##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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[Mark One]

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007

OR



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

For the transition period from  to

Commission File Number 0-23315



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enherent Corp.

(Exact name of Registrant as Specified in Its Charter)



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|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Delaware                                       |  | No. 13-3914972                      
|(State or Other Jurisdiction of Incorporation) |  | (I.R.S. Employer Identification No.)

101 Eisenhower Parkway, Suite 300

Roseland, NJ 07068

(Address of Principal Executive Offices)

(973) 795-1290

(Registrants Telephone Number, Including Area Code)



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Indicate by check mark 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 ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act.

Large Accelerated Filer ̈Accelerated Filer ̈Non-Accelerated
Filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    YES ̈NO  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date:





|                              |  |                                        
|----------------------------- |  | ---------------------------------------
|Class                         |  | Shares outstanding as of August 7, 2007
|Common stock, par value $.001 |  | 50,701,451                             



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##### Table of Contents

enherent Corp. and Subsidiaries

INDEX



|                                                                                                          |  |     
|--------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                          |  | Page
|PART I. FINANCIAL INFORMATION                                                                             |  |     
|                                                                                                          | 
|Item 1. Financial Statements.                                                                             |  |     
|                                                                                                          | 
|Condensed Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006                           |  | 1   
|                                                                                                          | 
|Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2007 and 2006 |  | 2   
|                                                                                                          | 
|Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006           |  | 3   
|                                                                                                          | 
|Notes to Condensed Consolidated Financial Statements                                                      |  | 4   
|                                                                                                          | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.            |  | 7   
|                                                                                                          | 
|Item 3. Quantitative and Qualitative Disclosures about Market Risk.                                       |  | 15  
|                                                                                                          | 
|Item 4. Controls and Procedures.                                                                          |  | 15  
|                                                                                                          | 
|PART II. OTHER INFORMATION                                                                                |  |     
|                                                                                                          | 
|Item 1. Legal Proceedings.                                                                                |  | 16  
|                                                                                                          | 
|Item 4. Submission of Matters to a Vote of Security Holders                                               |  | 16  
|                                                                                                          | 
|Item 5. Other Information                                                                                 |  | 16  
|                                                                                                          | 
|Item 6. Exhibits.                                                                                         |  | 17  
|                                                                                                          | 
|Signatures                                                                                                |  | S-1 
|                                                                                                          | 
|Exhibit Index                                                                                             |  | E-1 



i



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------

ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------ | ----------- | - | -------------------------- | - | ----------- | -
|                                                                                                                                                 |  | June 30, 2007(Unaudited) |             |   | December 31,2006 (Audited) |  
|ASSETS                                                                                                                                           |  |                          |             |   |                            |   |             |  
|Current assets:                                                                                                                                  |  |                          |             |   |                            |   |             |  
|Cash and cash equivalents                                                                                                                        |  | $                        | 783,220     |   |                            | $ | 631,656     |  
|Accounts receivable, net                                                                                                                         |  |                          | 5,442,055   |   |                            |   | 4,320,334   |  
|Prepaid expenses and other current assets                                                                                                        |  |                          | 296,740     |   |                            |   | 134,854     |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|Total current assets                                                                                                                             |  |                          | 6,522,015   |   |                            |   | 5,086,844   |  
|                                                                                                                                                 |  |                         
|Furniture, equipment and improvements, net                                                                                                       |  |                          | 195,861     |   |                            |   | 174,506     |  
|                                                                                                                                                 |  |                         
|Goodwill                                                                                                                                         |  |                          | 4,334,278   |   |                            |   | 4,334,278   |  
|Other intangibles, net                                                                                                                           |  |                          | 275,000     |   |                            |   | 325,000     |  
|Deferred financing costs, net                                                                                                                    |  |                          | 66,743      |   |                            |   | 85,812      |  
|Other assets                                                                                                                                     |  |                          | 41,833      |   |                            |   | 31,376      |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|TOTAL                                                                                                                                            |  | $                        | 11,435,730  |   |                            | $ | 10,037,816  |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|LIABILITIES                                                                                                                                      |  |                          |             |   |                            |   |             |  
|                                                                                                                                                 |  |                         
|Current liabilities:                                                                                                                             |  |                          |             |   |                            |   |             |  
|Revolving credit facility                                                                                                                        |  | $                        | 3,670,816   |   |                            | $ | 2,852,628   |  
|Current portion of long-term debt                                                                                                                |  |                          | 731,828     |   |                            |   | 758,335     |  
|Accounts payable and accrued expenses                                                                                                            |  |                          | 3,333,344   |   |                            |   | 3,186,815   |  
|Deferred revenue                                                                                                                                 |  |                          | 227,643     |   |                            |   | 171,275     |  
|Accrued compensation and benefits                                                                                                                |  |                          | 1,027,714   |   |                            |   | 853,979     |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|Total current liabilities                                                                                                                        |  |                          | 8,991,345   |   |                            |   | 7,823,032   |  
|                                                                                                                                                 |  |                         
|Long-term liabilities:                                                                                                                           |  |                          |             |   |                            |   |             |  
|Long-term debt, net of current portion above                                                                                                     |  |                          | 3,187,246   |   |                            |   | 3,234,184   |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|Total liabilities                                                                                                                                |  |                          | 12,178,591  |   |                            |   | 11,057,216  |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|CAPITAL DEFICIENCY                                                                                                                               |  |                          |             |   |                            |   |             |  
|Preferred stock,$.001 par value; authorized - 10,000,000 shares, issued - none                                                                   |  |                          |            |   |                            |   |            |  
|Common stock,$ .001 par value, authorized - 101,000,000 shares, issued and outstanding  50,661,451 shares in 2007 and
50,361,451 shares in 2006 |  |                          | 50,661      |   |                            |   | 50,361      |  
|Additional paid-in capital                                                                                                                       |  |                          | 27,341,588  |   |                            |   | 27,256,889  |  
|Accumulated deficit                                                                                                                              |  |                          | (28,135,110 | ) |                            |   | (28,326,650 | )
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|Total capital deficiency                                                                                                                         |  |                          | (742,861    | ) |                            |   | (1,019,400  | )
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  
|TOTAL                                                                                                                                            |  | $                        | 11,435,730  |   |                            | $ | 10,037,816  |  
|                                                                                                                                                 |  |                          |             |   |                            |   |             |  

The accompanying notes are part of these consolidated financial statements.



1



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##### Table of Contents

ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|---------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                       |  | Three Months Ended June 30, |            |   | Six Months Ended June 30, |  
|                                                                       |  | 2007                        |            |   | 2006                      |   |            | 2007 |  |   | 2006       |  
|Revenues:                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Service revenue                                                        |  | $                           | 7,373,538  |   |                           | $ | 7,146,831  |      |  | $ | 14,523,344 |   |  | $ | 13,762,555 |  
|Equipment and software revenue                                         |  |                             | 1,108,273  |   |                           |   | 399,622    |      |  |   | 1,505,980  |   |  |   | 835,023    |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total revenue                                                          |  |                             | 8,481,811  |   |                           |   | 7,546,453  |      |  |   | 16,029,324 |   |  |   | 14,597,578 |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Cost of revenues:                                                      |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Cost of services                                                       |  |                             | 5,681,184  |   |                           |   | 5,431,339  |      |  |   | 11,274,762 |   |  |   | 10,619,556 |  
|Cost of equipment and software                                         |  |                             | 1,002,472  |   |                           |   | 296,085    |      |  |   | 1,248,804  |   |  |   | 611,898    |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Cost of revenues                                                       |  |                             | 6,683,656  |   |                           |   | 5,727,424  |      |  |   | 12,523,566 |   |  |   | 11,231,454 |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Gross profit                                                           |  |                             | 1,798,155  |   |                           |   | 1,819,029  |      |  |   | 3,505,758  |   |  |   | 3,366,124  |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Operating expenses:                                                    |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Selling, general and administrative                                    |  |                             | 1,413,869  |   |                           |   | 1,524,435  |      |  |   | 2,839,979  |   |  |   | 3,316,100  |  
|Depreciation and amortization expense                                  |  |                             | 65,876     |   |                           |   | 81, 702    |      |  |   | 129,566    |   |  |   | 162,935    |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total operating expenses                                               |  |                             | 1,479,745  |   |                           |   | 1,606,137  |      |  |   | 2,969,545  |   |  |   | 3,479,035  |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Operating income (loss)                                                |  |                             | 318,410    |   |                           |   | 212,892    |      |  |   | 536,213    |   |  |   | (112,911   | )
|Interest expense                                                       |  |                             | (173,530   | ) |                           |   | (182,880   | )    |  |   | (338,427   | ) |  |   | (371,190   | )
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Income (loss) before income taxes                                      |  |                             | 144,880    |   |                           |   | 30,012     |      |  |   | 197,786    |   |  |   | (484,101   | )
|                                                                       |  |                             |            |  
|Provision for income taxes                                             |  |                             | (3,246     | ) |                           |   | (3,627     | )    |  |   | (6,246     | ) |  |   | (6,777     | )
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|NET INCOME (LOSS)                                                      |  | $                           | 141,634    |   |                           | $ | 26,385     |      |  | $ | 191,540    |   |  | $ | (490,878   | )
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Basic net income (loss) per share                                      |  | $                           | 0.00       |   |                           | $ | 0.00       |      |  | $ | 0.00       |   |  | $ | (0.01      | )
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Number of shares used in computing basic net income (loss) per share   |  |                             | 50,661,451 |   |                           |   | 50,361,451 |      |  |   | 50,661,451 |   |  |   | 50,360,896 |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Diluted net income (loss) per share                                    |  | $                           | 0.00       |   |                           | $ | 0.00       |      |  | $ | 0.00       |   |  | $ | (0.01      | )
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Number of shares used in computing diluted net income (loss) per share |  |                             | 51,375,409 |   |                           |   | 51,485,241 |      |  |   | 51,262,355 |   |  |   | 50,360,896 |  
|                                                                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  

The accompanying notes are part of these consolidated financial statements.



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ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                           |  |                           |            |   |      |   |          |  
|------------------------------------------------------------------------------------------ |  | ------------------------- | ---------- | - | ---- | - | -------- | -
|                                                                                           |  | Six Months Ended June 30, |           
|                                                                                           |  | 2007                      |            |   | 2006 |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                       |  |                           |            |   |      |   |          |  
|                                                                                           |  |                          
|Cash flows from operating activities:                                                      |  |                           |            |   |      |   |          |  
|Net income (loss)                                                                          |  | $                         | 191,540    |   |      | $ | (490,878 | )
|Adjustments to reconcile net loss to net cash provided by (used for) operating activities: |  |                           |            |   |      |   |          |  
|Depreciation and amortization                                                              |  |                           | 129,566    |   |      |   | 162,935  |  
|Stock based compensation                                                                   |  |                           | 85,000     |   |      |   | 114,000  |  
|Bad debt expense                                                                           |  |                           | 5,000      |   |      |   | 30,000   |  
|Deferred rent                                                                              |  |                           |           |   |      |   | (11,406  | )
|Deferred revenue                                                                           |  |                           | 56,368     |   |      |   | 114,254  |  
|Deferred compensation                                                                      |  |                           |           |   |      |   | 20,826   |  
|Changes in assets and liabilities:                                                         |  |                           |            |   |      |   |          |  
|Accounts receivable                                                                        |  |                           | (1,126,721 | ) |      |   | 179,239  |  
|Prepaid expenses and other current assets                                                  |  |                           | (161,886   | ) |      |   | (179,013 | )
|Prepaid and refundable taxes                                                               |  |                           |           |   |      |   | 4,484    |  
|Other assets                                                                               |  |                           | (10,457    | ) |      |   |         |  
|Accounts payable, accrued expense and accrued compensation and benefits                    |  |                           | 342,918    |   |      |   | (48,334  | )
|                                                                                           |  |                           |            |   |      |   |          |  
|Net cash used for operating activities                                                     |  |                           | (488,672   | ) |      |   | (103,893 | )
|                                                                                           |  |                           |            |   |      |   |          |  
|Cash flows from investing activities:                                                      |  |                           |            |   |      |   |          |  
|Purchase of furniture, fixtures, equipment and improvements                                |  |                           | (46,450    | ) |      |   | (40,436  | )
|                                                                                           |  |                           |            |   |      |   |          |  
|Net cash used for investing activities                                                     |  |                           | (46,450    | ) |      |   | (40,436  | )
|                                                                                           |  |                           |            |   |      |   |          |  
|Cash flows from financing activities:                                                      |  |                           |            |   |      |   |          |  
|Proceeds received from exercised stock options                                             |  |                           |           |   |      |   | 500      |  
|Net proceeds under revolving loan                                                          |  |                           | 818,188    |   |      |   | 157,961  |  
|Principal payments on capital lease obligations                                            |  |                           | (22,483    | ) |      |   | (24,473  | )
|Repayment of other notes payable                                                           |  |                           | (109,019   | ) |      |   | (72,580  | )
|                                                                                           |  |                           |            |   |      |   |          |  
|Net cash provided by financing activities                                                  |  |                           | 686,686    |   |      |   | 61,408   |  
|                                                                                           |  |                           |            |   |      |   |          |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                       |  |                           | 151,564    |   |      |   | (82,921  | )
|                                                                                           |  |                          
|Cash and cash equivalents  January 1,                                                     |  |                           | 631,656    |   |      |   | 320,574  |  
|                                                                                           |  |                           |            |   |      |   |          |  
|CASH AND CASH EQUIVALENTS  June 30,                                                       |  | $                         | 783,220    |   |      | $ | 237,653  |  
|                                                                                           |  |                           |            |   |      |   |          |  
|Supplemental disclosure of cash flow information:                                          |  |                           |            |   |      |   |          |  
|                                                                                           |  |                          
|Cash paid during the period for:                                                           |  |                           |            |   |      |   |          |  
|Interest                                                                                   |  | $                         | 296,348    |   |      | $ | 297,326  |  
|                                                                                           |  |                           |            |   |      |   |          |  
|Income taxes                                                                               |  | $                         | 7,949      |   |      | $ | 2,266    |  
|                                                                                           |  |                           |            |   |      |   |          |  
|Non Cash investing transactions:                                                           |  |                           |            |   |      |   |          |  
|Equipment acquired under capital leases                                                    |  | $                         | 35,403     |   |      | $ | 32,052   |  
|                                                                                           |  |                           |            |   |      |   |          |  

The accompanying notes are part of these consolidated financial statements.



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##### Table of Contents

ENHERENT CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|1. | Basis of Presentation:
|-- | ----------------------

The unaudited
condensed consolidated financial statements of enherent Corp. (the Company) presented herein have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to
Form 10-Q and Item 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring entries) considered necessary for a fair presentation of the financial condition and results of operations for the
periods presented. The results of operations for the six-month period ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. The unaudited condensed consolidated
financial statements should be read in conjunction with the consolidated December 31, 2006 financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K.



|2. | Income (Loss) Per Share:
|-- | ------------------------

The following
table sets forth the computation of basic and diluted income (loss) per share:



|                                       |  |                             |            |                           |   |            |  |      |            |  |   |            |  
|-------------------------------------- |  | --------------------------- | ---------- | ------------------------- | - | ---------- |  | ---- | ---------- |  | - | ---------- | -
|                                       |  | Three months ended June 30, |            | Six months ended June 30, |  
|                                       |  | 2007                        |            | 2006                      |   | 2007       |  | 2006 |           
|Numerator:                             |  |                             |            |                           |   |            |  |      |            |  |   |            |  
|Net income (loss)                      |  | $                           | 141,634    |                           | $ | 26,385     |  | $    | 191,540    |  | $ | (490,878   | )
|                                       |  |                             |            |                           |   |            |  |      |            |  |   |            |  
|Denominator:                           |  |                             |            |                           |   |            |  |      |            |  |   |            |  
|Weighted average of shares outstanding |  |                             |            |                           |   |            |  |      |            |  |   |            |  
|                                       |  |                             |            |                          
|Basic                                  |  |                             | 50,661,451 |                           |   | 50,361,451 |  |      | 50,661,451 |  |   | 50,360,896 |  
|Diluted                                |  |                             | 51,375,409 |                           |   | 51,485,241 |  |      | 51,262,355 |  |   | 50,360,896 |  
|Basic income (loss) per share          |  | $                           | 0.00       |                           | $ | 0.00       |  | $    | 0.00       |  | $ | (.01       | )
|Diluted income (loss) per share        |  | $                           | 0.00       |                           | $ | 0.00       |  | $    | 0.00       |  | $ | (.01       | )

Dilution is caused by issued and outstanding options. For the 2006 period in which the Company
incurred a net loss, the computation for net loss per share excludes the effect of stock options as they were antidilutive.



|3. | Stock-Based Compensation:
|-- | -------------------------

Effective
January 1, 2006, the Company adopted the fair value provisions for share-based awards pursuant to SFAS No. 123(R), using the modified-prospective-transition method. Under that transition method, compensation cost recognized in 2006
includes (a) compensation cost for all share-based awards granted prior to, but not yet vested as of January 1, 2006, based on the attribution method and grant date fair value estimated in accordance with the original provisions of SFAS
No. 123, and (b) compensation cost for all share-based awards granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R) and recognized on a straight
line basis over the shorter of the vesting or requisite service periods.



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##### Table of Contents

In determining the estimated fair value of its stock options as of the date of grant, the Company used
the Black-Scholes option pricing model with the following assumptions:



|                                                                     |  |          |   |  |          |  
|-------------------------------------------------------------------- |  | -------- | - |  | -------- | -
|                                                                     |  | June 30, |  
|                                                                     |  | 2007     |   |  | 2006     |  
|Risk-free interest rate                                              |  | 5.00     | % |  | 5.25     | %
|                                                                     |  |         
|Dividend yield                                                       |  | 0        | % |  | 0        | %
|                                                                     |  |         
|Volatility factors of the expected market price for our common stock |  | 54.00    | % |  | 49.00    | %
|                                                                     |  |         
|Weighted average expected life of options                            |  | 10 years |   |  | 10 years |  

The Black-Scholes option pricing model was developed for use in estimating the fair value of
traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Companys employee
stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in the Companys opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of the Companys employee stock options.



|4. | Contingencies:
|-- | --------------

In the normal course of
business, various claims are made against the Company. At this time, in the opinion of management, there are no pending claims the outcome of which are expected to result in a material adverse effect on the consolidated financial position or results
of operations of the Company.



|5. | Notes Payable:
|-- | --------------

At June 30, 2007 the
Company had notes payable of $1,576,000 to former preferred stockholders. Three of the promissory notes bearing 6% interest had terms of five years with no principal payments owed in the first twenty-nine months. The fourth note in the principal
amount of $188,000, had a term of two years with quarterly principal payments in the amount of $23,000 due. The Company made one installment payment under the terms of this note in 2005. All past due principal bore interest at 12% until paid,
increasing by an additional 2% every six months that a past-due amount remains outstanding to a maximum of 18% per annum. Through June 30, 2007 the Company accrued interest on all past-due amounts in accordance with the terms of the note.

Effective August 10, 2007, the Company and the former Preferred Stockholders agreed to amend and restate the four promissory notes.
The three amended and restated notes having an aggregate principal amount of $1,412,000 have a maturity date of July 1, 2011, with no principal payments due until January 1, 2009. Thereafter, semi-annual principal payments of $177,000 are
due for the following two years and for the last year semi-annual principal payments of $353,000 are due. Interest continues to accrue at 6% and is payable at maturity. In consideration for agreeing to amend and restate the notes, the Company has
agreed to issue to the holders of the three notes an aggregate number of shares of the Companys voting common stock equal to $200,000 divided by the average of the last reported sale prices of the Companys voting common stock on the
thirty trading days preceding August 10, 2007. The fourth note, which had outstanding principal and accrued interest of $189,165 as of August 10, 2007, was amended and restated to require twelve monthly payments of $15,764 commencing
August 15, 2007 and a final payment of $11,484 on August 15, 2008 as consideration for agreeing to amend and restate the note. The fourth amended and restated note will not bear interest following August 10, 2007, except in the event
of a default thereunder, in which case interest would accrue based on the original schedule of past due interest rates. The classification of these notes on the condensed balance sheet at June 30, 2007 gives effect to the amended and restated
terms of the notes.



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|6. | Income Taxes:
|-- | -------------

At December 31, 2006,
the Company had federal net operating loss carry forwards of approximately $52.5 million and state net operating loss carry forwards of approximately $55.8 million that begin to expire in 2018. However, as a result of the Companys
merger with Dynax Solutions, Inc. (Dynax) on April 1, 2005 (the Merger), the amount of net operating loss carry forwards available to be utilized in reduction of future taxable income was reduced to approximately
$660,000 annually pursuant to the change in control provisions of Section 382 of the Internal Revenue Code, plus any losses incurred after the Merger. Due to the uncertainty of its ability to utilize the deferred tax assets relating to the loss
carry forwards and other temporary differences between tax and financial reporting purposes, the Company has recorded a valuation allowance equal to the related deferred tax assets. If the Company generates U.S. taxable income in
future periods, reversal of this valuation allowance could have a significant positive impact on net income. As a result of the existence of the valuation allowance, no tax provision was required for the six months ended June 30, 2007,
except for certain state and local taxes which are not based on current earnings.

In June 2006, the FASB issued FASB Interpretation
No. 48,Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions. Effective January 1, 2007, the Company
adopted the provisions of FIN 48, as required. As a result of implementing FIN 48, there has been no adjustment to the Companys financial statements and the adoption of FIN 48 is not anticipated to have a material effect on the Companys
consolidated financial statements for the year ending December 31, 2007.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

The following discussion provides information that management believes is relevant to an assessment and an understanding of the operations and financial
condition of enherent Corp. (the Company). This discussion should be read in conjunction with the Companys audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for
the year ended December 31, 2006.

Overview

General

enherent is an information technology services firm with a primary focus of providing clients with:
(a) consultative resources including technology staffing; and (b) teams of technical consultants trained in the delivery of solutions related to systems integration, network and security, and application services. Our consultative resource
services allow clients to use enherent consultants to address strategic technology resource demands. Our solutions services offerings combine project management, technical and industry expertise, and as required, software product licenses and
computer equipment to deliver business value. enherents core competencies are project management, business requirements definition, technical application, data architecture, system design, application code development, test strategy, planning,
execution and deployment.

enherent is an IBM premier business partner. enherent leverages the IBM partnership to train and certify sales
personnel in the IBM solutions selling process and the functions, features and benefits of IBM products. enherent leverages IBMs technical training to train and certify its consultants in the IBM products that we use to support our application
and system integration solutions. enherent purchases equipment products for resale from Agilysys, an IBM value added distributor. IBM offers several incentive programs to its partners including purchase discounts, vendor incentive programs and sales
rebates. Incentive programs are at the discretion of IBM and usually require achievement of a specific sales volume or growth rate within a specified time period to qualify for all, or some, of the incentive programs.

enherents principal offices are located at 101 Eisenhower Parkway, Suite 300, Roseland, New Jersey and its client base is concentrated in
Connecticut, New York and New Jersey.

Critical Accounting Policies

Use of Estimates

As described in Note 1 thereto, the condensed consolidated financial
statements presented elsewhere in this document have been prepared in conformity with generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Item 10-01 of Regulation S-X. The
preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

In preparing the Companys condensed consolidated financial statements in conformity with accounting principles generally accepted in the United
States, the Company uses certain estimates and assumptions that affect the reported amounts and related disclosures. The Company considers the following accounting policies as those most important to the portrayal of its financial condition and
those that require the most subjective judgment. Although the Company believes that its estimates and assumptions are reasonable, actual results may differ, and such differences could be significant to its financial results.



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Revenue Recognition

The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, the product has been
shipped or the services have been provided to the customer, the sales price is fixed or determinable and collectibility is reasonably assured. In addition to the aforementioned general policy, the following are the specific revenue recognition
policies for each major category of revenue:

Consulting Services:The terms of service contracts generally are for periods of
less than one year. Revenue from time and material service contracts is recognized as the services are provided. Revenue from services requiring the delivery of unique products and/or services is recognized based on the completion of milestones.
Provisions for losses are recognized during the period in which the loss first becomes apparent. Revenue from service maintenance is recognized over the contractual period or as the service is performed. In some of the Companys services
contracts, the Company bills the customer prior to performing the service. This situation gives rise to deferred income. In other services contracts, the Company performs services prior to billing the customer. This situation gives rise to unbilled
accounts receivable, which are included in accounts receivable in the consolidated balance sheet. In these circumstances, billing usually occurs shortly after the Company performs the services.

Software: Revenue from the sale of one-time charge licensed software is recognized at the inception of the license term.

Equipment:Revenue from the sale of equipment is recognized when the product is shipped to the customer and there are no unfulfilled Company
obligations that affect the customers final acceptance of the equipment.

Accounts Receivable  Allowance for Doubtful Accounts

The Companys accounts receivable balance is reported net of allowances for amounts not expected to be collected from clients.
The Company regularly evaluates the collectibility of amounts owed to it based on the ability of the debtor to make payment. In the event the Companys evaluation indicates that a customer may be unable to satisfy its obligation, the Company
will record a reserve to reflect this anticipated loss. The Company periodically reviews the requirements, and adequacy of the reserve, for doubtful accounts.

Fixed Assets

Fixed assets are stated at cost, and depreciation on furniture and equipment, computer equipment and
software is calculated on the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated
useful life of the asset. The Company evaluates long-lived assets for impairment and records charges in operating results when events and circumstances indicate that assets may be impaired. The impairment charge is determined based upon the amount
by which the net book value of the asset exceeds its estimated fair market value or undiscounted cash flow. No impairment charges have been recognized in any of the periods presented herein.

Goodwill and Other Intangible Assets

In June
2001, Statement of Financial Accounting Standards No. 142 (SFAS 142) Goodwill and Other Intangible Assets was issued. Under SFAS 142, goodwill is no longer amortized after December 31, 2001. It must,
however, be evaluated for impairment at least annually and any losses due to impairment are recognized in earnings. SFAS 142 became effective for the Company on January 1, 2002. The Companys goodwill and other intangibles were
evaluated for impairment as of March 31, 2007. The Company determined that these assets had not been impaired and no losses should be recognized based on this evaluation.



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In August 2001, Statement of Financial Accounting Standards No. 144 (SFAS 144)
Accounting for the Impairment or Disposal of Long-Lived Assets was issued. Under SFAS 144, the Company is required to test long-lived assets other than goodwill for impairment whenever events or changes in circumstances indicate
that their carrying value may not be recoverable.

Results of Operations:

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006

Service
Revenues:

Service revenues increased 5.5% to $14.5 million for the six months ended June 30, 2007 from $13.8 million for
the six months ended June 30, 2006. The increase was attributable primarily to the increase in the bill rates and number of billable consultants deployed at certain key customers as a result of new project initiatives at these customers.

Gross profit from service revenues increased 3.4% to $3.2 million for the six months ended June 30, 2007 from $3.1 million for the
six months ended June 30, 2006. The increase in gross profit was attributable primarily to the additional revenue generated from the increase in billable consultants deployed at certain key customers.

Gross profit as a percentage of service revenues decreased to 22.4% for the six months ended June 30, 2007 from 22.8% for the six months ended
June 30, 2006. The decrease in gross profit percentage was attributable primarily to lower gross profit margins on certain time and material based engagements with one of our large customers.

Equipment and Software Revenues:

Equipment and
software revenues increased 80.4% to $1.5 million for the six months ended June 30, 2007 from $835,000 for the six months ended June 30, 2006. The increase in equipment and software revenues was attributable primarily to the Company
closing one large software transaction of $810,000 during the second quarter of 2007.

Gross profit from equipment and software revenues
increased 15.3% to $257,000 for the six-month period ended June 30, 2007 from $223,000 for the six-month period ended June 30, 2006. The increase in gross profit was attributable primarily to the increase in software sales during the
six-month period ended June 30, 2007.

Gross profit as a percentage of revenue depends on various factors outside of the
Companys control. These factors may include vendor rebates, incentive programs and the number of clients utilizing third-party leasing arrangements to finance their purchase. When a client purchases equipment directly from enherent, the
Company recognizes the gross revenue from the sale and its associated cost. If a client utilizes a third party leasing arrangement to finance its purchase, the Company recognizes only the net commission revenue versus the gross revenue.

Gross profit as a percentage of equipment and software revenues decreased to 17.1% for the six months ended June 30, 2007 from 26.7% for the six
months ended June 30, 2006, due primarily to the lower gross profit margin realized on one large software transaction in the second quarter of 2007.

Operating Expenses:

Operating expenses decreased 14.6% to $3.0 million for the six months ended June 30, 2007 from
$3.5 million for the six months ended June 30, 2006. The decrease was due primarily to cost reductions made by the Company that resulted in a relative decrease in selling and recruiting payroll costs, general and administrative payroll costs
and other operating expenses during the six months ended June 30, 2007.



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Interest Expense:

Interest expense decreased 8.8% to $338,000 for the six months ended June 30, 2007 from $371,000 for the six months ended June 30, 2006. The decrease was due primarily to a decrease in the utilization of the
revolving credit facility and lower banking fees offset by the higher interest rates during the three months ended June 30, 2007.

Provision for
Income Taxes:

Provision for income taxes relates primarily to revenue-based and minimum state taxes and was positively impacted from
the availability of net operating loss carry forwards, not previously recognized for financial accounting purposes.

Net Income (Loss):

Net income increased to $192,000 for the six months ended June 30, 2007 from a net loss of $491,000 for the six months ended June 30, 2006.
The change in net income was due primarily to the increase in gross profit from service revenues along with a reduction in operating expenses during the six months ended June 30, 2007.

Net Income (Loss) Per Share:

The net income per
share data for the six-month period ended June 30, 2007 is based on the Companys average outstanding shares for the period (basic) plus its dilutive outstanding stock options for that period (fully-diluted). Loss per share information has
been computed based on the weighted average number of Company shares outstanding for the six-month period ended June 30, 2006. Outstanding stock options were anti-dilutive and not considered in the calculation of loss per share for that period.

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006

Service Revenues:

Service revenues increased
3.2% to $7.4 million for the three months ended June 30, 2007 from $7.1 million for the three months ended June 30, 2006. The increase was attributable primarily to the additional revenues generated due to an increase in the bill rates and
number of billable consultants deployed at certain key customers.

Gross profit from service revenues decreased 1.3% to $1.69 million for
the three months ended June 30, 2007 from $1.72 million for the three months ended June 30, 2006. The decrease in gross profit was attributable primarily to the loss of a higher margin customer in 2007.

Gross profit as a percentage of service revenues declined to 23.0% for the three months ended June 30, 2007 from 24.0% for the three months ended
June 30, 2006. The decrease in gross profit percentage was attributable primarily to lower gross profit margins on certain time and material based engagements with certain of our customers.

Equipment and Software Revenues:

Equipment and
software revenues increased 177.3% to $1.1 million for the three months ended June 30, 2007 from $400,000 for the three-months ended June 30, 2006. The increase in equipment and software revenues was attributable primarily to the Company
closing one large software transaction of $810,000 during the three months ended June 30, 2007.

Gross profit from equipment and
software revenues increased by 2.2% to $106,000 for the three-month period ended June 30, 2007 from $104,000 for the three month period ending June 30, 2006. The increase in gross profit was attributable primarily to the increase in
software sales during the second quarter of 2007.



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Gross profit as a percentage of revenue depends on various factors outside of the Companys control.
These factors may include vendor rebates, incentive programs and the number of clients utilizing third-party leasing arrangements to finance their purchase. When a client purchases equipment directly from enherent, the Company recognizes the gross
revenue from the sale and its associated cost. If a client utilizes a third party leasing arrangement to finance its purchase, the Company recognizes only the net commission revenue versus the gross revenue.

Gross profit as a percentage of equipment and software revenues decreased to 9.6% for the three months ended June 30, 2007 from 25.9% for the three
months ended June 30, 2006, due primarily to the lower gross profit margin realized on one large software transaction in the second quarter of 2007.

Operating Expenses:

Operating expenses decreased 7.9% to $1.5 million for the three months ended June 30, 2007 from
$1.6 million for the three months ended June 30, 2006. The decrease was primarily due to cost reductions made by the Company that resulted in a relative decrease in selling, general and administrative payroll costs for the three months ended
June 30, 2007.

Interest Expense:

Interest expense decreased 5.1% to $174,000 for the three months ended June 30, 2007 from $183,000 for the three months ended June 30, 2006. The decrease was due primarily to a decrease in the utilization of the revolving credit
facility partially offset by the higher interest rates during the three months ended June 30, 2007.

Provision for Income Taxes:

Provision for income taxes relates primarily to revenue-based and minimum state taxes and was positively impacted from the availability of net operating
loss carry forwards, not previously recognized for financial accounting purposes.

Net Income (Loss):

Net income increased to $142,000 for the three months ended June 30, 2007 from $26,000 for the three months ended June 30, 2006. The change in
net income was due primarily to a reduction in operating expenses during the three months ended June 30, 2007.

Net Income Per Share:

The net income per share data for the three-month periods ended June 30, 2007 and June 30, 2006 are based on the
Companys average outstanding shares for the quarter (basic) plus its dilutive outstanding stock options for that period (fully-diluted).

Liquidity and Capital Resources:

On April 1, 2005, following the consummation of the Merger, we entered into an
Amended and Restated Credit Agreement, dated April 1, 2005, among us and Ableco Finance LLC (Ableco) as lender and agent (the Amended Credit Agreement). The Amended Credit Agreement with Ableco provided us with a
three-year extension of the revolving credit facility previously maintained by Dynax, and assumed by enherent in the Merger, and an increase in the revolving credit facility from $4.0 million to $6.0 million. The Amended Credit Agreement also
amended the terms of the Term Loan B, which was previously maintained by Dynax and was assumed by enherent in the Merger. The credit facility is secured by a first lien on all of our tangible and intangible assets. The Term Loan B is secured by a
subordinated lien on all of our tangible and intangible assets. The revolving credit facility with Ableco expires on April 1, 2008. The Company is exploring options to extend or replace the facility, but there can be no assurance that an
extension or refinancing will be available on terms favorable or suitable to the Company.



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Borrowings under the revolving credit facility bear interest at 3% above the greater of: (a) the
prime rate; or (b) 7.75% per annum, payable monthly and are limited, in general, to 85% of eligible accounts receivable and 80% of the net amount of unbilled accounts receivable. As of June 30, 2007, the balance outstanding under the
revolving credit facility was $3.7 million. The Term Loan B is payable in semi-annual installments of principal of $212,500 commencing October 1, 2007, with such installments increasing to $425,000 on October 1, 2009, together with annual
interest at a rate of 3%, to April 1, 2010. As of June 30, 2007, the outstanding principal balance of the Term Loan B was $1,700,000.

The holders of the enherent Preferred Stock (the Preferred Stockholders) had a redemption right, exercisable at their option, after January 16, 2006, at a value of $1.00 per share. With the consummation of the Merger, on
April 1, 2005, all of the shares of outstanding Preferred Stock have been converted in a non-cash exchange for an aggregate of 8,500,000 shares of enherent common stock and four subordinated secured notes in the aggregate principal amount of
$1,600,000. According to the terms of three of the promissory notes (having an aggregate principal amount of $1,412,000), 6% interest on the amount outstanding shall be payable in arrears and the Company has accrued interest in the amount of
$184,000 as of June 30, 2007. These three notes have terms of five years and no principal payments shall be owed in the first twenty-nine months ending September 1, 2007. Thereafter, semi-annual principal payments of $177,000 shall be due
for the following two years and for the last year semi-annual principal payments of $353,000 shall be due. According to the terms of the fourth note in the principal amount of $188,000, no interest is charged. This note has a term of two years and
quarterly principal payments in the amount of $23,000. The Company made one installment payment under the terms of this note in 2005. All past due principal bears interest at 12% until paid. The 12% past-due interest rate will increase by an
additional 2% every six months that a past-due amount remains outstanding, such that it will increase to 14% if a past-due amount remains outstanding for six months, 16% if a past-due amount remains outstanding for twelve months, and 18% if a
past-due amount remains outstanding for 18 months. The past-due interest rate will never exceed 18%. The Company has accrued interest on past-due amounts in accordance with the terms of the note in the amount of $22,000 as of June 30, 2007. As
of June 30, 2007, $164,000 was past due bearing a blended interest rate of approximately 15%.

Effective August 10, 2007, the
Company and the former Preferred Stockholders agreed to amend and restate the four promissory notes that had been issued to the Preferred Stockholders. The three amended and restated notes having an aggregate principal amount of $1,412,000 have a
maturity date of July 1, 2011, with no principal payments due until January 1, 2009. Thereafter, semi-annual principal payments of $177,000 shall be due for the following two years and for the last year semi-annual principal payments of
$353,000 shall be due. Interest continues to accrue at 6% and is payable at maturity. In consideration for agreeing to amend and restate the notes, the Company has agreed to issue to the holders of the three notes an aggregate number of shares of
the Companys voting common stock equal to $200,000 divided by the average of the last reported sale prices of the Companys voting common stock on the thirty trading days preceding August 10, 2007. The fourth note, which had
outstanding principal and accrued interest of $189,165 as of August 10, 2007, was amended and restated to require twelve monthly payments of $15,764 commencing August 15, 2007 and a final payment of $11,484 on August 15, 2008 as
consideration for agreeing to amend and restate the note. The fourth amended and restated note will not bear interest following August 10, 2007, except in the event of a default thereunder, in which case interest would accrue based on the
original schedule of past due interest rates.

The Company entered into an Intercreditor and Subordination Agreement dated April 1,
2005 among the Company, certain subsidiaries listed therein, Ableco and the Preferred Stockholders to define the rights of and evidence the priorities among those creditors. The credit facility is secured by a first lien on all tangible and
intangible assets of the Company. The Term Loan B and the notes issued to the Preferred Stockholders are secured on a pari passu basis by liens on all tangible and intangible assets of the Company, which liens are subordinated to the lien securing
the credit facility.



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The Company has three subordinated notes relating to prior Dynax acquisitions bearing interest rates of
between prime and prime plus 1%. As of June 30, 2007, the aggregate balance outstanding was $741,000, representing $457,000 of principal and $284,000 of accrued interest. The acquisition notes are subordinated to Ableco. Any payments of
principal or interest on the indebtedness will be subordinated in accordance with the terms and conditions of the senior secured lender. No payments were made subsequent to March 31, 2004.

The Company had a three-year $150,000 note payable relating to the repurchase of enherents Preferred Stock in 2004 bearing interest of 4%. Annual
principal payments of $50,000 were due commencing April 15, 2005. The final principal payment was made in the second quarter of 2007 and there is no principal balance outstanding.

The Company has compensation payable to a former board chairman of Dynax pursuant to the terms of a separation agreement. Amounts owed under the
separation agreement are payable in quarterly installments of $31,000 bearing imputed interest of 8.6% through March 2008. As of June 30, 2007, the balance outstanding was $91,000.

As of June 30, 2007, after giving effect to the amended and restated promissory notes effective August 10, 2007, the Companys long-term
obligations with maturities of less than one year totaling $4.4 million consist of the Ableco revolving asset based credit facility of $3.7 million, capital leases of $42,000, compensation payable to the former chairman of $91,000, and subordinated
notes in the aggregate amount of $598,000.

Cash and cash equivalents were $783,000 at June 30, 2007 compared to $632,000 at
December 31, 2006.

Cash flow used for operations was $489,000 during the six months ended June 30, 2007. The increase in cash
used during the six months ended June 30, 2007 was due primarily to an increase in accounts receivable and prepaid expenses, partially offset by an increase in the Companys trade accounts payable and accrued expenses, including accrued
compensation. The Company generated negative cash flow from operations of $104,000 during the six months ended June 30, 2006. The primary use of cash during the six months ended June 30, 2006 was to fund operating losses and interest
expenses.

Cash used in investing activities for the six-month period ended June 30, 2007 was $46,000 related to the purchase of
computers, office equipment and leasehold improvements. Cash used in investing activities for the six-month period ended June 30, 2006 was $40,000 relating to computers, software upgrades and office equipment.

Cash provided by financing activities for the six months ended June 30, 2007 was $687,000, consisting of net proceeds from the revolving credit
facility of $818,000, offset by principal repayments of long-term debt and capital leases of $132,000. Cash provided by financing activities for the six months ended June 30, 2006 was $61,000, consisting of net proceeds from the revolving
credit facility of $158,000, offset by principal repayments of long term debt and capital leases of $97,000.

The Companys accounts
receivable were $5.4 million at June 30, 2007 and $4.3 million at December 31, 2006, respectively. Billed days sales outstanding (DSO), net of allowance for doubtful accounts, were 59 days as of June 30, 2007 and 49 days as of
December 31, 2006. The increase in DSO was primarily the result of slower collections during the six-month period ended June 30, 2007 from certain customers and a higher level of software receivables as of June 30, 2007.

Inflation did not have a material impact on enherents revenue or loss from operations.

The Companys working capital deficiency was $2.5 million and $2.7 million as of June 30, 2007 and December 31, 2006, respectively.



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Off-Balance Sheet Arrangement:

The Company has not created, and is not a party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt
or operating parts of its business that are not consolidated into our financial statements. The Company does not have any other arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably
likely to materially affect our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Contractual
Obligations and Commercial Commitments:

The following table of contractual obligations sets forth the contractual obligations of enherent as of
June 30, 2007:



|                            |  |                        |           |                  |   |           |  |           |           |                  |   |         |  |   |  
|--------------------------- |  | ---------------------- | --------- | ---------------- | - | --------- |  | --------- | --------- | ---------------- | - | ------- |  | - | -
|                            |  | Payments due by Period
|Contractual Obligations     |  | Total                  |           | Less than 1 Year |   | 1-3 Years |  | 3-5 Years |           | More than5 Years
|Long-Term Debt Obligations  |  | $                      | 7,517,977 |                  | $ | 4,360,332 |  | $         | 2,662,503 |                  | $ | 495,142 |  | $ | 
|Capital Lease Obligations   |  |                        | 71,913    |                  |   | 42,312    |  |           | 29,601    |                  |   |        |  |   | 
|Operating Lease Obligations |  |                        | 888,190   |                  |   | 400,878   |  |           | 487,312   |                  |   |        |  |   | 
|                            |  |                        |           |                  |   |           |  |           |           |                  |   |         |  |   |  
|Total                       |  | $                      | 8,478,080 |                  | $ | 4,803,522 |  | $         | 3,179,416 |                  | $ | 495,142 |  | $ | 
|                            |  |                        |           |                  |   |           |  |           |           |                  |   |         |  |   |  



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Forward-looking and Cautionary Statements:

This report contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements include information about possible or assumed future results of enherents operations. Statements made in this SEC
filing that are qualified with words such as anticipates, would, believes, expects, estimate, predict, plan,, project, will,
should, intend and similar expressions as they relate to enherent or its management are intended to identify such forward-looking statements.Many possible events or factors could affect enherents
future financial results and performance, causing enherents results or performance to differ materially from those expressed in enherents forward-looking statements.Investors are cautioned that such forward-looking statements
involve risks and uncertainties including without limitation the following: (i) the Companys plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the
Companys plans and results of operations will be affected by the Companys ability to manage its growth and resources; (iii) competition in the industry and the impact of competition on pricing, revenues and margins; (iv) the
Companys ability to recruit and retain IT professionals; and (v) other risks and uncertainties indicated from time to time in the Companys filings with the Securities and Exchange Commission.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

For the period ended June 30, 2007, the Company did not experience any material changes in market risk exposures that affect the quantitative and qualitative disclosures presented in the Companys Annual Report on Form 10-K for
the fiscal year ended December 31, 2006.



|Item 4. | Controls and Procedures.
|------- | ------------------------

The Company maintains
disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to the Companys management, including the Companys Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure. Such controls and procedures, by their nature, can provide only reasonable assurance regarding managements control objectives.

The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and
Chief Financial Officer, on the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of June 30, 2007. Based upon that evaluation, the Companys Chief
Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures were effective as of June 30, 2007.

There was no change in the Companys internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal quarter ended June 30, 2007 that has materially
affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

In the normal course of
business, various claims are made against the Company. At this time, in the opinion of management, there are no pending claims the outcome of which are expected to result in a material adverse effect on the consolidated financial position or results
of operations of the Company.



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

The Companys Annual Report on
Form 10-K filed for the fiscal year ended December 31, 2006 includes a detailed discussion of the Companys risk factors. There have been no material changes to the risk factors that were included in the Form 10-K during the first six
months of fiscal 2007.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

The Company held its annual meeting of stockholders on May 24, 2007. Thomas Minerva and Douglas K. Mellinger were elected as Class I directors at the annual meeting with a term expiring in 2010.

Director Election Results.



|                     |  |                   |  |               
|-------------------- |  | ----------------- |  | --------------
|Class I Directors    |  | Affirmative Votes |  | Withheld Votes
|Thomas Minerva       |  | 35,936,138        |  | 1,089,960     
|Douglas K. Mellinger |  | 35,963,880        |  | 1,062,218     

Other directors whose terms continued after the annual meeting and their term expiration date:



|                   |  |             
|------------------ |  | ------------
|Director           |  | Term        
|Pamela A. Fredette |  | Expires 2008
|William J. Cary    |  | Expires 2008
|Elliot Smith       |  | Expires 2009
|Faith Griffin      |  | Expires 2009

The only other matter voted upon by the Companys stockholders at the 2007 Annual Meeting was
a proposal to amend and restate the enherent Corp. 2005 Stock Incentive Plan. The proposal was adopted when holders of 17,985,339 shares voted for this proposal; holders of 1,302,095 shares voted against this proposal and holders of 174,445 shares
abstained or did not vote with respect to this proposal.



|Item 5. | Other Information.
|------- | ------------------

Effective August 10, 2007,
the Company and the former Preferred Stockholders agreed to amend and restate the four promissory notes that had been issued to the Preferred Stockholders pursuant to the Preferred Stock Agreement dated as of October 28, 2004, by and among the
Company and the Preferred Stockholders named therein. The three amended and restated notes having an aggregate principal amount of $1,412,000 have a maturity date of July 1, 2011, with no principal payments due until January 1, 2009.
Thereafter, semi-annual principal payments of $177,000 shall be due for the following two years and for the last year semi-annual principal payments of $353,000 shall be due. Interest continues to accrue at 6% and is payable at maturity. In
consideration for agreeing to amend and restate the notes, the Company has agreed to issue to the holders of the three notes an aggregate number of shares of the Companys voting common stock equal to $200,000 divided by the average of the last
reported sale prices of the Companys voting common stock on the thirty trading days preceding August 10, 2007. The fourth note, which had outstanding principal and accrued interest of $189,165 as of August 10, 2007, was amended and
restated to require twelve monthly payments of $15,764 commencing August 15, 2007 and a final payment of



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##### Table of Contents

$11,484 on August 15, 2008 as consideration for agreeing to amend and restate the note. The fourth amended and restated note will not bear interest
following August 10, 2007, except in the event of a default thereunder, in which case interest would accrue based on the original schedule of past due interest rates. This description of the amended and restated notes is a summary and is
qualified by reference to the actual amended and restated notes, which will be filed as exhibits to the Companys Quarterly Report on Form 10-Q for the period ending September 30, 2007.



|Item 6. | Exhibits.
|------- | ---------

See Exhibit Index.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.



|                     |  |                |  |                                                
|-------------------- |  | -------------- |  | -----------------------------------------------
|                     |  | enherent Corp.
|                     |  |               
|DATE August 13, 2007 |  | BY:            |  | /s/ Pamela A. Fredette                         
|                     |  |                |  | Pamela A. Fredette                             
|                     |  |                |  | Chairman, Chief Executive Officer and President
|                     |  |               
|DATE August 13, 2007 |  | BY:            |  | /s/ Karl Brenza                                
|                     |  |                |  | Karl Brenza                                    
|                     |  |                |  | Chief Financial Officer                        



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EXHIBIT INDEX



|              |  |                                                                                                                                                                                                                                                      
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                                                                                                                                                               
|2.1           |  | Agreement and Plan of Merger dated as of October 12, 2004, by and between the Company and Dynax Solutions, Inc. (Incorporated by reference to Exhibit 2.1 of the Companys Quarterly Report
on Form 10-Q filed November 15, 2004).                   
|              | 
|2.2           |  | First Amendment to Agreement and Plan of Merger dated as of November 4, 2004, by and between the Company and Dynax Solutions, Inc. (Incorporated by reference to Exhibit 2.2 of the Companys
Quarterly Report on Form 10-Q filed November 15, 2004).
|              | 
|3.1           |  | Restated Certificate of Incorporation (Incorporated by reference to Exhibit 4.1 of the Companys Form S-8 filed January 22, 1998).                                                                                                                   
|              | 
|3.2           |  | Certificate of Amendment of Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 of the Companys Annual Report on Form 10-K filed April 4, 2001).                                                         
|              | 
|3.3           |  | Certificate of Amendment of Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on April 1, 2005 (Incorporated by reference to the
Companys Current Report on Form 8-K filed on April 6, 2005).   
|              | 
|3.4           |  | Certificate of Merger merging Dynax Solutions, Inc. into the Company as filed with the Secretary of State of Delaware on April 1, 2005 (Incorporated by reference to the Companys Current
Report on Form 8-K filed on April 6, 2005).               
|              | 
|3.5           |  | Amended and Restated Bylaws, as amended through April 22, 2005 (Incorporated by reference to Exhibit 3.1 of the Companys Current Report on Form 8-K filed April 27, 2005).                                                                          
|              | 
|4.1           |  | Form of Certificate of Common Stock (Incorporated by reference to Exhibit 4.1 of the Companys Annual Report on Form 10-K filed March 22, 2002).                                                                                                     
|              | 
|4.2           |  | Securities Purchase Agreement dated as of April 13, 2000, by and among the Company and the Investors named therein (Incorporated by reference to Exhibit 99.1 of the Companys Current Report
on Form 8-K filed April 14, 2000).                     
|              | 
|4.3           |  | Preferred Stock Agreement dated as of October 28, 2004, by and among the Company and the Preferred Stockholders named therein (Incorporated by reference to Exhibit 4.5 of the Companys
Quarterly Report on Form 10-Q filed November 15, 2004).     
|              | 
|10.1          |  | Employment Agreement effective April 1, 2006 between Lori Stanley and the Company (Incorporated by reference to Exhibit 10-1 of the Companys Quarterly Report on Form 10-Q filed August 14,
2006).                                                  
|              | 
|10.2          |  | Employment Agreement dated April 1, 2005 between Roger DiPiano and the Company (Incorporated by reference to Exhibit 10.6 of the Companys Current Report on Form 8-K filed on April 6,
2005).                                                       
|              | 
|10.3          |  | Amended and Restated 1996 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Companys Form S-8 filed January 22, 1998).                                                                                                         
|              | 
|10.4          |  | Stock Purchase Agreement dated as of April 1, 2004, by and between the Company and Primesoft, LLC (Incorporated by reference to Exhibit 10.4 of the Companys Quarterly Report on Form 10-Q
filed May 7, 2004).                                      



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|      |  |                                                                                                                                                                                                                                                                                                 
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.5  |  | Promissory Note dated April 1, 2004, by and between the Company and Primesoft, LLC (Incorporated by reference to Exhibit 10.5 of the Companys Quarterly Report on Form 10-Q filed
May 7, 2004).                                                                                                
|      | 
|10.6  |  | Non-Qualified Stock Option Agreement dated September 14, 2004, by and between the Company and Douglas Mellinger (Incorporated by reference to Exhibit 10.4 of the Companys Quarterly Report
on Form 10-Q filed November 15, 2004).                                                             
|      | 
|10.7  |  | Agreement dated September 14, 2004, by and between the Company and Douglas Mellinger (Incorporated by reference to Exhibit 10.5 of the Companys Quarterly Report on Form 10-Q filed November
15, 2004).                                                                                        
|      | 
|10.8  |  | Restricted Stock Agreement dated October 5, 2004, by and between the Company and Douglas Catalano (Incorporated by reference to Exhibit 10.6 of the Companys Quarterly Report on Form 10-Q
filed November 15, 2004).                                                                           
|      | 
|10.9  |  | Amended and Restated Credit Agreement among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto dated as of April 1, 2005 (Incorporated by
reference to Exhibit 10.2 of the Companys Current Report on Form 8-K filed on April 6, 2005).    
|      | 
|10.10 |  | Intercreditor and Subordination Agreement among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto dated as of April 1, 2005 (Incorporated by
reference to Exhibit 10.3 of the Companys Current Report on Form 8-K filed on April 6, 2005).
|      | 
|10.11 |  | Consulting Agreement dated April 1, 2005 between Douglas Catalano and the Company (Incorporated by reference to Exhibit 10.4 of the Companys Current Report on Form 8-K filed on April 6,
2005).                                                                                               
|      | 
|10.12 |  | Forms of Grant Agreements pursuant to 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on June 7,
2005).                                                                                                                  
|      | 
|10.13 |  | Employment Agreement executed on June 8, 2005, but effective April 1, 2005 between Pamela Fredette and the Company (Incorporated by reference to Exhibit 10.1 of the Companys Current Report
on Form 8-K filed on June 10, 2005).                                                              
|      | 
|10.14 |  | 2005 Management Incentive Compensation Plan, adopted May 10, 2005 (Incorporated by reference to Exhibit 10.15 of the Companys Quarterly Report on Form 10-Q filed August 12,
2005).                                                                                                            
|      | 
|10.15 |  | Director Compensation Plan, adopted May 10, 2005 (Incorporated by reference to Exhibit 10.16 of the Companys Quarterly Report on Form 10-Q filed on August 12,
2005).                                                                                                                          
|      | 
|10.16 |  | Employment Agreement between the Company and Karl Brenza executed on August 15, 2005 (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on August
19, 2005).                                                                                          
|      | 
|10.17 |  | Restricted Stock Agreement between the Company and Karl Brenza executed on August 15, 2005 (Incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form 8-K filed on
August 19, 2005).                                                                                    
|      | 
|10.18 |  | Stock Option Award Agreement between the Company and Karl Brenza executed on August 15, 2005 (Incorporated by reference to Exhibit 10.3 of the Companys Current Report on Form 8-K filed on
August 19, 2005).                                                                                  



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|      |  |                                                                                                                                                                                                                                                                                                                               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.19 |  | Form of Indemnification Agreement between the Company and each of its directors entered into as of September 20, 2005 (Incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed on September 22, 2005).                                                                                    
|      | 
|10.20 |  | Amendment to Agreement by and between the Company and Douglas K. Mellinger dated as of December 31, 2005 (Incorporated by reference to Exhibit 10.1 of the Companys Current Report
on Form 8-K filed on January 6, 2006).                                                                                                    
|      | 
|10.21 |  | Agreement by and between the Company and Thomas Minerva dated as of January 9, 2006 (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on
January 13, 2006).                                                                                                                        
|      | 
|10.22 |  | Non-Qualified Stock Option Award Agreement by and between the Company and Thomas Minerva dated as of January 9, 2006 (Incorporated by reference to Exhibit 10.2 of the Companys
Current Report on Form 8-K filed on January 13, 2006).                                                                                       
|      | 
|10.23 |  | First Amendment to Amended and Restated Financing Agreement, dated as of March 6, 2006, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders
party thereto (Incorporated by reference to Exhibit 10.24 of the Companys Quarterly Report on Form 10-Q filed on May 15, 2006).
|      | 
|10.24 |  | 2005 Stock Incentive Plan, as amended and restated as of May 24, 2007 (Incorporated by reference to Annex C of the Companys Definitive Proxy Statement filed April 24,
2007).                                                                                                                                                
|      | 
|10.25 |  | Master Consulting Agreement by and between The Wedgewood Group, LLC and the Company, dated as of October 6, 2006 (Incorporated by reference to Exhibit 10-1 of the Companys Quarterly Report
on Form 10-Q filed November 13, 2006).                                                                                          
|      | 
|31.1  |  | Certification of the Chief Executive Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                       
|      | 
|31.2  |  | Certification of the Principal Financial Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                   
|      | 
|32.1  |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                               
|      | 
|32.2  |  | Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                                                                                                           



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