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

| 10801 Johnston Road. Suite 210 Charlotte, 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] |
|--------------------------------------------|--------|-----------------------------------------------|--------|-------------------------------|

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|                                                    | Page                                                                                                                                |
|---------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |                                                                                                                                |
| PART I.  FINANCIAL INFORMATION                |                                                                                                                                |
|                                                    |                                                                                                                                |
| Item 1.                                                 | Financial Statements                                                                                                                | 4  |
|                                                    |                                                                                                                                |   |
|                                                    | Consolidated Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010                                                   | 4  |
|                                                    |                                                                                                                                |   |
|                                                    | Consolidated Statements of Operations for the Three Months and Six Months Ended  June 30, 2011  and 2010 (unaudited) | 5  |
|                                                    |                                                                                                                                |   |
|                                                    | Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2011 (unaudited)             | 6  |
|                                                    |                                                                                                                                |   |
|                                                    | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010(unaudited)                                    | 7  |
|                                                    |                                                                                                                                |   |
|                                                    | Notes to Consolidated Financial Statements                                                                                          | 8-19 |
|                                                    |                                                                                                                                |   |
| Item 2.                                                 | Management's Discussion and Analysis of Financial Condition and Results of Operations                                               | 25 |
|                                                    |                                                                                                                                |   |
| Item 3.                                                 | Quantitative and Qualitative Disclosures about Market Risk                                                                          | 25 |
|                                                    |                                                                                                                                |   |
| Item 4.                                                 | Controls and Procedures                                                                                                             | 26  |
|                                                    |                                                                                                                                |
| PART II.     OTHER INFORMATION |                                                                                                                                |
|                                                    |                                                                                                                                |
| Item 1.                                                 | Legal Proceedings                                                                                                                   | 27  |
|                                                    |                                                                                                                                |   |
| Item 1A.                                                | Risk Factors                                                                                                                        | 27 |
|                                                    |                                                                                                                                |   |
| Item 2.                                                 | Unregistered Sales of  Equity Securities and Use of Proceeds                                                              | 27  |
|                                                    |                                                                                                                                |   |
| Item 3.                                                 | Defaults Upon Senior Securities                                                                                                     | 27  |
|                                                    |                                                                                                                                |   |
| Item 4.                                                 | Removed and Reserved                                                                                                                | 27  |
|                                                    |                                                                                                                                |   |
| Item 5                                                  | Other Information                                                                                                                   | 27  |
|                                                    |                                                                                                                                |   |
| Item 6.                                                 | Exhibits                                                                                                                            | 27-28  |
|                                                    |                                                                                                                                |
| Signatures                                              | 29                                                                                                                             |
|                                                    |                                                                                                                                |
| Certifications                                |  30-33                                                                                                                         |

----

| CONSOLIDATED BALANCE SHEETS                             |   |
|---------------------------------------------------------|--------|
|                                                    |   |   |   |   |   |   |
| ASSETS                                                  |   |
|                                                    |   | (Unaudited) |   |   |   |   |
|                                                    |   | June 30, |   |   | December 31, |   |
|                                                    |   | 2011 |   |   | 2010 |   |
| CURRENT ASSETS:                                         |   |   |   |   |   |   |
| Cash                                                    |   | $ | 248,476 |   |   | $ | 163,320 |   |
| Retained interest in purchased accounts receivable, net |   |   | 6,127,957 |   |   |   | 7,641,953 |   |
| Earned but uncollected fee income                       |   |   | 153,217 |   |   |   | 203,068 |   |
| Prepaid expenses and other                              |   |   | 78,006 |   |   |   | 100,630 |   |
| Total current assets                                    |   |   | 6,607,656 |   |   |   | 8,108,971 |   |
|                                                    |   |   |   |   |   |   |   |   |
| PROPERTY AND EQUIPMENT, net                             |   |   | 13,206 |   |   |   | 18,998 |   |
|                                                    |   |   |   |   |   |   |   |   |
| SECURITY DEPOSITS                                       |   |   | 5,486 |   |   |   | 5,486 |   |
|                                                    |   |   |   |   |   |   |   |   |
|                                                    |   | $ | 6,626,348 |   |   | $ | 8,133,455 |   |
|                                                    |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                    |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES:                                    |   |   |   |   |   |   |   |   |
| Due to financial institution                            |   | $ | 4,232,268 |   |   | $ | 5,607,572 |   |
| Accounts payable                                        |   |   | 53,409 |   |   |   | 58,386 |   |
| Due to Lender                                           |   |   | - |   |   |   | 290,000 |   |
| Accrued payroll and related taxes                       |   |   | 49,120 |   |   |   | 55,555 |   |
| Accrued expenses                                        |   |   | 32,780 |   |   |   | 73,102 |   |
| Collected but unearned fee income                       |   |   | 57,773 |   |   |   | 39,620 |   |
| Total current liabilities                               |   |   | 4,425,350 |   |   |   | 6,124,235 |   |
|                                                    |   |   |   |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                           |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| PREFERRED STOCK, net of issuance costs of $ 1,209,383   |   |   |   |   |   |   |   |   |
|                                                    |   |   | 671,409 |   |   |   | 671,409 |   |
| COMMON STOCK                                            |   |   | 1,863 |   |   |   | 1,863 |   |
| ADDITIONAL PAID IN CAPITAL                              |   |   | 7,463,026 |   |   |   | 7,461,779 |   |
| ACCUMULATED DEFICIT                                     |   |   | (5,935,300 | ) |   |   | (6,125,831 | ) |
|                                                    |   |   | 2,200,998 |   |   |   | 2,009,220 |   |
|                                                    |   |   |   |   |   |   |   |   |
|                                                    |   | $ | 6,626,348 |   |   | $ | 8,133,455 |   |
|                                                    |   |   |   |   |   |   |   |   |
|                                                    |   |

----

|                                                          |   |   (Unaudited)For the three months ending June 30, |       |   |   (Unaudited)For the six months ending June 30, |   |
|---------------------------------------------------------------|--------|--------------------------------------------------------|------------|--------|------------------------------------------------------|--------|
|                                                          |   | 2011                                                   |       |   | 2010                                                 |   |   | 2011 |   |   |   | 2010 |   |
| FINANCE REVENUES                                              |   | $                                                      | 731,848    |   |                                                 | $      | 648,230 |   |   | $ | 1,319,140 |   |   | $ | 1,101,582 |   |
| INTEREST EXPENSE - financial institution                      |   |                                                   | (138,693   | )      |                                                 |   | (174,831 | ) |   |   | (287,287 | ) |   |   | (297,933 | ) |
| INTEREST EXPENSE - related party                              |   |                                                   | (14,429    | )      |                                                 |   | (50,295 | ) |   |   | (16,669 | ) |   |   | (52,221 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| NET FINANCE REVENUES                                          |   |                                                   | 578,726    |   |                                                 |   | 423,104 |   |   |   | 1,015,184 |   |   |   | 751,428 |   |
| (PROVISION) BENEFIT FOR CREDIT LOSSES                         |   |                                                   | (207       | )      |                                                 |   | (383 | ) |   |   | (175 | ) |   |   | 915 |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| FINANCE REVENUES, NET OF INTEREST EXPENSE                     |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|  AND CREDIT LOSSES                                       |   |                                                   | 578,519    |   |                                                 |   | 422,721 |   |   |   | 1,015,009 |   |   |   | 752,343 |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                            |   |                                                   | 405,025    |   |                                                 |   | 430,470 |   |   |   | 820,478 |   |   |   | 874,164 |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES  |   |                                                   | 173,494    |   |                                                 |   | (7,749 | ) |   |   | 194,531 |   |   |   | (121,821 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| INCOME TAXES                                                  |   |                                                   | -          |   |                                                 |   | - |   |   |   | - |   |   |   | - |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| INCOME (LOSS) FROM CONTINUING OPERATIONS                      |   |                                                   | 173,494    |   |                                                 |   | (7,749 | ) |   |   | 194,531 |   |   |   | (121,821 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM DISCONTINUED OPERATIONS                             |   |                                                   | -          |   |                                                 |   | (691,233 | ) |   |   | (4,000 | ) |   |   | (652,685 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                             |   |                                                   | 173,494    |   |                                                 |   | (698,982 | ) |   |   | 190,531 |   |   |   | (774,506 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| LESS: NONCONTROLLING INTEREST SHARE                           |   |                                                   | -          |   |                                                 |   | (135,736 | ) |   |   | - |   |   |   | (119,649 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| CONTROLLING INTEREST SHARE                                    |   |                                                   | 173,494    |   |                                                 |   | (563,246 | ) |   |   | 190,531 |   |   |   | (654,857 | ) |
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDER          |   | $                                                      | 173,494    |   |                                                 | $      | (563,246 | ) |   | $ | 190,531 |   |   | $ | 654,857 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| BASIC EARNINGS PER COMMON SHARE:                              |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|    INCOME (LOSS) FROM CONTINUING OPERATIONS    |   | $                                                      | 0.01       |   |                                                 | $      | - |   |   | $ | 0.01 |   |   | $ | (0.01 | ) |
|    INCOME (LOSS) FROM DISCONTINUED OPERATIONS  |   |                                                   | -          |   |                                                 |   | (0.03 | ) |   |   | - |   |   |   | (0.03 | ) |
|    NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDER |   | $                                                      | 0.01       |   |                                                 | $      | (0.03 | ) |   | $ | 0.01 |   |   | $ | (0.04 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| DILUTED EARNINGS PER COMMON SHARE:                            |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|    INCOME (LOSS) FROM CONTINUING OPERATIONS    |   | $                                                      | 0.01       |   |                                                 | $      | - |   |   | $ | 0.01 |   |   | $ | (0.01 | ) |
|    INCOME (LOSS) FROM DISCONTINUED OPERATIONS  |   |                                                   | -          |   |                                                 |   | (0.03 | ) |   |   | - |   |   |   | (0.03 | ) |
|    NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDER |   | $                                                      | 0.01       |   |                                                 | $      | (0.03 | ) |   | $ | 0.01 |   |   | $ | (0.04 | ) |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                 |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Basic                                             |   |                                                   | 17,763,618 |   |                                                 |   | 18,580,271 |   |   |   | 17,763,618 |   |   |   | 16,887,718 |   |
|   Dilutive                                          |   |                                                   | 20,572,341 |   |                                                 |   | 18,580,271 |   |   |   | 20,572,341 |   |   |   | 16,887,718 |   |
|                                                          |   |                                                   |       |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                               |   |      |    |   |   |   |   |            |   |   |        |   |   |   |       |
|--------------------------------------------------------------------|--------|-----------|---------|--------|--------|--------|--------|-----------------|--------|--------|-------------|--------|--------|--------|------------|
|                                                               |   | Preferred |    |   | Common |   |   | Additional      |   |   | Accumulated |   |   |   |       |
|                                                               |   | Stock     |    |   | Stock  |   |   | Paid in Capital |   |   | Deficit     |   |   | Total  |       |
| Balance, December 31, 2010                                         |   | $         | 671,409 |   |   | $      | 1,863  |            |   | $      | 7,461,779   |   |   | $      | (6,125,831 | ) |   | $ | 2,009,220 |   |
|                                                               |   |      |    |   |   |   |   |            |   |   |        |   |   |   |       |   |   |   |   |   |
| Provision for compensation expense related to issued stock options |   |      | -       |   |   |   | -      |            |   |   | 2,378       |   |   |   | -          |   |   |   | 2,378 |   |
|                                                               |   |      |    |   |   |   |   |            |   |   |        |   |   |   |       |   |   |   |   |   |
| Benefit for compensation expense related to expired stock options  |   |      | -       |   |   |   | -      |            |   |   | (1,131      | )      |   |   | -          |   |   |   | (1,131 | ) |
|                                                               |   |      |    |   |   |   |   |            |   |   |        |   |   |   |       |   |   |   |   |   |
| Net income                                                         |   |      | -       |   |   |   | -      |            |   |   | -           |   |   |   | 190,531    |   |   |   | 190,531 |   |
|                                                               |   |      |    |   |   |   |   |            |   |   |        |   |   |   |       |   |   |   |   |   |
| Balance, June 30, 2011 (unaudited)                                 |   | $         | 671,409 |   |   | $      | 1,863  |            |   | $      | 7,463,026   |   |   | $      | (5,935,300 | ) |   | $ | 2,200,998 |   |
|                                                               |   |      |    |   |   |   |   |            |   |   |        |   |   |   |       |   |   |   |   |   |

----

|                                                                                                            |   |        |       |   |        |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|
|                                                                                                            |   | (Unaudited) |       |   | (Unaudited) |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                           |   | 2011        |       |   | 2010        |   |
|   Net income (loss)                                                                                   |   | $           | 194,531    |   |        | $      | (121,821 | ) |
|   Loss from discontinued operations                                                                   |   |        | (4,000     | )      |        |   | (652,685 | ) |
|   Adjustments to reconcile net loss to net cash                                                       |   |        |       |   |        |   |   |   |
|     used in operating activities:                                                           |   |        |       |   |        |   |   |   |
|     Depreciation and amortization                                                           |   |        | 10,181     |   |        |   | 20,422 |   |
|     Net compensation expense related to issuance of stock options                           |   |        | 1,247      |   |        |   | 14,016 |   |
|     Allowance for uncollectible accounts                                                    |   |        |       |   |        |   |   |   |
|     (Increase) decrease in retained interest in purchased                                   |   |        |       |   |        |   |   |   |
|        accounts receivable                                                   |   |        | 1,513,996  |   |        |   | (3,672,477 | ) |
|     Decrease (increase) in earned but uncollected                                           |   |        | 49,851     |   |        |   | (66,304 | ) |
|     Decrease (increase) in prepaid expenses and other                                       |   |        | 22,624     |   |        |   | 11,399 |   |
|     (Decrease) increase in accounts payable                                                 |   |        | (4,977     | )      |        |   | 52,735 |   |
|     (Decrease) increase  in accrued payroll and related taxes                     |   |        | (6,435     | )      |        |   | 39,651 |   |
|     Increase (decrease) in collected but not earned                                         |   |        | 18,153     |   |        |   | (2,215 | ) |
|     Decrease in accrued expenses                                                            |   |        | (40,322    | )      |        |   | (67,984 | ) |
|       Net cash provided by (used in) operating activities - continuing operations |   |        | 1,754,849  |   |        |   | (4,445,263 | ) |
|       Net cash provided by operating activities - discontinued operations         |   |        | -          |   |        |   | 175,546 |   |
|       Net cash provided by (used in) operating activities                         |   |        | 1,754,849  |   |        |   | (4,269,717 | ) |
|                                                                                                            |   |        |       |   |        |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                           |   |        |       |   |        |   |   |   |
|   Purchases of property and equipment                                                                 |   |        | (4,389     | )      |        |   | (1,675 | ) |
|       Net cash used in investing activities - continuing operations               |   |        | (4,389     | )      |        |   | (1,675 | ) |
|       Net cash used in investing activities                                       |   |        | (4,389     | )      |        |   | (1,675 | ) |
|                                                                                                            |   |        |       |   |        |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                           |   |        |       |   |        |   |   |   |
|  (Payments to) proceeds from financial institution, net                                                    |   |        | (1,375,304 | )      |        |   | 1,786,919 |   |
|   (Payments to) proceeds from lender                                                                  |   |        | (290,000   | )      |        |   | 1,626,985 |   |
|      Net cash (used in) provided by financing activities - continuing operations       |   |        | (1,665,304 | )      |        |   | 3,413,904 |   |
|      Net cash  provided by financing activities - discontinued operations         |   |        | -          |   |        |   | 471,607 |   |
|      Net cash (used in) provided by financing activities                               |   |        | (1,665,304 | )      |        |   | 3,885,511 |   |
|                                                                                                            |   |        |       |   |        |   |   |   |
| INCREASE (DECREASE) IN CASH                                                                                     |   |        | 85,156     |   |        |   | (385,881 | ) |
|                                                                                                            |   |        |       |   |        |   |   |   |
| CASH, beginning of period                                                                                       |   |        | 163,320    |   |        |   | 453,880 |   |
|                                                                                                            |   |        |       |   |        |   |   |   |
| CASH, end of period                                                                                             |   | $           | 248,476    |   |        | $      | 67,999 |   |
|                                                                                                            |   |        |       |   |        |   |   |   |

----

|  Principles of Consolidation - The accompanying consolidated financial statements include the accounts of Anchor Funding Services, Inc. and, its wholly owned subsidiary, Anchor Funding Services, LLC (continuing operations). Anchor’s former 80% interest in Brookridge Funding Services, LLC is reflected in the consolidated statements of operations for the three and six months ended June 30, 2010 and the consolidated statements of cash flows for the six months ended June 30, 2010 as discontinued operations. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Estimates – The preparation of consolidated 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 consolidated 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: |
|------------------------------------------------------------------------------------------------------------|

----

----

| · | Compensation costs related to the issuance of stock options |
|--------|-------------------------------------------------------------|
| · | Use of the reserve method of accounting for bad debts       |

| · | Differences in basis of property and equipment between financial and income tax reporting |
|--------|-------------------------------------------------------------------------------------------|
| · | Net operating loss carryforwards.                                                         |

----

|                                      |   | June 30, 2011 |       |   | December 31, 2010 |   |
|-------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
| Purchased accounts receivable outstanding |   | $             | 7,493,862  |   |              | $      | 9,447,586 |   |
| Purchase order advances                   |   |          | 121,840    |   |              |   | 29,883 |   |
| Reserve account                           |   |          | (1,411,613 | )      |              |   | (1,755,016 | ) |
| Allowance for uncollectible invoices      |   |          | (76,132    | )      |              |   | (80,500 | ) |
|                                      |   | $             | 6,127,957  |   |              | $      | 7,641,953 |   |

----

|           |   | June 30, 2011 |      |   | December 31, 2010 |   |
|----------------|--------|---------------|-----------|--------|-------------------|--------|
| Staffing       |   | $             | 474,607   |   |              | $      | 471,612 |   |
| Transportation |   |          | 1,895,903 |   |              |   | 1,632,265 |   |
| Publishing     |   |          | -         |   |              |   | 1,463,411 |   |
| Construction   |   |          | 5,218     |   |              |   | 5,218 |   |
| Service        |   |          | 3,828,361 |   |              |   | 3,651,815 |   |
| Other          |   |          | -         |   |              |   | 498,132 |   |
|           |   | $             | 6,204,089 |   |              | $      | 7,722,453 |   |

|                    |   | For the three months ended,June 30, |       |   | For the six months ended June 30, |   |
|-------------------------|--------|-----------------------------------------------|------------|--------|-----------------------------------|--------|
|                    |   | 2011                                          |       |   | 2010                              |   |   | 2011 |   |   | 2010 |   |
| Purchased invoices      |   | $                                             | 20,920,248 |   |                              | $      | 25,120,614 |   |   | $ | 41,109,126 |   |   | $ | 42,987,580 |   |
| Purchase order advances |   |                                          | 653,660    |   |                              |   | 578,419 |   |   |   | 1,987,791 |   |   |   | 714,114 |   |
|                    |   | $                                             | 21,573,908 |   |                              | $      | 25,699,033 |   |   | $ | 43,096,917 |   |   | $ | 43,701,694 |   |

| Property and equipment consist of the following: |
|--------------------------------------------------|
|                                             |   |   |   |   |   |   |   |
|                                             | Estimated Useful Lives |   | June 30,2011 |   |   | December 31, 2010 |   |
| Furniture and fixtures                           | 2-5 years |   | $ | 44,731 |   |   | $ | 44,731 |   |
| Computers and software                           | 3-7 years |   |   | 158,355 |   |   |   | 153,966 |   |
|                                             |   |   |   | 203,086 |   |   |   | 198,697 |   |
| Less: accumulated depreciation                   |   |   |   | (189,880) |   |   |   | (179,699 | ) |
|                                             |   |   |   |   |   |   |   |   |   |
|                                             |   |   | $ | 13,206 |   |   | $ | 18,998 |   |

|   | Depreciation expense was $5,139 and $9,932 for the quarters ended June 30, 2011 and 2010, respectively and$10,181 and $20,422 for the six months ended June 30, 2011 and 2010, respectively. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| On, November 30, 2009, Anchor entered into a $7 million senior Accounts Receivable (A/R) Credit Facility with a maximum amount of up to $9 million with lender approval.  This funding facility is based upon Anchor's submission and approval of eligible accounts receivable. This facility replaced Anchor’s revolving credit facility from another financial institution.  Anchor pays .5% for the first 30 days of the face value for each invoice funded and .016% for each day thereafter until collected. In addition, interest on advances is paid monthly at the Prime Rate plus 2.0%.  Anchor pays the financial institution various other monthly fees as defined in the agreement. The agreement requires that Anchor use $1,000,000 of its own funds first to finance its clients.  The agreement contains customary representations and warranties, events of default and limitations, among other provisions. The agreement is collateralized by a first lien on all Anchors’ assets.  Borrowings on this agreement are partially guaranteed by the Company’s President and Chief Executive Officer.  The partial guarantee is $250,000 each.  On February 10, 2011, Anchor’s agreement with this financial institution was amended such that beginning February 10, 2011 Anchor would no longer pay discount fees and Anchor would pay interest on advances at the Prime Rate plus 8.0%  through November 30, 2011 and at the Prime Rate plus 9.0% thereafter. Anchor owed this financial institution $4,232,268 as of June 30, 2011 and $5,607,572 as of December 31, 2010. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  The agreement automatically renews each year provided that the Company has not provided 60 days notice to the financial institution in advance of the anniversary date. The agreement will expire November 30, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|  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 five 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. |

|  Common Stock – The Company is authorized to issue 65,000,000 shares of $.0001 par value Common Stock.  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 of Directors. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                        |   | Series 1 Convertible |    |   | Common |   |
|-----------------------------|--------|----------------------|---------|--------|--------|--------|
|                        |   | Preferred Stock      |    |   | Stock  |   |
| Balance, December 31, 2010  |   |                 | 376,387 |   |   |   | 18,634,369 |   |
| Preferred Stock Conversions |   |                 | -       |   |   |   | - |   |
| Common Stock Issuances      |   |                 | -       |   |   |   | - |   |
| Balance June 30, 2011       |   |                 | 376,387 |   |   |   | 18,634,369 |   |
|                        |   |

----

----

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

|   | The employment agreement with M. Rubin currently retains his services as Co-chairman and Chief Executive Officer through January 31, 2012. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 fair value of the options was one-third immediately, one-third on February 29, 2008 and one-third on February 28, 2009. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | The employment agreement with B. Bernstein currently retains his services as President for a three-year period through January 31, 2012. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|   | The following summarizes the stock option agreements entered into with three directors: |
|--------|-----------------------------------------------------------------------------------------|

| · | 10-year options to purchase 280,000 shares exercisable at $1.25 per share, pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. Vesting of the fair value of the options is one-third immediately, one-third one year from the grant date and the remainder 2 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. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| · | 10-year options to purchase 86,500 shares exercisable at prices of $1.00 and $1.25 per share, pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. The grant dates range from September 28, 2007 to November 30, 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.  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| The following table summarizes information about stock options as of June 30, 2011: |
|-------------------------------------------------------------------------------------|
|                                                                                |   |   |   |   |   |   |   |   |
| Exercise                                                                            |   |   | Number |   | Remaining |   | Number |   |
| Price                                                                               |   |   | Outstanding |   | Contractual Life |   | Exercisable |   |
|                                                                                |   |   |   |   |   |   |   |   |
| $                                                                                   | 1.25 |   |   |   | 1,885,000 |   | 6 years |   |   | 1,883,750 |   |
| $                                                                                   | 1.00 |   |   |   | 45,000 |   | 8 years |   |   | 17,500 |   |
| $                                                                                   | 0.62 |   |   |   | 500,000 |   | 8 years |   |   |     500,000 |   |
|                                                                                |   |   |   |   | 2,430,000 |   |   |   |   | 2,401,250 |   |

|           |   | The Company recorded the issuance of these options in accordance with ASC 718.  The following information was input into BSM. |
|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                    |   |
| Exercise price |   |                                                                                                                                    | $0.62 to $1.25 |   |
| Term           |   | 10 years                                                                                                                                |   |
| Volatility     |   | .85 to 2.50                                                                                                                             |   |
| Dividends      |   |                                                                                                                                    | 0 | % |
| Discount rate  |   | 2.82% to 4.75%                                                                                                                          |   |

| The pre-tax fair value effect recorded for these options in the statement of operations for the quarters ending June 30, 2011 and 2010 was as follows: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                              |   | 2011 |   |   | 2010 |   |
|                                                                                                                                                   |   |   |   |   |   |   |
| Fully vested stock options                                                                                                                             |   | $ | - |   |   | $ | - |   |
| Unvested portion of stock options                                                                                                                      |   |   | 2,378 |   |   |   | 14,016 |   |
|                                                                                                                                                   |   |   | 2,378 |   |   |   | 14,016 |   |
| Benefit for expired stock options                                                                                                                      |   |   | (1,131) |   |   |   | - |   |
| Provision, net                                                                                                                                         |   | $ | 1,247 |   |   | $ | 14,016 |   |

|   | In March, 2007, the placement agent was issued warrants to purchase 1,342,500 shares of the Company’s common stock.  The following information was input into BSM to compute a per warrant price of $.0462: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

|     |   |   |        |   | Weighted Average |   |                |         |
|----------|--------|--------|-------------|--------|------------------|--------|---------------------|--------------|
| Exercise |   |   | Number      |   | Remaining        |   | Number              |         |
| Price    |   |   | Outstanding |   | Contractual Life |   | Exercisable         |         |
|     |   |   |        |   |             |   |                |         |
| $        | 1.10   |   |        |   | 1,342,500        |   | 1 year              |    |   | 1,342,500 |   |
| $        | 1.00   |   |        |   | 2,000,004        |   |   9 years |         |   | 2,000,004 |   |
|     |   |   |        |   | 3,342,504        |   |                |         |   | 3,342,504 |   |

|           |
|----------------|
|           |   | For the quarters endedJune 30, |   |   | For the six months ended June 30, |   |
|           |   |   | 2011 |   |   |   | 2010 |   |   |   | 2011 |   |   |   | 2010 |   |
| Transportation |   | $ | 181,669 |   |   | $ | 199,417 |   |   | $ | 327,511 |   |   | $ | 332,219 |   |
| Staffing       |   |   | 34,806 |   |   |   | 42,930 |   |   |   | 70,350 |   |   |   | 94,314 |   |
| Service        |   |   | 417,315 |   |   |   | 278,850 |   |   |   | 697,572 |   |   |   | 503,514 |   |
| Other          |   |   | 98,058 |   |   |   | 19,896 |   |   |   | 134,287 |   |   |   | 28,513 |   |
| Publishing     |   |   | - |   |   |   | 107,137 |   |   |   | 89,420 |   |   |   | 143,022 |   |
|           |   | $ | 731,848 |   |   | $ | 648,230 |   |   | $ | 1,319,140 |   |   | $ | 1,101,582 |   |

|  Major Customers – For the three and six months ended June 30, 2011, the Company’s largest customer by revenues was a distributor of computers which accounted for approximately 13.2% and 9.8% of its revenues, respectively. In June, 2011, this customer terminated its agreement early with the Company and paid all of its fees and obligations to the Company, including a $55,000 early termination fee. For the three and six months ended June 30, 2011, the Company's also funded an importer of auto parts which accounted for approximately 10.4% and 8.2% of its revenues, respectively. For the three and six months ended June 30, 2010, the Company’s largest customer by revenues was a publishing company which accounted for approximately 16.5% and 13.0% of its revenues, respectively. In March 2011, this customer paid all of its fees and obligations to the Company and no longer required the Company’s services. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Cash – The Company places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation (FDIC) provides coverage up to $250,000 for substantially all depository accounts and provides unlimited coverage for certain qualifying and participating non-interest bearing transaction accounts.   During the quarter ended June 30, 2011, the Company from time to time may have had amounts on deposit in excess of the insured limits. As of June 30, 2011, the Company did not have amounts on deposit which exceeded these insured amounts.                                                                                                                                                                                                                                                                                                                                                              |

|                       |   | For the six months ending June 30, |    |
|----------------------------|--------|------------------------------------|---------|
|                       |   | 2011                               |    |   | 2010 |   |
| To a financial institution |   | $                                  | 288,437 |   |   | $ | 298,939 |   |
| To a related party         |   |                               | 16,669  |   |   |   | 52,221 |   |
| Total                      |   | $                                  | 305,106 |   |   | $ | 351,160 |   |

----

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

----

|                 |   | Three Months Ended |   |   | Six Months Ended |   |
|----------------------|--------|--------------------|--------|--------|------------------|--------|
|                 |   | June 30, 2011      |   |   | June 30, 2011    |   |
|                 |   |               |   |   |             |   |
| Net finance revenues |   | $                  | -      |   |             | $      | - |   |
| Net loss             |   | $                  | -      |   |             | $      | (4,000 | ) |

| (a)   | Brookridge’s current website (not including any rights or interest with respect to the Brookridge name, web address or domain name); and |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   |  the Sherburne Account |
|-----------------|-----------------------------|

----

|  ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------------|---------------------------------------------------------------------------------------|

| Principles of Consolidation - The accompanying consolidated financial statements include the accounts of Anchor Funding Services, Inc. and, its wholly owned subsidiary, Anchor Funding Services, LLC (continuing operations). Anchor’s former 80% interest in Brookridge Funding Services, LLC is reflected in the consolidated statements of operations and the consolidated statements of cash flows as discontinued operations for the three months and six months ended June 30, 2011.                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Estimates – The preparation of consolidated 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 consolidated 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: |
|------------------------------------------------------------------------------------------------------------|

----

----

| · | Compensation costs related to the issuance of stock options |
|--------|-------------------------------------------------------------|
| · | Use of the reserve method of accounting for bad debts       |

| · | Differences in basis of property and equipment between financial and income tax reporting |
|--------|-------------------------------------------------------------------------------------------|
| · | Net operating loss carryforwards.                                                         |

----

|                                                             |   |  Three Months Ended June 30, |     |
|------------------------------------------------------------------|--------|-----------------------------------|----------|
|                                                             |   | 2011                              |     |   | 2010 |   |   | $ Change |   |   | % Change |   |
| Finance revenues                                                 |   | $                                 | 731,848  |   |   | $ | 648,230 |   |   | $ | 83,618 |   |   |   | 12.9 |   |
| Interest income (expense), net  and commissions        |   |                              | (153,122 | ) |   |   | (225,126 | ) |   |   | 72,004 |   |   |   | (32.0 | ) |
| Net finance revenues                                             |   |                              | 578,726  |   |   |   | 423,104 |   |   |   | 155,622 |   |   |   | 36.8 |   |
| Provision for  credit losses                           |   |                              | (207     | ) |   |   | (383 | ) |   |   | 176 |   |   |   | (46.0 | ) |
| Finance revenues, net of interest expense and credit losses      |   |                              | 578,519  |   |   |   | 422,721 |   |   |   | 155,798 |   |   |   | 36.9 |   |
| Operating expenses                                               |   |                              | 405,025  |   |   |   | 430,470 |   |   |   | (25,445 | ) |   |   | (5.9 | ) |
| Net income (loss) from continuing operations before income taxes |   |                              | 173,494  |   |   |   | (7,749 | ) |   |   | 181,243 |   |   |   | - |   |
| Income tax (provision) benefit:                                  |   |                              | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Income (loss) from continuing operations                         |   |                              | 173,494  |   |   |   | (7,749 | ) |   |   | 181,243 |   |   |   | - |   |
| Loss from discontinued operations                                |   |                              | -        |   |   |   | (691,233 | ) |   |   | 691,233 |   |   |   | - |   |
| Net income (loss)                                                |   |                              | 173,494  |   |   |   | (698,982 | ) |   |   | 872,476 |   |   |   | - |   |
| Less: Noncontrolling interest share                              |   |                              | -        |   |   |   | (135,736 | ) |   |   | 135,736 |   |   |   | - |   |
| Controlling interest share                                       |   | $                                 | 173,494  |   |   | $ | (563,246 | ) |   | $ | 736,740 |   |   |   | - |   |

----

|                                                             |   |  Six Months Ended June 30, |      |
|------------------------------------------------------------------|--------|---------------------------------|-----------|
|                                                             |   | 2011                            |      |   | 2010 |   |   | $ Change |   |   | % Change |   |
| Finance revenues                                                 |   | $                               | 1,319,140 |   |   | $ | 1,101,582 |   |   | $ | 217,558 |   |   |   | 19.7 |   |
| Interest income (expense), net  and commissions        |   |                            | (303,956  | ) |   |   | (350,154 | ) |   |   | 46,198 |   |   |   | (13.2 | ) |
| Net finance revenues                                             |   |                            | 1,015,184 |   |   |   | 751,428 |   |   |   | 263,756 |   |   |   | 35.1 |   |
| (Provision) Benefit for  credit losses                 |   |                            | (175      | ) |   |   | 915 |   |   |   | (1,090 | ) |   |   | - |   |
| Finance revenues, net of interest expense and credit losses      |   |                            | 1,015,009 |   |   |   | 752,343 |   |   |   | 262,666 |   |   |   | 34.9 |   |
| Operating expenses                                               |   |                            | 820,478   |   |   |   | 874,164 |   |   |   | (53,686 | ) |   |   | (6.1 | ) |
| Net income (loss) from continuing operations before income taxes |   |                            | 194,531   |   |   |   | (121,821 | ) |   |   | 316,352 |   |   |   | - |   |
| Income tax (provision) benefit:                                  |   |                            | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Income (loss) from continuing operations                         |   |                            | 194,531   |   |   |   | (121,821 | ) |   |   | 316,352 |   |   |   | - |   |
| Income (loss) from discontinued operations                       |   |                            | (4,000    | ) |   |   | (652,685 | ) |   |   | 648,685 |   |   |   | (99.4 | ) |
| Net income (loss)                                                |   |                            | 190,531   |   |   |   | (774,506 | ) |   |   | 965,037 |   |   |   | - |   |
| Less: Noncontrolling interest share                              |   |                            | -         |   |   |   | (119,649 | ) |   |   | 119,649 |   |   |   | - |   |
| Controlling interest share                                       |   | $                               | 190,531   |   |   | $ | (654,857 | ) |   | $ | 845,388 |   |   |   | - |   |

----

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

----

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

----

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

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

| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS: |
|---------|--------------------------------------------------------------|

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

| ITEM 4. | REMOVED AND RESERVED: |
|---------|-----------------------|

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

|  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                                                  |
|  4.1  | Form of Placement Agent Warrant issued to Fordham Financial Management        |
|  10.1 | Directors’ Compensation Agreement-George Rubin                          |
|  10.2 | Employment Contract-Morry F. Rubin                                            |
|  10.3 | Employment Contract-Brad Bernstein                                            |
|  10.4 | Agreement-Line of Credit                                                      |
|  10.5 | Fordham Financial Management-Consulting Agreement                             |
|  10.6 | Facilities Lease – Florida                                              |
|  10.7 | Facilities Lease – North Carolina                                       |
| 10.8       | Loan and Security Agreement (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)                                                          |
| 10.16      | Asset Purchase Agreement between the Company and Brookridge Funding LLC (2)   |
| 10.17      | Senior Credit Facility between the Company and MGM Funding LLC  (2) |

----

| 10.18        | Senior Credit Facility Guarantee - Michael P. Hilton and John A. McNiff III  (4)                                                    |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| 10.19        | Employment Agreement - Michael P. Hilton  (4)                                                                                       |
| 10.20        | Employment Agreement - John A. McNiff  (4)                                                                                          |
| 10.21        | Accounts Receivable Credit Facility with Greystone Commercial Services LP  (3)                                                      |
| 10.22        | Memorandum of Understanding - Re: Rescission Agreement*                                                                                       |
| 10.23        | Rescission Agreement and Exhibits Thereto (5)                                                                                                 |
| 10.24        | Termination Agreement by and between Brookridge Funding Services LLC and MGM Funding LLC.(5)                                                  |
| 10.2510.26   | First Amendment to Factoring Agreement (6)Promissory Note dated April 26, 2011 between Anchor Funding Services, Inc. and MGM Funding, LLC (7) |
| 21.21        | Subsidiaries of Registrant listing state of incorporation (4)                                                                                 |
| 31.1         | Rule 13a-14(a) Certification – Principal Executive Officer *                                                                            |
| 31.2         | Rule 13a-14(a) Certification – Principal Financial Officer *                                                                            |
| 32.1         | Section 1350 Certification – Principal Executive Officer *                                                                              |
| 32.2         | Section 1350 Certification – Principal Financial Officer *                                                                              |
| 99.1         | 2007 Omnibus Equity Compensation Plan                                                                                                         |
| 99.2         | Form of Non-Qualified Option under 2007 Omnibus Equity Compensation Plan                                                                      |
| 99.3         | Amendment to 2007 Omnibus Equity Compensation Plan increasing the Plan to 4,200,000 shares                                          |
| 99.4         | Press Release - Results of Operations - Second Quarter 2011  *                                                                      |
| 101.INS      | XBRL Instance Document,XBRL Taxonomy Extension Schema *                                                                                       |
| 101.SCH      | Document, XBRL Taxonomy Extension *                                                                                                           |
| 101.CAL      | Calculation Linkbase, XBRL Taxonomy Extension Definition *                                                                                    |
| 101.DEF      | Linkbase,XBRL Taxonomy Extension Labels *                                                                                                     |
| 101.LAB      | Linkbase, XBRL Taxonomy Extension *                                                                                                           |
| 101.PRE      | Presentation Linkbase *                                                                                                                       |
|         | ___________________                                                                                                                           |
|    | *  Filed herewith.                                                                                                                  |

| (1)   | Incorporated by reference to the Registrant’s Form 8-K filed November 24, 2008 (date of earliest event November 21, 2008). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Incorporated by reference to the Registrant's Form 8-K filed December 8, 2009 (date of earliest event -December 4, 2009). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

| (3)   | Incorporated by reference to the Registrant's Form 8-K filed December 2, 2009 (date of earliest event -November 30, 2009). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------|

| (4)   | Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 2009. |
|-----------------|------------------------------------------------------------------------------------------------------|

| (5)   | Incorporated by reference to the Registrant's Form 8-K filed October 12, 2010 (date of earliest event - October 6, 2010). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

| (6)   | Incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 2010. |
|-----------------|------------------------------------------------------------------------------------------------------|

| (7)   | Incorporated by reference to the Registrant's Form 8-K filed April 28, 2011 (date of earliest event -April 26, 2011). |
|-----------------|-----------------------------------------------------------------------------------------------------------------------|

----

|                                   | ANCHOR FUNDING SERVICES, INC. |                                      |
|----------------------------------------|-------------------------------|-------------------------------------------|
|                                   |                          |                                      |   |
| Date:  August 15, 2011  | By:                           | /s/ Morry F. Rubin    |   |
|                                   |                          | Morry F. Rubin                            |   |
|                                   |                          | Principal Executive Officer               |   |
|                                   |                          |                                      |   |

|                 |   |                                      |   |
|----------------------|--------|-------------------------------------------|--------|
| Date: Augus 15, 2011 | By:    | /s/ Brad Bernstein              |   |
|                 |   | Brad Bernstein                            |   |
|                 |   | President and Principal Financial Officer |   |
|                 |   |                                      |   |