SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB

(MARK ONE)

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

     For the quarterly period ended June 30, 2007

                                       Or

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

     For the transition period from ________ to _________


                       COMMISSION FILE NUMBER: 000-161570


                        VELOCITY ASSET MANAGEMENT, INC.
       (Exact name of Small Business Issuer as Specified in its Charter)


                  DELAWARE                                65-0008442
        (State or Other Jurisdiction                    (IRS Employer
      of Incorporation or Organization)               Identification No.)


           1800 Route 34 North, Building 4, Suite 404A, Wall, NJ 07719
             (Address of Principal Executive Offices)  (Zip Code)


                                 (732) 556-9090
                (Issuer's Telephone Number, Including Area Code)

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

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: The Issuer had 16,179,321 shares of
common stock issued and outstanding as of August 1, 2007.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

<PAGE>

                    VELOCITY ASSET MANAGEMENT SERVICES, INC.

                                  FORM 10-QSB
                      For the Quarter Ended June 30, 2007

                                     Index

                                                                           Page
                                                                          Number
                                                                          ------
PART I   FINANCIAL INFORMATION

Item 1   Condensed Consolidated Balance Sheets at December 31, 2006
         and June 30, 2007 (unaudited as at June 30, 2007)                    2

         Condensed Consolidated Statements of Income for the three and six
         month periods ended June 30, 2007 and 2006 (unaudited)               4

         Condensed Consolidated Statement of Changes in Stockholders'
         Equity for the six months ended June 30, 2007
         (unaudited)                                                          5

         Condensed Consolidated Statements of Cash Flows for the six months
         ended June 30, 2007 and 2006 (unaudited)                             6

         Notes to Condensed Consolidated Financial Statements                 7

Item 2   Management's Discussion and Analysis or Plan of Operation           15

Item 3   Controls and Procedures                                             23

PART II

Item 1   Legal Proceedings                                                   24

Item 2   Unregistered Sales of Equity Securities and Use of Proceeds         24

Item 3   Defaults Upon Senior Securities                                     24

Item 4   Submission of Matters to a Vote of Security Holders                 24

Item 5   Other Information                                                   24

Item 6   Exhibits                                                            24

Signatures                                                                   25

Certifications


<PAGE>
<TABLE>
<CAPTION>

PART I
FINANCIAL INFORMATION

Item 1   Financial Statements

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                  June 30,      December 31,
                                                                    2007           2006
                                                                (Unaudited)     (Audited)
                                                                ------------    ------------
<S>                                                             <C>             <C>
                                     ASSETS

Cash and cash equivalents                                       $  2,089,469    $  2,444,356
Properties held for sale                                           7,197,299       6,314,346
Deposits on properties                                               130,000         240,000
Tax certificates held and accrued interest receivable, net           333,542         472,071
Consumer receivables, net                                         42,879,889      38,327,926
Property and equipment, net of accumulated depreciation               64,228          68,619
Deferred income tax asset                                            265,300         306,900
Security deposit                                                      33,724          30,100
Other assets                                                         498,340         229,841
                                                                ------------    ------------

    Total assets                                                $ 53,491,791    $ 48,434,159
                                                                ============    ============
</TABLE>


   See accompanying notes to the condensed consolidated financial statements.

                                      -2-
<PAGE>
<TABLE>
<CAPTION>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                      June 30,       December 31,
                                                                                        2007            2006
                                                                                    (Unaudited)       (Audited)
                                                                                    ------------    ------------
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                                 <C>             <C>
LIABILITIES

  Accounts payable and accrued expenses                                             $  1,423,078    $    873,507
  Estimated court and media costs                                                      7,485,249       8,446,319
  Lines of credit                                                                     16,768,379      13,791,388
  Notes payable to related parties                                                     2,370,000       2,370,000
  Notes and mortgages payable                                                          1,015,000         780,000
  Convertible subordinated notes                                                       2,250,000              --
  Income taxes payable                                                                    51,324         600,974
                                                                                    ------------    ------------

    Total liabilities                                                                 31,363,030      26,862,188
                                                                                    ------------    ------------

STOCKHOLDERS' EQUITY

  Series A 10% Convertible Preferred Stock, $0.001 par value,
    10,000,000 shares authorized, 1,380,000 shares issued
    and outstanding (liquidation preference of $13,800,000)                                1,380           1,380
  Common stock, $0.001 par value, 40,000,000 shares authorized,
    16,179,321 and 16,129,321 shares issued and outstanding,
    respectively                                                                          16,179          16,129
  Additional paid-in-capital                                                          23,573,581      23,502,381
  Accumulated deficit                                                                 (1,462,379)     (1,947,919)
                                                                                    ------------    ------------

  Total stockholders' equity                                                          22,128,761      21,571,971
                                                                                    ------------    ------------

    Total liabilities and stockholders' equity                                      $ 53,491,791    $ 48,434,159
                                                                                    ============    ============
</TABLE>

   See accompanying notes to the condensed consolidated financial statements.

                                       -3-
<PAGE>
<TABLE>
<CAPTION>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                                                        For the Three Months Ended        For the Six Months Ended
,                                                                                June 30,                         June 30,
                                                                       ----------------------------    ----------------------------
                                                                           2007            2006            2007            2006
                                                                       ------------    ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>             <C>
REVENUES
  Sales of real property                                               $    163,983    $    232,254    $    218,995    $    603,566
  Income on consumer receivables                                          3,291,023       1,841,730       6,347,066       3,296,377
  Interest income on tax certificates held                                   26,484          63,306          86,169          93,502
                                                                       ------------    ------------    ------------    ------------

Total revenues                                                            3,481,490       2,137,290       6,652,230       3,993,445
                                                                       ------------    ------------    ------------    ------------

OPERATING EXPENSES
  Cost of real property sold                                                177,284          19,522         239,436         320,676
  Professional fees (including fees paid to related parties of
    $273,891 and $326,838 and $611,641 and $665,790 for the
    three and six month periods ended  June 30, 2007 and 2006,
    respectively)                                                         1,279,575         884,927       2,232,430       1,628,922
  General and administrative expenses                                       585,697         521,103       1,411,428         918,787
                                                                       ------------    ------------    ------------    ------------

    Total operating expenses                                              2,042,556       1,425,552       3,883,294       2,868,385
                                                                       ------------    ------------    ------------    ------------

    Income from operations                                                1,438,934         711,738       2,768,936       1,125,060

OTHER EXPENSE
  Interest expense (including interest paid to related parties of
    $58,353 and $51,367 and $116,103 and $109,117 for the
    three and six month periods ended June 30, 2007 and 2006,
    respectively)                                                          (471,717)       (311,021)       (890,785)       (631,585)
                                                                       ------------    ------------    ------------    ------------

Income before provision for income taxes                                    967,217         400,717       1,878,151         493,475

Provision for income taxes                                                  321,485         200,035         702,611         223,456
                                                                       ------------    ------------    ------------    ------------

Net income                                                                  645,732         200,682       1,175,540         270,019

Preferred dividend                                                         (345,000)       (161,005)       (690,000)       (161,005)
                                                                       ------------    ------------    ------------    ------------

Net income attributable to common stockholders                         $    300,732    $     39,677    $    485,540    $    109,014
                                                                       ============    ============    ============    ============

Weighted average common shares - basic                                   16,163,936      15,972,321      16,151,144      15,972,321
                                                                       ============    ============    ============    ============

Net income per common share - basic                                    $       0.02    $       0.00    $       0.03    $       0.01
                                                                       ============    ============    ============    ============

Weighted average common shares - diluted                                 17,719,398      17,417,920      17,802,517      17,405,774
                                                                       ============    ============    ============    ============

Net income per common share - diluted                                  $       0.02    $       0.00    $       0.03    $       0.01
                                                                       ============    ============    ============    ============
</TABLE>

   See accompanying notes to the condensed consolidated financial statements.

                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                     For the Six Months Ended June 30, 2007
                                   (UNAUDITED)


                                  Preferred Stock                Common Stock
                            ---------------------------   ---------------------------    Additional                       Total
                              Number of                     Number of                     Paid in       Accumulated    Stockholders'
                               Shares       Par Value        Shares        Par Value      Capital         Deficit        Equity
                            ------------   ------------   ------------   ------------   ------------   ------------    ------------
<S>                            <C>         <C>              <C>          <C>            <C>            <C>             <C>
BALANCES, December 31,
 2006                          1,380,000   $      1,380     16,129,321   $     16,129   $ 23,502,381   $ (1,947,919)   $ 21,571,971

Dividends paid on
 preferred stock                      --             --             --             --             --       (690,000)       (690,000)

Stock-based compensation              --             --         50,000             50         71,200             --          71,250

Net income                            --             --             --             --             --      1,175,540       1,175,540
                            ------------   ------------   ------------   ------------   ------------   ------------    ------------

BALANCES, June 30, 2007        1,380,000   $      1,380     16,179,321   $     16,179   $ 23,573,581   $ (1,462,379)   $ 22,128,761
                            ============   ============   ============   ============   ============   ============    ============
</TABLE>

   See accompanying notes to the condensed consolidated financial statements.

                                       -5-

<PAGE>
<TABLE>
<CAPTION>

                VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                             For the Six Months Ended
                                                                                    June 30,
                                                                          -----------------------------
                                                                              2007             2006
                                                                          ------------     ------------
<S>                                                                       <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                $  1,175,540     $    270,019
Adjustments to reconcile net income to net cash
 used in operating activities
   Depreciation and amortization                                                90,052           15,589
   Non-cash expenses relating to stock compensation                             71,250           12,347
   Deferred income tax benefit                                                  41,600           16,100
   (Increase) decrease in:
      Accounts receivable                                                           --           23,881
      Properties held for sale                                                (882,953)         223,343
      Deposits on properties                                                   110,000          241,000
      Tax certificates held and accrued interest receivable                    138,529           78,126
      Consumer receivables                                                  (5,156,741)      (5,982,097)
      Security deposit                                                          (3,624)          61,000
      Other assets                                                             (97,223)        (144,371)
   Increase (decrease) in:
      Accounts payable and accrued expenses                                    549,571          263,120
      Estimated court and media costs                                         (385,890)         216,129
      Income taxes payable                                                    (549,650)         (80,235)
                                                                          ------------     ------------
Net cash used in operating activities                                       (4,899,539)      (4,786,049)
                                                                          ------------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of property and equipment                                       (12,339)          (2,217)
                                                                          ------------     ------------
Net cash used in investing activities                                          (12,339)          (2,217)
                                                                          ------------     ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from borrowings                                                  3,211,991        4,375,801
   Repayments of borrowings                                                         --       (2,537,796)
   Proceeds received from stock and warrants sales and offerings                    --       13,800,120
   Net proceeds from convertible subordinated notes                          2,035,000               --
   Commissions and related expenses paid on
     stock offering                                                                 --       (1,404,000)
   Payment of dividends                                                       (690,000)        (161,005)
                                                                          ------------     ------------
Net cash provided by financing activities                                    4,556,991       14,073,120
                                                                          ------------     ------------

Net increase (decrease) in cash and cash equivalents                          (354,887)       9,284,854

Cash and cash equivalents, beginning of period                               2,444,356           90,624
                                                                          ------------     ------------

Cash and cash equivalents, end of period                                  $  2,089,469     $  9,375,478
                                                                          ============     ============

Supplemental disclosure of cash flow information:
   Cash paid for interest                                                 $    727,934     $    441,546
   Cash paid for income taxes                                             $    902,045     $    319,534
</TABLE>

   See accompanying notes to the condensed consolidated financial statements.

                                       -6-

<PAGE>

                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BUSINESS

The condensed consolidated financial statements of Velocity Asset Management,
Inc. ("VAMI") and its wholly-owned subsidiaries, Velocity Investments, LLC
("Velocity"), J. Holder, Inc. ("J. Holder"), VOM, LLC, ("VOM"), TLOP Acquisition
Company, LLC ("TLOP") and SH Sales, Inc. ("SH") (the "Subsidiaries", and
together with Velocity Asset Management, Inc., the "Company") included herein
have been prepared by the Company and are unaudited; however, such information
is in accordance with Securities and Exchange Commission regulations and
reflects all adjustments (consisting solely of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair presentation of
the financial position, results of operations, and cash flows for the interim
periods to which the report relates. The results of operations for the periods
ended June 30, 2007 and 2006 are not necessarily indicative of the operating
results that may be achieved for the full year.

Certain information and footnote disclosures, normally included in consolidated
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America, have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the audited, consolidated financial statements and notes
thereto included in the Company's Form 10-KSB for the year ended December 31,
2006.

The Company has one continuing industry segment - the acquisition, management,
collection, and servicing of distressed assets.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Properties Held for Sale
------------------------

Properties held for sale consist of real property purchased by the Company for
resale and are carried at the lower of cost or market value. This includes the
cost to purchase the property and repairs or other costs required to present the
property ready for resale. The Company recognizes income and related expenses
from the sale of real property at the date the sale closes.

Tax Certificates Held and Accrued Interest Receivable
-----------------------------------------------------

The Company records its New Jersey municipal tax liens at cost plus accrued
interest. Interest income is recognized using the effective interest method
("interest method").

Consumer Receivables
--------------------

The Company purchases consumer receivable portfolios at a substantial discount
from their face amount due to a deterioration of credit quality between the time
of origination and the Company's acquisition of the portfolios. Income is
recognized using either the interest method or cost recovery method. Upon
acquisition, the Company reviews each consumer receivable portfolio to determine
whether each such portfolio is to be accounted for individually or whether such
portfolio will be assembled into static pools of consumer receivable portfolios
based on common risk characteristics. Once the static portfolio pools are
created, management estimates the future anticipated cash flows for each pool.
If management can reasonably estimate the expected timing and amount of future
cash flows, the interest method is applied. However, if the expected future cash
flows cannot be reasonably estimated, the Company uses the cost recovery method.

Prior to January 1, 2005, the Company accounted for its investment in consumer
receivables portfolios using the interest method under the guidance of Practice
Bulletin 6, "Amortization of Discounts on Certain Acquired Loans ("PB-6")."
Effective January 1, 2005, the Company adopted and began to account for its
investment in consumer receivable portfolios using the interest method under the
guidance of American Institute of Certified Public Accountants ("AICPA")
Statement of Position ("SOP") 03-3, "Accounting for Loans or Certain Securities
Acquired in a Transfer." SOP 03-3 addresses accounting for differences between
contractual cash flows and cash flows expected to be collected from an
investor's initial investment in loans or debt if those differences are
attributable, at least in part to credit quality. Increases in expected cash
flows are recognized prospectively through adjustment of the internal rate of
return ("IRR") while decreases in expected cash flows are recognized as
impairment.

                                      -7-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Consumer Receivables (Continued)
--------------------------------

Under both the guidance of SOP 03-3 and PB-6, as amended, when expected cash
flows are higher than prior projections, the increase in expected cash flows
results in an increase in the IRR and therefore, the effect of the cash flow
increase is recognized as increased revenue prospectively over the remaining
life of the affected pool. However, when expected cash flows are lower than
prior projections, SOP 03-3 requires that the expected decrease be recognized as
impairment by decreasing the carrying value of the affected pool (rather than
lowering the IRR) so that the pool will amortize over its expected life using
the original IRR. A pool can become fully amortized (zero carrying balance on
the balance sheet) while still generating cash collections. In this case, all
cash collections are recognized as revenue when received.

Under the cost recovery method, no revenue is recognized until the Company has
fully collected the cost of the portfolio, or until such time that the Company
considers the collections to be probable and estimable and begins to recognize
income based on the interest method as described above. At June 30, 2007 and
December 31, 2006, the Company had no consumer receivable portfolios accounted
for under the cost recovery method.

The Company estimates and capitalizes certain fees paid to third parties related
to the direct acquisition of a portfolio of accounts. These fees are added to
the cost of the individual portfolio and amortized over the life of the
portfolio using the interest method. An offsetting liability is included as
"Estimated court and media costs" on the balance sheet. The balance of these
estimated costs at June 30, 2007 and December 31, 2006 was $7,485,249, and
$8,446,319, respectively.

The Company establishes valuation allowances for all acquired loans subject to
SOP 03-3 to reflect only those losses incurred after acquisition (that is, the
present value of cash flows initially expected at acquisition that are no longer
expected to be collected). Valuation allowances are established only subsequent
to acquisition of the receivables. At June 30, 2007 and December 31, 2006, the
Company had no valuation allowance on its consumer receivables.

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 revenues and expenses
during the reporting period. Actual results could differ from those estimates.

With respect to income recognition under the interest method, significant
estimates have been made by management with respect to the collectibility of
future cash flows of portfolios. The Company takes into consideration the
relative credit quality of the underlying receivables constituting the portfolio
acquired, the strategy implemented to maximize collections thereof as well as
other factors to estimate the anticipated cash flows. Actual results could
differ from these estimates making it reasonably possible that a change in these
estimates could occur within one year. On a quarterly basis, management reviews
the estimate of future cash collections, and whether it is reasonably possible
that its assessment of collectibility may change based on actual results and
other factors.

Recent Accounting Pronouncements
--------------------------------

In September 2006, the FASB issued SFAS No.157, "Fair Value Measurement." This
statement defines fair values, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value measurements. We do not expect the adoption of SFAS No.157 to
have a material effect on our financial condition and results of operations.
This statement is effective for fiscal years beginning after November 15, 2007.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115." This statement permits entities to choose to measure many
financial instruments and certain other items at fair value. Most of the
provisions of SFAS No. 159 apply only to entities that elect the fair value
option. However, the amendment to SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity's first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, "Fair Value Measurements." Management has not
determined whether the Company will voluntarily choose to measure any of its
financial assets and financial liabilities at fair value. Management has not
determined whether the adoption of this statement will affect its reported
results of operations or financial condition.

                                      -8-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)

NOTE 3 - INVESTMENTS

Properties Held for Sale
------------------------

Properties held for sale consist of the following:

<TABLE>
<CAPTION>

                                                                                          June 30,        December 31,
                                                                                            2007              2006
                                                                                        -------------    -------------
<S>                                                                                     <C>              <C>
         Real property inventory                                                        $   7,097,602    $   6,289,649
         Assignments and judgments                                                             99,697           24,697
                                                                                        -------------    -------------

            Total properties held for sale                                              $   7,197,299    $   6,314,346
                                                                                        =============    =============
</TABLE>


Tax Certificates Held and Accrued Interest Receivable
-----------------------------------------------------

<TABLE>
<CAPTION>

                                                                                          June 30,        December 31,
                                                                                            2007              2006
                                                                                        -------------    -------------
<S>                                                                                     <C>              <C>
         Tax certificates held                                                          $     157,035    $     243,796
         Accrued interest                                                                     176,507          228,275
                                                                                        -------------    -------------

            Total tax certficates held and accrued interest                             $     333,542    $     472,071
                                                                                        =============    =============
</TABLE>


NOTE 4 - CONSUMER RECEIVABLES

Consumer receivable activity for the three months and six ended June 30, 2007
and 2006 was as follows:

<TABLE>
<CAPTION>

                                                      Three Months     Three Months      Six Months       Six Months
                                                          Ended            Ended            Ended            Ended
                                                      June 30, 2007    June 30, 2006    June 30, 2007    June 30, 2006
                                                      -------------    -------------    -------------    -------------
<S>                                                   <C>              <C>              <C>              <C>
Balance at beginning of period                        $  40,537,990    $  17,185,462    $  38,327,926    $  17,758,661

Acquisitions and capitalized costs, net of returns        3,599,777        7,472,888        6,450,400        7,840,816
Amortization of capitalized costs                           (14,799)              --          (29,598)              --
                                                      -------------    -------------    -------------    -------------
                                                          3,584,978        7,472,888        6,420,802        7,840,816
                                                      -------------    -------------    -------------    -------------

Cash collections                                         (4,534,102)      (2,759,322)      (8,215,905)      (5,155,096)
Income recognized on consumer receivables                 3,291,023        1,841,730        6,347,066        3,296,377
                                                      -------------    -------------    -------------    -------------
   Cash collections applied to principal                 (1,243,079)        (917,592)      (1,868,839)      (1,858,719)
                                                      -------------    -------------    -------------    -------------

Balance at end of period                              $  42,879,889    $  23,740,758    $  42,879,889    $  23,740,758
                                                      =============    =============    =============    =============
</TABLE>

                                      -9-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)

NOTE 4 - CONSUMER RECEIVABLES (Continued)

As of June 30, 2007 the Company had $42,879,889 in consumer receivables. Based
upon management's current estimation of projected future collections, principal
reductions for each of the periods ended June 30 will be as follows:


                                                                    June 30,
                                                                 -------------
                              2008                               $   7,531,477
                              2009                                   9,709,585
                              2010                                  11,309,745
                              2011                                   9,129,022
                              2012                                   5,200,060
                                                                 -------------

    Total                                                        $  42,879,889
                                                                 =============


The accretable yield represents the amount of income the Company can expect to
generate over the remaining life of its existing portfolios based on estimated
cash flows as of June 30, 2007 and 2006. Changes in the accretable yield are as
follows:

                                                   Six Months       Six Months
                                                      Ended           Ended
                                                  June 30, 2007   June 30, 2006
                                                  -------------   -------------
Balance at beginning of period                    $  29,643,803   $  15,618,641
Income recognized on consumer receivables            (6,347,066)     (3,296,377)
Additions                                             7,924,639       9,358,451
                                                  -------------   -------------

Balance at end of period                          $  31,221,376   $  21,680,715
                                                  =============   =============


NOTE 5 - LINES OF CREDIT

On February 23, 2007, Velocity entered into a Third Amendment to the Loan and
Security Agreement (the "Loan Agreement") with Wells Fargo Foothill, Inc., a
California corporation (the "Lender"), dated January 27, 2005. Pursuant to the
Loan Agreement, as amended and restated, the Lender agreed to permanently
increase the credit facility up to $17,500,000. In addition, Velocity agreed to
maintain certain ratios with respect to outstanding advances on the credit
facility against the estimated remaining return value on Wells Fargo Foothill
financed portfolios, and to maintain at least $6,500,000 in member's equity plus
50% of Velocity's net income for each calendar quarter that ends on or after
June 30, 2007. The Company has also agreed to maintain at least $21,000,000 in
stockholder's equity plus 50% of the net income of the Company for each calendar
quarter that ends on or after June 30, 2007. The maturity date of the credit
facility is January 27, 2009.

As of June 30, 2007 and December 31, 2006 the Company had $16,127,379 and
$13,791,388 outstanding on the credit facility, respectively.


                                      -10-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)


NOTE 5 - LINES OF CREDIT (Continued)

On June 14, 2007, the Company entered into an agreement to secure a revolving
credit line in the maximum principal sum of $800,000 with Northern State Bank.
During the term of the credit line, interest shall accrue on the outstanding
principal balance of the credit line at a rate of the lenders' prime rate plus
one-half percent per annum. The Company can draw upon the credit line during the
twelve month period commencing on June 14, 2007. Any sums loaned under the note
may be repaid at any time, without premium or penalty, and reborrowed from time
to time, until July 1, 2008. Payments of interest only are due on the 1st day of
each and every month until July 1, 2008, on which date the entire balance or
principal, interest and fees then unpaid shall be due and payable. The credit
line is secured by various mortgages of real property held and owned by the
Company's subsidiary, J. Holder, Inc. The Company had $641,000 outstanding on
the credit line as of June 30, 2007.

As of June 30, 2007 and December 31, 2006, the Company had an aggregate of
$16,768,379 and $13,791,388 outstanding on its credit facilities, respectively.

NOTE 6 - CONVERTIBLE SUBORDINATED NOTES

On June 29, 2007, Velocity Asset Management, Inc. (the "Company") consummated an
initial closing (final closing July 27, 2007) of its private placement offering
of 10.0% Convertible Subordinated Notes (the "Notes") due 2017 (the "Offering")
to accredited investors ("Investors"). The Notes are being offered and sold
pursuant to exemption from registration under Section 4(2) of the Securities Act
of 1933, as amended (the "Securities Act"). The Notes are being sold by the
Company through an NASD member firm which is serving as placement agent. In
connection with the Offering, the Company issued the Notes and also entered into
a Subscription Agreement with each of the Noteholders.

As of June 30, 2007, the Company issued Notes in the principal amount of
$2,250,000 ($2,350,000 as of July 27, 2007). Interest on the Notes will be paid
monthly in arrears commencing on September 30, 2007. The Notes will be
subordinated in liquidation preference and in right of payment to all of the
Company's existing debt. The Notes will be senior in right of payment and in
liquidation preference to any future long term debt of the Company. To the
extent the Company were to complete a subsequent financing with the placement
agent on or before March 29, 2008 ("Subsequent Financing"), the Notes will
automatically convert into the underlying securities (either convertible debt or
preferred stock) sold in the Subsequent Financing (the "Underlying Securities").
To the extent the new issue in the Subsequent Financing contains an interest
rate less than 10.0% per annum, the exchange ratio of the Notes will
automatically adjust to maintain a 10.0% yield. To the extent the Company does
not complete a Subsequent Financing, the Notes may be converted, at the option
of the holder, into shares of the Company's Common Stock at a price of $2.50 per
share, subject to certain adjustments within. The Company intends to use the net
proceeds from the Offering primarily for the purchase of portfolios of consumer
receivables and for general corporate purposes, including working capital.

For its services in connection with the Offering, the placement agent received a
placement fee computed at the rate of seven percent (7.0%) of the aggregate
principal amount of the Notes sold. In addition, the Company paid an accountable
expense allowance of one percent (1%) of the aggregate principal amount of the
Notes sold. As a result, after other Offering expenses of approximately $33,500
($41,500 as of July 27, 2007) (legal and blue sky filing fees), the Company
received net proceeds of approximately $2,035,000 ($2,127,000 as of July 27,
2007). Costs of $216,500 related to this offering have been
capitalized and will be amortized over the life of the notes.

The Company and the Placement Agent do not anticipate additional closings of the
Offering after July 27, 2007. There can be no assurance that there will be
additional sales of Notes. The Notes provide that, to the extent the Company
completes a Subsequent Financing, the Company will use its best efforts to
register the underlying securities in connection with the Subsequent Financing.
To the extent the Company does not complete a Subsequent Financing, the Company
will use its best efforts to register the common stock underlying the
outstanding Notes for resale by the Noteholders.


                                      -11-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)

NOTE 7 - NOTES PAYABLE

On April 25, 2007, the Company issued two promissory notes of $35,000 and
$200,000 to accredited investors in a private placement. Each of the notes bears
interest at a rate of 10% per annum plus 15% of the net profit related to the
sale of specified real property owned by the Company's subsidiary, J. Holder,
Inc. All amounts owed are due no later than April 25, 2008 and may be redeemed
at any time before the due date without penalty.

NOTE 8 - COMMITMENTS

On May 2, 2007, the Company signed a lease with Donato at Wall 4, LLC (the
"Donato Lease") with respect to its new business office (the "Office") located
at 1800 Route 34, Wall, New Jersey 07719. The Donato Lease covers 2,450 square
feet of office space and commences on July 1, 2007 with an initial term of five
years (the "Term"). The Company has two options to extend the Term for a period
of five years each. The total annual lease payment is $43,488, payable in equal
monthly installments on or before the first of each month.

The future minimum lease payments for each of the twelve month periods ended
June 30 are as follows:


                                                   June 30
                                                 ------------
                          2008                   $     39,863
                          2009                         43,488
                          2010                         43,488
                          2011                         43,488
                          2012                         43,488
                                                 ------------

  Total                                          $    213,815
                                                 ============

NOTE 9 - RELATED PARTY TRANSACTIONS

The Company has notes payable with various related parties. Total interest
expense to related parties for the three and six month periods ended June 30,
2007 and 2006 was $58,353 and $51,367 and $116,103 and $109,117, respectively.

The Company engages Ragan & Ragan, PC an entity owned by Messrs. Ragan & Ragan,
to service its consumer receivable portfolios, interests in distressed real
property and tax lien certificates with respect to obligors and properties
located in the State of New Jersey. The fee arrangements between the Company's
subsidiaries Velocity, J. Holder and VOM and Ragan & Ragan, P.C., each dated as
of January 1, 2005, have been reviewed and approved by all the members of a
committee appointed by the Board of Directors other than Mr. Ragan, Sr. who
abstained. John C. Kleinert and James J. Mastriani comprised the committee.

Ragan and Ragan, P.C. routinely advances court costs associated with their
servicing of consumer receivable portfolios, which are subsequently reimbursed
by the Company. These costs are included in the estimated court and media costs
in the condensed consolidated balance sheets.

                                      -12-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)


Legal fees paid to Ragan & Ragan, P.C., by the individual subsidiaries were as
follows:

<TABLE>
<CAPTION>

                                  Three Months      Three Months     Six Months       Six Months
                                      Ended            Ended            Ended            Ended
                                  June 30, 2007    June 30, 2006    June 30, 2007    June 30, 2006
                                  -------------    -------------    -------------    -------------
<S>                               <C>              <C>              <C>              <C>
Velocity Investments, LLC         $     273,866    $     324,618    $     611,450    $     653,292
J. Holder, Inc.                              --               --               --           10,139
VOM, LLC                                     25            2,220              191            2,359
                                  -------------    -------------    -------------    -------------

                                  $     273,891    $     326,838    $     611,641    $     665,790
                                  =============    =============    =============    =============
</TABLE>

NOTE 10- STOCK BASED COMPENSATION

Stock Based Consideration to Employees
--------------------------------------

The 2004 Equity Incentive Program of the Company, (the "Employee Plan")
authorizes the issuance of up to 1,000,000 shares of common stock in connection
with the grant of options or issuance of restricted stock awards. No options
have been granted to date.

To the extent that the Company derives a tax benefit from options exercised by
employees, if any, such benefit will be credited to additional paid-in capital
when realized on our income tax return.

During the year ended December 31, 2006, the Company issued restricted stock
awards. Prior to the year ended December 31, 2006, the Company had not issued
any restricted stock awards. As part of these restricted stock awards Mr.
Mastriani was granted 200,000 shares to be vested incrementally. As of June 30,
2007, 175,000 shares of Mr. Mastriani's stock had vested. The following
summarizes the transactions of shares of common stock under the Employee Plan
during the six month period ended June 30, 2007. There were no transactions
during the three months ended June 30, 2006.
<TABLE>
<CAPTION>

                             Number of Shares                        Compensation
       Employee                   Vesting          Market Value        Expense
------------------------ ----------------------    -------------    -------------
<S>                                      <C>       <C>              <C>
James J. Mastriani                       50,000        $1.55        $      77,500
</TABLE>


Mr. Mastriani's remaining 25,000 shares will vest on August 27, 2007, provided
that he is employed by the Company on such date.

In accordance with SFAS 123(R), the Company recorded approximately $77,500 of
expense related to grants of common stock which vested during the six month
period ended June 30, 2007. For the six month period ended June 30, 2007, there
were no tax benefits realized related to stock based compensation issued to
employees in 2006.

As of June 30, 2007, approximately $38,750 of unrecognized stock compensation
expense on 25,000 shares of common stock related to unvested restricted stock
awards (net of estimated forfeitures) is expected to be recognized through
August 2007.

NOTE 11 - EARNINGS PER SHARE

Basic earnings per share are computed using the weighted average number of
shares outstanding during each period. Diluted earnings per share are computed
using the weighted average number of shares outstanding during each period, plus
the incremental shares outstanding assuming the conversion of preferred shares
and convertible debt to common shares and the exercise of dilutive stock
options. Outstanding options and warrants to non-employees convertible into
1,177,160 shares of common stock at June 30, 2007 were not included in the
income per share calculation because their effect would have been anti-dilutive.
Convertible preferred stock, convertible into 5,520,000 shares of common stock
at June 30, 2007 were not included in the income per share because their effects
would have been anti-dilutive. Convertible notes, convertible into 9,890 and
4,945 shares of common stock for the three and six months ended June 30, 2007,
respectively, were not included in the income per share calculation because
their effect would have been anti-dilutive.

Convertible preferred stock, convertible into 1,941,099 and 970,549 shares of
common stock for the three and six months ended June 30, 2006, respectively,
were not included in the income per share calculation because their effects

                                      -13-
<PAGE>
                VELOCITY ASSET MANANGEMENT, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (UNAUDITED)


NOTE 11 - EARNINGS PER SHARE (Continued)

would have been anti-dilutive. Convertible notes, convertible into 383,854 and
416,927 shares of common stock for the three and six months ended June 30, 2006,
respectively, were not included in the income per share calculation because
their effect would have been anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>

Numerator:
                                            Three Months      Three Months      Six Months       Six Months
                                                Ended            Ended            Ended            Ended
                                            June 30, 2007    June 30, 2006    June 30, 2007    June 30, 2006
                                            -------------    -------------    -------------    -------------
<S>                                         <C>              <C>              <C>              <C>
Net income                                  $     645,732    $     200,682    $   1,175,540    $     270,019
Preferred dividend                               (345,000)        (161,005)        (690,000)        (161,005)
                                            -------------    -------------    -------------    -------------
Net income attributable to
common stockholders
- Basic and Diluted                         $     300,732    $      39,677    $     485,540    $     109,014
                                            =============    =============    =============    =============

Denominator:
  Weighted average shares - Basic              16,163,936       15,972,321       16,151,144       15,972,321
  Effect of dilutive instruments:
    Stock options                               1,555,462        1,445,599        1,651,373        1,433,453
                                            -------------    -------------    -------------    -------------

  Weighted average shares - Diluted            17,719,398       17,417,920       17,802,517       17,405,774
                                            =============    =============    =============    =============

Net income per common share - Basic         $        0.02    $        0.00    $        0.03    $        0.01
                                            =============    =============    =============    =============

Net income per common share - Diluted       $        0.02    $        0.00    $        0.03    $        0.01
                                            =============    =============    =============    =============
</TABLE>

                                      -14-
<PAGE>

Item 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and notes
thereto and the other financial information included elsewhere in this report.

NOTE ON FORWARD LOOKING STATEMENTS

         This quarterly report on Form 10-QSB includes and incorporates by
reference "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934 with respect to our financial condition, results of operations,
plans, objectives, future performance and business, which are usually identified
by the use of words such as "will," "may," "anticipates," "believes,"
"estimates," "expects," "projects," "plans," "predicts," "continues," "intends,"
"should," "would," or similar expressions. We intend for these forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995,
and are including this statement for purposes of complying with these safe
harbor provisions.

         These forward-looking statements reflect our current views and
expectations about our plans, strategies and prospects, which are based on the
information currently available and on current assumptions.

         We cannot give any guarantee that these plans, intentions or
expectations will be achieved. Investors are cautioned that all forward-looking
statements involve risks and uncertainties, and actual results may differ
materially from those discussed in the forward-looking statements as a result of
various factors, including those Risk Factors set forth in our Form 10-KSB for
the year ended December 31, 2006. Listed below and discussed elsewhere in this
quarterly report are some important risks, uncertainties and contingencies that
could cause our actual results, performances or achievements to be materially
different from the forward-looking statements included or incorporated by
reference in this quarterly report. These risks, uncertainties and contingencies
include, but are not limited to, the following:

         o        the availability for purchase of consumer receivable
                  portfolios, interests in distressed real property and tax lien
                  certificates that satisfy our criteria;

         o        competition in the industry;

         o        the availability of debt and equity financing;

         o        future acquisitions;

         o        the availability of qualified personnel;

         o        international, national, regional and local economic and
                  political changes;

         o        general economic and market conditions;

         o        changes in applicable laws;

         o        trends affecting our industry, our financial condition or
                  results of operations;

         o        the timing and amount of collections on our consumer
                  receivable portfolios;

         o        the timing of sales of interests in distressed real property
                  and redemption of tax lien certificates; and

         o        increases in operating expenses associated with the growth of
                  our operations.

         You should read this quarterly report and the documents that we
incorporate by reference in this quarterly report completely and with the
understanding that our actual future results may be materially different from
what we expect. We may not update these forward-looking statements, even though
our situation may change in the future. We qualify all of our forward-looking
statements by these cautionary statements.

                                      -15-
<PAGE>

Overview

Velocity Asset Management, Inc., previously known as Tele-Optics, Inc., was
organized in the State of Delaware in December 1986. We were inactive until
February 3, 2004, when we acquired STB, Inc., a New Jersey corporation. Since
that acquisition, we have engaged in the business of acquiring, managing and
servicing distressed assets, consisting of consumer receivable portfolios,
interests in distressed real property and tax lien certificates. The business is
carried on by our three wholly-owned subsidiaries: Velocity Investments, LLC,
which invests in non-performing consumer debt purchased in the secondary market
at a discount from face value and then seeks to liquidate these debt portfolios
through legal collection means; J. Holder, Inc., which invests in distressed
real property interests, namely real property being sold at sheriff's
foreclosure and judgment execution sales, defaulted mortgages, partial interests
in real property and the acquisition of real property with clouded title; and
VOM, LLC, which invests in New Jersey municipal tax liens with the focus on
realization of value through legal collection and owned real estate
opportunities presented by the current tax environment.

Our consumer receivable portfolios are purchased at a discount from the amount
actually owed by the obligor. Our interests in distressed real property are
purchased following an extensive due diligence process concerning the legal
status of each property and a market analysis of the value of the property or
underlying property. Our tax lien certificates are purchased at a discount from
par following a due diligence analysis similar to that performed in connection
with the purchase of interests in distressed real property. Our profitability as
a company depends upon our ability to purchase and collect on a sufficient
volume of our consumer receivables, the sale of our interests in distressed real
property and the collection of taxes and accrued interest on our tax lien
certificates to generate revenue that exceeds our cost. Most of our revenue is
derived from the consumer receivables business and it is our primary operating
focus.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is
based upon our consolidated financial statements which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the fair value of consumer receivables, the fair value of
properties held for sale and the reported amounts of revenues and expenses. On
an on-going basis, we evaluate our estimates, including those related to the
recognition of revenue, future estimated cash flows and income taxes. We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results could differ
from those estimates. We believe the following critical accounting policies
affect the significant judgment and estimates used in the preparation of our
consolidated financial statements.

Purchased Consumer Receivable Portfolios and Revenue Recognition

We purchase pools of consumer receivable accounts at a substantial discount from
their face amounts, usually discounted at 75% to 98% from face value, and which
are recorded by us at our acquisition cost, including the estimated cost of
court filing fees and account media. The pools of consumer receivables contain
accounts that have experienced deterioration of credit quality between
origination and our acquisition of the consumer receivable portfolios. The
discounted amount paid for a pool of consumer receivable accounts reflects our
determination that it is probable we will be unable to collect all amounts due
according to the contractual terms of the accounts. At acquisition, we review
the consumer receivable accounts in the portfolio to determine whether there is
evidence of deterioration of credit quality since origination and if it is
probable that we will be unable to collect all amounts due according to the
contractual terms of the accounts. If both conditions exist, we determine
whether each such loan is to be accounted for individually or whether such
receivables will be assembled into static pools based on common risk
characteristics. We consider expected prepayments and estimate the amount and
timing of undiscounted expected principal, interest and other cash flows for
each acquired portfolio of consumer receivable accounts and subsequently
aggregated pools of consumer receivable accounts. We determine the excess of the
pool's scheduled contractual principal and contractual interest payments over
all cash flows expected at acquisition as an amount that should not be accreted
based on our proprietary acquisition models. The remaining amount, representing
the excess of the loan's cash flows expected to be collected over the amount
paid, is accreted into income recognized on consumer receivables over the
remaining life of the loan or pool using the interest method.

We acquire these consumer receivable portfolios at a significant discount to the
amount actually owed by the borrowers. We acquire these portfolios after a
qualitative and quantitative analysis of the underlying receivables and

                                      -16-
<PAGE>

calculate the purchase price so that our estimated cash flow provides us with a
sufficient return on our acquisition costs and servicing expenses. After
purchasing a portfolio, we actively monitor its performance and review and
adjust our collection and servicing strategies accordingly.

Prior to January 1, 2005, we accounted for our investment in consumer
receivables using the interest method under the guidance of Practice Bulletin 6,
"Amortization of Discounts on Certain Acquired Loans." In accordance with
Practice Bulletin 6, revenue was recognized based on our anticipated cash
collections and the estimated rate of return over the useful life of the pool.
Effective January 1, 2005, we adopted and began to account for our investment in
consumer receivables using the interest method under the guidance of American
Institute of Certified Public Accountants Statement of Position 03-3,
"Accounting for Loans or Certain Securities Acquired in a Transfer." For
portfolios of consumer receivables acquired in fiscal years beginning prior to
December 15, 2004, Practice Bulletin 6 is still effective; however, Practice
Bulletin 6 was amended by Statement of Position 03-3. For portfolios of consumer
receivables acquired in fiscal years beginning after December 15, 2004,
Statement of Position 03-3 is effective. In accordance with Statement of
Position 03-03 (and the amended Practice Bulletin 6), revenue is recognized
based on our anticipated gross cash collections and the estimated rate of return
over the useful life of the pool.

We believe that the amounts and timing of cash collections for our purchased
receivables can be reasonably estimated and, therefore, we utilize the interest
method of accounting for our purchased consumer receivables prescribed by
Statement of Position 03-3. Such belief is predicated on our historical results
and our knowledge of the industry. Each static pool of receivables is
statistically modeled to determine its projected cash flows based on historical
cash collections for pools with similar risk characteristics. Statement of
Position 03-3 requires that the accrual basis of accounting be used at the time
the amount and timing of cash flows from an acquired portfolio can be reasonably
estimated and collection is probable.

Where the future cash collections of a portfolio cannot be reasonably estimated,
we use the cost recovery method as prescribed under Statement of Position 03-3.
Under the cost recovery method, no revenue is recognized until we have fully
collected the initial acquisition cost of the portfolio. We have no consumer
receivable portfolios that are accounted for under the cost recovery method.

Under Statement of Position 03-3, to the extent that there are differences in
actual performance versus expected performance, increases in expected cash flows
are recognized prospectively through adjustment of internal rate of return while
decreases in expected cash flows are recognized as the impairment. Under both
the guidance of Statement of Position 03-3 and the amended Practice Bulletin 6,
when expected cash flows are higher than prior projections, the increase in
expected cash flows results in an increase in the internal rate of return and
therefore, the effect of the cash flow increase is recognized as increased
revenue prospectively over the remaining life of the affected pool. However,
when expected cash flows are lower than prior projections, Statement of Position
03-3 requires that the expected decrease be recognized as an impairment by
decreasing the carrying value of the affected pool (rather than lowering the
internal rate of return) so that the pool will amortize over its expected life
using the original internal rate of return.

Generally, these portfolios are expected to amortize over a five year period
based on our estimated future cash flows. Historically, a majority of the cash
we ultimately collect on a portfolio is received during the first 36 months
after acquiring the portfolio, although additional amounts are collected over
the remaining period. The estimated future cash flows of the portfolios are
re-evaluated quarterly.

The internal rate of return is estimated and periodically recalculated based on
the timing and amount of anticipated cash flows using our proprietary collection
models. A pool can become fully amortized (zero carrying balance on the balance
sheet) while still generating cash collections. In this case, all cash
collections are recognized as revenue when received. Additionally, we use the
cost recovery method when collections on a particular pool of accounts cannot be
reasonably predicted. Under the cost recovery method, no revenue is recognized
until we have fully collected the cost of the portfolio, or until such time that
we consider the collections to be probable and estimable and begin to recognize
income based on the interest method as described above. We have no consumer
receivable portfolios that are accounted for under the cost recovery method.

We establish valuation allowances for all acquired consumer receivable
portfolios subject to Statement of Position 03-3 to reflect only those losses
incurred after acquisition (that is, the present value of cash flows initially
expected at acquisition that are no longer expected to be collected). Valuation
allowances are established only subsequent to acquisition of the loans. At
December 31, 2006 and June 30, 2007, we had no valuation allowance on our
consumer receivables. Prior to January 1, 2005, if estimated future cash
collections would be

                                      -17-
<PAGE>

inadequate to amortize the carrying balance, an impairment charge would be taken
with a corresponding write-off of the receivable balance.

Application of Statement of Position 03-3 requires the use of estimates to
calculate a projected internal rate of return for each pool. These estimates are
based on historical cash collections. If future cash collections are materially
different in amount or timing than projected cash collections, earnings could be
affected either positively or negatively. Higher collection amounts or cash
collections that occur sooner than projected cash collections will have a
favorable impact on yield and revenues. Lower collection amounts or cash
collections that occur later than projected cash collections will have an
unfavorable impact on internal rate of return and revenues.

The following table shows the changes in consumer receivables, including amounts
paid to acquire new portfolios of consumer receivables for the three and six
months ended June 30, 2007 and 2006:
<TABLE>
<CAPTION>

                                             Three            Three            Six Months       Six Months
                                             Months Ended     Months Ended     Ended            Ended
                                             June 30,         June 30,         June 30,         June 30,
                                             2007             2006             2007             2006
                                            -------------    -------------    -------------    -------------
<S>                                         <C>              <C>              <C>              <C>
Balance at beginning of period              $  40,537,990    $  17,185,462    $  38,327,926    $  17,758,661


Acquistions and capitalized costs, net of
returns                                         3,599,777        7,472,888        6,450,400        7,840,816

Amortization of capitalized costs                 (14,799)              --          (29,598)              --
                                            -------------    -------------    -------------    -------------

                                                3,584,978        7,472,888        6,420,802        7,840,816
                                            -------------    -------------    -------------    -------------
Cash collections                               (4,534,102)      (2,759,322)      (8,215,905)      (5,155,096)

Income recognized on finance receivables        3,291,023        1,841,730        6,347,066        3,296,377
                                            -------------    -------------    -------------    -------------

Cash collections applied to principal          (1,243,079)        (917,592)      (1,868,839)      (1,858,719)
                                            -------------    -------------    -------------    -------------

Balance at end of period                    $  42,879,889    $  23,740,758    $  42,879,889    $  23,740,758
                                            =============    =============    =============    =============
</TABLE>

Stock Based Compensation

We have adopted the fair value recognition provisions of SFAS No. 123 (revised
2004), "Share-Based Payment" (SFAS No. 123R), which supersedes Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees." The revised statement addresses the accounting for share-based
payment transactions with employees and other third parties, eliminates the
ability to account for share-based transactions using APB No. 25 and requires
that the compensation costs relating to such transactions be recognized in the
consolidated financial statements. SFAS No. 123R requires additional disclosures
relating to the income tax and cash flow effects resulting from share-based
payments. We have adopted the modified prospective application method of SFAS
No.123(R), effective January 1, 2006, and the adoption of SFAS No. 123(R) has
had an immaterial impact on our consolidated results of operations and earnings
per share. Additionally, regarding the treatment of non-employee stock based
compensation, we have followed the guidance of EITF 96-18, "Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services".

New Accounting Pronouncements

         In September 2006, the FASB issued SFAS No.157, "Fair Value
Measurement." This statement defines fair values, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), and
expands disclosures about fair value measurements. We do not expect the adoption
of SFAS No.157 to have a material effect on our financial condition and results
of operations. This statement is effective for fiscal years beginning after
November 15, 2007.

         In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115." This statement permits entities to choose to measure many
financial instruments and certain other items at fair value. Most of the
provisions of SFAS No. 159 apply only to entities that elect the fair value
option. However, the amendment to SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity's first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, "Fair Value Measurements." Management has not
determined whether the Company will voluntarily choose to measure any of its

                                      -18-
<PAGE>

financial assets and financial liabilities at fair value. Management has not
determined whether the adoption of this statement will affect its reported
results of operations or financial condition.

Results of Operations

Total revenues for the three month period ended June 30, 2007 (the "2007 Second
Quarter") were $3,481,490 as compared to $2,137,290 during the three month
period ended June 30, 2006 (the "2006 Second Quarter"), representing a 62.9%
increase. Revenues in the six month period ended June 30, 2007 (the "2007
Period") were $6,652,230 as compared to $3,993,445 in the same period in the
prior year (the"2006 Period"), representing a 66.6% increase. The increase in
revenues was primarily attributable to a significant increase in collections on
consumer receivables at our Velocity Investments subsidiary that was partially
offset by a decrease in revenues from the sale of real property at our J. Holder
subsidiary. Revenues from the sale of real property, the collection of consumer
receivables and the collection of principal and interest derived from tax lien
certificates owned by the Company represented approximately 4.7%, 94.5% and
0.8%, respectively, during the 2007 Second Quarter as compared to 10.9%, 86.2%
and 2.9% during the 2006 Second Quarter, and approximately 3.3%, 95.4% and 1.3%
during the 2007 Period as compared to 15.1%, 82.5% and 2.4% during the 2006
Period. Although management believes that the mix of revenues on a comparative
basis will vary from reporting period to reporting period partly as a result of
factors beyond its control, such as maturity dates, court decisions and other
similar events that affect the timing of revenue recognition, it also believes
that the increase in consumer receivables revenues in the 2007 Second Quarter is
reflective of the continued growth in its consumer receivables business.

Total Operating Expenses

Total operating expenses for the 2007 Second Quarter were $2,042,556 as compared
to $1,425,552 during the 2006 Second Quarter, representing a 43.3% increase.
Total operating expenses for the 2007 Period were $3,883,294 as compared to
$2,868,385 during the 2006 Period, representing a 35.4% increase. The increase
in total operating expenses in both periods was primarily attributable to
increased professional fees incurred as a result of an increase in collections
and a corresponding increase in legal commission expenses as a result of the
expansion of operations at our Velocity Investments' subsidiary. In addition,
after a management review of our tax certificate files at our tax lien
subsidiary, VOM, management determined that approximately $95,000 in tax liens
(principal and accrued interest) should be written off for the six months ended
June 30, 2007. General and administrative expenses also increased in the 2007
Second Quarter as a result of our increasing due diligence expenses and
electronic search fees for Velocity Investments and an increase in payroll
expense.

Other Income (Expense)

Interest expense in the 2007 Second Quarter was $471,717 as compared to $311,021
in the 2006 Second Quarter, representing a 51.7% increase. Interest expense in
the 2007 Period was $890,785 as compared to $631,585 in the 2006 Period,
representing a 41.0% increase. The increase in interest expense in both periods
was primarily attributable to an expansion of Velocity Investments' line of
credit with Wells Fargo Foothill, Inc.

Net Income

Net income for the 2007 Second Quarter was $645,732 as compared to net income
for the 2006 Second Quarter of $200,682, a 221.8% increase. Net income for the
2007 Period was $1,175,540 as compared to net income for the 2006 Period of
$270,019, a 335.4% increase. The increase in net income in both periods is
primarily attributable to an increase in net revenue from operations at Velocity
Investments, our consumer receivables subsidiary partially offset by an increase
in operating expenses.

Liquidity and Capital Resources

At June 30, 2007, the Company had approximately $2,100,000 in cash and cash
equivalents and trade accounts payable of approximately $1,400,000. Management
believes that such net cash and cash equivalents together with the revenues
expected to be generated from operations, the Company's lines of credit and the
proceeds of the subordinated debt financing discussed below, will be sufficient
to finance operations for the foreseeable future.

                                      -19-
<PAGE>

In order to expand operations by, among other things, purchasing additional
portfolios of distressed consumer receivables, we have been seeking to raise
additional capital by way of the sale of equity securities, debt instruments and
obtaining additional bank lines of credit. If, for any reason, our available
cash otherwise proves to be insufficient to fund operations (because of future
changes in the industry, general economic conditions, unanticipated increases in
expenses, or other factors, including acquisitions), we may be required to seek
additional funding.

Net cash used in operating activities was approximately $4,900,000 during the
2007 Period, compared to net cash used in operating activities of approximately
$4,800,000 in the 2006 Period. The increase in net cash used in operating
activities was primarily due to the increase in income taxes payable and
purchases of properties held for sale, partially offset by a decrease in the
purchase of consumer receivables portfolios. Net cash provided by financing
activities was approximately $4,560,000 during the 2007 Period, compared to net
cash provided by financing activities of approximately $14,100,000 in the 2006
Period. The decrease in net cash provided by financing activities was primarily
due to the $13,800,000 preferred stock offering in May 2006.

On January 27, 2005, Velocity Investments, LLC entered into a Loan and Security
Agreement with Wells Fargo Foothill, Inc., a California corporation, in which
Wells Fargo Foothill agreed to provide Velocity Investments, LLC with a three
year $12,500,000 senior credit facility to finance the acquisition of individual
pools of unsecured consumer receivables that are approved by Wells Fargo
Foothill under specific eligibility criteria set forth in the Loan and Security
Agreement.

Simultaneous with the Loan and Security Agreement, the following agreements were
also entered into with Wells Fargo Foothill: a Continuing Guaranty, in which we
unconditionally and irrevocably guaranteed Velocity's obligations under the Loan
and Security Agreement; a Security and Pledge Agreement, in which we pledged all
of our assets to secure the credit facility, including, but not limited to, all
of our stock ownership of J. Holder and all our membership interests in Velocity
Investments, LLC and VOM; and a Subordination Agreement, in which all sums owing
to us by Velocity Investments, LLC as an intercompany payable for advances or
loans made or property transferred to Velocity Investments, LLC will be
subordinated to the credit facility to the extent that such sums, when added to
Velocity Investments, LLC membership interest in the parent does not exceed
$3,250,000. In addition, three of our executive officers, John C. Kleinert, W.
Peter Ragan, Sr. and W. Peter Ragan, Jr., provided joint and several limited
guarantees of Velocity Investment's obligations under the Loan and Security
Agreement.

On February 27, 2006, Velocity Investments, LLC entered into a First Amendment
to the Loan and Security Agreement pursuant to which Wells Fargo Foothill
extended the credit facility until January 27, 2009 and agreed to increase the
advance rate under the facility to 75% (up from 60%) of the purchase price of
individual pools of unsecured consumer receivables that are approved by the
lender. Under the First Amendment to the Loan and Security Agreement, Wells
Fargo Foothill also agreed to reduce the interest rate on the loan from 3.50%
above the prime rate of Wells Fargo Bank, N.A. to 1.50% above such prime rate.
In addition, the amortization schedule for each portfolio has been extended from
twenty-four to thirty months. Wells Fargo Foothill also agreed to reduce the
personal limited guarantees from $1,000,000 to $250,000.

Use of the senior credit facility is subject to Velocity Investments, LLC
complying with certain restrictive covenants under the Loan and Security
Agreement, including but not limited to: a restriction on incurring additional
indebtedness or liens; a change of control of Velocity Investments, LLC; a
restriction on entering into transactions with affiliates outside the course of
Velocity Investment's ordinary business; and a restriction on making payments to
us in compliance with the Subordination Agreement. In addition, Velocity
Investments, LLC has agreed to maintain certain ratios with respect to
outstanding advances on the credit facility against the estimated remaining
return value on Wells Fargo Foothill financed portfolios.

On February 23, 2007, Velocity entered into a Third Amendment to the Loan and
Security Agreement dated January 27, 2005. Pursuant to the Amended and Restated
Loan Agreement, the Lender agreed to permanently increase the credit facility up
to $17,500,000. In addition, Velocity agreed to maintain certain ratios with
respect to outstanding advances on the credit facility against the estimated
remaining return value on Wells Fargo Foothill financed portfolios, and to
maintain at least $6,500,000 in member's equity plus 50% of Velocity's net
income for each calendar quarter that ends on or after March 31, 2007. The
Company also agreed to maintain at least $21,000,000 in stockholder's equity
plus 50% of the net income of the Company for each calendar quarter that ends on
or after March 31, 2007. As of June 30, 2007, the Company had $16,127,379
outstanding on the credit facility.

                                      -20-
<PAGE>

On October 27, 2005, we and our wholly-owned subsidiary, J. Holder, Inc.,
entered into a Securities Purchase Agreement with an institutional investor
relating to a sale of a 10% Secured Convertible Debenture, due April 27, 2007,
in the principal amount of $1.8 million, and an associated common stock purchase
warrant to purchase 200,000 shares of our common stock at an exercise price of
$3.10 per share. Proceeds from the financing ($1,780,000) were used primarily
for working capital purposes including, but not limited to, the purchase of
distressed real property interests and distressed consumer receivable
portfolios. On May 19, 2006, we entered into an amendment to the Securities
Purchase Agreement pursuant to which we extended the initial maturity date of
the Convertible Debenture and issued an additional warrant to purchase 50,000
shares of our common stock at a purchase price of $3.10. On May 19, 2006, we
used $1,823,000 from proceeds of the preferred offering of our Series A stock
(as described in the next paragraph) to repay in full interest and principal
under the Convertible Debenture.

On May 18, 2006, we consummated our public offering of 1,200,000 shares of our
Series A Convertible Preferred Stock. The offering was underwritten by Anderson
& Strudwick, Incorporated. The underwriters were granted an option to purchase
up to an additional 180,000 shares of Series A Convertible Preferred Stock to
cover over-allotments which they exercised on May 31, 2006. The public price per
share for the offering was $10.00. Net proceeds of the offering amounted to
approximately $12.4 million. As of June 30, 2006, approximately $6.5 million of
the proceeds of the offering have been used for the purchase and servicing of
distressed consumer receivable portfolios, $1.823 million has been used to repay
the convertible debenture, $1.0 million has been used to redeem a mortgage on an
investment property in Florida, $2.5 million has been used for general corporate
expenses and approximately $810,000 has been used to redeem certain short term
notes.

On June 29, 2007, the Company consummated an initial closing of its private
placement offering of 10.0% Convertible Subordinated Notes (the "Notes") due
2017 (the "Offering") to accredited investors ("Investors"). The Notes are being
offered and sold pursuant to exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended (the "Securities Act"). The Notes are
being sold by the Company through an NASD member firm which is serving as
placement agent. In connection with the Offering, the Company issued the Notes
and also entered into a Subscription Agreement with each of the investors.

The Company issued Notes in the principal amount of $2,250,000. Interest on the
Notes is paid monthly in arrears commencing on the last day of the month that is
three months after the closing of the Offering. The Company will pay the
principal amount of the Notes upon the earlier of maturity or redemption. The
Notes will be subordinated in liquidation preference and in right of payment to
all of the Company's existing debt. The Notes will be senior in right of payment
and in liquidation preference to any future "long term" debt of the Company. To
the extent the Company completes a subsequent financing with the placement agent
("Subsequent Financing"), the Notes will automatically convert into the
underlying securities sold in the Subsequent Financing (the "Underlying
Securities"). To the extent the new issue in the Subsequent Financing contains
an interest rate less than 10.0% per annum, the conversion price of the Notes
will automatically adjust to maintain a 10.0% yield. To the extent the Company
does not complete a Subsequent Financing, the Notes may be converted, at the
option of the holder, into shares of the Company's Common Stock at a price of
$2.50 per share, subject to certain adjustments. The Company intends to use the
net proceeds from the Offering primarily for the purchase of portfolios of
unsecured consumer receivables and for general corporate purposes, including
working capital.

For its services in connection with the Offering, the placement agent received a
placement fee computed at the rate of seven percent (7.0%) of the aggregate
principal amount of the Notes sold. In addition, the Company paid an accountable
expense allowance of one percent (1%) of the aggregate principal amount of the
Notes sold. As a result after other Offering expenses of approximately $35,000
(legal and blue sky filing fees), the Company received net proceeds of
approximately $2,035,000. Costs of $216,500 related to this offering have been
capitalized and will be amortized over the life of the debt.

The Company and the Placement Agent anticipate additional closings of the
Offering, up to the maximum gross amount of $4,000,000 of Notes (including an
oversubscription option of $1,000,000). There can be no assurance that there
will be additional sales of Notes. The Notes provide that, to the extent the
Company completes a subsequent Financing, the Company will register the
underlying securities in connection with the Subsequent Financing. To the extent
the Company does not complete a Subsequent Financing, the Company will register
the common Stock underlying the Notes for resale by the Noteholders.

On June 14, 2007 the Company's J. Holder subsidiary entered into an agreement to
secure a revolving credit line in the maximum principal sum of $800,000 dollars
with Northern State Bank. During the term of the note, interest shall accrue on
the outstanding principal balance of the note at a rate of the lenders prime
rate plus one-half percent per annum. The Company can draw upon the credit line
during the twelve month period commencing on June 14, 2007. Any sums loaned

                                      -21-
<PAGE>

under the credit line may be repaid at any time, without premium or penalty, and
reborrowed from time to time, until July 1, 2008. Payments of interest only are
due on the 1st day of each and every month until the payment due July 1, 2008,
on which date the entire balance or principal, interest and fees then unpaid
shall become due and payable. The credit line is secured by various mortgages of
real property held and owned by the Company's subsidiary, J. Holder, Inc. The
Company had $641,000 outstanding on the credit line as of June 30, 2007.

<TABLE>
<CAPTION>

Supplementary Information on Consumer Receivables Portfolios:

Portfolio Purchases/Collections

(dollar amounts in thousands)

                                                                          Gross
Reporting           Outstanding           Portfolios      Purchase        Cash Collections
Period              Principal Amount      Purchased       Price           Per Period

<S>                     <C>                        <C>    <C>             <C>
 3 Mo. Ended            $     41,696               5      $      5,845    $      2,759
6/30/2006

 6 Mo. Ended            $     43,827               8      $      6,015    $      5,155
6/30/2006

 3 Mo. Ended            $     37,937               6      $      3,039    $      4,534
6/30/2007

 6 Mo Ended             $     79,798              12      $      4,791    $      8,216
6/30/2007
</TABLE>

The prices we pay for our consumer receivable portfolios are dependent on many
criteria including the age of the portfolio, the type of receivable, our
analysis of the percentage of obligors who owe debt that is collectible through
legal collection means and the geographical distribution of the portfolio. When
we pay higher prices for portfolios which may have a higher percentage of
obligors whose debt we believe is collectible through legal collection means, we
believe it is not at the sacrifice of our expected returns. Price fluctuations
for portfolio purchases from quarter to quarter or year over year are indicative
of the overall mix of the types of portfolios we are purchasing.

During the three months ended June 30, 2007, we acquired 6 portfolios of
consumer receivables aggregating approximately $38 million in initial
outstanding principal amount at a purchase price of approximately $3.0 million
dollars, bringing the aggregate initial outstanding principal amount of consumer
receivables under management as of June 30, 2007 to approximately $433 million
as compared to approximately $198 million as of June 30, 2006, an increase of
119%. For the three month period ended June 30, 2007, we posted gross
collections of approximately $4.53 million as compared to gross collections of
$2.76 million in the three month period ended June 30, 2006, 64.1% increase.
For the six month period ended June 30, 2007, we posted gross collections of
approximately $8.22 million as compared to gross collections of $5.16 million in
the six month period ended June 30, 2006, a 59.3% increase.

Trends

As a result of our line of credit we anticipate that we will incur significant
increases in interest expense offset, over time, by expected increased revenues
from consumer receivable portfolios purchased utilizing funds under such line of
credit. No assurance can be given that the expected revenues from such purchased
portfolios will exceed the additional interest expense. As a result of our line
of credit and Preferred Stock offering, we anticipate that we will incur
significant increases in interest expense and dividend payments offset, over
time, by expected increased revenues from consumer receivable portfolios
purchased utilizing funds under such line of credit and the proceeds from the
Note Offering. No assurance can be given that the expected revenues from such
purchased portfolios will exceed the additional interest expense or dividends.
We are not presently aware of any other known trends that may have a material
impact on our revenues. We do not believe that the recent increases in interest
rates, and the anticipated continuing gradual increases in interest rates, has
had or will have a material adverse effect upon our business.

                                      -22-
<PAGE>

Item 3         Controls and Procedures.

(a) Disclosure Controls. As of the end of the period covered by this report,
with the participation of our Chief Executive Officer and Chief Financial
Officer, we evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Securities Exchange Act of 1934). Based upon that evaluation, our Chief
Executive Officer and our Chief Financial Officer concluded that as of the end
of such period, our disclosure controls and procedures were effective as of the
period covered by this report in timely alerting them to material information
relating to Velocity Asset Management, Inc. required to be disclosed in our
periodic reports with the Securities and Exchange Commission. In addition, our
Chief Executive Officer and our Chief Financial Officer concluded that as of the
end of such period, our disclosure controls and procedures are also effective to
ensure that information required to be disclosed in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.
There were no changes in our disclosure controls during the period covered by
the Report on Form 10-QSB.


                                      -23-
<PAGE>

                                     PART II

OTHER INFORMATION

Item 1   Legal Proceedings

         In the ordinary course of our business we are involved in numerous
         legal proceedings. We regularly initiate collection lawsuits against
         consumers using our network of third party law firms. Also, consumers
         may occasionally initiate litigation against us in which they allege
         that we have violated a Federal or state law in the process of
         collecting on their account. We do not believe that these ordinary
         course matters are material to our business and financial condition. As
         of June 30, 2007, there are presently no material pending legal
         proceedings to which we or any of our subsidiaries is a party or to
         which any of our property is the subject and, to the best of our
         knowledge, no such actions against us is contemplated or threatened.

Item 2   Unregistered Sales of Securities and Use of Proceeds

         On June 29, 2007, Velocity Asset Management, Inc. (the "Company")
         consummated an initial closing of its private placement offering of
         $2,250,000.00 principal amount 10.0% Convertible Subordinated Notes
         (the "Notes") due 2017 (the "Offering") to accredited investors
         ("Investors"). The Notes were offered and sold pursuant to exemption
         from registration under Section 4(2) of the Securities Act of 1933, as
         amended (the "Securities Act"). The Notes were sold by the Company
         through an NASD member firm which is serving as placement agent. In
         connection with the Offering, the Company issued the Notes and also
         entered into a Subscription Agreement with the Note holders.

         The Notes have not been registered under the Securities Act of 1933, as
         amended (the "Securities Act"), or any state securities laws, and are
         being offered and sold only in the United States to "accredited
         investors" (as defined in Rule 501(a) of the Securities Act) pursuant
         to an exemption from registration under Section 4(2) of the Securities
         Act. Neither the Securities and Exchange Commission (the "SEC") nor any
         state securities commission or regulatory body has approved or
         disapproved the securities. Any representation to the contrary is a
         criminal offense.

Item 3   Defaults Upon Senior Securities

         None.

Item 4   Submission of Matters to a Vote of Security Holders

         None.

Item 5   Other Information

         None.

Item 6   Exhibits and Reports on Form 8-K

         Exhibits

         31.1     Certification of Principal Executive Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         31.2     Certification of Principal financial Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1     Certification of Principal Executive Officer pursuant to 18
                  U.S.C. Section 1350

         32.2     Certification of Principal Financial Officer pursuant to 18
                  U.S.C. Section 1350.



                                      -24-
<PAGE>

SIGNATURES


         In accordance with the requirements of the Securities Exchange Act of
1934 the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.


                                       VELOCITY ASSET MANAGEMENT, INC.

Dated:  August 9, 2007                 By: /s/ JOHN C. KLEINERT
                                           ------------------------------------
                                           John C. Kleinert
                                           Chief Executive Officer and President



                                      -25-