**Quarterly        Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of        1934**

**For      The Quarterly Period Ended **
**June 30, 2007**

**Commission      File Number:**
**0-52589**

**ANCHOR      FUNDING SERVICES, INC.**

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

**Charlotte,      NC 28226**

**(866)      789-3863**

**Not      Applicable**

----

**ANCHOR      FUNDING SERVICES, INC.**

**Form      10-QSB Quarterly Report**

**Table      of Contents**

|                          |                                                                                                                                      | Page    |
|-------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                          |                                                                                                                                      |    |
| **PART                  I.**  | **FINANCIAL                  INFORMATION**                                                                                                |    |
|                          |                                                                                                                                      |    |
| Item                  1.      | Financial                  Statements (Unaudited)                                                                                         |    |
|                          |                                                                                                                                      |    |
|                          | Consolidated                  Balance Sheet as of June 30, 2007                                                                           | 3       |
|                          |                                                                                                                                      |    |
|                          | Consolidated                  Statements of Operations for the Three and six months ended June                  30,                  2007 |    |
|                          |   and                  2006                                                                                                     | 4       |
|                          |                                                                                                                                      |    |
|                          | Consolidated                Statements of Stockholder Equity for the six months ended June 30,                2007                        |  5 |
|                          |                                                                                                                                      |    |
|                          | Consolidated                  Statements of Cash Flows for the six months ended June 30, 2007                  and                        |    |
|                          |    June                  30, 2006                                                                                          | 6       |
|                          |                                                                                                                                      |    |
|                          | Notes                  to Consolidated Financial Statements                                                                               | 7       |
|                          |                                                                                                                                      |    |
| Item                  2.      | Management's                  Discussion and Analysis of Financial Condition and Results of                  Operations                   | 29      |
|                          |                                                                                                                                      |    |
| Item                  3.      | Controls                  and Procedures                                                                                                  | 38      |
|                          |                                                                                                                                      |    |
| **PART                  II.** | **OTHER                  INFORMATION**                                                                                                    |    |
|                          |                                                                                                                                      |    |
| Item                  1.      | Legal                  Proceedings                                                                                                        | 38      |
|                          |                                                                                                                                      |    |
| Item                  2.      | Changes                  in Securities                                                                                                    | 38      |
|                          |                                                                                                                                      |    |
| Item                  3.      | Defaults                  Upon Senior Securities                                                                                          | 38      |
|                          |                                                                                                                                      |    |
| Item                  4.      | Submissions                  of Matters to a Vote of Security Holders                                                                     | 38      |
|                          |                                                                                                                                      |    |
| Item                  5       | Other                  Information                                                                                                        | 38      |
|                          |                                                                                                                                      |    |
| Item                  6.      | Exhibits                  and Reports on Form 8-K                                                                                         | 39      |
|                          |                                                                                                                                      |    |
| **Signatures**                |                                                                                                                                      | 40      |
|                          |                                                                                                                                      |    |
|                          |                                                                                                                                      |    |

----

**PART      I. FINANCIAL INFORMATION**

**ANCHOR        FUNDING SERVICES, INC.**

**CONSOLIDATED        BALANCE SHEETS **

**ASSETS**

|                                                                              |   | (Unaudited                    & |                        |   | (Audited                    & |   |
|-----------------------------------------------------------------------------------|--------|-------------------------------------|-----------------------------|--------|-----------------------------------|--------|
|                                                                              |   | Restated)                           |                        |   | Restated)                         |   |
|                                                                              |   | June                                |                        |   | December                          |   |
|                                                                              |   |                                | 30,                    2007 |   |                              |   | 31,                    2006 |   |
| CURRENT                    ASSETS:                                                |   |                                |                        |   |                              |   |   |   |
|   Cash                                                                  |   | $                                   | 4,751,826                   |   |                              | $      | 55,771 |   |
|   Retained                    interest in purchased accounts receivable |   |                                | 893,860                     |   |                              |   | 440,324 |   |
|   Due                    from financial institution                     |   |                                | 36,405                      |   |                              |   | - |   |
|   Prepaid                    expenses and other                         |   |                                | 39,133                      |   |                              |   | 41,134 |   |
|     Total                    current assets                   |   |                                | 5,721,224                   |   |                              |   | 537,229 |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
| PROPERTY                    AND EQUIPMENT, net                                    |   |                                | 30,913                      |   |                              |   | 4,010 |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
| SECURITY                    DEPOSITS                                              |   |                                | 18,965                      |   |                              |   | - |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
|                                                                              |   | $                                   | 5,771,102                   |   |                              | $      | 541,239 |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' EQUITY**                       |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
| CURRENT                    LIABILITIES:                                           |   |                                |                        |   |                              |   |   |   |
|   Due                    to financial institution                       |   | $                                   | -                           |   |                              | $      | 44,683 |   |
|   Accounts                    payable                                   |   |                                | 38,081                      |   |                              |   | 39,218 |   |
|   Due                    to related company                             |   |                                | 2,768                       |   |                              |   | 21,472 |   |
|   Accrued                    payroll and related taxes                  |   |                                | 78,728                      |   |                              |   | 37,796 |   |
|   Accrued                    expenses                                   |   |                                | 5,300                       |   |                              |   | - |   |
|   Dividends                    payable                                  |   |                                | 132,860                     |   |                              |   | - |   |
|     Total                    current liabilities              |   |                                | 257,737                     |   |                              |   | 143,169 |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
| COMMITMENTS                    AND CONTINGENCIES                                  |   |                                |                        |   |                              |   |   |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
| MEMBERS'                    EQUITY                                                |   |                                | -                           |   |                              |   | 391,800 |   |
| PREFERRED                    STOCK                                                |   |                                | 6,712,500                   |   |                              |   | - |   |
| COMMON                    STOCK                                                   |   |                                | 11,795                      |   |                              |   | 3,795 |   |
| ADDITIONAL                    PAID IN CAPITAL                                     |   |                                | (785,417                    | )      |                              |   | 4,580 |   |
| ACCUMULATED                    DEFICIT                                            |   |                                | (425,513                    | )      |                              |   | (2,105 | ) |
|                                                                              |   |                                | 5,513,365                   |   |                              |   | 398,070 |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |
|                                                                              |   | $                                   | 5,771,102                   |   |                              | $      | 541,239 |   |
|                                                                              |   |                                |                        |   |                              |   |   |   |

----

**ANCHOR        FUNDING SERVICES, INC.**

**UNAUDITED        CONSOLIDATED STATEMENTS OF OPERATIONS**

|                                                              |   |                                                |       |   |                                                          |   |    |
|-------------------------------------------------------------------|--------|-----------------------------------------------------|------------|--------|---------------------------------------------------------------|--------|---------|
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |
|                                                              |   |                                                |       |   |                                                          |   |    |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |
|                                                              |   | (Unaudited                    and Restated)         |       |   |    (Unaudited                    and Restated) |   |
|                                                              |   | For                    the quarters ending June 30, |       |   | For                    the six months ending June 30,         |   |
|                                                              |   | 2007                                                |       |   | 2006                                                          |   |    | 2007 |   |   | 2006 |   |
| FINANCE                    REVENUES                               |   | $                                                   | 75,638     |   |                                                          | $      | 168,631 |   |   | $ | 175,744 |   |   | $ | 409,473 |   |
| INTEREST                    EXPENSE - financial institution       |   |                                                | (17,195    | )      |                                                          |   | (42,272 | ) |   |   | (21,365 | ) |   |   | (105,804 | ) |
| INTEREST                    INCOME                                |   |                                                | 68,584     |   |                                                          |   | -  |   |   |   | 97,529 |   |   |   | - |   |
| INTEREST                    EXPENSE, net - related parties        |   |                                                | -          |   |                                                          |   | (13,556 | ) |   |   | - |   |   |   | (32,471 | ) |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| NET                    FINANCE REVENUES                           |   |                                                | 127,027    |   |                                                          |   | 112,803 |   |   |   | 251,908 |   |   |   | 271,198 |   |
| PROVISION                    FOR CREDIT LOSSES                    |   |                                                | -          |   |                                                          |   | -       |   |   |   | - |   |   |   | - |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| FINANCE                    REVENUES, NET OF INTEREST EXPENSE      |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|  AND                    CREDIT LOSSES                        |   |                                                | 127,027    |   |                                                          |   | 112,803 |   |   |   | 251,908 |   |   |   | 271,198 |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| OPERATING                    EXPENSES                             |   |                                                | 289,668    |   |                                                          |   | 45,191  |   |   |   | 559,456 |   |   |   | 104,876 |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| NET                    INCOME (LOSS) BEFORE INCOME TAXES          |   |                                                | (162,641   | )      |                                                          |   | 67,612  |   |   |   | (307,548 | ) |   |   | 166,322 |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| INCOME                    TAX (PROVISION) BENEFIT:                |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   Current                                               |   |                                                | -          |   |                                                          |   | -       |   |   |   | - |   |   |   | - |   |
|   Deferred                                              |   |                                                | 2,000      |   |                                                          |   | -       |   |   |   | 17,000 |   |   |   | - |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   Total                                                 |   |                                                | 2,000      |   |                                                          |   | -       |   |   |   | 17,000 |   |   |   | - |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| NET                    INCOME (LOSS)                              |   |                                                | (160,641   | )      |                                                          |   | 67,612  |   |   |   | (290,548 | ) |   |   | 166,322 |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| DEEMED                    DIVIDEND ON CONVERTIBLE PREFERRED STOCK |   |                                                | (132,860   | )      |                                                          |   | -       |   |   |   | (134,320 | ) |   |   | - |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| NET                    INCOME (LOSS) ATTRIBUTABLE TO COMMON       |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   SHAREHOLDER                                           |   | $                                                   | (293,501   | )      |                                                          | $      | 67,612  |   |   | $ | (424,868 | ) |   | $ | 166,322 |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| NET                    INCOME (LOSS) ATTRIBUTABLE TO COMMON       |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   SHAREHOLDER,                    per share             |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   Basic                                                 |   | $                                                   | (0.02      | )      |                                                          | N/A    |    |   | $ | (0.04 | ) |   | N/A |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   Dilutive                                              |   | $                                                   | (0.02      | )      |                                                          | N/A    |    |   | $ | (0.04 | ) |   | N/A |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
| WEIGHTED                    AVERAGE NUMBER OF SHARES OUTSTANDING  |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   Basic                                                 |   |                                                | 11,820,555 |   |                                                          | N/A    |    |   |   | 10,450,389 |   |   | N/A |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|   Dilutive                                              |   |                                                | 18,530,308 |   |                                                          | N/A    |    |   |   | 15,661,991 |   |   | N/A |   |
|                                                              |   |                                                |       |   |                                                          |   |    |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                |       |   |                                                          |   |    |   |   |

----

**ANCHOR        FUNDING SERVICES, INC.**

**UNAUDITED        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**For        the six months ended June 30, 2007**

|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |
|-------------------------------------------------------------------------------------------------------------|--------|----------|----------|--------|-----------|--------|-----------|--------|--------|--------|------------------------------------|--------|--------|-------------|------------|
|                                                                                                        |   | Members' |     |   | Preferred |   |      | Common |   |   | Additional                         |   |   | Accumulated |       |
|                                                                                                        |   | Equity   |     |   | Stock     |   |      | Stock  |   |   | Paid                    in Capital |   |   | Deficit     |       |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |
| Balance,                    December 31, 2006 (audited and restated)                                        |   | $        | 391,800  |   |      | $      | 0         |   |   | $      | 3,795                              |   |   | $           | 4,580      |   |   | $ | (2,105 | ) |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
| To                    record the exchange of 8,000,000 common shares of BTHC XI,                    Inc.    |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |
| stock                    for 100,000 membership units of Anchor Funding Services,                    LLC    |   |     | (391,800 | )      |      |   | -         |   |   |   | 8,000                              |   |   |        | 383,800    |   |   |   | - |   |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
| To                    record issuance of 1,342,500 shares of convertible preferred                    stock |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |
| and                    related costs of raising this capital                                                |   |     | -        |   |      |   | 6,712,500 |   |   |   | -                                  |   |   |        | (1,206,483 | ) |   |   | - |   |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
| To                    record issuance of 1,960,000 in stock options                                         |   |     | -        |   |      |   | -         |   |   |   | -                                  |   |   |        | 32,686     |   |   |   | - |   |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
| Preferred                    stock dividends                                                                |   |     | -        |   |      |   | -         |   |   |   | -                                  |   |   |        | -          |   |   |   | (132,860 | ) |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
| Net                    loss for the six months ended June 30, 2007                                          |   |     | -        |   |      |   | -         |   |   |   | -                                  |   |   |        | -          |   |   |   | (290,548 | ) |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
| Balance,                    June 30, 2007 (unaudited and restated)                                          |   | $        | 0        |   |      | $      | 6,712,500 |   |   | $      | 11,795                             |   |   | $           | (785,417   | ) |   | $ | (425,513 | ) |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |
|                                                                                                        |   |     |     |   |      |   |      |   |   |   |                               |   |   |        |       |   |   |   |   |   |

----

| ** ANCHOR                    FUNDING SERVICES, INC.**                                                 |   |                                |           |   |                                |   |
|------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|----------------|--------|-------------------------------------|--------|
|                                                                                                       |   |                                |           |   |                                |   |
| **UNAUDITED                    CONSOLIDATED STATEMENTS OF CASH FLOWS**                                     |   |
|                                                                                                       |   |                                |           |   |                                |   |
| **For                    the six months ended June 30,**                                                   |   |
|                                                                                                       |   | (Unaudited                    & |           |   | (Unaudited                    & |   |
|                                                                                                       |   | Restated)                           |           |   | Restated)                           |   |
| CASH                    FLOWS FROM OPERATING ACTIVITIES:                                                   |   | 2007                                |           |   | 2006                                |   |
|   Net                    income (loss):                                                          |   | $                                   | (290,548       | )      |                                | $      | 166,322 |   |
|   Adjustments                    to reconcile net income (loss) to net cash                      |   |                                |           |   |                                |   |   |   |
|     (used                    in) provided by operating activities:                     |   |                                |           |   |                                |   |   |   |
|     Depreciation                    and amortization                                   |   |                                | 4,295          |   |                                |   | 3,120 |   |
|     Compensation                    expense related to issuance of stock options       |   |                                | 49,686         |   |                                |   | - |   |
|     Benefit                    for income taxes                                        |   |                                | (17,000        | )      |                                |   | - |   |
|     (Increase)                    decrease in retained interest in purchased           |   |                                |                |   |                                |   |   |   |
|        accounts                    receivable                           |   |                                | (453,536  | )      |                                |   | 231,555  |   |
|     Decrease                    in prepaid expenses and other                          |   |                                | 2,001          |   |                                |   | 5,002 |   |
|     Increase                    in security deposits                                   |   |                                | (18,965        | )      |                                |   | - |   |
|     (Decrease)                    increase in accounts payable                         |   |                                | (1,137         | )      |                                |   | 175 |   |
|     (Decrease)                    increase in due to related company                   |   |                                | (18,704        | )      |                                |   | 140,179 |   |
|     Increase                    (decrease) in accrued payroll and related taxes        |   |                                | 40,932         |   |                                |   | (4,371 | ) |
|     Increase                    in accrued expenses                                    |   |                                | 5,300          |   |                                |   | - |   |
|       Net                    cash (used in) provided by operating activities |   |                                | (697,676       | )      |                                |   | 541,982 |   |
|                                                                                                       |   |                                |           |   |                                |   |   |   |
| CASH                    FLOWS FROM INVESTING ACTIVITIES:                                                   |   |                                |           |   |                                |   |   |   |
|   Purchases                    of property and equipment                                         |   |                                | (31,198        | )      |                                |   | (1,008 | ) |
|                                                                                                       |   |                                |           |   |                                |   |   |   |
| CASH                    FLOWS FROM FINANCING ACTIVITIES:                                                   |   |                                |           |   |                                |   |   |   |
|   Payments                    to financial institution, net                                      |   |                                | (81,088        | )      |                                |   | (435,237 | ) |
|   Repayments                    on subordinated related party demand notes payable               |   |                                | -              |   |                                |   | (15,781 | ) |
|   Proceeds                    from sale of preferred stock                                       |   |                                | 6,712,500      |   |                                |   | - |   |
|   Payments                    made related to sale of preferred stock                            |   |                                | (1,206,483     | )      |                                |   | - |   |
|       Net                    cash provided by (used in) financing activities |   |                                | 5,424,929      |   |                                |   | (451,018 | ) |
|                                                                                                       |   |                                |           |   |                                |   |   |   |
| INCREASE                    IN CASH                                                                        |   |                                | 4,696,055      |   |                                |   | 89,956 |   |
|                                                                                                       |   |                                |           |   |                                |   |   |   |
| CASH,                    beginning of period                                                               |   |                                | 55,771         |   |                                |   | 30,240 |   |
|                                                                                                       |   |                                |           |   |                                |   |   |   |
| CASH,                    end of period                                                                     |   | $                                   | 4,751,826      |   |                                | $      | 120,196 |   |
|                                                                                                       |   |                                |           |   |                                |   |   |   |

----

**ANCHOR      FUNDING SERVICES, INC.**

**Notes      To Condensed Financial Statements**

**Three      and Six Months Ended June 30, 2007 and 2006**

**(Unaudited)**

| **1.** | **BACKGROUND                    AND DESCRIPTION OF                    BUSINESS:** |
|--------|-----------------------------------------------------------------------------------|

|   | The                    consolidated financial statements include the accounts of BTHC                    XI, Inc.                    and its wholly owned subsidiary, Anchor Funding Services, LLC                    (“the                    Company”).  In April of 2007, BTHC XI, Inc. changed its name to                    Anchor Funding Services, Inc.  All significant intercompany                    balances and transactions have been eliminated in                    consolidation. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | BTHC                      XI, Inc. is a Delaware corporation.  BTHC XI, 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. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On                      January 31, 2007, BTHC XI, Inc acquired Anchor Funding Services,                      LLC by                      exchanging shares in BTHC XI, Inc. for all the outstanding                      membership                      units of Anchor Funding Services, LLC (See Note                      8).   Anchor Funding Services, LLC is considered the                      surviving entity therefore these financial statements include                      the accounts                      of BTHC XI, Inc. and Anchor Funding Services, LLC since January                      1,                      2007. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.** | **SUMMARY                      OF SIGNIFICANT ACCOUNTING                      POLICIES:** |
|--------|-------------------------------------------------------------------------------------------|

|   | **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 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 are                    variable based on the length of time the purchased invoice is                    outstanding.   As specified in its contract with the                    client, the Company charges variable increasing percentages of                    the                    purchased invoice as time elapses from the purchase date to the                    collection                    date. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 accounts                      receivable. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 been                      material. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **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. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | **Property                      and Equipment –** Property and equipment, consisting primarily of                      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 5 years. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | For                      the six months ending June 30, |   |
|--------|---------------------------------------------------------|--------|
|   | 2007                                                    |   |   | 2006 |   |
|   |                                                    |   |   |   |   |
|   | $                                                       | 87,000 |   |   | $ | 31,500 |   |
|   |                                                    |   |   |   |   |   |   |
|   | For                      the quarters ending June 30,   |   |
|   | 2007                                                    |   |   | 2006 |   |
|   |                                                    |   |   |   |   |   |   |
|   | $                                                       | 55,200 |   |   | $ | 15,800 |   |

|   | **Earnings                    per Share –** The Company computes net income per share in                    accordance with SFAS No. 128 “Earnings Per Share.”  Basic net                    income per share is computed by dividing the net income for the                    period by                    the weighted average number of common shares outstanding during                    the                    period.  Dilutive net income 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 until December 31, 2005 -** In                      December 2004,                      the Financial Accounting Standards Board (“FASB”) issued Statement of                      Financial Accounting Standard (“SFAS”) No. 123(R), “Accounting for                      Stock-Based Compensation.” SFAS No. 123(R) establishes standards for the                      accounting for transactions in which an entity exchanges its                      equity                      instruments for goods or services. This statement focuses primarily                      on                      accounting for transactions in which an entity obtains employee                      services                      in share-based payment transactions. SFAS No. 123(R) requires                      that the                      fair value of such equity instruments be recognized as an expense                      in the                      historical financial statements as services are performed.                      Prior to SFAS                      No. 123(R), only certain pro forma disclosures of fair value                      were                      required. The provisions of this statement were effective for                      the first                      interim reporting period that began after December 15, 2005.                      The Company                      adopted the provisions of SFAS No.123(R) in the first quarter                      of fiscal                      2006. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | See                      Note 9 for the SFAS No. 123(R) impact on the operating results                      for the                      quarter and six months ended June 30, 2007.  The adoption of                      SFAS No. 123(R) had no impact on the Company’s operating results for the                      quarter and six months ended June 30,                      2006. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **Recent                      Accounting Pronouncements–** |
|--------|------------------------------------------------------------------|

*Fair Value            Measurements*

*Considering the Effects of Prior            Year Misstatements when Quantifying Misstatements in Current Year Financial            Statements*

*The Fair Value Option for            Financial Assets and Financial Liabilities – Including an amendment of FASB            Statement No. 115.*
*Accounting for Certain Investments in Debt            and Equity Securities*

----

|   | **Fair                      Value of Financial Instruments –** The carrying value of cash                      equivalents, retained interest in purchased accounts receivable,                      due                      from/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 –** Effective January 31, 2007, the Company became a“C”                      corporation for income tax purposes.  In a “C” corporation                      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 taxable                      income. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                      primary difference between financial statement and taxable                      income for the                      Company are compensation costs related to the issuance of stock                      options                      and net operating loss carryforwards.  The deferred tax asset                      represents the future tax return consequences of utilizing                      this net                      operating loss.   Deferred tax assets are reduced by a                      valuation reserve, when management is uncertain if the net                      operating loss                      carryforwards will ever be                      utilized. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

| **3.** | **RETAINED                      INTEREST IN PURCHASED ACCOUNTS                      RECEIVABLE:** |
|--------|---------------------------------------------------------------------------------------------------|

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

----

|                                                           |   |                               |      |   |                                   |   |
|----------------------------------------------------------------|--------|------------------------------------|-----------|--------|----------------------------------------|--------|
|                                                           |   | June                      30, 2007 |      |   | December                      31, 2006 |   |
| Purchased                      accounts receivable outstanding |   | $                                  | 1,107,181 |   |                                   | $      | 614,034 |   |
| Reserve                      account                           |   |                               | (210,102  | )      |                                   |   | (172,779 | ) |
|                                                           |   |                               | 897,079   |   |                                   |   | 441,255 |   |
| Collected                      but unearned commissions        |   |                               | (22,326   | )      |                                   |   | (11,730 | ) |
| Earned                      but uncollected fee income         |   |                               | 19,107    |   |                                   |   | 10,799 |   |
|                                                           |   |                               |      |   |                                   |   |   |   |
|                                                           |   | $                                  | 893,860   |   |                                   | $      | 440,324 |   |

|   | Total                        accounts receivable purchased were as                        follows: |
|--------|----------------------------------------------------------------------------------------------------|

|                                                                    |                                                                  |   |   |   |
|-------------------------------------------------------------------------|-----------------------------------------------------------------------|--------|--------|--------|
|   For                          the six months ending June 30, |
|                                                                    |                                                                  |   |   |   |
| 2007                                                                    |                                                                  |   | 2006   |   |
|                                                                    |                                                                  |   |   |   |
| $                                                                       | 4,370,000                                                             |   |   | $      | 7,644,000 |   |
|                                                                    |                                                                  |   |   |   |   |   |
|                                                                    |                                                                  |   |   |   |   |   |
|                                                                    |   For                          the quarters ending June 30, |
|                                                                    |                                                                  |   |   |   |   |   |
| 2007                                                                    |                                                                  |   | 2006   |   |
|                                                                    |                                                                  |   |   |   |   |   |
| $                                                                       | 2,779,000                                                             |   |   | $      | 2,067,000 |   |
|                                                                    |                                                                  |   |   |   |   |   |

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

|           |   | June                          30, 2007 |    |   | December                          31, 2006 |   |
|----------------|--------|----------------------------------------|---------|--------|--------------------------------------------|--------|
| Staffing       |   | $                                      | 603,380 |   |                                       | $      | 397,061 |   |
| Transportation |   |                                   | 4,676   |   |                                       |   | (52,854 | ) |
| Publishing     |   |                                   | 13,497  |   |                                       |   | 45,971 |   |
| Construction   |   |                                   | 52,711  |   |                                       |   | 26,591 |   |
| Service        |   |                                   | 244,619 |   |                                       |   | 14,951 |   |
| Other          |   |                                   | (21,804 | )      |                                       |   | 9,535 |   |
|           |   |                                   |    |   |                                       |   |   |   |
|           |   | $                                      | 897,079 |   |                                       | $      | 441,255 |   |
|           |   |                                   |    |   |                                       |   |   |   |

----

| **4.** | **PROPERTY                      AND EQUIPMENT:** |
|--------|--------------------------------------------------|

|   | Property                      and equipment consist of the                      following: |
|--------|--------------------------------------------------------------------------------------------|

|                                                 |   |                                 |    |   |                                     |   |
|------------------------------------------------------|--------|--------------------------------------|---------|--------|------------------------------------------|--------|
|                                                 |   |                                 |    |   |                                     |   |
|                                                 |   | June                        30, 2007 |    |   | December                        31, 2006 |   |
| Furniture                        and fixtures        |   | $                                    | 10,712  |   |                                     | $      | 1,235 |   |
| Computers                        and software        |   |                                 | 37,252  |   |                                     |   | 15,531 |   |
|                                                 |   |                                 | 47,964  |   |                                     |   | 16,766 |   |
| Less                        accumulated depreciation |   |                                 | (17,051 | )      |                                     |   | (12,756 | ) |
|                                                 |   |                                 |    |   |                                     |   |   |   |
|                                                 |   | $                                    | 30,913  |   |                                     | $      | 4,010 |   |

| **5.** | **DUE                      FROM/TO FINANCIAL                      INSTITUTION:** |
|--------|----------------------------------------------------------------------------------|

|   | The                      Company had an agreement with a financial institution under                      which the                      institution financed their purchased accounts receivable.  The                      institution received a fee of .3 percent of the receivables                      financed plus                      interest as described below.  The Company terminated this                      agreement on July 16, 2007. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Borrowings                      were made at the request of the Company.  The amount eligible to                      be borrowed was the lower of $1,000,000 or a borrowing base                      formula as                      defined in the agreement.  The interest on borrowings was paid                      monthly at a rate ranging from the institution’s prime rate plus 1% to                      12.75%. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As                      of June 30, 2007, the financial institution had collected more                      cash from                      previously factored receivables than was loaned to fund current                      factored                      receivables.  The excess collected is recorded as a receivable                      from the financial institution. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                      agreement was collateralized by all current and future Company                      assets and                      was guaranteed by the Company’s majority                      shareholders. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.** | **CAPITAL                      STRUCTURE:** |
|--------|---------------------------------------------|

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

|   | **Common                      Stock –** The Company is authorized to issue 40,000,000 shares                      of                      $.001 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. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                      changes in Series 1 Convertible Preferred Stock and Common                      Stock shares                      for the six months ended June 30, 2007 is summarized as                      follows: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     |   |                                        |      |   |   |   |
|----------------------------------------------------------|--------|---------------------------------------------|-----------|--------|--------|--------|
|                                                     |   | Series                        1 Convertible |      |   | Common |   |
|                                                     |   | Preferred                        Stock      |      |   | Stock  |   |
| Balance,                        December 31, 2006        |   |                                        | -         |   |   |   | 3,820,555 |   |
|                                                     |   |                                        |      |   |   |   |   |   |
| Shares                        issued in exchange for     |   |                                        |      |   |   |   |   |   |
| the                        membership units of           |   |                                        |      |   |   |   |   |   |
| Anchor                        Funding Services, LLC      |   |                                        | -         |   |   |   | 8,000,000 |   |
|                                                     |   |                                        |      |   |   |   |   |   |
| Shares                        issued in connection       |   |                                        |      |   |   |   |   |   |
| with                        sale of Series 1 Convertible |   |                                        |      |   |   |   |   |   |
| Preferred                        Stock                   |   |                                        | 1,342,500 |   |   |   | - |   |
|                                                     |   |                                        |      |   |   |   |   |   |
|                                                     |   |                                        |      |   |   |   |   |   |
| Balance,                        June 30, 2007            |   |                                        | 1,342,500 |   |   |   | 11,820,555 |   |
|                                                     |   |                                        |      |   |   |   |   |   |

----

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

|   | As                    of June 30, 2007 and December 31, 2006 the components of additional                    paid                    in capital were as follows: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   |                               |       |   |                                   |   |
|--------------------------------------------------------------|--------|------------------------------------|------------|--------|----------------------------------------|--------|
|                                                         |   | June                      30, 2007 |       |   | December                      31, 2006 |   |
|                                                         |   |                               |       |   |                                   |   |
| Consideration                      received in excess of     |   |                               |       |   |                                   |   |
|   common                      stock's par value    |   | $                                  | 463,380    |   |                                   | $      | 79,580 |   |
|                                                         |   |                               |       |   |                                   |   |   |   |
| Equity                      issuance fees                    |   |                               | (1,344,178 | )      |                                   |   | (75,000 | ) |
|                                                         |   |                               |       |   |                                   |   |   |   |
| Stock                      warrants                          |   |                               | 62,695     |   |                                   |   | - |   |
|                                                         |   |                               |       |   |                                   |   |   |   |
| Stock                      options, net of $17,000           |   |                               |       |   |                                   |   |   |   |
|   deferred                      income tax benefit |   |                               | 32,686     |   |                                   |   | - |   |
|                                                         |   |                               |       |   |                                   |   |   |   |
|                                                         |   |                               |       |   |                                   |   |   |   |
|                                                         |   | $                                  | (785,417   | )      |                                   | $      | 4,580 |   |
|                                                         |   |                               |       |   |                                   |   |   |   |

| **7.            ** | **RELATED                        PARTY TRANSACTIONS:** |
|--------------------------------------------------------------------------------|--------------------------------------------------------|

|   | **Due                        from/to Related Company –** Prior to December 31, 2006, the Company                        had borrowing and loan transactions with a limited liability                        company (LLC)                        related through common ownership.  These amounts were unsecured,                        interest bearing (at 10 percent), and payable on demand.  The                        Company recorded the following interest income (expense)                        amounts related                        to this activity: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|      |   |   For                          the six months ending June 30, |
|-----------|--------|-------------------------------------------------------------------------|
|      |   |                                                                    |   |   |   |   |
|      |   | 2007                                                                    |   |   | 2006 |   |
| Income    |   | $                                                                       | - |   |   | $ | 12,551 |   |
| (Expense) |   |                                                                    | - |   |   |   | (45,022 | ) |
|      |   |                                                                    |   |   |   |   |   |   |
|      |   | $                                                                       | - |   |   | $ | (32,471 | ) |
|      |   |                                                                    |   |   |   |   |   |   |
|      |   |                                                                    |   |   |   |   |   |   |
|      |   |                                                                    |   For                          the quarter ending June 30, |
|      |   |                                                                    |   |   |   |   |   |   |
|      |   | 2007                                                                    |   |   | 2006 |   |
| Income    |   | $                                                                       | - |   |   | $ | 12,551 |   |
| (Expense) |   |                                                                    | - |   |   |   | (26,107 | ) |
|      |   |                                                                    |   |   |   |   |   |   |
|      |   | $                                                                       | - |   |   | $ | (13,556 | ) |
|      |   |                                                                    |   |   |   |   |   |   |

----

|   | **Administrative                      Charges –** The Company uses the administrative staff and                      facilities of the LLC referred to above.  The services provided                      by the LLC consist primarily of rent, credit, collection, invoicing,                      payroll and bookkeeping.  The Company pays the LLC a fee for                      these services.  The fee is computed as a percentage of accounts                      receivable purchased by the Company.  The administrative fee                      charged by the LLC was as follows: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                  |                                                               |   |   |   |
|-----------------------------------------------------------------------|--------------------------------------------------------------------|--------|--------|--------|
|   For                        the six months ending June 30, |
|                                                                  |                                                               |   |   |   |
| 2007                                                                  |                                                               |   | 2006   |   |
|                                                                  |                                                               |   |   |   |
| $                                                                     | 14,000                                                             |   |   | $      | 16,500 |   |
|                                                                  |                                                               |   |   |   |   |   |
|                                                                  |                                                               |   |   |   |   |   |
|                                                                  |   For                        the quarter ending June 30, |
|                                                                  |                                                               |   |   |   |   |   |
| 2007                                                                  |                                                               |   | 2006   |   |
|                                                                  |                                                               |   |   |   |   |   |
| $                                                                     | 7,100                                                              |   |   | $      | 8,800 |   |
|                                                                  |                                                               |   |   |   |   |   |

|   | In                      connection with the Company’s relocation (See Note 14) to their Charlotte,                      NC facility, the Company is no longer using the administrative                      services of                      the related LLC. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | **EXCHANGE                      TRANSACTION:** |
|--------|------------------------------------------------|

|   | On                      January 31, 2007, Anchor Funding Services, LLC and its members                      entered                      into a Securities Exchange Agreement with BTHC XI, Inc.  The                      members namely, George Rubin, Morry Rubin (“M. Rubin”) and Ilissa                      Bernstein exchanged their units in Anchor Funding Services,                      LLC for an                      aggregate of 8,000,000 common shares of BTHC XI, Inc. issued                      to George                      Rubin (2,400,000 shares), M. Rubin (3,600,000 shares) and Ilissa                      Bernstein                      (2,000,000 shares).  Upon the closing of this transaction Anchor                      Funding Services, LLC became a wholly-owned subsidiary of BTHC                      XI,                      Inc. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | At                      the time of this transaction, BTHC XI, Inc. had no operations                      and no                      assets or liabilities. After this transaction the former members                      of Anchor                      Funding Services, LLC owned approximately 67.7% of the outstanding                      common                      stock of BTHC XI, Inc. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **9.** | **EMPLOYMENT                      AND STOCK OPTION                      AGREEMENTS:** |
|--------|---------------------------------------------------------------------------------------|

|   | At                      closing of the exchange transaction described above, M. Rubin                      and Brad                      Bernstein (“B. Bernstein”), the husband of Ilissa Bernstein and President                      of the Company, entered into employment contracts and stock                      option                      agreements with the BTHC XI, Inc.  Additionally, at closing two                      non-employee directors entered into stock option agreements                      with BTHC XI,                      Inc. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

----

| ·   | The                      employment agreement 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 BTHC XI, Inc. 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 BTHC                      XI, Inc.,                      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) BTHC XI, Inc.’s  industry, size and                      performance, and (iii) other relevant factors. M. Rubin is                      eligible to                      receive annual bonuses as determined by BTHC XI, Inc.’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 BTHC XI, Inc.’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, provided that in the event                      of a change                      in control or M. Rubin is terminated without cause or M. Rubin                      terminates                      for good reason, all unvested options shall accelerate and                      immediately                      vest and become exercisable in full on the earliest of the                      date of change                      in control or date of M. Rubin’s voluntary termination or by BTHC XI, Inc.                      without cause. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | The                      employment agreement 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 BTHC XI, Inc. may                      hereafter                      adopt from time to time.  B. Bernstein is eligible to receive                      annual bonuses as determined by BTHC XI, Inc.’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 BTHC XI, Inc.’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, provided that in the event                      of a change                      in control or B. Bernstein is terminated without cause or B.                      Bernstein                      terminates for good reason, all unvested options shall accelerate                      and                      immediately vest and become exercisable in full on the earliest                      of the                      date of change in control or date of B. Bernstein’s voluntary termination                      or by BTHC XI, Inc. without cause. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                      following summarizes the non-employee stock option agreements                      entered into                      with two directors: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 10-year                      options to purchase 360,000 shares exercisable at $1.25 per                      share,                      pursuant to BTHC XI, Inc.’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.  If either director ceases                      serving BTHC XI, Inc. 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 table summarizes information about stock options                      as of June 30,                      2007: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|     |   |        |   |                                    |   |        |
|----------|--------|-------------|--------|-----------------------------------------|--------|-------------|
|     |   |        |   | Weighted                        Average |   |        |
| Exercise |   | Number      |   | Remaining                               |   | Number      |
| Price    |   | Outstanding |   | Contractual                        Life |   | Exercisable |
|     |   |        |   |                                    |   |        |
| $1.25    |   | 1,960,000   |   | 10                        years         |   | 653,000     |
|     |   |        |   |                                    |   |        |

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

|   | BTHC                      XI, Inc. recorded the issuance of these options in February                      2007 in                      accordance with SFAS No. 123(R).  The following information was                      input into a Black Scholes option pricing model to compute                      a per option                      price of $.0468: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |   |   |   |                            |   |
|---------------------------------------|--------|--------|--------|---------------------------------|--------|
| Exercise                        price |   |   |   | $1.25                           |   |
| Term                                  |   |   |   | 10                        years |   |
| Volatility                            |   |   |   | 2.5                             |   |
| Dividends                             |   |   |   | 0%                              |   |
| Discount                        rate  |   |   |   | 4.75%                           |   |
|                                  |   |   |   |                            |   |
|                                  |   |   |   |                            |   |

|   | The                      financial effect of these options to record over their life                      is as                      follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   |   |   |      |   |   |
|--------------------------------------------------------|--------|--------|--------|-----------|--------|--------|
| Options                        to value                |   |   |   | 1,960,000 |   |   |
| Option                        price                    |   |   | $      | 0.0468    |   |   |
| Total                        expense to recognize over |   |   |   |      |
|   life                        of options     |   |   | $      | 91,728    |   |   |
|                                                   |   |   |   |      |   |   |
|                                                   |   |   |   |      |   |   |

|   | The                      amounts recorded for these options in the statement of operations                      for the                      six months and quarter ended June 30, 2007 and 2006 as                      follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                     |   |                                 |    |   |                                   |   |
|------------------------------------------|--------|--------------------------------------|---------|--------|----------------------------------------|--------|
|                                     |   | For                        the six   |    |   | For                        the quarter |   |
|                                     |   | months                        ended  |    |   | ended                                  |   |
|                                     |   | June                        30, 2007 |    |   | June                        30, 2007   |   |
|                                     |   |                                 |    |   |                                   |   |
|                                     |   |                                 |    |   |                                   |   |
| Pre-tax                        effect    |   | $                                    | 49,686  |   |                                   | $      | 11,466 |   |
| Tax                        benefit (34%) |   |                                 | (17,000 | )      |                                   |   | (4,000 | ) |
|                                     |   |                                 |    |   |                                   |   |   |   |
| After-tax                        effect  |   | $                                    | 32,686  |   |                                   | $      | 7,466 |   |
|                                     |   |                                 |    |   |                                   |   |   |   |

|   | The                      pre-tax effect recorded in the financial statements for the                      six months                      ending June 30, 2007 consists of $30,576 in fully vested stock                      options and                      a provision of $19,110 to record five months of the unvested                      portions of                      stock options that will eventually vest on February 28, 2008                      and                      2009. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10.** | **SALE                      OF CONVERTIBLE PREFERRED                      STOCK:** |
|---------|------------------------------------------------------------------------------------|

|                                                    |   |   |      |
|---------------------------------------------------------|--------|--------|-----------|
| Gross                        proceeds                   |   | $      | 6,712,500 |   |
|                                                    |   |   |      |   |
| Cash                        fees:                       |   |   |      |   |
| Placement                        agent                  |   |   | (949,050  | ) |
| Legal                        and accounting             |   |   | (218,552  | ) |
| Blue                        sky                         |   |   | (39,348   | ) |
| Net                        cash proceeds                |   | $      | 5,505,550 |   |
|                                                    |   |   |      |   |
| Non-cash                        fees:                   |   |   |      |   |
| Placement                        agents fees - warrants |   |   | (62,695   | ) |
|                                                    |   |   |      |   |
| Net                        proceeds                     |   | $      | 5,442,855 |   |
|                                                    |   |   |      |   |

|   | The                      placement agent was issued warrants to purchase 1,342,500 shares                      of the                      Company’s common stock.  The following information was input                      into a Black Scholes option pricing model to compute a per                      option 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   |   | 5                        years          |   | 1,342,500   |
|     |   |        |   |                                    |   |        |

**11.                     **
**CONCENTRATIONS:**

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

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

----

|           |   |                                                                      |                                                                   |   |   |   |
|----------------|--------|---------------------------------------------------------------------------|------------------------------------------------------------------------|--------|--------|--------|
| Industry       |   |    For                      the six months ending June 30, |                                                                   |
|           |   |                                                                      |                                                                   |   |   |   |
|           |   | 2007                                                                      |                                                                   |   | 2006   |   |
|           |   |                                                                      |                                                                   |   |   |   |
| Staffing       |   | $                                                                         | 136,192                                                                |   |   | $      | 84,005 |   |
| Transportation |   |                                                                      | 6,326                                                                  |   |   |   | 70,843 |   |
| Publishing     |   |                                                                      | 2,059                                                                  |   |   |   | 13,328 |   |
| Construction   |   |                                                                      | 4,831                                                                  |   |   |   | 231,721 |   |
| Service        |   |                                                                      | 20,217                                                                 |   |   |   | 7,428 |   |
| Other          |   |                                                                      | 6,119                                                                  |   |   |   | 2,148 |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
|           |   | $                                                                         | 175,744                                                                |   |   | $      | 409,473 |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
| Industry       |   |                                                                      |    For                      the quarter ending June 30, |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
|           |   | 2007                                                                      |                                                                   |   | 2006   |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
| Staffing       |   | $                                                                         | 56,889                                                                 |   |   | $      | 51,848 |   |
| Transportation |   |                                                                      | 102                                                                    |   |   |   | 31,792 |   |
| Publishing     |   |                                                                      | 547                                                                    |   |   |   | 6,385 |   |
| Construction   |   |                                                                      | 2,156                                                                  |   |   |   | 74,807 |   |
| Service        |   |                                                                      | 13,785                                                                 |   |   |   | 2,809 |   |
| Other          |   |                                                                      | 2,159                                                                  |   |   |   | 990 |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |
|           |   | $                                                                         | 75,638                                                                 |   |   | $      | 168,631 |   |
|           |   |                                                                      |                                                                   |   |   |   |   |   |

|   | **Major                    Customers –** The Company had the following transactions and                    balances with unrelated customers (4 for the six months ending                    June 30,                    2007 and 3 for the six months ending June 30, 2006) which represent                    10                    percent or more of its revenues for the six months June 30, 2007                    and 2006                    as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |
|-----------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                |   |      For                              the six months ended June 30, 2007 |                                                                                                        |
|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |
| Revenues                                            |   | $                                                                                                 | 25,300                                                                                                      |   |   | $      | 24,200  |   |   | $      | 28,900  |   |   | $ | 15,900 |   |
|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                |   |                                                                                              |       As                              of June 30,2007     |   |
| Purchased                              accounts     |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |
| receivable                              outstanding |   | $                                                                                                 | 159,300                                                                                                     |   |   | $      | 204,500 |   |   | $      | 155,400 |   |   | $ | 86,200 |   |
|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                |   |                                                                                              |       For                              the six months ended June 30, 2006     |   |
|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Revenues                                            |   | $                                                                                                 | 6,200                                                                                                       |   |   | $      | 41,300  |   |   | $      | 239,200 |   |   |   |   |   |
|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                |   |                                                                                              |       As                              of June 30,2006     |   |
| Purchased                              accounts     |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |
| receivable                              outstanding |   | $                                                                                                 | 285,500                                                                                                     |   |   | $      | 270,000 |   |   |   |    |   |   |   |   |   |
|                                                |   |                                                                                              |                                                                                                        |   |   |   |    |   |   |   |    |   |   |   |   |   |

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

|   | **Cash                          –** The Company maintains cash deposits with a bank.  At                          various times throughout the year, these balances exceeded                          the federally                          insured limit of $100,000. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **12.** | **SUPPLEMENTAL                          DISCLOSURES OF CASH FLOW:** |
|---------|---------------------------------------------------------------------|

|   | Cash                          paid for interest for the six months ended June 30, 2007                          and 2006 was                          $21,000 and $154,000 respectively. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | 8,000,000                          shares of common stock were issued in exchange for 100,000                          membership                          units of Anchor Funding Services, LLC (see Note                          8). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1,960,000                          stock options were issued to the Company’s President, CEO and two                          non-employee directors (see Note                          9). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1,342,500                          stock warrants were issued to the placement agent handling                          the sale of the                          Company’s convertible preferred stock (see Note                          10). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **13.** | **INCOME                          TAXES:** |
|---------|--------------------------------------------|

|   | The                          income tax benefit for the six months ending June 30, 2007                          consists of the                          change in deferred income taxes related to the issuance                          of stock options                          (See Note 9).  There is no current income tax liability for the                          period. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The** **net                          operating loss carryforward generated in the six months                          ending June 30,                          2007 was approximately $256,000.  The deferred tax asset related                          to this net operating loss carryforward is approximately                          $87,000.  This deferred tax asset has been reduced by a $87,000                          valuation allowance.  Management is uncertain if this net                          operating loss will ever be utilized, therefore it has                          been fully                          reserved. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **14.            ** | **FACILITIY                      LEASES:** |
|---------------------------------------------------------------------------------|--------------------------------------------|

|   | 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.  The monthly rental is                      approximately $1,500. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| **15.** | **RESTATEMENT                      OF FINANCIAL STATEMENTS:** |
|---------|---------------------------------------------------------------|

|   | The                      Company previously issued the following financial                      statements: |
|--------|-------------------------------------------------------------------------------------------------------------|

| ·   | December                      31, 2006 balance sheet |
|--------------------|------------------------------------------------------|

| ·   | June                      30, 2007 balance sheet |
|--------------------|--------------------------------------------------|

| ·   | Statements                      of operations for the six and three months ended June 30, 2007                      and                      2006 |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Statement                      of stockholders’ equity for the six months ended June 30,                      2007 |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Statements                      of cash flows for the six months ended June 30, 2007 and                      2006 |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

|   | These                      statements have been restated to correct the Company’s method of revenue                      recognition.  Historically, the Company recognized transaction                      fees upon the purchase of an accounts receivable and time based                      fees from                      the time an invoice is purchased until collected.  Management                      researched the current accounting literature and concluded                      revenue should                      be recognized on new customers using the cost recovery method                      and the                      accrual method for established                      customers. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                |   |                                |      |   |        |   |    |                               |                          |
|-------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|--------|-------------|--------|---------|------------------------------------|-------------------------------|
| **Anchor                      Funding Services, Inc**                               |   |                                |      |   |        |   |    |                               |                          |
| **Balance                      Sheets**                                             |   |                                |      |   |        |   |    |                               |                          |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |
|                                                                                |   | June                                |      |   |        |   |    | June                               |                          |
| **ASSETS**                                                                          |   |  30,                      2007 |      |   |        |   |    |                               | 30,                      2007 |   |
|                                                                                |   | (As                      Reported)  |      |   | Adjustments |   |    | (As                      Restated) |                          |
| CURRENT                      ASSETS:                                                |   |                                |      |   |        |   |    |                               |                          |   |   |
|   Cash                                                                    |   | $                                   | 4,751,826 |   |        |   |    |                               | $                             | 4,751,826 |   |
|   Retained                      interest in purchased accounts receivable |   |                                | 897,861   |   |        | $      | (4,001  | )                                  |                          |   | 893,860 |   |
|   Due                      from financial institution                     |   |                                | 36,405    |   |        |   |    |                               |                          |   | 36,405 |   |
|   Prepaid                      expenses                                   |   |                                | 39,133    |   |        |   |    |                               |                          |   | 39,133 |   |
|     Total                      current assets                   |   |                                | 5,725,225 |   |        |   |    |                               |                          |   | 5,721,224 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
| PROPERTY                      AND EQUIPMENT, net                                    |   |                                | 30,913    |   |        |   |    |                               |                          |   | 30,913 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
| SECURITY                      DEPOSITS                                              |   |                                | 18,965    |   |        |   |    |                               |                          |   | 18,965 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
|                                                                                |   | $                                   | 5,775,103 |   |        | $      | (4,001  | )                                  |                          | $ | 5,771,102 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
| **LIABILITIES                      AND STOCKHOLDERS' EQUITY**                       |   |                                |      |   |        |   |    |                               |                          |   |   |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
| CURRENT                      LIABILITIES:                                           |   |                                |      |   |        |   |    |                               |                          |   |   |   |
|   Accounts                      payable                                   |   | $                                   | 38,081    |   |        |   |    |                               |                          | $ | 38,081 |   |
|   Due                      to related company                             |   |                                | 2,768     |   |        |   |    |                               |                          |   | 2,768 |   |
|   Accrued                      payroll and related taxes                  |   |                                | 78,728    |   |        |   |    |                               |                          |   | 78,728 |   |
|   Accrued                      expenses                                   |   |                                | 5,300     |   |        |   |    |                               |                          |   | 5,300 |   |
|   Dividends                      payable                                  |   |                                | 132,860   |   |        |   |    |                               |                          |   | 132,860 |   |
|     Total                      current liabilities              |   |                                | 257,737   |   |        |   |    |                               |                          |   | 257,737 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
| PREFERRED                      STOCK                                                |   |                                | 6,712,500 |   |        |   |    |                               |                          |   | 6,712,500 |   |
| COMMON                      STOCK                                                   |   |                                | 11,795    |   |        |   |    |                               |                          |   | 11,795 |   |
| ADDITIONAL                      PAID IN CAPITAL                                     |   |                                | (758,322  | )      |        | $      | (27,095 | )                                  |                          |   | (785,417 | ) |
| ACCUMULATED                      DEFICIT                                            |   |                                | (448,607  | )      |        |   | 23,094  |                               |                          |   | (425,513 | ) |
|                                                                                |   |                                | 5,517,366 |   |        |   |    |                               |                          |   | 5,513,365 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |
|                                                                                |   | $                                   | 5,775,103 |   |        | $      | (4,001  | )                                  |                          | $ | 5,771,102 |   |
|                                                                                |   |                                |      |   |        |   |    |                               |                          |   |   |   |

----

|                                                                                |   | December                      31,  |    |   |        |   |    | December                      31,  |   |
|-------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|-------------|--------|---------|------------------------------------|--------|
| **ASSETS**                                                                          |   | 2006                               |    |   |        |   |    | 2006                               |   |
|                                                                                |   | (As                      Reported) |    |   | Adjustments |   |    | (As                      Restated) |   |
| CURRENT                      ASSETS:                                                |   |                               |    |   |        |   |    |                               |   |
|   Cash                                                                    |   | $                                  | 55,771  |   |        |   |    |                               | $      | 55,771 |   |
|   Retained                      interest in purchased accounts receivable |   |                               | 473,092 |   |        | $      | (32,768 | )                                  |   |   | 440,324 |   |
|   Prepaid                      expenses                                   |   |                               | 41,134  |   |        |   |    |                               |   |   | 41,134 |   |
|     Total                      current assets                   |   |                               | 569,997 |   |        |   |    |                               |   |   | 537,229 |   |
|                                                                                |   |                               |    |   |        |   |    |                               |   |   |   |   |
| PROPERTY                      AND EQUIPMENT, net                                    |   |                               | 4,010   |   |        |   |    |                               |   |   | 4,010 |   |
|                                                                                |   |                               |    |   |        |   |    |                               |   |   |   |   |
|                                                                                |   | $                                  | 574,007 |   |        | $      | (32,768 | )                                  |   | $ | 541,239 |   |
|                                                                                |   |                               |    |   |        |   |    |                               |   |   |   |   |
| **LIABILITIES                      AND STOCKHOLDERS' EQUITY**                       |   |                               |    |   |        |   |    |                               |   |   |   |   |
| CURRENT                      LIABILITIES:                                           |   |                               |    |   |        |   |    |                               |   |   |   |   |
|   Due                      to financial institution                       |   | $                                  | 44,683  |   |        |   |    |                               |   | $ | 44,683 |   |
|   Accounts                      payable                                   |   |                               | 39,218  |   |        |   |    |                               |   |   | 39,218 |   |
|   Due                      to related company                             |   |                               | 21,472  |   |        |   |    |                               |   |   | 21,472 |   |
|   Accrued                      payroll and related taxes                  |   |                               | 37,796  |   |        |   |    |                               |   |   | 37,796 |   |
|     Total                      current liabilities              |   |                               | 143,169 |   |        |   |    |                               |   |   | 143,169 |   |
|                                                                                |   |                               |    |   |        |   |    |                               |   |   |   |   |
| MEMBERS'                      EQUITY                                                |   |                               | 424,568 |   |        | $      | (32,768 | )                                  |   |   | 391,800 |   |
| COMMON                      STOCK                                                   |   |                               | 3,795   |   |        |   |    |                               |   |   | 3,795 |   |
| ADDITIONAL                      PAID IN CAPITAL                                     |   |                               |    |   |        |   |    |                               |   |   |   |   |
|   -                      equity issuance fees                             |   |                               | (75,000 | )      |        |   |    |                               |   |   | (75,000 | ) |
| ADDITIONAL                      PAID IN CAPITAL - common stock                      |   |                               | 79,580  |   |        |   |    |                               |   |   | 79,580 |   |
| ACCUMULATED                      DEFICIT                                            |   |                               | (2,105  | )      |        |   |    |                               |   |   | (2,105 | ) |
|                                                                                |   |                               | 430,838 |   |        |   |    |                               |   |   | 398,070 |   |
|                                                                                |   |                               |    |   |        |   |    |                               |   |   |   |   |
|                                                                                |   | $                                  | 574,007 |   |        | $      | (32,768 | )                                  |   | $ | 541,239 |   |
|                                                                                |   |                               |    |   |        |   |    |                               |   |   |   |   |

----

| **Anchor                      Funding Services, Inc**         |   |                                |     |   |        |   |   |                                |   |
|---------------------------------------------------------------|--------|-------------------------------------|----------|--------|-------------|--------|--------|-------------------------------------|--------|
| **Statements                      of Operations**             |   |                                |     |   |        |   |   |                                |   |
| **For                      the Six Months Ended**             |   |                                |     |   |        |   |   |                                |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |
|                                                          |   | June                                |     |   |        |   |   | June                                |   |
|                                                          |   |  30,                      2007 |     |   |        |   |   |  30,                      2007 |   |
|                                                          |   | (As                      Reported)  |     |   | Adjustments |   |   | (As                      Restated)  |   |
| FINANCE                      REVENUES                         |   | $                                   | 152,650  |   |        | $      | 23,094 |                                |   | $ | 175,744 |   |
| INTEREST                      EXPENSE - financial institution |   |                                | (21,365  | )      |        |   |   |                                |   |   | (21,365 | ) |
| INTEREST                      INCOME                          |   |                                | 97,529   |   |        |   |   |                                |   |   | 97,529 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| NET                      FINANCE REVENUES                     |   |                                | 228,814  |   |        |   |   |                                |   |   | 251,908 |   |
| PROVISION                      FOR CREDIT LOSSES              |   |                                | -        |   |        |   |   |                                |   |   | - |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| FINANCE                      REVENUES, NET OF INTEREST        |   |                                |     |   |        |   |   |                                |   |   |   |   |
|  EXPENSE                      AND CREDIT LOSSES          |   |                                | 228,814  |   |        |   |   |                                |   |   | 251,908 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| OPERATING                      EXPENSES                       |   |                                | 559,456  |   |        |   |   |                                |   |   | 559,456 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| NET                      INCOME (LOSS) BEFORE INCOME TAXES    |   |                                | (330,642 | )      |        |   |   |                                |   |   | (307,548 | ) |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| INCOME                      TAX (PROVISION) BENEFIT:          |   |                                |     |   |        |   |   |                                |   |   |   |   |
|   Current                                           |   |                                | -        |   |        |   |   |                                |   |   | - |   |
|   Deferred                                          |   |                                | 17,000   |   |        |   |   |                                |   |   | 17,000 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
|   Total                                             |   |                                | 17,000   |   |        |   |   |                                |   |   | 17,000 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| NET                      INCOME (LOSS)                        |   | $                                   | (313,642 | )      |        | $      | 23,094 |                                |   | $ | (290,548 | ) |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |

----

|                                                          |   | June                                |     |   |        |   |   | June                                |   |
|---------------------------------------------------------------|--------|-------------------------------------|----------|--------|-------------|--------|--------|-------------------------------------|--------|
|                                                          |   |  30,                      2006 |     |   |        |   |   |  30,                      2006 |   |
|                                                          |   | (As                      Reported)  |     |   | Adjustments |   |   | (As                      Restated)  |   |
| FINANCE                      REVENUES                         |   | $                                   | 403,041  |   |        | $      | 6,432  |                                |   | $ | 409,473 |   |
| INTEREST                      EXPENSE - financial institution |   |                                | (105,804 | )      |        |   |   |                                |   |   | (105,804 | ) |
| INTEREST                      INCOME                          |   |                                | 0        |   |        |   |   |                                |   |   | 0 |   |
| INTEREST                      EXPENSE, net - related parties  |   |                                | (32,471  | )      |        |   |   |                                |   |   | (32,471 | ) |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| NET                      FINANCE REVENUES                     |   |                                | 264,766  |   |        |   |   |                                |   |   | 271,198 |   |
| PROVISION                      FOR CREDIT LOSSES              |   |                                | -        |   |        |   |   |                                |   |   | - |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| FINANCE                      REVENUES, NET OF INTEREST        |   |                                |     |   |        |   |   |                                |   |   |   |   |
|  EXPENSE                      AND CREDIT LOSSES          |   |                                | 264,766  |   |        |   |   |                                |   |   | 271,198 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| OPERATING                      EXPENSES                       |   |                                | 104,876  |   |        |   |   |                                |   |   | 104,876 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| NET                      INCOME (LOSS) BEFORE INCOME TAXES    |   |                                | 159,890  |   |        |   |   |                                |   |   | 166,322 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| INCOME                      TAX (PROVISION) BENEFIT:          |   |                                |     |   |        |   |   |                                |   |   |   |   |
|   Current                                           |   |                                | -        |   |        |   |   |                                |   |   | - |   |
|   Deferred                                          |   |                                | -        |   |        |   |   |                                |   |   | - |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
|   Total                                             |   |                                | -        |   |        |   |   |                                |   |   | - |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
| NET                      INCOME (LOSS)                        |   | $                                   | 159,890  |   |        | $      | 6,432  |                                |   | $ | 166,322 |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |
|                                                          |   |                                |     |   |        |   |   |                                |   |   |   |   |

----

| **Anchor                      Funding Services, Inc**         |   |                               |                          |   |        |   |   |                               |   |
|---------------------------------------------------------------|--------|------------------------------------|-------------------------------|--------|-------------|--------|--------|------------------------------------|--------|
| **Statements                      of Operations**             |   |                               |                          |   |        |   |   |                               |   |
| **For                      the Three Months Ended**           |   |                               |                          |   |        |   |   |                               |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |
|                                                          |   | June                               |                          |   |        |   |   | June                               |   |
|                                                          |   |                               | 30,                      2007 |   |        |   |   |                               |   | 30,                      2007 |   |
|                                                          |   | (As                      Reported) |                          |   | Adjustments |   |   | (As                      Restated) |   |
| FINANCE                      REVENUES                         |   | $                                  | 81,514                        |   |        | $      | (5,876 | )                                  |   | $ | 75,638 |   |
| INTEREST                      EXPENSE - financial institution |   |                               | (17,195                       | )      |        |   |   |                               |   |   | (17,195 | ) |
| INTEREST                      INCOME                          |   |                               | 68,584                        |   |        |   |   |                               |   |   | 68,584 |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
| NET                      FINANCE REVENUES                     |   |                               | 132,903                       |   |        |   |   |                               |   |   | 127,027 |   |
| PROVISION                      FOR CREDIT LOSSES              |   |                               | -                             |   |        |   |   |                               |   |   | - |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
| FINANCE                      REVENUES, NET OF INTEREST        |   |                               |                          |   |        |   |   |                               |   |   |   |   |
|  EXPENSE                      AND CREDIT LOSSES          |   |                               | 132,903                       |   |        |   |   |                               |   |   | 127,027 |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
| OPERATING                      EXPENSES                       |   |                               | 289,668                       |   |        |   |   |                               |   |   | 289,668 |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
| NET                      INCOME (LOSS) BEFORE INCOME TAXES    |   |                               | (156,765                      | )      |        |   |   |                               |   |   | (162,641 | ) |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
| INCOME                      TAX (PROVISION) BENEFIT:          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
|   Current                                           |   |                               | -                             |   |        |   |   |                               |   |   | - |   |
|   Deferred                                          |   |                               | 2,000                         |   |        |   |   |                               |   |   | 2,000 |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
|   Total                                             |   |                               | 2,000                         |   |        |   |   |                               |   |   | 2,000 |   |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |
| NET                      INCOME (LOSS)                        |   | $                                  | (154,765                      | )      |        | $      | (5,876 | )                                  |   | $ | (160,641 | ) |
|                                                          |   |                               |                          |   |        |   |   |                               |   |   |   |   |

----

|                                                          |   |                               |                          |   |        |   |    |                               |   |
|---------------------------------------------------------------|--------|------------------------------------|-------------------------------|--------|-------------|--------|---------|------------------------------------|--------|
|                                                          |   | June                               |                          |   |        |   |    | June                               |   |
|                                                          |   |                               | 30,                      2006 |   |        |   |    |                               |   | 30,                      2006 |   |
|                                                          |   | (As                      Reported) |                          |   | Adjustments |   |    | (As                      Restated) |   |
| FINANCE                      REVENUES                         |   | $                                  | 180,267                       |   |        | $      | (11,636 | )                                  |   | $ | 168,631 |   |
| INTEREST                      EXPENSE - financial institution |   |                               | (42,272                       | )      |        |   |    |                               |   |   | (42,272 | ) |
| INTEREST                      INCOME                          |   |                               | 0                             |   |        |   |    |                               |   |   | 0 |   |
| INTEREST                      EXPENSE, net - related parties  |   |                               | (13,556                       | )      |        |   |    |                               |   |   | (13,556 | ) |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
| NET                      FINANCE REVENUES                     |   |                               | 124,439                       |   |        |   |    |                               |   |   | 112,803 |   |
| PROVISION                      FOR CREDIT LOSSES              |   |                               | -                             |   |        |   |    |                               |   |   | - |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
| FINANCE                      REVENUES, NET OF INTEREST        |   |                               |                          |   |        |   |    |                               |   |   |   |   |
|  EXPENSE                      AND CREDIT LOSSES          |   |                               | 124,439                       |   |        |   |    |                               |   |   | 112,803 |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
| OPERATING                      EXPENSES                       |   |                               | 45,191                        |   |        |   |    |                               |   |   | 45,191 |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
| NET                      INCOME (LOSS) BEFORE INCOME TAXES    |   |                               | 79,248                        |   |        |   |    |                               |   |   | 67,612 |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
| INCOME                      TAX (PROVISION) BENEFIT:          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
|   Current                                           |   |                               | -                             |   |        |   |    |                               |   |   | - |   |
|   Deferred                                          |   |                               | -                             |   |        |   |    |                               |   |   | - |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
|   Total                                             |   |                               | -                             |   |        |   |    |                               |   |   | - |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
| NET                      INCOME (LOSS)                        |   | $                                  | 79,248                        |   |        | $      | (11,636 | )                                  |   | $ | 67,612 |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |
|                                                          |   |                               |                          |   |        |   |    |                               |   |   |   |   |

----

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

**Estimates        –**

----

**Revenue        Recognition –**

| **1)  ** | **Fixed                  Transaction Fee.**Fixed transaction fees are 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 are                  variable based on the length of time the purchased invoice is                  outstanding.   As specified in its contract with the                  client, the Company charges variable increasing percentages of                  the                  purchased invoice as time elapses from the purchase date to the                  collection                  date. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Retained          Interest in Purchased Accounts Receivable –**

----

**Property      and Equipment –**

**Advertising      Costs –**

| For                  the six months ending June 30, |
|-----------------------------------------------------|
| 2007                                                |   |   | 2006 |
| $                                                   | 87,000 |   |   | $ | 31,500 |
|                                                |   |   |   |   |   |
| For                  the quarters ending June 30,   |
| 2007                                                |   |   | 2006 |
| $                                                   | 55,200 |   |   | $ | 15,800 |
|                                                |   |   |   |   |   |

**Earnings      per Share –**

**Stock      Based Compensation until December 31, 2005 -**

----

**Recent      Accounting Pronouncements -**

*Fair Value      Measurements*

*Considering the Effects of Prior      Year Misstatements when Quantifying Misstatements in Current Year Financial      Statements*

*The Fair Value Option for      Financial Assets and Financial Liabilities – Including an amendment of FASB      Statement No. 115.*
*Accounting for Certain Investments in Debt      and Equity Securities*

**Fair      Value of Financial Instruments –**

**Cash      and cash equivalents –**

**Income      Taxes –**

----

** **

----

|                                                                         |   | Three                  Months Ended June 30, |     |   |   |   |
|------------------------------------------------------------------------------|--------|----------------------------------------------|----------|--------|--------|--------|
|                                                                         |   | 2007                                         |     |   | 2006   |   |   | $                  Change |   |   | %                  Change |   |
| Finance                  revenues                                            |   | $                                            | 75,638   |   |   | $      | 168,631 |   |   | $ | (92,993 | ) |   |   | (55.1 | ) |
| Interest                  income (expense), net                              |   |                                         | 51,389   |   |   |   | (55,828 | ) |   |   | 107,217 |   |   |   | - |   |
| Net                  finance revenues                                        |   |                                         | 127,027  |   |   |   | 112,803 |   |   |   | (14,224 | ) |   |   | 12.6 |   |
| Provision                  for credit losses                                 |   |                                         | -        |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Finance                  revenues, net of interest expense and credit losses |   |                                         | 127,027  |   |   |   | 112,803 |   |   |   | (14,224 | ) |   |   | (12.6 | ) |
| Operating                  expenses                                          |   |                                         | 289,668  |   |   |   | 45,191 |   |   |   | 244,477 |   |   |   | 540.9 |   |
| Net                  income (loss) before income taxes                       |   |                                         | (162,641 | )      |   |   | 67,612 |   |   |   | (230,253 | ) |   |   |   |   |
| Income                  tax (provision) benefit:                             |   |                                         | 2,000    |   |   |   |   |   |   |   | 2,000 |   |   |   |   |   |
| Net                  income (loss)                                           |   | $                                            | (160,641 | )      |   | $      | 67,612 |   |   | $ | (228,253 | ) |   |   |   |   |

**Finance      revenue**

**Interest      income (expense).**

**Provision      for credit losses. **

**Operating        expenses.**

----

----

|                                                                         |   | Six                  Months Ended June 30, |     |   |   |   |     |                      |   |
|------------------------------------------------------------------------------|--------|--------------------------------------------|----------|--------|--------|--------|----------|---------------------------|--------|
|                                                                         |   | 2007                                       |     |   | 2006   |   |     | $                  Change |   |   | %                  Change |   |
| Finance                  revenues                                            |   | $                                          | 175,744  |   |   | $      | 409,473  |                      |   | $ | (233,729 | ) |   |   | (57.1 | ) |
| Interest                  income (expense), net                              |   |                                       | 76,164   |   |   |   | (138,275 | )                         |   |   | 214,439 |   |   |   | - |   |
| Net                  finance revenues                                        |   |                                       | 251,908  |   |   |   | 271,198  |                      |   |   | (19,290 | ) |   |   | (7.1 | ) |
| Provision                  for credit losses                                 |   |                                       | -        |   |   |   | -        |                      |   |   |   |   |   |   |   |   |
| Finance                  revenues, net of interest expense and credit losses |   |                                       | 251,908  |   |   |   | 271,198  |                      |   |   | (19,290 | ) |   |   | (7.1 | ) |
| Operating                  expenses                                          |   |                                       | 559,456  |   |   |   | 104,876  |                      |   |   | 12,000 |   |   |   | 433.4 |   |
| Net                  income (loss) before income taxes                       |   |                                       | (307,548 | )      |   |   | 166,322  |                      |   |   | (473,870 | ) |   |   |   |   |
| Income                  tax (provision) benefit:                             |   |                                       | 17,000   |   |   |   | -        |                      |   |   | 17,000  |   |   |   | - |   |
| Net                  income (loss)                                           |   | $                                          | (290,548 | )      |   | $      | 166,322  |                      |   | $ | (456,870 | ) |   |   |   |   |

**Finance      revenue**

**Interest      income (expense).**

**Provision      for credit losses. **

**Operating      expenses.**

|                                               |   | Six                  Months Ended June 30, |    |   |   |   |   |
|----------------------------------------------------|--------|--------------------------------------------|---------|--------|--------|--------|--------|
|                                               |   | 2007                                       |    |   | 2006   |   |   | $                Change |   | Explanation |
| Professional                fees                   |   | $                                          | 100,870 |   |   | $      | 8,376  |   |   | $ | 92,494 |   | Increased                cost for 2006 and 2005 audits. Additional legal fees for corporate                matters                and SEC filings |
| Payroll,                payroll taxes and benefits |   |                                       | 174,292 |   |   |   | 35,865 |   |   |   | 138,427 |   | Increased                payroll and health benefits for President and other corporate staff.                Increased health benefits for CEO and a Director. |
| Advertising                                        |   |                                       | 86,907  |   |   |   | 31,543 |   |   |   | 55,364 |   | Increased                marketing |
| Consulting                expense                  |   |                                       | 25,000  |   |   |   |   |   |   |   | 25,000 |   | Monthly                advisory fee to investment banking firm for acquiring other                companies |
| Insurance                                          |   |                                       | 33,764  |   |   |   |   |   |   |   | 33,764 |   | Premiums                for insurance policies including Directors and Officers and fidelity                policies |
|                                               |   | $                                          | 422,840 |   |   | $      | 77,790 |   |   | $ | 345,049 |   |   |

----

**Cash      Flow Summary**

**Cash      Flows from Operating Activities**

**Cash      Flows from Investing Activities**

**Cash      Flows from Financing Activities**

**Capital      Resources**

----

**ITEM      3.                      CONTROLS      AND PROCEDURES**

**PART      II. OTHER INFORMATION**

**ITEM      1.                      LEGAL      PROCEEDINGS:**

**ITEM      2.                      CHANGES      IN SECURITIES.**

| (a)   | For                the six months ended June 30, 2007, there were no sales of unregistered                securities, except as reported in our Form 10-SB, as                amended. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Rule                463 of the Securities Act is not applicable to the                Company. |
|-----------------|------------------------------------------------------------------------------------------------|

| (c)   | In                the six months ended June 30, 2007, there were no repurchases by                the                Company of its Common Stock. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      3.                      DEFAULTS      UPON SENIOR SECURITIES**

**ITEM      4.                      SUBMISSIONS      OF MATTERS TO A VOTE OF SECURITY HOLDERS:**

**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 |
|-----|---------------------------------------------|

| 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  | Second              Facilities Lease-North Carolina *  |
|       |                                                   |

| 31.1   | Chief                Executive Officer Rule 13a-14(a)/15d-14(a) Certification                * |
|------------------|------------------------------------------------------------------------------------------------|
|             |                                                                                           |

| 31.2   | Chief                Financial Officer Rule 13a-14(a)/15d-14(a) Certification                * |
|--------|------------------------------------------------------------------------------------------------|
|   |                                                                                           |

| 32.1   | Chief                Executive Officer Section 1350 Certification * |
|--------|---------------------------------------------------------------------|
|   |                                                                |

| 32.2 | Chief                Financial Officer Section 1350 Certification                * |
|------|------------------------------------------------------------------------------------|

| 99.1 | 2007                Omnibus Equity Compensation Plan |
|------|------------------------------------------------------|

| 99.2 | Form                of Non-Qualified Option under 2007 Omnibus Equity Compensation                Plan |
|------|--------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                                                                      | **ANCHOR                  FUNDING SERVICES, INC.** |                                                     |
|---------------------------------------------------------------------------|----------------------------------------------------|----------------------------------------------------------|
|                                                                      |                                               |                                                     |   |
| Date:  October                  24,                  2007  | By:                                                | /s/ Morry                F. Rubin    |   |
|                                                                      |                                               | Morry                F. Rubin                            |   |
|                                                                      |                                               | Chief                Executive Officer                   |   |
|                                                                      |                                               |                                                     |   |

|                                          |   |                                                                |   |
|-----------------------------------------------|--------|---------------------------------------------------------------------|--------|
| Date:                  October 24, 2007  | By:    | /s/ Brad                Bernstein                         |   |
|                                          |   | Brad                Bernstein                                       |   |
|                                          |   | President                and Chief                Financial Officer |   |
|                                          |   |                                                                |   |

----