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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







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

For the quarterly period ended September 30, 2009

OR



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

For the transition period from              to

Commission File No. 000-51478





TRX, INC.

(Exact name of registrant as specified in
charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-2502748                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                                 |  |           
|------------------------------------------------ |  | ----------
|2970 Clairmont Road, Suite 300, Atlanta, Georgia |  | 30329     
|(Address of principal executive offices)         |  | (Zip Code)

Issuers telephone number, including area code: (404) 929-6100





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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



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

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



The number of shares of the registrants common stock, $0.01
par value, outstanding at November 2, 2009 was 18,456,524 shares.









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TRX, INC.

FORM 10-Q

TABLE OF CONTENTS



|           |  |                                                                                                                 |  |        
|---------- |  | --------------------------------------------------------------------------------------------------------------- |  | -------
|           |  |                                                                                                                 |  | PAGENO.
|PART I:    |  | FINANCIAL INFORMATION                                                                                           |  |        
|           |  |                                                                                                                
|Item 1.    |  | Financial Statements                                                                                            |  |        
|           |  | Consolidated Balance Sheets as of September 30, 2009 (Unaudited) and December 31, 2008 (Audited)                |  | 1      
|           |  | Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2009 and 2008 |  | 2      
|           |  | Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2008           |  | 3      
|           |  | Notes to Unaudited Consolidated Financial Statements                                                            |  | 4      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                           |  | 12     
|Item 4T.   |  | Controls and Procedures                                                                                         |  | 20     
|           |  |                                                                                                                
|PART II:   |  | OTHER INFORMATION                                                                                               |  |        
|           |  |                                                                                                                
|Item 1A.   |  | Risk Factors                                                                                                    |  | 20     
|Item 6.    |  | Exhibits                                                                                                        |  | 28     
|           | 
|Signatures |  | 29                                                                                                             



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PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

TRX, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                                                             |  | September 30,2009 |         |   | December 31,2008 |  
|                                                                                                                                                                                                             |  | (Unaudited)       |         |   | (Audited)        |  
|ASSETS                                                                                                                                                                                                       |  |                   |         |   |                  |   |         |  
|CURRENT ASSETS:                                                                                                                                                                                              |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                                                                                    |  | $                 | 7,801   |   |                  | $ | 6,873   |  
|Trade accounts receivable, net                                                                                                                                                                               |  |                   | 6,704   |   |                  |   | 7,916   |  
|Prepaids and other                                                                                                                                                                                           |  |                   | 2,330   |   |                  |   | 2,480   |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total current assets                                                                                                                                                                                         |  |                   | 16,835  |   |                  |   | 17,269  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|NONCURRENT ASSETS:                                                                                                                                                                                           |  |                   |         |   |                  |   |         |  
|Property and equipment, net                                                                                                                                                                                  |  |                   | 7,820   |   |                  |   | 16,212  |  
|Goodwill                                                                                                                                                                                                     |  |                   |        |   |                  |   | 37,305  |  
|Other assets, net                                                                                                                                                                                            |  |                   | 1,396   |   |                  |   | 2,706   |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total noncurrent assets                                                                                                                                                                                      |  |                   | 9,216   |   |                  |   | 56,223  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total assets                                                                                                                                                                                                 |  | $                 | 26,051  |   |                  | $ | 73,492  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                         |  |                   |         |   |                  |   |         |  
|CURRENT LIABILITIES:                                                                                                                                                                                         |  |                   |         |   |                  |   |         |  
|Accounts payable and accrued liabilities                                                                                                                                                                     |  | $                 | 16,419  |   |                  | $ | 13,409  |  
|Customer deposits and deferred revenue                                                                                                                                                                       |  |                   | 4,795   |   |                  |   | 9,927   |  
|Current portion of long-term debt                                                                                                                                                                            |  |                   | 1,167   |   |                  |   | 1,167   |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total current liabilities                                                                                                                                                                                    |  |                   | 22,381  |   |                  |   | 24,503  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|NONCURRENT LIABILITIES:                                                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Long-term debtless current portion                                                                                                                                                                          |  |                   | 3,475   |   |                  |   | 5,150   |  
|Deferred income tax                                                                                                                                                                                          |  |                   |        |   |                  |   | 705     |  
|Other long-term liabilities                                                                                                                                                                                  |  |                   | 1,936   |   |                  |   | 1,917   |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total noncurrent liabilities                                                                                                                                                                                 |  |                   | 5,411   |   |                  |   | 7,772   |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total liabilities                                                                                                                                                                                            |  |                   | 27,792  |   |                  |   | 32,275  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|COMMITMENTS AND CONTINGENCIES (NOTE 1)                                                                                                                                                                       |  |                   |         |   |                  |   |         |  
|SHAREHOLDERS EQUITY:                                                                                                                                                                                        |  |                   |         |   |                  |   |         |  
|Common stock, $.01 par value; 100,000,000 shares authorized; 18,634,800 and 18,571,086 shares issued; 18,447,269 and 18,383,555
shares outstanding at September 30, 2009 and December 31, 2008, respectively |  |                   | 186     |   |                  |   | 185     |  
|Additional paid-in capital                                                                                                                                                                                   |  |                   | 96,121  |   |                  |   | 95,877  |  
|Treasury stock, at cost; 187,531 shares                                                                                                                                                                      |  |                   | (2,294  | ) |                  |   | (2,294  | )
|Cumulative translation adjustment                                                                                                                                                                            |  |                   | 229     |   |                  |   | 279     |  
|Accumulated deficit                                                                                                                                                                                          |  |                   | (95,983 | ) |                  |   | (52,830 | )
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total shareholders equity                                                                                                                                                                                   |  |                   | (1,741  | ) |                  |   | 41,217  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  
|                                                                                                                                                                                                             |  |                  
|Total liabilities and shareholders equity                                                                                                                                                                   |  | $                 | 26,051  |   |                  | $ | 73,492  |  
|                                                                                                                                                                                                             |  |                   |         |   |                  |   |         |  

See notes to unaudited consolidated financial statements.



1



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TRX, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)



|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|----------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------- | - |  | - | ------ | -
|                                                                              |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                                                              |  | 2009                            |        |   | 2008                           |   |        | 2009 |  |   | 2008    |  
|REVENUES:                                                                     |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Transaction and other revenues                                                |  | $                               | 15,237 |   |                                | $ | 19,560 |      |  | $ | 45,076  |   |  | $ | 78,979 |  
|Client reimbursements                                                         |  |                                 | 103    |   |                                |   | 347    |      |  |   | 350     |   |  |   | 621    |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Total revenues                                                                |  |                                 | 15,340 |   |                                |   | 19,907 |      |  |   | 45,426  |   |  |   | 79,600 |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|EXPENSES:                                                                     |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Operating, excluding depreciation and amortization                            |  |                                 | 9,164  |   |                                |   | 12,127 |      |  |   | 27,363  |   |  |   | 39,527 |  
|Selling, general, and administrative, excluding depreciation and amortization |  |                                 | 3,083  |   |                                |   | 3,576  |      |  |   | 8,622   |   |  |   | 12,811 |  
|Technology development                                                        |  |                                 | 927    |   |                                |   | 3,012  |      |  |   | 3,393   |   |  |   | 10,606 |  
|Client reimbursements                                                         |  |                                 | 103    |   |                                |   | 347    |      |  |   | 350     |   |  |   | 621    |  
|Impairment of goodwill, intangible assets and other long-lived assets         |  |                                 |       |   |                                |   |       |      |  |   | 43,692  |   |  |   |       |  
|Depreciation and amortization                                                 |  |                                 | 1,325  |   |                                |   | 2,742  |      |  |   | 5,112   |   |  |   | 8,047  |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Total expenses                                                                |  |                                 | 14,602 |   |                                |   | 21,804 |      |  |   | 88,532  |   |  |   | 71,612 |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|OPERATING INCOME (LOSS)                                                       |  |                                 | 738    |   |                                |   | (1,897 | )    |  |   | (43,106 | ) |  |   | 7,988  |  
|INTEREST (EXPENSE) INCOME:                                                    |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Interest income                                                               |  |                                 | 5      |   |                                |   | 30     |      |  |   | 15      |   |  |   | 97     |  
|Interest expense                                                              |  |                                 | (203   | ) |                                |   | (123   | )    |  |   | (595    | ) |  |   | (348   | )
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Total interest expense, net                                                   |  |                                 | (198   | ) |                                |   | (93    | )    |  |   | (580    | ) |  |   | (251   | )
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|INCOME (LOSS) BEFORE INCOME TAXES                                             |  |                                 | 540    |   |                                |   | (1,990 | )    |  |   | (43,686 | ) |  |   | 7,737  |  
|INCOME TAX EXPENSE (BENEFIT)                                                  |  |                                 | 100    |   |                                |   | 86     |      |  |   | (533    | ) |  |   | 86     |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|NET INCOME (LOSS)                                                             |  | $                               | 440    |   |                                | $ | (2,076 | )    |  | $ | (43,153 | ) |  | $ | 7,651  |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|WEIGHTED AVERAGE NUMBER OF SHARES:                                            |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Basic                                                                         |  |                                 | 18,442 |   |                                |   | 18,362 |      |  |   | 18,425  |   |  |   | 18,340 |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Diluted                                                                       |  |                                 | 18,627 |   |                                |   | 18,362 |      |  |   | 18,425  |   |  |   | 18,340 |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  
|BASIC AND DILUTED NET INCOME (LOSS) PER SHARE                                 |  | $                               | 0.02   |   |                                | $ | (0.11  | )    |  | $ | (2.34   | ) |  | $ | 0.42   |  
|                                                                              |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |        |  

See notes to unaudited consolidated financial statements.



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TRX, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



|                                                                                         |  |                                |         |   |      |   |         |  
|---------------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                         |  | Nine Months EndedSeptember 30, |        
|                                                                                         |  | 2009                           |         |   | 2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |                                |         |   |      |   |         |  
|Net (loss) income                                                                        |  | $                              | (43,153 | ) |      | $ | 7,651   |  
|                                                                                         |  |                                |         |   |      |   |         |  
|Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |                                |         |   |      |   |         |  
|Depreciation and amortization                                                            |  |                                | 5,112   |   |      |   | 8,047   |  
|Impairment of goodwill, intangible assets and other long-lived assets                    |  |                                | 43,692  |   |      |   |        |  
|Lease impairment                                                                         |  |                                | 407     |   |      |   |        |  
|Provision for bad debts                                                                  |  |                                | 149     |   |      |   | 363     |  
|Stock compensation expense                                                               |  |                                | 213     |   |      |   | 342     |  
|Changes in assets and liabilities, net of affects of acquisition:                        |  |                                |         |   |      |   |         |  
|Trade accounts receivable                                                                |  |                                | 1,132   |   |      |   | 3,587   |  
|Prepaids and other assets                                                                |  |                                | 140     |   |      |   | 360     |  
|Deferred taxes                                                                           |  |                                | (705    | ) |      |   |        |  
|Accounts payable and accrued liabilities                                                 |  |                                | 2,896   |   |      |   | (4,603  | )
|Customer deposits and deferred revenue                                                   |  |                                | (5,161  | ) |      |   | (10,810 | )
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|Total adjustments                                                                        |  |                                | 47,875  |   |      |   | (2,714  | )
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|Net cash provided by operating activities                                                |  |                                | 4,722   |   |      |   | 4,937   |  
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |  |                                |         |   |      |   |         |  
|Capital expenditures                                                                     |  |                                | (2,272  | ) |      |   | (5,431  | )
|Payment of contingent consideration                                                      |  |                                | (212    | ) |      |   |        |  
|Acquisition, net of cash acquired                                                        |  |                                |        |   |      |   | (989    | )
|Proceeds from sale of assets                                                             |  |                                |        |   |      |   | 578     |  
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|Net cash used in investing activities                                                    |  |                                | (2,484  | ) |      |   | (5,842  | )
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |                                |         |   |      |   |         |  
|Repayments of long-term debt                                                             |  |                                | (875    | ) |      |   | (1,750  | )
|Borrowings from credit facility                                                          |  |                                | 7,000   |   |      |   | 9,520   |  
|Payments on credit facility                                                              |  |                                | (7,800  | ) |      |   | (4,000  | )
|Debt issue costs                                                                         |  |                                | (38     | ) |      |   | (164    | )
|Proceeds from stock plans                                                                |  |                                | 28      |   |      |   | 74      |  
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|Net cash (used in) provided by financing activities                                      |  |                                | (1,685  | ) |      |   | 3,680   |  
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                             |  |                                | 375     |   |      |   | (282    | )
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                |  |                                | 928     |   |      |   | 2,493   |  
|                                                                                         |  |                               
|CASH AND CASH EQUIVALENTSBeginning of period                                            |  |                                | 6,873   |   |      |   | 8,879   |  
|                                                                                         |  |                                |         |   |      |   |         |  
|                                                                                         |  |                               
|CASH AND CASH EQUIVALENTSEnd of period                                                  |  | $                              | 7,801   |   |      | $ | 11,372  |  
|                                                                                         |  |                                |         |   |      |   |         |  

See notes to unaudited consolidated financial statements.



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TRX, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

(In
thousands, except share data)

1. ACCOUNTING AND REPORTING POLICIES

TRX, Inc., together with its subsidiaries (we, us, our or TRX), is a global technology
company. We develop and host software applications to automate manual processes and track transaction data, enabling our clients to optimize performance and control costs. We are a leading provider to the travel industry and expect to
eventually include growth in industries beyond travel, such as financial services and health care. For the foreseeable future, we intend to focus our efforts on the large opportunities within the travel industry. We deliver our technology
applications as a service over the Internet to travel agencies, corporations, travel suppliers, government agencies, credit card associations, credit card issuing banks, and third-party administrators. TRX is headquartered in Atlanta, Georgia with
operations and associates in North America, Europe, and Asia. We are majority-owned by BCD Technology, S.A. (BCD). The accompanying consolidated financial statements include the accounts of TRX, Inc. and its subsidiaries for the periods
presented.

Basis of PresentationThe accompanying unaudited consolidated financial statements of TRX, Inc.
and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. As a result, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated
financial statements and the accompanying notes included in our Form 10-K for the year ended December 31, 2008. Due to the seasonal fluctuations for the purchase of air travel by leisure and corporate travelers as well as credit card volume
related to corporate travel, interim results are not necessarily indicative of results for a full year.

In the opinion of
management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary for a fair statement of results for the interim periods presented.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will differ from those estimates.

ReclassificationsCertain reclassifications have been made in financing activities section of the 2008
statement of cash flows to conform to the 2009 presentation.

Subsequent EventsWe evaluated
subsequent events through November 13, 2009, which represents the date the consolidated financial statements were issued, and made the determination that no events occurred subsequent to September 30, 2009, that would be required to be
recognized in the consolidated financial statements. On October 26, 2009, we amended our Credit Agreement with Atlantic Capital Bank (ACB) as discussed in our debt footnote (Note 2).

Allowance for Doubtful AccountsWe maintain an allowance for doubtful accounts to reserve for potentially uncollectible
receivables. The balance was $926 and $486 as of September 30, 2009 and December 31, 2008, respectively.

GoodwillGoodwill represents the excess of the purchase price over the fair value of assets acquired. We test goodwill for impairment annually as of September 30 or more frequently if an event occurs or circumstances
change that more likely than not reduces the value of a reporting unit below its carrying value. We have one reporting unit as defined by the Intangibles  Goodwill and Other Topic of the Financial Accounting Standards Board (FASB)
Standards Codification. For purposes of goodwill impairment testing, we compare the fair value of the reporting unit determined on the basis of expected discounted future cash flows with its carrying amount, including goodwill. We also compare the
guideline public company and guideline transaction methods to the value derived from the income approach as a test of the reasonableness of our discounted cash flow analysis. If the carrying amount of the reporting unit exceeds its fair value,
goodwill is considered impaired. If goodwill is considered impaired, the impairment loss to be recognized is measured as the amount by which the carrying amount of the goodwill exceeds implied fair value of that goodwill. As a result of declining
market conditions from January 1, 2009 to March 31, 2009, and their related effect on current and anticipated volumes and pricing with clients, we determined that it was necessary to test goodwill for impairment as of March 31, 2009.
We used the same approach that was used during the 2008 impairment analysis, which required estimates of future operating results and cash flows of the reporting unit discounted using estimated discount rates ranging from 16% to 18%. The estimates
of future operating results and cash flows were principally derived from an updated long-term financial outlook in light of the first quarter of 2009 market conditions and the challenging economic outlook. As a result of our impairment test, we
determined that goodwill was fully impaired and recorded a noncash impairment charge to goodwill of $37.4 million during the first quarter of 2009, which is included in Impairment of goodwill, intangible assets and other long-lived
assets in our unaudited consolidated statements of operations.



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The following table discloses the changes in the carrying amount of goodwill during the nine
months ended September 30, 2009:



|                                        |  |   |         |  
|--------------------------------------- |  | - | ------- | -
|Balance, January 1                      |  | $ | 37,305  |  
|Earnout on Travel Analytics acquisition |  |   | 100     |  
|Impairment charge                       |  |   | (37,405 | )
|                                        |  |   |         |  
|                                        | 
|Balance, September 30                   |  | $ |        |  
|                                        |  |   |         |  

Other Intangible AssetsThe outcome of our goodwill
impairment analysis for the first quarter of 2009 indicated that the carrying amount of certain acquisition-related intangible assets or asset groups may not be recoverable. We assessed the recoverability of the acquisition-related intangible assets
by determining whether the unamortized balances could be recovered through undiscounted future net cash flows. We determined that certain of the acquisition-related intangible assets were impaired primarily due to the revised lower revenue forecasts
associated with the products incorporating the trademarks and patents, customer relationships and non-compete agreements. We measured the amount of impairment by calculating the amount by which the carrying value of the assets exceeded their
estimated fair values, which were based on projected discounted future net cash flows. As a result of this impairment analysis, we recorded a noncash impairment charge of approximately $1.1 million during the first quarter of 2009, which is included
in Impairment of goodwill, intangible assets and other long-lived assets in our unaudited consolidated statements of operations.

A summary of our intangible assets as of September 30, 2009 and December 31, 2008 is as follows:



|                       |  |             |  |                    |     |                         |                   |     |                    |  |                         |       |  |   |      |  
|---------------------- |  | ----------- |  | ------------------ | --- | ----------------------- | ----------------- | --- | ------------------ |  | ----------------------- | ----- |  | - | ---- | -
|                       |  |             |  | September 30, 2009 |     |                         | December 31, 2008 |    
|                       |  | UsefulLives |  | GrossCarryingValue |     | AccumulatedAmortization |                   |     | GrossCarryingValue |  | AccumulatedAmortization |      
|Customer relationships |  | 6  8 years |  | $                  |    |                         | $                 |    |                    |  | $                       | 615   |  | $ | (386 | )
|Trademarks and patents |  | 5 years     |  |                    | 866 |                         |                   | (87 | )                  |  |                         | 2,062 |  |   | (430 | )
|Non-compete agreements |  | 4  5 years |  |                    |    |                         |                   |    |                    |  |                         | 382   |  |   | (175 | )
|                       |  |             |  |                    |     |                         |                   |     |                    |  |                         |       |  |   |      |  
|                       |  |             |  |                    |    
|                       |  |             |  | $                  | 866 |                         | $                 | (87 | )                  |  | $                       | 3,059 |  | $ | (991 | )
|                       |  |             |  |                    |     |                         |                   |     |                    |  |                         |       |  |   |      |  

We expect to record approximately $173 of amortization expense related to these
intangible assets in each of the next four years and $87 in the year thereafter. We recorded related amortization expense of $43 and $176 during the three and nine months ended September 30, 2009, respectively, and $91 and $274 during the three
and nine months ended September 30, 2008, respectively.

Impairment of Long-Lived AssetsWe regularly
evaluate whether events and circumstances have occurred that indicate whether the carrying amount of property and equipment and other intangible assets may warrant revision or may not be recoverable. When factors indicate that these long-lived
assets should be evaluated for possible impairment, we assess the recoverability by determining whether the carrying value of such long-lived assets will be recovered through the future undiscounted cash flows expected from the use of the asset and
its eventual disposition. During the first quarter of 2009, we experienced a continued decline in our business that led us to revise our short-term and long-term financial forecasts that indicated that an impairment of long-lived assets may have
occurred. Accordingly, we performed an analysis comparing the undiscounted cash flows estimated to be generated by the long-lived assets to the carrying amounts of those assets. The estimates of future operating results and cash flows are derived
from our updated long-term financial forecast. The results of the comparison of our undiscounted cash flows to the carrying value of the long-lived assets indicated a requirement to move to a fair value approach. The values of the intangible long
lived assets were determined using both the cost approach and an income approach. The relief from royalty method was the specific income approach utilized. We also used an appraisal of certain long-lived fixed assets to support our conclusions
related to those assets. As a result, we recorded a long-lived asset impairment noncash charge during the first quarter of 2009 of $5.2 million, which is included in Impairment of goodwill, intangible assets and other long-lived assets
in our unaudited consolidated statement of operations.

Fair Value MeasurementsWe adopted the FASBs
guidance on Fair Value Measurements and Disclosures Topic for our financial assets and financial liabilities on January 1, 2008 and for our non-financial assets and non-financial liabilities on January 1, 2009. Under this guidance, fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The guidance outlines a valuation framework and
creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures.

We currently do not have financial or non-financial assets and financial or non-financial liabilities that are required to be measured at fair value on a recurring basis. The FASBs guidance
establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. The following table shows the fair value of our non-financial assets that were required to be measured at fair value on a non-recurring basis during the first
quarter of 2009. These non-financial assets, which included our goodwill, intangible assets and our other long-lived assets, were required to be measured at fair value in connection with the interim impairment tests we performed on our goodwill,
intangible assets and other long-lived assets in the first quarter of 2009.



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##### Table of Contents

|                                            |  |                          |        |                                        |   |                                            |  |                                        |   |                     |   |        |  |   |         |  
|------------------------------------------- |  | ------------------------ | ------ | -------------------------------------- | - | ------------------------------------------ |  | -------------------------------------- | - | ------------------- | - | ------ |  | - | ------- | -
|                                            |  | Balance atMarch 31, 2009 |        | Quoted Pricesin ActiveMarkets(Level 1) |   | Significant OtherObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3) |   | Total Gains(Losses) |  
|Goodwill                                    |  | $                        |       |                                        | $ |                                           |  | $                                      |  |                     | $ |       |  | $ | (37,405 | )
|Property and Equipment, net:                |  |                          |        |                                        |   |                                            |  |                                        |   |                     |   |        |  |   |         |  
|Leasehold improvements                      |  |                          | 514    |                                        |   |                                           |  |                                        |  |                     |   | 514    |  |   | (765    | )
|Computers, purchased software and equipment |  |                          | 5,623  |                                        |   |                                           |  |                                        |  |                     |   | 5,623  |  |   | (1,770  | )
|Internally-developed software               |  |                          | 2,814  |                                        |   |                                           |  |                                        |  |                     |   | 2,814  |  |   | (2,639  | )
|Furniture and fixtures                      |  |                          | 373    |                                        |   |                                           |  |                                        |  |                     |   | 373    |  |   |        |  
|Other Assets, net:                          |  |                          |        |                                        |   |                                            |  |                                        |   |                     |   |        |  |   |         |  
|Trademarks and patents                      |  |                          | 866    |                                        |   |                                           |  |                                        |  |                     |   | 866    |  |   | (714    | )
|Customer relationships                      |  |                          |       |                                        |   |                                           |  |                                        |  |                     |   |       |  |   | (211    | )
|Non-compete agreements                      |  |                          |       |                                        |   |                                           |  |                                        |  |                     |   |       |  |   | (188    | )
|                                            |  |                          |        |                                        |   |                                            |  |                                        |   |                     |   |        |  |   |         |  
|                                            |  | $                        | 10,190 |                                        | $ |                                           |  | $                                      |  |                     | $ | 10,190 |  | $ | (43,692 | )
|                                            |  |                          |        |                                        |   |                                            |  |                                        |   |                     |   |        |  |   |         |  

Revenue Recognition and Cost DeferralWe recognize revenue when
all of the following have occurred: (1) persuasive evidence of an arrangement exists; (2) services have been performed; (3) the fee for services is fixed or determinable; and (4) collectability is reasonably assured. Generally,
these criteria are considered to have been met as follows:



| |  |  | For transaction revenue, in which we perform ticketing, file-finishing, data consolidation and reporting, and customer care services, when the services
are provided;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | For short-term client-specific customizations, which do not generate direct on-going incremental transaction revenue, when the customization has been
delivered to our customer; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | For implementation and set-up fees, which generate direct on-going incremental transaction revenue, over the life of the underlying transaction service
agreement. Related costs are deferred and recognized as expenses over the life of the underlying transaction service agreement.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On July 13, 2007, TRX and Citibank executed an amendment to the Master Services Agreement dated February 1, 2002, as amended. The Amendment extends the scheduled expiration date of the Citibank
Master Services Agreement from January 13, 2009 to December 31, 2010. The primary purpose of the Amendment was for TRX to sell a $4.5 million limited perpetual license of certain source code to Citibank in order for Citibank to perform
certain services in-house that had previously been hosted by TRX. TRX continues to perform limited maintenance and project services for Citibank.

The Amendment also provided that we would continue to provide the hosting services historically provided to Citibank until such time as the sale of the perpetual license occurred. The license sale
was completed during the second quarter of 2008 and, as a result, we recognized $4.5 million of revenue, the contractually-stated sales price of the license. In addition to the license sale, Citibank also paid us approximately $1.4 million for
certain costs and assets that we had purchased in the past for Citibanks benefit, which are essential to the functionality of the technology.

The sale of the license, the compensation for the assets referred to above, and the hosting services are all elements of the Amendment. Since there was no vendor specific objective evidence of the fair
value of the perpetual license at the effective date of the Amendment, revenue associated with the hosting services was deferred until April 30, 2008, when the sale of the perpetual license occurred. We recognized revenue for the hosting
services of $10.0 million in the second quarter of 2008. All costs associated with the hosting services were expensed as incurred from July 2007 through April 2008.

Client reimbursements received for direct costs paid to third parties and related expenses are characterized as revenue. Client reimbursements represent direct costs paid to third parties primarily for
voice and data and items such as paper tickets.

Concentration of Credit RiskA significant portion of our
revenues is derived from a limited number of clients. Our top five clients accounted for approximately 67% and 74% of our total revenues in the three months ended September 30, 2009 and 2008, respectively, and approximately 69% and 79% of our
total revenues in the nine months ended September 30, 2009 and 2008, respectively. Contracts with the major clients may be terminated by the client if we fail to meet certain performance criteria. Expedia, Inc. and its affiliates accounted for
42% and 45% of our total revenues in the three months ended September 30, 2009 and 2008, respectively, and 43% and 35% of our total revenues in the nine months ended September 30, 2009 and 2008, respectively. American Express Travel
Related Services Company, Inc. (American Express) accounted for 16% and 15% of our total revenues in the three months ended September 30, 2009 and 2008, respectively, and 15% and 10% of our total revenues in the nine months ended
September 30, 2009, and 2008, respectively. Citibank accounted for 25% of revenues during the nine months ended September 30, 2008. At September 30, 2009 and December 31, 2008, 17% and 22%, respectively, of our accounts
receivable related to American Express.



6



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##### Table of Contents

Earnings per ShareBasic earnings per share is computed by dividing
reported income or loss available to common shareholders by weighted average shares outstanding during the period. Income or loss available to common shareholders is the same as reported net income or loss for all periods presented.

Diluted earnings per share is computed by dividing reported earnings available to common shareholders, adjusted for the earnings effect of
potentially dilutive securities, by weighted average shares outstanding during the period and the impact of securities that, if exercised, would have a dilutive effect on earnings per share.

All common stock equivalents with an exercise price less than the average market share price for the period are assumed to have a dilutive
effect on earnings per share. The following table sets forth the computation of basic and diluted net income (loss) per share:



|                                    |  |                                      |     |                                      |        |           |   |          |  |   |                       |   |           |        |  |   |       |  
|----------------------------------- |  | ------------------------------------ | --- | ------------------------------------ | ------ | --------- | - | -------- |  | - | --------------------- | - | --------- | ------ |  | - | ----- | -
|                                    |  | Three Months EndedSeptember 30, 2009 |     | Three Months EndedSeptember 30, 2008 |       
|                                    |  | Net Income                           |     | WeightedAverageShares                |        | Per Share |   | Net Loss |  |   | WeightedAverageShares |   | Per Share |       
|Basic net income (loss) per share   |  | $                                    | 440 |                                      | 18,442 |           | $ | 0.02     |  | $ | (2,076                | ) |           | 18,362 |  | $ | (0.11 | )
|Effect of dilutive securities:      |  |                                      |     |                                      |        |           |   |          |  |   |                       |   |           |        |  |   |       |  
|Options to acquire common stock     |  |                                      |    |                                      | 185    |           |   |         |  |   |                      |   |           |       |  |   |      |  
|                                    |  |                                      |     |                                      |        |           |   |          |  |   |                       |   |           |        |  |   |       |  
|Diluted net income (loss) per share |  | $                                    | 440 |                                      | 18,627 |           | $ | 0.02     |  | $ | (2,076                | ) |           | 18,362 |  | $ | (0.11 | )
|                                    |  |                                      |     |                                      |        |           |   |          |  |   |                       |   |           |        |  |   |       |  



|                                    |  |                                     |         |   |                                     |        |           |   |       |            |  |                       |       |           |        |  |   |     
|----------------------------------- |  | ----------------------------------- | ------- | - | ----------------------------------- | ------ | --------- | - | ----- | ---------- |  | --------------------- | ----- | --------- | ------ |  | - | ----
|                                    |  | Nine Months EndedSeptember 30, 2009 |         |   | Nine Months EndedSeptember 30, 2008
|                                    |  | Net loss                            |         |   | WeightedAverageShares               |        | Per Share |   |       | Net Income |  | WeightedAverageShares |       | Per Share
|Basic net (loss) income per share   |  | $                                   | (43,153 | ) |                                     | 18,425 |           | $ | (2.34 | )          |  | $                     | 7,651 |           | 18,340 |  | $ | 0.42
|Effect of dilutive securities:      |  |                                     |         |   |                                     |        |           |   |       |            |  |                       |       |           |        |  |   |     
|Options to acquire common stock     |  |                                     |        |   |                                     |       |           |   |      |            |  |                       |      |           |       |  |   |    
|                                    |  |                                     |         |   |                                     |        |           |   |       |            |  |                       |       |           |        |  |   |     
|Diluted net (loss) income per share |  | $                                   | (43,153 | ) |                                     | 18,425 |           | $ | (2.34 | )          |  | $                     | 7,651 |           | 18,340 |  | $ | 0.42
|                                    |  |                                     |         |   |                                     |        |           |   |       |            |  |                       |       |           |        |  |   |     

Because of their anti-dilutive effect on the net income (loss) per share recorded in
each of the periods presented, the diluted share base excludes incremental shares related to 1,763 employee stock options for the three months ended September 30, 2009 and all outstanding employee stock options for the three months ended
September 30, 2008 and for the nine months ended September 30, 2009 and 2008, respectively.

Stock-Based
Employee CompensationWe account for stock-based employee compensation under Compensation  Stock Compensation Topic of the FASB Standards Codification. The weighted average grant-date fair value of the options granted during the
three and nine months ended September 30, 2009, calculated using the Black-Scholes model, ranged from $0.20 to $0.51. The weighted average grant-date fair value of the options granted during the three and nine months ended September 30,
2008, calculated using the Black-Scholes model, ranged from $0.22 to $0.46.

The following assumptions were used for grants in
the three and nine months ended September 30, 2009: dividend yield of zero, volatility of 117.6% to 160.8%, risk-free interest rate of 0.86% to 2.17%, and an expected life of 2.00 to 4.25 years. The following assumptions were used for grants in
the three and nine months ended September 30, 2008: dividend yield of zero, volatility of 26.42% to 34.38%, risk-free interest rate of 1.78% to 2.96%, and an expected life of 2.00 to 4.25 years. Through December 2008, expected volatility was
based on the volatility of a group of stocks we view as peer companies, due to the limited history of our stock trading on an exchange. Beginning January 1, 2009 volatility is based on the volatility of our stock. We use historical data to
estimate the expected life and employee termination assumptions in our accounting under the FASBs guidance. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant over the expected life of the
grant.



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##### Table of Contents

The following table summarizes stock options outstanding as of September 30, 2009, as
well as activity during the nine months then ended:



|                            |  |           |   |  |                               |     
|--------------------------- |  | --------- | - |  | ----------------------------- | ----
|                            |  | Options   |   |  | WeightedAverageExercise Price
|Outstanding at January 1    |  | 2,440,500 |   |  | $                             | 4.98
|Granted                     |  | 495,000   |   |  |                               | 0.34
|Cancelled                   |  | (577,500  | ) |  |                               | 6.04
|Exercised                   |  |          |   |  |                               |    
|                            |  |           |   |  |                               |     
|Outstanding at September 30 |  | 2,358,000 |   |  | $                             | 3.75
|                            |  |           |   |  |                               |     

The intrinsic value of a stock option is the amount by which the market value of the
underlying stock exceeds the exercise price of the option. At September 30, 2009, the aggregate intrinsic value of options outstanding was $321 with a weighted average remaining contractual term of 7.8 years; the aggregate intrinsic value of
the 1,088,916 options exercisable was $0 with a weighted average exercise price of $6.67 and a weighted average remaining contractual term of 6.7 years; and the aggregate intrinsic value of the 2,108,052 options vested or expected to vest was $287
with a weighted average exercise price of $3.75 and a weighted average remaining contractual term of 7.8 years.

The following
table summarizes unvested stock options outstanding as of September 30, 2009, as well as activity during the nine months then ended:



|                            |  |           |   |  |                                     |     
|--------------------------- |  | --------- | - |  | ----------------------------------- | ----
|                            |  | Options   |   |  | WeightedAverageGrant-DateFair Price
|Outstanding at January 1    |  | 1,252,167 |   |  | $                                   | 2.60
|Granted                     |  | 495,000   |   |  |                                     | 0.34
|Forfeited                   |  | (296,250  | ) |  |                                     | 3.13
|Vested                      |  | (181,833  | ) |  |                                     | 4.85
|                            |  |           |   |  |                                     |     
|Outstanding at September 30 |  | 1,269,084 |   |  | $                                   | 1.27
|                            |  |           |   |  |                                     |     

Compensation cost from nonvested stock granted to employees is recognized as expense
using the straight-line method over the vesting period. As of September 30, 2009, total unrecognized compensation cost related to nonvested stock options was approximately $189. Approximately half of this cost is expected to be recognized over
the next year, with the remainder primarily over the subsequent two years. For the three and nine months ended September 30, 2009, our total stock-based compensation expense was approximately $73 and $218, respectively. For the three and nine
months ended September 30, 2008, our total stock-based compensation expense was approximately $123 and $354, respectively.

Comprehensive Income (Loss)Our comprehensive income (loss) includes net income (loss) and cumulative translation adjustments. The components of comprehensive income (loss) are as follows:



|                                  |  |                                 |     |      |                                |        |      |  |   |         |   |  |   |       |  
|--------------------------------- |  | ------------------------------- | --- | ---- | ------------------------------ | ------ | ---- |  | - | ------- | - |  | - | ----- | -
|                                  |  | Three Months EndedSeptember 30, |     |      | Nine Months EndedSeptember 30, |       
|                                  |  | 2009                            |     | 2008 |                                |        | 2009 |  |   | 2008    |  
|Net income (loss)                 |  | $                               | 440 |      | $                              | (2,076 | )    |  | $ | (43,153 | ) |  | $ | 7,651 |  
|Cumulative translation adjustment |  |                                 | 105 |      |                                | (237   | )    |  |   | (50     | ) |  |   | (124  | )
|                                  |  |                                 |     |      |                                |        |      |  |   |         |   |  |   |       |  
|Total comprehensive income (loss) |  | $                               | 545 |      | $                              | (2,313 | )    |  | $ | (43,203 | ) |  | $ | 7,527 |  
|                                  |  |                                 |     |      |                                |        |      |  |   |         |   |  |   |       |  

Statement of Cash FlowsCash paid for interest was $492 and $307
for the nine months ended September 30, 2009 and 2008, respectively. Cash paid for income taxes was $33 and $5 for the nine months ended September 30, 2009 and 2008, respectively. We had accrued capital expenditures of $0 at September,
2009 and 2008, respectively.

Segment ReportingOperating segments are defined by the Segments Topic of the
FASB Accounting Standards Codification. Our chief operating decision maker currently operates one operating segment and the expense structure of the business is managed functionally. Our measure of segment profit is consolidated operating
income.



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##### Table of Contents

Our revenue, aggregated by service offering, is as follows:



|                               |  |                                 |        |                                |   |        |  |      |        |  |   |       
|------------------------------ |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                               |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                               |  | 2009                            |        | 2008                           |   | 2009   |  | 2008
|Transaction processing         |  | $                               | 12,085 |                                | $ | 16,053 |  | $    | 36,366 |  | $ | 50,250
|Data reporting                 |  |                                 | 3,152  |                                |   | 3,507  |  |      | 8,710  |  |   | 28,729
|                               |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Transaction and other revenues |  |                                 | 15,237 |                                |   | 19,560 |  |      | 45,076 |  |   | 78,979
|Client reimbursements          |  |                                 | 103    |                                |   | 347    |  |      | 350    |  |   | 621   
|                               |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Total                          |  | $                               | 15,340 |                                | $ | 19,907 |  | $    | 45,426 |  | $ | 79,600
|                               |  |                                 |        |                                |   |        |  |      |        |  |   |       

The following is a geographic breakdown of revenues for the three and nine months
ended September 30, 2009 and 2008, and a geographic breakdown of property and equipment, net at September 30, 2009 and December 31, 2008:



|                    |  |                                 |        |                                |   |        |  |      |        |  |   |       
|------------------- |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                    |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                    |  | 2009                            |        | 2008                           |   | 2009   |  | 2008
|Revenues:           |  |                                 |        |                                |   |        |  |      |        |  |   |       
|United States       |  | $                               | 11,286 |                                | $ | 15,809 |  | $    | 34,104 |  | $ | 66,197
|Germany             |  |                                 | 2,726  |                                |   | 2,543  |  |      | 7,207  |  |   | 7,692 
|Other International |  |                                 | 1,328  |                                |   | 1,555  |  |      | 4,115  |  |   | 5,711 
|                    |  |                                 |        |                                |   |        |  |      |        |  |   |       
|Total               |  | $                               | 15,340 |                                | $ | 19,907 |  | $    | 45,426 |  | $ | 79,600
|                    |  |                                 |        |                                |   |        |  |      |        |  |   |       



|                             |  |                      |       |                     |   |       
|---------------------------- |  | -------------------- | ----- | ------------------- | - | ------
|                             |  | At September 30,2009 |       | At December 31,2008
|Property and equipment, net: |  |                      |       |                     |   |       
|United States                |  | $                    | 7,207 |                     | $ | 15,467
|Germany                      |  |                      | 342   |                     |   | 445   
|Other International          |  |                      | 271   |                     |   | 300   
|                             |  |                      |       |                     |   |       
|                             |  | $                    | 7,820 |                     | $ | 16,212
|                             |  |                      |       |                     |   |       

LitigationWe are involved in a few claims incidental to our
business. In the opinion of management, the ultimate resolution of such claims will not have a material effect on our financial position, liquidity, or results of operations.

Recent Accounting Pronouncements

Codification and the Hierarchy of Generally Accepted Accounting PrinciplesIn June 2009, the FASB issued guidance that identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. Rules and interpretive releases of the SEC
under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. This guidance was effective for financial statements issued for interim and annual periods ending after September 15, 2009 and did not have a
material effect on our consolidated financial position and results of operations.

Accounting for transfers of financial
assetsIn June 2009, the FASB issued accounting guidance that in part, amended the derecognition guidance to eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. This
guidance is effective for financial asset transfers occurring after the beginning of an entitys first fiscal year that begins after November 15, 2009. We do not expect that the implementation of this guidance will have a material effect
on our consolidated financial position and results of operations.

Consolidation of variable-interest entitiesIn
June 2009, the FASB issued accounting guidance that amends the consolidation guidance applicable to variable interest entities. The provisions of the new guidance significantly affect the overall consolidation analysis under the previous guidance.
This guidance is effective as of the beginning of the first fiscal year that begins after November 15, 2009. We do not expect that the implementation of this guidance will have a material effect on our consolidated financial position and
results of operations.

Subsequent eventsIn May 2009, the FASB issued accounting guidance that establishes
general standards of accounting for and disclosures of subsequent events that occurred after the balance sheet date but prior to the issuance of financial statements. This guidance is effective for financial statements issued for interim or fiscal
years ending after June 15, 2009. The adoption of this standard did not have a material effect on our consolidated financial position and results of operations.



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##### Table of Contents

Recognition and presentation of other-than-temporary impairmentsIn April 2009,
the FASB issued accounting guidance on the recognition and presentation of other-than-temporary impairments. This new guidance amends the existing impairment guidance relating to certain debt securities and requires a company to assess the
likelihood of selling the security prior to recovering its cost basis. When a security meets the criteria for impairment, the impairment charges related to credit losses would be recognized in earnings, while non-credit losses would be
reflected in other comprehensive income. This guidance is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this guidance did not have a material effect on our consolidated financial position
and results of operations.

Interim disclosures about fair value of financial instrumentsIn April 2009, the FASB
issued accounting guidance that requires that the fair value disclosures previously required on an annual basis be included for interim reporting periods. We adopted this guidance on April 1, 2009. This guidance is effective for interim
and annual reporting periods ending after June 15, 2009, and is applied prospectively. The adoption of this guidance did not have a material effect on our consolidated financial position and results of operations.

Determination of the Useful Life of Intangible AssetsIn April 2008, the FASB issued guidance which provides for additional
considerations to be used in determining useful lives and requires additional disclosure regarding renewals. The adoption of this guidance on January 1, 2009 did not have a material effect on our consolidated financial statements.

Fair value measurementsIn September 2006, the FASB issued accounting guidance on fair value measurements, which provides a
common definition of fair value and a framework for measuring assets and liabilities at fair values when a particular standard prescribes it. In addition, this guidance expands disclosures about fair value measurements. In February 2008,
the FASB issued additional guidance that (1) deferred the effective date of the original guidance for one year for certain nonfinancial assets and nonfinancial liabilities and (2) removed certain leasing transactions from the scope of the
original guidance. We did not elect to present our nonfinancial assets and liabilities at their fair value.

Business
combinations and noncontrolling interests in consolidated financial statementsIn December 2007, the FASB issued accounting guidance on business combinations and noncontrolling interests in consolidated financial statements. The
guidance on business combinations requires the acquiring entity in a business combination to recognize the assets acquired and liabilities assumed. Further, it also changes the accounting for acquired in-process research and development assets,
contingent consideration, partial acquisitions and transaction costs. Under the guidance on noncontrolling interests, all entities are required to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated
financial statements. In addition, transactions between an entity and noncontrolling interests will be treated as equity transactions. This guidance is effective for financial statements issued for fiscal years beginning after December 15,
2008. Our adoption of this guidance did not have a material effect on our consolidated financial statements.

2. DEBT

Debt consists of the following as of September 30, 2009 and December 31, 2008:



|                        |  |              |  |                   |       |                  |   |      
|----------------------- |  | ------------ |  | ----------------- | ----- | ---------------- | - | -----
|                        |  | MaturityDate |  | September 30,2009 |       | December 31,2008
|Note payable            |  | April 2011   |  | $                 | 2,042 |                  | $ | 2,917
|Revolver                |  | April 2011   |  |                   | 2,600 |                  |   | 3,400
|                        |  |              |  |                   |       |                  |   |      
|                        |  |              | 
|Total                   |  |              |  |                   | 4,642 |                  |   | 6,317
|Less current maturities |  |              |  |                   | 1,167 |                  |   | 1,167
|                        |  |              |  |                   |       |                  |   |      
|                        |  |              | 
|Long-term debt          |  |              |  | $                 | 3,475 |                  | $ | 5,150
|                        |  |              |  |                   |       |                  |   |      

Our note payable relates to the acquisition of certain assets and the assumption of
certain liabilities of Hi-Mark, LLC. Hi-Mark is principally owned by Kevin Austin, our Executive Vice President of Product Architecture. Our quarterly principal payments are approximately $0.3 million plus interest at a fixed annual rate of 8.0%.
This note matures in April 2011, but all remaining amounts would become immediately due and payable upon a change in control (as defined in the Note Amendment) of TRX.

Our credit agreement with ACB provides for a senior secured revolving credit facility with aggregate principal commitments not to exceed $10.0 million, which includes a $2.0 million letter of credit
subfacility. Any outstanding letters of credit on this subfacility reduce the borrowing capacity of the credit agreement. A loan under the credit agreement may be a Base Rate loan or a LIBOR loan, at the option of TRX. Interest under the credit
agreement accrues at an interest rate indexed to the prime rate as announced publicly by ACB from time to time (the Base Rate) or LIBOR (plus 1.5% for Base Rate loans and 2.75% for LIBOR loans) for the revolving credit facility. For
letters of credit, the letter of credit fee is equal to the Applicable Rate (as defined in the credit agreement) times the daily amount available to be drawn under the letter of credit. Overdue amounts bear a fee of 2% per annum above the rate
applicable to these amounts. We capitalized $215 of issuance cost related to this facility and our letter of credit, which is amortized as interest expense over the specific terms of the facility and letter of credit.



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The Credit Agreement requires us to meet certain financial tests including a consolidated
leverage ratio, and a fixed charge coverage ratio. The Credit Agreement also contains additional covenants which, among other things, require us to deliver to ACB specified financial information, including annual and quarterly financial information,
and limit our ability to (or to permit any subsidiaries to), subject to various exceptions and limitations, (i) merge with other companies, (ii) create liens on our property, (iii) incur debt obligations, (iv) enter into
transactions with affiliates, except on an arms-length basis, or (v) dispose of property.

BCD Holdings N.V. (BCD
Holdings), the parent of our majority shareholder, is the guarantor to our credit agreement. We pay BCD Holdings a guarantee fee of 250-350 basis points, depending on borrowing levels under the Credit Agreement.

As of September 30, 2009, we are in compliance with all financial covenants in the Credit Agreement, $5.9 million was available for
borrowing, there were $2.6 million of borrowings against the facility and there was a $1.5 million letter of credit against this facility related to the lease of our Atlanta office. As of September 30, 2009, the interest rate on our outstanding
borrowings was 3.06%.

On October 26, 2009 we amended our Credit Agreement with ACB. The amendment increases the interest
rate for loans made under the credit agreement, generally by 25 basis points to LIBOR plus 300 basis points, with a new minimum borrowing rate (4.25%), and extends the maturity date to April 30, 2011. The amendment also maintains BCD Holdings
as a guarantor to the Credit Agreement. There were no changes to financial or other covenants from the prior Credit Agreement, and we will continue to pay BCD a guarantee fee of 250-350 basis points, depending on borrowing levels under the Credit
Agreement.

3. RELATED-PARTY TRANSACTIONS

BCD Travel is majority-owned by the parent of our majority shareholder, BCD Holdings. In June 2008, we and BCD Travel provided mutual notice of the parties intent not to renew the Amended and
Restated Master Agreement by and between TRX Technology and BCD Travel (the Master Agreement). Effective January 1, 2009, the Master Agreement was extended for the period January 1, 2009 through August 31, 2009 for the
CORREX Services only. The provisions of the Master Agreement expired on December 31, 2008 with regard to all other services covered by that agreement. A separate three year agreement with an effective date of January 1, 2009 was entered
into between the parties for the RESX Services, which had previously been covered under the Master Agreement. During the three and nine months ended September 30, 2009, we recognized transaction and other revenues from BCD Travel, totaling $928
and $2,979, respectively. During the three and nine months ended September 30, 2008, we recognized transaction and other revenues from BCD Travel, totaling $1,790 and $5,633, respectively. At September 30, 2009 and December 31, 2008,
respectively, $692 and $1,392 was receivable from BCD Travel.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis presents the factors that had a material effect on our results of operations during the nine months ended
September 30, 2009 and 2008. Also discussed is our financial position as of September 30, 2009. You should read this discussion in conjunction with our unaudited consolidated financial statements and the notes to those unaudited
consolidated financial statements included elsewhere in this report and in our Annual Report on Form 10-K. This Managements Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See
Cautionary Notice Regarding Forward-Looking Statements for a discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

TRX is a global technology company. We develop and
host software applications to automate manual processes and track transaction data, enabling our clients to optimize performance and control costs. We are a leading provider to the travel industry and expect to eventually include growth in
industries beyond travel, such as financial services and health care. For the foreseeable future, we intend to focus our efforts on the large opportunities within the travel industry. We deliver our technology applications as a service over the
Internet to travel agencies, corporations, travel suppliers, government agencies, credit card associations, credit card issuing banks, and third-party administrators. TRX is headquartered in Atlanta, Georgia with operations and associates in North
America, Europe, and Asia.

We are focused on transaction-based revenue from data reporting, reservation processing and online
booking technologies that provide economies of scale to our clients and to us. These transactions are an integral part of our clients daily operations. Transaction levels, and thus revenues, fluctuate with our clients business levels,
which are impacted by market changes and seasonality. We supplement our transaction-based revenue with short-term projects to implement, customize or enhance our service delivery.

A significant portion of our revenue is derived from long-term contracts with several large clients. Our largest client, Expedia and its
affiliates, accounted for 42% and 45% of our total revenues in the three months ended September 30, 2009 and 2008, respectively and 43% and 35% of our total revenues in the nine months ended September 30, 2009 and 2008, respectively.
Expedia has been a client since its launch in 1996. In December 2006, we replaced our existing contracts with Expedia with a Master Services Agreement (the Expedia Agreement). The Expedia Agreement continues through 2010; we are in
negotiation with Expedia to extend the Expedia Agreement through 2011 for certain services. Based on discussions with Expedia, we expect that licensing and services that will generate over half of our 2009 revenues from Expedia will cease at the end
of 2010. We expect that 2010 revenues from Expedia will be 10-15% lower than in 2009, and that 2011 revenues from Expedia will be approximately one-third their 2009 level, assuming we ultimately come to agreement on renewal terms with Expedia. The
agreement being negotiated does not contain minimum volume commitments from Expedia. We can give no assurance that a renewal will occur, nor that we will retain business from Expedia during the renewal term or beyond.

In addition, a number of global airlines have recently announced capacity reductions, some permanent and others seasonal, due to continuing
weak air travel demand. In general, reduced airline capacity results in lower transaction volumes for us. Based on our expectation of reduced revenues from Expedia and from lower transaction volumes, it is likely that our revenues, operating
results and cash flows will be adversely impacted and the impact will be material, unless sufficiently offset by new revenue growth, further cost reductions, or a combination of the two.

Our scale and process-reengineering expertise has allowed us to reduce our costs in several areas when measured on a per transaction basis,
and we continue to take steps to reduce our cost structure in the normal course of business. Additionally, in September 2008 we announced a cost reduction program specifically designed to align our costs with expectations of reduced 2009 revenues.
Reductions made in 2008 and thus far in 2009 included personnel, leasehold and other operations-related costs. We have established pricing models that provide volume-based discounts to share scale efficiencies with our clients to ensure long-term,
mutually-beneficial relationships. As a result, our average revenue per transaction has generally declined over the last few years. We expect it to continue to decline in the future because of scale efficiencies, as well as trends in the travel
processing supply chain that are putting negative pressure on our revenue per transaction.

On July 13, 2007, TRX and
Citibank executed an amendment to the Master Services Agreement dated February 1, 2002, as amended. The Amendment extends the scheduled expiration date of the Citibank Master Services Agreement from January 13, 2009 to December 31,
2010. The primary purpose of the Amendment was for TRX to sell a $4.5 million limited perpetual license of certain source code to Citibank in order for Citibank to perform certain services in-house that had previously been hosted by TRX. TRX
continues to perform maintenance and project services for Citibank. As a result of the Amendment, recurring revenues from Citibank generated in 2008 were significantly less than revenues generated in 2007 and continue to decline in 2009.

The Amendment also provided that we would continue to provide the hosting services historically provided to Citibank until the sale of
the perpetual license occurred. The license sale was completed during the second quarter of 2008 and, as a result, we recognized $4.5 million of revenue, the contractually-stated sales price of the license. In addition to the license sale,
Citibank also paid



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us approximately $1.4 million for certain costs and assets that we had purchased in the past for Citibanks benefit, which are essential to the functionality of the technology.

The sale of the license, the compensation for the assets referred to above, and the hosting services are all elements of the Amendment.
In accordance with the FASB Standards Codification, as there was no vendor specific objective evidence of the fair value of the perpetual license at the effective date of the Amendment, revenue associated with the hosting services was deferred until
April 30, 2008, when the sale of the perpetual license occurred. We recognized revenue for the hosting services of $10.0 million in the second quarter of 2008. All costs associated with the hosting services were expensed as incurred
from July 2007 through April 2008.

Effective January 1, 2009, we extended the Amended and Restated Master Agreement by
and between TRX Technology and BCD Travel (the Master Agreement) for the period January 1, 2009 through August 31, 2009 for the CORREX Services only. The provisions of the Master Agreement expired on December 31, 2008 with
regard to all other services covered by that agreement. A separate three year agreement with an effective date of January 1, 2009 was entered into between the parties for the RESX Services, which had previously been covered under the Master
Agreement.

In March 2009, as part of a program to reduce our cost structure, we decided not to pay bonuses globally for 2008
performance or provide funding for the 401K program in the U.S. These expenses were accrued during 2008. The reversal of the amounts accrued for the bonuses and 401K program funding resulted in a reduction of employee related expenses of $1.8
million during the first quarter of 2009.

Industry factors impacting our operating results include the channel shifts toward
online bookings and direct distribution, cost compression in the travel processing supply chain, use of corporate credit cards, reduction in airline seat capacity, changing and increasing access methods to reach supplier inventory, reduction in
supplier commission rates, global distribution system (GDS) incentive levels, and overall economic conditions. Our estimates of future results are primarily affected by assumptions of transaction volumes, pricing levels, our ability to
efficiently scale with our clients, and client retention and acquisition. These anticipated results may be impacted by seasonality of the travel industry and credit card volumes related to travel.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles
generally accepted in the U.S. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On
an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates. We believe that, of our significant accounting policies described in Note 1 of the notes to our consolidated financial statements
included elsewhere in this Form 10-Q and described in our Form 10-K for the year ended December 31, 2008, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are
the most critical to assist investors in fully understanding and evaluating our consolidated financial condition and results of operations.

Revenue recognition. A significant portion of our revenue is recognized based on objective criteria that do not require significant estimates or uncertainties. Accordingly, revenues recognized
under these methods do not require the use of significant estimates that are susceptible to change.

We recognize revenue when
certain other consulting or other services are combined with our transaction processing revenues and when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) services have been performed, (3) the
fee for services is fixed or determinable, and (4) collectability is reasonably assured. Generally, these criteria are considered to have been met as follows:



| |  |  | for transaction revenue, in which we perform ticketing, file-finishing, data consolidation and reporting, and customer care services, when the services
are provided;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | for short-term client-specific customizations, which do not generate direct on-going incremental transaction revenue, when the customization has been
delivered to our client; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | for implementation and set-up fees, which generate direct on-going incremental transaction revenue, over the life of the underlying transaction service
agreement. Related costs are deferred and recognized as expenses over the life of the underlying transaction service agreement.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

With respect to the Citibank amendment discussed above in the Overview section, the sale of the license, the compensation for the assets referred to above, and the hosting services are all
elements of the Amendment. In accordance with the FASB Standards Codification, as there was no vendor specific objective evidence of the fair value of the perpetual license, revenue associated with the hosting services was deferred until the
sale of the perpetual license, which occurred on April 30, 2008. We recognized revenue for the



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hosting services of $10.0 million in the second quarter of 2008. All costs associated with the hosting services were expensed as incurred from July 2007 through April 2008.

Internal-Use Software Development Costs. We account for internal-use software development costs in accordance with the applicable
guidance which specifies that software costs, including internal payroll costs, incurred in connection with the development or acquisition of software for internal use is charged to technology development expense as incurred until the project enters
the application development phase. Costs incurred in the application development phase are capitalized and depreciated over an estimated useful life of three years, beginning when the software is ready for use.

Each of our software products enters the application development phase upon completion of a detailed program in which (1) we have
established that the necessary skills, hardware and software technology are available to us to produce the product, (2) the completeness of the detailed program design has been confirmed by documentation and tracing the design to product
specifications, and (3) the detailed program design has been reviewed for high-risk development issues (for example, novel, unique, unproven function and features or technological innovations), and any uncertainties related to identified
high-risk development issues have been resolved through coding and testing. Significant judgment is required in determining when the application development phase has begun.

Goodwill and other intangible assets. Goodwill represents the excess of the purchase price over the fair value of assets acquired. We
test goodwill for impairment annually as of September 30 or more frequently if an event occurs or circumstances change that more likely than not reduce the value of a reporting unit below its carrying value. We have one reporting unit as
defined by the applicable guidance. For purposes of goodwill impairment testing, we compare the fair value of the reporting unit determined on the basis of expected discounted future cash flows with its carrying amount, including goodwill. We also
compare the guideline public company and guideline transaction methods to the value derived from the income approach as a test of the reasonableness of our discounted cash flow analysis. If the carrying amount of the reporting unit exceeds its fair
value, goodwill is considered impaired. If goodwill is considered impaired, the impairment loss to be recognized is measured as the amount by which the carrying amount of the goodwill exceeds implied fair value of that goodwill. As a result of
declining market conditions from January 1, 2009 to March 31, 2009, and their related effect on current and anticipated volumes and pricing with clients, we determined that it was necessary to test goodwill for impairment as of
March 31, 2009. We used the same approach that was used during the 2008 impairment analysis, which required estimates of future operating results and cash flows of the reporting unit discounted using estimated discount rates ranging from 16% to
18%. The estimates of future operating results and cash flows were principally derived from an updated long-term financial outlook in light of the first quarter of 2009 market conditions and the challenging economic outlook. As a result of our
impairment test, we determined that goodwill was fully impaired and recorded a noncash impairment charge to goodwill of $37.4 million during the first quarter of 2009, which is included in Impairment of goodwill, intangible assets and other
long-lived assets in our unaudited consolidated statements of operations.

The outcome of our goodwill impairment
analysis as of March 31, 2009 indicated that the carrying amount of certain acquisition-related intangible assets or asset groups may not be recoverable. We assessed the recoverability of the acquisition-related intangible assets by determining
whether the unamortized balances could be recovered through undiscounted future net cash flows. We determined that certain of the acquisition-related intangible assets were impaired primarily due to the revised lower revenue forecasts associated
with the products incorporating the trademarks and patents, customer relationships and non-compete agreements. We measured the amount of impairment by calculating the amount by which the carrying value of the assets exceeded their estimated fair
values, which were based on projected discounted future net cash flows. As a result of this impairment analysis, we recorded a noncash impairment charge of approximately $1.1 million during the first quarter of 2009, which is included in
Impairment of goodwill, intangible assets and other long-lived assets in our unaudited consolidated statements of operations.

Impairment of long-lived assets. We record our long-lived assets, such as property and equipment and software development costs, at cost. We review the carrying value of our long-lived assets for
possible impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. We evaluate these assets by examining estimated future cash flows to determine if their current recorded value is
impaired. We evaluate these cash flows by using weighted probability techniques as well as comparisons of past performance against projections. Assets may also be evaluated by identifying independent market values. If we determine that an
assets carrying value is impaired, we will record an impairment of the carrying value of the identified asset as an operating expense in the period in which the determination is made. During the first quarter of 2009, we experienced a
continued decline in our business that led us to revise our short-term and long-term financial forecasts which indicated that an impairment of long-lived assets may have occurred. Accordingly, we performed an analysis comparing the undiscounted cash
flows estimated to be generated by the long-lived assets to the carrying amounts of those assets. The estimates of future operating results and cash flows are derived from our updated long-term financial forecast. The results of the comparison of
our undiscounted cash flows to the carrying value of the long-lived assets indicated a requirement to move to a fair value approach. The values of the intangible long lived assets were determined using both the cost approach and an income approach.
The relief from royalty method was the specific income approach utilized. We also used an appraisal of certain long-lived fixed assets to support our conclusions related to those assets. As a result, we recorded a long-lived asset impairment noncash
charge during the first quarter of 2009 of $5.2



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million, which is included in Impairment of goodwill, intangible assets and other long-lived assets in our unaudited consolidated statements of operations.

Transaction processing provisions. We have recorded estimates to account for processing errors made in the ticketing or fareloading
process that result in tickets being issued at incorrect prices or from agency commissions being miscalculated. Our reserve for processing errors is based on several factors including historical trends, average debit memo lag time and timely
identification of errors. Transaction processing provisions were $0 and $0.3 million during the three months ended September 30, 2009 and 2008, respectively, and $0.3 million and $0.8 million during the nine months ended September 30, 2009
and 2008, respectively, and are included as operating expenses in our consolidated statements of operations.

Results of Operations

The following table sets forth selected statement of operations data expressed as a percentage of transaction and other
revenues for each of the periods indicated.

Comparison of Three and Nine Months Ended September 30, 2009 and September 30,
2008

The following tables set forth comparative revenue and expense items by type, in dollars and as a percentage of
transaction and other revenue, for the three and nine months ended September 30, 2009 and 2008, respectively:



|                                     |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|------------------------------------ |  | -------------------------------- | ------ | - | ---- | --- | - | ------ | - | ------ | - |  | --- | - |  | - | ------ | - |  | --- | --
|                                     |  | Three Months Ended September 30, |       
|                                     |  | 2009                             |        |   | 2008 |     |   | Change |  
|                                     |  | (dollars in thousands)           |       
|Revenue:                             |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|Transaction processing               |  | $                                | 12,085 |   |      | 79  | % |        | $ | 16,053 |   |  | 82  | % |  | $ | (3,968 | ) |  | (25 | )%
|Data reporting                       |  |                                  | 3,152  |   |      | 21  |   |        |   | 3,507  |   |  | 18  |   |  |   | (355   | ) |  | (10 | ) 
|                                     |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|Transaction and other revenues       |  |                                  | 15,237 |   |      | 100 | % |        |   | 19,560 |   |  | 100 | % |  |   | (4,323 | ) |  | (22 | )%
|Client reimbursements                |  |                                  | 103    |   |      |     |   |        |   | 347    |   |  |     |   |  |   |        |   |  |     |   
|                                     |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|Total revenues                       |  |                                  | 15,340 |   |      |     |   |        |   | 19,907 |   |  |     |   |  |   |        |   |  |     |   
|Expenses:                            |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|Operating                            |  |                                  | 9,164  |   |      | 60  |   |        |   | 12,127 |   |  | 62  |   |  |   | (2,963 | ) |  | (24 | ) 
|Selling, general, and administrative |  |                                  | 3,083  |   |      | 20  |   |        |   | 3,576  |   |  | 18  |   |  |   | (493   | ) |  | (14 | ) 
|Technology development               |  |                                  | 927    |   |      | 6   |   |        |   | 3,012  |   |  | 15  |   |  |   | (2,085 | ) |  | (69 | ) 
|Client reimbursements                |  |                                  | 103    |   |      |     |   |        |   | 347    |   |  |     |   |  |   | (244   | ) |  | (70 | ) 
|Depreciation and amortization        |  |                                  | 1,325  |   |      | 9   |   |        |   | 2,742  |   |  | 14  |   |  |   | (1,417 | ) |  | (52 | ) 
|Interest (expense) income:           |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|Interest income                      |  |                                  | 5      |   |      |     |   |        |   | 30     |   |  |     |   |  |   | (25    | ) |  | (83 | ) 
|Interest expense                     |  |                                  | (203   | ) |      |     |   |        |   | (123   | ) |  |     |   |  |   | 80     |   |  | 65  |   
|Income tax provision                 |  |                                  | 100    |   |      |     |   |        |   | 86     |   |  |     |   |  |   | 14     |   |  | 16  |   
|                                     |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   
|                                     |  |                                  |        |   |      |    
|Net income (loss)                    |  | $                                | 440    |   |      |     |   |        | $ | (2,076 | ) |  |     |   |  | $ | 2,516  |   |  |     |   
|                                     |  |                                  |        |   |      |     |   |        |   |        |   |  |     |   |  |   |        |   |  |     |   



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|                                                                      |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|--------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | --- | - | ------ | - | ------ | - |  | --- | - |  | - | ------- | - |  | ---- | --
|                                                                      |  | Nine Months Ended September 30, |        
|                                                                      |  | 2009                            |         |   | 2008 |     |   | Change |  
|                                                                      |  | (dollars in thousands)          |        
|Revenue:                                                              |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|Transaction processing                                                |  | $                               | 36,366  |   |      | 81  | % |        | $ | 50,250 |   |  | 64  | % |  | $ | (13,884 | ) |  | (28  | )%
|Data reporting                                                        |  |                                 | 8,710   |   |      | 19  |   |        |   | 28,729 |   |  | 36  |   |  |   | (20,019 | ) |  | (70  | ) 
|                                                                      |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|Transaction and other revenues                                        |  |                                 | 45,076  |   |      | 100 | % |        |   | 78,979 |   |  | 100 | % |  |   | (33,903 | ) |  | (43  | )%
|Client reimbursements                                                 |  |                                 | 350     |   |      |     |   |        |   | 621    |   |  |     |   |  |   |         |   |  |      |   
|                                                                      |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|Total revenues                                                        |  |                                 | 45,426  |   |      |     |   |        |   | 79,600 |   |  |     |   |  |   |         |   |  |      |   
|Expenses:                                                             |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|Operating                                                             |  |                                 | 27,363  |   |      | 61  |   |        |   | 39,527 |   |  | 50  |   |  |   | (12,164 | ) |  | (31  | ) 
|Selling, general, and administrative                                  |  |                                 | 8,622   |   |      | 19  |   |        |   | 12,811 |   |  | 16  |   |  |   | (4,189  | ) |  | (33  | ) 
|Technology development                                                |  |                                 | 3,393   |   |      | 8   |   |        |   | 10,606 |   |  | 13  |   |  |   | (7,213  | ) |  | (68  | ) 
|Client reimbursements                                                 |  |                                 | 350     |   |      |     |   |        |   | 621    |   |  |     |   |  |   | (271    | ) |  | (44  | ) 
|Impairment of goodwill, intangible assets and other long-lived assets |  |                                 | 43,692  |   |      | 97  |   |        |   |       |   |  |     |   |  |   | 43,692  |   |  |     |   
|Depreciation and amortization                                         |  |                                 | 5,112   |   |      | 8   |   |        |   | 8,047  |   |  | 10  |   |  |   | (2,935  | ) |  | (36  | ) 
|Interest (expense) income:                                            |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|Interest income                                                       |  |                                 | 15      |   |      |     |   |        |   | 97     |   |  |     |   |  |   | (82     | ) |  | (85  | ) 
|Interest expense                                                      |  |                                 | (595    | ) |      |     |   |        |   | (348   | ) |  |     |   |  |   | 247     |   |  | 71   |   
|Income tax (benefit) provision                                        |  |                                 | (533    | ) |      |     |   |        |   | 86     |   |  |     |   |  |   | (619    | ) |  | (720 | ) 
|                                                                      |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   
|                                                                      |  |                                 |         |   |      |    
|Net (loss) income                                                     |  | $                               | (43,153 | ) |      |     |   |        | $ | 7,651  |   |  |     |   |  | $ | (50,804 | ) |  |      |   
|                                                                      |  |                                 |         |   |      |     |   |        |   |        |   |  |     |   |  |   |         |   |  |      |   

Transaction processing revenues. The decrease for both the three and nine
months ended September 30, 2009 compared to the same periods in the prior year was primarily due to a reduction in corporate and leisure travel volumes related to the economic downturn in the global travel industry and as a result of the
decreased level of services provided to Expedia as previously discussed. We expect revenues per transaction to continue to decline in the future because of scaled pricing we offer to clients for increased volume, as well as trends in the travel
processing supply chain that are putting negative pressure on our revenue per transaction.

Data reporting revenues.
The decrease in data reporting revenues for the three months ended September 30, 2009 compared to the same period in the prior year was primarily due to volume reductions and customer churn as a result of the economic downturn in the global
travel industry. Additionally, the decrease in data reporting revenues for the nine months ended September 30, 2009 compared to the same period in the prior year was primarily due to the recognition of $10.0 million of routine data reporting
revenues from Citibank that were previously deferred and the sale of a $4.5 million limited perpetual license to Citibank in the second quarter of 2008, as previously discussed.

Operating expenses. The decrease in operating expenses for both the three and nine months ended September 30, 2009 compared to
the same periods in the prior year was primarily due to the reduction in our revenues and a program to reduce our cost structure primarily through personnel reductions in preparation for significantly lower revenues in 2009. Additionally, we
recorded $0.4 million in lease impairment expense related to one of our UK offices closing in the third quarter of 2009 and one-time reductions in personnel-related accrued expenses of $0.7 million in the first quarter of 2009, which were partially
offset by severance expenses during the same period.

Selling, general and administrative expenses. The decrease in
selling, general and administrative expenses for both the three and nine months ended September 30, 2009 compared to the same periods in the prior year was primarily due to a program to reduce our cost structure primarily through reductions in
personnel, contract labor and travel in preparation for expected revenues in 2009. Additionally, we recorded one-time reductions in personnel-related accrued expenses of $0.8 million in the first quarter of 2009, which were partially offset by
severance expenses during the same period.

Technology development expenses. The decrease in technology development
expense for both the three and nine months ended September 30, 2009 compared to the same periods in the prior year was primarily due to a program to reduce our cost structure primarily through reductions in personnel and contract labor in
preparation for significantly lower revenues in 2009. Additionally, we recorded one-time reductions in personnel-related accrued expenses of $0.3 million in the first quarter of 2009, which were partially offset by severance expenses during the same
period.

Impairment of goodwill, intangible assets and other long-lived assets. We recorded an impairment charge of
$43.7 million during the first quarter of 2009 as discussed above.



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Depreciation and amortization. The decrease for the three and nine months ended
September 30, 2009 compared to the same periods in the prior year was primarily due to a decrease in our capital additions and a reduction in our property and equipment balances as a result of our impairment of other long-lived assets recorded
in the first quarter of 2009.

Interest income. The decrease for both the three and nine months ended
September 30, 2009 compared to the same periods in the prior year was primarily due to reduced average cash balances available for investment.

Interest expense. The increase for both the three and nine months ended September 30, 2009 compared to the same periods in the prior year was primarily due to additional interest expense
related to our credit facility borrowings, which were partially offset by lower interest rates.

Income tax provision
(benefit).Income tax provision of $0.1 million was recorded in the three months ended September 30, 2009, related to our alternative minimum tax for our India operations, additional state tax expense based on the completion of the 2008
state tax returns and an adjustment to the deferred tax recorded in Germany for net operating losses. Income tax benefit of $0.5 million was recorded in the nine months ended September 30, 2009 due to the reversal of deferred tax liabilities
recorded in 2008 related to our goodwill, which was written-off during the first quarter of 2009.

Liquidity and Capital Resources

We fund our ongoing operations primarily with cash from operating activities. The underlying drivers of cash from operating
activities include cash receipts from the sale of our products and services and cash payments to our employees and service providers. Most of our larger clients remit payment for our services 30 to 90 days in advance of our service delivery. Advance
payments from clients are recorded as customer deposits and deferred revenue until the service is performed.

The global
financial markets have been and continue to be in turmoil, with volatility in the equity and credit markets and with many financial and other institutions experiencing significant financial distress. At September 30, 2009, our principal sources
of liquidity were cash and cash equivalents of $7.8 million and $5.9 million of availability under our revolving credit facility with Atlantic Capital Bank (ACB). We had $2.6 million of borrowings outstanding under our credit facility at
September 30, 2009. Neither our access to nor the value of our cash equivalents have been negatively affected by the recent liquidity problems of financial institutions. Although we have been prudent in our strategy for our anticipated
near-term liquidity needs, it is not possible to accurately predict how the financial market turmoil and the macroeconomic conditions may affect our financial position, results of operations or cash flows. Additional failures of financial and other
institutions could impact our customers ability to pay us, reduce amounts available under our credit facility, cause losses to the extent cash amounts or the value of securities exceed government deposit insurance limits, and restrict our
access to the equity and debt markets. A continuation of the recent turmoil in the capital and credit markets and the general economic downturn could adversely impact the availability, terms and/or pricing of financing if we need additional
liquidity. We would experience liquidity problems if we are unable to obtain sufficient additional financing as our debt becomes due, or we otherwise need additional liquidity. Adverse economic conditions, increased competition, or other
unfavorable events also could affect our liquidity.

On October 26, 2009 we amended our Credit Agreement with ACB. The
amendment increases the interest rate for loans made under the credit agreement, generally by 25 basis points to LIBOR plus 300 basis points, with a new minimum borrowing rate (4.25%), and extends the maturity date to April 30, 2011. The
amendment also maintains BCD Holdings as a guarantor to the Credit Agreement. There were no changes to financial or other covenants from the prior Credit Agreement, and we will continue to pay BCD a guarantee fee of 250-350 basis points, depending
on borrowing levels under the Credit Agreement.

Net cash provided by operating activities was $4.7 million in the nine months
ended September 30, 2009 compared to $4.9 million in the nine months ended September 30, 2008. Our change in working capital for the nine months ended September 30, 2009 is primarily the result of decreasing revenues.

Net cash used in investing activities was $2.5 million in the nine months ended September 30, 2009, compared to $5.8 million in the
nine months ended September 30, 2008. The driver of our 2009 investing activities is our capital expenditures, which include costs associated with internally developed software, as well as infrastructure required to support and maintain our
existing systems and opportunities to reduce costs. As of September 30, 2009, we had no material commitments related to capital expenditures.

Net cash used in financing activities was $1.7 million in the nine months ended September 30, 2009, compared to net cash provided by financing activities of $3.7 million in the nine months ended
September 30, 2008. The primary drivers for the first nine months of 2009 were repayments on both our credit facility and note payable.

As of September 30, 2009, we are in compliance with all financial covenants of our revolving credit facility with ACB, $5.9 million was available for borrowing, there were $2.6 million of borrowings
against the facility and there was a $1.5 million letter of



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credit against this facility related to the lease of our new Atlanta office. As of September 30, 2009, the effective rate on our outstanding borrowings was 3.06%.

Seasonality

Our business
experiences seasonal fluctuations, reflecting seasonal trends for the purchase of air travel by both leisure and corporate travelers as well as credit card volume related to corporate travel. For example, traditional leisure air travel bookings are
higher in the first two calendar quarters of the year in anticipation of spring and summer vacations and holiday periods. Corporate travel air bookings and credit card spending levels are generally higher in the first and third calendar quarters of
the year. Business and consumer travel bookings typically decline during the fourth quarter of each calendar year. Accordingly, our fourth calendar quarter generally reflects lower revenues as compared to the first three calendar quarters.

Inflation and Changing Prices

We do not believe that inflation and changing prices have materially impacted our results of operations during the past two years.

Recent Accounting Pronouncements

Codification and the Hierarchy of
Generally Accepted Accounting PrinciplesIn June 2009, the Financial Accounting Standards Board (FASB) issued guidance that identifies the sources of accounting principles and the framework for selecting the principles used in
the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. Rules and interpretive releases of the SEC under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. This guidance was effective for financial statements issued for interim and annual periods ending after September 15, 2009 and did not have material effect on our consolidated
financial position and results of operations.

Accounting for transfers of financial assetsIn June 2009, the
FASB issued accounting guidance that in part, amended the derecognition guidance to eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. This guidance is effective for financial asset
transfers occurring after the beginning of an entitys first fiscal year that begins after November 15, 2009. We do not expect that the implementation of this guidance will have a material effect on our consolidated financial position and
results of operations.

Consolidation of variable-interest entitiesIn June 2009, the FASB issued accounting
guidance that amends the consolidation guidance applicable to variable interest entities. The provisions of the new guidance significantly affect the overall consolidation analysis under the previous guidance. This guidance is effective as of the
beginning of the first fiscal year that begins after November 15, 2009. We do not expect that the implementation of this guidance will have a material effect on our consolidated financial position and results of operations.

Subsequent eventsIn May 2009, the FASB issued accounting guidance that establishes general standards of accounting for and
disclosures of subsequent events that occurred after the balance sheet date but prior to the issuance of financial statements. This guidance is effective for financial statements issued for interim or fiscal years ending after June 15, 2009.
The adoption of this standard did not have a material effect on our consolidated financial position and results of operations.

Recognition and presentation of other-than-temporary impairmentsIn April 2009, the FASB issued accounting guidance on the recognition and presentation of other-than-temporary impairments. This new guidance amends
the existing impairment guidance relating to certain debt securities and requires a company to assess the likelihood of selling the security prior to recovering its cost basis. When a security meets the criteria for impairment, the impairment
charges related to credit losses would be recognized in earnings, while non-credit losses would be reflected in other comprehensive income. This guidance is effective for interim and annual reporting periods ending after June 15, 2009. The
adoption of this guidance did not have a material effect on our consolidated financial position and results of operations.

Interim disclosures about fair value of financial instrumentsIn April 2009, the FASB issued accounting guidance that requires that the fair value disclosures previously required on an annual basis be included for interim
reporting periods. We adopted this guidance on April 1, 2009. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and is applied prospectively. The adoption of this guidance did not have a
material effect on our consolidated financial position and results of operations.

Determination of the Useful Life of
Intangible AssetsIn April 2008, the FASB issued guidance which provides for additional considerations to be used in determining useful lives and requires additional disclosure regarding renewals. The adoption of this guidance on
January 1, 2009 did not have a material effect on our consolidated financial statements.



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Fair value measurementsIn September 2006, the FASB issued accounting guidance
on fair value measurements, which provides a common definition of fair value and a framework for measuring assets and liabilities at fair values when a particular standard prescribes it. In addition, this guidance expands disclosures about fair
value measurements. In February 2008, the FASB issued additional guidance that (1) deferred the effective date of the original guidance for one year for certain nonfinancial assets and nonfinancial liabilities and (2) removed certain
leasing transactions from the scope of the original guidance. We did not elect to present our nonfinancial assets and liabilities at their fair value.

Business combinations and noncontrolling interests in consolidated financial statementsIn December 2007, the FASB issued accounting guidance on business combinations and noncontrolling
interests in consolidated financial statements. The guidance on business combinations requires the acquiring entity in a business combination to recognize the assets acquired and liabilities assumed. Further, it also changes the accounting for
acquired in-process research and development assets, contingent consideration, partial acquisitions and transaction costs. Under the guidance on noncontrolling interests, all entities are required to report noncontrolling (minority) interests
in subsidiaries as equity in the consolidated financial statements. In addition, transactions between an entity and noncontrolling interests will be treated as equity transactions. This guidance is effective for financial statements issued for
fiscal years beginning after December 15, 2008. Our adoption of this guidance did not have a material effect on our consolidated financial statements.

Cautionary Notice Regarding Forward-Looking Statements

Certain statements
in this Quarterly Report on Form 10-Q may constitute forward-looking statements as defined in Section 27A of the Securities Act of 1933 (the Securities Act), Section 21E of the Securities Exchange Act of 1934 (the
Exchange Act), the Private Securities Litigation Reform Act of 1995 (the PSLRA), or in releases made by the Securities and Exchange Commission (the SEC), all as may be amended from time to time. Statements
contained in this quarterly report that are not historical facts may be forward-looking statements within the meaning of the PSLRA. You can identify forward-looking statements as those that are not historical in nature, particularly those that use
terminology such as may, will, should, expect, anticipate, contemplate, estimate, believe, plan, project, predict,
potential or continue, or the negative of these, or similar terms.

Any such forward-looking
statements reflect our beliefs and assumptions and are based on information currently available to us. Forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These cautionary statements are being made pursuant
to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the safe harbor provisions of such laws. We caution investors that any forward-looking statements we make are not guarantees or
indicative of future performance.

In evaluating these forward-looking statements, you should consider the following factors,
as well as others set forth under Risk Factors in this Quarterly Report on Form 10-Q filed with the SEC and as are detailed from time to time in other reports we file with the SEC, which may cause our actual results to differ materially
from any forward-looking statement:



| |  |  | the loss of current key clients or the inability to obtain new clients;
| | - |  | -----------------------------------------------------------------------



| |  |  | volatility in the number of transactions we service;
| | - |  | ----------------------------------------------------



| |  |  | failure or interruptions of our software, hardware or other systems;
| | - |  | --------------------------------------------------------------------



| |  |  | industry declines and other competitive pressures; and
| | - |  | ------------------------------------------------------



| |  |  | our ability to control costs and implement measures designed to enhance operating efficiencies.
| | - |  | -----------------------------------------------------------------------------------------------

Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in this Quarterly Report. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the
result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.



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|Item 4T. | Controls and Procedures
|-------- | -----------------------

(a)
Evaluation of Disclosure Controls and Procedures

Our management, including our principal executive officer and principal
financial officer, concluded an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2009. Our evaluation tested controls and other procedures designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Securities and Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Based on
our evaluation, as of September, 2009, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting or in other factors that occurred during the quarter ended September 30, 2009 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

PART II  OTHER INFORMATION



|Item 1A. | Risk Factors
|-------- | ------------

You should carefully
consider the following risk factors, as well as other information contained in or incorporated by reference in this Quarterly Report on Form 10-Q. If any of the possible adverse events described below actually occur, our business, results of
operations, or financial condition would likely suffer and the market price of our common stock could decline.

Risks Related to Our
Business

A substantial portion of our revenue is generated by our key clients; a significant loss of business with any of these
clients would reduce our revenues and our results of operations and financial condition could deteriorate due to lower revenue.

Our top five client contracts accounted for approximately 69% of our total revenues thus far in 2009. Entities affiliated with Expedia, Inc., our largest client, accounted for approximately 43% of our revenue thus far in 2009. Our clients
can generally terminate their agreements with us if we do not meet specified performance or other criteria. Some clients, including Expedia.com, can terminate these agreements without cause upon notice and payment of specified fees. If agreements
with these or other key clients are terminated, or if we are unable to negotiate favorable renewal terms, our revenues and operating results would be significantly diminished.

Expedia has been a client since its launch in 1996. In December 2006, we replaced our existing contracts with Expedia with a Master Services
Agreement (the Expedia Agreement). The Expedia Agreement continues through 2010; we are in negotiation with Expedia to extend the Expedia Agreement through 2011 for certain services. Based on discussions with Expedia, we expect that
licensing and services that will generate over half of our 2009 revenues from Expedia will cease at the end of 2010. We expect that 2010 revenues from Expedia will be 10-15% lower than in 2009, and that 2011 revenues from Expedia will be
approximately one-third their 2009 level, assuming we ultimately come to agreement on renewal terms with Expedia. The agreement being negotiated does not contain minimum volume commitments from Expedia. We can give no assurance that a renewal will
occur, nor that we will retain business from Expedia during the renewal term or beyond.

In addition, a number of global
airlines have recently announced capacity reductions, some permanent and others seasonal, due to continuing weak air travel demand. In general, reduced airline capacity results in lower transaction volumes for us. Based on our expectation of reduced
revenues from Expedia and from lower transaction volumes, it is likely that our revenues, operating results and cash flows will be adversely impacted and the impact will be material, unless sufficiently offset by new revenue growth,
further cost reductions, or a combination of the two. Failure by the airlines to increase capacity or failure of the general macroeconomic climate to improve may materially affect our revenues, operating results and cash flows.

Additionally, many of our large clients prepay us for our services. Consequently, if we were to lose one or more of such prepayment
arrangements, our liquidity and working capital would be affected, which could harm our ability to grow.

We experience volatility in
the volume of transactions we service; such volatility may negatively impact our ability to provide consistent services and strain our operational capabilities.

We have experienced and expect to continue to experience significant levels of volatility in the volume of travel transactions we service. This volatility is attributable to a number of factors, including
travel industry conditions and promotional programs by our clients. Significant or unanticipated increases in transaction volume have strained and may continue to strain our operational capabilities, leading to higher costs and lower quality of
service. In addition, we may experience significantly lower transaction



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volume than expected, which would lead to decreased revenues and underutilization of our resources. Our failure to address unanticipated transaction volume may decrease our profitability and harm
our relationships with our clients.

We also experience volatility in the number and scope of project requests for the
customization of our products and services. There can be no assurance that we will be able to accurately forecast volatility related to project requests and that we will be able to meet all client project delivery mandates in a manner satisfactory
to our clients.

We also have experienced and expect to continue to experience seasonal fluctuations in our business. Business
and consumer travel bookings typically decline during the fourth quarter of each calendar year. This seasonality has caused, and will likely continue to cause, quarterly fluctuations in our operating results.

Failures of our software, hardware, and other systems could increase our operating costs, subject us to monetary damages, undermine our clients
confidence in our reliability, and cause us to lose clients or prevent us from gaining new clients.

Delivering our
services requires the successful integration and operation of a network of software, computer hardware, and telecommunications equipment. A failure of any element in this network could partially or completely disrupt our activities, which could
materially adversely affect our business, financial condition or results of operations by causing us to lose clients, prevent us from gaining new clients, or result in our owing monetary damages. Third parties provide some of these elements and,
accordingly, they are not within our control. In addition, this network is vulnerable to interruption from power failures, telecommunications outages, natural disasters, computer viruses, physical or electronic break-ins, and other network service
outages and disruptions. The loss of one or more of our facilities or failures of our software, hardware, and other systems could result in delays, service interruptions, service errors or loss of critical data and, therefore, significantly
undermine our clients confidence in our reliability and diminish the TRX brand name. We cannot guarantee that our back-up systems or disaster recovery plans will adequately protect against such failures. These failures or other interruptions
may be costly to remedy as our business interruption or other insurance may not protect us fully against any losses that may result.

Interruptions in our ability to access third-party computer systems could impair the quality of our service.

We and our clients rely on third-party computer systems, including the computerized reservation systems serving the airline industry, to make and complete travel reservations. We also rely on the compatibility of our proprietary software
with these computer systems. Interruptions in our ability to access these systems or the failure of our software to interact with these systems would significantly harm our business and operating results by causing us to lose clients, preventing us
from gaining new clients, or resulting in our owing monetary damages.

Failure to meet our clients performance expectations and to
provide their customers with high quality customer service could cause us to lose clients or prevent us from gaining new clients.

Our clients expect us to maintain high levels of service quality for their businesses. In many cases, specific performance criteria such as service levels, average response time, and timely processing are
included in our contracts with clients. Any failure by us to meet specified or otherwise expected performance criteria or to provide the level of service required by our clients could lead to financial penalties, the deterioration of our
relationships with our clients, and a loss of credibility in the marketplace. Dissatisfied clients may choose to terminate or not renew their contracts with us or seek services from other sources. This could reduce our revenues and harm our
operating results, as well as make it more difficult to attract new clients.

Our strategy of sales through distributors may not be
successful.

We currently sell our products and services directly, as well as through a network of distributors, such
as American Express, Expedia, Inc. and BCD Travel. In many cases we must rely on the efforts of our partners to sell and implement our products and services. Expected growth may not materialize as quickly as we are anticipating or at all, or
distributors may decide to discontinue this relationship with us. Additionally, poor performance by our partners could cause harm to our reputation with the end user corporations and travelers.

Our sales and implementation cycle is lengthy and variable, depends upon factors outside our control, and could cause us to expend significant time
and resources prior to earning associated revenues.

The typical sales cycle, whether direct sales or through our
distributor network, for our services is lengthy and unpredictable, requires pre-purchase evaluation by a significant number of employees in our clients organizations, and often involves a significant operational decision by our clients.
Moreover, a purchase decision by a potential large client typically requires the approval of several senior decision makers. Our sales cycle for our larger clients is generally between six and eighteen months. Additionally, the implementation and
testing of our services can take up to one year, and unexpected implementation delays and difficulties can occur.



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This lengthy and variable sales and implementation cycle may have a negative impact on the timing of our revenues, causing our revenues and operating results to vary significantly from period to
period.

We have a history of net losses, and we cannot assure you that we will become profitable.

We incurred net losses in every year of our operations prior to 2006 and again in 2007. As of September 30, 2009, we have incurred a net
loss of $43.2 million in 2009 and had an accumulated deficit of $96.0 million. We cannot assure you that we will be able to become profitable or, if we become profitable, will be able to sustain it, on a quarterly or annual basis. Our results of
operations will be harmed if our revenues do not increase or are insufficient for us to achieve or sustain profitability.

Failure to
manage our growth, or to recruit or retain qualified employees, could reduce our revenues or net income.

Rapid
expansion strains our infrastructure, management, internal controls and financial systems. We may not be able to effectively manage our present growth or any future expansion. New clients and the expansion of services from existing clients may cause
rapid increases to our transaction volumes. Rapid increases in transaction volumes can inhibit our ability to train and integrate our new employees. Inadequate training and integration of our employees may result in inefficiencies in our workforce
and may reduce our revenues or net income.

We are also heavily dependent on our employees to provide the high level of
service our clients expect. If we cannot recruit and retain enough qualified and skilled employees, the growth of our business may be limited. Our ability to provide services to clients and grow our business depends, in part, on our ability to
attract and retain qualified employees. If our employee turnover rate increases significantly, our recruiting and training costs could rise, and our operating efficiency and productivity could decline. We may not be able to recruit or retain the
caliber of employees required to carry out essential functions at the pace necessary to sustain or grow our business.

If we are not
successful in adapting to changes in technology made by the major GDSs or integrating our systems with those of alternatives to the major GDSs, we may lose clients and market share.

Most of our transaction processing originates from traditional GDSs and, in general, our current solutions are tightly integrated with the
four major GDS providers. Unforeseen changes in technologies, standards or procedures at any of the GDS providers could make it difficult for us to integrate our systems. Also, recent travel industry deregulation has resulted in the emergence of
alternatives to the traditional GDS providers. Moreover, significant volumes of travel transactions from our clients may migrate to these alternative. If we are not successful in integrating our systems with GDS alternatives as they evolve, we may
lose clients and market share.

Our ability to increase our revenues will depend upon introducing new products and services, and if the
marketplace does not accept these new products and services, our revenues may not increase or may decline.

To increase
our revenues, we must enhance and improve existing products and continue to introduce new products and new versions of existing products that satisfy increasingly sophisticated client requirements and achieve market acceptance. Products and services
that we plan to market in the future are in various stages of development or are a result of recent acquisitions, and we are in the process of integrating them into TRX. Significant human and capital investment is often made to develop and launch
new products and services and to discontinue old products and services. We cannot assure you that the marketplace will accept our new products and services. If our current or potential clients are not willing to switch to or adopt our new products
and services, our ability to increase revenues will be significantly impaired.

We may seek to diversify our revenue streams by serving
many different industry segments. If we are not successful in serving industry segments other than the travel and travel-related industries we currently serve, we may not be successful in capturing these potential revenue streams or recapturing
expenditures pursuing these diversified revenue streams.

We may seek to adapt our products and services to industries
other than the travel and travel-related industries upon which we currently depend. Our ability to increase our revenues will depend on how effectively we are able to modify and enhance our software, technology and networks in the future to address
the various needs of different industry segments. If we are unable to accurately anticipate the needs of industry segments other than the travel and travel-related industries we currently serve, if costs associated with serving additional industries
are higher than expected, or if we are not successful in marketing our solutions to new industries, we may be unable to profitably grow our revenues.

If we fail to keep up with rapidly changing technologies, our products and services could become less competitive or obsolete.

In our business, technology changes rapidly, and there are continuous improvements and changes in computer hardware, software applications, network operating systems, programming tools, programming
languages, operating systems, database technology, and communication protocols. Advances in technology may result in changing client preferences for products and services



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and delivery formats. If we fail to enhance our current products and develop new products in response to changes in technology, industry standards, or client preferences, our products and
services could rapidly become less competitive or obsolete.

We face significant competition in the markets we serve.

We have different competitors in each category of services that we offer. The market for transaction processing for
the travel industry is new and continues to evolve as more agencies and suppliers look to outsource these processes. Currently, the marketplace for transaction processing services for the travel industry is comprised primarily of in-house solutions
and operations residing mostly on legacy systems at travel agencies. All of the GDSs provide their own booking solutions. Our competition comes from, or is anticipated to come from, the following sources:



| |  |  | in-house operations of prospective or existing clients;
| | - |  | -------------------------------------------------------



| |  |  | traditional travel service providers including travel agencies;
| | - |  | ---------------------------------------------------------------



| |  |  | operators of reservation systems;
| | - |  | ---------------------------------



| |  |  | information technology service firms building customized solutions;
| | - |  | -------------------------------------------------------------------



| |  |  | teleservice companies introducing online customer support capabilities;
| | - |  | -----------------------------------------------------------------------



| |  |  | enterprise software companies adding travel management functionality to their products; and
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | other outsourced providers, including providers of customer care products and services.
| | - |  | ---------------------------------------------------------------------------------------

Innovations in technology have increased the ability of travel suppliers to distribute their travel products and services directly to
businesses and consumers. As travel suppliers focus increasingly on direct distribution, new travel processing services competitors may emerge that offer greater flexibility, accuracy, reliability, speed of service, or price. In addition, as travel
agencies, travel specific websites and corporate travel management companies expand their size and financial resources through consolidation, they may combine existing businesses or create new businesses that compete directly with us. Additionally,
increased consolidation means that we have fewer new client prospects or could cause us to lose clients.

The data
intelligence software and consulting services we offer are substantially tied to travel and travel-related processes. We compete against many of the traditional providers in this category. Companies offering such services include Ascential Software
Corporation, which is owned by International Business Machines Corporation, Informatica Corporation, and SAS Institute Inc.

As the market for both data processing and data reporting grows, we believe a number of companies will increase their efforts to develop products and services that will compete with ours. It is also possible that new competitors or
alliances among our competitors and potential clients may emerge and rapidly acquire significant market share. Moreover, our current and future competitors may have significantly greater financial, marketing and other resources than we have. If we
are unable to effectively respond to market and competitive pressures, we may lose clients and market share, which could decrease our revenues or margins.

We could be required to pay damages due to errors, such as errors made in ticketing or fare loading processes.

We depend in part on manual programming, input of travel policies and restrictions, loading of fares, and other data used in connection with the delivery of our products and services to our clients. Human
errors, miscommunication and other factors could lead to errors made in ticketing, fare loading or other processes that result in tickets being issued at incorrect prices or agency commissions being miscalculated. Such errors on our part have led
to, and could lead to, claims against us and payments by us for damages.

Our international operations subject us to additional business
risks that may reduce our profitability or revenues.

A significant part of our business is conducted outside of the
U.S. During the nine months ended September 30, 2009, we received approximately 25% of our revenue from Europe-based clients. We incur material costs in the United States, United Kingdom, Germany and India. We plan to continue to pursue
opportunities abroad, and approximately half of our workforce is located in Bangalore, India. As a result, our future operating results could be negatively affected by a variety of factors, many of which are beyond our control. The risks and
potential costs of our international operations include:



| |  |  | political and economic instability;
| | - |  | -----------------------------------



| |  |  | changes in regulatory requirements and policy and the adoption of laws detrimental to our operations, such as legislation relating to trade protection,
and restrictions on pricing and privacy;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | negative impact of currency exchange rate fluctuations;
| | - |  | -------------------------------------------------------



| |  |  | potentially adverse tax consequences;
| | - |  | -------------------------------------



| |  |  | increased restrictions on the repatriation of funds;
| | - |  | ----------------------------------------------------



| |  |  | general economic conditions in international markets;
| | - |  | -----------------------------------------------------



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| |  |  | labor laws and restrictions;
| | - |  | ----------------------------



| |  |  | staffing key management positions;
| | - |  | ----------------------------------



| |  |  | cultural differences;
| | - |  | ---------------------



| |  |  | negative impact of wage rate increases and other costs subject to inflation;
| | - |  | ----------------------------------------------------------------------------



| |  |  | competition;
| | - |  | ------------



| |  |  | nationalization; and
| | - |  | --------------------



| |  |  | foreign tax and other laws.
| | - |  | ---------------------------

These risks may adversely affect our ability to conduct and grow business internationally, which could cause us to increase expenditures and costs, decrease our revenue growth, or both.

Fluctuations in the exchange rate of the U.S. dollar and other foreign currencies could increase our operating expenses and decrease our operating
margins.

A portion of our costs and revenues are denominated in non-U.S. currencies, such as the euro, British pound
sterling and Indian rupee. As a result, changes in the exchange rates of these currencies or any other applicable currencies to the U.S. dollar will affect our operating expenses and operating margins and could result in exchange losses. As it is
not cost effective, we currently do not hedge our exposure to currency fluctuation risks. The impact of future exchange rate fluctuations on our results of operations cannot be accurately predicted.

If we are not able to adequately protect our intellectual property rights, our competitors may be able to duplicate our services.

We rely in part upon our proprietary technology to conduct our business. Our failure to adequately protect our intellectual property
rights could harm our business by making it easier for our competitors to duplicate our services. We hold a U.S. patent entitled Tool for Analyzing Corporate Airline Bids (Patent #7,401,029 B2), which was issued on July 15, 2008. We
also have a small portfolio of pending patent applications which relate to our proprietary technology. Currently, we primarily rely on a combination of copyrights, trade secrets, confidential procedures and contractual provisions to protect our
technology. Despite these protections, it may be possible for unauthorized parties to copy, obtain or use certain portions of our proprietary technology. Any misappropriation of our intellectual property could have a material adverse effect on our
competitive position.

We cannot be certain that third parties will not infringe or misappropriate our proprietary rights or
that third parties will not independently develop similar proprietary information. Any infringement, misappropriation or independent development could harm our future financial results. In addition, effective protection of intellectual property
rights may not be available in every country where we provide services. We may, at times, have to incur significant legal costs and spend time defending our intellectual property rights. Any defensive efforts, whether successful or not, would divert
both time and resources from the operation and growth of our business.

There is also significant uncertainty regarding the
applicability to the Internet of existing laws regarding matters such as property ownership, copyrights and other intellectual property rights. Legislatures adopted the vast majority of these laws prior to the advent of the Internet, and as a
result, these laws do not contemplate or address the unique issues of the Internet and related technologies. We cannot be sure what laws and regulations may ultimately affect our business or intellectual property rights.

Others may assert that our technology infringes their intellectual property rights.

We may be subject to infringement claims in the future. The defense of any claims of infringement made against us by third parties could
involve significant legal costs and require our management to divert time from our business operations. If we are unsuccessful in defending any claims of infringement, we may be forced to obtain licenses or to pay royalties to continue to use our
technology. We may not be able to obtain any necessary licenses on commercially reasonable terms or at all. If we fail to obtain necessary licenses or other rights, or if these licenses are too costly, our operating results may suffer either from
reductions in revenues through our inability to serve clients or from increases in costs to license third-party technology.

If any
breaches or compromises to the security systems of our databases occur, including theft of our customers personal information, our reputation could suffer, our customers may not be willing to use our products and services, and we may have
difficulty attracting new customers.

If the security systems of our databases are breached or compromised in any way,
our business and operations could be harmed. Our collection and processing of travel transactions and enhancement of data requires us to receive and store personally identifiable data, such as names and addresses, credit card information and
transaction history records. Any breaches of the security systems of our databases could result in the theft of personal confidential information of our customers or other modification of our records. We have had incidents of security breaches which
led to the theft of confidential information. If any breaches or compromises to the security



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systems of our databases were to occur, customers may be deterred from using our products and services, our reputation may be harmed, we may be exposed to liability, and we may incur increased
costs relating to any liability.

Our business could be adversely affected by reduced levels of cash, whether from operations or
pursuant to the terms of our debt, as well as our ability to refinance our existing debt.

Reduced levels of cash
generated from operations as well as our ability to refinance our existing debt could adversely impact our current business and our ability to grow.

Historically, our principal sources of cash have been cash flows from operations and borrowings from banks and other sources. Given the continued weak global economic conditions, operations may continue
to generate less cash than in the past. Our current bank credit facility expires in April 2011. We believe that we will be able to secure future renewals with adequate capacity, or to generate additional capital to meet our liquidity needs. However,
the credit markets remain volatile, and, as such, can provide no assurances that future renewals of our bank credit facility will be executed at favorable or desirable terms. If we are not successful in achieving the anticipated refinancing the
lender is entitled to enforce the guarantee under our credit facility. Management believes its additional sources of liquidity include but are not limited to, generating positive operating cash flows, further reducing our expenses and/or capital
expenditures, generating working capital through our clients and/or vendors, refinancing our debt, issuing equity, convertible debt or other securities, or selling assets.

The terms of our senior secured revolving credit facility may limit our ability to grow.

Our senior secured revolving credit facility may restrict our ability to take specific actions, even if such actions may be in our best interest. These restrictions limit our ability to, among other
things, make advances to our European operations, make acquisitions, make capital expenditures, incur additional debt and pay dividends. Under the facility, we are subject to maintenance of a maximum consolidated senior leverage ratio (as defined in
the facility) of 1.65 to 1 at September 30, 2009, increasing to 1.75 to 1 on December 31, 2009. Our failure to comply with these covenants could result in an event of default that, if not cured or waived, could result in our being required
to repay any borrowings, which totaled $2.6 million as of September 30, 2009, before their due date. In addition, these covenants and restrictions may limit our future growth opportunities.

The liquidity of our common stock may be adversely affected if our common stock is delisted from the NASDAQ Capital Market.

In September 2009, we were notified by The NASDAQ Stock Market (NASDAQ) that we no longer satisfied the continued listing
requirements of the NASDAQ Global Market (the Global Market) due to not maintaining shareholders equity of at least $10 million as required by Marketplace Rule 5450(b)(1)(A), and were notified by NASDAQ that we no longer satisfied
the continued listing requirements of the Global Market due to not maintaining a $1.00 per share bid price as required by Marketplace Rule 5550(a)(2). In response, we submitted an application to list our shares on the NASDAQ Capital Market (the
Capital Market), which NASDAQ approved in October 2009. As the Capital Market has different continued listing requirements with respect to shareholders equity, once the transfer was complete, we were no longer out of compliance
with the shareholders equity continued listing requirement. The $1.00 bid price requirement, however, applies to both the Global Market and the Capital Market. Under Marketplace Rule 5810(c)(3)(A), we have until March 29, 2010 to regain
compliance with the $1.00 minimum bid price standard. Compliance will be regained if the bid price of our common stock closes at $1.00 or more for a minimum of ten consecutive trading days during this period. As of the date of this report, we were
not compliant with the $1.00 bid price requirement. If we are not in compliance with this listing standard at the end of the applicable compliance period or if we fail one or more of the other listing requirements in the future, our stock may be
delisted. While we may appeal the NASDAQ staffs determination to a listing qualifications panel, there can be no assurance that we would be successful if we were to appeal.

If we are delisted from the Capital Market, our common stock may be traded over-the-counter on the OTC Bulletin Board or in the pink
sheets if one or more market makers seeks and obtains approval by the Financial Industry Regulatory Authority (FINRA) to continue quoting in our common stock. The over-the-counter market, however, is generally considered to be less efficient
than the Capital Market. Many over-the-counter stocks trade less frequently and in smaller volumes than securities traded on the NASDAQ markets, which could have a material adverse effect on the liquidity and value of our common stock.

We may be unsuccessful in pursuing and integrating business combinations and strategic alliances, which could result in increased expenditures or
cause us to fail to achieve anticipated cost savings or revenue growth.

In August 2006 and January 2007, we acquired
certain assets and assumed of certain liabilities of Travel Analytics, Inc. (Travel Analytics) and Hi-Mark, LLC (Hi-Mark), respectively. In December 2007, we acquired the assembled workforce and certain property assets used
by Siemens to provide services to TRX in India. We regularly evaluate potential business combinations and



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growth opportunities and may pursue acquisitions of other companies or technologies in the future in order to maintain and grow revenues and increase our market position. We may not be successful
in identifying suitable acquisition candidates or may not be able to obtain financing on acceptable terms for such business combinations or strategic alliances.

Even if we are able to complete these types of business transactions, we may face additional risks, including:



| |  |  | difficulties in integrating or assimilating acquired operations, technology and personnel;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | diversion of managements attention from other business concerns and market developments;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | loss of key management and technical personnel from acquired businesses;
| | - |  | ------------------------------------------------------------------------



| |  |  | impairment of relationships with existing clients, employees and business partners; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | expenses associated with amortization of acquired intangible assets and other expenses associated with a change in control.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------

If we are unable to successfully pursue and integrate business combinations and strategic alliances, our
financial condition and results of operations may be materially adversely affected due to the increased expenditures or our failure to achieve anticipated cost savings or revenue growth.

Risks Related to Our Industry

We are currently dependent on the travel industry, and
declines or disruptions in the travel industry could reduce our revenues.

We rely in large part on the health and
growth of the travel industry. Travel is highly sensitive to business and personal discretionary spending levels and tends to decline during general economic downturns. In addition, other adverse trends or events that tend to reduce travel are
likely to reduce our revenues. These may include:



| |  |  | price escalation in the airline industry or other travel-related industries due to increased fuel costs or other factors;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | financial instability of clients;
| | - |  | ---------------------------------



| |  |  | occurrence of travel-related accidents and concerns about passenger convenience and safety;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | airline or other travel-related strikes;
| | - |  | ----------------------------------------



| |  |  | advances in business technology and communication, such as videoconferencing and online teleconferencing;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | a slowdown in the growth of the adoption of online travel;
| | - |  | ----------------------------------------------------------



| |  |  | political instability, regional hostilities, terrorism, natural disasters and governmental terror warnings;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | consolidations in the airline industry;
| | - |  | ---------------------------------------



| |  |  | health-related fears; and
| | - |  | -------------------------



| |  |  | bad weather.
| | - |  | ------------

In addition, our clients may seek reduced prices for our services in response to changing fare and commission structures and other travel industry conditions.

Acts of terrorism, war and/or pandemic or fear of pandemic could have an adverse effect on the travel industry, which in turn could adversely affect our business due to the possible decrease in new
travel bookings.

Travel is sensitive to safety, security, and health concerns, and thus declines after occurrences of
and fears of future incidents that affect the safety, security and confidence of travelers. For example, the H1N1 flu pandemic during 2009, the start of the war in Iraq in 2003 and the terrorist attacks of September 11, 2001 resulted in the
cancellation of a significant number of flights and travel bookings and a decrease in new travel bookings. Future revenues may be reduced by similar and/or other acts of terrorism, war, or pandemic. The effects of these events could include, among
other things, a protracted decrease in demand for air travel due to fear, military and governmental responses and a perceived inconvenience in traveling by air and increased costs and reduced operations by airlines due, in part, to new safety and
security directives adopted by the Federal Aviation Administration, Transportation Security Administration, Homeland Security or other governmental agencies.

Travel industry and travel-related industry participants may choose not to adopt outsourcing or may otherwise be precluded from adopting outsourcing.

Our business depends in significant part on the continued adoption by travel industry participants of the outsourcing of transaction
processing and data reporting services and by travel-related industry participants of the outsourcing of data reporting services as a means to achieve cost savings and enhanced customer service. There is no guarantee that our services will lower the
costs



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of our clients businesses or improve customer service. If these cost savings or customer service improvements do not occur, we may not be able to retain clients or attract new clients.

Our processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation,
conflicting legal requirements or differing views of personal privacy rights.

Our collection and processing of travel
transactions and our consolidation, extraction, and enhancement of data requires us to receive and store a large volume of personally identifiable data. This type of data is subject to legislation and regulation in various jurisdictions, including
the European Union through the Data Protection Directive, and variations of this directive in legislation enacted by member states of the European Union. Such laws typically protect the privacy of personal data that is collected, processed and
transmitted in or from these jurisdictions. Our business, financial condition and results of operations could be adversely affected if the laws and regulations are expanded, implemented or interpreted to require changes to our business practices and
methods of data collection.

In the U.S., government agencies continue to discuss and develop initiatives to increase airline
security, including the Transportation Security Administrations Computer-Assisted Passenger Prescreening System and its successors. These government initiatives could change the way we handle data and may result in conflicting legal
requirements in the various jurisdictions in which we operate.

As personal and legal issues relating to privacy and data
protection become more sensitive, we may become exposed to potential liabilities with respect to the data we collect, manage and process, and may incur legal costs if our or our vendors established information security policies and procedures
are not effective or if we are required to defend our methods of collection, processing and storage of personal data. Future investigations, lawsuits or adverse publicity relating to our methods of handling personal data could adversely affect our
business, financial condition, and results of operations due to the costs and negative market reaction to such developments.

Regulatory
requirements and regulatory changes may impose burdens on our business.

The laws and regulations applicable to the
travel and financial services industries affect us and our clients. We must comply with laws and regulations relating to the sale and fulfillment of travel services and the financial services industry. Our services are indirectly affected by
regulatory and legal uncertainties affecting the businesses of our clients and reservation systems providers.

We must also
comply with laws and regulations applicable to online commerce and businesses in general. Currently, few laws and regulations directly apply to the Internet and commercial online services. Moreover, there is currently great uncertainty about whether
or how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet and commercial online services. As laws and regulations are adopted or interpreted to address these and other
issues, it is likely that such new laws or different applications of existing laws will impose additional burdens on companies conducting business online and may decrease the growth of commercial online services. In turn, this could decrease the
demand for our products and services or increase our cost of operations.



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|Item 6. | Exhibits
|------- | --------



|            |  |                                                                                                                          
|----------- |  | -------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                              
|31.1        |  | Certification of H. Shane Hammond, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  
|            | 
|31.2        |  | Certification of David D. Cathcart, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
|            | 
|32.1        |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                



| | Filed herewith.
|- | ---------------



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SIGNATURE

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



|                         |  |           |  |                                                                     
|------------------------ |  | --------- |  | --------------------------------------------------------------------
|                         |  | TRX, INC.
|                         |  |          
|Dated: November 13, 2009 |  | By:       |  | /s/    David D. Cathcart                                            
|                         |  |           |  | David D. Cathcart                                                   
|                         |  |           |  | Chief Financial Officer (principal financial and accounting officer)



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