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the Company’s fiscal year ended December 31, ~~2005~~
		2006

	Page

Report of Independent Registered Public Accounting Firm		2F-2

Financial Statements

Consolidated Balance Sheet		3F-3

Consolidated Statements of Operations		4F-4

Consolidated Statements of Stockholders Equity (Deficit)		~~5-6~~F-5-F-6

Consolidated Statements of Cash Flows		~~7-9~~F-7-F-9

Notes to the Consolidated Financial Statements		~~10-31~~F-10-F-33


		/s/Rosenberg Rich Baker Berman & Company
Bridgewater, New Jersey April 15, 2008		Rosenberg Rich Baker Berman & Company

Assets
Current Assets
Cash	$	81,307		$	470,148
Accounts receivable, net of allowance for doubtful accounts of $1,900		66
Accounts receivable, net of allowance for doubtful accounts of $0					7,893
Prepaid expenses		39,789			12,339
Total Current Assets		121,162			490,380
Property and equipment, net of accumulated depreciation of $35,429		10,076
Property and equipment, net of accumulated depreciation of $81,965					.20,788
Deferred financing costs, net of accumulated amortization of $539,597					35,303
Goodwill					2,663,751
Other Assets		37,890			11,114
Total Assets		169,128			3,221,336
Liabilities and Stockholders’ Equity (Impairment)
Current Liabilities
Accounts payable and accrued expenses		466,746			907,799
Deferred revenues		102,829			100,000
Dividends payable		341,168			376,743
Obligations to be settled in stock		97,439			1,622,921
Notes payable		442,450
Loans and notes payable					450,000
Current maturities of long-term debt		33,529			33,529
Derivative liability for warrants and options		1,190,452			2,825,920
Total Current Liabilities		2,674,613			6,316,912

Commitments and Contingencies		-			-

Stockholders’ Equity (Impairment)
Preferred stock, $.001 par value, non-voting, 3,000,000 shares authorized; 109,857
shares issued and outstanding		110
Common stock, $.0001 par value, 300,000,000 shares authorized; 224,235,472 shares issued
and outstanding		22,424
Preferred stock, $.001 par value, non-voting, 3,000,000 shares authorized; 129,500 shares issued and outstanding					129
Common stock, $.0001 par value, 700,000,000 shares authorized; 276,709,237 shares issued and outstanding					27,671
Additional paid in capital		33,112,773			36,739,270
Loans receivable - stockholders					(286,721	)
Accumulated (deficit)		(35,640,792	)		(39,575,925	)
Total Stockholders’ Equity (Impairment)		(2,505,485	)		(3,095,576	)
Total Liabilities and Stockholders’ Equity (Impairment)	$	169,128		$	3,221,336

	Year Ended December 31,						Year Ended December 31,
	2006			2005			2007			2006
Net Sales
Software	$	47,701		$	189,552
Software licensing and maintenance							$	4,252		$	47,701
Advertising								25,493			-
Total Net Sales		47,701			189,552			29,745			47,701

Cost of Goods Sold
Software		145,496			151,713
Software amortization								-			145,496
Total Cost of Goods Sold		145,496			151,713			-			145,496
Gross Profit (Loss)		(97,795	)		37,839			29,745			(97,795	)

Research and development costs		75,998			217,067			735			75,998
Stock-based compensation (see below)		1,583,075			430,239			890,504			1,583,075
Selling, general and administrative expenses		1,959,999			1,801,203			1,586,338			1,959,999
Loss From Operations		(3,716,867	)		(2,410,670	)		(2,447,832	)		(3,716,867	)
Other Income (Expense)
Miscellaneous income		-			4,846
Interest income		20			6			2,551			20
Interest expense		(326,744	)		(21,703	)		(357,385	)		(326,744	)
Gain on extinguishment of debt								49,678			-
Loss on disposition of assets		(355	)		-			-			(355	)
Other expenses		(5,000	)		-			(156	)		(5,000	)
Amortization of intangible asset								(30,000	)		-
Impairment of software intangibles		(174,954	)		-			-			(174,954	)
Amortization financing costs								(539,597	)		-
Change in fair value of derivative conversion feature		102,762			-			-			102,762
Change in fair value of options and warrants		192,136			-			(558,911	)		192,136
Total Other Income (Expense)		(212,135	)		(16,851	)		(1,433,820	)		(212,135	)
Loss Before Benefit from Income Taxes		(3,929,002	)		(2,427,521	)		(3,881,652	)		(3,929,002	)
Benefit from Income Taxes		33,740			209,264			-			33,740
Net Loss	$	(3,895,262	)	$	(2,218,257	)	$	(3,881,652	)	$	(3,895,262	)

Dividends on Preferred Shares	$	(578,464	)	$	(123,235	)	$	(53,481	)	$	(578,464	)
Net Loss Applicable to Common Shareholders, basic and diluted	$	(4,473,726	)	$	(2,341,492	)	$	(3,935,133	)	$	(4,473,726	)
Net Loss Per Common Share, basic and diluted		(0.03	)		(0.02	)		(0.02	)		(0.03	)
Weighted Average of Common Shares Outstanding		170,692,731			138,097,577			243,609,819			170,692,731

	Convertible				Cumulative Preferred										Additional									Total Stockholders’
	Preferred Shares				Shares				Common Stock						Paid in			Accumulated			Deferred			Equity
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Compensation			(Deficit)

Balances, January 1, 2005		193,190	$	193		1	$	-		127,837,612		$	12,784		$	28,365,186		$	(28,825,573	)	$	(65,636	)	$	(513,046	)
Issuance of convertible preferred stock pursuant to private equity placements		16,667		17		-		-		-			-			99,983			-			-			100,000
Conversion of common stock into convertible preferred stock		112,476		112		-		-		(11,247,607	)		(1,125	)		1,013			-			-			-
Issuance of common stock for compensation		-		-		-		-		1,000,000			100			99,900			-			(100,000	)		-
Issuance of common stock pursuant to private equity placements		-		-		-		-		19,666,667			1,967			1,558,033			-			-			1,560,000
Issuance of common stock for services performed		-		-		-		-		3,350,000			335			297,465			-			(205,000	)		92,800
Issuance of warrants for services performed		-		-		-		-		-			-			46,700			-			(32,900	)		13,800
Issuance of options for services performed		-		-		-		-		-			-			108,780			-			-			108,780
Private placement finders fees		-		-		-		-		-			-			(67,000	)		-			-			(67,000	)
Dividends on convertible preferred stock		-		-		-		-		-			-			-			(116,936	)		-			(116,936	)
Recognition of expense on deferred compensation		-		-		-		-		-			-			-			-			375,478			375,478
Amortization of discount on preferred stock		-		-		-		-		-			-			6,299			(6,299	)		-			-
Net loss, year ended December 31, 2005		-		-		-		-		-			-			-			(2,218,257	)		-			(2,218,257	)

Balances, December 31, 2005		322,333	$	322		1	$	-		140,606,672		$	14,061		$	30,516,359		$	(31,167,065	)	$	(28,058	)	$	(664,381	)

																								Total
	Convertible						Cumulative								Additional									Stockholders’
	Preferred Shares						Preferred Shares				Common Stock				Paid in			Accumulated			Deferred			Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Compensation			(Deficit)
Balances, January 1, 2006		322,333		$	322			1	$	-		140,606,672	$	14,061	$	30,516,359		$	(31,167,065	)	$	(28,058	)	$	(664,381	)
Issuance of convertible preferred stock pursuant to private equity placements		24,583			25			-		-		-		-		138,475			-			-			138,500
Issuance of common stock and warrants pursuant to private equity placements		-			-			-		-		39,000,000		3,900		1,076,500			-			-			1,080,000
Conversion of convertible preferred stock into common stock		(137,059	)		(137	)		-		-		13,705,940		1,371		(1,234	)		-			-			-
Issuance of common stock pursuant to settlement agreements for redemption of preferred stock and accr. dividends with former officer		(100,000	)		(100	)		-		-		10,250,000		1,025		818,975			(469,005	)		-			350,895
Issuance of equity securities pursuant to severance arrangement with former officer												6,000,000		600		567,077									567,677
Issuance of common stock in connection with the conversion of a promissory note and settlement of certain other liabilities		-			-			-		-		8,442,500		844		183,096			-			-			183,940
Issuance of common stock for services performed		-			-			-		-		6,230,360		623		467,273			-			-			467,896
Issuance of options and warrants for services performed		-			-			-		-		-		-		545,345			-			-			545,345
Amortization of discount on preferred stock		-			-			-		-		-		-		18,895			(18,895	)		-			-
Reclassification of warrants and options from equity to liabilities		-			-			-		-		-		-		(1,315,085	)		-			-			(1,315,085	)
Recognition of beneficial conversion feature on convertible debt																97,497									97,497
Dividends on conv. preferred stock		-			-			-		-		-		-		-			(90,565	)		-			(90,565	)
Recognition of expense on deferred compensation		-			-			-		-		-		-		-			-			28,058			28,058
Net loss, year ended December 31, 2006		-			-			-		-		-		-		-			(3,895,262	)		-			(3,895,262	)
Balances, December 31, 2006		109,857		$	110			1	$	-		224,235,472	$	22,424	$	33,112,773		$	(35,640,792	)	$	-		$	(2,505,485	)

Schedule of non-cash investing and financing activities

In connection with the issuance of notes payable, the Company incurred deferred finance costs payable in common stock	$	574,900

In connection with the redemption of the Company’s Series A and F preferred stock and accrued dividends, 2,207,658 common shares were issued	$	17,907

Sales commissions payable in the form of 143,542 shares of common stock	$	12,719

In connection with the conversion of promissory notes, 7,289,000 common shares were issued	$	364,450

Value of 3,802,315 common shares issued for interest and financing costs	$	195,116

Value of 43,610 preferred shares and 30,000,000 common shares issued to former principals of Kiwibox Media Inc pursuant to merger agreement	$	2,000,000

Recognition of intrinsic value of beneficial conversion features on convertible debt, credited to additional paid-in capital	$	152,046

Schedule of non-cash investing and financing activities

In connection with the settlement of certain liabilities stemming from prior agreements with a consultant and two former officers of the Company, and the conversion of a promissory note for $99,890, 8,442,500 common shares were issued	$	183,940

In connection with the redemption of the Company’s Series C preferred stock and accrued dividends, 10,250,000 common shares were issued	$	819,900

Value of options and warrants reclassified during the year from equity to liabilities	$	1,315,085

Recognition of beneficial conversion feature on convertible debt instruments	$	97,497

Schedule of non-cash investing and financing activities

In connection with consideration for settlement of accruals for past services, 130,000 common shares and options for 1,200,000 common shares were issued	$	121,780

In connection with consideration for future services, 3,500,000 common shares and warrants for 1,000,000 were issued and recorded initially as deferred compensation	$	337,900

Furniture and fixtures	$	2,014
Computer equipment		74,722
Office equipment		26,017
Total		102,753
Less: accumulated depreciation		81,965
	$	20,788

Accounts payable	$	181,540	$	489,782
Accrued interest		75,029		85,212
Accrued consulting fees		5,000
Accrued professional fees		119,132
Accrued professional and consulting fees				133,309
Finder’s fee payable on investment		50,000		50,000
Accrued payroll		34,045
Penalty payments due to KiwiBox former shareholders				100,000
Accrued finance costs				22,500
Accrued payroll and commissions				19,466
Miscellaneous accruals		2,000		7,530
	$	466,746	$	907,799

~~Accrued consulting fees~~Subscriptions for 36,000,000 units comprised of one common share and one warrant each, exercisable during 5 years at $0.07 /share (total subscription value $1,800,000, with $925,852 allocated to warrants based on relative fair values)	$	874,148
Estimated fair value of common shares issuable to former principals of Kiwibox Media, Inc. pursuant to acquisition agreement		~~72,000~~ 292,773
~~Accrued commissions~~975,000 common shares issuable to two consultants for services rendered, one of who is a director of the Company		~~25,439~~ 106,000
Deferred financing costs		350,000
	$	~~97,439~~ 1,622,921

On December 4, 1996, Magnitude, Inc. repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue at December 31, 2006 and no demand for payment has been made.	$	75,000
On December 4, 1996, Magnitude, Inc. repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue at December 31, 2007 and no demand for payment has been made.			$	75,000
Total	$	75,000	$	75,000

~~At December 31, 1999 the Company had $1,475,000 of notes outstanding related to a June 1995 private placement offering. During 2000 the holders of~~ ~~$1,450,000 worth of notes agreed to accept partial repayment of approximately 30% of the note balances and converted the remaining balances into common shares or~~convertible preferred shares. The total amount of non-converted notes outstanding at December 31, 2006 is $25,000. Attempts to locate the holder of this note, to settle this liability, have been unsuccessful.	$	~~25,000~~
~~In July 2006 two investors who also are shareholders advanced $342,450 to the Company, for which the Company~~ ~~issued two promissory notes, bearing interest at the rate of 8 % per year, repayable on demand.~~	$	~~342,450~~
~~Total~~	$	~~367,450~~