| Delaware                                 | 20-5456087                                |
|-----------------------------------------------|-------------------------------------------|
| (State      of jurisdiction of Incorporation) | (I.R.S.      Employer Identification No.) |
|                                          |                                      |

| 10801      Johnston Road. Suite 210Charlotte,      NC(Address      of Principal Executive Offices) |   |  28226(Zip      Code) |
|----------------------------------------------------------------------------------------------------|--------|----------------------------|

| Large      accelerated filer [  ] |   |   |   | Accelerated      filer [  ] |
|---------------------------------------------|--------|--------|--------|---------------------------------------|

|  Non-accelerated      filer [  ] |   | (Do      not check if a smaller reporting company) |   | Smaller      reporting company [X] |
|-------------------------------------------------|--------|----------------------------------------------------|--------|------------------------------------|

----

----

|                                                         |                                                                                                                                    | Page   |   |
|--------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                         |                                                                                                                                    |   |   |
| PART      I.  FINANCIAL INFORMATION                |                                                                                                                                    |   |   |
|                                                         |                                                                                                                                    |   |   |
| Item      1.                                                 | Financial      Statements                                                                                                               |   |   | F-1 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
|                                                         | Consolidated      Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008      (audited)                              |   |   | F-1 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
|                                                         | Consolidated      Statements of Operations for the Three Months and Nine Months      Ended September 30, 2009 and 2008 (unaudited) |   |   | F-2 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
|                                                         | Consolidated      Statement of Changes in Stockholders’ Equity for the Nine Months      Ended September 30, 2009 (unaudited) |   |   | F-3 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
|                                                         | Consolidated      Statements of Cash Flows for Nine Months Ended September 30, 2009 and 2008      (unaudited)                           |   |   | F-4 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
|                                                         | Notes      to Consolidated Financial Statements                                                                                         |   |   | F-5-F-16 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      2.                                                 | Management's      Discussion and Analysis of Financial Condition and Results of      Operations                                         |   |   | 4 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      3.                                                 | Quantitative      and Qualtitative Disclosures about Market Risk                                                                        |   |   | 10 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      4.                                                 | Controls      and Procedures                                                                                                            |   |   | 10 |   |
|                                                         |                                                                                                                                    |   |   |   |
| PART      II.     OTHER INFORMATION |                                                                                                                                    |   |   |   |
|                                                         |                                                                                                                                    |   |   |   |
| Item      1.                                                 | Legal      Proceedings                                                                                                                  |   |   | 11 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      1A.                                                | Risk      Factors                                                                                                                       |   |   |  11 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      2.                                                 | Changes      in Securities                                                                                                              |   |   | 11 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      3.                                                 | Defaults      Upon Senior Securities                                                                                                    |   |   | 11 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      4.                                                 | Submissions      of Matters to a Vote of Security Holders                                                                               |   |   | 11 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      5                                                  | Other      Information                                                                                                                  |   |   | 12 |   |
|                                                         |                                                                                                                                    |   |   |   |   |
| Item      6.                                                 | Exhibits      and Reports on Form 8-K                                                                                                   |   |   | 13 |   |
|                                                         |                                                                                                                                    |   |   |   |
| Signatures                                                   |                                                                                                                                    |   |   |   |

----

| ANCHOR      FUNDING SERVICES, INC.                                                                              |   |
|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |   |   |   |   |   |
| CONSOLIDATED      BALANCE SHEETS                                                                                |   |
|                                                                                                            |   |   |   |   |   |   |
| ASSETS                                                                                                          |   |
|                                                                                                            |   | (Unaudited) |   |   | (Audited) |   |
|                                                                                                            |   | September |   |   | December |   |
|                                                                                                            |   |   | 30,      2009 |   |   |   | 31,      2008 |   |
| CURRENT      ASSETS:                                                                                            |   |   |   |   |   |   |   |   |
|   Cash                                                                                                |   | $ | 384,891 |   |   | $ | 401,104 |   |
|   Retained      interest in purchased accounts receivable, net                                        |   |   | 5,392,420 |   |   |   | 4,292,366 |   |
|   Earned      but uncollected fee income                                                              |   |   | 93,427 |   |   |   | 87,529 |   |
|   Other      receivable                                                                               |   |   | 215,152 |   |   |   | - |   |
|   Deferred      financing costs, current                                                              |   |   | 72,728 |   |   |   | 85,130 |   |
|   Prepaid      expenses and other                                                                     |   |   | 101,131 |   |   |   | 116,950 |   |
|     Total      current assets                                                               |   |   | 6,259,749 |   |   |   | 4,983,079 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| PROPERTY      AND EQUIPMENT, net                                                                                |   |   | 59,353 |   |   |   | 70,181 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| DEFERRED      FINANCING COSTS, non-current                                                                      |   |   | - |   |   |   | 156,073 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| SECURITY      DEPOSITS                                                                                          |   |   | 19,500 |   |   |   | 19,500 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
|                                                                                                            |   | $ | 6,338,602 |   |   | $ | 5,228,833 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                       |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| CURRENT      LIABILITIES:                                                                                       |   |   |   |   |   |   |   |   |
|   Due      to financial institution                                                                   |   | $ | 3,412,936 |   |   | $ | 1,187,224 |   |
|   Accounts      payable                                                                               |   |   | 78,940 |   |   |   | 122,900 |   |
|   Loan      fees payable                                                                              |   |   | - |   |   |   | 50,000 |   |
|   Accrued      payroll and related taxes                                                              |   |   | 50,899 |   |   |   | 35,067 |   |
|   Accrued      expenses                                                                               |   |   | 42,305 |   |   |   | 45,141 |   |
|   Collected      but unearned fee income                                                              |   |   | 52,145 |   |   |   | 58,707 |   |
|   Preferred      dividends payable                                                                    |   |   | 354,552 |   |   |   | - |   |
|     Total      current liabilities                                                          |   |   | 3,991,777 |   |   |   | 1,499,039 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| LOAN      FEES PAYABLE, non-current                                                                             |   |   | - |   |   |   | 50,000 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES                                                                                          |   |   | 3,991,777 |   |   |   | 1,549,039 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| COMMITMENTS      AND CONTINGENCIES                                                                              |   |   |   |   |   |   |   |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| PREFERRED      STOCK, net of issuance costs of                                                                  |   |   |   |   |   |   |   |   |
|      $1,209,383                                                                        |   |   | 4,736,937 |   |   |   | 5,361,512 |   |
| COMMON      STOCK                                                                                               |   |   | 13,594 |   |   |   | 12,941 |   |
| ADDITIONAL      PAID IN CAPITAL                                                                                 |   |   | 2,404,608 |   |   |   | 1,660,516 |   |
| ACCUMULATED      DEFICIT                                                                                        |   |   | (4,808,314 | ) |   |   | (3,355,175 | ) |
|                                                                                                            |   |   | 2,346,825 |   |   |   | 3,679,794 |   |
|                                                                                                            |   | $ | 6,338,602 |   |   | $ | 5,228,833 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| The      accompanying notes to consolidated financial statements are an integral      part of these statements. |   |

----

|                                                |   | For      the quarters ending September 30, |       |    | For      the nine months ending September 30, |   |
|-----------------------------------------------------|--------|--------------------------------------------|------------|---------|-----------------------------------------------|--------|
|                                                |   | 2009                                       |       |    | 2008                                          |   |   | 2009 |   |   | 2008 |   |
| FINANCE      REVENUES                               |   | $                                          | 390,555    |    |                                          | $      | 338,356 |   |   | $ | 1,188,035 |   |   |   | 823,533 |   |
| INTEREST      EXPENSE - financial institution       |   |                                       | (28,722    | )       |                                          |   |   |   |   |   | (62,339 | )  |   |   |   |   |
| INTEREST      INCOME                                |   |                                       |       |    |                                          |   | 5,087 |   |   |   |   |   |   |   | 39,606 |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| NET      FINANCE REVENUES                           |   |                                       | 361,833    |    |                                          |   | 343,443 |   |   |   | 1,125,696 |   |   |   | 863,139 |   |
| (PROVISION)      BENEFIT FOR CREDIT LOSSES          |   |                                       | 1,706      |    |                                          |   | (226 | ) |   |   | (26,003 | )  |   |   | (5,270 | ) |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| FINANCE      REVENUES, NET OF INTEREST EXPENSE      |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|  AND      CREDIT LOSSES                        |   |                                       | 363,539    |    |                                          |   | 343,217 |   |   |   | 1,099,693 |   |   |   | 857,869 |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES                             |   |                                       | 760,461    |    |                                          |   | 583,644 |   |   |   | 2,170,268 |   |   |   | 1,805,549 |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS BEFORE INCOME TAXES                   |   |                                       | (396,922   | )  |                                          |   | (240,427 | ) |   |   | (1,070,575 | )  |   |   | (947,680 | )  |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| INCOME      TAXES:                                  |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|   Current                                 |   |                                       | -          |    |                                          |   | - |   |   |   | - |   |   |   | - |   |
|   Deferred                                |   |                                       | -          |    |                                          |   | - |   |   |   | - |   |   |   | - |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|   Total                                   |   |                                       | -          |    |                                          |   | - |   |   |   | - |   |   |   | - |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS                                       |   |                                       | (396,922   | )  |                                          |   | (240,427 | ) |   |   | (1,070,575 | )  |   |   | (947,680 | )  |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| DEEMED      DIVIDEND ON CONVERTIBLE PREFERRED STOCK |   |                                       | (93,841    | )  |                                          |   | (122,682 | ) |   |   | (354,552 | )  |   |   | (383,863 | )  |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS ATTRIBUTABLE TO COMMON STOCKHOLDER    |   | $                                          | (490,763   | )  |                                          | $      | (363,109 | ) |   | $ | (1,425,127 | )  |   |   | (1,331,543 | )  |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS ATTRIBUTABLE TO COMMON                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|   STOCKHOLDER,      per share             |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|   Basic                                   |   | $                                          | (.04       | )  |                                          | $      | (.03 | ) |   | $ | (.11 | )  |   |   | (.11 | )  |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|   Dilutive                                |   | $                                          | (.04       | )  |                                          | $      | (.03 | ) |   | $ | (.11 | )  |   |   | (.11 | )  |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF SHARES OUTSTANDING  |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |
|   Basic      and dilutive                 |   |                                       | 13,415,664 |    |                                          |   | 12,940,168 |   |   |   | 13,100,548 |   |   |   | 12,649,494 |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                                       |       |    |                                          |   |   |   |   |

----

| ANCHOR      FUNDING SERVICES, INC.                                                                                           |   |      |      |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|--------|--------|
| CONSOLIDATED      STATEMENTS OF STOCKHOLDERS' EQUITY                                                                         |   |      |      |   |   |   |   |
| For      the nine months ended September 30, 2009                                                                            |   |      |      |   |   |   |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   | Preferred |      |   | Common |   |   | Additional |   |   | Accumulated |   |
|                                                                                                                         |   | Stock     |      |   | Stock  |   |   | Paid      in Capital |   |   | Deficit |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2008 (audited)                                                                                    |   | $         | 5,361,512 |   |   | $      | 12,941 |   |   | $ | 1,660,516 |   |   | $ | (3,355,175 | ) |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for compensation expense related to issued stock    options                                                   |   |      | -         |   |   |   | -      |   |   |   | 4,582 |   |   |   | - |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Benefit      for compensation expense related to expired stock      options                                                  |   |      | -         |   |   |   | -      |   |   |   | (8,424 | ) |   |   | - |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      options issued to directors/officers related to financing agreement      obtained                                 |   |      | -         |   |   |   | -      |   |   |   | 96,000 |   |   |   | - |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| To      record conversion of 124,915 preferred shares, plus accrued      anddeclared      dividends to 652,587 common shares |   |      | (624,575) |   |   |   | 653    |   |   |   | 651,934 |   |   |   | (28,012 | )  |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred      stock dividends                                                                                               |   |      | -         |   |   |   | -      |   |   |   | - |   |   |   | (354,552 | ) |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss for the nine months ended September 30, 2009                                                                   |   |      | -         |   |   |   | -      |   |   |   | - |   |   |   | (1,070,575 | ) |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      September 30, 2009 (unaudited)                                                                                 |   | $         | 4,736,937 |   |   | $      | 13,594 |   |   | $ | 2,404,608 |   |   | $ | (4,808,314 | ) |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |      |      |   |   |   |   |   |   |

----

| ANCHOR      FUNDING SERVICES, INC.                                                                 |   |
|----------------------------------------------------------------------------------------------------|--------|
|                                                                                               |   |   |   |   |   |   |
| CONSOLIDATED      STATEMENTS OF CASH FLOWS (Unaudited)                                             |   |
|                                                                                               |   |   |   |   |   |   |
| For the nine months ended      September 30,                                                       |   |
|                                                                                               |   |   |   |   |   |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                         |   | 2009 |   |   | 2008 |   |
|   Net      loss:                                                                         |   | $ | (1,070,575 | )  |   |   | (947,680 | )  |
|   Adjustments      to reconcile net loss to net cash                                     |   |   |   |   |   |   |   |   |
|     used      in operating activities:                                         |   |   |   |   |   |   |   |   |
|     Depreciation                                                               |   |   | 21,857 |   |   |   | 33,798 |   |
|     Compensation      (benefit) expense related to issuance of                 |   |   |   |   |   |   |   |   |
|        stock      options                                       |   |   | (3,842 | )  |   |   | 16,261 |   |
|     Allowance      for uncollectible accounts                                  |   |   | 21,646 |   |   |   | 5,270 |   |
|     Amortization      of loan fees                                             |   |   | 122,841 |   |   |   | - |   |
|     Increase      in retained interest in purchased                            |   |   |   |   |   |   |   |   |
|        accounts      receivable                                 |   |   | (1,121,700 | )  |   |   | (1,800,239 | )  |
|     Increase      in earned but uncollected                                    |   |   | (5,898 | )  |   |   | (38,527 | )  |
|     Increase      in other receivable                                          |   |   | (215,152 | )  |   |   | - |   |
|     Decrease      (increase) in prepaid expenses and other                     |   |   | 15,819 |   |   |   | (49,511 | )  |
|     Decrease      in security deposits                                         |   |   | - |   |   |   | 453 |   |
|          (Decrease) increase in accounts payable                                    |   |   | (2,326 | )  |   |   | 13,229 |   |
|     Increase      (decrease) in accrued payroll and related taxes              |   |   | 15,832 |   |   |   | (14,610 | )  |
|     (Decrease)      increase in collected but not earned                       |   |   | (6,562 | )  |   |   | 16,847 |   |
|     Decrease      in accrued expenses                                          |   |   | (2,836 | )  |   |   | (58,215 | )  |
|       Net      cash used in operating activities                     |   |   | (2,230,896 | )  |   |   | (2,822,924 | )  |
|                                                                                               |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                         |   |   |   |   |   |   |   |   |
|   Purchases      of property and equipment                                               |   |   | (11,029 | )  |   |   | (27,147 | )  |
|                                                                                               |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                         |   |   |   |   |   |   |   |   |
|   Proceeds      from financial institution, net                                          |   |   | 2,225,712 |   |   |   | - |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| DECREASE      IN CASH                                                                              |   |   | (16,213 | )  |   |   | (2,850,071 | )  |
|                                                                                               |   |   |   |   |   |   |   |   |
| CASH,      beginning of period                                                                     |   |   | 401,104 |   |   |   | 3,499,044 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| CASH,      end of period                                                                           |   | $ | 384,891 |   |   |   | 648,973 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                               |   |   |   |   |   |   |   |   |
| The      accompanying notes to financial statements are an integral part of these      statements. |   |

----

|   | The      consolidated financial statements include the accounts of Anchor Funding      Services, Inc. and its wholly owned subsidiary, Anchor Funding Services,      LLC (“the Company”).  All significant intercompany balances and      transactions have been eliminated in  consolidation. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Anchor      Funding Services, Inc. is a Delaware corporation.  Anchor      Funding Services, Inc. has no operations; substantially all operations of      the Company are the responsibility of Anchor Funding Services,      LLC. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Anchor      Funding Services, LLC is a North Carolina limited liability      company.    Anchor Funding Services, LLC was formed      for the purpose of providing factoring and back office services to      businesses located throughout the United States of  America. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Estimates – The      preparation of financial statements in conformity with accounting      principles generally accepted in the United States of America requires      management to make estimates 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Revenue Recognition –      The Company charges fees to its customers in one of two ways as      follows: |
|--------|----------------------------------------------------------------------------------------------------------------|

|   | 1)   | Fixed      Transaction Fee - Fixed transaction fees are derived from a fixed      percentage of the purchased invoice.  This percentage does not      change from the date the purchased invoice is funded until the date the      purchased invoice is collected. |
|--------|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2)   | Variable      Transaction Fee - Variable transaction fees vary based on the      length of time the purchased invoice is outstanding.   As      specified in its contract with the customer, the Company charges variable      increasing percentages of the purchased invoice as time elapses from the      purchase date to the collectiondate. |
|--------|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For      both fixed and variable transaction fees, the Company recognizes revenue      by using one of two methods depending on the type of      customer.  For new customers the Company recognizes revenue      using the cost recovery method.  For established customers the      Company recognizes revenue using the accrual  method. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Under      the cost recovery method, all revenue is recognized upon collection of the      entire amount of purchased accountsreceivable. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The      Company considers new customers to be accounts whose initial funding has      been within the last three months or less.  Management believes      it needs three months of history to reasonably estimate a customer’s      collection period and accrued revenues.  If three months of      history has a limited number of transactions, the cost recovery method      will continue to be used until a reasonable revenue estimate can be made      based on additional history.  Once the Company obtains      sufficient historical experience, it will begin using the accrual method      to recognize revenue. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For      established customers the Company uses the accrual method of      accounting.  The Company applies this method by multiplying the      historical yield, for each customer, times the amount advanced on each      purchased invoice outstanding for that customer, times the portion of a      year that the advance is outstanding.  The customers’ historical      yield is based on the Company’s last six months of experience with the      customer along with the Company’s experience in the customer’s industry,      if applicable. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      amounts recorded as revenue under the accrual method described above are      estimates.  As purchased invoices are collected, the Company      records the appropriate adjustments to record the actual revenue earned on      each purchased invoice. These adjustments from the estimated revenue to      the actual revenue have not beenmaterial. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Retained Interest in Purchased      Accounts Receivable – Retained interest in purchased accounts      receivable represents the gross amount of invoices purchased from      factoring customers less amounts maintained in a reserve account and      collected but unearned fee income, plus earned but uncollected fee      income.  The Company purchases a customer’s accounts receivable      and advances them a percentage of the invoice total.  The      difference between the purchase price and amount advanced is maintained in      a reserve account.  The reserve account is used to offset any      potential losses the Company may have related to the purchased accounts      receivable.  Upon collection, the retained interest is refunded      back to the client. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Property and Equipment –      Property and equipment, consisting primarily of furniture and fixtures,      computers and software, are stated at cost.  Depreciation is      provided over the estimated useful lives of the depreciable assets using      the straight-line method.  Estimated useful lives range from 2      to 7 years. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred Financing Costs      – Costs incurred to obtain financing are capitalized and amortized      over the term of the debt using the straight-line method, which      approximates the effective interestmethod. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      March 2009, the Company issued stock options to its Chief Executive      Officer and President.  These options were issued to reward      these executive’s for providing personal guarantees on the Company’s      financing agreement obtained in November of 2008 (see Note      5).  The fair value of these options were computed as specified      by current accounting standards (see Note 7) and recorded as deferred      financing costs.  This amount will be amortized to operations      over the remaining term of the financing  agreement. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      May 2009, the terms of the financing agreement were      amended.  One of the amendments was to remove the Company from      its obligation to pay the lender $100,000 in loan fees.  Also,      in May the Company negotiated a reduction in legal fees charged by their      corporate attorney related to work done on this financing      agreement.  This reduction was approximately      $41,600. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | As      of September 30, 2009 and December 31, 2008, the total amount capitalized      and accumulated amortization is asfollows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                           |   | September      30, 2009 |     |   | December      31, 2008 |   |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------|----------|--------|------------------------|--------|
|                                                                                                           |   |                    |     |   |                   |   |
| Cash      paid or payable                                                                                      |   | $                       | 105,000  |   |                   | $      | 246,634 |   |
| Stock      options granted                                                                                     |   |                    | 96,000   |   |                   |   | - |   |
| Accumulated      amortization                                                                                  |   |                    | (128,272 | )      |                   |   | (5,431 | ) |
|                                                                                                           |   |                    |     |   |                   |   |   |   |
|                                                                                                           |   | $                       | 72,728   |   |                   | $      | 241,203 |   |
|                                                                                                           |   |                    |     |   |                   |   |   |   |
| The      net amount is classified in the balance sheets based on future expected      amortization as follows: |   |                    |     |   |                   |   |   |   |
|                                                                                                           |   |                    |     |   |                   |   |   |   |
|                                                                                                           |   | September      30, 2009 |     |   | December      31, 2008 |   |
|                                                                                                           |   |                    |     |   |                   |   |   |   |
| Current                                                                                                        |   | $                       | 72,728   |   |                   | $      | 85,130 |   |
| Non-current                                                                                                    |   |                    | -        |   |                   |   | 156,073 |   |
|                                                                                                           |   |                    |     |   |                   |   |   |   |
|                                                                                                           |   | $                       | 72,728   |   |                   | $      | 241,203 |   |
|                                                                                                           |   |                    |     |   |                   |   |   |   |

|   | Advertising Costs – The      Company charges advertising costs to expense as incurred.  Total      advertising costs were as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| For      the nine months ending September 30, |    |
|-----------------------------------------------|---------|
| 2009                                          |    |   | 2008 |   |
| $                                             | 256,000 |   |   | $ | 309,000 |   |
| For      the quarters ending September 30,    |    |
| 2009                                          |    |   | 2008 |   |
| $                                             | 83,000  |   |   | $ | 78,000 |   |

|   | Earnings per Share –      Basic earnings per share is computed by dividing the earnings for      the period by the weighted average number of common shares outstanding      during the period.  Dilutive earnings per share includes the      potential impact of dilutive securities, such as convertible preferred      stock, stock options and stock warrants.  The dilutive effect of      stock options and warrants is computed using the treasury stock method,      which assumes the repurchase of common shares at the average market      price. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Stock Based Compensation      – The fair value of transactions in which the Company      exchanges its equity instruments for employee services (share-based      payment transactions) must be recognized as an expense in the financial      statements as services areperformed. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | See      Note 7 for the impact on the operating results for the nine months ended      September 30, 2009 and 2008. |
|--------|---------------------------------------------------------------------------------------------------------------------|

|   | Fair Value of Financial      Instruments – The carrying value of cash equivalents, retained      interest in purchased accounts receivable, due to financial institution,      accounts payable and accrued liabilities approximates their fair      value. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Cash and cash equivalents      – Cash and cash equivalents consist primarily of highly liquid cash      investment funds with original maturities of three months or less when      acquired. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Income Taxes – Income      taxes are provided for the tax effects of transactions reported in the      financial statements plus deferred income taxes related to the differences      between financial statement and taxableincome. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      primary differences between financial statement and taxable income for the      Company are as follows: |
|--------|------------------------------------------------------------------------------------------------------------------|

| · | Compensation      costs related to the issuance of stockoptions |
|--------|-----------------------------------------------------------------|

| · | Use      of the reserve method of accounting for bad  debts |
|--------|-------------------------------------------------------------|

| · | Differences      in bases of property and equipment between financial and income tax      reporting |
|--------|-----------------------------------------------------------------------------------------------------|

| · | Net      operating loss carryforwards. |
|--------|----------------------------------------|

|   | Retained      interest in purchased accounts receivable consists of the      following: |
|--------|-----------------------------------------------------------------------------------------|

|                                           |   | September      30, 2009 |       |   | December      31, 2008 |   |
|------------------------------------------------|--------|-------------------------|------------|--------|------------------------|--------|
|                                           |   |                    |       |   |                   |   |
| Purchased      accounts receivable outstanding |   | $                       | 6,525,766  |   |                   | $      | 5,340,975 |   |
| Reserve      account                           |   |                    | (1,066,124 | )      |                   |   | (954,104 | ) |
| Allowance      for uncollectible accounts      |   |                    | (67,222    | )      |                   |   | (94,505 | ) |
|                                           |   |                    |       |   |                   |   |   |   |
|                                           |   | $                       | 5,392,420  |   |                   | $      | 4,292,366 |   |

|   | Retained      interest in purchased accounts receivable consists of United States      companies in the followingindustries: |
|--------|------------------------------------------------------------------------------------------------------------------------------|

|           |   | September      30, 2009 |      |   | December      31, 2008 |   |
|----------------|--------|-------------------------|-----------|--------|------------------------|--------|
| Staffing       |   | $                       | 618,057   |   |                   | $      | 1,049,623 |   |
| Transportation |   |                    | 2,281,632 |   |                   |   | 1,666,895 |   |
| Construction   |   |                    | 5,218     |   |                   |   | 5,218 |   |
| Service        |   |                    | 2,121,856 |   |                   |   | 1,417,615 |   |
| Other          |   |                    | 432,880   |   |                   |   | 247,520 |   |
|           |   |                    |      |   |                   |   |   |   |
|           |   | $                       | 5,459,643 |   |                   | $      | 4,386,871 |   |

----

|   | Total      accounts receivable purchased were asfollows: |
|--------|----------------------------------------------------------|

| For      the nine months ending September 30, |                                       |
|-----------------------------------------------|--------------------------------------------|
| 2009                                          |                                       |   | 2008 |   |
|                                          |                                       |   |   |   |
| $                                             | 40,846,200                                 |   |   | $ | 23,851,600 |   |
|                                          |                                       |   |   |   |   |   |
|                                          |                                       |   |   |   |   |   |
|                                          | For      the quarters ending September 30, |   |
|                                          | 2009                                       |   |   |   | 2008 |   |
|                                          |                                       |   |   |   |   |   |
| $                                             | 16,350,000                                 |   |   | $ | 10,255,500 |   |

|   | Property      and equipment consist of thefollowing: |
|--------|------------------------------------------------------|

|   |    |
|--------|--------------|

|                                | Estimated         |   | September      30, |    |   | December      31, |   |
|-------------------------------------|-------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                | Useful      Lives |   | 2009               |    |   | 2008              |   |
| Furniture      and fixtures         | 2-5      years    |   | $                  | 33,960  |   |              | $      | 33,960 |   |
| Computers      and software         | 3-7      years    |   |               | 143,682 |   |              |   | 121,012 |   |
|                                |              |   |               | 177,642 |   |              |   | 154,972 |   |
| Less:      accumulated depreciation |              |   |               | 118,289 |   |              |   | 84,791 |   |
|                                |              |   |               |    |   |              |   |   |   |
|                                |              |   | $                  | 59,353  |   |              | $      | 70,181 |   |

|   | In      November 2008, the Company entered into an agreement with a financial      institution to finance the factoring of receivables and to provide ongoing      working capital.  The agreement is a revolving credit facility      that allows the Company to borrow up to a maximum amount, subject to a      borrowing base formula.  This agreement was amended in May      2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      original agreement permitted the Company to borrow up to $15,000,000; the      amended agreement lowers the maximum borrowing amount to      $5,000,000.  The original agreement was scheduled to expire in      November 2011; the amended agreement expires on December 31,      2009.  The amended agreement requires the Company to pay a      $50,000 fee if any amounts are unpaid on the expiration    date. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      the event the Company is not able to obtain replacement financing for this      revolving credit facility on or before its expiration date (December 31,      2009) severe liquidity problems couldoccur. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Borrowings      are made at the request of the Company.  The amount eligible to      be borrowed is based on a borrowing base formula as defined in the      agreement.  The interest on borrowings is paid monthly at LIBOR      rate plus 4%.  In addition to interest, the Company pays the      financial institution various monthly fees as defined in the      agreement. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      agreement is collateralized by a first lien on all Company      assets.  Borrowings on this agreement are partially guaranteed      by the Company’s President and Chief Executive Officer.  The      partial guarantee is $250,000 each. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      original agreement, among other covenants, required the Company to      maintain certain financial ratios.  The amended agreement      revised the financial ratio covenants.  As of September 30, 2009      and December 31, 2008, the Company was in compliance with, or obtained      waivers for, all provisions of thisagreement. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The      Company’s capital structure consists of preferred and common stock as      described below: |
|--------|------------------------------------------------------------------------------------------------------------|

|   | Preferred Stock – The      Company is authorized to issue 10,000,000 shares of $.001 par value      preferred stock.  The Company’s Board of Directors determines      the rights and preferences of its preferred  stock. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On      January 31, 2007, the Company filed a Certificate of Designation with the      Secretary of State of Delaware.  Effective with this filing,      2,000,000 preferred shares became Series 1 Convertible Preferred      Stock.  Series 1 Convertible Preferred Stock will rank senior to      Common Stock. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Series      1 Convertible Preferred Stock is convertible into 5 shares of the      Company’s Common Stock.  The holder of the Series 1 Convertible      Preferred Stock has the option to convert the shares to Common Stock at      any time.  Upon conversion all accumulated and unpaid dividends      will be paid as additional shares of Common  Stock. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      dividend rate on Series 1 Convertible Preferred Stock is      8%.  Dividends are paid annually on December 31st in the form of      additional Series 1 Convertible Preferred Stock unless the Board of      Directors approves a cash dividend.  Dividends on Series 1      Convertible Preferred Stock shall cease to accrue on the earlier of      December 31, 2009, or on the date they are converted to Common      Shares.  Thereafter, the holders of Series 1 Convertible      Preferred Stock have the same dividend rights as holders of Common Stock,      as if the Series 1 Convertible Preferred Stock had been converted to      Common Stock.  Accrued dividends at September 30, 2009 and      December 31, 2008 were $260,711 and$0. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Common Stock – The      Company is authorized to issue 40,000,000 shares of $.001 par value Common      Stock.  See “Subsequent Events.” Each share of Common Stock      entitles the holder to one vote at all stockholder      meetings.  Dividends on Common Stock will be determined annually      by the Company’s Board ofDirectors. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      shares issued in Series 1 Convertible Preferred Stock and Common Stock as      of September 30, 2009 and December 31, 2008 is summarized as      follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | Series      1 Convertible |      |   | Common |   |
|----------------------------------|--------|---------------------------|-----------|--------|--------|--------|
|                             |   | Preferred      Stock      |      |   | Stock  |   |
|                             |   |                      |      |   |   |   |
| Balance,      December 31, 2008  |   |                      | 1,314,359 |   |   |   | 12,940,378 |   |
|                             |   |                      |      |   |   |   |   |   |
| Balance,      September 30, 2009 |   |                      | 1,189,484 |   |   |   | 13,592,965 |   |

|   | Employee/Directors |
|--------|--------------------|

|   | The      Company has employment and stock option agreements with its Chief      Executive Officer, Morry Rubin (“M. Rubin”) and its President, Brad      Bernstein (“B. Bernstein”) |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      following summarizes M. Rubin’s employment agreement and stock      options: |
|--------|---------------------------------------------------------------------------------------------|

| ·   | The      employment agreement (dated January 31, 2007) with M. Rubin retains his      services as Co-chairman and Chief Executive Officer for a three-year      period. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An      annual salary of $1 until, the first day of the first month following such      time as the Company shall have, within any period beginning on January 1      and ending not more than 12 months thereafter, earned pre-tax net income      exceeding $1,000,000, M. Rubin’s base salary shall be adjusted to an      amount, to be mutually agreed upon between M. Rubin and the Company,      reflecting the fair value of the services provided, and to be provided, by      M. Rubin taking into account (i) his position, responsibilities and      performance, (ii) the Company’s industry, size and performance, and (iii)      other relevant factors. M. Rubin is eligible to receive annual bonuses as      determined by the Company’s compensation committee.  M. Rubin      shall be entitled to a monthly automobile allowance of    $1,500. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | 10-year      options to purchase 650,000 shares exercisable at $1.25 per share,      pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. Vesting      of the options was one-third immediately, one-third on February 29, 2008      and one-third on February 28, 2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 10-year      options to purchase 250,000 shares exercisable at $.62 per share, pursuant      to agreements entered into in March 2009.  These options were      issued in March 2009 in connection with a personal guarantee provided to a      financial institution (see Note 5).  These options were recorded      as deferred financing costs and will be amortized to operations over the      remaining life of the line of creditagreement. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      following summarizes B. Bernstein’s employment agreement and stock      options: |
|--------|-------------------------------------------------------------------------------------------------|

| · | The      employment agreement (dated January 31, 2007) with B. Bernstein retains      his services as President for a three-year  period. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

| · | An      annual salary of $205,000 during the first year, $220,000 during the      second year and $240,000 during the third year and any additional year of      employment.  The Board may periodically review B. Bernstein’s      base salary and may determine to increase (but not decrease) the base      salary in accordance with such policies as the Company may hereafter adopt      from time to time.  B. Bernstein is eligible to receive annual      bonuses as determined by the Company’s compensation      committee.  B. Bernstein shall be entitled to a monthly      automobile allowance of $1,000. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 10-year      options to purchase 950,000 shares exercisable at $1.25 per share,      pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. Vesting      of the options is one-third immediately, one-third on February 29, 2008      and one-third on February 28, 2009. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |  10-year      options to purchase 250,000 shares exercisable at $.62 per share, pursuant      to agreements entered into in March 2009.  These options were      issued in March 2009 in connection with a personal guarantee provided to a      financial institution (see Note 5).  These options were recorded      as deferred financing costs and will be amortized to operations over the      remaining life of the line of creditagreement. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Outside      Directors |
|--------|------------------------|

|   | The      Company entered into stock option agreements with outside      directors.  The following summarizes stock option agreements      entered into with these directors: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | As      of December 31, 2008, there were 460,000 shares exercisable at $1.25 per      share, pursuant to the Company’s 2007 Omnibus Equity Compensation      Plan.  The exercise period for these options is 10      years.  Vesting of the options was one-third immediately,      one-third one year from the grant date and the remainder two years from      grant date.  If any director ceases serving the Company for any      reason, all unvested options shall terminate immediately and all vested      options must be exercised within 90 days after the director ceases serving      as a director.  In December 2008, one of these directors      resigned.  As of September 30, 2009, all options granted to this      director expired. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Managerial      Employees |
|--------|---------------------------|

|   | The      following summarizes stock option agreements entered into with five      managerial employees: |
|--------|---------------------------------------------------------------------------------------------------------|

| · | As      of September 30, 2009, 10-year options to purchase 56,500 shares      exercisable at $1.00 to $1.25 per share, pursuant to the Company’s 2007      Omnibus Equity Compensation Plan were granted. The grant dates vary from      September 2007 to March 2009.  Vesting periods range from one to      four years.  If any employee ceases being employed by the      Company for any reason, all vested and unvested options shall terminate      immediately. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|               |   |        |   |                  |   |        |
|--------------------|--------|-------------|--------|-----------------------|--------|-------------|
|               |   |        |   | Weighted      Average |   |        |
| Exercise           |   | Number      |   | Remaining             |   | Number      |
| Price              |   | Outstanding |   | Contractual      Life |   | Exercisable |
|               |   |        |   |                  |   |        |
| $.62      to $1.25 |   | 2,436,500   |   | 10      years         |   | 2,314,583   |
|               |   |        |   |                  |   |        |

|   |   |
|--------|--------|

| Exercise      price |   |   | $.62      to $1.25  |
|---------------------|--------|--------|---------------------|
| Term                |   |   | 10      years       |
| Volatility          |   |   | 83%      to 250%    |
| Dividends           |   |   | 0%                  |
| Discount      rate  |   |   | 2.82%      to 4.75% |
|                |   |   |                |

| Options      to value                |   |   | 1,936,500 |   |   |   | 500,000 |   |   |   | 2,436,500 |   |
|--------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|--------|-----------|--------|
| Option      price                    |   | $      | 0.0468    |   |   | $      | 0.1920  |   |   |   |      |   |
| Total      expense to recognize over |   |   |      |   |   |   |    |   |   |   |      |   |
|   life      of options     |   | $      | 90,628    |   |   | $      | 96,000  |   |   | $      | 186,628   |   |

|                                   |   | For      the nine       |   |    | For      the nine       |   |
|----------------------------------------|--------|-------------------------|--------|---------|-------------------------|--------|
|                                   |   | months      ended       |   |    | months      ended       |   |
|                                   |   | September      30, 2009 |   |    | September      30, 2008 |   |
|                                   |   |                    |   |    |                    |   |
|                                   |   |                    |   |    |                    |   |
| Fully      vested stock options        |   | $                       | 1,466  |    |                    | $      | 2,548 |   |
| Unvested      portion of stock options |   |                    | 3,116  |    |                    |   | 13,713 |   |
|                                   |   |                    |   |    |                    |   |   |   |
|                                   |   |                    | 4,582  |    |                    |   | 16,261 |   |
|                                   |   |                    |   |    |                    |   |   |   |
| Benefit      for expired stock options |   |                    | (8,424 | )  |                    |   | - |   |
|                                   |   |                    |   |    |                    |   |   |   |
| (Benefit)      provision, net          |   | $                       | (3,842 | )  |                    | $      | 16,261 |   |

----

| Exercise      price |   | $            | 1.10   |   |
|---------------------|--------|--------------|--------|--------|
| Term                |   | 5      years |   |
| Volatility          |   |         | 2.5    |   |
| Dividends           |   |         | 0      | %      |
| Discount      rate  |   |         | 4.70   | %      |

|   | Revenues – The Company      recorded revenues from United States companies in the following industries      as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------|

| Industry       |   | For      the nine months ending September 30, |      |
|----------------|--------|----------------------------------------------------|-----------|
|           |   |                                               |      |   |   |   |
|           |   | 2009                                               |      |   | 2008 |   |
|           |   |                                               |      |   |   |   |
| Staffing       |   | $                                                  | 191,718   |   |   | $ | 202,746 |   |
| Transportation |   |                                               | 465,738   |   |   |   | 343,382 |   |
| Construction   |   |                                               | -         |   |   |   | 4,850 |   |
| Service        |   |                                               | 480,935   |   |   |   | 239,177 |   |
| Other          |   |                                               | 49,644    |   |   |   | 33,378 |   |
|           |   |                                               |      |   |   |   |   |   |
|           |   |                                               |      |   |   |   |   |   |
|           |   | $                                                  | 1,188,035 |   |   | $ | 823,533 |   |

| Industry       |   | For      the quarter ending September 30, |    |
|----------------|--------|-------------------------------------------|---------|
|           |   |                                      |    |   |   |   |
|           |   | 2009                                      |    |   | 2008 |   |
|           |   |                                      |    |   |   |   |
| Staffing       |   | $                                         | 55,597  |   |   | $ | 52,348 |   |
| Transportation |   |                                      | 147,876 |   |   |   | 174,705 |   |
| Construction   |   |                                      | -       |   |   |   | 1,945 |   |
| Service        |   |                                      | 173,493 |   |   |   | 99,721 |   |
| Other          |   |                                      | 13,589  |   |   |   | 9,637 |   |
|           |   |                                      |    |   |   |   |   |   |
|           |   |                                      |    |   |   |   |   |   |
|           |   | $                                         | 390,555 |   |   | $ | 338,356 |   |

----

|                        |   | For      the nine       |    |   | For      the nine       |   |
|-----------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                        |   | months      ended       |    |   | months      ended       |   |
|                        |   | September      30, 2009 |    |   | September      30, 2008 |   |
|                        |   |                    |    |   |                    |   |
| Revenues                    |   | $                       | 124,242 |   |                    | $      | 0 |   |
|                        |   |                    |    |   |                    |   |   |   |
|                        |   | As      of              |    |   | As      of              |   |
|                        |   | September      30,2009  |    |   | September      30,2008  |   |
| Purchased      accounts     |   |                    |    |   |                    |   |   |   |
| receivable      outstanding |   | $                       | 818,985 |   |                    | $      | 0 |   |

|   |   |
|--------|--------|

|   | Cash – The Company      places its cash and cash equivalents on deposit with a North Carolina      financial institution. In October and November, 2008 the Federal Deposit      Insurance Corporation (FDIC) temporarily increased coverage to $250,000      for substantially all depository accounts and temporarily provides      unlimited coverage for certain qualifying and participating non-interest      bearing transaction accounts.  The increased coverage is scheduled to      expire on December 31, 2009, at which time it is anticipated amounts      insured by the FDIC will return to $100,000.  During the year, the      Company from time to time may have had amounts on deposit in excess of the      insured limits. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      income tax benefit for the nine months ending September 30, 2009 and 2008      consists of the following: |
|--------|--------------------------------------------------------------------------------------------------------------------|

|                               |   | September |          |    | September |   |
|------------------------------------|--------|-----------|---------------|---------|-----------|--------|
|                               |   |      | 30,      2009 |    |      |   | 30,      2008 |   |
|                               |   |      |          |    |      |   |   |   |
|   Current      provision |   | $         | 0             |    |      | $      | 0 |   |
|   Deferred      benefit  |   |      | 418,000       |    |      |   | 313,000 |   |
|                               |   |      |          |    |      |   |   |   |
|                               |   |      | 418,000       |    |      |   | 313,000 |   |
|                               |   |      |          |    |      |   |   |   |
|   Valuation      reserve |   |      | (418,000      | )  |      |   | (313,000 | ) |
|                               |   |      |          |    |      |   |   |   |
|                               |   | $         | 0             |    |      | $      | 0 |   |

|   | The net operating loss      carryforward generated in the nine months ending September 30, 2009 and      2008 was approximately $1,070,000 and $921,000,      respectively.  The deferred tax assets related to these net      operating loss carryforwards was approximately $418,000 and $313,000 as      September 30, 2009 and 2008, respectively.  These deferred tax      assets have been reduced by valuation allowances.  Management is      uncertain if this net operating loss will ever be utilized, therefore it      has been fully reserved. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      May 2007, the Company executed lease agreements for office space in      Charlotte, NC and Boca Raton, FL.  Both lease agreements are      with unrelated parties. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      Charlotte lease is effective on August 15, 2007, is for a twenty-four      month term and includes an option to renew for an additional three year      term at substantially the same terms.  On November 1, 2007, the      Company entered into a lease for additional space adjoining its Charlotte      office.  The lease is for 19 months and includes a two year      renewal option at substantially the same terms.  The monthly      rent for the combined space is approximately  $2,250. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      Boca Raton lease was effective on August 20, 2007 and is for a sixty-one      month term.  The monthly rental is approximately      $8,300. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Total      rent expense for the nine months ending September 30, 2009 and 2008 was      approximately $105,000 and $103,000  respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | Other      receivable represents an amount due from a customer that the Company had      purchased accounts receivable from.  In June of 2009, the      Company learned that the accounts receivable purchased from this customer      were not paid to the Company, but to another party.  The      Company’s factoring and security agreements provide the Company with      several remedies for collecting.  The Company is pursuing all      collection remedies available to it under its factoring and security      agreements, including personal guarantees by the customer’s      principals. The Company has initiated a lawsuit against the customer      and its principals. As of September 30, 2009, the Company believes,      through the available courses of action,  these funds will be      collected and has ceased accruing fees on the invoices. The Company will      be monitoring this account closely and will make additional judgments and      decisions as the facts and circumstances  dictate. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Cash      paid for interest for the nine months ended September 30, 2009 and 2008      was $62,300 and $0 respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | Non-cash      financing and investing activities consisted of the    following: |
|--------|---------------------------------------------------------------------------------|

|   | For the nine months      ending September 30, 2009 - |
|--------|------------------------------------------------------|

|   | Exchange      of 124,915 preferred shares for 652,587 of common  shares. |
|--------|--------------------------------------------------------------------------|

|   | For the nine months      ending September 30, 2008 - |
|--------|------------------------------------------------------|

|   | 94,685      preferred shares issued in satisfaction of the accrued dividend obligation      as of December 31, 2007. |
|--------|----------------------------------------------------------------------------------------------------------------------|

|   | Exchange      of 220,366 preferred shares for 1,119,613 of common  shares. |
|--------|----------------------------------------------------------------------------|

|   | In      April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1 “Interim Disclosures about Fair      Value of Financial Instruments” (“ASC 825-10” and “ASC 270-10”,      Transition Related to  FSP SFAS 107-1 and APB 28-1). ASC 825-10and      270-10 amend the disclosure requirements in ASC 825, “Disclosures about Fair Value      of Financial Instruments”, and ASC 270, “Interim Financial      Reporting,” to require disclosures about the fair value of      financial instruments, including disclosure of the method(s) and      significant assumptions used to estimate the fair value of financial      instruments, in interim financial statements as well as in annual      financial statements.  Previously, these disclosures were      required only in annual financial statements.  ASC 825-10and      270-10 are effective and should be applied prospectively for financial      statements issued for interim and annual reporting periods ending after      June 15, 2009.  In periods after initial adoption, ASC 825-10and      270-10 require comparative disclosures only for periods ending subsequent      to initial adoption and does not require earlier periods to be disclosed      for comparative purposes at initial adoption.  The Company was      not impacted by the adoption of this  pronouncement. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      May 2009, the FASB issued FASB Statement No. 165, Subsequent Events (“ASC      855”, Subsequent      Events), which establishes general standards of and accounting for      and disclosure of events that occur after the balance sheet date but      before financial statements are issued or are available to be      issued.  This Statement was effective for interim and annual      periods ending after June 15, 2009.  The Company has complied      with the requirements of ASC 855. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      June 2009, the FASB issued Statement No. 168, The FASB Accounting Standards      Codification TM and the Hierarchy of Generally Accepted Accounting      Principles (“ASC 105,” Generally Accepted Accounting Principles).      ASC 105 replaces      FASB Statement No. 162.  Under the Statement, The FASB      Accounting Standards Codification (Codification) has become the source of      authoritative U.S. generally accepted accounting principles (GAAP)      recognized by the FASB to be applied by nongovernmental      entities.  Rules and interpretive releases of the Securities and      Exchange Commission (SEC) under authority of federal securities laws are      also sources of authoritative GAAP for SEC registrants.  On the      effective date of this Statement, the Codification will supersede all      then-existing non-SEC accounting and reporting standards.  All      other non-grandfathered non-SEC accounting literature not included in the      Codification will become non-authoritative.  This Statement is      effective for financial statements issued for interim and annual periods      ending after September 15, 2009.  The codification is effective      for these third quarter financial statements and the principal impact is      limited to disclosures as all future references to authoritative      literature will be referenced in accordance with the      codification. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | In      August 2009, the FASB issued Accounting Standards Update (“ASU”) No.      2009-05, Fair Value      Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair      Value. This ASU provides amendments for fair value measurements of      liabilities. It provides clarification that in circumstances in which a      quoted price in an active market for the identical liability is not      available, a reporting entity is required to measure fair value using one      or more techniques. ASU 2009-05 also clarifies that when estimating a fair      value of a liability, a reporting entity is not required to include a      separate input or adjustment to other inputs relating to the existence of      a restriction that prevents the transfer of the liability. ASU 2009-05 is      effective for the first reporting period (including interim periods)      beginning after issuance or fourth quarter 2009. The Company is assessing      the impact of ASU 2009-05 on our financial condition, results of      operations and disclosures. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Subsequent      events have been evaluated through November __, 2009, which is the date      the financial statements were available to be  issued. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Estimates – The      preparation of financial statements in conformity with accounting      principles generally accepted in the United States of America requires      management to make estimates 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Revenue Recognition –      The Company charges fees to its customers in one of two ways as      follows: |
|--------|----------------------------------------------------------------------------------------------------------------|

|   | 1)   | Fixed      Transaction Fee - Fixed transaction fees are derived from a fixed      percentage of the purchased invoice.  This percentage does not      change from the date the purchased invoice is funded until the date the      purchased invoice is collected. |
|--------|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2)   | Variable      Transaction Fee - Variable transaction fees vary based on the      length of time the purchased invoice is outstanding.   As      specified in its contract with the customer, the Company charges variable      increasing percentages of the purchased invoice as time elapses from the      purchase date to the collectiondate. |
|--------|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For      both fixed and variable transaction fees, the Company recognizes revenue      by using one of two methods depending on the type of      customer.  For new customers the Company recognizes revenue      using the cost recovery method.  For established customers the      Company recognizes revenue using the accrual  method. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Under      the cost recovery method, all revenue is recognized upon collection of the      entire amount of purchased accountsreceivable. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      Company considers new customers to be accounts whose initial funding has      been within the last three months or less.  Management believes      it needs three months of history to reasonably estimate a customer’s      collection period and accrued revenues.  If three months of      history has a limited number of transactions, the cost recovery method      will continue to be used until a reasonable revenue estimate can be made      based on additional history.  Once the Company obtains      sufficient historical experience, it will begin using the accrual method      to recognize revenue. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For      established customers the Company uses the accrual method of      accounting.  The Company applies this method by multiplying the      historical yield, for each customer, times the amount advanced on each      purchased invoice outstanding for that customer, times the portion of a      year that the advance is outstanding.  The customers’ historical      yield is based on the Company’s last six months of experience with the      customer along with the Company’s experience in the customer’s industry,      if applicable. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The      amounts recorded as revenue under the accrual method described above are      estimates.  As purchased invoices are collected, the Company      records the appropriate adjustments to record the actual revenue earned on      each purchased invoice. These adjustments from the estimated revenue to      the actual revenue have not beenmaterial. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Retained Interest in Purchased      Accounts Receivable – Retained interest in purchased accounts      receivable represents the gross amount of invoices purchased from      factoring customers less amounts maintained in a reserve account and      collected but unearned fee income, plus earned but uncollected fee      income.  The Company purchases a customer’s accounts receivable      and advances them a percentage of the invoice total.  The      difference between the purchase price and amount advanced is maintained in      a reserve account.  The reserve account is used to offset any      potential losses the Company may have related to the purchased accounts      receivable.  Upon collection, the retained interest is refunded      back to the client. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

|   | Property and Equipment –      Property and equipment, consisting primarily of furniture and fixtures,      computers and software, are stated at cost.  Depreciation is      provided over the estimated useful lives of the depreciable assets using      the straight-line method.  Estimated useful lives range from 2      to 7 years. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred Financing Costs      – Costs incurred to obtain financing are capitalized and amortized      over the term of the debt using the straight-line method, which      approximates the effective interestmethod. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      March 2009, the Company issued stock options to its Chief Executive      Officer and President.  These options were issued to reward      these executive’s for providing personal guarantees on the Company’s      financing agreement obtained in November of 2008 (see Note      5).  The fair value of these options were computed as specified      by current accounting standards (see Note 7) and recorded as deferred      financing costs.  This amount will be amortized to operations      over the remaining term of the financing  agreement. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      May 2009, the terms of the financing agreement were      amended.  One of the amendments was to remove the Company from      its obligation to pay the lender $100,000 in loan fees.  Also,      in May the Company negotiated a reduction in legal fees charged by their      corporate attorney related to work done on this financing      agreement.  This reduction was approximately      $41,600. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As      of September 30, 2009 and December 31, 2008, the total amount capitalized      and accumulated amortization is asfollows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

----

|   | Advertising Costs – The      Company charges advertising costs to expense as incurred.  Total      advertising costs were as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| For      the nine months ending September 30, |    |
|-----------------------------------------------|---------|
| 2009                                          |    |   | 2008 |   |
| $                                             | 256,000 |   |   | $ | 309,000 |   |
| For      the quarters ending September 30,    |    |
| 2009                                          |    |   | 2008 |   |
| $                                             | 83,000  |   |   | $ | 78,000 |   |

|   | Earnings per Share –      Basic earnings per share is computed by dividing the earnings for      the period by the weighted average number of common shares outstanding      during the period.  Dilutive earnings per share includes the      potential impact of dilutive securities, such as convertible preferred      stock, stock options and stock warrants.  The dilutive effect of      stock options and warrants is computed using the treasury stock method,      which assumes the repurchase of common shares at the average market      price. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Stock Based Compensation      – The fair value of transactions in which the Company      exchanges its equity instruments for employee services (share-based      payment transactions) must be recognized as an expense in the financial      statements as services areperformed. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | See      Note 7 for the impact on the operating results for the nine months ended      September 30, 2009 and 2008. |
|--------|---------------------------------------------------------------------------------------------------------------------|

|   | Fair Value of Financial      Instruments – The carrying value of cash equivalents, retained      interest in purchased accounts receivable, due to financial institution,      accounts payable and accrued liabilities approximates their fair      value. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Cash and cash equivalents      – Cash and cash equivalents consist primarily of highly liquid cash      investment funds with original maturities of three months or less when      acquired. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Income Taxes – Income      taxes are provided for the tax effects of transactions reported in the      financial statements plus deferred income taxes related to the differences      between financial statement and taxableincome. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      primary differences between financial statement and taxable income for the      Company are as follows: |
|--------|------------------------------------------------------------------------------------------------------------------|

| · | Compensation      costs related to the issuance of stockoptions |
|--------|-----------------------------------------------------------------|

| · | Use      of the reserve method of accounting for bad  debts |
|--------|-------------------------------------------------------------|

| · | Differences      in bases of property and equipment between financial and income tax      reporting |
|--------|-----------------------------------------------------------------------------------------------------|

| · | Net      operating loss carryforwards. |
|--------|----------------------------------------|

----

|                                 |   | Three      Months Ended |    |   |   |   |    |
|--------------------------------------|--------|-------------------------|---------|--------|--------|--------|---------|
|                                 |   | September      30,      |    |   |   |   |    |
|                                 |   | 2009                    |    |   | 2008   |   |    | $      Change |   | Explanation |
| Amortization      of financing costs |   | $                       | 72,726  |   |   | $      |    |   |   | $ | 72,726 |   | Increased      amortization of deferred financing costs |
| Recruiting      expense              |   |                    | 28,750  |   |   |   |    |   |   |   | 28,750 |   | Placement      fee paid for business development executive |
| Credit      bureau fees              |   |                    | 29,799  |   |   |   | (3,099) |   |   |   | 32,898 |   | Increase      in cost to check debtors |
|                                 |   | $                       | 131,275 |   |   | $      | (3,099) |   |   | $ | 134,374 |   |   |
|                                 |   |                    |    |   |   |   |    |   |   |   |   |   |   |

|                                                             |   | Three      Months Ended |     |   |   |   |     |          |   |
|------------------------------------------------------------------|--------|-------------------------|----------|--------|--------|--------|----------|---------------|--------|
|                                                             |   | September      30,      |     |   |   |   |     |          |   |
|                                                             |   | 2009                    |     |   | 2008   |   |     | $      Change |   |   | %      Change |   |
| Finance      revenues                                            |   | $                       | 390,555  |   |   | $      | 338,356  |          |   | $ | 52,199 |   |   |   | 15.4 |   |
| Interest      income (expense), net                              |   |                    | (28,722  | )      |   |   | 5,087    |          |   |   | (33,809 | ) |   |   |   |   |
| Net      finance revenues                                        |   |                    | 361,833  |   |   |   | 343,443  |          |   |   | 18,390 |   |   |   | 5.4 |   |
| (Provision)      Benefit for  credit losses            |   |                    | 1,706    |   |   |   | (226     | )             |   |   |   |   |   |   |   |   |
| Finance      revenues, net of interest expense and credit losses |   |                    | 363,539  |   |   |   | 343,217  |          |   |   | 20,322 |   |   |   | 5.9 |   |
| Operating      expenses                                          |   |                    | 760,461  |   |   |   | 583,644  |          |   |   | 176,817 |   |   |   | 30.3 |   |
| Net      loss before income taxes                                |   |                    | (396,922 | )      |   |   | (240,427 | )             |   |   | (156,495 | ) |   |   | 65.1 |   |
| Income      tax (provision) benefit:                             |   |                    |     |   |   |   |     |          |   |   |   |   |   |   |   |   |
| Net      loss                                                    |   | $                       | (396,922 | )      |   | $      | (240,427 | )             |   | $ | (156,495 | ) |   |   | 65.1 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                       | Percentage      of Revenues for |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Percentage      of Accounts ReceivablePortfolio      as of | The      Three Months Ended     |
| Entity                                                                         | September      30, 2009                                    | September      30, 2009         |
| Transportation      Company in Virginia                                                                                                                                                                                                                                                                                                                                                                                                                |  12.6                                                 |  11.2                      |

| Key      changes in certain selling, general and administrative      expenses: |   |                   |
|--------------------------------------------------------------------------------|--------|------------------------|
|                                                                           |   | Nine      Months Ended |   |   |   |   |   |
|                                                                           |   | September      30,     |   |   |   |   |   |
|                                                                           |   | 2009                   |   |   | 2008 |   |   | $      Change |   | Explanation |
| Legal      fees                                                                |   | $                      | 132,601 |   |   | $ | 74,946 |   |   | $ | 57,655 |   | Additional      legal fees for corporate matters. |
| Payroll,      payroll taxes and benefits                                       |   |                   | 928,526 |   |   |   | 802,560 |   |   |   | 125,966 |   | Increased      payroll to support growth initiatives |
| Credit      bureau fees                                                        |   |                   | 94,361 |   |   |   | 45,729 |   |   |   | 48,632 |   | Increase      in cost to check debtors |
| Amortization      of financing costs                                           |   |                   | 122,841 |   |   |   |   |   |   |   | 122,841 |   | Increased      amortization of deferred financing costs |
|                                                                           |   | $                      | 1,278,329 |   |   | $ | 923,235 |   |   | $ | 355,094 |   |   |

----

|                                                             |   | Nine      Months Ended |       |   |   |   |      |          |   |
|------------------------------------------------------------------|--------|------------------------|------------|--------|--------|--------|-----------|---------------|--------|
|                                                             |   | September      30,     |       |   |   |   |      |          |   |
|                                                             |   | 2009                   |       |   | 2008   |   |      | $      Change |   |   | %      Change |   |
| Finance      revenues                                            |   | $                      | 1,188,035  |   |   | $      | 823,533   |          |   | $ | 364,502 |   |   |   | 44.3 |   |
| Interest      income (expense), net                              |   |                   | (62,339    | )      |   |   | 39,606    |          |   |   | (101,945 | ) |   |   | - |   |
| Net      finance revenues                                        |   |                   | 1,125,696  |   |   |   | 863,139   |          |   |   | 262,557 |   |   |   | 30.4 |   |
| (Provision)      Benefit for  credit losses            |   |                   | (26,003    | )      |   |   | (5,270    | )             |   |   | (20,733 | )  |   |   | 393.4 |   |
| Finance      revenues, net of interest expense and credit losses |   |                   | 1,099,693  |   |   |   | 857,869   |          |   |   | 241,824 |   |   |   | 28.2 |   |
| Operating      expenses                                          |   |                   | 2,170,268  |   |   |   | 1,805,549 |          |   |   | 364,719 |   |   |   | 20.2 |   |
| Net      loss before income taxes                                |   |                   | (1,070,575 | )      |   |   | (947,680  | )             |   |   | (122,895 | ) |   |   | 13.0 |   |
| Income      tax (provision) benefit:                             |   |                   |       |   |   |   |      |          |   |   |   |   |   |   |   |   |
| Net      loss                                                    |   | $                      | (1,070,575 | )      |   | $      | (947,680  | )             |   | $ | (122,895 | ) |   |   | 13.0 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                       | Percentage      of Revenues for |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Percentage      of Accounts ReceivablePortfolio      as of | The      Nine Months Ended      |
| Entity                                                                         | September      30, 2009                                    | September      30, 2009         |
| Transportation      Company in Virginia                                                                                                                                                                                                                                                                                                                                                                                                                |  12.6                                                 |  10.4                      |

----

| ITEM      3. | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK |
|--------------|----------------------------------------------------------------|

| ITEM      4. | CONTROLS      AND PROCEDURES |
|--------------|------------------------------|

----

| ITEM      1. | LEGAL      PROCEEDINGS: |
|--------------|-------------------------|

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

| ITEM      2. | CHANGES      IN SECURITIES: |
|--------------|-----------------------------|

| Date      of Sale  |    | Title      of Security  |    | NumberSold                      |    | ConsiderationReceived,Commissions                                                               |    | Purchasers                          |    | Exemption      fromRegistrationClaimed                                                   |    |
|-------------------------|--------------|------------------------------|--------------|---------------------------------|--------------|------------------------------------------------------------------------------------------------------|--------------|------------------------------------------|--------------|-----------------------------------------------------------------------------------------------|--------------|
|                    |         |                         |         |                            |         |                                                                                                 |         |                                     |         |                                                                                          |         |
| March      2009    |         | Common      StockOptions     |         |     51,500  |         | Securities      granted under Equity Compensation Plan; no cash received; no commissions      paid   |         | Employees,      directors and/orOfficers |         | Section      4(2) of the Securities Act of 1933 and/or Rule 506promulgatedthereunder      (6) |         |
|                    |         |                         |         |                            |         |                                                                                                 |         |                                     |         |                                                                                          |         |
| March      2009    |         | Common      StockOptions     |         |     500,000 |         | Securities      granted outside Equity Compensation Plan; no cash received; no commissions      paid |         | Employees,      directors and/orOfficers |         | Section      4(2) of the Securities Act of 1933 and/or Rule 506promulgatedthereunder      (6) |         |

| ITEM      3. | DEFAULTS      UPON SENIOR SECURITIES: |
|--------------|---------------------------------------|

| ITEM      4. | SUBMISSIONS      OF MATTERS TO A VOTE OF SECURITYHOLDERS: |
|--------------|-----------------------------------------------------------|

----

| ITEM      5. | OTHER      INFORMATION: |
|--------------|-------------------------|

----

| ITEM      6.  | EXHIBITS: |
|--------------------|-----------|

|  2.1 | Exchange      Agreement |
|-----------|-------------------------|

| 3.1 | Certificate of      Incorporation-BTHC,INC. |
|-----|--------------------------------------------------|

| 3.2 | Certificate      of Merger of BTHC XI, LLC into BTHC XI,  Inc. |
|-----|----------------------------------------------------------------|

| 3.3 | Certificate      of Amendment |
|-----|-------------------------------|

| 3.4 | Designation      of Rights and Preferences-Series 1 Convertible Preferred      Stock |
|-----|--------------------------------------------------------------------------------------|

| 3.5 | Amended      and Restated By-laws |
|-----|-----------------------------------|

| 3.6  | Amendment to Certificate of Incorporation      (3)                                                                                                                      |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | Form      of Placement Agent Warrant issued to Fordham Financial      Management |
|-----|----------------------------------------------------------------------------------|

| 10.1 | Directors’      Compensation Agreement-GeorgeRubin |
|------|----------------------------------------------------------|

| 10.2 | Employment      Contract-Morry F. Rubin |
|------|-----------------------------------------|

| 10.3 | Employment      Contract-Brad Bernstein |
|------|-----------------------------------------|

| 10.4 | Agreement-Line      of Credit |
|------|-------------------------------|

| 10.5 | Fordham      Financial Management-ConsultingAgreement |
|------|-------------------------------------------------------|

| 10.6       | Facilities      Lease –      Florida                     |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                               |
| 10.7       | Facilities      Lease – North Carolina                                                                                                                       |
|       |                                                                                                                                                               |
| 10.8  | Loan      and Security Agreement with Textron Financial Corporation      (1)                                                                                       |
|       |                                                                                                                                                               |
| 10.9       | Revolving      Note (1)                                                                                                                                            |
|       |                                                                                                                                                               |
| 10.10      | Debt      Subordination Agreement (1)                                                                                                                              |
|       |                                                                                                                                                               |
| 10.11      | Guaranty      Agreement (Morry Rubin) (1)                                                                                                                          |
|       |                                                                                                                                                               |
| 10.12      | Guaranty      Agreement (Brad Bernstein) (1)                                                                                                                       |
|       |                                                                                                                                                               |
| 10.13      | Continuing      Guaranty Agreement (1)                                                                                                                             |
|       |                                                                                                                                                               |

----

| 10.14                   | Pledge      Agreement (1)                                                                                                                                                     |
|-------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                    |                                                                                                                                                                          |
| 10.15                   | Amendment      to Loan and Security Agreement with Textron Financial Corporation      (2)                                                                                     |
|                    |                                                                                                                                                                          |
| 10.16    | Termination of Lease and surrender, acceptance and release      dated October 16, 2009 by and between Boca Town Partners, LLC and      Anchor Funding Services, LLC. (4) |
|                    |                                                                                                                                                                          |
| 31(a)                   | Rule      13a-14(a) Certification – Chief Executive Officer  *                                                                                                          |
|                    |                                                                                                                                                                          |
| 31(b)                   | Rule      13a-14(a) Certification – Chief Financial Officer  *                                                                                                          |
|                    |                                                                                                                                                                          |
| 32(a)                   | Section      1350 Certification – Chief Executive Officer *                                                                                                             |
|                    |                                                                                                                                                                          |
| 32(b)                   | Section      1350 Certification – Chief Financial Officer *                                                                                                             |
|                    |                                                                                                                                                                          |
| 99.1                    | 2007      Omnibus Equity CompensationPlan                                                                                                                                     |

| 99.2   | Form      of Non-Qualified Option under 2007 Omnibus Equity Compensation      Plan |
|--------|------------------------------------------------------------------------------------|
|   |                                                                               |
| 99.3   | Press      Release – Results of Operations – Third Quarter  2009*      |

----

|                                          | ANCHOR      FUNDING SERVICES, INC. |                                           |
|-----------------------------------------------|------------------------------------|------------------------------------------------|
|                                          |                               |                                           |   |
| Date:  November      16, 2009  | By:                                | /s/ Morry      F. Rubin    |   |
|                                          |                               | Morry      F. Rubin                            |   |
|                                          |                               | Chief      Executive Officer                   |   |
|                                          |                               |                                           |   |

|                         |   |                                       |   |
|------------------------------|--------|--------------------------------------------|--------|
| Date:      November 16, 2009 | By:    | /s/ Brad      Bernstein          |   |
|                         |   | Brad      Bernstein                        |   |
|                         |   | President      and Chief Financial Officer |   |
|                         |   |                                       |   |