UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C.  20549
 
  FORM
10-K
  
 (Mark
      One)x
                        ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended December 31, 2008ORo
                        ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from  to
  Commission File Number
000-50302
 TREY
RESOURCES, INC.
 (Exact
name of registrant as specified in its charter)
  New
      Jersey
                      16-1633636(State
      ofincorporation)
                      (I.R.S.
      Employer Identification No.)5 Regent Street, Livingston, New
      Jersey
                      07039(Address
      of principal executive offices)
                      (Zip
      Code)
  Registrant’s
telephone number, including area code: (973)
958-9555
 Securities
registered pursuant to Section 12(b) of the Act:  None
 Securities
registered pursuant to Section 12(g) of the Act:  Class A Common par value $.00001 per
share
  Indicate
by checkmark if registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.   Yes  o      No  x
  Indicate
by checkmark if registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act.  Yes o       No x
  Indicate
by checkmark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.    Yes  x     No
o
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  o
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
definition of “large accelerated filer”, “accelerated filer”, and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer o
                  Accelerated
      filer oNon-accelerated
      filer   o (Do not check if
      a smaller reporting company)
                  Smaller
      reporting company x
 Indicate
by checkmark whether the registrant is a shell company (as defined in Rule 12b-2
of the Securities Act).  Yes o  No x
  As of
April 2, 2009, the Registrant had issued and outstanding 4,200,473,533 Class A
common stock shares. The aggregate market value of the voting Common Stock (par
value $.00001 per share) held by non-affiliates on June 30, 2008 (the last
business day of our most recently completed second quarter) was $512,464 using
the closing price on June 30, 2008.
   1
 Table of Contents
  Tableof
Contents
 
 PagePART
      IItem
      1.
                                      Description of business
                                      3Item
      2.
                                      Description of property
                                      14Item
      3.
                                      Legal proceedings
                                      14PART
      IIItem
      5.
                                      Market for common equity and related stockholder
      matters
                                      15Item
      7.
                                      Management's discussion and analysis or plan of
      operations
                                      19Item
      8.
                                      Financial statements
                                      24Item
      9A (T).
                                      Controls & Procedures
                                      25PART
      IIIItem
      10.
                                      Directors, executive officers, promoters and control
      persons, compliance with Section 16(a) of the Exchange Act
                                      26Item
      11.
                                      Executive compensation
                                      28Item
      12.
                                      Security ownership of certain beneficial owners and
      management
                                      30Item
      13.
                                      Certain relationships and related
transactions
                                      32PART
      IVItem
      14.
                                      Principal Accountant Fees and Services
                                      33Item
      15.
                                      Exhibits
                                      34
   2
 Table of Contents
 
 PART
I
 
 Item1.  Description of
Business
  Background
  Trey
Resources, Inc. (the “Company”), was incorporated as iVoice Acquisition 1, Inc.
in Delaware on October 3, 2002 as a wholly owned subsidiary of iVoice, Inc.
(“iVoice”). On April 24, 2003, we changed our corporate name from iVoice
Acquisition 1, Inc. to Trey Industries, Inc. On September 5, 2003, we changed
our corporate name to Trey Resources, Inc.  On February 13, 2004, Trey
Resources, Inc. became an independent public company when all the shares owned
by iVoice, Inc. were distributed to the iVoice shareholders.  In March
2004, Trey Resources, Inc. began trading on the NASD OTC Bulletin Board under
the symbol TYRIA.OB.
 
 Trey
initially owned iVoice’s Automatic Reminder software business.  That
software was sold in November 2004, and Trey is no longer engaged in the sale of
Automatic Reminder software.   During 2004, we consummated
business combinations with two companies that are consultants and value added
resellers of financial accounting software to small and medium sized
businesses.  One company is also the publisher of its own proprietary
electronic data interchange (EDI) software.
  In June
2004, Trey Resources’ wholly-owned subsidiary, SWK Technologies, Inc., completed
a merger with SWK, Inc.  SWK, Inc. was a value added reseller and
master developer for Sage Software’s MAS 90/200/500 financial accounting
software, and was also the publisher of its own proprietary EDI software,
“MAPADOC”.  As a result of the merger, SWK, Inc.’s shareholders were
issued, in exchange for all of the common stock of SWK, Inc., 2,750,000
restricted shares of Trey Resources’ Class A Common Stock.
  In
November 2004, Trey Resources’ wholly-owned subsidiary, BTSG Acquisition Corp.
completed the acquisition of certain assets of Business Tech Solutions Group,
Inc.   Business Tech Solutions Group, Inc was a value added
reseller for Sage Software’s BusinessWorks financial accounting
software.  As a result of the merger, Business Tech Solutions Group,
Inc.’s shareholder was issued, in exchange for selected assets of Business Tech
Solutions Group, Inc.,648,149 restricted
shares of Trey Resources’ Class A Common Stock.
 
 On March
25, 2006, Trey Resources’ wholly-owned subsidiary, SWK Technologies, entered
into an Asset Purchase Agreement and an Employment Agreement with Jodi Katz to
consummate the acquisition of Wolen Katz Associates.  Wolen Katz is a
value-added reseller of Sage Software’s category leading ABRA Human Resources
Management Solution.
 
 On June
2, 2006, Trey Resources’ wholly-owned subsidiary, SWK Technologies, Inc.,
executed an asset purchase agreement between and among AMP-Best Consulting, Inc.
(“AMP-Best”), a New York Corporation, Patrick Anson, Crandall Melvin III and
Michelle Paparo for acquisition of certain assets, the customer list and
business name of AMP-Best. AMP-Best Consulting, Inc. is an information
technology company and value added reseller of licensed accounting software
published by Sage Software.  AMP-Best Consulting, Inc. sells services
and products to various end users, manufacturers, wholesalers and distribution
industry clients located throughout the United States, with special emphasis on
companies located in the upstate New York region.  Terms of the
agreement provided for a cash payment at closing of $85,000, issuance of a
$380,000 promissory note to Crandall Melvin III, the issuance of 6,000,000
shares of Trey Resource’s Class A Common Stock and employment agreements for
Patrick Anson, Crandall Melvin III and Michelle Paparo. Payments on the
promissory note are to commence 120 days after the closing for a term of 5
years.
 
 Our
principal offices and facilities are located at 5 Regent Street, Suite 520,
Livingston, NJ  07039 and our telephone number is (973)
758-9555.
  3
 Table of Contents
  General
  We are
business consultants for small and medium sized businesses and value-added
resellers and developers of financial accounting software.  We also
publish our own proprietary EDI software.  We are a leader in
marketing financial accounting solutions across a broad spectrum of industries
focused on manufacturing and distribution. We specialize in software integration
and deployment, programming, and training and technical support, aimed at
improving the financial reporting and operational efficiencies of small and
medium sized companies. The sale of our financial accounting software is
concentrated in the northeastern United States, while our EDI software and
programming services are sold to corporations nationwide.
  We
differentiate ourselves from traditional software resellers through our wide
range of value-added services, consisting primarily of programming, training,
technical support, and other consulting and professional services. We also
provide software customization, data migration, business consulting, and
implementation assistance for complex design environments. Our strategic focus
is to respond to our customers’ requests for interoperability and provide
solutions that address broad, enterprise-wide initiatives.
  Our
product sales are cyclical, and increase when the developer of a specific
software product offers new versions, promotions or discontinues support of an
older product.
  As is
common among software resellers, we purchase our products from our suppliers
with a combination of cash and credit extended by the supplier. We do not carry
significant inventory, and generally place an order with the supplier only after
receiving a firm commitment from our customer. Except in unusual situations, we
do not allow our customers to return merchandise and rarely offer extended
payment terms to our customers.
  Our
Products
 
 Substantially
all of our initial sales of financial accounting solutions consist of
prepackaged software and associated services to customers in the United States.
Our sales are focused on three major product categories and associated
value-added services.
  Financial Accounting
Software
 
 The
Company resells accounting software published by Sage Software, Inc. (Sage) for
the financial accounting requirements of small and medium sized businesses
focused on manufacturing and distribution, and the delivery of related services
from the sales of these products, including installation, support and training.
These product sales are primarily packaged software programs installed on a user
workstation, on a local area network server, or in a hosted environment. The
programs perform and support a wide variety of functions related to accounting,
including financial reporting, accounts payable and accounts receivable, and
inventory management.
  We
provide a variety of services along with our financial accounting software sales
to assist our customers in maximizing the benefits from these software
applications. These services include training, technical support, and
professional services.  We have six employees who serve as class
instructors and have formal, specific training in the topics they are teaching.
We can also provide on-site training services that are highly tailored to meet
the needs of a particular customer. Our instructors must pass annual
subject-matter examinations required by Sage to retain their product-based
teaching certifications.
  We
provide end-user technical support services through our support/help
desk.  A staff of 3 full-time product and technology consultants
assist customers calling with questions about product features, functions,
usability issues, and configurations. The support/help desk offers services in a
variety of ways, including prepaid services, time and materials billed as
utilized and annual support contracts. Customers can communicate with the
support/help desk through e-mail, telephone, and fax channels. Standard
support/help desk services are offered during normal business hours five days
per week.
  Our
professional services include project-focused offerings such as software
customization, data migration, and small and medium sized business consulting.
We have four project managers who provide professional services to our financial
accounting customers.
  4
 Table of Contents
  Electronic Data Interchange
(EDI) Software
 
 We
publish our own proprietary EDI software “MAPADOC.”  EDI can be used
to automate existing processes, to rationalize procedures and reduce costs, and
to improve the speed and quality of services. Because EDI necessarily involves
business partners, it can be used as a catalyst for gaining efficiencies across
organizational boundaries.
  Our
“MAPADOC” EDI solution is a fully integrated EDI solution that provides users of
Sage Software’s market-leading MAS family of accounting software products with a
feature rich product that is easy to use. “MAPADOC” provides the user with
dramatically decreased data entry time, elimination of redundant steps, the
lowering paper and postage costs, the reduction of time spent typing, signing,
checking and approving documents and the ability to self-manage EDI and to
provide a level of independence that saves time and money.
  We market
our “MAPADOC” solutions to our existing and new small and medium-sized business
customers, and through a network of resellers.  As of December 31,
2008, we have a sales team and 5 technical specialists involved in marketing and
supporting sales of the “MAPADOC” product and associated services.
 
 Warehouse Management
Systems
 
 We are
resellers of the Warehouse Management System (WMS) software published by Radio
Beacon, Inc.  Radio Beacon Inc. develops warehouse management software
for mid-market distributors. The primary purpose of a WMS is to control the
movement and storage of materials within an operation and process the associated
transactions.  Directed picking, directed replenishment, and directed
put away are the key to WMS.  The detailed setup and processing within
a WMS can vary significantly from one software vendor to
another.  However, the basic WMS will use a combination of item,
location, quantity, unit of measure, and order information to determine where to
stock, where to pick, and in what sequence to perform these
operations.
  The Radio
Beacon warehouse management software improves accuracy and efficiency,
streamlines materials handling, meets retail compliance requirements, and
refines inventory control.  Radio Beacon works as part of a complete
operational solution by integrating seamlessly with RF hardware, accounting
software, shipping systems and warehouse automation equipment.
  We market
the Radio Beacon solution to our existing and new medium-sized business
customers. As of December 31, 2008, we have five salespeople and two technical
specialists involved in marketing and supporting sales of the Radio Beacon
product and associated services.
  Network
Services  and Business Consulting
 
 We
provide network maintenance and service upgrades for our business
clients.  We are a Microsoft Solutions Provider.  Our staff
includes engineers who maintain certifications from Microsoft and Sage
Software.  They are Microsoft Certified Systems Engineers and
Microsoft Certified Professionals, and they provide a host of services for our
clients, including server implementation, support and assistance, operation and
maintenance of large central systems, technical design of network
infrastructure, technical troubleshooting for large scale problems, network and
server security, and backup, archiving, and storage of data from
servers.  There are numerous competitors, both larger and smaller,
nationally and locally, with whom we compete in this market.
  We also
provide, as consultants, the information technology (IT) audit required by
Section 404 of the Sarbanes Oxley Act of 2002. Section 404 (SOX 404) requires
CEOs, CFOs, and outside auditors to attest to the effectiveness of internal
controls for financial reporting.  To satisfy Section 404
requirements, CEO’s, CFO’s, and outside auditors must sign off on company’s
internal controls. They need to know that the company can document its adherence
to IT procedures and processes, and that IT processes supporting financial
management systems are well controlled. Our qualified staff of certified network
engineers and certified public accountants allows us to provide these audits to
small and medium sized publicly traded corporations.  Our competition
to render these services includes accounting firms and independent information
technology consultants like ourselves.
  5
 Table of Contents
  Markets
  Financial Accounting
Software
 
 In the
financial accounting software market, we focus on providing enterprise solutions
to small- and medium-sized businesses (“SMB”) with less than $100 million of
annual revenue, primarily in the manufacturing and distribution
industries.  The SMB market is comprised of thousands of companies in
the New York region alone.
  While
several local and regional competitors exist in the various geographic
territories where we conduct business, we have a competitive advantage in terms
of geographic reach, comprehensive training and support, and the provision of
other products and services. We are one of the larger Sage resellers in the
United States.   While there are numerous national, regional, and
local competitors that could be compared to us in scale, size, geographical
reach, and target markets for the resale of Sage products, there is no one
dominant competitor or dominant group of competitors with whom we compete for
contracts or assignments on a regular basis.  There are also numerous
competitors who publish and/or resell competing product lines, such as
Microsoft’s Great Plains and Solomon accounting software.
  Electronic Data Interchange
Software
 
 We
publish and sell through a network of software resellers our proprietary EDI
software, “MAPADOC”.  Electronic Data Interchange (EDI) is
computer-to-computer communication of business documents between
companies.  It is a paperless way to send and receive Purchase Orders,
Invoices, etc.  EDI replaces human-readable documents with
electronically coded documents. The sending computer creates the document and
the receiving computer interprets the document.  Implementation of EDI
streamlines the process of exchanging standard business
transactions.   Companies save by eliminating people cost as well
as the cost due to errors and double entry of data.   The
transmissions are accomplished by connecting to a mailbox via a modem or the
Internet.   The most common mailbox is a Value Added Network's
(VAN) electronic mailbox.  Each user, identified by a unique EDI ID,
accesses his mailbox to send and receive all EDI transactions.  To
standardize the documents communicated between many companies, the
Transportation Data Coordinating Committee, in 1975, published its first set of
standards.
  EDI
standards are formats and protocols that trading partners agree to use when
sending and receiving business documents.  Around 1979, The American
National Standards Institute (ANSI) designated an accredited standards committee
for EDI.  The standards continue to evolve to address the needs of the
member companies.   “MAPADOC” complies with all current
standards. The market for EDI continues to expand as big box retailers, such as
Wal-Mart, Target, and K-Mart, insist their vendors utilize EDI in their business
transactions. There are numerous companies with whom we compete in the SMB EDI
marketplace, including True Commerce and Kissinger Associates.
  Warehouse Management
Systems
 
 We resell
under a distributor agreement the Warehouse Management Solution published by
Radio Beacon, Inc.  Radio Beacon Inc. develops warehouse management
software for mid-market distributors. The primary purpose of a WMS is to control
the movement and storage of materials within an operation and process the
associated transactions.  Directed picking, directed replenishment,
and directed put away are the key to WMS.  The detailed setup and
processing within a WMS can vary significantly from one software vendor to
another. However the basic WMS will use a combination of item, location,
quantity, unit of measure, and order information to determine where to stock,
where to pick, and in what sequence to perform these operations. The Radio
Beacon warehouse management software improves accuracy and efficiency,
streamlines materials handling, meets retail compliance requirements, and
refines inventory control.  Radio Beacon works as part of a complete
operational solution by integrating seamlessly with RF hardware, accounting
software, shipping systems and warehouse automation equipment.  The
WMS marketplace is extremely competitive.  We compete against
national, regional, and local resellers, some significantly larger than
us.
  6
 Table of Contents
  Arrangements
with Principal Suppliers
  Our
revenues are primarily derived from the resale of vendor software products and
services. These resales are made pursuant to channel sales agreements whereby we
are granted authority to purchase and resell the vendor products and services.
Under these agreements, we either resell software directly to our customers or
act as a sales agent for various vendors and receive commissions for our sales
efforts.
  We are
required to enter into an annual Channel Partner Agreement with Sage Software,
Inc. whereby Sage appoints us as a non-exclusive partner to market, distribute,
and support MAS 90/200/500 software. This agreement authorizes us to sell these
software products to certain customers in the United States. There are no
clauses in this agreement that limit or restrict the services that we can offer
to customers.  We also operate a Sage Software Authorized Training
Center Agreement and also are party to a Master Developers Program License
Agreement.
  Customers
  We market
our products to private companies throughout the United States.  In
the year ended December 31, 2008, the revenues generated by our top ten
customers represented approximately seventeen percent (17%) of consolidated
revenues, and no single customer accounted for ten percent or more of our
consolidated revenues.
 
 Intellectual
Property
  We regard
our technology and other proprietary rights as essential to our business. We
rely on copyright, trade secret, confidentiality procedures, contract
provisions, and trademark law to protect our technology and intellectual
property. We have also entered into confidentiality agreements with our
consultants and corporate partners and intend to control access to, and
distribution of our products, documentation, and other proprietary
information.
  We own
several trademarks registered with the U.S. Patent and Trademark Office,
including “MAPADOC” and have a number of trademark applications pending. We have
no patents or patent applications pending.
  Employees
  As of
December 31, 2008, we had approximately 35 full time employees and one office in
New Jersey, and two offices in New York. Approximately six of our employees are
engaged in sales and marketing activities and approximately seventeen employees
are engaged in service fulfillment.
  Our
future success depends in significant part upon the continued services of our
key sales, technical, and senior management personnel and our ability to attract
and retain highly qualified sales, technical, and managerial personnel. None of
our employees are represented by collective bargaining agreements, and we have
never experienced a work stoppage. We believe our employee relations are
good.
  Company
Reports Filed with the U.S. Securities and Exchange Commission
  The
public may read and copy any materials the Company files with the Securities and
Exchange Commission at the Commission's Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. The public may obtain information on the operation
of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The
Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission. The Internet address of the Commission's
site is (http://www.sec.gov).
  7
 Table of Contents
  Risk
Factors
 
 In
addition to other information in this Annual Report on Form 10-K, the following
important factors should be carefully considered in evaluating the Company and
its business because such factors currently have a significant impact on the
Company's business, prospects, financial condition and results of
operations
  Forward
Looking Statements - Cautionary Factors
 
 This
annual report on Form 10-K contains forward-looking statements within the
meaning of that term in Section 27A of the Securities Act of 1933, as
amended, and in Section 21F of the Securities Exchange Act of 1934 as amended.
The statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
“may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,”
“estimate,” “predict,” “potential” or “continue,” the negative of these terms or
other similar terminology. These forward-looking statements involve risks and
uncertainties and other factors that may cause the actual results, performance
or achievements to differ from any future results, performance or achievements
expressed or implied by such forward-looking statements. Except for the
historical information and statements contained in this Report, the matters and
items set forth in this Report are forward looking statements that involve
uncertainties and risks some of which are discussed at appropriate points in the
Report and are also summarized as follows:
 
 As
of December 31, 2008 there was substantial doubt about our ability to continue
as a going concern.  The Company may not be able to continue its
operations and the financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
 
 As of December 31, 2008, the Company’s
independent public accounting firm issued a “going concern opinion” wherein they
stated that the accompanying financial statements were prepared assuming the
Company will continue as a going concern.  The Company did not
generate sufficient cash flows from revenues during the year ended December 31,
2008 to fund its operations.  Also, as of December 31, 2008, the
Company had negative net working capital of approximately $5.4
million.  These matters raise substantial doubt about the Company’s
ability to continue as a going concern.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
 
 We
have a limited operating history.
 
 We did
not begin our value added reseller, software, and consulting business until June
2004.  Accordingly, we have a limited operating history on which to
base an evaluation of our business and prospects.  We cannot assure
successfully address the risks involved in operating our
business.  Our failure to do so could materially adversely affect our
business, financial condition and operating results.
 
 We
have historically lost money and may continue to lose money in the
future.
  We have
historically lost money.  For the years ended December 31, 2008 and
2007, we had net losses of $1,486,398 and $1,614,008, respectively, and net
losses of $0.00 and $0.00 per share, respectively.  Future losses
are likely to occur.  Accordingly, we may experience significant
liquidity and cash flow problems because our operations may not be
profitable.  No assurances can be given that we will be successful in
reaching or maintaining profitable operations.
  8
 Table of Contents
  We
cannot accurately forecast our future revenues and operating results, which may
fluctuate.
 
 Our short
operating history and the rapidly changing nature of the markets in which we
compete make it difficult to accurately forecast our revenues and operating
results.  Furthermore, we expect our revenues and operating results to
fluctuate in the future due to a number of factors, including the
following:
  s
              the
      timing of sales of our products and
services;
 s
              the
      timing of product implementation, particularly large design
      projects;
 s
              unexpected
      delays in introducing new products and
services;
 s
              increased
      expenses, whether related to sales and marketing, product
      development,or
      administration;
 s
              deferral
      in the recognition of revenue in accordance with applicable accounting
      principles,
      due to the time required to complete
  projects;
 s
              the
      mix of product license and services revenue; ands
              costs
      related to possible acquisitions of technology or
      businesses.
  
 We
may fail to develop new products, or may incur unexpected expenses or
delays.
 
 Although
we currently have fully developed products available for sale, we may also
develop various new technologies, products and product features and may rely on
them to remain competitive.  Due to the risks inherent in developing
new products and technologies—limited financing, competition, obsolescence, loss
of key personnel, and other factors—we may fail to develop these technologies
and products, or may experience lengthy and costly delays in doing
so.  Although we are able to license some of our technologies in their
current stage of development, we cannot assure that we will be able to develop
new products or enhancements to our existing products in order to remain
competitive.
 
 If
we cannot raise additional capital to finance future operations, we may need to
curtail our operations in the future.
 
 We have
relied on significant external financing to fund our operations.  Such
financing has historically come from a combination of borrowings and sales of
securities from third parties.  We cannot assure you that financing
from external sources will be available if needed or on favorable
terms.  Our inability to obtain adequate financing will result in the
need to curtail business operations.  Any of these events would be
materially harmful to our business and may result in a lower stock
price.  While we have recently raised sufficient working capital to
fund our operations for what we believe should be sufficient for the next 12
months, we will subsequently need to raise additional capital to fund our future
operations.
  Because
our financial accounting software, EDI software, and business consulting
businesses are still evolving, we may experience difficulties that could prevent
us from becoming profitable.
 
 Because
our financial accounting software, EDI software, and business consulting
businesses are still evolving, we may experience the difficulties frequently
encountered by companies in the early stage of development in new and evolving
markets.  These difficulties include the following:
 
 ·
              substantial
      delays and expenses related to testing and developing  new
      products;
 ·
              marketing
      and distribution problems encountered in connection with our new and
      existing products and technologies;
 ·
              competition
      from larger and more established
companies;
 ·
              delays
      in reaching our marketing goals;
 ·
              difficulty
      in recruiting qualified employees for management and other
      positions;
 ·
              lack
      of sufficient customers, revenues and cash flow;
  and
 ·
              limited
      financial resources.
 
 We may
continue to face these and other difficulties in the future, some of which may
be beyond our control.  If we are unable to successfully address these
problems, our business will suffer and our stock price could
decline.
  9
 Table of Contents
  If
our technologies and products contain defects or otherwise do not work as
expected, we may incur significant expenses in attempting to correct these
defects or in defending lawsuits over any such defects.
 
 Software
products are not currently accurate in every instance, and may never
be.  Furthermore, we could inadvertently release products and
technologies that contain defects.  In addition, third-party
technology that we include in our products could contain defects.  We
may incur significant expenses to correct such defects.  Clients who
are not satisfied with our products or services could bring claims against us
for substantial damages.  Such claims could cause us to incur
significant legal expenses and, if successful, could result in the plaintiffs
being awarded significant damages.  Our payment of any such expenses
or damages could prevent us from becoming profitable.
 
 Our
success is highly dependent upon our ability to compete against competitors that
have significantly greater resources than we have.
 
 The financial accounting software, EDI
software, and business consulting industries are highly competitive, and we
believe that this competition will intensify.   Many of our
competitors have longer operating histories, significantly greater financial,
technical, product development and marketing resources, greater name recognition
and larger client bases than we do.  Our competitors could use these
resources to market or develop products or services that are more effective or
less costly than any or all of our products or services or that could render any
or all of our products or services obsolete.  Our competitors could
also use their economic strength to influence the market to continue to buy
their existing products.
 
 If
we are not able to protect our trade secrets through enforcement of our
confidentiality and non-competition agreements, then we may not be able to
compete effectively and we may not be profitable.
 
 We
attempt to protect our trade secrets, including the processes, concepts, ideas
and documentation associated with our technologies, through the use of
confidentiality agreements and non-competition agreements with our current
employees and with other parties to whom we have divulged such trade
secrets.  If the employees or other parties breach our confidentiality
agreements and non-competition agreements or if these agreements are not
sufficient to protect our technology or are found to be unenforceable, our
competitors could acquire and use information that we consider to be our trade
secrets and we may not be able to compete effectively.  Most of our
competitors have substantially greater financial, marketing, technical and
manufacturing resources than we have, and we may not be profitable if our
competitors are also able to take advantage of our trade secrets.
  We
may unintentionally infringe on the proprietary rights of others.
 
 Many
lawsuits currently are being brought in the software industry alleging violation
of intellectual property rights.  Although we do not believe that we
are infringing on any patent rights, patent holders may claim that we are doing
so.  Any such claim would likely be time-consuming and expensive to
defend, particularly if we are unsuccessful, and could prevent us from selling
our products or services. In addition, we may also be forced to enter into
costly and burdensome royalty and licensing agreements.
 
 Our
two officers control a significant percentage of our capital stock and have
sufficient voting power to control the vote on substantially all corporate
matters.
 
 As of
March 31, 2009, Jerome R. Mahoney and Mark Meller, our Non-Executive Chairman of
the Board of Directors and our President, respectively, collectively owned
approximately 88% of our outstanding shares of our Class A common stock
(assuming the conversion of outstanding debt into shares of Class A common stock
and/or Class B common stock).  Mr. Mahoney and Mr. Meller may be able
to influence all matters requiring stockholder approval, including the election
of directors and approval of significant corporate transactions.  This
concentration of ownership, which is not subject to any voting restrictions,
could limit the price that investors might be willing to pay for our Class A
common stock.  In addition, Mr. Mahoney and Mr. Meller are in a
position to impede transactions that may be desirable for other
stockholders.  They could, for example, make it more difficult for
anyone to take control of us.
  10
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  Our industry is characterized by
rapid technological change and failure to adapt our product development to these
changes may cause our products to become obsolete.
 
 We participate in a highly dynamic
industry characterized by rapid change and uncertainty relating to new and
emerging technologies and markets. Future technology or market changes may cause
some of our products to become obsolete more quickly than expected.
 
 The
trend toward consolidation in our industry may impede our ability to compete
effectively.
 
 As consolidation in the software
industry continues, fewer companies dominate particular markets, changing the
nature of the market and potentially providing consumers with fewer
choices.  Also, many of these companies offer a broader range of
products than us, ranging from desktop to enterprise solutions.  We
may not be able to compete effectively against these
competitors.  Furthermore, we may use strategic acquisitions, as
necessary, to acquire technology, people and products for our overall product
strategy.  The trend toward consolidation in our industry may result
in increased competition in acquiring these technologies, people or products,
resulting in increased acquisition costs or the inability to acquire the desired
technologies, people or products. Any of these changes may have a significant
adverse effect on our future revenues and operating results.
 
 We
face intense price-based competition for licensing of our products which could
reduce profit margins.
 
 Price competition is often intense in
the software market. Price competition may continue to increase and become even
more significant in the future, resulting in reduced profit
margins.
 
 If
we lose the services of any of our key personnel, including our non-executive
chairman of the board of directors or chief executive officer, our business may
suffer.
 
 We are
dependent on our key officers, Jerome R. Mahoney and Mark Meller, our
Non-Executive Chairman of the Board of Directors and our Chief Executive
Officer, respectively, and our key employees in our operating subsidiary,
specifically Jeffrey Roth, Lynn Berman, and Gary Berman.   The
loss of any of our key personnel could materially harm our business because of
the cost and time necessary to retain and train a replacement.  Such a
loss would also divert management attention away from operational
issues.  In an attempt to minimize the effects of such loss, we
presently maintain a $1,000,000 key-man term life insurance policies on Mr.
Roth, Ms. Berman and Mr. Berman.
  Our
Non-Executive Chairman of the Board of Directors May Have Conflicts Of Interest,
And We Do Not Have Any Formal Procedure For Resolving Any Such Conflicts In The
Future.
 
 As of
December 31, 2008, our Non-Executive Chairman of the Board of Directors, Jerome
R. Mahoney, will have the right to convert $89,125 of indebtedness into 89,125
shares of Class B common stock of Trey Resources, which will be convertible into
an indeterminable number of shares of Class A common stock of Trey
Resources.  This could create, or appear to create, potential
conflicts of interest when our Non-Executive Chairman is faced with decisions
that could have different implications for Trey Resources.  Examples
of these types of decisions might include any of the potential business
acquisitions made by us or the resolution of disputes arising out of the
agreements governing the relationship between iVoice and us following the
distribution.  Also, the appearance of conflicts, even if such
conflicts do not materialize, might adversely effect the public's perception of
us following the distribution.  Furthermore, we do not have any formal
procedure for resolving any such conflicts of interest if they do
arise.
  11
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  Our
Securities
 
 We
do not expect to pay dividends in the foreseeable future.
 
 We intend
to retain any future earnings to finance the growth and development of our
business.  Therefore, we do not expect to pay any cash dividends in
the foreseeable future.  Any future dividends will depend on our
earnings, if any, and our financial requirements.
 
 Existing
stockholders will experience significant dilution from our sale of shares under
the YA Globalf/k/aCornell Capital
Partners) Debentures.
 
 The sale
of shares of Class A Common Stock pursuant to the terms of the YA Global (f/k/a
Cornell Capital Partners) Debentures will have a dilutive impact on our
stockholders. As a result, our net income per share could decrease in future
periods, and the market price of our Class A Common Stock could decline. In
addition, for a given advance, we will need to issue a greater number of shares
of Class A Common Stock under the YA Global (f/k/a Cornell) Debentures as our
stock price declines. If our stock price is lower, then our existing
stockholders would experience greater dilution. [See “Liquidity and Capital
Resources” in Item 7. Management’s Discussion and Analysis or Plan of
Operation.]
  The
investors holding our convertible debentures will pay less than the
then-prevailing market price of our Class A Common Stock.
 
 The Class
A Common Stock to be issued under the YA Global (f/k/a Cornell) Debentures will
be issued at ninety percent (90%) of the lowest Closing Bid Price of the Common
Stock during the thirty (30) days trading days immediately preceding the
Conversion Date, as quoted by Bloomberg, LP. These discounted sales could cause
the price of our Class A Common Stock to decline.
 
 Further,
because the investor under the YA Global (f/k/a. Cornell) Debentures will
acquire our Class A Common Stock at a discount, it will have an incentive to
sell immediately in order to realize a gain on the difference. This incentive to
sell immediately into the public market to realize a gain on the difference
accelerates if the market price of our Class A Common Stock
declines.  [See “Liquidity and Capital Resources” in Item 7.
Management’s Discussion and Analysis or Plan of Operation.]
  The
investors holding our convertible debentures intend to sell their shares of
Class A Common Stock in the public market, which sales may cause our stock price
to decline.
 
 The
investors holding our convertible debentures intend to sell the shares of Class
A Common Stock in the public market. The number of shares of Class A Common
Stock that may be sold is undeterminable at this time. Such sales may cause our
stock price to decline.
  12
 Table of Contents
  The
sale of our Class A Common Stock issuable upon conversion of the YA Global
(f/k/a Cornell) Debentures could encourage short sales by third parties, which
could contribute to the further decline of our stock price.
 
 The
significant downward pressure on the price of our Class A Common Stock caused by
the sale of material amounts of Class A Common Stock under the YA Global (f/k/a
Cornell) Debentures could encourage short sales by third parties. Such an event
could place further downward pressure on the price of our Class A Common
Stock.
 
 Our
Class A Common Stock is thinly traded and we cannot predict the extent to which
a more active trading market will develop.
 
 Our Class
A Common Stock is thinly traded compared to larger more widely known companies.
Thinly traded Class A Common Stock can be more volatile than common stock
trading in an active public market. We cannot predict the extent to which an
active public market for the Class A Common Stock will develop or be sustained
after this offering.
  We
cannot assure you that we will be able to access external funding when
needed.
 
 We currently depend on external
financing to fund our operations, and we have no current plans to obtain other
financing.  We cannot assure you that we will be able to obtain such
financing on favorable terms, in sufficient amounts, or at all, when
needed.  Our inability to obtain sufficient financing would have an
immediate material adverse effect on us, and our business, financial condition
and results of operations.
 
 The
price of our stock may be affected by a limited trading volume and may fluctuate
significantly.
 
 There has
been a limited public market for our Class A common stock and there can be no
assurance that an active trading market for our stock will
continue.  An absence of an active trading market could adversely
affect our stockholders' ability to sell our Class A common stock in short time
periods, or possibly at all.  Our Class A common stock has
experienced, and is likely to experience in the future, significant price and
volume fluctuations which could adversely affect the market price of our stock
without regard to our operating performance.  In addition, we believe
that factors such as quarterly fluctuations in our financial results and changes
in the overall economy or the condition of the financial markets could cause the
price of our Class A common stock to fluctuate substantially.
  Our
class A common stock is deemed to be "penny stock," which may make it more
difficult for investors to sell their shares due to suitability
requirements.
 
 Our Class
A common stock is deemed to be "penny stock" as that term is defined in Rule
3a51-1 promulgated under the Securities Exchange Act of 1934. These requirements
may reduce the potential market for our Class A common stock by reducing the
number of potential investors.  This may make it more difficult for
investors in our Class A common stock to sell shares to third parties or to
otherwise dispose of them.  This could cause our stock price to
decline.  Penny stocks are stock:
 
 ·
              With
      a price of less than $5.00 per
share
 ·
              That
      are not traded on a "recognized" national
  exchange;
 ·
              Whose
      prices are not quoted on the NASDAQ automated quotation
      system  (NASDAQ listed stock must still have a price of not less
      than $5.00 per share); or
 ·
              In
      issuers with net tangible assets less than $2.0 million (if the issuer has
      been in continuous operation for at least three years) or $5.0 million (if
      in continuous operation for less than three years), or with average
      revenues of less than $6.0 million for the last three
    years.
 
 Broker/dealers
dealing in penny stocks are required to provide potential investors with a
document disclosing the risks of penny stocks.  Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.
  13
 Table of Contents
  Future
sales of our Class A common stock could cause our stock price to
decline.
 
 The sale
of a large number of our shares, or the perception that such a sale may occur,
could lower our stock price.  Such sales could make it more difficult
for us to sell equity securities in the future at a time and price that we
consider appropriate.
 
 Issuance
of our reserved shares of Class A common stock may significantly dilute the
equity interest of existing stockholders.
 
 We have
reserved for issuance shares of our Class A common stock upon exercise or
conversion of stock options, warrants, or other convertible securities that are
presently outstanding.  Issuance of these shares will have the effect
of diluting the equity interest of our existing stockholders and could have an
adverse effect on the market price for our Class A common stock
  Item 2.Description of Property
 
 We do not
own any real property for use in our operations or otherwise.  On June
10, 2005, we consolidated our two New Jersey offices and moved into 6,986 square
feet of space at 5 Regent Street, Livingston, NJ  07039 at a monthly
rent of $7,423.    Effective March 15, 2005, we entered into
a lease for 621 square feet of space at 900 Walt Whitman Road, Melville, NY
11747 at a monthly rent of $932. We terminated this lease in February 2008. On
June 2, 2006, the Company entered into a two-year lease, with a one-year
extension, for office space at 6834 Buckley Road, North Syracuse, New York, at a
monthly rent of $1,800. On June 2, 2006, the Company entered into a one-year
lease, with variable extension, for office space at 2448 Union Road, Buffalo, NY
at a monthly rent of $157.  Such lease expires in November
2009.   We use our facilities to house our corporate headquarters
and operations and believe our facilities are suitable for such
purpose.  We also believe that our insurance coverage adequately
covers our interest in our leased space.  We have a good relationship
with our landlords.  We believe that these facilities will be adequate
for the foreseeable future.
 
 Our
executive offices are located at 5 Regent Street, Suite 520, Livingston,
NJ  07039 and our telephone number is (973) 758-9555.
 
 Item 3. Legal Proceedings
 
 We are
subject to litigation from time to time arising from our normal course of
operations.  Currently, there are no open litigation matters relating
to our products, product installations or technical services
provided.
  
 14
 Table of Contents
  PART
II
  
 Item 5. Marketfor
Common Equity and Related Stockholder Matters
 
 Market
Information
 
 Our Class A common stock, $0.00001 par
value, is quoted on the NASD OTC Bulletin Board under the symbol
“TYRIA.”  The following table shows the high and low closing prices
for the periods indicated.
 
 High
                                    
                                    
                                    Low2007First
      Quarter
                                    
                                    $
                                    0.0056
                                    
                                    
                                    $
                                    0.0023Second
      Quarter
                                    
                                    $
                                    0.0025
                                    
                                    
                                    $
                                    0.0004Third
      Quarter
                                    
                                    $
                                    0.0007
                                    
                                    
                                    $
                                    0.0002Fourth
      Quarter
                                    
                                    $
                                    0.0004
                                    
                                    
                                    $
                                    0.00012008First
      Quarter
                                    
                                    $
                                    0.000187
                                    
                                    
                                    $
                                    0.000125Second
      Quarter
                                    
                                    $
                                    0.000125
                                    
                                    
                                    $
                                    0.000125Third
      Quarter
                                    
                                    $
                                    0.000187
                                    
                                    
                                    $
                                    0.000100Fourth
      Quarter
                                    
                                    $
                                    0.000125
                                    
                                    
                                    $
                                    0.000100
  Holders
of Common Equity
  As of
April 2, 2009, the number of record holders of our common shares was
approximately 694.
  Dividend
Information
  To date,
the Company has never paid a cash dividend. We have no plans to pay any
dividends in the near future.  We intend to retain all earnings, if
any, for the foreseeable future, for use in our business
operations.
  Sales
of Unregistered Securities
  In the
year ending December 31, 2008, the Company issued the following securities
pursuant to various exemptions from registration under the Securities Act of
1933.
  For the
year ended December 31, 2008, the Company issued 986,111,111 shares of its Class
A common stock to YA Global (f/k/a Cornell Capital Partners) pursuant to certain
convertible debenture agreements.
  15
 Table of Contents
  We relied
upon the exemption provided in Section 4(2) of the Securities Act and/or Rule
506 thereunder, which cover "transactions by an issuer not involving any public
offering," to issue securities discussed above without registration under the
Securities Act of 1933. The Company made a determination in each case that the
person to whom the securities were issued did not need the protections that
registration would afford. The certificates representing the securities issued
displayed a restrictive legend to prevent transfer except in compliance with
applicable laws, and our transfer agent was instructed not to permit transfers
unless directed to do so by our Company, after approval by our legal counsel.
The Company believes that the investors to whom securities were issued had such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of the prospective investment. The Company also
believes that the investors had access to the same type of information as would
be contained in a registration statement.
  Description
of Securities
  Pursuant
to our certificate of incorporation, as amended, we are authorized to issue up
to: 10,000,000,000 shares of Class A common stock, par value $0.00001 per share;
50,000,000 shares of Class B common stock, par value $.00001 per share;
20,000,000 shares of Class C common stock, par value $0.00001; and 1,000,000
shares of preferred stock, par value of $1.00 per share.  Below is a
description of Trey Resources’ outstanding securities, including Class A common
stock, Class B common stock, options, warrants and debt.
  Class
A Common Stock
  Each
holder of our Class A Common Stock is entitled to one vote for each share held
of record. Holders of our Class A Common Stock have no preemptive, subscription,
conversion, or redemption rights. There are 10,000,000,000 shares authorized and
4,105,473,533 issued and outstanding at December 31, 2008.  Upon
liquidation, dissolution or winding-up, the holders of Class A Common Stock are
entitled to receive our net assets pro rata. Each holder of Class A Common Stock
is entitled to receive ratably any dividends declared by our board of directors
out of funds legally available for the payment of dividends. We have not paid
any dividends on our Common Stock and do not contemplate doing so in the
foreseeable future. We anticipate that any earnings generated from operations
will be used to finance our growth.
  Class
B Common Stock
  Each
share of Class B Common Stock has voting rights equal to 100 shares of Class A
Common Stock. Holders of Class B Common Stock are entitled to receive dividends
in the same proportion as the Class B Common Stock conversion and voting rights
have to Class A Common Stock. There are 50,000,000 shares authorized and there
were no shares issued and outstanding as of December 31, 2008. A holder of Class
B Common Stock has the right to convert each share of Class B Common Stock into
the number of shares of Class A Common Stock determined by dividing the number
of Class B Common Stock being converted by a 50% discount of the lowest price
that Trey had ever issued its Class A Common Stock. Upon our liquidation,
dissolution, or winding-up, holders of Class B Common Stock will be entitled to
receive distributions.
  Class
C Common Stock
  Each holder of our Class C Common Stock
is entitled to 1 vote for each 1,000 shares held of record. Holders of our Class
C Common Stock have no preemptive, subscription, conversion, or redemption
rights. Shares of Class C Common Stock are not convertible into Class A Common
Stock. There are 20,000,000 shares authorized and there were no shares issued
and outstanding as of December 31, 2008. Upon liquidation, dissolution or
winding-up, the holders of Class C Common Stock are not entitled to receive our
net assets pro rata. We have not paid any dividends on our common stock and do
not contemplate doing so in the foreseeable future. We anticipate that any
earnings generated from operations will be used to finance our
growth.
  16
 Table of Contents
  Preferred
Stock
  Trey
filed an amendment to its certificate of incorporation, authorizing the issuance
of 1,000,000 shares of Preferred Stock, par value $1.00 per share. As of
December 31, 2008, Trey has not issued any shares of Preferred
Stock.
  Our board
of directors is authorized (by resolution and by filing an amendment to our
certificate of incorporation and subject to limitations prescribed by the
General Corporation Law of the State of Delaware) to issue, from to time, shares
of Preferred Stock in one or more series, to establish from time to time the
number of shares to be included in each series, and to fix the designation,
powers, preferences and other rights of the shares of each such series and to
fix the qualifications, limitations and restrictions thereon, including, but
without limiting the generality of the foregoing, the following:
  ·
              the
      number of shares constituting that series and the distinctive designation
      of that series;
  ·
              the
      dividend rate on the shares of that series, whether dividends are
      cumulative, and, if so, from which date or dates, and the relative rights
      of priority, if any, of payment of dividends on shares of that
      series;
  ·
              whether
      that series has voting rights, in addition to voting rights provided by
      law, and, if so, the terms of those voting
  rights;
  ·
              whether
      that series has conversion privileges, and, if so, the terms and
      conditions of conversion, including provisions for adjusting the
      conversion rate in such events as our board of directors
      determines;
  ·
              whether
      or not the shares of that series are redeemable, and, if so, the terms and
      conditions of redemption, including the dates upon or after which they are
      redeemable, and the amount per share payable in case of redemption, which
      amount may vary under different conditions and at different redemption
      dates;
  ·
              whether
      that series has a sinking fund for the redemption or purchase of shares of
      that series, and, if so, the terms and amount of that sinking
      fund;
  ·
              the
      rights of the shares of that series in the event of voluntary or
      involuntary liquidation, dissolution or winding up of Trey, and the
      relative rights of priority, if any, of payment of shares of that series;
      and
  ·
              any
      other relative powers, preferences and rights of that series, and
      qualifications, limitations or restrictions on that
  series.
  If we
liquidate, dissolve or wind up our affairs, whether voluntarily or
involuntarily, the holders of Preferred Stock of each series will be entitled to
receive only that amount or those amounts as are fixed by the certificate of
designations or by resolution of the board of directors providing for the
issuance of that series.
  17
 Table of Contents
  Options
and Stock Awards
  During
the fiscal year ended December 31, 2004, the Company adopted the Trey Resources,
Inc. 2004 Stock Incentive Plan (the “Stock Incentive Plan”) to:  (i)
provide long-term incentives and rewards to employees, directors, independent
contractors or agents the Company and its subsidiaries; (ii) assist the Company
in attracting and retaining employees, directors, independent contractors or
agents with experience and/or ability on a basis competitive with industry
practices; and (iii) associate the interests of such employees, directors,
independent contractors or agents with those of the Company's stockholders. The
Board of Directors authorized the issuance of up to 2.4 million shares of Class
A common stock under the Stock Incentive Plan. In 2005, the Board of Directors
amended this plan to increase the authorized number of shares to 20 million
Class A Common Stock.  In 2007, the Board of Directors amended this
plan to increase the authorized number of shares to 87.9 million Class A Common
Stock.
  During
the fiscal year ended December 31, 2007, the Company adopted the Trey Resources,
Inc. 2007 Consultant Stock Incentive Plan (the “Consultant Plan”) to: (i)
provide long-term incentives, payment in stock in lieu of cash and rewards to
consultants, advisors, attorneys, independent contractors or agents ("Eligible
Participants") of Trey Resources, Inc. ("the Company") and its subsidiaries;
(ii) assist the Company in attracting and retaining independent contractors or
agents with experience and/or ability on a basis competitive with industry
practices; and (iii) associate the interests of such independent contractors or
agents with those of the Company's stockholders.  Total shares
issuable under this plan may not exceed twenty (20) percent of the issued and
outstanding shares of the Company’s Class A Common Stock.
  No
securities were issued pursuant to the 2004 Plan and 2007 Plans for the year
ended December 31, 2008.
  During
2007, the following securities were issued pursuant to Stock Incentive and
Consultant Plans:
  ·
              At
      various times during the year ended December 31, 2007, the Company issued
      the aggregate of 2,500,000 and 175,866,802 for consultant and professional
      services rendered, respectively.
  ·
              At
      various times during the year ended December 31, 2007, the Company issued
      the aggregate of 170,000,000 shares of Class A common stock for
      compensation and bonuses to SWK
employees.
  During
the fiscal year ended December 31, 2004, and as amended, the Company adopted the
Trey Resources, Inc. 2004 Directors’ and Officers’ Stock Incentive Plan (the
"Directors’ and Officers’ Plan") is to (i) provide long-term incentives and
rewards to officers and directors the Company and its subsidiaries; (ii) assist
the Company in attracting and retaining officers and directors with experience
and/or ability on a basis competitive with industry practices; and (iii)
associate the interests of such officers and directors with those of the
Company's stockholders.  The Board of Directors authorized the
issuance of up to 2.4 million shares of Class A common stock under the
Directors’ and Officers’ Plan.  In 2005, the Board of Directors
amended this plan to increase the authorized number of shares to 20 million
Class A Common Stock.
  No
securities were issued pursuant to the 2004 D&O Plan for the year ended
December 31, 2008.
  During
2007, the following securities were issued pursuant to this Plan:
  s At
various times during the year ended December 31, 2007, the Company issued
170,000,000 shares of Class A common stock for repayment of accrued salaries for
two officers of the Company.
  18
 Table of Contents
  Item 7. Management’sDiscussion and Analysis or Plan of
Operation
  This
discussion and analysis of our financial condition and results of operations
includes “forward-looking” statements that reflect our current views with
respect to future events and financial performance.  We use words such
as we “expect,” “anticipate,” “believe,” and “intend” and similar expressions to
identify forward-looking statements.  You should be aware that actual
results may differ materially from our expressed expectations because of risks
and uncertainties inherent in future events and you should not rely unduly on
these forward looking statements.  We will not necessarily update the
information in this discussion if any forward-looking statement later turns out
to be inaccurate.
  This
discussion and analysis of financial condition and results of operations should
be read in conjunction with our Financial Statements included in this
filing.
  Overview
 
 With the
acquisition of SWK in 2004, the Board of Directors decided that Trey will focus
on the business software and information technology consulting market, and is
looking to acquire other companies in this industry.  SWK
Technologies, Inc., Trey’s wholly owned subsidiary and the surviving company
from the acquisition and merger with SWK, Inc., is a New Jersey-based
information technology company, value added reseller, and master developer of
licensed accounting software published by Sage Software.  SWK
Technologies also publishes its own proprietary supply-chain software, the
Electronic Data Interchange (EDI) solution “MAPADOC.”  SWK
Technologies sells services and products to various end users, manufacturers,
wholesalers and distribution industry clients located throughout the United
States, along with network services provided by the Company.
 
 On June
2, 2006, SWK Technologies, Inc. completed the acquisition of certain assets of
AMP-Best Consulting, Inc. of Syracuse, New York.  AMP-Best Consulting,
Inc. is an information technology company and value added reseller of licensed
accounting software published by Sage Software.  AMP-Best Consulting,
Inc. sells services and products to various end users, manufacturers,
wholesalers and distribution industry clients located throughout the United
States, with special emphasis on companies located in the upstate New York
region.
 
 Management
is uncertain that it can generate sufficient cash to sustain its operations in
the next twelve months, or beyond.  It is unclear whether the
acquisition of SWK, Inc, will result in a reasonably successful operating
business and can give no assurances that we will be able to generate sufficient
revenues to be profitable, obtain adequate capital funding or continue as a
going concern.
  December
31, 2008 compared to December 31, 2007
 
 Since the
acquisition of SWK, Inc., on June 2, 2004, all revenues reported by Trey are
derived from the sales and service of Sage Software and MAPADOC products to
various end users, manufacturers, wholesalers and distribution industry clients
located throughout the United States, along with network services provided by
the Company.
  Revenues
for the year ended December 31, 2008 increased $346,086 (4.7%) to $7,724,295 as
compared to sales of $7,378,209 for the year ended December 31, 2007. These
sales were all generated by the Company’s operating subsidiary, SWK Technologies
(“SWKT”).  This increase is primarily due to increased focus by
management on marketing and sales across all its product lines. However, due to
the current economic downturn, there can be no assurance that sales increases
will continue in 2009.
  The gross
profit for the year ended December 31, 2008 increased $166,700 (6.5%) to
$2,731,897 as compared to a gross profit of $2,565,197 for the year ended
December 31, 2007. The increase in gross profit in primarily attributed to the
increase in sales. The mix of products being sold by the company changes from
time to time, and sometimes causes the overall gross margin percentage to
vary.  Sales of the larger Sage Software products carries lower gross
margin percentage as the relative discount percentage from the supplier
decreases. There was no significant variation in the gross margin percentage for
the year ended December 31, 2008 as compared to the year ended December 31,
2007. Gross profit as a percentage of sales was 35.4% for the year ended
December 31, 2008 as compared to 34.8% for the year ended December 31,
2007.
  19
 Table of Contents
  Total
operating expenses decreased $263,169 (7.4%) to $3,309,590 for the year ended
December 31, 2008 as compared to $3,572,759 for the year ended December 31,
2007. This decrease is primarily attributed to management’s efforts to reduce
expenses in all areas.
 
 Total
other income (expense) for the year ended December 31, 2008 was an expense of
$908,705 as compared to an expense of $606,446 for the year ended December 31,
2007, an increase of $302,259. The increase in other expenses primarily reflects
an increase in loss on revaluation of derivatives of $1,568,041 offset partially
by lower amortization of discount on debt conversion of $900,075.
 
 Net loss
for the year ended December 31, 2008 was $1,486,398 as compared to net loss of
$1,614,008 for the year ended December 31, 2007. The change in net loss of was
the result of the factors discussed above.
  Liquidity and Capital
Resources
 
 We are
currently seeking additional operating income opportunities through potential
acquisitions or investments. Such acquisitions or investments may consume cash
reserves or require additional cash or equity.  Our working capital
and additional funding requirements will depend upon numerous factors,
including: (i) strategic acquisitions or investments; (ii) an increase to
current company personnel; (iii) the level of resources that we devote to sales
and marketing capabilities; (iv) technological advances; and (v) the activities
of competitors.
 
 To date,
Trey has incurred substantial losses, and will require financing for working
capital to meet its operating obligations. While the current cash provided by
operations has been positive (see below), we will subsequently need to raise
additional capital to fund our future operations. We anticipate that we will
require financing on an ongoing basis for the foreseeable future.
 
 On
December 30, 2005, the Company entered into a Securities Purchase Agreement with
Cornell Capital Partners, LP (n/k/a/ YA Global Investments “YA
Global”).  Pursuant to such purchase agreement, YA Global purchased
$2,359,047 of secured convertible debentures which shall be convertible into
shares of the Company's Class A common stock. Pursuant to the Securities
Purchase Agreement, two Secured Convertible Debentures were issued on December
30, 2005 for an aggregate of $1,759,047. A portion of this financing was used to
convert promissory notes and accrued interest equal to $1,159,047 into new
secured convertible debentures and the balance was new financing in the form of
secured convertible debentures equal to $600,000 with interest payable at the
rate of 7.5% per annum to be issued and sold on the closing of this Securities
Purchase Agreement and a second secured convertible debenture equal to $600,000
with interest payable at the rate of 7.5% per annum to be issued and sold two
business days prior to the filing of the registration statement that will
register the common stock shares issuable upon conversion of the secured
convertible debentures.  The debentures were due on December 30, 2007
and May 2, 2008, respectively, and carry an interest rate of 7.5% per annum. The
principal and accrued interest on the debentures are convertible into shares of
Class A Common Stock at a price per share equal to 90% of the lowest closing bid
price of our Class A Common Stock for the thirty trading days immediately
preceding conversion. The aggregate balance due of the YA Global debentures at
December 31, 2008 is $1,559,100 for principal and $429,780 for interest. As of
December 31, 2008, the Company is in default of all the YA Global debentures and
is currently in negotiations with YA Global to cure the default.
 
 In March
2003, Trey issued an aggregate of $40,000 in convertible debentures to Elma S.
Foin, Darryl A. Moy, Henry Tyler and Steven R. LeMott. These debentures are
convertible into shares of Class A Common Stock at a price equal to either (a)
an amount equal to one hundred twenty percent (120%) of the closing bid price of
the Class A Common Stock as of the closing date of the distribution or (b) an
amount equal to eighty percent (80%) of the average closing bid price of the
Class A Common Stock for the four trading days immediately preceding the
conversion date. These convertible debentures accrue interest at a rate of 5%
per year and are convertible at the holder's option. These convertible
debentures have a term of two years with all accrued interest due and payable at
the end of the term. On December 31, 2007, the balance on these debentures is
$15,000.
  20
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  In the
year ended December 31, 2008, SWK Technologies, Inc. drew down $290,000 and
repaid $325,000 on its line of credit with Bank of America f/k/a Fleet National
Bank. The secured line of credit bears interest at prime plus 1% per annum,
which can change with the changes in the prime rate. Monthly payments of
interest only in arrears shall be due and payable on the 4th of each month and
these have been paid. Principal shall be due and payable on demand from Bank of
America. This line of credit is also fully guaranteed by the Company. As of
December 31, 2008, the outstanding balance payable to Bank of America was $-0-,
and there remains $250,000 of borrowing availability.
 
 During
the year ended December 31, 2008, Trey had a net increase in cash of
$273,599.  Trey’s principal sources and uses of funds were as
follows:
  Cash provided by (used in) operating
activities.  For the year ended December 31, 2008, the Company
provided  $562,963 in cash from operating activities as compared to
cash used for operating activities of $542,857 for the year ended December 31,
2007. This increase in primarily attributed to the increase in accounts payable
and accrued expenses. Management has been keeping tight control on the cash and
expenses and has been leveraging their funding needs through related party
accounts.
  Cash provided by investing
activities. Investing activities for the year ended December 31, 2008
provided cash of $46,668 from cash redemptions of the notes receivable offset
partially by purchases of property and equipment. For the year ended December
31, 2007, cash provided by investing activities totaled $132,813. During 2007,
the Company used $115,904 for the purchase and upgrade of computers and network
equipment, and business acquisition costs, offset by $248,717 net proceeds
realized from the sale of securities.
  Cash provided by financing
activities. Financing activities in the year ended December 31, 2008 used
a total of $336,032 in cash as compared to providing $183,050 of cash for the
year ended December 31, 2007. This decline in cash used in financing activities
is the result of lower proceeds from notes payable, convertible debentures and
capital leases of $781,650. This was offset by repayments of related party loans
of $77,617, and repayments on the SWKT line of credit and repayment of capital
leases of $520,983.
  Critical
Accounting Policies
 
 The
discussion and analysis of our financial condition and results of operations are
based on our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP).
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. On an
on-going basis, we evaluate these estimates, including those related to bad
debts, inventory obsolescence, intangible assets, payroll tax obligations, and
litigation. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of certain assets and liabilities. Actual results may differ from these
estimates under different assumptions or conditions.
  We have
identified below the accounting policies, revenue recognition and software
costs, related to what we believe are most critical to our business operations
and are discussed throughout Management’s Discussion and Analysis of Financial
Condition or Plan of Operation where such policies affect our reported and
expected financial results.
 Revenue
Recognition
  Revenue
is recognized when persuasive evidence of an agreement exists, delivery has
occurred, the amount is fixed or determinable, and cash is
received.
 
 The
Company recognizes revenues from consulting and support services as the services
are performed.
 
 The
Company recognizes revenues from consulting and support services as the services
are performed.
  21
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  The
assessment of collectability is critical in determining whether revenue should
be recognized. As part of the revenue recognition process, we determine whether
trade receivables are reasonably assured of collection based on various factors.
Revenue and related costs are deferred if we are uncertain as to whether the
receivable can be collected. Revenue is deferred but costs are recognized when
we determine that the collection of the receivable is
unlikely.  Hardware and software revenues are recognized when the
product is shipped to the customer. The Company separates the software component
and the professional services component into two distinct parts for purposes of
determining revenue recognition. In that situation where both components are
present, software sales revenue is recognized when the cash is received and the
product is delivered, and professional service revenue is recognized as the
service time is incurred.  Commissions are recognized when payments
arereceived,
since the Company has no obligation to perform any future services.
 
 With
respect to the sale of software license fees, the Company recognizes revenue in
accordance with Statement of Position 97-2, software Revenue Recognition (SOP
97-2), as amended, and generally recognizes revenue when all of the following
criteria are met: (1) persuasive evidence of an arrangement exists generally
evidenced by a signed, written purchase order from the customer, (2) delivery of
the software product on Compact Disk (CD) or other means to the customer has
occurred, (3) the perpetual license fee is fixed or determinable and (4)
collectability, which is assessed on a customer-by-customer basis, is
probable.
 
 With
respect to customer support services, upon the completion of one year from the
date of sale, considered to be the warranty period, the Company offers customers
an optional annual software maintenance and support agreement for subsequent
one-year periods. Sales of purchased maintenance and support agreements are
recorded as deferred revenue and recognized over the respective terms of the
agreements.
  Derivative
Liabilities
  The
Company accounts for its embedded conversion features in its convertible
debentures in accordance with SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which requires a periodic valuation of
their fair value and a corresponding recognition of liabilities associated with
such derivatives, and EITF 00-19, “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. The
recognition of derivative liabilities related to the issuance of convertible
debt is applied first to the proceeds of such issuance as a debt discount, at
the date of issuance, and the excess of derivative liabilities over the proceeds
is recognized as “Loss on Valuation of Derivative” in other expense in the
accompanying financial statements. Any subsequent increase or decrease in the
fair value of the derivative liabilities is recognized as other expense or other
income, respectively. The financial statements for the period include the
recognition of the derivative liability on the underlying securities issuable
upon conversion of the Convertible Debentures with YA Global Investments
(f/k/a/Cornell Capital Partners).
 
 Accounts
receivable
 
 The
Company performs ongoing credit evaluations of its customers and adjusts credit
limits based on customer payment and current credit worthiness, as determined by
review of their current credit information.  The Company continuously
monitors credits and payments from its customers and maintains provision for
estimated credit losses based on its historical experience and any specific
customer issues that have been identified.  While such credit losses
have historically been within our expectation and the provision established, the
Company cannot guarantee that it will continue to receive positive
results.
 
 Impact
of Recent Accounting Pronouncements
  In
September 2006, The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurement" ("SFAS No. 157"), which clarifies the definition of fair value
whenever another standard requires or permits assets or liabilities to be
measured at fair value. Specifically, the standard clarifies that fair value
should be based on the assumptions market participants would use when pricing
the asset or liability, and establishes a fair value hierarchy that prioritizes
the information used to develop those assumptions. SFAS No. 157 does not expand
the use of fair value to any new circumstances, and must be applied on a
prospective basis except in certain cases. The standard also requires expanded
financial statement disclosures about fair value measurements, including
disclosures of the methods used and the effect on earnings.
  22
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  In
February 2008, FASB Staff Position ("FSP") FAS No. 157-2, "Effective Date of
FASB Statement No. 157" ("FSP No. 157-2") was issued. FSP No. 157-2 defers the
effective date of SFAS No. 157 to fiscal years beginning after December 15,
2008, and interim periods within those fiscal years, for all nonfinancial assets
and liabilities, except those that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually). Examples of
items within the scope of FSP No. 157-2 are nonfinancial assets and nonfinancial
liabilities initially measured at fair value in a business combination (but not
measured at fair value in subsequent periods), and long-lived assets, such as
property, plant and equipment and intangible assets measured at fair value for
an impairment assessment under SFAS No. 144.
 
 The
partial adoption of SFAS No. 157 on January 1, 2008 with respect to financial
assets and financial liabilities recognized or disclosed at fair value in the
financial statements on a recurring basis did not have a material impact on the
Company's financial statements. See Note 15 for the fair value measurement
disclosures for these assets and liabilities. The Company is in the process of
analyzing the potential impact of SFAS No. 157 relating to its planned January
1, 2009 adoption of the remainder of the standard.
 
 In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interests
in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS
160”).  SFAS 160 requires that ownership interests in subsidiaries
held by parties other than the parent, and the amount of consolidated net
income, be clearly identified, labeled, and presented in the consolidated
financial statements within equity, but separate from the parent’s equity. It
also requires once a subsidiary is deconsolidated, any retained non-controlling
equity investment in the former subsidiary be initially measured at fair value.
Sufficient disclosures are required to clearly identify and distinguish between
the interests of the parent and the interests of the non-controlling owners.
SFAS 160 will be effective beginning January 1, 2009. Management
anticipates that the adoption of SFAS 160 will not have a material impact on the
Company’s financial statements.
  In
December 2007, the FASB issued SFAC No 141(R), “Business
Combinations.”  This statement provides new accounting guidance and
disclosure requirements for business combinations.  SFAS No 141(R) is
effective for business combinations which occur in the first fiscal year
beginning on or after December 15, 2008. The Company is currently assessing the
effect of EITF Issue No. 07-1 on its financial statements, but it is not
expected to be material.
 
 In
December 2007, the FASB finalized the provisions of the Emerging Issues Task
Force (EITF) Issue No. 07-1, “Accounting for Collaborative
Arrangements.”  This EITF Issue provides guidance and requires
financial statement disclosures for collaborative arrangements.  EITF
Issue No. 07-1 is effect for financial statements issued for fiscal years
beginning after December15, 2008.  The Company is currently assessing
the effect of EITF Issue No. 07-1 on its financial statements, but it is not
expected to be material.
 
 In March
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No. 133”
(“SFAS 161”), which modifies and expands the disclosure requirements for
derivative instruments and hedging activities.  SFAS 161 requires that
objectives for using derivative instruments be disclosed in terms of underlying
risk and accounting designation and requires quantitative disclosures about fair
value amounts and gains and losses on derivative instruments.  It also
requires disclosures about credit-related contingent features in derivative
agreements. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged.  SFAS 161 encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.  The
adoption of SFAS 161 is not expected to have a material impact on our
consolidated financial condition or results of operations.
 
 In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets. FSP 142-3 amends the factors an entity should consider in
developing renewal or extension assumptions used in determining the useful life
of recognized intangible assets under SFAS 142, Goodwill and Other Intangible
Assets, and adds certain disclosures for an entity’s accounting policy of the
treatment of the costs, period of extension, and total costs
incurred.  FSP 143-3 must be applied prospectively to intangible
assets acquired after January 1, 2009.  The Company is currently
evaluating the impact that FSP 142-3 will have on its financial position or
results of operations.
  23
 Table of Contents
  During
May of 2008, The FASB issued FASB Staff Position 14-1 “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)” (“FSP 14-1”).  FSP 14-1 requires
the proceeds from the issuance of convertible debt be allocated between a debt
component and an equity component.  The debt component will be
measured based on the fair value of similar debt without an equity conversion
feature, and the equity component will be determined as the residual of the fair
value of the debt deducted from the original proceeds received.  The
resulting discount on the debt component will be amortized over the period the
convertible debt is expected to be outstanding as additional non-cash interest
expense.  FSP 14-1 is effective for fiscal years beginning after
December 15, 2008, and is applied retrospectively to all periods
presented.  The Company is currently evaluating the impact of this FSP
on its financial statements.
 
 In May
2008, the Financial Accounting Standards Board (the “FASB”) issued FAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”). This
statement identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in accordance with GAAP. With the
issuance of this statement, the FASB concluded that the GAAP hierarchy should be
directed toward the entity and not its auditor, and reside in the accounting
literature established by the FASB as opposed to the American Institute of
Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69,
“The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” This statement is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” The adoption of FAS 162 is not expected to have a material impact
on the Company’s results from operations or financial position.
  In June
2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 08-3,
Accounting for Lessees for Maintenance Deposits Under Lease Arrangements ("EITF
08-3"). EITF 08-3 provides guidance for accounting for nonrefundable maintenance
deposits. It also provides revenue recognition accounting guidance for the
lessor. EITF 08-3 is effective for fiscal years beginning after December 15,
2008. The adoption of this EITF will not have a material effect on our financial
statements.
  Off
Balance Sheet Arrangements
 
 During
fiscal 2008, we did not engage in any material off-balance sheet activities or
have any relationships or arrangements with unconsolidated entities established
for the purpose of facilitating off-balance sheet arrangements or other
contractually narrow or limited purposes. Further, we have not guaranteed any
obligations of unconsolidated entities nor do we have any commitment or intent
to provide additional funding to any such entities.
  Item 8. FinancialStatements
  The financial statements and notes of
this Form 10-K appear after the signature page to this Form 10-K.
  24
 Table of Contents
  Item 9A (T). Controls and Procedures
 
 Evaluation
of disclosure controls and procedures
 
 Management
of the Company has evaluated, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or
15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this Annual Report on Form 10-K. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer of the
Company had concluded that the Company's disclosure controls and procedures as
of the period covered by this Annual Report on Form 10-K were not effective for
the following reasons:
 
 a)           The
deficiency was identified as the Company's limited segregation of duties amongst
the Company's employees with respect to the Company's control activities. This
deficiency is the result of the Company's limited number of employees. This
deficiency may affect management's ability to determine if errors or
inappropriate actions have taken place. Management is required to apply its
judgment in evaluating the cost-benefit relationship of possible changes in our
disclosure controls and procedures.
 
 b)           The
deficiency was identified in respect to the Company's Board of Directors. This
deficiency is the result of the Company's limited number of external board
members. This deficiency may give the impression to the investors that the board
is not independent from management. Management and the Board of Directors are
required to apply their judgment in evaluating the cost-benefit relationship of
possible changes in the organization of the Board of Directors.
  Management’s
Report on Internal Control Over Financial Reporting
 
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). Management conducted an evaluation of the effectiveness of
the Company's internal control over financial reporting as of December 31, 2008.
In making this assessment, management used the framework set forth in the report
entitled "Internal Control-Integrated Framework" issued by the Committee of
Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework
summarizes each of the components of a Company's internal control system,
including (i) the control environment, (ii) risk assessment, (iii) control
activities, (iv) information and communication, and (v) monitoring. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer of the
Company have concluded, as of the end of the fiscal year covered by this Annual
Report on Form 10-K, due to a lack of segregation of duties that our internal
control over financial reporting has not been effective. However, at this time,
our resources and size prevent us from being able to employ sufficient resources
to enable us to have adequate segregation of duties within our internal control
system. The Company intends to remedy the material weakness by hiring additional
employees and reallocating duties, including responsibilities for financial
reporting, among the Company's employees as soon as the Company has the
financial resources to do so. Management is required to apply judgment in
evaluating the cost-benefit relationship of possible changes in our disclosure
controls and procedures.
 
 This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this annual
report. Our registered public accounting firm will be required to attest to our
management's assessment of internal control over financial reporting beginning
with our annual report for the year ended December 31, 2009.
  Changes
in internal controls
 
 Management
of the Company has evaluated, with the participation of the Chief Executive
Officer of the Company, any change in the Company's internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the fiscal year covered by this Annual Report
on Form 10-K. There was no change in the Company's internal control over
financial reporting identified in that evaluation that occurred during the
fiscal year covered by this Annual Report on Form 10-K that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting, other than what has been reported
above.
 
 25
 Table of Contents
  PART
III
  
 Item 10. Directors,
Executive Officers, Promoters and Control Persons; Compliance With Section 16(a)
of the Exchange Act
  The Company has two directors and one
principal officer. Listed below is certain information concerning individuals
who currently serve as directors and executive officers of the
Company.
  Period
      Served asName
                                      Age
                                      Position
                                      Officer\DirectorJerome
      R. Mahoney
                                      49
                                      Non-Executive
                                      1-1-03
      to presentChairman
      of the Board of DirectorsMark
      Meller
                                      49
                                      President,
                                      9-15-03
      to presentChief
      Executive Officer,

                                        Chief
      Financial Officer and DirectorJohn
      C. Rudy
                                      62
                                      Director
                                      6-9-05
      to
5-7-08
 Jerome R.
Mahoney.  Mr. Mahoney has been our Non-Executive Chairman of
the Board of Directors since January 1, 2003.  Mr. Mahoney started at
Executone Information Systems, a telephone systems manufacturer, and was
Director of National Accounts from 1988 to 1989.  In 1989, Mr. Mahoney
founded Voice Express, Inc., a New York company that sold voicemail systems and
telephone system service contracts and installed these systems.  Mr.
Mahoney sold Voice Express Systems in 1993.  From 1993 to 1997,
Mr. Mahoney was President of IVS Corp., and on December 17, 1997, he
established International Voice Technologies, which was merged with iVoice, Inc.
on May 21, 1999.  Since May 21, 1999, Mr. Mahoney has served as
President, Chief Executive Officer, Chief Financial Officer and Secretary of
iVoice Technology, Inc., which was the parent of Trey Resources before the
spin-off in February 2004.  Mr. Mahoney has served as Non-Executive
Chairman of the Board of Directors of SpeechSwitch, Inc., Matawan, New Jersey,
from November 10, 2004 until February 2008.  He has served as
Non-Executive Chairman of the Board of Thomas Pharmaceuticals, Ltd. (f/k/a
iVoice Acquisition Corp), Matawan, New Jersey since May 19, 2005.  He
has also served as Non-Executive Chairman of the Board of MM2 Group, Inc.,
Matawan, New Jersey since October 19, 2005.  He was also the
Non-Executive Chairman of the Board of Deep Field Technologies, Inc., Matawan,
New Jersey, until January 27, 2007.  Mr. Mahoney received a B.A. in
finance and marketing from Fairleigh Dickinson University, Rutherford, N.J. in
1983.
  Mark Meller.Mr. Meller has
been the President, Chief Financial Office and Director since September 15,
2003, and was further appointed Chief Executive Officer on September 1,
2004.  From October 2004 until February 2007, Mr. Meller was the
President, Chief Executive Officer, Chief Financial Officer and Director of Deep
Field Technologies, Inc. Since December 15, 2004, Mr. Meller has been the
President, Chief Executive Officer, Chief Financial Officer and Director of MM2
Group, Inc. From August 29, 2005 until August 2006, Mr. Meller was the
President, Chief Executive Officer and Chief Financial Officer of iVoice
Technology, Inc. Since 1988, Mr. Meller has been Chief Executive Officer of
Bristol Townsend & Co., Inc., a New Jersey based consulting firm providing
merger and acquisition advisory services to middle market companies. From 1986
to 1988, Mr. Meller was Vice President of Corporate Finance and General Counsel
of Crown Capital Group, Inc, a New Jersey based consulting firm providing
advisory services for middle market leveraged buy-outs (LBO’s). Prior to 1986,
Mr. Meller was a financial consultant and practiced law in New York City. He is
a member of the New York State Bar.
  John C. Rudy. Mr. Rudy has
been our outside Board Member since June 9, 2005 and is the Chairman of The
Audit Committee. Mr. Rudy's financial and business operations career spans more
than 35 years and covers a broad spectrum of industries. Since 1992, Mr. Rudy
has been President of Beacon Consulting Associates, a firm of business
consultants and accountants, with the objective of providing “big business”
financial, marketing and business strategy skills to middle market businesses.
From 1990 through 1992, he headed Coopers & Lybrand's Turnaround Services
practice for the New York Metropolitan area. Prior to that, he was a Principal
in a leveraged buyout firm and served as Chief Financial Officer of Plymouth
Lamston Stores Corporation, a chain of women’s ready-to-wear stores and a chain
of hard goods variety stores. Mr. Rudy holds an MBA degree from Emory University
in Atlanta, Georgia, and is a Certified Public Accountant in New York
State.  On May 07, 2008, John C. Rudy resigned his position as
Director with the Company.
  26
 Table of Contents
  The
Company does not have a standing nominating committee or a committee performing
similar functions as the Company’s Board of Directors consists of only two
members and therefore there would be no benefit in having a separate nominating
committee that would consist of the same number of members as the full board of
directors. Both members of the Board of Directors participate in the
consideration of director nominees.
 
 There are no agreements or
understandings for the officer or directors to resign at the request of another
person and the above-named officers are not acting on behalf of nor will act at
the direction of any other person. As of the fiscal year ended December 31,
2008, the Company has an audit committee in place and has one non-executive
member of the Board of Directors.
 
 For the year ended December 31, 2008,
the Board held one meeting.
  AUDIT
COMMITTEE
 
 During
2008, Jerome Mahoney served on the Audit Committee for the full year and John
Rudy served on the Audit Committee until his resignation on May 7, 2008. The
Audit Committee currently consists of Mr. Mahoney. and Knef, with Mr. Mahoney
serving as the Chairman of the Committee. The Audit Committee has no independent
members and no member that may deemed a financial expert as defined in
ss.228.401(e) of the regulations promulgated by the SEC pursuant to the
Securities Exchange Act of 1934, as amended. Due to the Company's limited
operating history, it cannot attract a financial expert to sit on its Board of
Directors. Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's financial statements in
accordance with generally accepted accounting principles and to issue a report
thereon and as to management's assessment of the effectiveness of internal
controls over financial reporting. The Audit Committee's responsibility is to
monitor and oversee these processes, although the member of the Audit Committee
is not engaged in the practice of auditing or accounting. The Audit committee
did not meet in 2008. The Board of Directors approved an Audit Committee
Charter. As of this date, the Audit Committee operates pursuant to this Audit
Committee Charter.
 
 The
Audit Committee has one independent member and one member that may be deemed a
financial expert as defined in §228.401(e) of the regulations promulgated by the
SEC pursuant to the Securities Exchange Act of 1934, as
amended.  Management is responsible for the Company’s internal
controls and the financial reporting process. The independent auditors are
responsible for performing an independent audit of the Company’s consolidated
financial statements in accordance with accounting principles generally accepted
in the United States and to issue a report thereon and as to management’s
assessment of the effectiveness of internal controls over financial reporting.
The Audit Committee’s responsibility is to monitor and oversee these processes,
although the members of the Audit Committee are not engaged in the practice of
auditing.  The Audit Committee met once in 2007. The Board of
Directors approved an Audit Committee Charter on March 23, 2006. As of this
date, the Audit Committee operates pursuant to this Audit Committee
Charter.
  AUDIT
COMMITTEE REPORT
 
 The
following is the Audit Committee’s report submitted to the Board of Directors
for the fiscal year ended December 31, 2008.  The Audit Committee
has:
 
 · reviewed
and discussed the Company’s audited financial statements with management and
Bagell, Josephs, Levine & Company, L.L.C., the Company’s independent
registered accounting firm;
 · discussed
with Bagell, Josephs, Levine & Company, L.L.C. the matters required to be
discussed by Statement on Auditing Standards No. 114, as may be modified or
supplemented; and
 · received
from Bagell, Josephs, Levine & Company, L.L.C. the written disclosures and
the letter regarding their independence as required by Independence Standards
Board Standard No. 1, as may be modified or supplemented, and discussed the
auditors’ independence with them.
  27
 Table of Contents
  Based on
the review and discussions referred to above, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2008, for filing with the Securities and Exchange Commission.
 
 AUDIT
      COMMITTEEJerome
      Mahoney, Non-executive
      Chairman of the Board
  The
Audit Committee report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Annual Report on Form 10-K
into any filing under the Securities Act of 1933, as amended or the Securities
Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under
these acts.
 
 Section
16(a) Beneficial Ownership Reporting Compliance
 
 No person
who was a director, officer, beneficial owner of more than ten percent of any
class of equity securities of the registrant registered pursuant to section 12
(“Reporting Person”) failed to file on a timely basis the necessary reports, on
Forms 3, 4, or 5, as required by section 16(a) of the Exchange Act during the
most recent fiscal year or prior fiscal years.
 
 Code
of Ethics
 
 The
Company has adopted a Code of Ethics for adherence by its Chief Executive
Officer, Chief Financial Officer, Chief Accounting Officer and Controller to
ensure honest and ethical conduct; full, fair and proper disclosure of financial
information in the Company's periodic reports filed pursuant to the Securities
Exchange Act of 1934; and compliance with applicable laws, rules, and
regulations. Any person may obtain a copy of our Code of Ethics by mailing a
request to the Company at the address appearing on the front page of this Annual
Report on Form 10-K.
  Item 11. ExecutiveCompensation
  The
following table sets forth compensation information for services rendered by
certain of our executive officers in all capacities during the last two
completed fiscal years.  The following information includes the dollar
value of base salaries and certain other compensation, if any, whether paid or
deferred.The
executive officers of the company did not receive any stock award, option award,
non-equity incentive plan compensation, or nonqualified deferred compensation
earnings during the last two completed fiscal years.
  Name and
      Position(s)
                                                      Year
                                                      
                                                      Salary($)
                                                      
                                                      
                                                      Bonus(2)
                                                      
                                                      
                                                      Stock
      Awards
                                                      
                                                      
                                                      All Other Compensation
                                                      
                                                      
                                                      Total CompensationJerome
      R. Mahoney (1)Non-Executive
                                                      2008
                                                      
                                                      $
                                                      289,892
                                                      (2)
                                                      
                                                      $
                                                      2,500
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      292,392Chairman
      of the Board
                                                      2007
                                                      
                                                      $
                                                      263,538
                                                      (2)
                                                      
                                                      $
                                                      1,500
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      265,038Of
      DirectorsMark
      Meller (4)
                                                      2008
                                                      
                                                      $
                                                      271,225
                                                      (5)
                                                      
                                                      $
                                                      2,500
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      273,725President,
      Chief
                                                      2007
                                                      
                                                      $
                                                      246,568
                                                      (5)
                                                      
                                                      $
                                                      1,500
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      0
                                                      
                                                      
                                                      $
                                                      248,068Executive
      Officer,Chief
      Financial Officerand
      Director
  Summary
Compensation Table
  (1)
              Mr.
      Mahoney has been serving as our Non-Executive Chairman of the Board since
      January 1, 2003. Mr. Mahoney’s employment contract is for a term of
      five-years at a base salary of $180,000 in the first year with annual
      increases based on the Consumer Price Index every year
      thereafter.
  (2)
              $160,176
      was accrued and unpaid in fiscal year
2008.
  (3)
              $111,664
      was accrued and unpaid in fiscal year
2007.
  (4)
              Mr.
      Meller served as our President, Chief Executive Officer and Chief
      Financial Officer since September 13, 2003. Mr. Meller employment contract
      is for a term of five-years at a base salary of $180,000 in the first year
      with annual increases based on the Consumer Price Index every year
      thereafter.
  (5)
              $140,508
      was accrued and unpaid in fiscal year
2008.
  (6)
              $94,694
      was accrued and unpaid in fiscal year
2007.
  28
 Table of Contents
 
 Compensation
of Directors
 
 Effective
May 20, 2005, Mr. Rudy was paid $3,000 per quarter in cash and/or Trey stock for
his services until his resignation on May 7, 2008. Prior to this date, we did
not have any arrangements to provide compensation to our non-employee
directors.
 
 The
following table sets forth compensation information for services rendered by our
non-employee directors during the year ended December 31, 2008.  The
following information includes the dollar value of fees earned or paid in cash
and certain other compensation, if any, whether paid or deferred.  Our
directors did not receive any bonus, stock awards, option awards, non-equity
incentive plan compensation, or nonqualified deferred compensation earnings
during the last completed fiscal year.
 
 Director
Compensation
 
 Name
                    
                    Fees Earned or Paid in
      Cash
                      ($)
                    
                    
                    All Other Compensation
                      ($)
                    
                    
                    Total Compensation
                      ($)John
      C. Rudy(2)
                    
                    $
                    4,000
                    
                    
                    $
                    0
                    
                    
                    $
                    4,000
 
 (1)
              Mr.
      Mahoney had served as our Non-Executive Chairman of the Board since
      January 1, 2003. His compensation during that period is included in the
      Executive Compensation Summary
Table.
  (2)
              Mr.
      Rudy served as our outside director since June 9, 2005 at a fee of $12,000
      per year until his resignation on May 7,
2008.
  Employment
Contracts
  The
Company has entered into employment contracts with its Non-Executive Chairman of
the Board of Directors. As consideration, the Company agreed to pay Mr. Mahoney
the sum of $180,000 the first year with a 10% increase every year thereafter.
The employment agreement with Mr. Mahoney provides for a severance payment to
him of three hundred percent (300%), less $100, of his gross income for services
rendered to Trey in each of the five prior calendar years (or shorter period
during which Mr. Mahoney shall have been employed by Trey) should his employment
be terminated following a change in control, as defined in the employment
agreement. Mr. Mahoney shall also be paid the sum of $350,000 upon the
completion of the Spin-Off.
 
 On
September 15, 2003, the Company entered into an employment agreement with Mr.
Meller. He will serve as the Company's President and Chief Financial Officer for
a term of five years. As consideration, the Company agreed to pay Mr. Meller the
sum of $180,000 the first year with a 10% increase every year thereafter. The
employment agreement with Mr. Meller provides for a severance payment to him of
three hundred percent (300%), less $100, of his gross income for services
rendered to Trey in each of the five prior calendar years (or shorter period
during which Mr. Meller shall have been employed by Trey) should his employment
be terminated following a change in control, as defined in the employment
agreement. Mr. Meller shall also be paid the sum of $350,000 upon the completion
of the Spin-Off, and compensation retroactive to August 1, 2003, at the annual
rate dictated by the terms of the employment agreement, as a result of Trey
Resources acquiring SWK, Inc. on June 2, 2004.  This retroactive
compensation is equal to $147,534. In addition, Mr. Meller was awarded a cash
bonus of $114,800.
  Mr.
Mahoney and Mr. Meller have agreed to defer the receipt of the $350,000 payments
owed to each of them for the successful completion of the spin-off, plus any
accrued but as yet unpaid salary, bonus, or benefits, until management believes
it has sufficient liquidity and capital resources to fund these obligations.
They have each agreed, however, to accept payment or partial payment, from time
to time, in the form of the Company’s Class A Common Stock and/or the Company’s
Class B Company Stock, at such time as the Board of Directors determines to
issue such shares in satisfaction of these accrued liabilities.
 
 29
 Table of Contents
  Item 12. SecurityOwnership of Certain Beneficial Owners and Management
  The
following tables set forth certain information regarding the beneficial
ownership of our voting securities as of April 1, 2009 of (i) each person
known to us to beneficially own more than 5% of the applicable class of voting
securities, (ii) our directors, (iii) and each named executive officer
and (iv) all directors and executive officers as a group.  As of
April 1, 2009 there were a total of 4,200,473,533 shares of Class A common stock
outstanding. Each share of Class A common stock and Class B common stock is
entitled to one vote on matters on which holders of common stock are eligible to
vote.  The column entitled “Percentage of Total Voting Stock” shows
the percentage of total voting stock beneficially owned by each listed
party.
 
 The number of shares beneficially owned
is determined under rules promulgated by the Securities and Exchange Commission,
and the information is not necessarily indicative of beneficial ownership for
any other purpose.  Under those rules, beneficial ownership includes
any shares as to which the individual has sole or shared voting power or
investment power and also any shares which the individual has the right to
acquire within 60 days of April 1, 2009, through the exercise or conversion of
any stock option, convertible security, warrant or other
right.  Unless otherwise indicated, each person or entity named in the
table has sole voting power and investment power (or shares that power with that
person’s spouse) with respect to all shares of capital stock listed as owned by
that person or entity.
 
 Ownership
of Common Stock
  Common
      Stock
                    Beneficially
      OwnedName/Address
                Title
      of Class
                
                Number
                
                
                PercentJerome
      R. Mahoney (Chairman)
                Class
      A Common Stock
                
                
                18,840,945,745
                (1)
                
                
                82.0
                %c/o
      Trey Resources, Inc.5
      Regent Street, Suite 520Livingston,
      New Jersey  07039Mark
      Meller (President)
                Class
      A Common Stock
                
                
                12,426,631,181
                (2)
                
                
                86.9
                %c/o
      Trey Resources, Inc.5
      Regent Street, Suite 520Livingston,
      New Jersey  07039Directors
      and executive officer as a group
                Class
      A Common Stock
                
                
                31,267,576,926
                
                
                
                83.8
                %
  ____________________________________
  (1)
              Includes
      a) 16,097,993,389 shares of our Class A common stock issuable upon
      conversion of $965,879 due to related party accounts with Mr. Mahoney and
      (b) 2,737,189.167 shares of our Class A common stock issuable upon
      conversion of a promissory note assumed on February 11, 2004. These
      figures assume that Class B Common Stock is issued to satisfy these
      obligations, and such Class B Common Stock shares are subsequently
      converted to shares of Class A Common Stock.  Note balance of
      $164,231 includes principle and interest through 12/31/08. Pursuant to
      such promissory note, Mr. Mahoney may, at any time, convert amounts owed
      to him for monies loaned thereunder and interest thereon into (i) one
      share of our Class B common stock for each dollar owed, (ii) the number of
      shares of our Class A common stock calculated by dividing (x) the sum of
      the amount being prepaid by (y) 50% of the lowest issue price of shares of
      our Class A common stock since the first advance of funds under such note,
      or (iii) payment of the principal of the note, before any repayment of
      interest. Also includes 5,763,189 shares
held
 (2)
              Includes
      10,094,816,667 shares of our Class A common stock issuable upon conversion
      of $605,689 due to related party accounts with Mr. Meller. These figures
      assume that Class B Common Stock is issued to satisfy these obligations,
      and such Class B Common Stock shares are subsequently converted to shares
      of Class A Common Stock. Pursuant to an  agreement between the
      Company and Mr. Meller, Mr. Meller may, at any time, convert amounts owed
      to him for monies thereon into (i) one share of our Class B common stock
      for each dollar owed, (ii) the number of shares of our Class A common
      stock calculated by dividing (x) the sum of the amount being prepaid by
      (y) 50% of the lowest issue price of shares of our Class A common stock
      since the first advance of funds under such amounts
  due.
 
 30
 Table of Contents
  Securities
Authorized For Issuance Under Equity Compensation Plans
  During
the fiscal year ended December 31, 2004, the Company adopted the Trey Resources,
Inc. 2004 Stock Incentive Plan and thereafter re-adopted as the Amended and
Restated Trey Resources, Inc. 2004 Stock Incentive Plan (the “Stock Incentive
Plan”) to:  (i) provide long-term incentives and rewards to employees,
independent contractors or agents the Company and its subsidiaries; (ii) assist
the Company in attracting and retaining employees, directors, independent
contractors or agents with experience and/or ability on a basis competitive with
industry practices; and (iii) associate the interests of such employees,
independent contractors or agents with those of the Company's
stockholders.  Total shares issuable under Stock Incentive Plan may
not exceed twenty (20) percent of the issued and outstanding shares of the
Company’s Class A Common Stock. As of December 31, 2008, the Stock Incentive
Plan was authorized to issue up to 200 million shares of Class A Common Stock
and an aggregate of 120 million shares have been issued pursuant to the Stock
Incentive with 80 million shares authorized, but unissued.  As of
December 31, 2008, there were 75,000 options and warrants to purchase 7,000,000
shares of Class A common stock outstanding.  No shares were awarded in
the fiscal year ended December 31, 2008 pursuant to the Stock Incentive Plan and
90 million Class A Common Stock shares were awarded in fiscal 2007.
  During
the fiscal year ended December 31, 2004, the Company adopted the Trey Resources,
Inc. 2004 Directors’ and Officers’ Stock Incentive Plan and thereafter
re-adopted the Amended and Restated Trey Resources, Inc. 2004 Directors’ and
Officers’ Stock Incentive Plan (the “Directors’ and Officers’ Stock Incentive
Plan”) to:  (i) provide long-term incentives and rewards to officers
and directors of the Company and its subsidiaries; (ii) assist the Company in
attracting and retaining officers and directors; and (iii) associate the
interests of such officers and directors with those of the Company's
stockholders.  Total shares issuable under Directors’ and Officers’
Stock Incentive Plan may not exceed twenty (20) percent of the issued and
outstanding shares of the Company’s Class A Common Stock. As of December 31,
2008, the Directors’ and Officers’ Stock Incentive Plan was authorized to issue
up to 200 million shares of Class A Common Stock and an aggregate of 120 million
shares have been issued pursuant to the Directors’ and Officers’ Stock Incentive
with 80 million shares authorized, but unissued.  No shares were
awarded in the fiscal year ended December 31, 2008 pursuant to the Directors’
and Officers’ Stock Incentive Plan and 90 million Class A Common Stock shares
were awarded in fiscal 2007.
  During
the fiscal year ended December 31, 2007, the Company adopted the Trey Resources,
Inc. 2007 Consultant Stock Incentive Plan (the “Consultant Plan”) to: (i)
provide long-term incentives, payment in stock in lieu of cash and rewards to
consultants, advisors, attorneys, independent contractors or agents ("Eligible
Participants") of Trey Resources, Inc. ("the Company") and its subsidiaries;
(ii) assist the Company in attracting and retaining independent contractors or
agents with experience and/or ability on a basis competitive with industry
practices; and (iii) associate the interests of such independent contractors or
agents with those of the Company's stockholders.  Total shares
issuable under this plan may not exceed twenty (20) percent of the issued and
outstanding shares of the Company’s Class A Common Stock. As of December 31,
2008, the Consultant Plan was authorized to issue up to 200 million shares of
Class A Common Stock and an aggregate of 120 million shares have been issued
pursuant to the Directors’ and Officers’ Stock Incentive with 80 million shares
authorized, but unissued.  No shares were awarded in the fiscal year
ended December 31, 2008 pursuant to the Directors’ and Officers’ Stock Incentive
Plan and 120 million Class A Common Stock shares were awarded in fiscal
2007.
  31
 Table of Contents
  The
following table sets forth information as of December 31, 2008 with respect to
compensation plans (including individual compensation arrangements) under which
our common shares are authorized for issuance, aggregated as
follows:
  Equity
Compensation Plan
  All
compensation plans previously approved by security holders; and
 All
compensation plans not previously approved by security holders
  Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
                        
                        
                        Weighted
      average exercise price of outstanding options, warrants and
      rights
                        
                        
                        Number
      of securities remaining available for future issuancePlan
      category
                        
                        (a)
                        
                        
                        (b)
                        
                        
                        (c)Equity
      compensation plans approved by security holders
                        
                        
                        0
                        
                        
                        $
                        0.00
                        
                        
                        
                        0Equity
      compensation plans not approved by security holders
                        
                        
                        3,075,000
                        (1,2)
                        
                        $
                        0.016
                        
                        
                        
                        240,000,000
                        (3)Total
                        
                        
                        3,075,000
                        
                        
                        $
                        0.016
                        
                        
                        
                        240,000,000
 (1)
              Consists
      of options to purchase 75,000 Class A common shares of Trey Resources,
      Inc. issued to unrelated third parties for contractual services and fees
      related to investor relations transactions of the Company. These options
      have an exercise price of $0.07 per share.  These options will
      expire on July 31, 2014.
  (2)
              Consists
      of warrants to purchase 3,000,000 Class A common shares of Trey Resources,
      Inc. issued to unrelated third parties for professional consulting
      services to the Company. These warrants have an exercise price of $0.015
      per share.  These warrants will expire on July 11,
      2012.
  (3)
              Represents
      the balance of 80 million shares authorized and unissued each under the
      Amended and Restated Trey Resources, Inc. 2004 Stock Incentive Plan, the
      Amended and Restated Trey Resources, Inc. 2004 Directors’ and Officers’
      Stock Incentive Plan and the Trey Resources, Inc. 2007 Consultant Stock
      Incentive Plan
  Item 13. CertainRelationships and Related
Transactions
  Related
Party Notes and Accounts Due
  In
connection with the assumption of assets and liabilities by Trey from iVoice,
Trey assumed from iVoice immediately prior to the effectiveness of the
registration statement relating to the Spin-Off $250,000 of outstanding
indebtedness from iVoice to Jerry Mahoney. The debt is subject to a promissory
note having substantially the same terms as the note from iVoice to Mr. Mahoney.
Trey, upon the effectiveness of the registration statement relating to the
Spin-Off, issued a promissory note in the amount of $250,000 payable to Mr.
Mahoney at the rate of 9.5% per annum on the unpaid balance until paid or until
default. Interest payments are due and payable annually. Mr. Mahoney may, at his
sole discretion, convert the $250,000 note (including accrued interest) into
Class B Common Stock of Trey at the rate of one dollar per share. The Class B
Common Stock is convertible at any time into Class A Common Stock at a rate
equal to 50% of the lowest price that Trey issues shares of Class A Common Stock
subsequent to the date of the note.
 
 See Notes 8 and 9 to the Financial
Statements for information related to the employment agreements between Jerome
Mahoney and Mark Meller.
  32
 Table of Contents
  In
connection with the acquisition of SWK, Inc, the Company assumed a note payable
to Gary Berman, a former shareholder of SWK, Inc. and current shareholder of
Trey. On April 1, 2004, Mr. Berman loaned the company $25,000 pursuant to the
Agreement and Plan of Merger and Reorganization among Trey, SWK and SWK
Technologies, Inc. The unsecured note bears interest at 5% per annum and is
payable in bi-weekly amounts of $217. At December 31, 2008, the outstanding
balance to Mr. Berman was $1,510.
  In
connection with the acquisition of SWK, Inc, the Company assumed a note payable
to Lynn Berman, a former shareholder of SWK, Inc. and current shareholder of
Trey. On April 1, 2004, Ms. Berman loaned the company $25,000 pursuant to the
Agreement and Plan of Merger and Reorganization among Trey, SWK and SWK
Technologies, Inc. The unsecured note bears interest at 5% per annum and is
payable in bi-weekly amounts of $217. At December 31, 2008, the outstanding
balance to Ms. Berman was $1,510.
  Administrative
Service Agreements
  Pursuant
to the spin-off, the Company entered into an Administrative Services Agreement
whereby iVoice will provide the Company with services in such areas as
information management and technology, employee benefits administration,
payroll, financial accounting and reporting, and other areas where the Company
may need transitional assistance and support following the spin-off
distribution. The term of the agreement commences upon the effective date of the
spin-off and continues for two years, but may be terminated earlier under
certain circumstances, including a default, and may be renewed for additional
one-year terms. In exchange for services under the administrative services
agreement, Trey Resources has agreed to pay iVoice an annual fee of
$95,000.
 
 On May
16, 2005, iVoice, Inc terminated its administrative services agreement with the
Company and iVoice agreed to accept the assignment of 10 million shares of Laser
Energetics Class A Common Stock as settlement of all Administrative Fees owed by
the Company.  The value of the exchanged securities was determined to
be $64,891.
  Item 14.Principal Accountant Fees and
Services
  The
following table sets forth fees billed to the Company by the Company’s
independent auditors for the years ended December 31, 2008 and December 31, 2007
for (i) services rendered for the audit of the Company’s annual financial
statements and the review of the Company’s quarterly financial statements, (ii)
services rendered that are reasonably related to the performance of the audit or
review of the Company’s financial statements that are not reported as Audit
Fees, and (iii) services rendered in connection with tax preparation,
compliance, advice and assistance.
  Services
                      
                      2008
                      
                      
                      2007Audit
      Fees
                      
                      $
                      27,000
                      
                      
                      $
                      25,000Audit
      - Related Fees
                      
                      
                      -
                      
                      
                      
                      -Tax
      fees
                      
                      $
                      5,000
                      
                      
                      $
                      3,500All
      Other Fees
                      
                      
                      -
                      
                      
                      $
                      13,430Total
                      
                      $
                      32,000
                      
                      
                      $
                      41,930
 Prior to
engaging our accountants to perform a particular service, our Audit Committee
obtains an estimate for the service to be performed. All of the services
described above were approved by the Audit Committee in accordance with its
procedures.
  33
 Table of Contents
 Item 15. Exhibits
  (a)           Exhibits
  No.
                                                                      Description3.1
                                                                      Third
      Amended and Restated Certificate of Incorporation incorporate by reference
      herein by reference to Exhibit 3.1to the Form 10-QSB for the period ended
      June 30, 2004.3.2
                                                                      By-laws
      of iVoice, Inc., a New Jersey corporation, incorporated herein by
      reference to Exhibit 3.2 of the Registrant’s Form 10-QSB for the period
      ended March 31, 2003.4.1
                                                                      Amended
      and Restated Trey Resources, Inc. 2004 Stock Incentive Plan previously
      filed with the Commission.4.2
                                                                      Amended
      and Restated Trey Resources, Inc. Directors’ and Officers’ 2004 Stock
      Incentive Plan previously filed with the Commission.4.3
                                                                      Trey
      Resources, Inc. 2007 Consultant Stock Incentive Plan previously filed with
      the Commission.10.1
                                                                      Employment
      Agreement, dated January 1, 2003, between iVoice Acquisition 1, Inc. and
      Jerome Mahoney. (incorporated herein by reference to Exhibit 10.8 of the
      Registration Statement on Form SB-2 filed on November 25,
      2003).10.2
                                                                      Employment
      Agreement, dated September 15, 2003, between Trey Resources, Inc. and Mark
      Meller. (incorporated herein by reference to Exhibit 10.8 of the
      Registration Statement on Form SB-2 filed on November 25,
      2003).10.3
                                                                      Trey
      Resources, Inc., f/k/a iVoice Acquisition 1, Inc. 5% Convertible Debenture
      due March 20, 2005 issued to Elma S. Foin (incorporated herein by
      reference to Exhibit 4.2of the registration statement on Form SB-2, filed
      with the SEC on December 22, 2003).10.4
                                                                      Trey
      Resources, Inc., f/k/a iVoice Acquisition 1, Inc. 5% Convertible Debenture
      due March 20, 2005 issued to Darryl A. Moy (incorporated herein by
      reference to Exhibit4.2
      of the registration statement on Form SB-2, filed with the SEC on December
      22, 2003).10.5
                                                                      Trey
      Resources, Inc., f/k/a iVoice Acquisition 1, Inc. 5% Convertible Debenture
      due March 20, 2005 issued to Henry Tyler (incorporated herein by reference
      to Exhibit 4.2of
      the registration statement on Form SB-2, filed with the SEC onDecember
      22, 2003).10.6
                                                                      Trey
      Resources, Inc. 7.5% Secured Convertible Debenture, for a value of
      $600,000, due December 30, 2007 to Cornell Capital Partners, LP.
      previously filed with the Commission.10.7
                                                                      Trey
      Resources, Inc. 7.5% Secured Convertible Debenture, for a value of
      $1,159,047, due December 30, 2007 to Cornell Capital Partners, LP.
      previously filed with the Commission.10.8
                                                                      SWK
      Technologies, Inc. secured line of credit with Bank of America f/k/a Fleet
      National Bank previously filed with the Commission previously filed with
      the Commission.10.09
                                                                      Security
      Agreement dated August 1, 2005 by and between SWK Technologies, Inc. and
      Bank of America, N.A. previously filed with the
  Commission.10.10
                                                                      Amended
      and Restated Security Agreement dated December 30, 2005 between Cornell
      Capital Partners, LP and Trey Resources, Inc. previously filed with the
      Commission.10.11
                                                                      Employment
      Agreement, dated March 1, 2005, between SWK Technologies, Inc., and Andrew
      Rudin previously filed with the Commission.10.12
                                                                      Amendment
      No. 1 dated March 25, 2005 to the Employment Agreement dated March 1, 2005
      by and among SWK Technologies, Inc., Trey Resources, Inc. and Andrew Rudin
      previously filed with the Commission.10.13
                                                                      Lease
      dated April 8, 2005 by and between SWK Technologies, Inc., a wholly owned
      subsidiary of Trey Resources, Inc. and Five Regent Park Associates
      previously filed with the Commission.10.14
                                                                      Promissory
      Note dated June 1, 2006 for the sum of $380,000 payable to Crandall Melvin
      III previously filed with the Commission.10.15
                                                                      Lease
      Agreement date June 1, 2006 by and between SWK Technologies, Inc. and
      Crandall Melvin III previously filed with the
  Commission.10.17
                                                                      Employment
      Agreement dated June 1, 2006 by and between SWK Technologies, Inc. and
      Patrick J. Anson previously filed with the Commission.10.18
                                                                      Employment
      Agreement dated June 1, 2006 by and between SWK Technologies, Inc. and
      Crandall Melvin III previously filed with the
  Commission.10.19
                                                                      Employment
      Agreement dated June 1, 2006 by and between SWK Technologies, Inc. and
      Michelle A. Paparo previously filed with the
Commission.14.1
                                                                      Code
      of Ethics incorporated by reference to Exhibit 14.1 filed with the
      Registrant’s Form 10-KSB for the fiscal year ended December 31,
      2003.31.1
      *
                                                                      Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002 filed
      herein.32.1
      *
                                                                      Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002 filed
      herein.
 
 * Filed
herewith
 34
 Table of Contents
  Signatures
  In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
this report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.
  Trey
      Resources, Inc.Date:
      April 6, 2009
                  By:
                  /s/ MARK
      MELLERMark
      MellerPresident,
      Chief Executive Officer,
                    Chief
      Financial Officer and Director
 
 In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
  By:
                      /s/ Mark
      Meller
                      April
      6, 2009Mark
      MellerPresident,
      Chief Executive Officer,Chief
      Financial Officer and DirectorBy:
                      /s/ Jerome R.
      Mahoney
                      April
      6, 2009Jerome
      R. MahoneyNon-executive
      Chairman of the Board
 
 35
 Table of Contents
  INDEX
OF EXHIBITS
  No.
                                                                              Description3.1
                                                                              Third
      Amended and Restated Certificate of Incorporation incorporate by reference
      herein by reference to Exhibit 3.1to the Form 10-QSB for the period ended
      June 30, 2004.3.2
                                                                              By-laws
      of iVoice, Inc., a New Jersey corporation, incorporated herein by
      reference to Exhibit 3.2 of the Registrant’s Form 10-QSB for the period
      ended March 31, 2003.4.1
                                                                              Amended
      and Restated Trey Resources, Inc. 2004 Stock Incentive Plan previously
      filed with the Commission.4.2
                                                                              Amended
      and Restated Trey Resources, Inc. Directors’ and Officers’ 2004 Stock
      Incentive Plan previously filed with the Commission.4.3
                                                                              Trey
      Resources, Inc. 2007 Consultant Stock Incentive Plan previously filed with
      the Commission.10.1
                                                                              Employment
      Agreement, dated January 1, 2003, between iVoice Acquisition 1, Inc. and
      Jerome Mahoney. (incorporated herein by reference to Exhibit 10.8 of the
      Registration Statement on Form SB-2 filed on November 25,
      2003).10.2
                                                                              Employment
      Agreement, dated September 15, 2003, between Trey Resources, Inc. and Mark
      Meller. (incorporated herein by reference to Exhibit 10.8 of the
      Registration Statement on Form SB-2 filed on November 25,
      2003).10.3
                                                                              Trey
      Resources, Inc., f/k/a iVoice Acquisition 1, Inc. 5% Convertible Debenture
      due March 20, 2005 issued to Elma S. Foin (incorporated herein by
      reference to Exhibit 4.2of the registration statement on Form SB-2, filed
      with the SEC on December 22, 2003).10.4
                                                                              Trey
      Resources, Inc., f/k/a iVoice Acquisition 1, Inc. 5% Convertible Debenture
      due March 20, 2005 issued to Darryl A. Moy (incorporated herein by
      reference to Exhibit4.2
      of the registration statement on Form SB-2, filed with the SEC on December
      22, 2003).10.5
                                                                              Trey
      Resources, Inc., f/k/a iVoice Acquisition 1, Inc. 5% Convertible Debenture
      due March 20, 2005 issued to Henry Tyler (incorporated herein by reference
      to Exhibit 4.2of
      the registration statement on Form SB-2, filed with the SEC onDecember
      22, 2003).10.6
                                                                              Trey
      Resources, Inc. 7.5% Secured Convertible Debenture, for a value of
      $600,000, due December 30, 2007 to Cornell Capital Partners, LP.
      previously filed with the Commission.10.7
                                                                              Trey
      Resources, Inc. 7.5% Secured Convertible Debenture, for a value of
      $1,159,047, due December 30, 2007 to Cornell Capital Partners, LP.
      previously filed with the Commission.10.8
                                                                              SWK
      Technologies, Inc. secured line of credit with Bank of America f/k/a Fleet
      National Bank previously filed with the Commission previously filed with
      the Commission.10.09
                                                                              Security
      Agreement dated August 1, 2005 by and between SWK Technologies, Inc. and
      Bank of America, N.A. previously filed with the
  Commission.10.10
                                                                              Amended
      and Restated Security Agreement dated December 30, 2005 between Cornell
      Capital Partners, LP and Trey Resources, Inc. previously filed with the
      Commission.10.11
                                                                              Employment
      Agreement, dated March 1, 2005, between SWK Technologies, Inc., and Andrew
      Rudin previously filed with the Commission.10.12
                                                                              Amendment
      No. 1 dated March 25, 2005 to the Employment Agreement dated March 1, 2005
      by and among SWK Technologies, Inc., Trey Resources, Inc. and Andrew Rudin
      previously filed with the Commission.10.13
                                                                              Lease
      dated April 8, 2005 by and between SWK Technologies, Inc., a wholly owned
      subsidiary of Trey Resources, Inc. and Five Regent Park Associates
      previously filed with the Commission.10.14
                                                                              Promissory
      Note dated June 1, 2006 for the sum of $380,000 payable to Crandall Melvin
      III previously filed with the Commission.10.15
                                                                              Lease
      Agreement date June 1, 2006 by and between SWK Technologies, Inc. and
      Crandall Melvin III previously filed with the
  Commission.10.17
                                                                              Employment
      Agreement dated June 1, 2006 by and between SWK Technologies, Inc. and
      Patrick J. Anson previously filed with the Commission.10.18
                                                                              Employment
      Agreement dated June 1, 2006 by and between SWK Technologies, Inc. and
      Crandall Melvin III previously filed with the
  Commission.10.19
                                                                              Employment
      Agreement dated June 1, 2006 by and between SWK Technologies, Inc. and
      Michelle A. Paparo previously filed with the
Commission.14.1
                                                                              Code
      of Ethics incorporated by reference to Exhibit 14.1 filed with the
      Registrant’s Form 10-KSB for the fiscal year ended December 31,
      2003.31.1
      *
                                                                              Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002 filed
      herein.32.1
      *
                                                                              Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002 filed
      herein.
 
 * Filed
herewith
  36
 Table of Contents










TREY
RESOURCES, INC. AND SUBSIDIARIES


CONSOLIDATED
FINANCIAL STATEMENTS


DECEMBER
31, 2008 AND 2007




















Table of Contents








TREY
RESOURCES, INC. AND SUBSIDIARIES


CONSOLIDATED
FINANCIAL STATEMENTS





CONTENTS








Page
  (s)REPORT OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                F-3CONSOLIDATED FINANCIAL STATEMENTS
                F-4Balance Sheets
                F-4Statements of Operations
                F-6Statement of Stockholders' Deficit
                F-7Statements of Cash Flows
                F-8NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
                F-10
      to F-23






Table of Contents





Bagell, Josephs, Levine &
Company, LLC


406
Lippincott Drive, Suite J, Marlton, NJ 08053


Tel:
856.355.5900  Fax: 856.396.0022











REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM








TO
THE BOARD OF DIRECTORS AND STOCKHOLDERS OF


TREY
RESOURCES, INC.


Livingston,
New Jersey





We have
audited the accompanying consolidated balance sheets of Trey Resources, Inc. and
Subsidiaries as of December 31, 2008 and 2007, and the related consolidated
statements of operations, stockholders' deficit, and cash flows for each of the
years in the two-year period ended December 31, 2008.  These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.





We
conducted our audits in accordance with standards established by the Public
Company Accounting Oversight Board (United States of America).  Those
standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Trey Resources, Inc.
and Subsidiaries as of December 31, 2008 and 2007, and the consolidated results
of its operations and its cash flows for each of the years in the two-year
period ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.





The
accompanying consolidated financial statements as of December 31, 2008 and 2007
have been prepared assuming the Company will continue as a going concern. As
discussed in Note 16 to the consolidated financial statements, the Company has
incurred substantial accumulated deficits and operating losses. These issues
lead to substantial doubt about the Company’s ability to continue as a going
concern. Management’s plans in regards to these matters are also discussed in
Note 16. The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.











Bagell,
Josephs, Levine & Company, LLC


Marlton,
New Jersey


March 27,
2009








F-3
 Table of Contents




TREYRESOURCES, INC. AND SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 
  ASSETS
                          
                          December
    31,2008
                          
                          
                          2007CURRENT
      ASSETSCash
      and cash equivalents
                          
                          $
                          420,042
                          
                          
                          $
                          146,443Accounts
      receivable, net of allowance fordoubtful
      accounts of $163,193 and $147,647, respectively
                          
                          
                          566,084
                          
                          
                          
                          687,282Inventory
                          
                          
                          34,565
                          
                          
                          
                          45,647Notes
      receivable
                          
                          
                          -
                          
                          
                          
                          66,471Prepaid
      expenses and other current assets
                          
                          
                          73,599
                          
                          
                          
                          106,722Total
      current assets
                          
                          
                          1,094,290
                          
                          
                          
                          1,052,565PROPERTY
      AND EQUIPMENT, net
                          
                          
                          191,451
                          
                          
                          
                          270,177OTHER
      ASSETSIntangible
      assets, net of accumulated amortization of $491,520 and$294,550,
      respectively
                          
                          
                          101,711
                          
                          
                          
                          298,681Deposits
      and other assets
                          
                          
                          25,105
                          
                          
                          
                          32,267Total
      other assets
                          
                          
                          126,816
                          
                          
                          
                          330,948TOTAL
      ASSETS
                          
                          $
                          1,412,557
                          
                          
                          $
                          1,653,690
 
 F-4
 Table of Contents





TREY
RESOURCES, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS (Continued)





LIABILITIES AND
STOCKHOLDERS' DEFICIT








December
    31,2008
                        
                        
                        
                        2007CURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                        
                        $
                        1,860,610
                        
                        
                        $
                        1,385,998Due
      to related parties
                        
                        
                        1,711,477
                        
                        
                        
                        1,408,393Current
      portion of convertible debentures payable, net of discounts
    of$-0-
      and $73,393, respectively
                        
                        
                        1,574,100
                        
                        
                        
                        1,603,207Derivative
      liability
                        
                        
                        857,236
                        
                        
                        
                        216,497Current
      portion of notes payables and capital leases
                        
                        
                        92,828
                        
                        
                        
                        83,550Line
      of credit
                        
                        
                        -
                        
                        
                        
                        185,000Warrant
      liability
                        
                        
                        75,450
                        
                        
                        
                        75,450Notes
      payable to related parties
                        
                        
                        321,063
                        
                        
                        
                        407,112Deferred
      revenue
                        
                        
                        174,104
                        
                        
                        
                        127,809Total
      current liabilities
                        
                        
                        6,666,958
                        
                        
                        
                        5,493,016LONG
      TERM DEBTNotes
      payable and capital leases, net of current portion
                        
                        
                        -
                        
                        
                        
                        74,261Total
      liabilities
                        
                        
                        6,666,958
                        
                        
                        
                        5,567,277COMMITMENTS
      AND CONTINGENCIES
                        
                        
                        -
                        
                        
                        
                        -STOCKHOLDERS'
      DEFICITPreferred
      stock, $1.00 par value; authorized 1,000,000 shares;no
      shares issued and outstanding
                        
                        
                        -
                        
                        
                        
                        -Common
      stock, Class A:2008
      – par value $.00001; Authorized 10,000,000,000,4,105,473,533
      shares issued and outstanding2007
      – par value $.00001; Authorized 10,000,000,000,3,119,362,422
      shares issued and outstanding
                        
                        
                        41,055
                        
                        
                        
                        31,194Common
      stock Class B - par value $.00001; authorized 50,000,000
      shares;no
      shares issued and outstanding
                        
                        
                        -
                        
                        
                        
                        -Common
      stock Class C - par value $.00001; authorized 20,000,000
      shares;no
      shares issued and outstanding
                        
                        
                        -
                        
                        
                        
                        -Additional
      paid in capital
                        
                        
                        5,483,389
                        
                        
                        
                        5,347,666Additional
      paid in capital - warrants
                        
                        
                        125,166
                        
                        
                        
                        125,166Accumulated
      deficit
                        
                        
                        (10,904,011
                        )
                        
                        
                        (9,417,613
                        )Total
      stockholders' deficit
                        
                        
                        (5,254,401
                        )
                        
                        
                        (3,913,587
                        )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                        
                        $
                        1,412,557
                        
                        
                        $
                        1,653,690






F-5
 Table of Contents




TREYRESOURCES, INC. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 
 
 For
      the Years EndedDecember
    31,2008
                          
                          
                          2007SALES,
      net
                          
                          $
                          7,724,295
                          
                          
                          $
                          7,378,209COST
      OF SALES
                          
                          
                          4,992,398
                          
                          
                          
                          4,813,012GROSS
      PROFIT
                          
                          
                          2,731,897
                          
                          
                          
                          2,565,197SELLING,
      GENERAL ANDADMINISTRATIVE
      EXPENSESSelling
      expenses
                          
                          
                          1,209,754
                          
                          
                          
                          1,234,362General
      and administrative expenses
                          
                          
                          1,797,803
                          
                          
                          
                          1,875,891Depreciation
      and amortization
                          
                          
                          302,033
                          
                          
                          
                          305,523Research
      and development
                          
                          
                          -
                          
                          
                          
                          156,983Total selling, general and
      administrative expenses
                          
                          
                          3,309,590
                          
                          
                          
                          3,572,759LOSS
      FROM OPERATIONS
                          
                          
                          (577,693
                          )
                          
                          
                          (1,007,562
                          )OTHER
      INCOME (EXPENSE)Gain
      (loss) on revaluation of derivatives
                          
                          
                          (640,829
                          )
                          
                          
                          925,212Gain
      on sale of securities available for sale
                          
                          
                          -
                          
                          
                          
                          71,413Other
      income (expense), net
                          
                          
                          11,107
                          
                          
                          
                          (403,566
                          )Amortization
      of discounts on debt conversion
                          
                          
                          (73,393
                          )
                          
                          
                          (973,468
                          )Interest
      expense
                          
                          
                          (205,590
                          )
                          
                          
                          (226,037
                          )Total other income
      (expense)
                          
                          
                          (908,705
                          )
                          
                          
                          (606,446
                          )LOSS
      BEFORE INCOME TAXES
                          
                          
                          (1,486,398
                          )
                          
                          
                          (1,614,008
                          )PROVISION
      FOR INCOME TAXES
                          
                          
                          -
                          
                          
                          
                          -NET
      LOSS
                          
                          $
                          (1,486,398
                          )
                          
                          $
                          (1,614,008
                          )NET
      LOSS PER COMMON SHAREBasic
      and Diluted
                          
                          $
                          (.00
                          )
                          
                          $
                          (.00
                          )WEIGHTED
      AVERAGE SHARES OUTSTANDINGBasic
      and Diluted
                          
                          
                          3,808,885,798
                          
                          
                          
                          1,054,240,963








F-6
 Table of Contents




TREYRESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT





FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007





Common
      Stock Class A
                
                
                Additional
                  Paid
      in
                
                
                Additional
                  Paid
      in
                  Capital
      -
                
                
                Accumulated
                
                
                Total
                  Stockholders’Shares
                
                
                Amount
                
                
                Capital
                
                
                Warrants
                
                
                Deficit
                
                
                DeficitBalance
      at January 1, 2007
                
                
                160,621,297
                
                
                $
                1,606
                
                
                $
                4,021,663
                
                
                $
                125,166
                
                
                $
                (7,803,605
                )
                
                $
                (3,655,170
                )Issuance
      of stock for compensation, accruedsalaries,
      and services
                
                
                518,366,802
                
                
                
                5,184
                
                
                
                250,423
                
                
                
                -
                
                
                
                -
                
                
                
                255,607Issuance
      of stock on debt conversion, net ofrevaluation
      of debenture
                
                
                2,280,649,779
                
                
                
                22,807
                
                
                
                619,451
                
                
                
                -
                
                
                
                -
                
                
                
                642,258Issuance
      of stock for debt repayment
                
                
                159,724,544
                
                
                
                1,597
                
                
                
                28,778
                
                
                
                -
                
                
                
                -
                
                
                
                30,375Beneficial
      conversion in conjunction with stockissued
      for compensation, accrued salaries,services,
      and debt repayment and conversion
                
                
                -
                
                
                
                -
                
                
                
                427,351
                
                
                
                -
                
                
                
                -
                
                
                
                427,351Net
      loss for the year ended December 31, 2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,614,008
                )
                
                
                (1,614,008
                )Balance
      at December 31, 2007
                
                
                3,119,362,422
                
                
                $
                31,194
                
                
                $
                5,347,666
                
                
                $
                125,166
                
                
                $
                (9,417,613
                )
                
                $
                (3,913,587
                )




Balance
      at January 1, 2008
                    
                    
                    3,119,362,422
                    
                    
                    $
                    31,194
                    
                    
                    $
                    5,347,666
                    
                    
                    $
                    125,166
                    
                    
                    $
                    (9,417,613
                    )
                    
                    $
                    (3,913,587
                    )Issuance
      of stock on debt conversion, netof
      revaluation of debenture
                    
                    
                    986,111,111
                    
                    
                    
                    9,861
                    
                    
                    
                    135,723
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    145,584Net
      loss for the year ended December 31, 2008
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,486,398
                    )
                    
                    
                    (1,486,398
                    )Balance
      at December 31, 2008
                    
                    
                    4,105,473,533
                    
                    
                    $
                    41,055
                    
                    
                    $
                    5,483,389
                    
                    
                    $
                    125,166
                    
                    
                    $
                    (10,904,011
                    )
                    
                    $
                    (5,254,401
                    )








F-7
 Table of Contents





TREYRESOURCES, INC. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 
 
 For
      the Years EndedDecember
    31,2007
                        
                        
                        2007CASH
      FLOW FROM OPERATING ACTIVITIESNet
      loss
                        
                        $
                        (1,486,398
                        )
                        
                        $
                        (1,614,008
                        )Adjustments
      to reconcile net loss to net cash provided by (used in)operating
      activities:Net
      gain on conversion of securities available for sale
                        
                        
                        -
                        
                        
                        
                        (71,413
                        )Depreciation
      and amortization
                        
                        
                        99,437
                        
                        
                        
                        102,926Amortization
      of other intangibles
                        
                        
                        196,970
                        
                        
                        
                        202,597Loss
      (gain) on revaluation of derivatives
                        
                        
                        640,829
                        
                        
                        
                        (925,212
                        )Amortization
      of debt discounts
                        
                        
                        73,393
                        
                        
                        
                        973,468Bad
      debts
                        
                        
                        15,546
                        
                        
                        
                        105,611Common
      stock issued for compensation, accrued salaries and
    services
                        
                        
                        -
                        
                        
                        
                        255,607Common
      stock issued for debt conversion discount
                        
                        
                        43,084
                        
                        
                        
                        427,351Deferred
      interest income on notes receivable
                        
                        
                        (908
                        )
                        
                        
                        -Changes
      in assets and liabilities:Accounts
      receivable
                        
                        
                        105,652
                        
                        
                        
                        5,912Inventory
                        
                        
                        11,082
                        
                        
                        
                        5,647Prepaid
      expenses and other assets
                        
                        
                        40,285
                        
                        
                        
                        (9,786
                        )Accounts
      payable and accrued liabilities
                        
                        
                        474,612
                        
                        
                        
                        (116,593
                        )Deferred
      revenue
                        
                        
                        46,295
                        
                        
                        
                        18,158Related
      party accounts
                        
                        
                        303,084
                        
                        
                        
                        96,878Total
      cash provided by (used in) operating activities
                        
                        
                        562,963
                        
                        
                        
                        (542,857
                        )
  CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
                              
                              
                              (20,711
                              )
                              
                              
                              (108,154
                              )Net
      proceeds from sale of securities available for sale
                              
                              
                              -
                              
                              
                              
                              248,717Purchase
      of intangible assets
                              
                              
                              -
                              
                              
                              
                              (7,750
                              )Redemption
      of notes receivable
                              
                              
                              67,379
                              
                              
                              -Total
      cash provided by investing activities
                              
                              
                              46,668
                              
                              
                              
                              132,813CASH
      FLOWS FROM FINANCING ACTIVITIESRepayment
      of related party loans
                              
                              
                              (43,505
                              )
                              
                              
                              (77,617
                              )Proceeds
      from notes payable, capital leases and convertible
    debentures
                              
                              
                              -
                              
                              
                              
                              781,650Repayment
      of notes payable, capital leases and convertible
debentures
                              
                              
                              (292,527
                              )
                              
                              
                              (520,983
                              )Total
      cash provided by (used in) financing activities
                              
                              
                              (336,032
                              )
                              
                              
                              183,050NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                              
                              
                              273,599
                              
                              
                              
                              (226,994
                              )CASH
      AND CASH EQUIVALENTS – BEGINNING OF YEAR
                              
                              
                              146,443
                              
                              
                              
                              373,437CASH
      AND CASH EQUIVALENTS – END OF YEAR
                              
                              $
                              420,042
                              
                              
                              $
                              146,443SUPPLEMENTAL
      SCHEDULE OF NON-CASH INVESTING ACTIVITIES:CASH
      PAID DURING THE YEAR FOR:Interest
      expense
                              
                              $
                              2,875
                              
                              
                              $
                              55,074Income
      taxes
                              
                              $
                              -
                              
                              
                              $
                              -










F-8
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)


YEARS
ENDED DECEMBER 31, 2008 AND 2007




SUPPLEMENTAL
SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
  For
the Year Ended December 31, 2007:
 
 During
the year ended December 31, 2007, the Company assigned all of its rights to a
debenture receivable to THI, Inc. for $184,387 and received a $13,000 down
payment and promissory note for $171,387 (see note 4).




SUPPLEMENTAL
SCHEDULE OF NON-CASH FINANCING ACTIVITIES





For the Year Ended December
31, 2008





a)Issued
986,111,111 shares of Class A Common Stock with a total value of $145,584 for
conversion of $102,500 of principal on outstanding debentures with YA Global
Investments (f/k/a. Cornell Capital Partners, LP.)





For the Year Ended December
31, 2007





During
the year ended December 31, 2007, the Company:





a) Issued
2,280,649,779 shares of Class A Common Stock with a total value of
$782,280.  Of this amount  $642,258 was repayment of
principal on the convertible debentures held by YA Global Investments (f/k/a.
Cornell Capital Partners, LP.)  The balance of $140,022 represents
discount on conversions of principal.





b) Issued
159,724,544 shares of Class A common stock with a value of $109,666 for a
conversion of $30,375 to an officer of the Company for repayment of a note
payable.





c) Issued
170,000,000 shares of Class A common stock with a value of $137,215 for
repayment of $44,236 accrued salaries for two officers of the
Company.





d) Issued
175,866,802 shares of Class A common stock with a value of $179,575 for
conversion of $64,516 of debt for legal services.





e) Issued 170,000,000 shares of Class A
common stock with a value of $137,215 for compensation and bonuses to employees
of SWK Technologies, Inc.





f) Issued 2,500,000 shares of Class A
common stock with a value of $8,500 for investor relation services to Wall
Street Savant Corporation.








F-9
 Table of Contents





TREYRESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2008 AND 2007





NOTE 1 - DESCRIPTION OF
BUSINESS AND BASIS OF PRESENTATION





Description of
Business


Trey
Resources, Inc. (the “Company”), was incorporated in Delaware on October 3, 2002
as a wholly owned subsidiary of iVoice Inc. On February 11, 2004, the Company
was spun off from iVoice, Inc. and is now an independent publicly traded
company.





The
spin-off transaction was accomplished by the distribution of certain
intellectual property, representing the software codes of the Automatic
Reminder, and certain accrued liabilities and related party debt into a
wholly-owned subsidiary of iVoice., Trey Resources, Inc. (“Trey”), formerly
known as iVoice Acquisition 1, Inc. and Trey Industries, Inc.) and subsequently
distributed on a pro-rata basis to iVoice shareholders in the form of a taxable
dividend.





Up until
its acquisition of SWK, Inc. on June 2, 2004, the Company was engaged in the
design, manufacture, and marketing of specialized telecommunication equipment.
With the acquisition of SWK and as part of its plan to expand into new markets,
Trey is focusing on the business software and information technology consulting
market, and is looking to acquire other companies in this industry. SWK
Technologies, Inc., (“SWK”) the surviving entity in the merger and acquisition
of SWK, Inc., is a New Jersey-based information technology company, value added
reseller, and master developer of licensed accounting software. The Company also
publishes its own proprietary supply-chain software, “MAPADOC”. The Company
sells services and products to various end users, manufacturers, wholesalers and
distributor industry clients located throughout the United States.





On June
2, 2006, SWK Technologies, Inc. completed the acquisition of certain assets of
AMP-Best Consulting, Inc. of Syracuse, New York.  AMP-Best Consulting,
Inc. is an information technology company and value added reseller of licensed
accounting software published by Sage Software.  AMP-Best Consulting,
Inc. sells services and products to various end users, manufacturers,
wholesalers and distribution industry clients located throughout the United
States, with special emphasis on companies located in the upstate New York
region.





Certain
intellectual property, representing the software codes of the Automatic
Reminder, was sold in November 2004 to Laser Energetics, Inc. (LEI), a New
Jersey based technology company.  The Company received 10 million
shares of Laser Energetics Class A Common Stock and was further issued a
convertible debenture by Laser Energetics, Inc. in the amount of
$250,000.  The debenture, which bears interest at the rate of 3% per
annum, has a five year term, and is convertible into shares of LEI Class A
Common Stock at a rate equal to fifty percent (50%) of the average closing bid
price of the Class A Common Stock for the four trading days immediately
preceding the conversion date. The convertible debenture is convertible at the
holder's option. On May 16, 2005, the 10 million shares of Laser Energetics
Class A Common Stock were assigned to iVoice, Inc. as settlement of all
Administrative Fees owed by the Company to iVoice.  As of December 31,
2007, the Company has determined that the value of the debenture was
significantly impaired and the entire debenture, including the accrued interest
income for 2007 and 2006, were written down to zero as a provision for doubtful
accounts.




The
Company is publicly traded and is currently traded on the Over The Counter
Bulletin Board (“OTCBB”) under the symbol “TYRIA”.





Basis of
Presentation




The
accompanying consolidated financial statements include the accounts of Trey
Resources, Inc. (the “Company” or “Trey”) and its wholly owned subsidiaries, SWK
Technologies, Inc. and BTSG Acquisition Corp. These consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States for financial information and with the
instructions to Form 10-K.





On March
1, 2005, Trey Resources’ wholly-owned subsidiary, SWK Technologies, Inc.,
executed an employment agreement with Mr. Andrew Rudin of Business Consulting
Solutions LLC (“BCS”), whereby Mr. Rudin was to be paid a commission in cash and
stock of Trey Resources in the event he was successful in arranging for the
clients of BCS to transfer over to SWKT.  On March 25, 2005, this
employment agreement was amended that made the commission payable to Mr. Rudin
contingent upon the retention of the clients transferred from BCS through March
1, 2007 and payable over a thirty-six month period from the employment
agreement’s commencement date.  Following the successful transfer of
BCS clients to SWKT, SWKT will assume responsibility for maintenance and support
of the BCS clients.





On
February 7, 2006, Trey Resources’ wholly-owned subsidiary, SWK Technologies,
Inc., executed an asset purchase agreement and employment agreement with Ms.
Jodie Katz of Wolen Katz Associates (“Wolen Katz”), whereby Ms. Katz was paid
compensation in cash and stock of Trey Resources for successfully arranging for
the clients of Wolen Katz to transfer over to SWKT.  The cash portion
of the compensation is payable in twelve (12) equal monthly installments
commencing on the 90th day
following the Closing Date.  Following the successful transfer of
Wolen Katz clients to SWKT, SWKT assumed responsibility for maintenance and
support of the BCS clients.





On June
2, 2006, Trey Resources’ wholly-owned subsidiary, SWK Technologies, Inc.,
executed an asset purchase agreement between and among AMP-Best Consulting, Inc.
(“AMP-Best”), a New York Corporation, Patrick Anson, Crandall Melvin III and
Michelle Paparo for acquisition of certain assets, the customer list and
business name of AMP-Best. Terms of the agreement provided for a cash payment at
closing of $85,000, issuance of a $380,000 promissory note to Crandall Melvin
III, the issuance of 6,000,000 shares of Trey Resource’s Class A Common Stock
and employment agreements for Patrick Anson, Crandall Melvin III and Michelle
Paparo. Payments on the promissory note are to commence 120 days after the
closing for a term of 5 years.








F-10
 Table of Contents


TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007




NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES





Principles of
Consolidation


The
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant inter-company
transactions and accounts have been eliminated in consolidation.





Use of
Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period.  Actual results could differ from those
estimates.





Revenue
Recognition


Revenue
is recognized when persuasive evidence of an agreement exists, delivery has
occurred, the amount is fixed or determinable, and cash is
received.





The
Company recognizes revenues from consulting and support services as the services
are performed.





The
assessment of collectability is critical in determining whether revenue should
be recognized. As part of the revenue recognition process, we determine whether
trade receivables are reasonably assured of collection based on various factors.
Revenue and related costs are deferred if we are uncertain as to whether the
receivable can be collected. Revenue is deferred but costs are recognized when
we determine that the collection of the receivable is
unlikely.  Hardware and software revenues are recognized when the
product is shipped to the customer. The Company separates the software component
and the professional services component into two distinct parts for purposes of
determining revenue recognition. In that situation where both components are
present, software sales revenue is recognized when the cash is received and the
product is delivered, and professional service revenue is recognized as the
service time is incurred.  Commissions are recognized when payments
arereceived,
since the Company has no


obligation
to perform any future services.





With
respect to the sale of software license fees, the Company recognizes revenue in
accordance with Statement of Position 97-2, software Revenue Recognition (SOP
97-2), as amended, and generally recognizes revenue when all of the following
criteria are met: (1) persuasive evidence of an arrangement exists generally
evidenced by a signed, written purchase order from the customer, (2) delivery of
the software product on Compact Disk (CD) or other means to the customer has
occurred, (3) the perpetual license fee is fixed or determinable and (4)
collectability, which is assessed on a customer-by-customer basis, is
probable.





With
respect to customer support services, upon the completion of one year from the
date of sale, considered to be the warranty period, the Company offers customers
an optional annual software maintenance and support agreement for subsequent
one-year periods. Sales of purchased maintenance and support agreements are
recorded as deferred revenue and recognized over the respective terms of the
agreements.





Advertising
Costs


Advertising
costs are expensed as incurred and are included in selling
expenses.  For the years ended December 31, 2008 and 2007, advertising
expenses were $1,848 and $8,235, respectively.





Cash and Cash
Equivalents


The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. The Company had cash
equivalents at December 31, 2008 and 2007 of $-0- and $112,547, respectively.
The cash equivalents represent investments in Triple A credit rated money market
funds that have 7 day auction rates competitive with current market
conditions.





Concentration of Credit
Risk





For the
years ended December 31, 2008 and 2007, our top ten customers had approximately
$1,342,453 and $1,454,733 in sales and these represented 17% and 19%,
respectively, of our total sales for the period.  Generally, we do not
rely on any one specific customer for any significant portion of our revenue
base.





For the
years ended December 31, 2008 and 2007, purchases from one supplier were
approximately $20% or 16%, respectively, of the Company’s total
cost.  Generally, the Company does not rely any one specific supplier
for all of its purchases and maintains relationships with other suppliers that
could replace its existing supplier if the need arose.





Accounts
Receivable


Accounts
receivables consist primarily of uncollected invoices for maintenance and
professional services. Payment for software sales are due in advance of ordering
from the software supplier. Payment for maintenance and support plan renewals
are due before the beginning of the maintenance period. Payment for professional
services are due 50% in advance and the balance on completion of the services.
The Company maintains a small provision for bad debts and reviews the provision
quarterly.





Inventory


Inventory
consists primarily of pre-packaged software programs that are held for resale to
customers. Cost is determined by specific identification related to the purchase
order from the software supplier.





Property and
Equipment


Property
and equipment is stated at cost.  Depreciation is computed using the
straight-line method based upon the estimated useful lives of the assets,
generally five to seven years.  Maintenance and repairs are charged to
expense as incurred.





Deferred
Revenues


Deferred
revenues consist primarily of annual telephone support plan revenues that will
be earned in future periods.


F-11
 Table of Contents


TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007




NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)





Software License
Cost


Software
license costs are recorded at cost, which approximates fair market value as of
the date of purchase.  These costs represent the purchase of various
exploitation rights to certain software, pre-developed codes and systems
patented by a non-related third party.  These costs are capitalized
pursuant to Statement of Financial Accounting Standards (“SFAS”) 86, “Accounting
for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed”,
and were being amortized using the straight-line method over a period of five
years.  As described later in Note 1, the Company has adopted SFAS No.
121.  The carrying value of software license costs are regularly
reviewed by the Company and a loss would be recognized if the value of the
estimated un-discounted cash flow benefit related to the asset falls below the
unamortized cost.  The remaining unamortized cost was written off in
2005.





Income
Taxes


The
Company accounts for income taxes in accordance with Statements of Financial
Accounting Standards No. 109, “Accounting for Income Taxes,” which requires an
asset and liability approach to financial accounting and reporting for income
taxes. Deferred income taxes and liabilities are computed annually for
differences between the financial statement and the tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.





Financing
Costs


Financing
costs consist primarily of professional fees and various paid commissions
relating to the issuance of the Company’s convertible debentures and equity
credit lines.  These costs are amortized over the life of the loan, or
charged to equity, as incurred.





Debt Issue
Costs


Debt
issue costs represent the estimated cost of the conversion discount feature
relating to the issuance of the Company’s convertible
debentures.  Conversion costs are charged to expense at the fair value
of the beneficial conversion features of the convertible debt as measured at the
date of issuance in accordance with Emerging Issues Task Force (EITF) Issue
98-5.





Fair Value of Financial
Instruments


The
Company estimates that the fair value of all financial instruments at December
31, 2008 and 2007, as defined in FASB 107, does not differ materially from the
aggregate carrying values of its financial instruments recorded in the
accompanying consolidated balance sheets. The estimated fair value amounts have
been determined by the Company using available market information and
appropriate valuation methodologies. Considerable judgment is required in
interpreting market data to develop the estimates of fair value, and
accordingly, the estimates are not necessarily indicative of the amounts that
the Company could realize in a current market exchange.




Long-Lived
Assets


SFAS No.
142, “Goodwill and Other Intangible Assets” requires goodwill to be tested for
impairment under certain circumstances, and written off when impaired, rather
than being amortized as previous standards require.  In accordance
with the requirements of this pronouncement, the Company has assessed the value
of the intangible assets reflected as goodwill on its books and has determined
that future benefit for these assets exists.  At December 31, 2007,
the Company had realized a decline in the value of the Goodwill and recorded
cumulative impairments of $1,062,040.





Stock-Based
Compensation


SFAS No.
123R, “Accounting for Stock-Based Compensation” establishes financial accounting
and reporting standards for stock-based employee compensation
plans.  This statement also applies to transactions in which an entity
issues its equity instruments to acquire goods or services from non-employees.
Those transactions must be accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable.  For stock options, fair value
is determined using an option-pricing model that takes into account the stock
price at the grant date, the exercise price, the expected life of the option,
the volatility of the underlying stock and the expected dividends on it, and the
risk-free interest rate over the expected life of the option.  The
Company has adopted this statement and recorded the option value as outlined
above.





Earnings Per
Share


SFAS No.
128, “Earnings Per Share” requires presentation of basic earnings per share
(“basic EPS”) and diluted earnings per share (“diluted EPS”).





The
computation of basic EPS is computed by dividing income (loss) available to
common stockholders by weighted average number of common shares during the
period. Diluted earnings per share gives effect to all dilutive potential common
shares outstanding during the period. The computation of diluted EPS is not
presented due the Company incurring a loss and to do so would be
anti-dilutive.




F-12
 Table of Contents


TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007


NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)




The
shares used in the computations are as follows:





As
      of December 31,2008
                                
                                
                                2007Basic
      and Diluted for EPS Purposes
                                
                                
                                3,808,885,798
                                
                                
                                
                                1,054,240,963
  The
Company had common stock equivalents of 3,075,000 and 7,075,000 at December 31,
2008 and 2007, respectively.







Derivative
Liabilities


During April 2003, the Financial
Accounting Standards Board issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities."  SFAS 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
133, "Accounting for Derivative Instruments and Hedging Activities." The
statement requires that contracts with comparable characteristics be accounted
for similarly and clarifies when a derivative contains a financing component
that warrants special reporting in the statement of cash flows.  SFAS
149 is effective for contracts entered into or modified after June 30, 2003,
except in certain circumstances, and for hedging relationships designated after
June 30, 2003. The financial statements for the years ended December 31, 2008
and 2007 include the recognition of the derivative liability on the underlying
securities issuable upon conversion of the YA Global (f/k/a Cornell Partners LP)
Convertible Debentures.





Recent Accounting
Pronouncements


In
September 2006, The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurement" ("SFAS No. 157"), which clarifies the definition of fair value
whenever another standard requires or permits assets or liabilities to be
measured at fair value. Specifically, the standard clarifies that fair value
should be based on the assumptions market participants would use when pricing
the asset or liability, and establishes a fair value hierarchy that prioritizes
the information used to develop those assumptions. SFAS No. 157 does not expand
the use of fair value to any new circumstances, and must be applied on a
prospective basis except in certain cases. The standard also requires expanded
financial statement disclosures about fair value measurements, including
disclosures of the methods used and the effect on earnings.





In
February 2008, FASB Staff Position ("FSP") FAS No. 157-2, "Effective Date of
FASB Statement No. 157" ("FSP No. 157-2") was issued. FSP No. 157-2 defers the
effective date of SFAS No. 157 to fiscal years beginning after December 15,
2008, and interim periods within those fiscal years, for all nonfinancial assets
and liabilities, except those that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually). Examples of
items within the scope of FSP No. 157-2 are nonfinancial assets and nonfinancial
liabilities initially measured at fair value in a business combination (but not
measured at fair value in subsequent periods), and long-lived assets, such as
property, plant and equipment and intangible assets measured at fair value for
an impairment assessment under SFAS No. 144.




The
partial adoption of SFAS No. 157 on January 1, 2008 with respect to financial
assets and financial liabilities recognized or disclosed at fair value in the
financial statements on a recurring basis did not have a material impact on the
Company's financial statements. See Note 15 for the fair value measurement
disclosures for these assets and liabilities. The Company is in the process of
analyzing the potential impact of SFAS No. 157 relating to its planned January
1, 2009 adoption of the remainder of the standard.





Recent Accounting
Pronouncements (continued)


In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS
160”).  SFAS 160 requires that ownership interests in subsidiaries
held by parties other than the parent, and the amount of consolidated net
income, be clearly identified, labeled, and presented in the consolidated
financial statements within equity, but separate from the parent’s equity. It
also requires once a subsidiary is deconsolidated, any retained noncontrolling
equity investment in the former subsidiary be initially measured at fair value.
Sufficient disclosures are required to clearly identify and distinguish between
the interests of the parent and the interests of the noncontrolling owners. SFAS
160 will be effective beginning January 1, 2009. Management anticipates
that the adoption of SFAS 160 will not have a material impact on the Company’s
financial statements.





In
December 2007, the FASB issued SFAC No 141(R), “Business
Combinations.”  This statement provides new accounting guidance and
disclosure requirements for business combinations.  SFAS No 141(R) is
effective for business combinations which occur in the first fiscal year
beginning on or after December 15, 2008. The Company is currently assessing the
effect of EITF Issue No. 07-1 on its financial statements, but it is not
expected to be material.





In
December 2007, the FASB finalized the provisions of the Emerging Issues Task
Force (EITF) Issue No. 07-1, “Accounting for Collaborative
Arrangements.”  This EITF Issue provides guidance and requires
financial statement disclosures for collaborative arrangements.  EITF
Issue No. 07-1 is effect for financial statements issued for fiscal years
beginning after December15, 2008.  The Company is currently assessing
the effect of EITF Issue No. 07-1 on its financial statements, but it is not
expected to be material.





In March
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No. 133”
(“SFAS 161”), which modifies and expands the disclosure requirements for
derivative instruments and hedging activities.  SFAS 161 requires that
objectives for using derivative instruments be disclosed in terms of underlying
risk and accounting designation and requires quantitative disclosures about fair
value amounts and gains and losses on derivative instruments.  It also
requires disclosures about credit-related contingent features in derivative
agreements. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged.  SFAS 161 encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.  The
adoption of SFAS 161 is not expected to have a material impact on our
consolidated financial condition or results of operations.





F-13
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007


NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)





Recent Accounting
Pronouncements (continued)


In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets. FSP 142-3 amends the factors an entity should consider in
developing renewal or extension assumptions used in determining the useful life
of recognized intangible assets under SFAS 142, Goodwill and Other Intangible
Assets, and adds certain disclosures for an entity’s accounting policy of the
treatment of the costs, period of extension, and total costs
incurred.  FSP 143-3 must be applied prospectively to intangible
assets acquired after January 1, 2009.  The Company is currently
evaluating the impact that FSP 142-3 will have on its financial position or
results of operations.





In May
2008, the Financial Accounting Standards Board (the “FASB”) issued FAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”). This
statement identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in accordance with GAAP. With the
issuance of this statement, the FASB concluded that the GAAP hierarchy should be
directed toward the entity and not its auditor, and reside in the accounting
literature established by the FASB as opposed to the American Institute of
Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69,
“The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” This statement is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” The adoption of FAS 162 is not expected to have a material impact
on the Company’s results from operations or financial position.





In June
2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 08-3,
Accounting for Lessees for Maintenance Deposits Under Lease Arrangements ("EITF
08-3"). EITF 08-3 provides guidance for accounting for nonrefundable maintenance
deposits. It also provides revenue recognition accounting guidance for the
lessor. EITF 08-3 is effective for fiscal years beginning after December 15,
2008. The adoption of this EITF will not have a material effect on our financial
statements.





NOTE 3 - PROPERTY AND
EQUIPMENT





Property
and equipment is summarized as follows:





December
    31,2008
              
              
              2007Leasehold
      improvements
              
              $
              30,557
              
              
              $
              30,557Equipment,
      furniture and fixtures
              
              
              498,188
              
              
              
              477,477528,745
              
              
              
              508,034Less:
      Accumulated depreciation
              
              
              337,294
              
              
              
              237,857Property
      and equipment, net
              
              $
              191,451
              
              
              $
              270,177




Depreciation
and amortization expense for the years ended December 31, 2008 and 2007 was
$99,437 and $102,926, respectively.






F-14
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007





NOTE 4 – NOTES AND
CONVERTIBLE DEBENTURES RECEIVABLE





In
November 2004, the Company sold certain intellectual property, representing the
software codes of the Automatic Reminder to Laser Energetics, Inc. (LEI), a New
Jersey based technology company.  As part of the sale, the Company was
issued a convertible debenture in the amount of $250,000.  The
debenture, which bears interest at the rate of 3% per annum, has a five year
term, and is convertible into shares of LEI Class A Common Stock at a rate equal
to fifty percent (50%) of the average closing bid price of the Class A Common
Stock for the four trading days immediately preceding the conversion date. The
convertible debenture is convertible at the holder's option. At December 31,
2007, the Company determined that value of the debenture was significantly
impaired and the entire debenture, including the accrued interest income for
2007 and 2006, were written down to zero as a provision for doubtful accounts.
On September 15, 2008, the Board of Directors authorized the Company to assign
to Mr. Mahoney and Mr. Meller the Note in consideration for their agreement to
reduce their accrued compensation by $500 each.





In
January 2005, the Company purchased $328,695 of Voyager One, Inc. convertible
debentures from YA Global (f/k/a Cornell Capital Partners).  The
debentures, which bear interest at the rate of 5% per annum, have a three year
term, and are convertible into shares of Voyager One, Inc. Common Stock at a
conversion price equal to the lower of (i) 150% of the lowest initial bid price
of the common stock as submitted by a market maker and approved by the NASD or
(ii) 50% of the lowest closing bid price of the common stock for the five
trading days immediately preceding the conversion date.  The
convertible debentures are convertible at the holder's option any time up to the
maturity date. In May 2007 the Company assigned all of its rights to the Voyager
securities to THI, Inc. The note was collateralized by the assigned Voyager
securities.  At December 31, 2007, the aggregate value of the note
receivable plus accrued interest income was $66,471. During the year ended
December 31, 2008, THI, Inc. paid down the balance of the promissory note in its
entirety in the amount of $67,379, which included accrued interest of
$4,349.





NOTE 5 – GOODWILL AND
INTANGIBLES





The
acquisition of the client lists of Wolen Katz and AMP-Best Consulting in 2006 is
valued at $101,711, which is net of accumulated amortization of $491,520. These
intangible assets are being amortized over a three-year period. Amortization
expense for the years ended December 31, 2008 and 2007 was $196,970 and
$196,970, respectively.





Management
reviewed these intangible assets for impairment at December 31, 2008 and
December 31, 2007 and has determined that no further write-down for impairment
is required.





Intangible
      assets consist of the following:
                        
                        December
    31,2008
                        
                        
                        2007Intangible
      Assets, customer lists
                        
                        $
                        593,231
                        
                        
                        $
                        593,231Less:
      accumulated amortization
                        
                        
                        (491,520
                        )
                        
                        
                        (294,550
                        )Intangible
      assets, net
                        
                        $
                        101,711
                        
                        
                        $
                        298,681


The
estimated aggregate amortization expense for each of the succeeding periods is
as follows:





2009  $ 100,711
 2010 and
thereafter   -0-









F-15
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007




NOTE 6 - INCOME
TAXES




The
reconciliation of the effective income tax rate to the Federal statutory rate is
as follows:





Federal
      Income Tax Rate
                  
                  
                  (34.0
                  )%Effect
      on Valuation Allowance
                  
                  
                  35.6
                  %State
      Income Tax, Net of Federal Benefit
                  
                  
                  (1.6
                  )%Effective
      Income Tax Rate
                  
                  
                  0.0
                  %


As of
December 31, 2008, the Company has net operating loss carry forwards of
approximately $7,961,000 that can be utilized to offset future taxable income
for Federal income tax purposes through 2027. Utilization of these net loss
carry forwards is subject to the limitations of Internal Revenue Code Section
382.  Because of the current uncertainty of realizing the benefit of
the tax carry forward, a valuation allowance equal to the tax benefit for
deferred taxes has been established.





The full
realization of the tax benefit associated with the carry forward depends
predominantly upon the Company's ability to generate taxable income during the
carry forward period.





Deferred
tax assets and liabilities reflect the net tax effect of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and amounts used for income tax purposes.  Significant
components of the Company's deferred tax assets and liabilities are summarized
as follows:




December
    31,2008
                      
                      
                      2007Deferred
      Tax Asset
                      
                      $
                      4,207,000
                      
                      
                      $
                      3,040,000Less:
      Valuation Allowance
                      
                      
                      (4,207,000
                      )
                      
                      
                      (3,040,000
                      )Net
      Deferred Tax Assets
                      
                      $
                      -
                      
                      
                      $
                      -




Net
operating loss carry forwards expire starting in 2024 through 2028.





Deferred
income taxes are determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities.  Deferred income taxes will be
measured based on the tax rates expected to be in effect when the temporary
differences are included in the Company’s tax return.  Deferred tax
assets and liabilities are recognized based on anticipated future tax
consequences attributable to differences between financial statement carrying
amounts of assets and liabilities and their respective tax bases.




NOTE 7 - NOTES
PAYABLE





In
January 2005, the Company issued the ninth promissory note payable to YA Global
Investments LP. (f/k/a. Cornell Capital Partners, LP.) ("YA Global") for
$1,150,000 for advances on the equity-line financing agreement entered into with
YA Global in January 2003. The notes mature 120 days from the date of issue with
interest accruing at 12% per annum on any balance left unpaid after the maturity
date. As of December 31, 2005, $325,000 was repaid for principal through the
issuance of 32,559,098 shares of Class A common stock. On December 30, 2005, the
balance of the principal ($825,000) and accrued interest ($126,091) was
transferred to a Secured Convertible Debenture as discussed below.





In August
2005, the Company issued a promissory note payable to YA Global for $200,000 for
advances on the equity-line financing agreement entered into with YA Global in
January 2003. The notes mature 120 days from the date of issue with interest
accruing at 12% per annum on any balance left unpaid after the maturity date. On
December 30, 2005, the balance of the principal ($200,000) and accrued interest
($7,956) was transferred to a Secured Convertible Debenture as discussed
below.





During
the year ended December 31, 2008, SWK Technologies, Inc. borrowed $290,000 and
repaid $325,000 on its line of credit with Bank of America. The secured line of
credit bears interest at prime plus 1% (4.25% at December 31, 2008) per annum,
which changes with fluctuations in the prime rate. Monthly payments of interest
only in arrears shall be due and payable on the 4th of each month and these have
been paid. Principal shall be due and payable on demand from Bank of America.
The Company had outstanding loan balances of $-0- and $185,000 as of December
31, 2008 and 2007, respectively. Interest payments during the years ended
December 31, 2008 and 2007 were $2,875 and $4,643, respectively.





On
December 30, 2005, the various promissory notes payable to YA Global were
terminated and replaced with a Secured Convertible Debenture for the principal
amount of $1,159,047, as discussed in Note 10.





On
December 30, 2005, the Company issued a Secured Convertible Debenture for the
principal amount of $600,000 to YA Global as discussed in Note 10.






F-16
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007


NOTE 8 – DUE TO RELATED
PARTIES





Pursuant
to the employment contract dated January 1, 2003 between the Company and Jerome
Mahoney, the Non-Executive Chairman of the Board, Mr. Mahoney is to receive a
salary of $180,000 per year subject to 10% increases every year thereafter, as
well as a monthly unaccountable travel expense allowance of $725, an auto
allowance of $800 and a health insurance allowance of $1,400 per
month.  Also, pursuant to the employment contract with Mr. Mahoney,
following the completion of the Spin-off from its former parent company, iVoice
Inc., which occurred on February 11, 2004, Mr. Mahoney is entitled to receive a
one-time payment of $350,000.




Total
amounts owed to Mr. Mahoney at December 31, 2008 and 2007, representing unpaid
salary, unpaid expense and auto allowances and the one-time payment in
connection with the Spin-off totaled $965,879 and $802,704,
respectively.





Pursuant
to the employment contract dated September 15, 2003 between the Company and Mark
Meller, the President, Chief Executive Officer and Chief Financial Officer of
Trey Resources, Mr. Meller is to receive a salary of $180,000 per year subject
to 10% increases every year thereafter, as well as a monthly unaccountable
travel expense allowance of $600 and an auto allowance of $800.  Also,
pursuant to the employment contract dated September 15, 2003 between the Company
and Mr. Meller, following the completion of the Spin-off from its former parent
company, iVoice Inc., which occurred on February 11, 2004, Mr. Meller is
entitled to receive a one-time payment of $350,000





Total
amounts owed to Mr. Meller at December 31, 2008 and 2007, representing unpaid
salary, unpaid expense and auto allowances, and the one-time payment in
connection with the Spin-off, totaled $745,598 and $605,689,
respectively.





Mr.
Mahoney and Mr. Meller have agreed to defer payment of any monies due and owing
them representing fixed compensation, which have been accrued on the Company’s
balance sheet, and the one-time payment in connection with the Spin-off, until
such time as the Board of Directors determines that the Company has sufficient
capital and liquidity to make such payments.  Mr. Mahoney and Mr.
Meller have further agreed, however, to accept payment or partial payment, from
time to time, as determined in the sole discretion of the Board of Directors in
the form of cash, the Company’s Class A Common Stock and/or the Company’s Class
B Common Stock.





NOTE 9 – NOTES PAYABLE TO
RELATED PARTIES





Pursuant
to the Spin-off from iVoice, the Company has assumed a promissory note totaling
$250,000 payable to Jerry Mahoney, President and Chief Executive Officer of
iVoice and Non- Executive Chairman of the Board of Trey
Resources.  This amount is related to funds loaned to iVoice and is
unrelated to the operations of Trey.  The note bears interest at the
rate of 9.5% per annum on the unpaid balance until paid or until
default.  At the time of default (if any) the interest rate shall
increase to 20% until the principal balance has been paid.  Under the
terms of the Promissory Note, at the option of the Note holder, principal and
interest can be converted into either (i) one Class B common stock share of Trey
Resources, Inc., par value $0.00001, for each dollar owed, (ii) the number of
Class A common stock shares of iVoice, Inc. calculated by dividing (x) the sum
of the principal and interest that the Note holder has decided to prepay by (y)
fifty percent (50%) of the lowest issue price of Series A common stock since the
first advance of funds under this Note, or (iii) payment of the principal of
this Note, before any repayment of interest. At December 31, 2008 and 2007, the
principal balance on this note was $86,625, and accrued interest was $75,106 and
$66,616, respectively.





In
connection with the acquisition of SWK, Inc., the Company assumed a note payable
to Gary Berman, a former shareholder of SWK, Inc. and current shareholder of
Trey.  On April 1, 2004, Mr. Berman loaned the company $25,000
pursuant to the Agreement and Plan of Merger and Reorganization among Trey, SWK
and SWK Technologies, Inc.  The unsecured note bears interest at 5%
per annum and is payable in bi-weekly amounts of $217.  At December
31, 2008 and 2007, the outstanding balance to Mr. Berman was $1,510 and $6,942,
respectively.





In
connection with the acquisition of SWK, Inc, the Company assumed a note payable
to Lynn Berman, a former shareholder of SWK, Inc. and current shareholder of
Trey.  On April 1, 2004,


Ms.
Berman loaned the Company $25,000 pursuant to the Agreement and Plan of Merger
and Reorganization among Trey, SWK and SWK Technologies, Inc.  The
unsecured note bears interest at 5% per annum and is payable in bi-weekly
amounts of $217.  At December 31, 2008 and 2007, the outstanding
balance to Mr. Berman was $1,510 and $6,942, respectively.





In
connection with the acquisition of Wolen Katz, the Company agreed to pay Ms.
Katz $12,000 payable in twelve (12) equal monthly installments commencing on the
90th day following the Closing Date. At December 31, 2006, the outstanding
balance to Ms. Katz was $5,000. The amount was repaid in 2007.





In
connection with the acquisition of AMP-Best, the Company agreed to collect some
outstanding receivables and to pay some outstanding payables of the previous
company. At December 31, 2007 and 2006, the outstanding balance due to the
previous owners of AMP-Best was $0 and $33,497, respectively.





Pursuant
to the asset purchase agreement with AMP-Best, SWK Technologies, Inc. issued a
$380,000 promissory note to Crandall Melvin III. The note carries an interest
rate of 7.75% and is payable in 60 monthly payments, commencing 120 days from
the closing. As of December 31, 2008 and 2007, the principal balance on the note
is $231,418 and $304,103, respectively.






F-17
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


DECEMBER
31, 2008 AND 2007





NOTE 10 - CONVERTIBLE
DEBENTURES PAYABLE





In
January 2003, the Company entered into subscription agreements with certain
purchasers to issue $140,000 in convertible debentures, with interest payable at
5% annum.  The notes are convertible into the Company's Class A common
stock at a price equal to either (a) an amount equal to one hundred twenty
percent (120%) of the closing bid price for the Common Stock on the Closing
Date, or (b) an amount equal to eighty percent (80%) of the average of the four
(4) lowest Closing Bid Prices of the Common Stock for the five (5) trading days
immediately preceding the Conversion Date.





Pursuant
to the subscription agreements set forth above, on June 30, 2003, the Company
issued $40,000 in 5% convertible debentures and on September 19, 2003, the
Company issued an additional $100,000 in 5% convertible debentures to the
private investors under the subscription agreement.  The 20%
beneficial conversion feature was previously recorded as prepaid financing
costs, until such time as the Company's Class A common stock into which the
debentures are convertible was registered and deemed effective by the U.S
Securities and Exchange Commission.  The Company completed the
effective registration of the Company's common stock,
and any amounts capitalized have been charged to expense in accordance with EITF
Issue 98-5. During the years ended December 31, 2008 and 2007, no additional
payments have been made on these outstanding convertible debentures. Total
outstanding principal balance of the convertible debentures as of December 31,
2008 and 2007 was $15,000, plus accrued interest of $5,425 and $4,673,
respectively.





On
December 30, 2005, the Company entered into a Securities Purchase Agreement with
YA Global (f/k/a Cornell Capital Partners, LP) ("Cornell").  Pursuant
to such purchase agreement, Cornell shall purchase up to $2,359,047 of secured
convertible debentures which shall be convertible into shares of the Company's
Class A common stock. Pursuant to the Securities Purchase Agreement, two Secured
Convertible Debentures were issued on December 30, 2005 for an aggregate of
$1,759,047. A portion of this financing was used to convert promissory notes and
accrued interest therefrom equal to $1,159,047 into new secured convertible
debentures and the balance was new financing in the form of secured convertible
debentures equal to $600,000 with interest payable at the rate of 7.5% per annum
to be issued and sold on the closing of this Securities Purchase Agreement and a
second secured convertible debenture equal to $600,000 with interest payable at
the rate of 7.5% per annum to be issued and sold two business days prior to the
filing of the registration statement that will register the common stock shares
issuable upon conversion of the secured convertible debentures.  On
May 2, 2006, the second $600,000 was funded 2 business days prior to the date
the registration statement was filed with the United States Securities and
Exchange Commission.





Interest
on the outstanding principal balance of the Secured Convertible Debentures
accrues at the annual rate of 7.5%. Payment of principal and accrued interest
shall be paid on or before December 30, 2007 on the 2005 debentures, and May 2,
2008 for the 2006 debenture. The Company has the option to redeem a portion or
all of the outstanding debentures at 120% of the amount redeemed plus accrued
interest. The holder shall be entitled to convert in whole or in part at any
time and from time to time, any amount of principal and accrued interest at a
price equal to 90% of the lowest closing bid price of the Common Stock during
the 30 trading days immediately preceding the conversion date, as quoted by
Bloomberg, LP (“Conversion Price”). In the event of a default, the full
principal amount of this Debenture, together with interest and other amounts
owing, shall be due and payable in cash, provided however, the holder of the
debenture may request payment of such amounts in Common Stock of the Obligor at
the Conversion Price then in-effect. A holder of the debenture may not convert
this Debenture or receive shares of Common Stock as payment of interest
hereunder to the extent such conversion or receipt of such interest payment
would result in the holder of the debenture beneficially owning in excess of
4.9% of the then issued and outstanding shares of Common Stock, including shares
issuable upon conversion of, and payment of interest on, this Debenture.
Providing that the holder of the debenture meets all restrictions and that the
Company does not enter into default, then the Company would expect to issue
approximately 344,000,000 shares of Common Stock in settlement of the three
secured convertible debentures, over the life of these debentures at the current
Conversion Price of $.0075.







During
the year ended December 31, 2008, the Company issued 986,111,111 shares of Class
A common stock for repayment of $102,500 of principal on the convertible
debenture held by YA Global Investments (f.k.a. Cornell Capital Partners, LP).
The aggregate principal value of the debentures at December 31, 2008 and 2007
was $1,559,100 and $1,661,600, respectively. Debt discount has been fully
amortized as of December 31, 2008, and had an unamortized balance of $73,393 as
of December 31, 2007.





During
the year ended December 31, 2007, the Company issued 2,280,649,779 shares of
Class A common stock for repayment of $642,258 of principal on the convertible
debenture held by YA Global Investments (f.k.a. Cornell Capital Partners,
LP).





As of
December 31, 2008, the Company is in default on all of these debentures and is
currently negotiating with YA Global to cure the default.








F-18
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007


NOTE 11 - DERIVATIVE
LIABILITY





In
accordance with SFAS 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES" and EITF 00-19, "ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS
INDEXED TO, AND POTENTIALLY SETTLED IN, A COMPANY'S OWN STOCK", the conversion
feature associated with the YA Global (f/k/a Cornell Capital Partners LLP)
Secured Convertible Debentures represents embedded derivatives. As such, the
Company had recognized embedded derivatives in the amount of $1,946,936 as a
liability in the accompanying consolidated balance sheet, and it was measured at
its estimated fair value of $857,236 and $216,497 as of December 31, 2008 and
2007, respectively. In addition the Company issued $4 million warrants which
were valued at $75,450 and are not subject to revaluation.  These
warrants are included in the consolidated balance sheets as warrant liability.
The estimated fair value of the embedded derivative has been calculated based on
a Black-Scholes pricing model using the following assumptions:


2008
                      
                      
                      2007Fair
      market value of stock
                      
                      $
                      0.00013
                      
                      
                      $
                      0.0002Exercise
      price
                      
                      $
                      0.00011
                      
                      
                      $
                      0.00018Dividend
      yield
                      
                      
                      0.00
                      %
                      
                      
                      0.00
                      %Risk
      free interest rate
                      
                      
                      1.00
                      %
                      
                      
                      4.00
                      %Expected
      volatility
                      
                      
                      63.33
                      %
                      
                      
                      210.62
                      %Expected
      life
                      
                      0.00
      to 1.63 Years
                      
                      
                      0.00
      to 1.63 Years


NOTE 12 - COMMITMENTS AND
CONTINGENCIES





The
Company does not own any real property for use in its operations or
otherwise.  On June 10, 2005, the Company consolidated its two New
Jersey offices and moved into 6,986 square feet of space at 5 Regent Street,
Livingston, NJ  07039 at a monthly rent of $7,423.  In
addition, it sublets 1,090 square feet of space in Clifton, NJ at a monthly rent
of $1,998.  Effective March 15, 2005, the Company entered into a lease
for 621 square feet of space at 900 Walt Whitman Road, Melville, NY 11747, at a
monthly rent of $932.  On October 30, 2007, the Company entered into a
one-year lease for office space at 1902 Wright Place, Carlsbad, CA 92008, at a
monthly rent of $567. On June 2, 2006, the Company entered into a two-year lease
for office space at 6834 Buckley Road, North Syracuse, New York at a monthly
rent of $1,800. The Company uses its facilities to house its corporate
headquarters and operations and believe that these facilities are suitable for
such purpose.  The Company maintains a good relationship with its
landlords and believes that these facilities will be adequate for the
foreseeable future.  Total rent expense under these operating leases
for the year ended December 31, 2008 and 2007 was $177,090 and $203,290,
respectively.





See Notes
8 and 9 to the Financial Statements for information related to the employment
agreements between Jerome Mahoney and Mark Meller.





The
Company has entered into subscription agreements with certain purchasers for the
sale of $140,000 in convertible debentures.  The convertible
debentures are convertible into Class A common stock at the discretion of the
holders. During 2004, the Company issued 2,444,177 shares of Trey's Class A
common stock for repayment of $125,000 of principal. The outstanding principal
balance was $15,000 as of December 31, 2008 and 2007, and $5,425 and $4,673 was
due for accrued interest on these debentures as of December 31, 2008 and 2007,
respectively.





The
Company assumed a total of $324,000 in accrued liabilities and related party
debt outstanding and incurred by iVoice.  The terms and conditions of
the liabilities and debt being assumed are as follows:





·
            Kevin
      Whalen, a former officer of iVoice, is owed $74,000 in amounts due for
      unpaid salary from iVoice and is unrelated to the operations of Trey. A
      portion of this amount is convertible into Class A Common Stock of Trey
      calculated by dividing (x) the sum of the principal the obligee requests
      to be converted by (y) the average closing bid price of Class A Common
      Stock of Trey for the five (5) business days immediately preceding the
      conversion date. As of December 31, 2008 and 2007, the balance due Mr.
      Whalen was $49,500, respectively.





·
            The
      Company had also assumed an outstanding promissory note in the amount of
      $250,000 payable to Mr. Mahoney, President and Chief Executive Officer of
      iVoice and Non- Executive Chairman of the Board of Trey Resources. This
      amount is related to funds loaned to iVoice and is unrelated to the
      operations of Trey. The terms of this obligation are further discussed in
      Note 9 to the financial statements.





On
December 30, 2005, the Company entered an Investor Registration Rights Agreement
with YA Global Investments, f/k/a Cornell Capital Partners. Pursuant to the
terms of the agreement, the Company was to file a registration statement with
the SEC within 60 calendar days and to use its best efforts to have the Initial
Registration Statement declared effective by the SEC no later than 120 calendar
days after the date of the agreement. In the event of default of the
registration rights agreement, the Company will pay liquidated damages, either
in cash or shares of the Company’s Common Stock, at 2% of the liquidated value
of the Convertible Debentures outstanding for each thirty (30) day period after
the Scheduled Filing Deadline or the Scheduled Effective Deadline as the case
may be. Any Liquidated Damages payable hereunder shall not limit, prohibit or
preclude the Investor from seeking any other remedy available to it under
contract, at law or in equity. As of December 31, 2008 and 2007, the Company has
incurred and accrued $198,905 in Liquidated Damages in the consolidated balance
sheets.  There is no maximum stipulated in the agreement.






F-19
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007


NOTE 13 - CAPITAL
STOCK





In
accordance with its Certificate of Incorporation as amended on April 24, 2003,
the Company is authorized to issue up to: 10,000,000,000 shares of Class A
common stock at $.00001 par value; 50,000,000 shares of Class B Common Stock,
par value $.00001; and 20,000,000 shares of Class C Common Stock, par value
$.00001. Additionally, the board of directors has the rights to prescribe and
authorize the issuance of 1,000,000 preferred shares, $1.00 par
value.





PREFERRED
STOCK





Preferred
Stock consists of 1,000,000 shares of authorized preferred stock with $1.00 par
value. For the year ending December 31, 2008, the Company had no transactions in
its Preferred Stock.





CLASS A
COMMON STOCK





Class A
Common Stock consists of the following as of December 31, 2008: 10,000,000,000
shares of authorized common stock with a par value of $.00001, 4,105,473,533
shares were issued and outstanding. Each holder of Class A common stock is
entitled to receive ratably dividends, if any, as may be declared by the Board
of Directors out of funds legally available for the payment of dividends. The
Company has never paid any dividends on its common stock and does not
contemplate doing so in the foreseeable future. The Company anticipates that any
earnings generated from operations will be used to finance the growth
objectives.





For the
year ended December 31, 2008, the Company had the following transactions in its
Class A common stock:





Ø The
Company issued 986,111,111 shares of Class A common stock with a total value of
$145,584 for conversion of $102,500 of principal on convertible debentures with
YA Global Investments, f/k/a Cornell Capital Partners.




For the
year ended December 31, 2007, the Company had the following transactions in its
Class A Common Stock:





Ø The
Company issued 2,280,649,779 shares of Class A common stock with a total value
of $782,280.  Of this amount $642,258 was repayment of principal on
the convertible debenture with YA Global Investments (f/k/a. Cornell Capital
Partners, LP).  The balance of $140,022 represents discount on
conversions of principal.





Ø The
Company issued 159,724,544 shares of Class A common stock with a total value of
$109,666 to an officer of the Company for repayment of a note payable. Of this
amount, $30,375 was for payment of principal and $79,291 represents discount on
conversions.





Ø The
Company issued 2,500,000 shares of Class A common stock with a value of $8,500
for compensation for investor relations services to Savant
Corporation.




Ø The
Company issued 170,000,000 shares of Class A common stock with a total value of
$137,215 to officers of the Company as repayment accrued salaries.  Of
this amount, $44,236 was for payment of accrued salaries and $92,979 represents
discount on conversions.





Ø The
Company issued 175,866,802 shares of Class A common stock with a total value of
$179,575.  Of this amount, $64,516 was for repayment legal
services.  The balance of $115,059 represents discount on
conversions.





Ø The
Company issued 170,000,000 shares of Class A common stock for compensation and
bonuses to employees of SWK Technologies, Inc., valued at
$137,215.




CLASS B
COMMON STOCK





Class B
Common Stock consists of 50,000,000 shares of authorized common stock with a par
value of $0.00001. Class B stock has voting rights of 1 to 1 with respect to
Class A Common Stock. As of December 31, 2008, no shares were issued and
outstanding; Class B common stockholders are entitled to receive dividends in
the same proportion as the Class B Common Stock conversion and voting rights
have to Class A Common Stock. A holder of Class B Common Stock has the right to
convert each share of Class B Common Stock into the number of shares of Class A
Common Stock determined by dividing the number of Class B Common Stock being
converted by a 50% discount of the lowest price that Trey had ever issued its
Class A Common Stock. Upon the liquidation, dissolution, or winding - up of the
Company, holders of Class B Common Stock will be entitled to receive
distributions. For the years ended December 31, 2008 and 2007, the company had
no transactions in its Class B Common Stock.





CLASS C
COMMON STOCK





Class C
Common Stock consists of 20,000,000 shares of authorized common stock with a par
value of $0.00001. Class C stock has voting rights of 1 vote for every 1,000
shares. For the year ended December 31, 2008, the company had no transactions in
its Class C Common Stock.








F-20
 Table of Contents





TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007




NOTE 14 - STOCK OPTIONS,
STOCK INCENTIVES & WARRANTS





2004 Stock Incentive
Plan


During
the year ended December 31, 2004, and as amended in 2004 and 2005, the Company
adopted the 2005 Stock Incentive Plan (the “2004 Plan”) in order to attract and
retain qualified employees, directors, independent contractors or agents of Trey
Resources, Inc.  Under the Plan, the Board of
Directors (the “Board”), in its discretion may grant stock options (either
incentive or non-qualified stock options) to employees, directors, independent
contractors or agents to purchase the Company’s common stock at no less than 50%
of the fair market price on the date the option is granted.  Options
generally vest over four years and have a maximum term of ten
years.





During
the fiscal year ended December 31, 2007, the Company adopted the 2007 Consultant
Stock Incentive Plan (the “2007 Plan”) to: (i) provide long-term incentives,
payment in stock in lieu of cash and rewards to consultants, advisors,
attorneys, independent contractors or agents ("Eligible Participants") of the
Company; (ii) assist the Company in attracting and retaining independent
contractors or agents with experience and/or ability on a basis competitive with
industry practices; and (iii) associate the interests of such independent
contractors or agents with those of the Company's stockholders.  Total
shares issuable under this plan may not exceed twenty (20) percent of the issued
and outstanding shares of the Company’s Class A Common Stock.





No
securities were issued pursuant to the 2004 Plan and 2007 Plans for the year
ended December 31, 2008.





The
following securities were issued pursuant to the 2004 Plan and 2007 Plan for the
year ended December 31, 2007:





Ø
            On
      March 5, 2007 the Company issued 2,500,000 shares of Class A common stock
      for investor relations to Savant
Corporation.





Ø
            At
      various times during the year ended December 31, 2007, the Company issued
      the aggregate of 170,000,000 shares of Class A common stock for
      compensation and bonuses to SWK
employees.





Ø
            At
      various times during the year ended December 31, 2007 the Company issued
      175,866,802 shares of Class A common stock to a Meritz & Muenz LLP for
      legal services provided.





2004 Directors’ and
Officers’ Stock Incentive Plan


During
the year ended December 31, 2004, and as amended in 2004 and 2005, the Company
adopted the 2004 Directors’ and Officers’ Stock Incentive Plan (the “2004
D&O Plan”) in order to provide long-term incentive and rewards to officers
and directors of Trey Resources and subsidiaries and to attract and retain
qualified employees, directors, independent contractors or agents of Trey
Resources, Inc.  Under the Plan, the Board, in its discretion may
grant stock options (either incentive or non-qualified stock options) to
employees, directors, independent contractors or agents to purchase the
Company’s common stock at no less than 50% of the market price on the date the
option is granted.  Options generally vest over four years and have a
maximum term of ten years.








2004 Directors’ and
Officers’ Stock Incentive Plan (continued)


No
securities were issued pursuant to the 2004 D&O Plan for the year ended
December 31, 2008.





The
following securities were issued pursuant to the 2004 D&O Plan for the year
ended December 31, 2007:





Ø
            At
      various times during the year ended December 31, 2007, the Company issued
      170,000,000shares
      of Class A common stock for repayment of accrued salaries for two officers
      of the Company.





Options/Warrants
Outstanding


No
options or warrants were granted for the years ended December 31, 2008 and 2007.
The following options and warrants were issued pursuant to their respective
agreements.  Unexpired options and warrants outstanding are as follows
as of December 31, 2008:




Expiration
      Date
                    
                    Exercise
      Price
                    
                    
                    SharesJuly
      11, 2012
                    
                    
                    .015
                    
                    
                    
                    3,000,000July
      31, 2014
                    
                    
                    .070
                    
                    
                    
                    75,0003,075,000






F-21
 Table of Contents




TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007




NOTE 14 - STOCK OPTIONS,
STOCK INCENTIVES & WARRANTS (Continued)





Options
and warrants for 4,000,000 shares with an exercise price of $0.030 expired
during the year ended December 31, 2008





The
following table summarizes the stock option and warrants
transactions:




Stock
                      
                      
                      WeightedOption
      &
                      
                      
                      AverageWarrants
                      
                      
                      ExerciseOutstanding
                      
                      
                      PriceBalance,
      January 1, 2007
                      
                      
                      7,075,000
                      
                      
                      $
                      .024Granted
                      
                      
                      -
                      
                      
                      $
                      .000Exercised
                      
                      
                      -
                      
                      
                      $
                      .000Canceled
                      
                      
                      -
                      
                      
                      $
                      .000Balance,
      December 31, 2006
                      
                      
                      7,075,000
                      
                      
                      $
                      .024Granted
                      
                      
                      -
                      
                      
                      $
                      .000Exercised
                      
                      
                      -
                      
                      
                      $
                      .000Canceled
                      
                      
                      4,000,000
                      
                      
                      $
                      .030Balance,
      December 31, 2007
                      
                      
                      3,075,000
                      
                      
                      $
                      .016Outstanding
      and Exercisable,December
      31, 2007
                      
                      
                      7,075,000
                      
                      
                      $
                      .024Outstanding
      and Exercisable,December
      31, 2008
                      
                      
                      3,075,000
                      
                      
                      $
                      .016




NOTE 15 – FAIR VALUE
MEASUREMENTS





On
January 1, 2008, the Company adopted SFAS No. 157 “Fair Value
Measurements” (“SFAS 157”). SFAS 157 defines fair value, provides a consistent
framework for measuring fair value under Generally Accepted Accounting
Principles and expands fair value financial statement disclosure requirements.
SFAS 157’s valuation techniques are based on observable and unobservable inputs.
Observable inputs reflect readily obtainable data from independent sources,
while unobservable inputs reflect our market assumptions. SFAS 157 classifies
these inputs into the following hierarchy:





Level 1
Inputs– Quoted prices for identical instruments in active markets.


Level 2
Inputs– Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.


Level 3
Inputs– Instruments with primarily unobservable value drivers.





The
following table represents the fair value hierarchy for those financial assets
and liabilities measured at fair value on a recurring basis as of December 31,
2008.




Level
      I
                          
                          
                          Level II
                          
                          
                          Level III
                          
                          
                          TotalConvertible
      debentures
                          
                          $
                          -
                          
                          
                          $
                          1,574,100
                          
                          
                          $
                          -
                          
                          
                          $
                          1,574,100Notes
      payable and capital leases
                          
                          
                          -
                          
                          
                          
                          92,828
                          
                          
                          
                          -
                          
                          
                          
                          92,828Notes
      payable to related parties
                          
                          
                          -
                          
                          
                          
                          321,063
                          
                          
                          
                          -
                          
                          
                          
                          321,063Derivative
      liabilities
                          
                          
                          -
                          
                          
                          
                          857,326
                          
                          
                          
                          -
                          
                          
                          
                          857,326Warrant
      liabilities
                          
                          
                          -
                          
                          
                          
                          75,450
                          
                          
                          
                          -
                          
                          
                          
                          75,450Total
      Liabilities
                          
                          $
                          -
                          
                          
                          $
                          2,920,767
                          
                          
                          $
                          -
                          
                          
                          $
                          2,920,767





F-22
 Table of Contents


TREY
RESOURCES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 DECEMBER
31, 2008 AND 2007




NOTE 16 - GOING
CONCERN




The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplates continuation of the Company as a going concern.


The
Company has suffered recurring losses, and current liabilities exceeded current
assets by approximately $5.6 million, as of December 31, 2008. These matters
raise substantial doubt about the Company's ability to continue as a going
concern. The recoverability of a major portion of the recorded asset amounts
shown in the accompanying consolidated balance sheet is dependent upon continued
operations of the Company, which in turn, is dependent upon the Company's
ability to raise capital and/or generate positive cash flows from
operations.




In
addition to developing new products, obtaining new customers and increasing
sales to existing customers, management plans to achieve profitability through
acquisitions of companies in the business software and information technology
consulting market with solid revenue streams, established customer bases, and
generate positive cash flow.





These
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.





F-23
 Table of Contents