UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549










FORM
10-Q







(MARK
      ONE)x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30, 2009ORo
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from  ______________ to
      ______________





COMMISSION
FILE NUMBER: 000-50302




Trey
Resources, Inc.


(Exact
name of registrant as specified in its charter)




Delaware
              16-1633636(State
      or Other Jurisdiction of Incorporation or Organization)
              (I.R.S.
      Employer Identification No.)




5 Regent Street, Suite 520,
Livingston, NJ 07039


(Address
of Principal Executive Offices) (Zip Code)




Registrant’s
Telephone Number, Including Area Code:    (973) 758-9555




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 xNoo




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated files, 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 filero
Accelerated filero
Non-accelerated filero Smaller reporting companyx




Indicate
by check mark whether the registrant has submitted electronically and posted on
its Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such
files).   Yes oNox




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




Number of
shares of Class A, common stock, par value $.00001, outstanding as of November
6, 2009:  5,463,980,056




Table of Contents




TREY
RESOURCES, INC. and SUBSIDIARIES




TABLE OF
CONTENTS




Page
      No.PART
      I. FINANCIAL INFORMATIONItem
      1.
                Condensed
      Consolidated Financial Statements (unaudited)
                2Balance Sheets –
      September
      30, 2009and December 31, 2008
                2Statements of
      Operations - For
      the three and nine monthsended
      September 30, 2009 and 2008
                3Statements of Cash
      Flows – For
      the nine months endedSeptember
      30, 2009 and 2008
                4Notes to
      Condensed Consolidated Financial Statements
      (unaudited)
                6-18Item
      2.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                19Item
      4T.
                Controls and
      Procedures
                21PART
      II. OTHER INFORMATIONItem
      3.
                Defaults Upon Senior Securities
                22Item
      5.
                Other
      Information
                22Item
      6.
                Exhibits
                22






Table of Contents




ITEM 1  - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


TREY RESOURCES, INC. and SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 
 September
      30,
                
                
                December
      31,2009
                
                
                2008ASSETSCURRENT
      ASSETSCash
                
                $
                374,391
                
                
                $
                420,042Accounts
      receivable, net of allowance for doubtful accounts of$155,999
      and $163,193, respectively
                
                
                556,052
                
                
                
                566,084Inventory
                
                
                -
                
                
                
                34,565Prepaid
      expenses and other current assets
                
                
                43,874
                
                
                
                73,599Total
      current assets
                
                
                974,317
                
                
                
                1,094,290PROPERTY
      AND EQUIPMENT, net of accumulated depreciation of$401,488
      and $337,294, respectively
                
                
                141,806
                
                
                
                191,451OTHER
      ASSETSIntangible
      assets, net of accumulated amortization of$593,231
      and $491,520, respectively
                
                
                -
                
                
                
                101,711Deposits
      and other assets
                
                
                54,684
                
                
                
                25,105Total
      other assets
                
                
                54,684
                
                
                
                126,816TOTAL
      ASSETS
                
                $
                1,170,807
                
                
                $
                1,412,557LIABILITIES AND STOCKHOLDERS'
      DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                
                $
                1,616,927
                
                
                $
                1,860,610Due
      to related parties
                
                
                844,936
                
                
                
                1,711,477Convertible
      debentures payable
                
                
                1,491,800
                
                
                
                1,574,100Derivative
      liability
                
                
                1,355,751
                
                
                
                857,236Current
      portion of notes payable and capital leases
                
                
                39,900
                
                
                
                92,828Warrant
      liability
                
                
                -
                
                
                
                75,450Notes
      payable to related parties
                
                
                155,517
                
                
                
                321,063Deferred
      revenue
                
                
                133,934
                
                
                
                174,104Total
      current liabilities
                
                
                5,638,765
                
                
                
                6,666,958Total
      long-term liabilities
                
                
                -
                
                
                -TOTAL
      LIABILITIES
                
                
                5,638,765
                
                
                
                6,666,958COMMITMENTS
      AND CONTINGENCIES
  STOCKHOLDERS'
      DEFICITPreferred
      stock, $1.00 par value; authorized 1,000,000 shares; no shares issued and
      outstanding
                  
                  
                  -
                  
                  
                  
                  -Common
      stock:Class
      A – par value $.00001; authorized 10,000,000,000 shares; 5,103,892,337
                    and 4,105,473,533 shares issued and outstanding,
    respectively
                  
                  
                  51,039
                  
                  
                  
                  41,055Class
      B - par value $.00001; authorized 50,000,000 shares; no shares issued and
      outstanding
                  
                  
                  -
                  
                  
                  
                  -Class
      C - par value $.00001; authorized 20,000,000 shares; no shares issued and
      outstanding
                  
                  
                  -
                  
                  
                  
                  -Additional
      paid in capital
                  
                  
                  7,109,879
                  
                  
                  
                  5,483,389Additional
      paid in capital - warrants
                  
                  
                  125,166
                  
                  
                  
                  125,166Accumulated
      deficit
                  
                  
                  (11,754,042
                  )
                  
                  
                  (10,904,011
                  )Total
      stockholders' deficit
                  
                  
                  (4,467,958
                  )
                  
                  
                  (5,254,401
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                  
                  $
                  1,170,807
                  
                  
                  $
                  1,412,557
 See
accompanying footnotes to the condensed consolidated financial
statements
 
 2
 Table of Contents
  
 TREY RESOURCES, INC. and SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
 For
      the nine months
                  ended
      September 30,
                
                
                For
      the three months ended
                  September
      30,2009
                
                
                2008
                
                
                2009
                
                
                2008SALES,
      net
                
                $
                5,751,394
                
                
                $
                5,711,263
                
                
                $
                1,861,205
                
                
                $
                1,833,669COST
      OF SALES
                
                
                3,310,394
                
                
                
                3,701,414
                
                
                
                1,004,857
                
                
                
                1,239,666GROSS
      PROFIT
                
                
                2,441,000
                
                
                
                2,009,849
                
                
                
                856,348
                
                
                
                594,003SELLING,
      GENERAL ANDADMINISTRATIVE
      EXPENSESSelling
      expenses
                
                
                914,927
                
                
                
                877,060
                
                
                
                155,142
                
                
                
                266,689General
      and administrative expenses
                
                
                1,387,574
                
                
                
                1,259,402
                
                
                
                527,936
                
                
                
                399,832Depreciation
      and amortization
                
                
                171,343
                
                
                
                227,234
                
                
                
                23,989
                
                
                
                74,316Total
      selling, general and administrative expenses
                
                
                2,473,844
                
                
                
                2,363,696
                
                
                
                707,067
                
                
                
                740,837PROFIT
      (LOSS) FROM OPERATIONS
                
                
                (32,844
                )
                
                
                (353,847
                )
                
                
                149,281
                
                
                
                (146,834
                )OTHER
      INCOME (EXPENSE)Gain
      (loss) on revaluation of derivatives
                
                
                (422,975
                )
                
                
                (1,286,112
                )
                
                
                (183,362
                )
                
                
                93,775Amortization
      of discount on debt conversion
                
                
                -
                
                
                
                (73,393
                )
                
                
                -
                
                
                
                -Common
      stock issued for debt conversion discount
                
                
                (260,444
                )
                
                
                -
                
                
                
                (260,444
                )
                
                
                -Other
      income (expense)
                
                
                -
                
                
                
                10,873
                
                
                
                -
                
                
                
                3,113Interest
      expense
                
                
                (133,768
                )
                
                
                (167,218
                )
                
                
                (30,877
                )
                
                
                (76,164
                )Total
      other income (expense)
                
                
                (817,187
                )
                
                
                (1,515,850
                )
                
                
                (474,683
                )
                
                
                20,724INCOME
      (LOSS) BEFORE PROVISION FORINCOME
      TAXES
                
                
                (850,031
                )
                
                
                (1,869,697
                )
                
                
                (325,402
                )
                
                
                (126,110
                )PROVISION
      FOR INCOME TAXES
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -NET
      INCOME (LOSS) APPLICABLE TOCOMMON
      SHARES
                
                $
                (850,031
                )
                
                $
                (1,869,697
                )
                
                $
                (325,402
                )
                
                $
                (126,110
                )NET
      INCOME (LOSS) PER COMMON SHAREBasic
      and Diluted
                
                $
                0.00
                
                
                $
                (0.00
                )
                
                $
                0.00
                
                
                $
                (0.00
                )WEIGHTED
      AVERAGE SHARES OUTSTANDINGBasic
      and Diluted
                
                
                4,387,136,912
                
                
                
                3,709,301,595
                
                
                
                4,762,909,431
                
                
                
                3,851,029,089
 See accompanying footnotes to the
condensed consolidated financial statements.
  3
 Table of Contents
 
 TREY RESOURCES, INC. and SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
 (Unaudited)
 2009
                
                
                2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
                
                $
                (850,031
                )
                
                $
                (1,869,687
                )Adjustments
      to reconcile net income (loss) to net cash provided by(used
      in) operating activitiesDepreciation
      and amortization
                
                
                171,344
                
                
                
                223,014Amortization
      of debt discounts
                
                
                -
                
                
                
                73,393Beneficial
      interest on issuance of stock
                
                
                22,874
                
                
                
                -Common
      stock issued for repayment of deferred compensation
                
                
                17,000
                
                
                
                -Loss
      on revaluation of derivative
                
                
                422,975
                
                
                
                1,286,112Common
      stock issued for debt conversion discount
                
                
                260,444
                
                
                
                43,084Deferred
      interest income on notes receivable
                
                
                -
                
                
                
                (908
                )Changes
      in certain assets and liabilities:Accounts
      receivable, net
                
                
                10,032
                
                
                
                (66,860
                )Inventory
                
                
                34,565
                
                
                
                11,082Prepaid
      expenses and other assets
                
                
                (4,075
                )
                
                
                51,484Accounts
      payable and accrued liabilities
                
                
                (164,894
                )
                
                
                365,410Deferred
      revenue
                
                
                (40,170
                )
                
                
                17,525Related
      party accounts
                
                
                79,001
                
                
                
                225,996Total
      cash provided by (used in) operating activities
                
                
                (40,935
                )
                
                
                359,645CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
                
                
                (15,767
                )
                
                
                (11,255
                )Redemption
      of notes receivable
                
                
                -
                
                
                
                67,379Total
      cash provided by (used in) investing activities
                
                
                (15,767
                )
                
                
                56,124CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from (repayment of) related party loans
                
                
                -
                
                
                
                (41,005
                )Proceeds
      on sale of shares of SWK
                
                
                150,000
                
                
                
                -Repayment
      of loans, notes payable, capital leases and convertible
      debentures
                
                
                (138,949
                )
                
                
                (252,467
                )Total
      provided by (cash used) in financing activities
                
                
                11,051
                
                
                
                (293,472
                )NET
      INCREASE (DECREASE) IN CASH
                
                
                (45,651
                )
                
                
                122,297CASH
      – BEGINNING OF PERIOD
                
                
                420,042
                
                
                
                146,443CASH
      – END OF PERIOD
                
                $
                374,391
                
                
                $
                268,740CASH
      PAID DURING THE PERIOD FOR:Interest
      expense
                
                $
                -
                
                
                $
                -Income
      taxes
                
                $
                -
                
                
                $
                -
 See
accompanying footnotes to the condensed consolidated financial
statements.
 
 4
 Table of Contents
 
 
 TREY RESOURCES, INC. and SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
 
 SUPPLEMENTAL
SCHEDULE OF NON-CASH FINANCING ACTIVITIES
 
 For the nine months ended
September 30, 2009:
 
 a)
      The Company paid Jerome R. Mahoney, the Company’s Non-Executive Chairman
      of the Board of Directors since January 1, 2003, the sum of $117,500 in
      full and total satisfaction on any and all outstanding obligations that
      exist or may exist between Mr. Mahoney and Trey Resources, Inc. Such sum
      to be allocated first to principal outstanding on a promissory note by and
      between Mr. Mahoney and Trey Resources, Inc., second to any interest due
      and outstanding on such promissory note, and any balance thereafter to
      deferred and accrued compensation due Mr. Mahoney. The total outstanding
      debt due to Mr. Mahoney was approximately
  $1,212,000.
 
 b)
      The Company issued 200,000,000 shares of Class A Common stock for
      repayment of $17,000 in deferred compensation with a fair value of value
      $37,500. The difference in the market value and $17,000 of deferred
      compensation repaid was charged to beneficial interest in the amount of
      $20,500.
 
 c)
      The Company issued 95,000,000 shares of Class A Common stock for repayment
      of $9,500 in accrued    expenses with a fair value of
      value $11,875. The difference in the market value and $9,500 of accrued
      expenses was charged to beneficial interest in the amount of
      $2,375.
 
 d) The
      Company issued 703,418,804 shares of Class A Common Stock with a total
      value of $342,744 for conversion of $82,300 of principal on outstanding
      debentures with YA Global Investments, (f/k/a Cornell Capital
      Partners).
 
 For the nine months ended
September 30, 2008, the Company:
 
 a)Issued 626,111,111 shares of Class A Common Stock with a total
      value of $78,264 for conversion of $70,100 of principal on outstanding
      debentures with YA Global Investments, (f/k/a Cornell Capital
      Partners).
  
 
 
 
 
 
 
 See
accompanying footnotes to the condensed consolidated financial
statements.
  5
 Table of Contents
  TREY RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  NOTE 1 – DESCRIPTION OF
BUSINESS AND BASIS OF PRESENTATION
 
 Basis of
Presentation
 
 The
accompanying unaudited condensed consolidated financial statements include the
accounts of Trey Resources, Inc. (the “Company” or “Trey”) and its wholly owned
subsidiaries, SWK Technologies, Inc. and BTSG Acquisition Corp.  On
February 11, 2004, the Company was spun off from iVoice, Inc. and is now an
independent publicly traded company.  These condensed consolidated
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with the instructions to Form 10-Q and Regulation S-X.  Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been
included.  It is suggested that these condensed consolidated financial
statements be read in conjunction with the December 31, 2008 audited financial
statements and the accompanying notes thereto filed with the Securities and
Exchange Commission on Form 10-K.
 
 Description
of  Business
 
 Trey
Resources, Inc. (the “Company”), was incorporated in Delaware on October 3, 2002
as a wholly owned subsidiary of iVoice Inc.  On February 11, 2004, the
Company was spun off from iVoice, Inc. and is now an independent publicly traded
company. The spin-off transaction was accomplished by the distribution of
certain intellectual property, representing the software codes of the Automatic
Reminder, and certain accrued liabilities and related party debt into a
wholly-owned subsidiary of iVoice., Trey Resources, Inc. (“Trey”), formerly
known as iVoice Acquisition 1, Inc. and Trey Industries, Inc.), and subsequently
distributed on a pro-rata basis to iVoice shareholders in the form of a taxable
dividend.
 
 Up until
its acquisition of SWK, Inc. on June 2, 2004, the Company was engaged in the
design, manufacture, and marketing of specialized telecommunication equipment.
With the acquisition of SWK and as part of its plan to expand into new markets,
Trey is focusing on the business software and information technology consulting
market, and is looking to acquire other companies in this industry. SWK
Technologies, Inc., (“SWK”) the surviving entity in the merger and acquisition
of SWK, Inc., is a New Jersey-based information technology company, value added
reseller, and master developer of licensed accounting software. The Company also
publishes its own proprietary supply-chain software, “MAPADOC”. The Company
sells services and products to various end users, manufacturers, wholesalers and
distributor industry clients located throughout the United States. On June 2,
2006, SWK Technologies, Inc. completed the acquisition of certain assets of
AMP-Best Consulting, Inc. of Syracuse, New York.  AMP-Best Consulting,
Inc. is an information technology company and value added reseller of licensed
accounting software published by Sage Software.  AMP-Best Consulting,
Inc. sells services and products to various end users, manufacturers,
wholesalers and distribution industry clients located throughout the United
States, with special emphasis on companies located in the upstate New York
region.
  The
Company is publicly traded and is currently traded on the NASD Over The Counter
Bulletin Board (“OTCBB”) under the symbol “TYRIA.”
  NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Principles of
Consolidation
 
 The
accompanying condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries.  All significant
intercompany transactions and accounts have been eliminated in
consolidation.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
 
 Revenue
Recognition
 
 Revenue
is recognized when persuasive evidence of an agreement exists, delivery has
occurred, the amount is fixed or determinable, and cash is
received.
 
 The
Company recognizes revenues from consulting and support services as the services
are performed.
  6
 Table of Contents
 
 TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Revenue Recognition
(Continued)
  The
assessment of collectability is critical in determining whether revenue should
be recognized.  As part of the revenue recognition process, we
determine whether trade receivables are reasonably assured of collection based
on various factors.  Revenue and related costs are deferred if we are
uncertain as to whether the receivable can be collected.  Revenue is
deferred but costs are recognized when we determine that the collection of the
receivable is unlikely.  Hardware and software revenues are recognized
when the product is shipped to the customer. The Company separates the software
component and the professional services component into two distinct parts for
purposes of determining revenue recognition.  In that situation where
both components are present, software sales revenue is recognized when the cash
is received and the product is delivered, and professional service revenue is
recognized as the service time is incurred.  Commissions are
recognized when payments are received, since the Company has no obligation to
perform any future services.
 
 With
respect to the sale of software license fees, the Company recognizes revenue in
accordance with in FASB ASC 985-605 (Prior authoritative literature: Statement
of Position 97-2, software Revenue Recognition (SOP 97-2)), as amended, and
generally recognizes revenue when all of the following criteria are met: (1)
persuasive evidence of an arrangement exists generally evidenced by a signed,
written purchase order from the customer,
(2) delivery of the software product on Compact Disk (CD) or other means to the
customer has occurred, (3) the perpetual license fee is fixed or determinable
and (4) collectability, which is assessed on a customer-by-customer basis, is
probable.
 
 With
respect to customer support services, upon the completion of one year from the
date of sale, considered to be the warranty period, the Company offers customers
an optional annual software maintenance and support agreement for subsequent
one-year periods. Sales of purchased maintenance and support agreements are
recorded as deferred revenue and recognized over the respective terms of the
agreements.
 
 Advertising
Costs
 
 Advertising
costs are expensed as incurred and are included in selling
expenses.  For the three months ended September 30, 2009 and 2008,
advertising expenses were $270 and $-0-, respectively. For the nine months ended
September 30, 2009 and 2008, advertising expenses were $270 and $1,763,
respectively.
 
 Income
Taxes
  The
Company accounts for income taxes using the asset and liability method described
in FASB ASC 740-10 (Prior authoritative literature: FASB Statement 109,
“Accounting for Income Taxes,”), which requires an asset and liability approach
to financial accounting and reporting for income taxes. Deferred income taxes
and liabilities are computed annually for differences between the financial
statement and the tax basis of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.
 
 Cash and Cash
Equivalents
 
 The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. The Company had no
cash equivalents at September 30, 2009 and December 31, 2008,
respectively.
 
 The
Company maintains cash balances at a financial institution that is insured by
the Federal Deposit Insurance Corporation. The Company had uninsured cash
balances of $76,686 and $131,081 at September 30, 2009 and December 31, 2008,
respectively.
  7
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Accounts
Receivable
 
 Accounts
receivables consist primarily of uncollected invoices for maintenance and
professional services. Payments for software sales are due in advance of
ordering from the software supplier. Payments for maintenance and support plan
renewals are due before the beginning of the maintenance period. Payments for
professional services are due 50% in advance and the balance on completion of
the services. The Company maintains a small provision for bad debts and reviews
the provision quarterly.
  Inventory
 
 Inventory
consists primarily of pre-packaged software programs that are held for resale to
customers. Cost is determined by specific identification related to the purchase
order from the software supplier.
 
 Property and
Equipment
  Property
and equipment is stated at cost.  Depreciation is computed using the
straight-line method based upon the estimated useful lives of the assets,
generally five to seven years.  Maintenance and repairs are charged to
expense as incurred.
  Deferred
Revenues
 
 Deferred
revenues consist primarily of annual telephone support plan revenues that will
be earned in future periods.
  Fair Value of Financial
Instruments
  The
Company estimates that the fair value of all financial instruments at September
30, 2009 and December 31, 2008, as defined in FASB ASC 825-10, does not differ
materially from the aggregate carrying values of its financial instruments
recorded in the accompanying condensed consolidated balance sheets. The
estimated fair value amounts have been determined by the Company using available
market information and appropriate valuation methodologies. Considerable
judgment is required in interpreting market data to develop the estimates of
fair value, and accordingly, the estimates are not necessarily indicative of the
amounts that the Company could realize in a current market
exchange.
  Effective
this January 1, 2009, we implemented FASB ASC 825-10, Fair Value Measurements,
or SFAS 157, for our nonfinancial assets and liabilities that are re-measured at
fair value on a non-recurring basis. The adoption of FASB ASC 825-10 for our
nonfinancial assets and liabilities that are re-measured at fair value on a
non-recurring basis did not impact our financial position or results of
operations; however, could have an impact in future periods. In addition, we may
have additional disclosure requirements in the event we complete an acquisition
or incur impairment of our assets in future periods.
  8
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 (Loss) Per Common
Share
 
 FASB
Accounting Standards Codification (“ASC”) 260-10 (Prior authoritative
literature: FASB Statement 128, “Earnings Per Share”) requires the presentation
of basic earnings per share ("basic EPS") and diluted earnings per share
("diluted EPS").
 
 The
Company’s basic income (loss) per common share is based on net income (loss) for
the relevant period, divided by the weighted average number of common shares
outstanding during the period.  Diluted income per common share is
based on net income, divided by the weighted average number of common shares
outstanding during the period, including common share equivalents, such as
outstanding stock options and beneficial conversion of related party
accounts.  Diluted loss per share does not include common stock
equivalents, as these shares would have no effect. The computation of diluted
loss per share also does not assume conversion, exercise or contingent exercise
of securities due to the beneficial conversion of related party accounts, as
this would be anti-dilutive.
 
 Three Months Ended
              
              
              Three Months EndedSeptember 30, 2009
              
              
              September 30, 2008Basic
      net income (loss) per share computation:Net
      income (loss) attributable to common stockholders
              
              $
              (325,402
              )
              
              $
              (126,110
              )Weighted-average
      common shares outstanding
              
              
              4,762,909,431
              
              
              
              3,851,029,089Basic
      net income (loss) per share attributable to commonstockholders
              
              $
              (0.00
              )
              
              $
              (0.00
              )Diluted
      net income (loss) per share computationNet
      loss attributable to common stockholders
              
              $
              (325,402
              )
              
              $
              (126,110
              )Weighted-average
      common shares outstanding
              
              
              4,762,909,431
              
              
              
              3,851,029,089Incremental
      shares attributable to the common stock
                equivalents
              
              
              -
              
              
              
              -Total
      adjusted weighted-average shares
              
              
              4,762,909,431
              
              
              
              3,851,029,089Diluted
      net income (loss) per share attributable to common
                Stockholders
              
              $
              (0.00
              )
              
              $
              (0.00
              )
 
 Nine Months Ended
              
              
              Nine Months EndedSeptember 30, 2009
              
              
              September 30, 2008Basic
      net income (loss) per share computation:Net
      income (loss) attributable to common stockholders
              
              $
              (850,031
              )
              
              $
              (1,869,697
              )Weighted-average
      common shares outstanding
              
              
              4,387,136,912
              
              
              
              3,709,301,595Basic
      net income (loss) per share attributable to common
                Stockholders
              
              $
              (0.00
              )
              
              $
              (0.00
              )Diluted
      net income (loss) per share computationNet
      loss attributable to common stockholders
              
              $
              (850,031
              )
              
              $
              (1,869,697
              )Weighted-average
      common shares outstanding
              
              
              4,387,136,912
              
              
              
              3,709,301,595Incremental
      shares attributable to the common stock
                equivalents
              
              
              -
              
              
              
              -Total
      adjusted weighted-average shares
              
              
              4,387,136,912
              
              
              
              3,709,301,595Diluted
      net income (loss) per share attributable to commonStockholders
              
              $
              (0.00
              )
              
              $
              (0.00
              )
 
   9
 Table of Contents
 
 TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Derivative
Liabilities
 
 During
April 2003, the Financial Accounting Standards Board issued FASB ASC 815-10
(Prior authoritative literature, SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." FASB ASC 815-10 clarifies
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. FASB ASC 815-10
requires that contracts with comparable characteristics be accounted for
similarly and clarifies when a derivative contains a financing component that
warrants special reporting in the statement of cash flows.  FASB ASC
815-10 is effective for contracts entered into or modified after June 30, 2003,
except in certain circumstances, and for hedging relationships designated after
June 30, 2003. The financial statements for the three and nine months ended
September 30, 2009 include the recognition of the derivative liability on the
underlying securities issuable upon conversion of the Cornell Convertible
Debentures (see note 9).
  Long-Lived
Assets
 
 FASB ASC
350-30, formerly SFAS No. 142, “Goodwill and Other Intangible Assets”, requires
goodwill to be tested for impairment under certain circumstances, and written
off when impaired, rather than being amortized as previous standards
require.  In accordance with the requirements of this pronouncement,
the Company has assessed the value of the intangible assets reflected as
goodwill on its books and has determined that future benefit for these assets
exists.  At September 30, 2009, and December 31, 2008 the Company had
realized a decline in the value of the Goodwill and recorded cumulative
impairments of $1,062,040.
 
 Stock-Based
Compensation
 
 The
Company has adopted FASB ASC 718-10 (Prior authoritative
literature:  SFAS No. 123R, “Accounting for Stock-Based
Compensation”), which establishes financial accounting and reporting standards
for stock-based employee compensation plans.  This pronouncement also
applies to transactions in which an entity issues its equity instruments to
acquire goods or services from non-employees. Those transactions must be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, whichever is more reliably
measurable.  For stock options, fair value is determined using an
option-pricing model that takes into account the stock price at the grant date,
the exercise price, the expected life of the option, the volatility of the
underlying stock and the expected dividends on it, and the risk-free interest
rate over the expected life of the option.
 
 Reclassifications
 
 Certain
prior year amounts have been reclassified to conform to the current year
presentation. The reclassifications have had no effect on the results of
operations or cash flows for the period ended September 30, 2008.
  Recent Accounting
Pronouncements
 
 In
December 2007, the FASB issued FASB ASC 810-10 (Prior authoritative
literature: SFAS No. 160, Non-controlling Interests in Consolidated Financial
Statements — an amendment of ARB No. 51.  FASB ASC 810-10
requires that ownership interests in subsidiaries held by parties other than the
parent, and the amount of consolidated net income, be clearly identified,
labeled, and presented in the consolidated financial statements within equity,
but separate from the parent’s equity. It also requires once a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary be initially measured at fair value. Sufficient disclosures are
required to clearly identify and distinguish between the interests of the parent
and the interests of the non-controlling owners. FASB ASC 810-10 will be
effective  beginning January 1, 2009. The adoption of FASB ASC
810-10 did not have a material impact on the Company’s condensed consolidated
financial statements.
 
 In
December 2007, the FASB issued FASB ASC 805-10 (Prior authoritative literature
SFAS No 141(R), “Business Combinations.”  This statement provides new
accounting guidance and disclosure requirements for business
combinations.  FASB ASC 805-10 is effective for business combinations
which occur in the first fiscal year beginning on or after December 15, 2008.
The adoption of FASB ASC 805-10 did not have a significant impact on the
Company’s condensed consolidated financial statements or financial position, but
the nature and magnitude of the specific effects will depend upon the nature,
terms and size of the acquisitions the Company consummates after the effective
date.
  10
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent Accounting
Pronouncements (continued)
  In
December 2007, the FASB finalized the provisions of the FASB ASC 808-10,
“Accounting for Collaborative Arrangements.”  FASB ASC 808-10 provides
guidance and requires financial statement disclosures for collaborative
arrangements. FASB ASC 808-10 is effect for financial statements issued for
fiscal years beginning after December 15, 2008.  The adoption of FASB
ASC 808-10 did not have a material impact on the Company’s condensed
consolidated financial statements.
 
 In March
2008, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 815-10
(Prior authoritative literature (“SFAS”) No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No. 133”
which modifies and expands the disclosure requirements for derivative
instruments and hedging activities.  FASB ASC 815-10requires that
objectives for using derivative instruments be disclosed in terms of underlying
risk and accounting designation and requires quantitative disclosures about fair
value amounts and gains and losses on derivative instruments.  It also
requires disclosures about credit-related contingent features in derivative
agreements. FASB ASC 815-10 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged.  FASB ASC 815-10 encourages, but does not
require, comparative disclosures for earlier periods at initial
adoption.  The Company adopted this standard effective January 1,
2009. The implementation of this standard did not have a material impact on the
Company’s condensed consolidated financial statements.
  In April
2008, the FASB issued FASB ASC 350-30, Determination of the Useful Life of
Intangible Assets. FASB ASC 350-30 amends the factors an entity should consider
in developing renewal or extension assumptions used in determining the useful
life of recognized intangible assets under SFAS 142, Goodwill and Other
Intangible Assets, and adds certain disclosures for an entity’s accounting
policy of the treatment of the costs, period of extension, and total costs
incurred.  FASB ASC 350-30must be applied prospectively to intangible
assets acquired after January 1, 2009.  The Company’s adoption of FASB
ASC 350-30 did not have a material impact on the Company’s condensed
consolidated financial statements.
  In June
2008, the FASB ratified FASB ASC 840-10, Accounting for Lessees for Maintenance
Deposits Under Lease Arrangements. FASB ASC 840-10 provides guidance for
accounting for nonrefundable maintenance deposits. It also provides revenue
recognition accounting guidance for the lessor. FASB ASC 840-10 is effective for
fiscal years beginning after December 15, 2008. The Company’s adoption of FASB
ASC 840-10 did not have a material impact on the Company’s condensed
consolidated financial statements.
  In
November 2008, the FASB issued FASB ASC 350-30, Accounting for Defensive
Intangible Assets”. FASB ASC 350-30 addresses the accounting for assets acquired
in a business combination or asset acquisition that an entity does not intend to
actively use, otherwise referred to as a ‘defensive asset.’ FASB ASC 350-30
requires defensive intangible assets to be initially accounted for as a separate
unit of accounting and not included as part of the cost of the acquirer’s
existing intangible asset(s) because it is separately identifiable. FASB ASC
350-30 also requires that defensive intangible assets be assigned a useful life
in accordance with FASB ASC 350-30-35 and is effective for financial statements
issued for fiscal years beginning after December 15, 2008. The Company has
adopted this standard effective January 1, 2009 and the Company’s adoption of
this pronouncement did not have a material impact on the Company’s condensed
consolidated financial statements.
 
 In April
2009, the FASB issued FASB ASC 320-10, Recognition and Presentation of
Other-Than-Temporary Impairments. FASB ASC 320-10 amends the
other-than-temporary impairment guidance for debt securities to make the
guidance more operational and to improve the presentation and disclosure of
other-than-temporary impairments in the financial statements. The most
significant change FASB ASC 320-10 brings is a revision to the amount of
other-than-temporary loss of a debt security recorded in earnings. FASB ASC
320-10 is effective for interim and annual reporting periods ending after June
15, 2009 The Company’s adoption of FASB ASC 320-10 did not have a material
impact on the Company’s condensed consolidated financial
statements.
 
 11
 Table of Contents
 
 TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 
 NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent Accounting
Pronouncements (continued)
  In April
2009, the FASB issued FASB ASC 820-10, Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly. FASB ASC 820-10 provides
additional guidance for estimating fair when the volume and level of activity
for the asset or liability have significantly decreased. FASB ASC 820-10 also
includes guidance on identifying circumstances that indicate a transaction is
not orderly. This FSP emphasizes that even if there has been a significant
decrease in the volume and level of activity for the asset or liability and
regardless of the valuation technique(s) used, the objective of a fair value
measurement remains the same. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction (that
is, not a forced liquidation or distressed sale) between market participants at
the measurement date under current market conditions. FASB ASC 820-10 is
effective for interim and annual reporting periods ending after June 15, 2009,
and is applied prospectively. The Company’s adoption of FASB ASC 820-10 did not
have a material impact on the Company’s condensed consolidated financial
statements.
  In April
2009, the FASB issued FASB ASC 825-10, Interim Disclosures about Fair Value of
Financial Instruments. FASB ASC 825-10 amends FASB Statement No. 107,
Disclosures about Fair Value of Financial Instruments, to require disclosures
about fair value of financial instruments for interim reporting periods of
publicly traded companies as well as in annual financial statements. FASB ASC
825-10 also amends APB Opinion No. 28, Interim Financial Reporting, to require
those disclosures in summarized financial information at interim reporting
periods FASB ASC 825-10 is effective for interim and annual reporting periods
ending after June 15, 2009. The Company’s adoption of issued FASB ASC 825-10 did
not have a material impact on the Company’s condensed consolidated financial
statements.
  In June
2009, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 105-10,
The FASB Accounting Standards Codification and Hierarchy of Generally Accepted
Accounting Principles, a replacement of FASB Statement No. 162. FASB ASC 105-10
establishes the FASB Standards Accounting Codification (“Codification”) as the
source of authoritative GAAP recognized by the FASB to be applied to
nongovernmental entities. The only other source of authoritative GAAP is the
rules and interpretive releases of the SEC which only apply to SEC registrants.
The Codification will supersede all the existing non-SEC accounting and
reporting standards upon its effective date. Since the issuance of the
Codification is not intended to change or alter existing GAAP, adoption of this
statement will not have an impact on the Company’s financial position or results
of operations, but will change the way in which GAAP is referenced in the
Company’s financial statements. FASB ASC 105-10  is effective for
interim and annual reporting periods ending after September 15,
2009.
 
 In May
2009, the FASB issued FASB ASC 855-10, Subsequent Events, which establishes
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before the financial statements are issued or are
available to be issued. The Company adopted FASB ASC 855-10 effective
April 1, 2009 and has evaluated subsequent events after the balance sheet
date of September 30, 2009 through the date the financial statements were
issued.
 
 In
October 2009, the FASB issued Accounting Standards Update 2009-13, “Revenue
Recognition (Topic 605)”. This Update provides amendments to the criteria in
Subtopic 605-24 for separating consideration in multiple-deliverable revenue
arrangements. It establishes a hierarchy of selling prices to determine the
selling price of each specific deliverable which includes vendor-specific
objective evidence (if available), third-party evidence (if vendor-specific
evidence is not available), or estimated selling price if neither of the first
two are available. This Update also eliminates the residual method for
allocating revenue between the elements of an arrangement and requires that
arrangement consideration be allocated at the inception of the arrangement.
Finally, this Update expands the disclosure requirements regarding a vendor’s
multiple-deliverable revenue arrangements. This Update is effective for fiscal
years beginning on or after June 15, 2010. We do not anticipate any
material impact from this Update.
 
 NOTE 3 - FAIR VALUE
MEASUREMENTS
 
 In
September 2006, the FASB issued FASB ASC 820-10, which defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements. The provisions of FASB ASC 820-10 were effective
January 1, 2008.
 
 As
defined in FASB ASC 820-10, fair value is 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 (exit price). The Company utilizes
market data or assumptions that market participants would use in pricing the
asset or liability, including assumptions about risk and the risks inherent in
the inputs to the valuation technique.
 
 These
inputs can be readily observable, market corroborated, or generally
unobservable. The Company classifies fair value balances based on the
observability of those inputs. FASB ASC 820-10 establishes a fair value
hierarchy that prioritizes the inputs used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (level 1 measurement) and the lowest priority to
unobservable inputs (level 3 measurement).
 
 12
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 
 NOTE 3 - FAIR VALUE
MEASUREMENTS (continued)
 
 The three
levels of the fair value hierarchy defined by FASB ASC 820-10 are as
follows:
 
 Level 1 –
Quoted prices are available in active markets for identical assets or
liabilities as of the reporting date. Active markets are those in which
transactions for the asset or liability occur in sufficient frequency and volume
to provide pricing information on an ongoing basis. Level 1 primarily consists
of financial instruments such as exchange-traded derivatives, marketable
securities and listed equities.
 
 Level 2 –
Pricing inputs are other than quoted prices in active markets included in level
1, which are either directly or indirectly observable as of the reported date.
Level 2 includes those financial instruments that are valued using models or
other valuation methodologies. These models are primarily industry-standard
models that consider various assumptions, including quoted forward prices for
commodities, time value, volatility factors, and current market and contractual
prices for the underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable in the
marketplace throughout the full term of the instrument, can be derived from
observable data or are supported by observable levels at which transactions are
executed in the marketplace. Instruments in this category generally include
non-exchange-traded derivatives such as commodity swaps, interest rate swaps,
options and collars.
 
 Level 3 –
Pricing inputs include significant inputs that are generally less observable
from objective sources. These inputs may be used with internally developed
methodologies that result in management’s best estimate of fair
value.
 
 The
following table sets forth by level within the fair value hierarchy the
Company’s financial assets and liabilities that were accounted for at fair value
as of September 30, 2009 and December 31, 2008. As required by FASB ASC 820-10,
financial assets and liabilities are classified in their entirety based on the
lowest level of input that is significant to the fair value
measurement.
 
 The
Company’s assessment of the significance of a particular input to the fair value
measurement requires judgment, and may affect the valuation of fair value assets
and liabilities and their placement within the fair value hierarchy
levels.
 
 September 30, 2009
                
                Level
      I
                
                
                Level II
                
                
                Level III
                
                
                TotalConvertible
      debentures
                
                $
                -
                
                
                $
                1,491,800
                
                
                $
                -
                
                
                $
                1,491,800Notes
      payable and capital leases
                
                
                -
                
                
                
                39,900
                
                
                
                -
                
                
                
                39,900Notes
      payable to related parties
                
                
                -
                
                
                
                155,517
                
                
                
                -
                
                
                
                155,517Derivative
      liabilities
                
                
                -
                
                
                
                1,355,751
                
                
                
                -
                
                
                
                1,355,751Warrant
      liabilities
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Total
      Liabilities
                
                $
                -
                
                
                $
                3,042,968
                
                
                $
                -
                
                
                $
                3,042,968
 
 December 31, 2008
                
                Level
      I
                
                
                Level II
                
                
                Level III
                
                
                TotalConvertible
      debentures
                
                $
                -
                
                
                $
                1,574,100
                
                
                $
                -
                
                
                $
                1,574,100Notes
      payable and capital leases
                
                
                -
                
                
                
                92,828
                
                
                
                -
                
                
                
                92,828Notes
      payable to related parties
                
                
                -
                
                
                
                321,063
                
                
                
                -
                
                
                
                321,063Derivative
      liabilities
                
                
                -
                
                
                
                857,236
                
                
                
                -
                
                
                
                857,236Warrant
      liabilities
                
                
                -
                
                
                
                75,450
                
                
                
                -
                
                
                
                75,450Total
      Liabilities
                
                $
                -
                
                
                $
                2,920,677
                
                
                $
                -
                
                
                $
                2,920,677
 
 Effective
this January 1, 2009, we implemented FASB ASC 820-10, formerly Statement of
Financial Accounting Standards No. 157, Fair Value Measurements, or SFAS 157,
for our nonfinancial assets and liabilities that are re-measured at fair value
on a non-recurring basis. The adoption of FASB ASC 820-10 for our nonfinancial
assets and liabilities that are re-measured at fair value on a non-recurring
basis did not impact our financial position or results of operations; however,
could have an impact in future periods. In addition, we may have additional
disclosure requirements in the event we complete an acquisition or incur
impairment of our assets in future periods.
  13
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 NOTE 4 –INTANGIBLE
ASSETS
 
 The
acquisition of the client lists of Wolen Katz and AMP-Best Consulting in 2006 is
currently valued at $-0-, which is net of accumulated amortization of $593,231.
These intangible assets are being amortized over a three-year period. The
amortization expense for the three and nine months ended September 30, 2009 and
2008 was $3,226 and $101,711, respectively, as compared to $49,243 and $147,728
for the same periods in the prior year.
 
 As of
September 30, 2009, this intangible has been fully amortized.
 
 NOTE 5 - GOING
CONCERN
 
 The
accompanying condensed consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going
concern.
 
 The
Company has suffered recurring operating losses and current liabilities exceeded
current assets by approximately $4.7 million, as of September 30, 2009. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. The recoverability of a major portion of the recorded asset
amounts shown in the accompanying condensed consolidated balance sheet is
dependent upon continued operations of the Company, which in turn, is dependent
upon the Company's ability to raise capital and/or generate positive cash flows
from operations.
 
 In
addition to developing new products, obtaining new customers and increasing
sales to existing customers, management plans to achieve profitability through
acquisitions of companies in the business software and information technology
consulting market with solid revenue streams, established customer bases, and
generate positive cash flow.
 
 These
condensed consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
 
 NOTE 6- LINE OF
CREDIT
 
 The
Company has a line of credit with Bank of America in the amount of $250,000. The
secured line of credit bears interest at prime plus 1% per annum, which can
change with the fluctuations in the prime rate.  Monthly payments of
interest only in arrears shall be due and payable on the 4th of each month and
these have been paid.  Principal shall be due and payable on
demand.  The Company had no outstanding loan balances as of September
30, 2009 and December 31, 2008.
 
 NOTE 7- CONVERTIBLE
DEBENTURES PAYABLE
 
 In
January 2003, the Company entered into subscription agreements with certain
purchasers to issue $140,000 in convertible debentures, with interest payable at
5% annum.  The notes are convertible into the Company's Class A common
stock at a price equal to either (a) an amount equal to one hundred twenty
percent (120%) of the closing bid price for the Common Stock on the Closing
Date, or (b) an amount equal to eighty percent (80%) of the average of the four
(4) lowest Closing Bid Prices of the Common Stock for the five (5) trading days
immediately preceding the Conversion Date.
 
 Pursuant
to the subscription agreements set forth above, on June 30, 2003, the Company
issued $40,000 in 5% convertible debentures and on September 19, 2003, the
Company issued an additional $100,000 in 5% convertible debentures to the
private investors under the subscription agreement.  The 20%
beneficial conversion feature was previously recorded as prepaid financing
costs, until such time as the Company's Class A common stock into which the
debentures are convertible
was registered and deemed effective by the U.S Securities and Exchange
Commission.  The Company completed the effective registration of the
Company's common stock, and any amounts capitalized have been charged to expense
in accordance with in FASB ASC 470-2, formerly EITF Issue 98-5. During the nine
months ended September 30, 2009 and during the year ended December 31, 2008, no
additional payments have been made on these outstanding convertible debentures.
Total outstanding principal balance of the convertible debentures as of
September 30, 2009 and December 31, 2008 was $15,000, plus accrued interest of
$5,986 and $5,425, respectively.
 
 14
 Table of Contents
 
 TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  NOTE 7- CONVERTIBLE
DEBENTURES PAYABLE (Continued)
 
 On
December 30, 2005, the Company entered into a Securities Purchase Agreement with
YA Global (f/k/a Cornell Capital Partners, LP) ("Cornell").  Pursuant
to such purchase agreement, Cornell shall purchase up to $2,359,047 of secured
convertible debentures, which shall be convertible into shares of the Company’s
Class A common stock. Pursuant to the Securities Purchase Agreement, two Secured
Convertible Debentures were issued on December 30, 2005 for an aggregate of
$1,759,047. A portion of this financing was used to convert promissory notes and
accrued interest equal to $1,159,047 into new secured convertible debentures and
the balance was new financing in the form of secured convertible debentures
equal to $600,000 with interest payable at the rate of 7.5% per annum to be
issued and sold on the closing of this Securities Purchase Agreement and a
second secured convertible debenture equal to $600,000 with interest payable at
the rate of 7.5% per annum to be issued and sold two business days prior to the
filing of the registration statement that will register the common stock shares
issuable upon conversion of the secured convertible debentures.  On
May 2, 2006, the second $600,000 was funded 2 business days prior to the date
the registration statement was filed with the United States Securities and
Exchange Commission.
 
 Interest
on the outstanding principal balance of the Secured Convertible Debentures
accrues at the annual rate of 7.5%. Payment of principal and accrued interest
shall be paid on or before December 30, 2007 on the 2005 debentures, and May 2,
2008 for the 2006 debenture. The Company has the option to redeem a portion or
all of the outstanding debentures at 120% of the amount redeemed plus accrued
interest. The holder shall be entitled to convert in whole or in part at any
time and from time to time, any amount of principal and accrued interest at a
price equal to 90% of
the lowest closing bid price of the Common Stock during the 30 trading days
immediately preceding the conversion date, as quoted by Bloomberg, LP
(“Conversion Price”). In the event of a default, the full principal amount of
this Debenture, together with interest and other amounts owing, shall be due and
payable in cash, provided however, the holder of the debenture may request
payment of such amounts in Common Stock of the Obligor at the Conversion Price
then in-effect. A holder of the debenture may not convert this Debenture or
receive shares of Common Stock as payment of interest hereunder to the extent
such conversion or receipt of such interest payment would result in the holder
of the debenture beneficially owning in excess of 4.9% of the then issued and
outstanding shares of Common Stock, including shares issuable upon conversion
of, and payment of interest on, this Debenture. Providing that the holder of the
debenture meets all restrictions and that the Company does not enter into
default, then the Company would expect to issue approximately 344,000,000 shares
of Common
  Stock in
settlement of the three secured convertible debentures, over the life of these
debentures at the current Conversion Price of $.0075.
 
 During
the nine months ended September 30, 2009, the Company issued 703,418,804 shares
of Class A common stock for repayment of $82,300 of principal on the convertible
debenture held by YA Global Investments, f/k/a Cornell Capital Partners. The
aggregate principal value of the debentures at September 30, 2009 is $1,476,800.
Debt discount has been fully amortized.
 
 As of
September 30, 2009, the Company is in default on all of these debentures and
continues to negotiate with YA Global to cure the default. On October 30, 2009,
YAG Investments L.P. agreed to change the maturity date of the convertible
debentures to December 30, 2010 ( See Note 15).
 
 NOTE 8 - DERIVATIVE
LIABILITY
 
 In
accordance with FASB ASC 815-10 (Prior authoritative literature: SFAS 133,
"ACCOUNTING FOR DERIVATIVE INSTRUMENTSAND HEDGING ACTIVITIES"
and FASB ASC 815-40, formerly EITF 00-19, "ACCOUNTING FOR DERIVATIVE FINANCIAL
INSTRUMENTS INDEXED TO, AND POTENTIALLY SETTLED IN, A COMPANY'S OWN STOCK," the
conversion feature associated with the YA Global Investments, f/k/a Cornell
Capital Partners Convertible Debentures represents embedded derivatives. As
such, the Company had recognized embedded derivatives in the amount of
$1,946,936 as a liability in the accompanying condensed consolidated balance
sheet, and it is now measured at its estimated fair value of $1,355,751 at
September 30, 2009. In addition the Company issued 4 million warrants which were
valued at $75,450 and are not subject to revaluation. These warrants have
expired, and, as such, the warrant liability was credited to gain on valuation
of derivative during the nine months ended September 30, 2009.  These
warrants are included in theconsolidated balance sheets as warrant liability at
December 31, 2008.
 
 Theestimated fair value of
the embedded derivative has been calculated based on a Black-Scholes pricing
model using the following assumptions at September 30, 2009:
  Fair
      market value of stock
                
                $
                0.00031Exercise
      price
                
                $
                0.000279Dividend
      yield
                
                
                0.00
                %Risk
      free interest rate
                
                
                1.45
                %Expected
      volatility
                
                
                152.24
                %Expected
      life
                
                3
      Years
 15
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 
 NOTE 9 - DUE TO RELATED
PARTIES
 
 Pursuant
to the employment contract dated January 1, 2003 between the Company and Jerome
Mahoney, the Non-Executive Chairman of the Board, Mr. Mahoney is to receive a
salary of $180,000 per year subject to 10% increases every year thereafter, as
well as a monthly unaccountable travel expense allowance of $725, an auto
allowance of $800 and a health insurance allowance of $1,400 per
month.  Also, pursuant to the employment contract with Mr. Mahoney,
following the completion of the Spin-off from its former parent company, iVoice
Inc., which occurred on February 11, 2004, Mr. Mahoney is entitled to receive a
one-time payment of $350,000. In May 2009 the Company issued 100,000,000 shares
of Class A Common stock to Mr. Mahoney for repayment of $8,500 in deferred
compensation with a fair value of value $18,750. The difference in the fair
value and amount of deferred compemsation repaid was charged to beneficial
interest in the amount of $10,250. In May 2009, the Company paid Jerome R.
Mahoney, the Company’s Non-Executive Chairman of the Board of Directors since
January 1, 2003, the sum of $117,500 in full and total satisfaction on any and
all outstanding obligations that exist or may exist between Mr. Mahoney and Trey
Resources, Inc. Such sum to be allocated first to principal outstanding on a
promissory note by and between Mr. Mahoney and Trey Resources, Inc., second to
any interest due and outstanding on such promissory note, and any balance
thereafter to deferred and accrued compensation due Mr. Mahoney. The total
outstanding debt due to Mr. Mahoney was $1,211,856. The remaining unpaid and
forgiven balance was credited to Additional Paid-In capital in the accompanying
balance sheet  in the amount of $1,094,356.
 
 Pursuant
to the employment contract dated September 15, 2003 between the Company and Mark
Meller, the President, Chief Executive Officer and Chief Financial Officer of
Trey Resources, Mr. Meller is to receive a salary of $180,000 per year subject
to 10% increases every year thereafter, as well as a monthly unaccountable
travel expense allowance of $600 and an auto allowance of $800.  Also,
pursuant to the employment contract dated September 15, 2003 between the Company
and Mr. Meller, following the completion of the Spin-off from its former parent
company, iVoice Inc., which occurred on February 11, 2004, Mr. Meller is
entitled to receive a one-time payment of $350,000.  In addition, Mr.
Meller was awarded a cash bonus of $114,800 on September 14, 2004. During the
nine months ended September 30, 2009, the Company issued 100,000,000 shares of
Class A Common stock to Mr. Meller for repayment of $8,500 in deferred
compensation with a fair value of value $18,750. The difference in the fair
value and amount of deferred compemsation repaid was charged to beneficial
interest in the amount of $10,250.  Total amounts owed to Mr. Meller
at September 30, 2009, representing unpaid salary, unpaid expense and auto
allowances, and the one-time payment in connection with the Spin-off, totaled
$844,936.
 
 Mr.
Meller has agreed to defer payment of any monies due and owing him representing
fixed compensation, which has been accrued on the Company’s balance sheet, and
the one-time payment in connection with the Spin-off, until such time as the
Board of Directors determines that the Company has sufficient capital and
liquidity to make such payments.  Mr. Meller has further agreed,
however, to accept payment or partial payment, from time to time, as determined
in the sole discretion of the Board of Directors in the form of cash, the
Company’s Class A Common Stock and/or the Company’s Class B Common
Stock.
  NOTE 10 – NOTES PAYABLE TO
RELATED PARTIES
  Pursuant
to the Spin-off from iVoice, the Company has assumed a promissory note totaling
$250,000 payable to Jerome Mahoney, President and Chief Executive Officer of
iVoice and Non- Executive Chairman of the Board of Trey Resources.  At
the end of the first quarter, March 31, 2009,  the principal on this
note was $79,525 and accrued interest was $77,086. This is included in notes
payable to related parties on the balance sheet. In May 2009, the Company paid
Jerome R. Mahoney, the Company’s Non-Executive Chairman of the Board of
Directors since January 1, 2003, the sum of $117,500 in full and total
satisfaction on any and all outstanding obligations that exist or may exist
between Mr. Mahoney and Trey Resources, Inc. Such sum to be allocated first to
principal outstanding on a promissory note by and between Mr. Mahoney and Trey
Resources, Inc., second to any interest due and outstanding on such promissory
note, and any balance thereafter to deferred and accrued compensation due Mr.
Mahoney (see Note 9).
 
 In
connection with the acquisition of SWK, Inc., the Company assumed a note payable
to Gary Berman, VP – MAPADOC EDI Service of SWK Technologies, Inc., our wholly
owned subsidiary.  On April 1, 2004, Mr. Berman loaned the company
$25,000 pursuant to the Agreement and Plan of Merger and Reorganization among
Trey, SWK and SWK Technologies, Inc.  The unsecured note bears
interest at 5% per annum and is payable in bi-weekly amounts of
$217.  As of September 30, 2009, the note had been fully
paid.
 
 In
connection with the acquisition of SWK, Inc, the Company assumed a note payable
to Lynn Berman, President of SWK Technologies, Inc., our wholly owned
subsidiary.  On April 1, 2004, Ms. Berman loaned the company $25,000
pursuant to the Agreement and Plan of Merger and Reorganization among Trey, SWK
and SWK Technologies, Inc.  The unsecured note accrued interest at 5%
per annum and was payable in bi-weekly amounts of $217.  As of
September 30, 2009, the note had been fully paid.
 
 Pursuant
to the asset purchase agreement with AMP-Best, SWK Technologies, Inc. issued a
$380,000 promissory note to Crandall Melvin III, former officer of AMP-Best and
current Chief Financial Officer of SWK Technologies, Inc. The note carries an
interest rate of 7.75% and is payable in 60 monthly payments, commencing 120
days from the closing. As of September 30, 2009 and December 31, 2008, the
principal balance on the note is $155,517 and $231,418,
respectively.
  16
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 NOTE 11 – INCOME
TAXES
 
 The
Company adopted the provisions of FASB ASC 740-10 (Prior authoritative
literature Financial Accounting Standards Board ("FASB") Interpretation No. 48
("FIN 48"), Accounting for Uncertainty in Income Taxes- an Interpretation of
FASB Statement No. 109, on April 1, 2007. The Company has analyzed filing
positions in all of the federal and state jurisdictions where it is required to
file income tax returns, as well as all open tax years in these jurisdictions.
The Company does not believe it has any unrecognized tax benefits and there was
no effect on its financial condition or results of operations as a result of
implementing FASB ASC 740-10.
  The tax
effect of temporary differences, primarily net operating loss carryforwards,
asset reserves and accrued liabilities, gave rise to the Company's deferred tax
asset in the accompanying September 30, 2009 and December 31, 2008 consolidated
balance sheets. Deferred income taxes are recognized for the tax consequence of
such temporary differences at the enacted tax rate expected to be in effect when
the differences reverse. Because of the current uncertainty of realizing the
benefit of the tax carry forward, a valuation allowance equal to the tax benefit
for deferred taxes has been established. The full realization of the tax benefit
associated with the carry forward depends predominantly upon the Company's
ability to generate taxable income during the carry forward period.
 
 NOTE 12 - CAPITAL
STOCK
 
 In
accordance with its Certificate of Incorporation as amended on April 24, 2003,
the Company is authorized to issue 10,000,000,000 shares of Class A common stock
at $.00001 par value; 50,000,000 shares of Class B Common Stock, par value
$.00001; and 20,000,000 shares of Class C Common Stock, par value
$.00001.  Additionally, the board of directors has the right to
prescribe and authorize the issuance of 1,000,000 preferred shares, $1.00 par
value.
 
 PREFERRED
STOCK
 
 Preferred
Stock consists of 1,000,000 shares of authorized preferred stock with $1.00 par
value. As of September 30, 2009, no shares were issued or
outstanding.
 
 CLASS A
COMMON STOCK
 
 Class A
Common Stock consists of the following as of September 30, 2009: 10,000,000,000
shares of authorized common stock with a par value of $.00001, 5,103,892,337
shares were issued and outstanding.  Each holder of Class A common
stock is entitled to receive ratably dividends, if any, as may be declared by
the Board of Directors out of funds legally available for the payment of
dividends.  The Company has never paid any dividends on its common
stock and does not contemplate doing so in the foreseeable
future.  The Company anticipates that any earnings generated from
operations will be used to finance the growth objectives.
 
 For the
nine months ended September 30, 2009, the Company had the following transactions
in its Class A common stock:
 
 The
Company issued 200,000,000 shares of Class A Common stock for repayment of
$17,000 in deferred compensation with a fair value of value $37,500. The
difference in the market value and $17,000 of  deferred compensation
repaid was charged to beneficial interest in the amount of
$10,250.
 
 The
Company issued 95,000,000 shares of Class A Common Stoc for repayment of accrued
expenses of $9,500 with a fair value of $11,875. The difference in the market
value and $11,875 of  deferred compensation repaid was charged to
beneficial interest in the amount of $2,375.
 
 The
Company issued 703,418,804 shares of Class A Common Stock with a total value of
$342,744 for conversion of $82,300 of principal on outstanding debentures with
YA Global Investments, (f/k/a Cornell Capital Partners).
 
 CLASS B
COMMON STOCK
 
 Class B
Common Stock consists of 50,000,000 shares of authorized common stock with a par
value of $0.00001.  Class B stock has voting rights of 1 to 100 with
respect to Class A Common Stock.  As of September 30, 2009, no shares
were issued and outstanding; Class B common stockholders are entitled to receive
dividends in the same proportion as the Class B Common Stock conversion and
voting rights have to Class A Common Stock.  A holder of Class B
Common Stock has the right to convert each share of Class B Common Stock into
the number of shares of Class A Common Stock determined by dividing the number
of Class B Common Stock being converted by a 50% discount of the lowest price
that Trey had ever issued its Class A Common Stock.  Upon the
liquidation, dissolution, or winding - up of the Company, holders of Class B
Common Stock will be entitled to receive distributions.
 17
 Table of Contents
  TREY
RESOURCES, INC. and SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 CLASS C
COMMON STOCK
 
 Class C
Common Stock consists of 20,000,000 shares of authorized common stock with a par
value of $0.00001.  Class C stock has voting rights of 1 vote for
every 1,000 shares with respect to Class A Common Stock.  As of
September 30, 2009, no shares were issued or outstanding.
 
 NOTE 13 – SALE OF SHARES OF
SWK TECHNOLOGIES
 
 On May 6,
2009, the Company sold twenty-five (25) newly issued shares or 20% of the stock
of SWK Technologies, Inc. (“SWK”), a wholly owned subsidiary of Trey Resources,
Inc. for a purchase price of $150,000 to the President of SWK.
  NOTE 14 –
RESTATEMENT
 
 The
September 30, 2009 financial statements have been restated to reflect the
reclassification of $1,094,356 related party debt forgiveness, from other income
where it was previously reported, to additional paid-in capital. Net loss
applicable to common shares, accumulated deficit and additional paid-in capital
all increased by this amount. Net loss increased from income of$244,825 to a loss
of $850,031; accumulated deficit increased from $10,659,686 to $11,754,042; and
additional paid-in capital increased from $6,015,523 to $7,109,879. Net loss per
basic and diluted share and cash provided by operating activities did not
change.
 
 NOTE 15 – SUBSEQUENT
EVENT
 
 On
October 30, 2009, YAG Investments, L.P. agreed to extend the maturity date of
the Convertible Debentures to December 30, 2010.
   18
 Table of Contents
  ITEM 2 - MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
 
 Readers
should read the following discussion in conjunction with our condensed
consolidated financial statements and related notes included elsewhere in this
filing as well as our audited consolidated financial statements and related
notes for the year ending December 31, 2008 filed with Form 10-K.  The
following discussion contains forward-looking statements.  Please see
“Forward Looking Statements - Cautionary Factors” for a discussion of
uncertainties, risks and assumptions associated with these financial
statements
 
 Overview
 
 With the
acquisition of SWK in 2004, the Board of Directors decided that Trey will focus
on the business software and information technology consulting market, and is
looking to acquire other companies in this industry.  SWK
Technologies, Inc., Trey’s wholly owned subsidiary and the surviving company
from the acquisition and merger with SWK, Inc., is a New Jersey-based
information technology company, value added reseller, and master developer of
licensed accounting software published by Sage Software.  SWK
Technologies also publishes its own proprietary supply-chain software, the
Electronic Data Interchange (EDI) solution “MAPADOC.”  SWK
Technologies sells services and products to various end users, manufacturers,
wholesalers and distribution industry clients located throughout the United
States, along with network services provided by the Company.
 
 On June
2, 2006, SWK Technologies, Inc. completed the acquisition of certain assets of
AMP-Best Consulting, Inc. of Syracuse, New York.  AMP-Best Consulting,
Inc. is an information technology company and value added reseller of licensed
accounting software published by Sage Software.  AMP-Best Consulting,
Inc. sells services and products to various end users, manufacturers,
wholesalers and distribution industry clients located throughout the United
States, with special emphasis on companies located in the upstate New York
region.
 
 Management
is uncertain that it can generate sufficient cash to sustain its operations in
the next twelve months, or beyond.  It is unclear whether the
acquisition of SWK, Inc. will result in a reasonably successful operating
business and can give no assurances that we will be able to generate sufficient
revenues to be profitable, obtain adequate capital funding or continue as a
going concern.
 
 Nine months ended September
30, 2009 as compared to the nine months ended September 30,
2008
 
 Since the
acquisition of SWK, Inc., on June 2, 2004, all revenues reported by Trey are
derived from the sales and service of Sage Software and MAPADOC products to
various end users, manufacturers, wholesalers and distribution industry clients
located throughout the United States, along with network services provided by
the Company.
 
 Revenues
for the nine months ended September 30, 2009 increased $40,131 (0.7%) to
$5,751,394 as compared to $5,711,263 for the nine months ended September 30,
2008. These sales were all generated by the Company’s operating subsidiary, SWK
Technologies (“SWKT”).  This increase is primarily due to increased
consulting revenues offset mostly by decreases in software sales and revenues
derived from maintenance agreements.
 
 Gross
profit for the nine months ended September 30, 2009 increased $431,151 (21.5%)
to $2,441,000 as compared to $2,009,849 for the nine months ended September 30,
2008. For the nine months ended September 30, 2009 the gross profit percentage
was 42.4% as compared to 35.2% for the nine months ended September 30, 2008. The
mix of products being sold by the company changes from time to time, and
sometimes causes the overall gross margin percentage to vary.  Sales
of the larger Sage Software products carries lower gross margin percentage as
the relative discount percentage from the supplier decreases whereas consulting
revenues derive a higher gross profit. The change in sales mix resulted in gross
profit being higher as a percent of sales.
 
 Total
operating expenses increased $110,148 (4.7%) to $2,473,844 for the nine months
ended September 30, 2009 as compared to $2,363,696 for the nine months ended
September 30, 2008. This increase is mainly attributed to the increase in
general and administrative salaries.
 
 Total
other income (expense) for the nine months ended September 30, 2009 was an
expense of $817,187 as compared to an expense of $1,515,850 for the nine months
ended September 30, 2008. The decrease in other expense primarily reflects the
smaller loss on revaluation of derivatives offset partially bu higher expense
associated with the debt conversion discount..
 
 For nine
months ended September 30, 2009 the Company had a net loss of $850,031 as
compared to a net loss of $1,869,697 for the nine months ended September 30,
2008. The change in net income (loss) was the result of the factors discussed
above.
  19
 Table of Contents
  Three months ended September
30, 2009 as compared to the three months ended September 30,
2008
 
 Revenues
for the three months ended September 30, 2009 increased $27,536 (1.5%) to
$1,861,205 as compared to $1,833,669 for the three months ended September 30,
2008. These sales were all generated by the Company’s operating subsidiary, SWK
Technologies (“SWKT”).  This increase is primarily due to higher
consulting revenues offset partially by lower software sales and revenues
derived from maintenance agreements offset partially by an increase in
consulting revenues.
 
 Gross
profit for the three months ended September 30, 2009 increased $262,345 (44.2%)
to $856,348 as compared to $594,003 for the three months ended September 30,
2008. For the three months ended September 30, 2009 the gross profit percentage
was 46.0% as compared to 32.4% for the three months ended September 30, 2008.
The mix of products being sold by the company changes from time to time, and
sometimes causes the overall gross margin percentage to vary.  Sales
of the larger Sage Software products carries lower gross margin percentage as
the relative discount percentage from the supplier decreases. The change in
sales mix resulted in gross profit being higher as a percent of
sales.
 
 Total
operating expenses decreased $33,770 (4.6%) to $707,067 for the three months
ended September 30, 2009 as compared to $740,837 for the three months ended
September 30, 2008. This increase is mainly attributed to a decrease in general
and administrative salaries.
 
 Total
other income (expense) for the three months ended September 30, 2009 was an
expense of $474,683 as compared to income of $20,724 for the three months ended
September 30, 2008. The increase in expense primarily attributed to the higher
loss on valuation of derivatives and the expense associated with the common
stock issued for debt conversion discount.
 
 For three
months ended September 30, 2009 the Company had a net loss of $325,402 as
compared to a net loss of $126,110 for the three months ended September 30,
2008. The change in net income (loss) was the result of the factors discussed
above.
  Liquidity and Capital
Resources
 
 We are
currently seeking additional operating income opportunities through potential
acquisitions or investments.  Such acquisitions or investments may
consume cash reserves or require additional cash or equity.  Our
working capital and additional funding requirements will depend upon numerous
factors, including: (i) strategic acquisitions or investments; (ii) an increase
to current company personnel; (iii) the level of resources that we devote to
sales and marketing capabilities; (iv) technological advances; and (v) the
activities of competitors.
 
 The
Company has suffered recurring losses and current liabilities exceeded current
assets by approximately $4.7 million, as of September 30, 2009, and, as such,
will require financing for working capital to meet its operating
obligations.  These matters raise substantial doubt about the
Company's ability to continue as a going concern. The recoverability of a major
portion of the recorded asset amounts shown in the accompanying condensed
consolidated balance sheet is dependent upon continued operations of the
Company, which in turn, is dependent upon the Company's ability to raise capital
and/or generate positive cash flows from operations.
  In
addition to developing new products, obtaining new customers and increasing
sales to existing customers, management plans to achieve profitability through
acquisitions of companies in the business software and information technology
consulting market with solid revenue streams, established customer bases, and
generate positive cash flow. We anticipate that we will require financing on an
ongoing basis for the foreseeable future.
 
 On
December 30, 2005, the Company entered into a Securities Purchase Agreement with
Cornell Capital Partners, LP (n/k/a/ YA Global Investments “YA
Global”).  Pursuant to such purchase agreement, YA Global purchased
$2,359,047 of secured convertible debentures which shall be convertible into
shares of the Company's Class A common stock. Pursuant to the Securities
Purchase Agreement, two Secured Convertible Debentures were issued on December
30, 2005 for an aggregate of $1,759,047. A portion of this financing was used to
convert promissory notes and accrued interest therefrom equal to $1,159,047 into
new secured convertible debentures and the balance was new financing in the form
of secured convertible debentures equal to $600,000 with interest payable at the
rate of 7.5% per annum to be issued and sold on the closing of this Securities
Purchase Agreement and a second secured convertible debenture equal to $600,000
with interest payable at the rate of 7.5% per annum to be issued and sold two
business days prior to the filing of the registration statement that will
register the common stock shares issuable upon conversion of the secured
convertible debentures.  The debentures were due on December 30, 2007
and May 2, 2008, respectively, and carry an interest rate of 7.5% per annum. The
principal and accrued interest on the debentures are convertible into shares of
Class A Common Stock at a price per share equal to 90% of the lowest closing bid
price of our Class A Common Stock for the thirty trading days immediately
preceding conversion. The aggregate balance due of the YA Global debentures at
September 30, 2009 is $1,476,800 for principal and $524,267 for interest. As of
September 30, 2009, the Company is in default of all the YA Global debentures
and continues to negotiate with YA Global to cure the default.
  20
 Table of Contents
  During
the nine months ended September 30, 2009, Trey had a net decrease in cash of
$45,651.  Trey’s principal sources and uses of funds were as
follows:
  Cash provided by (used in) operating
activities.  Trey had used cash in operating activities of
$40,935 for the nine months ended September 30, 2009, a decrease of $400,580 as
compared to cash provided by operating activities of $359,645 for the nine
months ended September 30, 2008. This decrease is primarily attributed to the
decrease in accounts payable and accrued expenses. Management has been keeping
tight control on the cash and expenses and has been leveraging their funding
needs through related party accounts.
  Cash provided by (used in) investing
activities.Investing activities for the nine months ended
September 30, 2009 used cash of $15,767 as compared to generating cash of
$56,124 for the nine months ended September 30, 2008. This decrease is primarily
attributed to the proceeds of $67,379 from cash redemptions of the notes
receivable that was received during the nine months ended September 30,
2008..
 
 Cash provided by (used in) financing
activities.  Financing activities in the nine months ended
September 30, 2009 provided a total of $11,051 in cash as compared to using
$293,472 of cash for the nine months ended September 30, 2008. This increase is
primarily attributed to the proceeds of $150,000 from the sale of shares of SWK
Technologies during the nine months ended September 30, 2009  and
lower repayments of notes payable, convertible debentures and capital
leases.
 
 Off Balance Sheet
Arrangements
 
 During
the nine months ended September 30, 2009, we did not engage in any material
off-balance sheet activities nor have any relationships or arrangements with
unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited
purposes. Further, we have not guaranteed any obligations of unconsolidated
entities nor do we have any commitment or intent to provide additional funding
to any such entities.
 
 Forward Looking Statements -
Cautionary Factors
 
 Certain
information included in this Form 10-Q and other materials filed or to be filed
by us with the Securities and Exchange Commission (as well as information
included in oral or written statements made by us or on our behalf), may contain
forward-looking statements about our current and expected performance trends,
growth plans, business goals and other matters.  These statements may
be contained in our filings with the Securities and Exchange Commission, in our
press releases, in other written communications, and in oral statements made by
or with the approval of one of our authorized officers.  Information
set forth in this discussion and analysis contains various “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.  The Private
Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe
harbor” provisions for forward-looking statements.  The reader is
cautioned that such forward-looking statements are based on information
available at the time and/or management’s good faith belief with respect to
future events, and are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed in the
statements.  Forward-looking statements speak only as of the date the
statement was made.  We assume no obligation to update forward-looking
information to reflect actual results, changes in assumptions or changes in
other factors affecting forward-looking information.  Forward-looking
statements are typically identified by the use of terms such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“predict,” “project,” “should,” “will,” and similar words, although some
forward-looking statements are expressed differently.  Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to be
correct.
 
 ITEM4T. CONTROLS AND PROCEDURES
 
 Management's
report on internal control over financial reporting.
 
 Management
of the Company has evaluated, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or
15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this Quarterly Report on Form 10-Q. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer of the
Company had concluded that the Company's disclosure controls and procedures as
of the period covered by this Quarterly Report on Form 10-Q were not effective
for the following reasons:
 
 a)           The
deficiency was identified as the Company's limited segregation of duties amongst
the Company's employees with respect to the Company's control activities. This
deficiency is the result of the Company's limited number of employees. This
deficiency may affect management's ability to determine if errors or
inappropriate actions have taken place. Management is required to apply its
judgment in evaluating the cost-benefit relationship of possible changes in our
disclosure controls and procedures.
 
 b)           The
deficiency was identified in respect to the Company's Board of Directors. This
deficiency is the result of the Company's limited number of external board
members. This deficiency may give the impression to the investors that the board
is not independent from management. Management and the Board of Directors are
required to apply their judgment in evaluating the cost-benefit relationship of
possible changes in the organization of the Board of Directors.
 
 Changes
in internal control over financial reporting.
 
 Management
of the Company has also evaluated, with the participation of the Chief Executive
Officer of the Company, any change in the Company’s internal control over
financial reporting that occurred during the period covered by this Quarterly
Report on Form 10-Q and determined that there was no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
 
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 PART
II – OTHER INFORMATION
 
 ITEM3. DEFAULTS UPON SENIOR SECURITIES
 
 As of
September 30, 2009, the Company was in default of all of the Secured Convertible
Debentures held by YA Global Investments LP. As of September 30, 2009, the total
principal amount due on these debentures was $1,476,80 and the total accrued
interest was $524,267. As of the date of this filing, management is currently in
negotiations with holder of these debentures to cure the
default.
 
 ITEM5. OTHER INFORMATION
 
 (b)
              The
      Company does not have a standing nominating committee or a committee
      performing similar functions as the Company’s Board of Directors consists
      of only one member and therefore there would be no benefit in having a
      separate nominating committee that would consist of the same number of
      members as the full board of directors.  The sole Board
      member  participates in the consideration of director
      nominees.
  ITEM6. EXHIBITS
 
 31.1
              Rule 13a-14(a)/15d-14(a)
    Certifications.
 
 32.1
              Certification of Chief Executive and Chief Financial
      Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002.
 
 
 
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 Table of Contents
 
 
 SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of
1934, the registrant has duly caused this report on Form 10-Q to be signed on
its behalf by the undersigned thereunto duly authorized.
 
 
 Trey
Resources, Inc.
 
 By:/s/ Mark
Meller                                                                                                           Date:           November
12, 2009
 Mark
Meller, President
 Chief
Executive Officer and
 Principal
Financial Officer
 
 
 In
accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
 
 By: /s/ Mark
Meller                                                                                                           Date:           November
12, 2009
 Mark
Meller, President
 Chief
Executive Officer and
 Principal
Financial Officer
 
 
 23
 Table of Contents
 
 Index
of Exhibits
 
 
 31.1
              Rule 13a-14(a)/15d-14(a)
    Certifications.
 
 32.1
              Certification of Chief Executive and Chief Financial
      Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002.