BigString CORP - FORM 10-K

Attached files

file	filename
EX-21.1 - SUBSIDIARIES OF BIGSTRING - BigString CORP	f10k2011ex21i_bigstring.htm
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - BigString CORP	f10k2011ex32i_bigstring.htm
EX-23.1 - CONSENT OF MADSEN & ASSOCIATES CPAS, INC - BigString CORP	f10k2011ex23i_bigstring.htm
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - BigString CORP	f10k2011ex31i_bigstring.htm
EX-32.2 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - BigString CORP	f10k2011ex32ii_bigstring.htm
EX-31.2 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - BigString CORP	f10k2011ex31ii_bigstring.htm
EXCEL - IDEA: XBRL DOCUMENT - BigString CORP	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

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

For the fiscal year ended December 31, 2011

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

For the Transition Period from _______ to _______.

Commission File Number 000-51661

BIGSTRING CORPORATION

(Exact name of registrant as specified in its charter)

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

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

(Address of principal executive offices) (Zip Code)

(732) 741-2840

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

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

Common Stock, par value $0.0001

(Title of class)

Indicate by check mark if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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

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

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

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x

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

At June 30, 2011, the aggregate market value of shares held by non-affiliates of the Registrant (based upon the closing sale price of such shares on The NASDAQ OTC Pink Sheets on June 30, 2011) was $1,272,629.

At March 30, 2012, there were 144,027,690 shares of the Registrant’s common stock outstanding.

Index

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

Index

BIGSTRING CORPORATION

INDEX TO FORM 10-K

PART I		PAGE

Item 1.	Business	2
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	5
Item 2.	Properties	5
Item 3.	Legal Proceedings	5
Item 4.	Mine Safety Disclosure	5

PART II

Item 5.	Market for Registrant’s Common Equity	6
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 8.	Financial Statements and Supplementary Data	10
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	11
Item 9A.	Controls and Procedures	11
Item 9B.	Other Information	11

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	12
Item 11.	Executive Compensation	14
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
Item 13.	Certain Relationships and Related Transactions and Director Independence	18
Item 14.	Principal Accountant Fees and Services	18
Item 15.	Exhibits, Financial Statement Schedules	19
	Index to Consolidated Financial Statements	F-1
	Index of Exhibits	E-1

Signatures		20

Index

PART I

Item 1. Business

Background

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

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

PeopleString Corporation (“PeopleString”), incorporated in the state of Delaware, was formed by BigString in early 2009 to develop technology relating to social networks. PeopleString is a separate reporting company under the Exchange Act. As of March 30, 2012, BigString owned less than 15% of PeopleString’s outstanding common stock.

Business Strategy

Many entities in the Internet communications industry utilize a blended model that includes advertising, subscriptions and hosting. Email service providers offer premium services and products which include, among other features, value-added services such as advanced spam filters, advanced virus protection, additional storage, multiple email addresses and secure email. In addition to our free email service product, which includes the aforementioned features plus our proprietary features, we offer premium email services, products and applications, which are offered in several different packages at various prices and may be purchased by the users of our BigString email service.

BigString includes advertising with its email services. Advertisements are primarily displayed to users of our free service. Advertisements customarily include text and banner ads and are paid based on a mix of impressions, clicks and actions. BigString currently has agreements with a number of firms that provide advertising services. In the future, we may add additional types of advertisements and additional advertising service firms, as well as direct advertisers and sponsors, as we increase the monetization of our user base.

BigString developed email hosting, private label, and co-branded solutions to leverage the ‘stickiness’ of email and the advantage it can offer an Internet property. These solutions offer BigString’s unique email features under the logos and marks of web publishers and content sites, such as search engines, social networks, online dating sites, ISPs and social media portals. Web publishers and content sites can further their image and differentiate their services from competitors, while increasing incremental traffic, page views and ad revenue from their existing members. Agreements may include a revenue share arrangement, and we may also charge development and maintenance fees. Web publishers and content sites provide the marketing, which expands awareness of BigString’s unique services beyond BigString’s marketing and can help us grow more quickly.

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

In December 2009, we received a patent from the United States Patent and Trademark Office for Universal, Recallable, Erasable, Secure and Timed Delivery Email. The issued patent may help us explore new licensing and revenue opportunities for our patented technology, as well as pursue any possible infringement.

Promotion

We promote our messaging service and products through the Internet, including messaging and email tag lines, organic search, paid search, banners, blogs, social networks, video and other viral tactics, multimedia, print, and radio, as well as through alliances with marketing affiliates and programs contained on our interactive entertainment portal. We also offer fee based services through online stores as a point of sale license purchase.

Our promotions may also include partnerships, hosting, private label, co-branded solutions and software as a service (“SaaS”). Web publishers and content sites may offer our messaging services to their existing registered member base as well as all future members that register. The web publishers and content sites are responsible for marketing.

Index

Market Affiliations

We enter into market affiliations with other Internet companies regarding advertisements and other marketing promotions which can be accessed through our website. Through these marketing affiliations, advertisements, such as banner ads, are posted on our website and may be accessed by our users. In addition, advertising websites may be accessed directly through our website. Our marketing affiliates are obligated to pay us a portion of the revenue they receive from advertisers as compensation for BigString’s sale of promotional space on our website.

We generate revenue when our users access the advertisements or advertising websites and purchase products and services. In addition, we generate revenue based on the number of our users accessing advertisements and advertisers’ websites. We also generate revenue based upon the number of impressions per advertisement.

Products and Services

BigString offers a web-based, POP3/IMAP server, email service solution. Our patented technology provides a user with the ability to manage and control content sent by email. The user’s email executes through the BigString server but such execution is transparent to the sender and recipients of the email.

A user of our BigString email services will have his, her or its email transposed from a text-based message through BigString’s server, and an exact, replicated image of the email will be instantaneously streamed to the recipient. The recipient never actually receives the content, but only receives images of the content.

The user of the BigString email service and products can transparently edit, recall, cancel, and erase the email as well as insert or delete attachments, even after the email has been sent out and opened. All the subsequent changes by the sender will be completely transparent to the recipient. In addition, the sender has complete control over the life and duration of the email. The sender can have the email self-destruct or disappear after a defined number of views or after a certain time period.

BigString’s current email service provides, at no cost to its users, advanced spam filters, virus protection and large-storage, web-based email accounts with features similar to those offered by AOL®, Yahoo®, Hotmail®, Google®, Verizon® and Comcast®. In addition to the equivalent features provided by competitors, BigString’s email service offers erasable, recallable and self destroying applications, set time or number of views (including ‘view-once’) and masquerading to protect the sender’s privacy and security. It also allows a sender to view tracking reports that indicate when emails were opened by the recipient, and how many times they were viewed. Senders can add, change and/or delete attachments before or after a recipient opened the email. In addition, it allows senders to direct emails to disintegrate in front of their recipient’s eyes and allows senders to create, save and send self-destructing video email.

Products Offered – BigString currently offers its consumer, business and enterprise customers the following packages:

BigString Free Email (No Charge), provides the features of BigString’s email service, includes unlimited GB email storage and permits the user to send unlimited emails per month. It is accessed by the user through the web as web-based email, or webmail, and each user is given one address. Individuals can signup for multiple “disposable” accounts. Wizards help users import previously saved contacts. To personalize their email, users can create an alias, create their own font, add signatures, add pictures to both their profile and their contacts’ profiles, create multiple expire messages, and create custom templates with editable fields and then access the saved templates to save time while composing messages.

·	BigString Premium Email ($29.95 per year), offers all the features of the BigString Free Email account, plus vanity domains (yourname@yourdomain.com), POP3 access using any email client (such as Microsoft Outlook®), 30 minute video email and reduced banner advertising.

·	BigString Business Email ($149.95+ per year), offers all the features of the BigString Premium account, plus 10 email accounts, global filter notification and advanced email management. Small and medium sized businesses can customize the number of additional addresses for an additional fee.

Email Hosting

BigString Private Label Email ($5,000.00 development, $500.00 per year + revenue share), offers web publishers and content sites BigString’s hosted email platform as a value-added service for their members, and helps generate incremental traffic, page views and ad revenue from their existing members. The private labeled, or white labeled, solution offers a revenue share of advertising and/or premium fees generated by BigString.

·	BigString Email Hosting (Enterprise level) ($11,500.00+ per year), offers enterprise level firms all the features of BigString Private Label Email, in a licensed package which can be customized to integrate with the firms’ messaging, networking and video applications.

Index

BigString continues to apply its streaming audio and video experience and technologies into its messaging, email and social network applications.

Technical and Customer Support – Technical and customer support for BigString’s messaging service and products is available by customers contacting BigString through email.

Historically, the customers of BigString’s services and products have required very little support. BigString reviews its support capabilities and updates and enhances such capabilities to meet the needs of the users of its products and services. In the future, BigString may outsource the support of its products and services to cost effective call centers or service providers.

Also available on the BigString website is a Frequently Asked Questions section and a comprehensive BigString User Guide. We believe that BigString’s Frequently Asked Questions section and User Guide usually can resolve most of a user’s problems. As we introduce new products or enhancements to existing products, we expect our Frequently Asked Questions section and User Guide to be updated.

Protection of Proprietary Rights

We rely on a combination of U.S. and foreign patent, copyright, trademark and trade secret laws to establish and protect our proprietary rights. In particular, we rely upon our patent for Universal Recallable, Erasable, Secure and Timed Delivery Email, U.S. Patent Number 7,640,307B2; our patent application for Destroyable Instant Messaging (IM), Serial No. 12/060,406; our service mark for the word “BigString,” Serial No. 78/336,856; our service mark for the word “Our Prisoner,” Serial No. 78/751,930; and the protection of our proprietary information afforded by the Lanham Act of 1946, 15 U.S.C. §§ 1051-1127; the Economic Espionage Act of 1996, 18 U.S.C. §1832; the Uniform Trade Secrets Act; as well as by common-law. The patent for Universal Recallable, Erasable and Timed Delivery Email will expire on April 18, 2024, 20 years following the date our patent application was filed. If issued by the United States Patent and Trademark Office, the patent for Destroyable Instant Messaging (IM) will expire on April 1, 2028, 20 years following the date our patent application was filed. Our service marks will not expire provided that we continue to make routine filings to keep them current with the United States Patent and Trademark Office.

Under the U.S. patent laws, our rights to the intellectual property which is the subject of our patent and patent application may not be infringed upon by a third party. We may assert rights and provisional rights as to the intellectual property covered by the patent and patent application, respectively. BigString may obtain a reasonable royalty from a third party that infringes on a claim, provided actual notice is given to the third party by BigString and with respect to the patent application, that a patent issues from the application with a substantially identical claim.

Market

We currently market to Internet users who seek to utilize the Internet as their source for email and messaging services. Generally, our products and services can be readily accessed through the Internet and thus from virtually anywhere the Internet is accessible. Email users can access BigString’s English language site, http://www.BigString.com, on a global basis, 24 hours a day. Social network users can access BigString’s private wall site, http://www.PrivateString.com, on a global basis, 24 hours a day.

Competition

We have existing competitors for our businesses that have greater financial, personnel and other resources, longer operating histories, more technological expertise, more recognizable names and more established relationships in industries that we currently serve or may serve in the future. Increased competition, our inability to compete successfully against current or future competitors, pricing pressures or loss of market share could result in increased costs and reduced operating margins, which could harm our business, operating results, financial condition and future prospects. Many of these firms are well established, have reputations for success and have significantly greater financial, marketing, distribution, personnel, and other resources than we do. Further, we may experience price competition, and this competition may adversely affect our financial condition and results of operations or adversely affect our revenues and profitability.

The markets for our services are highly competitive. With limited barriers to entry we believe the competitive landscape will continue to increase both from new entrants to the market as well as from existing players. We remain focused on delivering better, more advanced and innovative services than our competitors.

Index

Employees

We currently have five employees, a number of whom also share their time and expenses with PeopleString. At December 31, 2011, we had five employees. We believe that our relationship with our employees is satisfactory. We have not suffered any labor problems since our inception.

Darin M. Myman, Robert S. DeMeulemeester and Adam M. Kotkin are members of the board of directors of BigString. Mr. Myman and Mr. DeMeulemeester are key executives of BigString. Mr. Myman, Mr. DeMeulemeester and Mr. Kotkin are also key executives and directors of PeopleString.

Government Regulation

We do not currently face direct regulation by any governmental agency, other than laws and regulations generally applicable to businesses.

Due to the widespread use of the Internet, it is possible that a number of laws and regulations may be adopted in the U.S. and abroad with particular applicability to the Internet. It is possible that governments will enact legislation that may be applicable to us in areas including network security, encryption, data and privacy protection, electronic authentication or “digital” signatures, access charges and retransmission activities. Moreover, the applicability to the Internet of existing laws governing issues including property ownership, content, taxation, defamation and personal privacy is uncertain.

The majority of laws that currently regulate the Internet were adopted before the widespread use and commercialization of the Internet and, as a result, do not contemplate or address the unique issues of the Internet and related technologies. Any export or import restrictions, new legislation or regulation or governmental enforcement of existing regulations may limit the growth of the Internet, increase our cost of doing business or increase our legal exposure. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.

Violations of local laws may be alleged or charged by state or foreign governments, and we may unintentionally violate local laws. Local laws may be modified or new laws enacted, in the future. Any of these developments could have a material adverse effect on our business, results of operations and financial condition.

Item 1A. Risk Factors

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

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

BigString shares approximately 1,426 square feet of office space at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701 with PeopleString. Our operating lease for these premises is month to month. The current occupancy rate is $2,300 per month. In addition, we lease hosting facilities. While we believe that the offices are adequate to meet our current requirements, we continue to evaluate facility needs and requirements for the future.

Item 3. Legal Proceedings

We are not a party to, and none of our property is the subject of, any pending legal proceedings. To our knowledge, no governmental authority is contemplating any such proceedings.

Item 4. Mine Safety Disclosure

Not applicable.

Index

PART II

Item 5. Market for Registrant’s Common Equity

Market Information

Our common stock commenced quotation on the NASDAQ OTC Bulletin Board under the trading symbol “BSGC” on May 2, 2006. In late 2010, stock quotations for BigString moved from the NASDAQ OTC Bulletin Board to the NASDAQ OTC Pink Sheets. The closing price of our common stock on March 30, 2012 was $0.01 per share. The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported on the NASDAQ OTC Bulletin Board and NASDAQ OTC Pink Sheets. This information reflects inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Year Ended December 31, 2011	High		Low
First Quarter	$	0.06	$	0.02
Second Quarter	$	0.02	$	0.01
Third Quarter	$	0.01	$	0.01
Fourth Quarter	$	0.01	$	0.00	(1)

Year Ended December 31, 2010	High		Low
First Quarter	$	0.02	$	0.01
Second Quarter	$	0.05	$	0.01
Third Quarter	$	0.03	$	0.02
Fourth Quarter	$	0.04	$	0.02

(1)	Price was less than $0.01.

The NASDAQ OTC Bulletin Board and NASDAQ OTC Pink Sheets are generally considered to be less active and efficient markets than the NASDAQ Global Market, the NASDAQ Capital Market or any national exchange and will not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market or a national exchange would offer. As of March 30, 2012, we had over ten market makers for our common stock, including: Automated Trading Desk Financial Services, Inc., Cantor Fitzgerald & Co., Citadel Securities LLC, E*Trade Capital Markets, LLC, Knight Equity Markets, L.P., Pershing LLC, Rodman & Renshaw, Inc., The Vertical Trading Group, LLC, UBS Securities, LLC, and Vfinance Investments, Inc.

As of March 30, 2012, the approximate number of registered holders of our common stock was 49. As of March 30, 2012, the number of outstanding shares of our common stock was 144,027,690; the number of outstanding shares of our Series A Preferred Stock was 79,657 (currently convertible into 1,101,452 shares of our common stock); and there were 5,375,000 shares of common stock subject to outstanding warrants, and 9,125,000 shares of common stock subject to outstanding stock options.

Dividends

No dividends were declared on BigString’s common stock in the years ended December 31, 2011 and 2010, and it is anticipated that cash dividends will not be declared on BigString’s common stock in the foreseeable future. Our dividend policy is subject to the discretion of our board of directors and depends upon a number of factors, including operating results, financial condition and general business conditions. Holders of common stock are entitled to receive dividends as, if and when declared by our board of directors out of funds legally available therefor. We may pay cash dividends if net income available to stockholders fully funds the proposed dividends, and the expected rate of earnings retention is consistent with capital needs, asset quality and overall financial condition.

Issuance of Shares of Common Stock in Connection With Conversion of Notes

On January 10, 2011, BigString issued 1,666,667 shares of its common stock upon the conversion of convertible promissory notes totaling $25,000 by Alpha Capital Anstalt. The conversion price was $0.015 per share.

On January 20, 2011, BigString issued 3,000,000, 2,918,283 and 4,547,478 shares of its common stock upon the conversion of convertible promissory notes totaling $45,000, $43,774 and $68,212 by Alpha Capital Anstalt, Excalibur Special Opportunities LP and Whalehaven Capital Fund Limited, respectively. The conversion price was $0.015 per share.

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On January 24, 2011, BigString issued 1,000,000 and 4,800,000 shares of its common stock upon the conversion of convertible promissory notes totaling $15,000 and $72,000 by Alpha Capital Anstalt and Whalehaven Capital Fund Limited, respectively. The conversion price was $0.015 per share.

On January 25, 2011, BigString issued 4,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $60,000 by Alpha Capital Anstalt. The conversion price was $0.015 per share.

On January 26, 2011, BigString issued 3,333,334 shares of its common stock upon the conversion of convertible promissory notes totaling $50,000 by Iroquois Capital Management, LLC. The conversion price was $0.015 per share.

On February 24, 2011, BigString issued 3,000,000 shares of its common stock upon the conversion of convertible promissory notes totaling $45,000 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share.

On March 11, 2011, BigString issued 3,353,457 shares of its common stock upon the conversion of convertible promissory notes totaling $50,302 by Excalibur Special Opportunities LP. The conversion price was $0.015 per share.

On March 16, 2011, BigString issued 4,319,189 shares of its common stock upon the conversion of convertible promissory notes totaling $64,788 by Whalehaven Capital Fund Limited. The conversion price was $0.015 per share.

In connection with each of the issuances of shares described, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.

Details of Issuance of Shares of Our Common Stock in Connection With Accrued Interest

On March 11, 2011, BigString issued 2,448,642 shares of its common stock for accrued interest on convertible promissory notes totaling $36,730. BigString issued 1,000,000, 510,759 and 937,883 shares of BigString’s common stock to Alpha Capital Anstalt, Excalibur Special Opportunities LP and Whalehaven Capital Fund Limited, respectively. The interest conversion price was $0.015 per share. In connection with these issuances of common stock, BigString relied on an exemption from registration for a private transaction not involving a public distribution provided by Section 4(2) of the Securities Act.

Item 6. Selected Financial Data

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

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

The following discussion and analysis is intended to provide information about BigString’s financial condition and results of operations for the years ended December 31, 2011 and 2010. This information should be read in conjunction with BigString’s audited consolidated financial statements for the years ended December 31, 2011 and 2010, including the related notes thereto, which begin on page F-2 of this report.

Background

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

BigString Interactive, incorporated in the state of New Jersey on January 20, 2006 to develop technology relating to interactive web portals, is a wholly-owned subsidiary of BigString.

At December 31, 2011, BigString was not considered a development stage enterprise in accordance with the guidance contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities.”

Overview

BigString is a technology firm with a global client base, focused on providing a superior online communications experience for its users. We serve three main email markets: free and premium fee email accounts for individuals; professional business email solutions; and email hosting, private label, and co-branded solutions for web publishers and content sites, such as search engines, social networks, online dating sites, ISPs and social media portals. A few of the key features of our email services include:

Index

·	Self-destructing video email that can be programmed to self-destruct after a specific number of viewings or a set time;

·	New tracking tools to enable the sender to know when and how many times their email has been opened and if it has been forwarded; and

·	Unlimited email storage.

In addition to our recallable email, we have developed other security focused messaging and social networking products and services.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon BigString’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires BigString to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, BigString evaluates its estimates, including, but not limited to, those related to such items as costs to complete performance contracts, income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. BigString bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

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

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

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

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

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

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

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

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

Evaluation of Long-Lived Assets. BigString reviews property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flow expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related carrying amount.

Index

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

Recent Accounting Pronouncements. BigString’s significant accounting policies are summarized in Note 1 of BigString’s consolidated financial statements for the years ended December 31, 2011 and 2010. There were no significant changes to these accounting policies during the years ended December 31, 2011 and 2010 and BigString does not expect that the adoption of other recent accounting pronouncements will have a material impact on its consolidated financial statements.

Results of Operations

For the Years Ended December 31, 2011 and 2010

Net Earnings (Loss). For the year ended December 31, 2011, net earnings were $603,670, as compared to a net loss of $540,601 for the year ended December 31, 2010. The $1,144,271 increase in net earnings was primarily attributable to other income from a gain on sale of investments, partially offset by an increase in operating expenses.

Revenues. For the year ended December 31, 2011, revenues were $56,879, a $12,322 decrease from revenues of $69,201 generated during the year ended December 31, 2010. Of the revenues generated for the year ended December 31, 2011, $43,847 was generated from product and service fees and $13,032 was generated from advertisers, as compared to $52,907 from product and service fees and $16,294 from advertisers for the year ended December 31, 2010.

As of December 31, 2011, unearned revenue from product fees decreased to $0 from $1,303 at December 31, 2010.

Operating Expenses. For the year ended December 31, 2011, operating expenses were $826,716, a $644,656 increase from operating expenses of $182,060 incurred in the year ended December 31, 2010.

·	Cost of revenues: Cost of revenues for the year ended December 31, 2011 were $51,695, as compared to $46,622 for the prior year. The $5,073 increase in cost of revenues was primarily attributable to increased hosting expenses.

Research, development, sales, general and administrative: Research, development, sales, general and administrative expenses for the year ended December 31, 2011 were $775,021, as compared to $135,438 for the prior year. The $639,583 increase in expenses was primarily attributable to increased consulting, legal, staffing and associated overhead expenses.

Other income (expense). For the year ended December 31, 2011, other income was $1,373,507, a $1,801,249 increase over other expenses of $427,742 incurred in the year ended December 31, 2010.

·	Interest income: Interest income for the year ended December 31, 2011 was $482, as compared to $45 for the prior year. The $437 increase in income was primarily due to increased cash balances.

·	Interest expense: Interest expense for the year ended December 31, 2011 was $11,427, as compared to $92,680 for the prior year. The $81,253 decrease in expense was primarily due to reduced debt.

Other, net: Other, net income for the year ended December 31, 2011 was $1,384,452, as compared to Other, net expense of $335,107 for the prior year. The $1,719,559 increase in income was primarily due to an increase in gain on sale of investment of $2,318,827 and reduction of amortization expenses of $294,935, partially offset by amortization of deferred financing of $155,100 and other loss of $739,103 related to the gain on sale of investment as part of several Agreement and Releases. The gain on sale of investment included $260,000, $740,000 and $18,826 from the sale of PeopleString common shares in April 2011, March 2011 and January 2011, respectively, and $1,300,000 from the issuance of PeopleString common shares in January 2011 as part of several Agreement and Releases.

Index

Income Taxes. For the years ended December 31, 2011 and 2010, we had no net income tax benefits.

Valuation allowances for the years ending December 31, 2011 and 2010 have been applied to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized as BigString may continue to incur losses. Net operating loss carryforwards were applied to earnings for the year ended December 31, 2011.

At December 31, 2011, BigString has available net operating loss carry forwards of approximately $12.6 million for federal income tax reporting purposes and $1.2 million for state income tax reporting purposes which expire in various years through 2031. The differences between book income and tax income primarily relates to amortization of intangible assets and other expenditures. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s net operating loss and research credit carry forwards may be limited, and, as such, BigString may be restricted in using its net operating loss and research credit carry forwards to offset future federal income tax expense.

Liquidity and Capital Resources

Our operating and capital requirements have exceeded our cash flow from operations as we have been building our business. Since inception through December 31, 2011, we have expended $5,102,316 for operating and investing activities, which has been primarily funded by investments of $5,371,533 from our stockholders and convertible note holders. For the year ended December 31, 2011, we generated $253,992 from our operating and investing activities, an increase of $241,806 from the $12,186 generated during the year ended December 31, 2010.

Our cash balance as of December 31, 2011 was $269,217, which was an increase of $253,992 from our cash balance of $15,225 as of December 31, 2010. This increase to our cash balance was primarily associated with the gain on sale of investments.

In March 2011, BigString sold 1,850,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $740,000. As of March 31, 2011, BigString owned 6,125,600 shares of PeopleString common stock, approximately 17.7% of the issued and outstanding shares. In April 2011, BigString sold 650,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $260,000. As of March 30, 2012, BigString owned 5,475,600 shares of PeopleString common stock, approximately 14.3% of the issued and outstanding shares.

Management believes its current cash balance of approximately $155,000 at March 30, 2012 is sufficient to fund the minimum level of operations for the next nine months.

Our consolidated financial statements beginning on page F-2 have been prepared assuming we will continue as a going concern. As more fully explained in Note 2 to our consolidated financial statements, we have a working capital deficit and have incurred losses since operations commenced. Our continued existence is dependent upon our ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as we continue to incur losses. However, there can be no assurance that such funds will be available to us or, if available, on terms satisfactory to us. Our failure to obtain adequate additional financing may require us to delay or curtail some or all of our business efforts and could cause us to seek bankruptcy protection. Any additional equity financing may involve substantial dilution to our then-existing stockholders. These uncertainties raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties should we be unable to continue as a going concern.

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

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

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

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

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and supplementary data of BigString called for by this item are submitted under a separate section of this report. Reference is made to the Index of Financial Statements contained on page F-1 herein.

Index

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

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

Based on management’s evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2011, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

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

There were no changes in our internal control over financial reporting that occurred during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management is responsible for establishing and maintaining adequate control over financial reporting for BigString. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of BigString; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of BigString are being made only in accordance with authorizations of management and directors of BigString; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of BigString’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations 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, with the participation of our principal executive officer and principal financial and accounting officer, conducted an evaluation of the effectiveness of BigString’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2011.

Item 9B. Other Information

None.

Index

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors

Number of Directors. Our board of directors currently consists of three members. Our Amended and Restated Bylaws provide that the board of directors may consist of a minimum of three directors and a maximum of twelve, as determined by the board of directors from time to time.

Director Qualifications. While the selection of directors is a complex and subjective process that requires considerations of many intangible factors, the Company believes that candidates should generally meet the following criteria:

·	Broad training, experience and a successful track record at senior policy-making levels in business, government, education, technology, accounting, law, consulting and/or administration;
·	The highest personal and professional ethics, integrity and values;

·	Commitment to representing the long-term interests of the Company and all of its stockholders;
·	An inquisitive and objective perspective, strength of character and the mature judgment essential to effective decision-making;

·	Expertise that is useful to the Company and complementary to the background and experience of other board members; and
·	Sufficient time to devote to board and committee activities and to enhance their knowledge of our business, operations and industry.

The board believes that all of our directors meet these criteria. In addition, as outlined below, each director brings a strong and unique background and set of skills to the board, giving the board as a whole competence and experience in a wide variety of areas, including the messaging industry, related Internet industries, finance and accounting, operations, corporate governance, board service and executive management. We believe that the board as a whole and each of our directors possess the necessary qualifications and skills to effectively advise management on strategy, monitor our performance and serve our best interests and the best interests of our stockholders.

Audit Committees. The audit committee of the board is responsible for developing and monitoring the audit of BigString. The audit committee selects the outside auditor and meets with the board to discuss the results of the annual audit and any related matters. The audit committee also receives and reviews the reports and findings and any other information presented to members of the audit committee by the officers of BigString regarding financial reporting policies and practices.

Compensation for Board of Directors: Currently members of the board of directors do not receive compensation for their services as board members. In the future, the Company may adopt a policy which will compensate existing and/or new board members. Board members may receive additional compensation for participating on board committees. The amount of any compensation paid to board members and/or committee members will be set and approved by the board based on the board’s review of compensation paid by companies which are similarly situated to BigString.

Each director serves for a term set to expire at the next annual meeting of stockholders of BigString. The name, age, principal occupation or employment and biographical information of each member of the board of directors of BigString who served as of December 31, 2011 are set forth below:

Name and Address	Age	Principal Occupation or Employment
Darin M. Myman	47	President and Chief Executive Officer of BigString
Robert S. DeMeulemeester	45	Executive Vice President, Chief Financial Officer, Secretary and Treasurer of BigString
Adam M. Kotkin	32	Chief Operating Officer of PeopleString Corporation

There are no family relationships among BigString’s directors and executive officers. None of the directors of BigString has served as a director of any company registered pursuant to Section 12 of the Exchange Act, or subject to the requirements of Section 15(d) of the Exchange Act, or any company registered as an investment company under the Investment Company Act of 1940, as amended, during the last five years, except that Mr. Myman, Mr. DeMeulemeester and Mr. Kotkin are directors of PeopleString; and Mr. Kotkin is a director of Apps Genius Corporation.

Index

Biographical Information

Darin M. Myman is a co-founder of BigString and has served as the President and Chief Executive Officer of BigString since its inception on October 8, 2003. He also has served as a member of BigString’s board of directors since BigString’s inception. Mr. Myman developed extensive Internet skills through a variety of positions. He has executive management and founder experience having served as a co-founder and CEO of PeopleString, a publicly traded company, since January 2009. He also has corporate governance and board experience having served as a member of PeopleString’s board of directors since PeopleString’s inception. Prior to BigString, Mr. Myman was a co-founder and Chief Executive Officer of LiveInsurance.com, the first online insurance broker that pioneered the electronic storefront for large national insurance agencies. Prior to co-founding LiveInsurance.com, he served as a Vice President of the online brokerage services unit of Westminster Securities Corporation. Mr. Myman’s aforementioned experience and skills make him a valued advisor and highly qualified to serve as our President and Chief Executive Officer and as a director.

Robert S. DeMeulemeester has served as Executive Vice President, Chief Financial Officer and Treasurer of BigString since September 2006. He also has served as a member of BigString’s board of directors since May 30, 2007, and was appointed as Secretary of BigString on March 14, 2011. Mr. DeMeulemeester developed extensive financial skills through a variety of positions. He also has Internet and executive management experience having served as a co-founder and Executive Vice President, Chief Financial Officer and Treasurer of PeopleString, a publicly traded company, since January 2009. He also has corporate governance and board experience having served as a member of PeopleString’s board of directors since its inception. Prior to joining BigString, from 1998 to 2006, Mr. DeMeulemeester served as managing director and treasurer of the Securities Industry Automation Corporation ("SIAC"), a New York based provider of automated information and communication systems that supports NYSE Euronext, the American Stock Exchange and related affiliates. He also served as managing director, CFO and controller of Sector, Inc. From 1993 to 1997, he gained marketing, business development and finance experience having served as an executive at Honeywell International Inc. (formerly AlliedSignal, Inc.) and from 1989 to 1991 as a management consultant at Accenture (formerly Andersen Consulting). Mr. DeMeulemeester earned his MBA at Columbia Business School, Columbia University and his Bachelor of Science, in Industrial Engineering at Lehigh University. Mr. DeMeulemeester’s aforementioned experience and skills make him a valued advisor and highly qualified to serve as our Executive Vice President, Chief Financial Officer, Secretary and Treasurer and as a director.

Adam M. Kotkin has served as a member of BigString’s board of directors since June 29, 2005. He also served as the Chief Operating Officer of BigString since its inception on October 8, 2003 through November 12, 2010 and as Secretary of BigString from August 17, 2005 through November 12, 2010. Mr. Kotkin has executive management experience having served as the Chief Operating Officer of PeopleString, a publicly traded company, since January 2009 and as the Chief Executive Officer of Apps Genius Corporation since its inception on December 17, 2009. He also has corporate governance and board experience having served as a member of PeopleString’s board of directors since PeopleString’s inception and as the sole member of Apps Genius’ Board of Directors since Apps Genius’ inception. Prior to joining BigString, he gained operating and Internet experience having served as a business manager for InsuranceGenie.com. Prior thereto, Mr. Kotkin developed sales skills having served as business developer and sales manager at LiveInsurance.com from March 1999 until December 2000. Mr. Kotkin graduated with distinction from New York University with a BA in Economics. Mr. Kotkin’s aforementioned experience and skills make him a valued advisor and highly qualified to serve as a director.

Executive Officers

The name, age, current position and biographical information of each executive officer of BigString are set forth below:

Name	Age	Position
Darin M. Myman	47	President and Chief Executive Officer
Robert S. DeMeulemeester	45	Executive Vice President, Chief Financial Officer, Secretary and Treasurer

For the biographical information for the above listed executive officers, see “Directors.” Adam M. Kotkin resigned as Chief Operating Officer and Secretary of BigString on November 12, 2010.

Index

Section 16 Compliance

Section 16(a) of the Exchange Act requires BigString’s executive officers and directors, and persons who own more than ten percent of a registered class of BigString’s equity securities, to file reports of ownership and changes of ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (the “SEC”). Executive officers, directors and greater than ten percent stockholders are required by SEC regulation, to furnish BigString with copies of all Forms 3, 4 and 5 they file.

Based solely upon a review of Forms 3 and 4 (and amendments thereto) furnished to BigString during the year ended December 31, 2011 and Forms 5 (and amendments thereto) furnished to BigString with respect to the year ended December 31, 2011, BigString believes that all filings required to be made by its executive officers and directors pursuant to Section 16(a) of the Exchange Act have been filed within the time periods prescribed.

Chief Executive and Senior Financial Officer Code of Ethics

The chief executive and senior financial officers of BigString are held to the highest standards of honest and ethical conduct when conducting the affairs of BigString. All such individuals must act ethically at all times in accordance with the policies contained in BigString’s Chief Executive and Senior Financial Officer Code of Ethics. Copies of the Chief Executive and Senior Financial Officer Code of Ethics will be furnished without charge upon written request. Requests should be directed to BigString Corporation, 157 Broad Street, Suite 109, Red Bank, New Jersey 07701, Attention: Secretary.

Item 11. Executive Compensation

EXECUTIVE COMPENSATION

The following table sets forth information concerning the annual and long-term compensation of the Named Executive Officers (as defined below) for services in all capacities to BigString for the years ended December 31, 2011 and 2010. The Named Executive Officers are Darin M. Myman, President and Chief Executive Officer, and Robert S. DeMeulemeester, Executive Vice President, Chief Financial Officer, Secretary and Treasurer (the “Named Executive Officers”).

2011 SUMMARY COMPENSATION TABLE
Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)			Total ($)
Darin M. Myman, President and Chief Executive Officer		2011 2010	$ $	112,000 70,100	$ $	--- ---	$ $	--- ---	$ $	--- ---	$ $	--- ---	$ $	--- ---	$ $	--- 15,719	(1)	$ $	112,000 85,819

Robert S. DeMeulemeester, Executive Vice President, Chief Financial Officer, Secretary and Treasurer (2)		2011 2010	$ $	91,100 100	$ $	--- ---	$ $	--- ---	$ $	--- ---	$ $	--- ---	$ $	--- ---	$ $	--- ---		$ $	91,000 100

________

(1)	Represents amounts reimbursed for automobile expenses.
(2)	Please see “Certain Relationships and Related Transactions and Director Independence – Related Party Transactions” below for information on additional amounts paid to Mr. DeMeulemeester.

Index

Chief Financial Officer - Employment Agreement

Mr. DeMeulemeester and BigString entered into a letter agreement, effective September 18, 2006 (the “Letter Agreement”), pursuant to which BigString has employed Mr. DeMeulemeester as Executive Vice President, Chief Financial Officer and Treasurer of BigString, on an “at will” basis, whereby either BigString or Mr. DeMeulemeester can terminate his employment at any time for any reason or no reason. Pursuant to the terms of the Letter Agreement, BigString will pay Mr. DeMeulemeester an annual base salary of $130,000, which base salary will increase to $200,000 in the event BigString participates in one or more offerings of its securities and BigString receives, in the aggregate, more than $2,000,000 in net proceeds from such offering(s). At such time, Mr. DeMeulemeester will receive a lump sum payment, subject to any withholding required by law, equal to the difference between (a) the total amount of base salary paid to him up until the date of the increase to his base salary and (b) the total amount of base salary that would have been paid to him up until the date of the increase to his base salary, if his base salary was $200,000 as of September 18, 2006. To alleviate constraints on BigString’s limited financial resources during the years ended December 31, 2011 and 2010, Mr. DeMeulemeester’s base salary was reduced for such years.

Mr. DeMeulemeester is also entitled to benefits afforded to all full-time employees of BigString, including medical and dental, as applicable. Moreover, Mr. DeMeulemeester may be eligible for certain bonuses in connection with his performance, to be determined and awarded in the sole discretion of BigString’s Board of Directors and Compensation Committee. In connection with BigString’s employment of Mr. DeMeulemeester, BigString granted him an incentive stock option to purchase 1,800,000 shares of BigString’s common stock, par value $0.0001 per share.

In the event Mr. DeMeulemeester’s employment is terminated by BigString for any reason other than Cause (as defined in the Letter Agreement) after BigString is in receipt of more than $2,000,000 in net proceeds as a result of one or more offerings of its securities, or if Mr. DeMeulemeester’s employment is terminated by BigString or a successor entity for any reason other than Cause after or in connection with a Change of Control (as defined in BigString’s 2006 Equity Incentive Plan), Mr. DeMeulemeester will receive a lump sum payment equal to two months of his base salary, subject to any withholding required by law, within three days of the date his employment is terminated.

No other officer or employee of BigString has an employment agreement with BigString. At the discretion of our Board of Directors, BigString may in the future enter into employment agreements with one or more of its officers or other employees.

2006 Equity Incentive Plan

Pursuant to BigString’s 2006 Equity Incentive Plan, which was approved by the stockholders of BigString at its 2006 annual meeting of stockholders, options to purchase up to 15,000,000 shares of common stock may be granted to employees and directors of BigString who are in a position to make significant contributions to the success of BigString. As of December 31, 2011, stock options to purchase 4,825,000 shares of common stock were outstanding under the 2006 Equity Incentive Plan.

Securities Authorized for Issuance under Equity Compensation Plans

The number of stock options outstanding under the Equity Incentive Plan, the weighted-average exercise price of outstanding stock options, and the number of securities remaining available for issuance as of December 31, 2011 were as follows:

2011 EQUITY COMPENSATION PLAN TABLE

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)			Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders (1)		4,825,000	(2)	$	0.39		10,175,000
Equity compensation plans not approved by security holders		5,675,000	(3)	$	0.24		---
Total		10,500,000		$	0.31		10,175,000

_________

(1)	BigString currently has no stockholder-approved equity compensation plan other than the 2006 Equity Incentive Plan described herein.
(2)	Represents options to purchase common stock outstanding at December 31, 2011 issued under the Equity Incentive Plan. See discussion above for additional information.
(3)	Includes warrants to purchase 5,375,000 shares of common stock which were issued and outstanding as of December 31, 2011 and 300,000 shares of common stock issued to a vendor under a partnering arrangement.

Index

Outstanding Equity Awards at Fiscal Year End

The following table provides information about all equity compensation awards held by the Named Executive Officers at December 31, 2011:

OUTSTANDING EQUITY AWARDS FOR THE YEAR ENDED DECEMBER 31, 2011

Name

Date of

Grant

Number of

Securities

Underlying

Unexercised

Options

(#) Exercisable

Number of

Securities

Underlying

Unexercised

Options

(#) Unexercisable

Equity Incentive

Plan Awards:

Number of Securities

Underlying Unexercised

Unearned Options

(#)

Option

Exercise

Price

($)

Option

Expiration

Date

Darin M.

Myman,

President and Chief Executive Officer

4/11/08

500,000

$0.21

4/11/13

Robert S.

DeMeulemeester,

Executive Vice President, Chief Financial Officer, Secretary and Treasurer

4/11/08

11/14/07

9/18/06

500,000

400,000

600,000

400,000

$0.21

$0.18

$0.24

$0.50

$0.90

$1.25

4/11/13

11/14/17

9/18/16

Risk Management

The Board of Directors does not believe that BigString’s executive compensation program gives rise to any risks that are reasonably likely to have a material adverse effect on BigString. Executive officers are compensated on a salary basis and have not been awarded any bonuses or other compensation in 2011 and 2010 that might encourage the taking of unnecessary or excessive risks that threaten the long-term value of BigString. The Board has sought to align the interests of the executive officers with the long-term interests of BigString and its stockholders though grants of stock options under the Equity Incentive Plan, thereby giving the executive officers additional motivation to protect the long-term value of BigString.

DIRECTOR COMPENSATION

The following table sets forth information concerning the compensation of the directors of BigString for the year ended December 31, 2011.

2011 DIRECTOR COMPENSATION TABLE

Name

Fees

Earned or

Paid in

Cash

($)(1)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)

Darin M. Myman

Robert S. DeMeulemeester

Adam M. Kotkin

________

(1)	BigString does not currently pay its directors any retainer or other fees for service on the Board or any committee thereof.
	BigString did not have non-employee directors as of December 31, 2011.

Index

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Principal Stockholders and Security Ownership of Management

The following table sets forth information as of March 30, 2012 with respect to the beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of BigString’s common stock by (1) each director of BigString, (2) the Named Executive Officers of BigString, (3) each person or group of persons known by BigString to be the beneficial owner of greater than 5% of BigString’s outstanding common stock, and (4) all directors and officers of BigString as a group:

BENEFICIAL OWNERSHIP OF COMMON STOCK

Name of Beneficial Owner:			Percent
Directors, Officers and 5% Stockholders	No. of Shares (1)		of Class
Darin M. Myman (2)(3)(4)(5)		9,700,000		6.70	%
Robert S. DeMeulemeester (2)(3)(6)(7)		3,042,300		2.07	%
Adam M. Kotkin (2)(3)(8)		1,722,500		1.19	%
Alpha Capital Anstalt (9)		17,166,667		10.72	%
Jo Myman (2)(10)		9,700,000		6.70	%
All Directors and Executive Officers as a Group (3 persons) (5)(7)(9)		14,464,800		9.73	%

________

(1)	In accordance with Rule 13d-3 of the Exchange Act, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of BigString’s common stock if he or she has voting or investment power with respect to such security. This includes shares (a) subject to options exercisable within sixty (60) days, and (b)(1) owned by a spouse, (2) owned by other immediate family members, or (3) held in trust or held in retirement accounts or funds for the benefit of the named individuals, over which shares the person named in the table may possess voting and/or investment power.
(2)	This executive officer and/or director, or spouse of an executive officer and/or director, maintains a mailing address at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701.
(3)	Such person currently serves as a director of BigString.
(4)	Mr. Myman serves as the President and Chief Executive Officer of BigString.
(5)	Includes 100,000 shares of common stock registered in the name of Mr. Myman’s wife, Jo Myman, and 900,000 shares of common stock held by Mr. Myman for the benefit of Mr. and Mrs. Myman’s children under the Uniform Transfers to Minors Act. Mr. Myman disclaims any beneficial interest in the shares held by his wife and the shares held by him as custodian for his children. Includes 700,000 shares of common stock subject to currently exercisable stock options.
(6)	Mr. DeMeulemeester serves as Executive Vice President, Chief Financial Officer, Secretary and Treasurer of BigString.
(7)	Includes options to purchase 3,000,000 shares of common stock.
(8)	Includes options to purchase 1,000,000 shares of common stock.
(9)	Includes 16,166,667 shares of common stock issuable upon the conversion of issued and outstanding convertible notes. Konrad Ackerman has voting and investment control over shares held by Alpha Capital Anstalt. Mr. Ackerman disclaims beneficial ownership of such shares. Alpha Capital Anstalt maintains a mailing address at Pradafant 7, 9490 Furstentums, Vaduz, Lichtenstein.
(10)	Includes 8,000,000 shares of common stock registered in the name of her husband, Darin M. Myman, and 900,000 shares of common stock held by Mr. Myman for the benefit of Mr. and Mrs. Myman’s children under the Uniform Transfers to Minors Act, as to which shares Mrs. Myman disclaims any beneficial ownership.

Index

Item 13. Certain Relationships and Related Transactions and Director Independence

Related Party Transactions

On December 29, 2008, in order to alleviate constraints on BigString’s limited financial resources, BigString signed an agreement with Digital BobKat, LLC, a limited liability company in which Robert S. DeMeulemeester, an officer and director of BigString, has an interest. Digital BobKat, LLC provides business consulting services, including, but not limited to, management, product development, marketing, research, advertising and general business and administrative procedures and processes. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. In May, 2011, the parties agreed to temporarily suspend services. Expenses for the years ended December 31, 2011 and 2010 were $69,310 and $78,436, respectively.

In addition, BigString issued shares of its common stock to Alpha Capital Anstalt, a holder of more than five percent (5%) of BigString’s outstanding common stock, during 2011, as described under Item 5, “Market for Registrant’s Common Equity – Issuance of Shares of Common Stock in Connection with Conversion of Notes,” above.

Meetings and Committees of the Board of Directors

The board of directors of BigString conducts business through meetings of the board or by unanimous written consents of the board. The board of directors for 2011 consisted of Robert S. DeMeulemeester, Adam M. Kotkin and Darin M. Myman following the election of directors at the 2008 annual meeting of stockholders. BigString did not hold an annual meeting in 2009, 2010 or 2011. None of Mr. DeMeulemeester, Mr. Kotkin or Mr. Myman qualifies as an independent director in accordance with NASDAQ’s definition of “independent director” and the rules and regulations of the SEC. During 2011, the board held one (1) meeting, and the board acted by unanimous written consent on two (2) occasions.

For the year ended December 31, 2011, the audit committee consisted of directors Robert S. DeMeulemeester and Adam M. Kotkin. Mr. DeMeulemeester served as the chair of the audit committee. Neither Mr. DeMeulemeester nor Mr. Kotkin qualified as an independent director under NASDAQ’s definition of “independent director” in fiscal 2011. The board has determined that Mr. DeMeulemeester qualifies as a financial expert under the rules of the SEC. The audit committee selected the accounting firm of Madsen & Associates CPAs, Inc. to act as BigString’s independent public accounting firm for the year ended December 31, 2011 and audit the financial statements of BigString for such year. The audit committee met five (5) times during 2011, with all members attending each meeting.

For the year ended December 31, 2011, the compensation committee consisted of director Darin M. Myman. Mr. Myman served as the chair of the compensation committee. Mr. Myman did not qualify as an independent director under NASDAQ’s definition of “independent director” in fiscal 2011. The compensation committee did not meet during 2011.

For the year ended December 31, 2011, the nominating and corporate governance committee consisted of directors Darin M. Myman and Adam M. Kotkin. Mr. Myman served as the chair of the nominating and corporate governance committee. Neither Mr. Myman nor Mr. Kotkin qualified as an independent director under NASDAQ’s definition of “independent director” in fiscal 2011. The nominating and corporate governance committee did not meet during 2011.

Item 14. Principal Accounting Fees and Services.

Audit Fees

BigString incurred fees of approximately $20,500 and $20,500 in 2011 and 2010, respectively, to Madsen & Associates CPAs, Inc. for audit services, which included work related to the audits rendered for the years ended December 31, 2011 and 2010.

Audit Related Fees

As of December 31, 2011, BigString has not paid any fees associated with audit related services to Madsen & Associates CPAs, Inc., or any other accounting firm.

Index

Tax Fees

As of December 31, 2011, BigString has not paid any fees associated with tax compliance, tax advice or tax planning to Madsen & Associates CPAs, Inc. or any other accounting firm.

All Other Fees

As of December 31, 2011, BigString has not paid any fees associated with non-audit services to Madsen & Associates CPAs, Inc., or any other accounting firm.

Policy on Pre-Approval of Audit and Permissible Non-Audit Services

The audit committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its charter, the audit committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered public accounting firm. Such approval process ensures that the independent registered public accounting firm does not provide any non-audit services to BigString that are prohibited by law or regulation.

Item 15. Exhibits and Financial Statement Schedules.

(a) Exhibits

Reference is made to the Index of Exhibits beginning on page E-1 herein.

(b) Financial Statements

Reference is made to the Index to Consolidated Financial Statements on page F-1.

Index

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BIGSTRING CORPORATION

Date: April 12, 2012	By:	/s/ Darin M. Myman
		Darin M. Myman
		President and Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Darin M. Myman and Robert S. DeMeulemeester and each of them, his true and lawful attorneys-in-fact and agents for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this annual report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue hereof.

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed by the following persons in the capacities and on the dates stated.

Signatures	Title	Date

/s/ Darin M. Myman	President and Chief Executive Officer and Director (Principal Executive Officer)	April 12, 2012
Darin M. Myman

/s/ Robert S. DeMeulemeester	Executive Vice President, Chief Financial Officer, Secretary and Treasurer	April 12, 2012
Robert S. DeMeulemeester	and Director (Principal Financial and Accounting Officer)

/s/ Adam M. Kotkin	Director	April 12, 2012
Adam M. Kotkin

Index

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

BIGSTRING CORPORATION AND SUBSIDIARY

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets at December 31, 2011 and 2010	F-3
Consolidated Statement of Operations for the years ended December 31, 2011 and 2010	F-4
Consolidated Statement of Stockholders’ Deficiency for the period ended December 31, 2011	F-5
Consolidated Statement of Cash Flows for the years ended December 31, 2011 and 2010	F-6
Notes to Consolidated Financial Statements	F-7

F-1

Index

Madsen & Associates, CPA's Inc.

684 East Vine Street

Murray, UT 84107

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

BigString Corporation

Red Bank, New Jersey

We have audited the accompanying consolidated balance sheet of BigString Corporation and Subsidiary (collectively, the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the periods ended December 31, 2011 and 2010, in conformity with accounting principles generally accepted in the United States of America.

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

/s/ Madsen & Associates, CPAs Inc.

April 12, 2012

F-2

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

	December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	269,217		$	15,225
Accounts receivable - net of allowance of $0 and $25		-			1,888
Prepaid expenses and other current assets		4,600			11,842
Total current assets		273,817			28,955
Property and equipment - net		-			13,731
Other assets		3,000			3,000
TOTAL ASSETS	$	276,817		$	45,686

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable	$	134,134		$	192,826
Accrued expenses		311,015			262,119
Unearned revenue		-			1,303
Accrued interest		40,883			86,234
Short-term debt		91,500			928,646
Total current liabilities		577,532			1,471,128
Long term liabilities:
Long-term debt		148,600			-
TOTAL LIABILITIES		726,132			1,471,128

Stockholders' deficiency:
Preferred stock, $0.0001 par value - authorized 1,000,000 shares; issued and outstanding 79,657 and 79,657 shares, respectively		8			8
Common stock, $0.0001 par value - authorized 249,000,000 shares; issued and outstanding 137,027,690 and 98,640,640 shares, respectively		13,703			9,864
Additional paid in capital		14,596,798			14,228,180
Deficit		(15,059,824	)		(15,663,494	)
Total stockholders' deficiency		(449,315	)		(1,425,442	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	276,817		$	45,686

See notes to consolidated financial statements.

F-3

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

	For the Years Ended
	December 31,
	2011			2010
Operating revenues	$	56,879		$	69,201
Operating expenses:
Cost of revenues		51,695			46,622
Research, development, sales, general and administrative		775,021			135,438
Total operating expenses		826,716			182,060
Loss from operations		(769,837	)		(112,859	)
Other income (expense):
Interest income		482			45
Interest expense		(11,427	)		(92,680	)
Other, net		1,384,452			(335,107	)
Total other income (expenses)		1,373,507			(427,742	)
Earnings (loss) before provision for income taxes		603,670			(540,601	)
Provision for income taxes		-			-
Net earnings (loss)	$	603,670		$	(540,601	)

Net earnings (loss) per common share calculation:
Basic	$	0.00		$	(0.01	)
Diluted	$	0.00		$	(0.01	)
Weighted average common shares outstanding:
Basic		133,168,655			79,516,732
Diluted		178,195,227			79,516,732

See notes to consolidated financial statements.

F-4

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY

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

Balance, January 1, 2010	$	(1,414,865	)		79,657	$	8		63,329,761	$	6,333	$	13,701,687		$	(15,122,893	)
Stock-based compensation expense		361			-		-		-		-		361			-
Issuance of common stock for accrued interest (at $0.015 per share)		71,171			-		-		4,744,715		474		70,697			-
Issuance of common stock for conversion of promissory notes (at $0.015 per share)		458,492			-		-		30,566,164		3,057		455,435			-
Net loss		(540,601	)		-		-		-		-		-			(540,601	)
Balance, December 31, 2010		(1,425,442	)		79,657		8		98,640,640		9,864		14,228,180			(15,663,494	)
Issuance of common stock for accrued interest (at $0.015 per share)		36,730			-		-		2,448,642		245		36,485			-
Issuance of common stock for conversion of promissory notes (at $0.015 per share)		539,076			-		-		35,938,408		3,594		535,482			-
Deferred financing		(203,349	)		-		-		-		-		(203,349	)		-
Net earnings		603,670			-		-		-		-		-			603,670
Balance, December 31, 2011	$	(449,315	)		79,657	$	8		137,027,690	$	13,703	$	14,596,798		$	(15,059,824	)

See notes to consolidated financial statements.

F-5

Index

BIGSTRING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

	For the Years Ended
	December 31,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	603,670		$	(540,601	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization of property and equipment, intangible and other assets		13,731			96,238
Gain on sale of investments		(2,318,827	)		-
Accretion for beneficial conversion feature, note discount, note cost amortization, deferred financing and gain on sale of investments offset		947,181			264,532
Stock-based compensation		-			361
Changes in operating assets and liabilities:
Decrease in accounts receivable, net		1,888			2,402
Decrease in prepaid expenses and other assets		7,242			310,691
(Decrease) in accounts payable		(58,692	)		(38,732	)
Increase (decrease) in accrued expenses and other liabilities		40,275			(82,359	)
(Decrease) in unearned revenue		(1,303	)		(346	)
Net cash (used in) provided by operating activities		(764,835	)		12,186
Cash flows from investing activities:
Proceeds from sale of marketable securities		1,018,827			-
Net cash provided by investing activities		1,018,827			-
Net change in cash and cash equivalents		253,992			12,186
Cash and cash equivalents - beginning of year		15,225			3,039
Cash and cash equivalents - end of year	$	269,217		$	15,225

Supplementary information:
Cash paid during the periods for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non-cash transactions during the periods for:
Conversion of promissory notes	$	539,076		$	458,492
Issuance of common stock for accrued interest	$	36,730		$	71,170
Exchange of assets for elimination of common stock warrants and deferred financing	$	1,300,000		$	-

See notes to consolidated financial statements.

F-6

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

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

ORGANIZATION

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

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

PeopleString Corporation (“PeopleString”), incorporated in the state of Delaware, was formed by BigString in early 2009 to develop technology relating to social networks. BigString currently owns approximately 14% of PeopleString’s outstanding common stock.

PRINCIPLES OF CONSOLIDATION

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

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including but not limited to those related to such items as costs to complete performance contracts, income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain reclassifications have been made to prior period balances in order to conform to the current period’s presentation.

CASH AND CASH EQUIVALENTS

Cash equivalents include short-term investments in United States treasury bills and commercial paper with an original maturity of three months or less when purchased. At December 31, 2011 and 2010, cash and cash equivalents approximated $269,000 and $15,000, respectively.

CERTAIN RISKS AND CONCENTRATION

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and accounts receivable.

The Company places its temporary cash investments with quality financial institutions and commercial issuers of short term paper.

The Company grants credit to customers based on an evaluation of the customer’s financial condition, sometimes without requiring collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company controls its exposure to credit risk through credit approvals, credit limits and monitoring procedures and establishes allowances for anticipated losses.

F-7

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unearned revenue consists primarily of prepaid electronic commerce and subscription fees billed and paid in advance. Under certain agreements, the Company may be obligated to provide refunds if services are not delivered.

BigString has a verbal agreement with PeopleString, a related party, to license BigString’s messaging technology and share the cost of certain common services. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice.

REVENUE RECOGNITION

BigString derives revenue from online services, electronic commerce, advertising and data network services. BigString also derives revenue from marketing affiliations. BigString recognizes revenue in accordance with the guidance contained in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 605, “Revenue Recognition” (“ASC 605”).

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

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

RESEARCH AND DEVELOPMENT

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

ADVERTISING

Advertising costs incurred by the Company are expensed as incurred.

DEPRECIATION

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated primarily using the straight-line method over their estimated useful lives of these assets.

EVALUATION OF LONG-LIVED ASSETS

BigString reviews property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flow expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related carrying amount.

DEFERRED FINANCING COSTS

Debt issue costs were deferred and amortized in other income (expense) over the original terms of the related debts. BigString issued notes in June 2009, February 2008 and May 2007, which have been fully amortized and is included in other, net in the consolidated statement of operations.

F-8

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES

BigString accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax basis of reported assets and liabilities. A valuation allowance reduces the deferred tax assets to the amount estimated more likely than not to be realized.

The principal items giving rise to deferred taxes are timing differences between book and tax assets, other expenditures and a net operating loss carryforward.

STOCK-BASED COMPENSATION

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

BigString issues shares of common stock to non-employees as stock-based compensation. BigString accounts for the services using the fair market value of the consideration issued, generally measured as the closing price of BigString’s common stock on the date of the agreement. For the years ended December 31, 2011 and 2010, the Company did not issue shares of common stock as compensation.

BigString has one stock-based compensation plan under which incentive and nonqualified stock options or rights to purchase stock may be granted to employees, directors and other eligible participants. The fair values of the stock options are estimated on the date of grant using the Black-Scholes option-pricing model. For the years ended December 31, 2011 and 2010, BigString recorded compensation expense of $0 and $361, respectively, in connection with the issuance of stock options.

BigString issues stock purchase warrants to non-employees as stock-based compensation. The fair values of the stock purchase warrants are estimated on the date of grant using the Black-Scholes option-pricing model. For the years ended December 31, 2011 and 2010, the Company did not issue stock purchase warrants as compensation.

ACCOUNTING FOR DERIVATIVES

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

BENEFICIAL CONVERSION FEATURE

When debt or equity is issued which is convertible into common stock at a discount from the common stock market price at the date the debt or equity is issued, a beneficial conversion feature for the difference between the closing price and the conversion price multiplied by the number of shares issuable upon conversion is recognized. The beneficial conversion feature is presented as a discount to the related debt or a dividend to the related equity, with an offsetting amount increasing additional paid-in capital.

EQUITY METHOD INVESTMENTS

BigString accounts for non-marketable investments using the equity method of accounting if the investment gives it the ability to exercise significant influence over, but not control of, an investee. Significant influence generally exists if there is an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for additional investments and their proportionate share of earnings or losses and distributions. BigString records its share of the investee’s earnings or losses in earnings (losses) from unconsolidated entities, net of income taxes, in its consolidated statement of operations. Equity investments of less than 20% are generally stated at cost; the cost is not adjusted for its proportionate share of the earnings or losses. BigString evaluates its equity investments for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such investments may have experienced an other-than-temporary decline in value. When evidence of a loss in value has occurred, BigString compares fair value of the investment to its carrying value to determine whether impairment has occurred. If the estimated fair value is less than the carrying value and management considers the decline to be other than temporary, the excess of the carrying value over the estimated fair value is recognized as impairment in the consolidated financial statements.

F-9

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BigString accounts for its investment in PeopleString under the equity method. The investment has been reduced to $0 and BigString is not required to make any capital contributions to PeopleString. Any increase in fair market value has not been recorded. BigString maintains a significant amount of influence over the operation of PeopleString and the executive officers of BigString also serve as executive officers of PeopleString.

NEW FINANCIAL ACCOUNTING STANDARDS

Accounting Standards Update No. 2011-04 – Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU No. 2011-04”). ASU No. 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and International Financial Reporting Standards (“IFRS”), and in some limited cases, changes some principles to achieve convergence between U.S. GAAP and IFRS. ASU No. 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. This ASU also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. The Company will implement the provisions of ASU No. 2011-04 effective January 1, 2012. The Company does not expect the adoption of the provisions of this ASU to have a material effect on its consolidated financial position, results of operations or cash flows, nor is it expected to materially modify or expand the Company’s financial statement footnote disclosures.

Accounting Standards Update No. 2011-05 – Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU No. 2011-05”). ASU No. 2011-05 amends existing guidance by allowing only two options for presenting the components of net income and other comprehensive income: (1) in a single continuous statement of comprehensive income or (2) in two separate but consecutive financial statements, consisting of an income statement followed by a separate statement of other comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. This ASU requires retrospective application, and it is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company will implement the provisions of ASU 2011-05 by presenting the components of net income and other comprehensive income in two separate but consecutive financial statements beginning in the first quarter of 2012.

NOTE 2. GOING CONCERN

For the year ended December 31, 2011, BigString’s consolidated financial statements reflect a loss from operations of $769,837, net cash used in operations of $764,835, a working capital deficit of $303,715, a stockholders’ deficit of $15,059,824 and a cumulative net loss of $14,579,824. These matters raise substantial doubt about the ability of BigString to continue as a going concern. BigString’s consolidated financial statements do not include any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern.

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

In April 2011, BigString sold 650,000 shares of PeopleString common stock through private transactions to accredited investors. The common stock was sold at $0.40 per share and BigString received aggregate gross proceeds of $260,000.

As a result of these sales of PeopleString common stock, BigString owned approximately 14.6% of PeopleString’s common stock as of December 31, 2011. Based on the proceeds received from these sales, BigString believes it has sufficient capital to fund operations for at least the next nine months as of March 30, 2012.

F-10

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the specified period and after preferred stock dividend requirements. Diluted earnings (loss) per common share is computed by dividing net earnings (loss) by the weighted average number of common shares and potential common shares outstanding during the specified period and after preferred stock dividend requirements. All potentially dilutive securities at December 31, 2010, which include convertible notes, outstanding preferred stock, warrants and options, have been excluded from the computation, as their effect is antidilutive.

NOTE 4. FAIR VALUE MEASUREMENTS

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

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

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

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

As of December 31, 2011 and 2010, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of cash and cash equivalents and investments. The fair value of the cash and cash equivalents is determined based on quoted market prices in public markets and is categorized as Level 1. The fair value of BigString’s investment in PeopleString at December 31, 2011 was determined based on quoted market prices in public markets and is categorized as Level 1. However, BigString’s investment in PeopleString at December 31, 2010 was determined based on a private placement per share purchase price for PeopleString’s common stock and was categorized as Level 2. The fair value of BigString’s investment in FindItAll, Inc. was determined based on cost and was categorized as Level 3. There were no transfers in or out of Level 3 during the years ended December 31, 2011 and 2010.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of December 31, 2011 and 2010:

			Assets at Fair Value at Period End, Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Assets:	Total		(Level 1)		(Level 2)		(Level 3)
December 31, 2011
Cash and cash equivalents	$	269,217	$	269,217	$	-	$	-
Investments		276,780		273,780		-		3,000
	$	545,997	$	542,997	$	-	$	3,000
December 31, 2010
Cash and cash equivalents	$	15,225	$	15,225	$	-	$	-
Investments		1,253,000		-		1,250,000		3,000
	$	1,268,225	$	15,225	$	1,250,000	$	3,000

There were no financial assets accounted for at fair value on a nonrecurring basis at December 31, 2011 and 2010.

The Company has other financial instruments, such as receivables, accounts payable and other liabilities which have been excluded from the table above. Due to the short-term nature of these instruments, the carrying value of receivables, accounts payable and other liabilities approximate their fair values. The Company did not have any other financial instruments within the scope of the fair value disclosure requirements as of December 31, 2011 and 2010.

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	December 31,
	2011		2010
Computer equipment and internal software	$	159,313	$	159,313
Furniture and fixtures		5,721		5,721
		165,034		165,034
Less accumulated depreciation		165,034		151,303
	$	-	$	13,731

Depreciation expense for the years ended December 31, 2011 and 2010 was $13,731 and $25,663, respectively.

NOTE 6. INVESTMENTS

Equity Investment:

The Company owned 5,475,600 shares of PeopleString’s common stock, approximately 15% of PeopleString’s outstanding common stock, at December 31, 2011, which had a fair market value of $273,780 based on the closing price of PeopleString common stock at such date. At December 31, 2011, the historical cost value of equity investments was $0.

A consolidated balance sheet for PeopleString is as follows:

	December 31,
	2011		2010
Assets	$	499,942	$	613,236

Liabilities		153,720		312,641
Stockholders' equity		346,222		300,595
Total liabilities and stockholders' equity	$	499,942	$	613,236

A consolidated statement of operations for PeopleString is as follows:

	For the Years Ended
	December 31,
	2011			2010
Revenues	$	716,166		$	2,653,949
Expenses		2,002,019			2,601,305
Net (loss) earnings	$	(1,285,853	)	$	52,644

F-11

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost Method Investment:

At December 31, 2011, the Company held a $3,000 investment in FindItAll, Inc. at cost. This investment is categorized as other assets on the Company’s consolidated balance sheets.

NOTE 7. OTHER INCOME (EXPENSE)

Other income (expense) consists of interest income, interest expense, and other, net. The components of other, net consist of gain on investments, amortization of expenses related to the Company’s convertible debenture, preferred stock, warrant and common stock financings, and other income (loss), and are as follows:

	For the Years Ended
	December 31,
	2011			2010
Gain on sale of investments	$	2,318,827		$	-
Amortization of debt issue costs		(7,242	)		(70,575	)
Amortization of promissory note discount		(6,629	)		(49,437	)
Amortization of beneficial conversion feature		(26,301	)		(215,095	)
Amortization of deferred financing		(155,100	)		-
Other income (loss)		(739,103	)
	$	1,384,452		$	(335,107	)

For the year ended December 31, 2011, gain on sale of investment included $260,000, $740,000 and $18,826 from the sale of PeopleString common shares in April 2011, March 2011 and January 2011, respectively, and $1,300,000 from the issuance of PeopleString common shares in January 2011 as part of several Agreement and Releases as discussed in Note 9. Other loss of $739,103 was recorded as part of several Agreement and Releases as discussed in Note 9.

Deferred financing costs were $65,000, $250,000 and $22,500 for the June 2009, February 2008 and May 2007 financings, respectively, and are being amortized over the incremental term of each note issued in those financings, as such terms may have been extended pursuant to the Agreement and Releases.

NOTE 8. INCOME TAXES

BigString applies the provisions of the ASC 740, “Income Taxes.” A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Valuation allowances as of December 31, 2011 have been applied to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized as BigString may continue to incur losses. Net operating loss carryforwards were applied to earnings for the year ended December 31, 2011.

Components of deferred income tax assets are as follows:

	December 31,
	2011			2010
Deferred tax assets - current	Tax Effect			Tax Effect
Benefit due to loss carryforward	$	5,102,938		$	5,314,223
Valuation allowance		(5,102,938	)		(5,314,223	)
	$	-		$	-

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

F-12

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2011, BigString has available NOL carry forwards of approximately $12.6 million for federal income tax reporting purposes and $1.2 million for state income tax reporting purposes which expire in various years through 2031. The differences between book income and tax income primarily relates to amortization of intangible assets and other expenditures. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s NOL and research credit carry forwards may be limited, and, as such, BigString’s NOL carry forwards available to offset future federal taxable income may be limited. Similarly, BigString may be restricted in using its research credit carry forwards to offset future federal income tax expense.

NOTE 9. DEBT

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

Each June 23, 2009 convertible note had an original term of two years and accrues interest at a rate of 6% annually. The holder of a June 23, 2009 convertible note has the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.015 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the June 23, 2009 convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.015 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

On January 31, 2011, BigString entered into a separate Agreement and Release with each of Alpha Capital Anstalt and Whalehaven Capital Fund Limited which extended the terms of the June 23, 2009 convertible notes and other convertible notes issued by BigString to each of them by two years. As a result, the terms of the June 23, 2009 convertible notes have been extended to June 23, 2013. The Agreement and Releases are discussed in greater detail below in this Note 9.

At December 31, 2011, the outstanding aggregate principal amount of the June 23, 2009 convertible notes was $75,000.

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

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

F-13

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Each February 29, 2008 convertible note had an original term of three years and accrues interest at a rate of 6% annually. The holder of a February 29, 2008 convertible note has the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock at a conversion price of $0.15 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the February 29, 2008 convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.15 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

The February 29, 2008 convertible notes were scheduled to mature on February 28, 2011. On January 31, 2011, BigString entered into a separate Agreement and Release with each of Alpha Capital Anstalt and Whalehaven Capital Fund Limited which extended the terms of the February 29, 2008 convertible notes and other convertible notes issued by BigString to each of them by two years. As a result, the terms of the February 29, 2008 convertible notes have been extended to February 28, 2013. The Agreement and Releases are discussed in greater detail below in this Note 9.

At December 31, 2011, the outstanding aggregate principal amount of the February 29, 2008 convertible notes was $250,000.

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

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

Each May 1, 2007 convertible note had an original term of three years and accrues interest at a rate of 6% annually. The holder of a May 1, 2007 convertible note has the right from and after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of BigString’s common stock at a conversion price of $0.15 per share, as adjusted. The conversion price and number and kind of shares to be issued upon conversion of the May 1, 2007 convertible notes are subject to adjustment from time to time. The warrants have an exercise price of $0.30 per share, as adjusted. The number of shares of common stock underlying each warrant and the exercise price are subject to certain adjustments.

At December 31, 2011, the outstanding aggregate principal amount of the May 1, 2007 convertible notes was $97,500.

On May 1, 2010, the convertible notes issued by BigString on May 1, 2007 to each of Alpha Capital Anstalt, Iroquois Master Fund and Whalehaven Capital Fund Limited matured. On November 5, 2010, BigString received a notice of default from Iroquois Capital Management, LLC demanding immediate repayment of the entire balance of the May 1, 2007 convertible note in cash plus all accrued and unpaid interest and penalties. Subsequently, Iroquois Capital Management, LLC verbally rescinded such demand. The May 1, 2007 convertible notes issued to each of Alpha Capital Anstalt and Whalehaven Capital Fund Limited were extended by two years pursuant to the terms of the Agreement and Release between BigString and each of them, described below in this Note 9. As a result, the term of the May 1, 2007 convertible notes issued to each of Alpha Capital Anstalt and Whalehaven Capital Fund Limited have been extended to May 1, 2012. The term of the convertible note issued to Iroquois Capital Management, LLC was not extended.

F-14

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On January 31, 2011, BigString entered into a separate Agreement and Release (each an “Agreement and Release”) with each of Alpha Capital Anstalt and Whalehaven Capital Fund Limited (collectively, the “Releasors”). As discussed above in this Note 9, each of the Releasors is the holder of convertible notes previously issued to each of them by BigString on the following dates and in the following principal amounts: May 1, 2007 in the principal amount of $250,000; February 29, 2008 in the principal amount of $250,000; and June 23, 2009 in the principal amount of $75,000 (collectively the “Notes”). Each of the Releasors is also the holder of certain warrants to acquire shares of BigString’s common stock that were previously issued to each of them by BigString on the following dates: February 29, 2008 for the right to purchase 833,333 shares (including an additional 729,167 shares as adjusted) of BigString’s common stock; and June 23, 2009 for the right to purchase 2,500,000 shares of BigString’s common stock (collectively, the “Warrants”). Pursuant to the terms of each Agreement and Release, the Warrants held by each of the Releasors were cancelled and each of the Notes held by each of them was amended to extend the term by two years. In addition, the Releasors released any claims they each had or may have had against BigString through the date of their respective Agreement and Release. In consideration of the foregoing, BigString has transferred 500,000 shares of PeopleString common stock to Alpha Capital Anstalt and 1,500,000 shares of PeopleString common stock to Whalehaven Capital Fund Limited. BigString accounted for the transaction as a gain on investment, waived accrued interest expense, cancellation of warrants, other loss and deferred financing cost which will be accrued over the remaining life of the Notes.

For the years ended December 31, 2011 and 2010, $539,076 and $458,492, respectively, of the convertible notes were converted, resulting in 35,938,408 and 30,566,164 shares, respectively, of BigString’s common stock being issued to the holders of the convertible notes.

Information regarding the convertible notes outstanding at December 31, 2011 and December 31, 2010 is as follows:

	December 31,
	2011			2010
Convertible note, May 1, 2007, maturing May 1, 2010 and May 1, 2012	$	97,500		$	292,500
Beneficial conversion feature		-			-
Note discount		-			-
Deferred financing		(6,000	)		-
		91,500			292,500

Convertible note, February 29, 2008, maturing February 28, 2013		250,000			594,076
Beneficial conversion feature		-			(8,801	)
Note discount		-			(3,592	)
Deferred financing		(140,000	)		-
		110,000			581,683

Convertible note, June 23, 2009, maturing June 23, 2013		75,000			75,000
Beneficial conversion feature		-			(17,500	)
Note discount		-			(3,037	)
Deferred financing		(36,400	)		-
		38,600			54,463
Total		240,100			928,646
Less current maturities		91,500			928,646
Long-term debt	$	148,600		$	-

As of December 31, 2011, the current debt of $97,500 is net of deferred financing costs of $6,000 and long term debt of $325,000 is net of deferred financing costs of $176,400.

As of December 31, 2011, the maturities of the outstanding debt are as follows:

Maturities as of December 31, 2011
Years Ending	Outstanding
December 31,	Debt
2012	$	97,500
2013		325,000
	$	422,500

F-15

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2011 and 2010, BigString issued 2,448,642 and 4,744,715 shares, respectively, of BigString’s common stock in lieu of $36,730 and $71,171, respectively, of accrued interest. Interest expense for the years ended December 31, 2011 and 2010 was $11,427 and $92,680, respectively.

NOTE 10. COMMON STOCK

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

In 2010, BigString issued 4,744,715 shares of its common stock, at $0.015 per share, for accrued interest on convertible promissory notes totaling $71,171.

In 2010, BigString issued 30,566,164 shares of its common stock upon the conversion of convertible notes totaling $458,492. The conversion price was $0.015 per share.

In January 2011, BigString issued 25,265,762 shares of its common stock upon the conversion of convertible notes totaling $378,986. The conversion price was $0.015 per share.

In February 2011, BigString issued 3,000,000 shares of its common stock upon the conversion of convertible notes totaling $45,000. The conversion price was $0.015 per share.

In March 2011, BigString issued 7,672,646 shares of its common stock upon the conversion of convertible notes totaling $115,090. The conversion price was $0.015 per share.

In March 2011, BigString issued 2,448,642 shares of its common stock, at $0.015 per share, for accrued interest on convertible notes totaling $36,730.

NOTE 11. PREFERRED STOCK

On May 19, 2006, BigString issued a total of 400,000 shares of Series A Preferred Stock, par value $0.0001 per share, and warrants to purchase 1,000,000 shares of its common stock to Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., for an aggregate purchase price of $2,000,000. The shares of Series A Preferred Stock are convertible under certain circumstances into shares of BigString’s common stock, and have certain dividend, voting, liquidation and conversion rights. The warrants may be exercised to acquire shares of BigString’s common stock at an exercise price per share of $1.25, as adjusted. BigString has registered the shares of common stock issuable upon conversion of the shares of Series A Preferred Stock and the shares of common stock underlying the warrants.

Currently, there are 79,657 shares of Series A Preferred Stock outstanding.

NOTE 12. SHARE-BASED COMPENSATION

Warrants:

As discussed in Note 9, on January 31, 2011, BigString entered into a separate Agreement and Release with each of the Releasors. Pursuant to the terms of each Agreement and Release, the Releasors have each agreed to forfeit the Warrants held by each of them to BigString for cancellation. Warrants to purchase 8,125,000 shares of BigString’s common stock, exercisable at $0.015 per share of common stock, were cancelled, resulting in a reduction of additional paid in capital of $203,349. The Company valued the warrants based on fair market value as estimated on the date of the Agreement and Release using the Black-Scholes option-pricing model.

Information regarding the warrants outstanding, all of which are exercisable, for 2011 and 2010 is as follows:

F-16

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Warrants outstanding at January 1, 2010		16,393,545		$	0.14
Warrants granted		-		$	-
Warrants exercised		-		$	-
Warrants cancelled/forfeited/expired		(2,343,545	)	$	0.18
Warrants outstanding at December 31, 2010		14,050,000		$	0.13		3.2	$	175,500
Warrants granted		-		$	-
Warrants exercised		-		$	-
Warrants cancelled/forfeited/expired		(8,675,000	)	$	0.06
Warrants outstanding at December 31, 2011		5,375,000		$	0.25		2.7	$	-
Warrants exercisable at December 31, 2011		5,375,000		$	0.25		2.7	$	-

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

No warrants were granted during the years ended December 31, 2011 and 2010.

No warrants were exercised and no cash received during the years ended December 31, 2011 and 2010.

During the years ended December 31, 2011 and 2010, 8,125,000 and 0 warrants were cancelled, respectively, with an aggregate intrinsic value of $121,875 and $0, respectively, at the date of cancellation. During the years ended December 31, 2011 and 2010, 550,000 and 2,343,545 warrants were forfeited or expired, respectively, with an aggregate intrinsic value of $0 and $0, respectively, at the date of forfeit or expiration.

Equity Incentive Plan and Stock Options Issued to Consultants:

For the years ended December 31, 2011 and 2010, BigString recorded stock-based option compensation expense of $0 and $361, respectively. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense was recorded net of estimated forfeitures.

Information regarding the stock options outstanding during the years ended December 31, 2011 and 2010 is as follows:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Options outstanding at January 1, 2010		9,150,100		$	0.33
Options granted		-		$	-
Options exercised		-		$	-
Options cancelled/forfeited/expired		(2,200,000	)	$	0.26
Options outstanding at December 31, 2010		6,950,100		$	0.36		3.4	$	-
Options granted		-		$	-
Options exercised		-		$	-
Options cancelled/forfeited/expired		(1,825,100	)	$	0.32
Options outstanding at December 31, 2011		5,125,000		$	0.37		3.4	$	-
Options exercisable at December 31, 2011		5,125,000		$	0.37		3.4	$	-

F-17

Index

BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

No options were granted during the years ended December 31, 2011 and 2010.

No options were exercised and consequently no cash was received from, and no tax benefit was attributable to, option exercises and no cash was received from purchases of shares for the years ended December 31, 2011 and 2010.

During the years ended December 31, 2011 and 2010, options to purchase a total of 1,825,100 and 2,200,000 shares of BigString’s common stock, respectively, were cancelled, forfeited or expired with an aggregate intrinsic value of $0 and $0, respectively, at the date of expiration.

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

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

	Years Ended
	December 31,
	2011			2010
Risk-free interest rate		-	%		-	%
Expected volatility		-	%		-	%
Expected life (in years)		-			-
Dividend yield		-			-

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

NOTE 13. ACCRUED EXPENSES

Accrued expenses at December 31, 2011 and 2010 were $311,015 and $262,119, respectively, primarily for compensation. BigString’s management monitors accrued expenses.

NOTE 14. RELATED PARTY TRANSACTIONS

On December 29, 2008, BigString signed an agreement with Digital BobKat, LLC, a limited liability company in which Robert S. DeMeulemeester, an officer and director of BigString, has an interest, to provide business consulting services, including, but not limited to, management, product development, marketing, research, advertising and general business and administrative procedures and processes. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. In May, 2011, the parties agreed to temporarily suspend services. Expenses for the years ended December 31, 2011 and 2010 were $69,310 and $78,436, respectively.

On April 2, 2009, PeopleString entered into a verbal agreement with BigString to license BigString’s messaging technology and share the cost of certain common services. At September 30, 2011, BigString was a significant, non-majority stockholder of PeopleString. The agreement renews annually, is subject to adjustment periodically, and may be terminated at will by either party upon three days notice. Under the agreement, BigString provides messaging services to PeopleString users. The licensing fee was based on BigString’s experience providing services to other third parties and was determined by BigString’s management. Based on volume, BigString charges PeopleString fees that are higher in aggregate than BigString charges other third parties for outsourced messaging services. BigString recorded revenue for the years ended December 31, 2011 and 2010 of $42,000 and $42,000, respectively.

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BIG STRING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shared services costs are quantified based on PeopleString management’s estimate of the percentage of time devoted to each company. Payments are due quarterly. In 2010, the shared services included hosting, insurance, rent and miscellaneous general and administrative expenses, and were primarily paid by PeopleString by year-end. PeopleString determined, in its sole discretion, based on its subjective estimate of the amount of time devoted to each company, the amount incurred and paid for the shared services that are allocated to PeopleString. For the years ended December 31, 2011 and 2010, BigString recorded expense of $151,647 and $(5,403), respectively.

NOTE 15. COMMITMENTS AND CONTINGENCIES

Leases:

BigString leases its facilities which may require BigString to pay certain executory costs (such as insurance and maintenance). At December 31, 2011, the Company had no future minimum lease payments for operating leases.

Rental expense, excluding shared service costs, was $13,800 and $18,832 for the years ended December 31, 2011 and 2010, respectively.

Computer co-location, power and Internet access expense, including shared service costs, was $32,833 and $15,322 for the years ended December 31, 2011 and 2010, respectively.

Consulting Agreements:

In June, 2011, BigString entered into a two year agreement with Lifeline Industries, Inc. to provide business consulting services. The work was materially completed in 2011. Expenses for the years ended December 31, 2011 and 2010 were $50,000 and $0, respectively.

Other Commitments:

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

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INDEX OF EXHIBITS

Exhibit No.	Description of Exhibit
3.1.1	Certificate of Incorporation of BigString, placed into effect on October 8, 2003, incorporated by reference to Exhibit 3.1.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
3.1.2	Certificate of Amendment to the Certificate of Incorporation of BigString, placed into effect on July 19, 2005, incorporated by reference to Exhibit 3.1.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
3.1.3	Certificate of Designations of Series A Preferred Stock, par value $0.0001 per share, of BigString, incorporated by reference to Exhibit 3.1.3 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
3.2	Amended and Restated By-laws of BigString, incorporated by reference to Exhibit 3.2 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
4.1	Specimen certificate representing BigString’s common stock, par value $0.0001 per share, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form SB-2 (Registration No. 333-127923) filed with the SEC on August 29, 2005.
4.2	Form of Convertible Note, dated May 1, 2007, issued to the following entities and in the following amounts: Whalehaven Capital Fund Limited ($250,000); Alpha Capital Anstalt ($250,000); Chestnut Ridge Partners LP ($125,000); Iroquois Master Fund Ltd. ($125,000); and Penn Footwear ($50,000), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on May 3, 2007.
4.3	Form of Convertible Note, dated February 29, 2008, issued to the following subscribers and in the following amounts: Whalehaven Capital Fund Limited ($250,000); Alpha Capital Anstalt ($250,000); and Excalibur Small Cap Opportunities LP ($200,000), incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on March 6, 2008.
4.4	Form of Convertible Note, dated June 29, 2009, issued to the following subscribers and in the following amounts: Whalehaven Capital Fund Limited ($75,000); Alpha Capital Anstalt ($75,000); and Excalibur Special Opportunities LP ($30,000), incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on June 29, 2009.
4.5	Amendment No. 1 to Convertible Note (principal amount $250,000, issued May 1, 2007) between BigString and Alpha Capital Anstalt dated January 31, 2011, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
4.6	Amendment No. 1 to Convertible Note (principal amount $250,000, issued February 29, 2008) between BigString and Alpha Capital Anstalt dated January 31, 2011, incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
4.7	Amendment No. 1 to Convertible Note (principal amount $75,000, issued June 23, 2009) between BigString and Alpha Capital Anstalt dated January 31, 2011, incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
4.8	Amendment No. 1 to Convertible Note (principal amount $250,000, issued May 1, 2007) between BigString and Whalehaven Capital Fund Limited dated January 31, 2011, incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
4.9	Amendment No. 1 to Convertible Note (principal amount $250,000, issued February 29, 2008) between BigString and Whalehaven Capital Fund Limited dated January 31, 2011, incorporated by reference to Exhibit 4.5 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
4.10	Amendment No. 1 to Convertible Note (principal amount $75,000, issued June 23, 2009) between BigString and Whalehaven Capital Fund Limited dated January 31, 2011, incorporated by reference to Exhibit 4.6 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
10.1	Lease between BigString, as Tenant, and Walter Zimmerer & Son, as Landlord, dated February 3, 2009, for the premises located at 157 Broad Street, Suite 109, Red Bank, New Jersey 07701, incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K filed with the SEC on March 31, 2009.

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10.2	Securities Purchase Agreement, dated as of May 19, 2006, by and among BigString and Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., including Schedule 1 – Schedule of Purchasers, and Exhibit C – Form of Warrant. Upon the request of the SEC, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 2-3.2(d) – Warrants; Schedule 2-3.3 – Registration Rights; Schedule 2-3.7 – Financial Statements; Schedule 2-3.10 – Broker’s or Finder’s Fees; Schedule 2-3.11 – Litigation; Schedule 2-3.16 – Intellectual Property Claims Against the Company; Schedule 2-3.17 – Subsidiaries; Schedule 2-3.19(a) – Employee Benefit Plans; Schedule 2-3.22 – Material Changes; Exhibit A – Form of Certificate of Designations of the Series A Preferred Stock; Exhibit B – Form of Registration Rights Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion, incorporated by reference to Exhibit 10.33 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
10.3	Registration Rights Agreement, dated as of May 19, 2006, by and among BigString and Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C., incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K filed with the SEC on May 22, 2006.
10.4	Letter Agreement, dated September 18, 2006, between BigString and Robert S. DeMeulemeester, incorporated by reference to Exhibit 10.41 to the Current Report on Form 8-K filed with the SEC on September 21, 2006.
10.5	BigString Corporation 2006 Equity Incentive Plan, incorporated by reference to Exhibit 10.42 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.
10.6	Form of Incentive Option Agreement (Employees), incorporated by reference to Exhibit 10.42.1 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.
10.7	Form of Director Option Agreement (Non-employee Directors), incorporated by reference to Exhibit 10.42.2 to the Annual Report on Form 10-KSB filed with the SEC on April 2, 2007.
10.8	Subscription Agreement, dated as of April 30, 2007, by and among BigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt, Chestnut Ridge Partners LP, Iroquois Master Fund Ltd. and Penn Footwear, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Schedule 11.1(iv) – Additional Securities to be Included in the Registration Statement; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.43 to the Current Report on Form 8-K filed with the SEC on May 3, 2007.
10.9	Agreement, Waiver and Limited Release, dated as of November 30, 2007, by and among BigString and the Releasors, incorporated by reference to Exhibit 10.37 to the Current Report on Form 8-K filed with the SEC on December 5, 2007.
10.10	Subscription Agreement, dated as of February 29, 2008, by and among BigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Small Cap Opportunities LP, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.44 to the Current Report on Form 8-K filed with the SEC on March 6, 2008.

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10.11	Subscription Agreement, dated as of June 29, 2009, by and among BigString and Whalehaven Capital Fund Limited, Alpha Capital Anstalt and Excalibur Special Opportunities LP, including Exhibit B – Form of Common Stock Purchase Warrant. Upon the request of the Securities and Exchange Commission, BigString agrees to furnish copies of each of the following schedules and exhibits: Schedule 5(a) – Subsidiaries; Schedule 5(d) – Additional Issuances/Capitalization; Schedule 5(f) – Conflicts; Schedule 5(q) – Undisclosed Liabilities; Schedule 5(v) – Transfer Agent; Schedule 8 – Finder’s Fee; Schedule 9(s) – Lockup Agreement Providers; Exhibit A – Form of Convertible Note (included as Exhibit 4.2); Exhibit C – Form of Escrow Agreement; Exhibit D – Form of Giordano, Halleran & Ciesla, P.C. Legal Opinion; Exhibit E – Proposed Public Announcement; and Exhibit F – Form of Lock-Up Agreement, incorporated by reference to Exhibit 10.45 to the Current Report on Form 8-K filed with the SEC on June 29, 2009.
10.12	Agreement and Release, dated as of January 31, 2011, by and between BigString and Alpha Capital Anstalt, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
10.13	Agreement and Release, dated as of January 31, 2011, by and between BigString and Whalehaven Capital Fund Limited, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on February 4, 2011.
21.1	Subsidiaries of BigString.
23.1	Consent of Madsen & Associates CPAs, Inc., independent registered public accountants, as to the report relating to the consolidated financial statements of BigString.
24.1	Powers of Attorney of officers and directors of BigString, included in the signature page to this report.
31.1	Section 302 Certification of Chief Executive Officer.
31.2	Section 302 Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

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Attached files

BigString CORP Reports

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