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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





[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, 2010

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





enherent Corp.

(Exact name of Registrant as Specified in Its Charter)







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

100 Wood Avenue South, Suite 116

Iselin, NJ 08830

(Address of Principal Executive Offices)

(732) 321-1004

(Registrants Telephone Number, Including Area Code)





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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    YES   ̈    NO   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See definition of accelerated filer, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|                        |  |   | 
|Non-Accelerated Filer   |  |  ̈ |  | Smaller Reporting Company |  | 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 3,
2010
|Common stock, par value $.001 |  | 52,375,653                             









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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, 2010 (Unaudited) and December 31,
2009                          |  | 1   
|Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 
30, 2010 and 2009 |  | 2   
|Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 
30, 2010 and 2009           |  | 3   
|Notes to Unaudited Condensed Consolidated Financial Statements                                                       |  | 4   
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.                       |  | 6   
|Item 3. Quantitative and Qualitative Disclosures about Market Risk.                                                  |  | 12  
|Item 4. Controls and Procedures.                                                                                     |  | 12  
|PART II. OTHER INFORMATION                                                                                           |  |     
|Item 1. Legal Proceedings.                                                                                           |  | 14  
|Item 5. Other Information                                                                                            |  | 14  
|Item 6. Exhibits.                                                                                                    |  | 14  
|Signatures                                                                                                           |  | S-1 
|                                                                                                                     | 
|Exhibit Index                                                                                                        |  | E-1 



i



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PART I. FINANCIAL INFORMATION



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

ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                            |  | June 30,2010(Unaudited) |             |   | December 31,2009 |  
|ASSETS                                                                                                                                      |  |                         |             |   |                  |   |             |  
|Current assets:                                                                                                                             |  |                         |             |   |                  |   |             |  
|Cash and cash equivalents                                                                                                                   |  | $                       | 92,649      |   |                  | $ | 89,068      |  
|Accounts receivable, net                                                                                                                    |  |                         | 2,010,520   |   |                  |   | 1,372,025   |  
|Prepaid expenses and other current assets                                                                                                   |  |                         | 179,553     |   |                  |   | 84,827      |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|Total current assets                                                                                                                        |  |                         | 2,282,722   |   |                  |   | 1,545,920   |  
|Furniture, equipment and improvements, net                                                                                                  |  |                         | 99,892      |   |                  |   | 156,893     |  
|Goodwill                                                                                                                                    |  |                         | 2,819,278   |   |                  |   | 2,819,278   |  
|Other intangibles, net                                                                                                                      |  |                         |            |   |                  |   | 25,000      |  
|Deferred financing costs, net                                                                                                               |  |                         | 51,067      |   |                  |   | 76,599      |  
|Other assets                                                                                                                                |  |                         | 13,664      |   |                  |   | 13,664      |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|TOTAL                                                                                                                                       |  | $                       | 5,266,623   |   |                  | $ | 4,637,354   |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|LIABILITIES                                                                                                                                 |  |                         |             |   |                  |   |             |  
|Current liabilities:                                                                                                                        |  |                         |             |   |                  |   |             |  
|Revolving credit facility                                                                                                                   |  | $                       | 2,166,465   |   |                  | $ | 1,695,076   |  
|Current portion of long-term debt                                                                                                           |  |                         | 1,063,505   |   |                  |   | 718,399     |  
|Accounts payable and accrued expenses                                                                                                       |  |                         | 2,329,210   |   |                  |   | 2,263,286   |  
|Deferred revenue                                                                                                                            |  |                         | 432,084     |   |                  |   | 370,494     |  
|Accrued compensation and benefits                                                                                                           |  |                         | 396,592     |   |                  |   | 150,422     |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|Total current liabilities                                                                                                                   |  |                         | 6,387,856   |   |                  |   | 5,197,677   |  
|Long-term liabilities:                                                                                                                      |  |                         |             |   |                  |   |             |  
|Long-term debt, net of current portion above                                                                                                |  |                         | 809,948     |   |                  |   | 1,164,805   |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|Total liabilities                                                                                                                           |  |                         | 7,197,804   |   |                  |   | 6,362,482   |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|STOCKHOLDERS (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  52,375,653 as of
June 30, 2010 and December 31, 2009 |  |                         | 52,376      |   |                  |   | 52,376      |  
|Additional paid-in capital                                                                                                                  |  |                         | 27,843,374  |   |                  |   | 27,827,674  |  
|Accumulated deficit                                                                                                                         |  |                         | (29,826,931 | ) |                  |   | (29,605,178 | )
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|Total stockholders (deficiency)                                                                                                            |  |                         | (1,931,181  | ) |                  |   | (1,725,128  | )
|                                                                                                                                            |  |                         |             |   |                  |   |             |  
|                                                                                                                                            |  |                        
|TOTAL                                                                                                                                       |  | $                       | 5,266,623   |   |                  | $ | 4,637,354   |  
|                                                                                                                                            |  |                         |             |   |                  |   |             |  

The accompanying notes are part of these unaudited condensed consolidated financial statements.



1



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ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------------------------- |  | --------------------------- | ---------- | - | ------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                              |  | Three Months EndedJune 
30, |            |   | Six Months EndedJune 
30, |  
|                                                              |  | 2010                        |            |   | 2009                      |   |            | 2010 |  |   | 2009       |  
|Revenues:                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Service revenue                                               |  | $                           | 2,037,163  |   |                           | $ | 2,528,502  |      |  | $ | 3,966,299  |   |  | $ | 5,786,604  |  
|Equipment and software revenue                                |  |                             | 130,864    |   |                           |   | 111,796    |      |  |   | 420,121    |   |  |   | 414,322    |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Total revenue                                                 |  |                             | 2,168,027  |   |                           |   | 2,640,298  |      |  |   | 4,386,420  |   |  |   | 6,200,926  |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Cost of revenues:                                             |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Cost of services                                              |  |                             | 1,465,164  |   |                           |   | 1,862,564  |      |  |   | 2,804,415  |   |  |   | 4,268,731  |  
|Cost of equipment and software                                |  |                             | 106,203    |   |                           |   | 89,185     |      |  |   | 343,177    |   |  |   | 330,412    |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Cost of revenues                                              |  |                             | 1,571,367  |   |                           |   | 1,951,749  |      |  |   | 3,147,592  |   |  |   | 4,599,143  |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Gross profit                                                  |  |                             | 596,660    |   |                           |   | 688,549    |      |  |   | 1,238,828  |   |  |   | 1,601,783  |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Operating expenses:                                           |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Selling, general and administrative                           |  |                             | 491,780    |   |                           |   | 673,279    |      |  |   | 1,081,657  |   |  |   | 1,505,162  |  
|Depreciation and amortization expense                         |  |                             | 52,107     |   |                           |   | 66,186     |      |  |   | 111,254    |   |  |   | 153,986    |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Total operating expenses                                      |  |                             | 543,887    |   |                           |   | 739,465    |      |  |   | 1,192,911  |   |  |   | 1,659,148  |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Operating income (loss)                                       |  |                             | 52,773     |   |                           |   | (50,916    | )    |  |   | 45,917     |   |  |   | (57,365    | )
|Interest expense                                              |  |                             | (134,386   | ) |                           |   | (112,465   | )    |  |   | (261,670   | ) |  |   | (219,119   | )
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Loss before income taxes                                      |  |                             | (81,613    | ) |                           |   | (163,381   | )    |  |   | (215,753   | ) |  |   | (276,484   | )
|Provision for income taxes                                    |  |                             | (3,000     | ) |                           |   | (3,000     | )    |  |   | (6,000     | ) |  |   | (6,000     | )
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|NET LOSS                                                      |  | $                           | (84,613    | ) |                           | $ | (166,381   | )    |  | $ | (221,753   | ) |  | $ | (282,484   | )
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Basic net loss per share                                      |  | $                           | (0.01      | ) |                           | $ | (0.01      | )    |  | $ | (0.01      | ) |  | $ | (0.01      | )
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Number of shares used in computing basic net loss per share   |  |                             | 52,375,653 |   |                           |   | 52,375,653 |      |  |   | 52,375,653 |   |  |   | 52,375,653 |  
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Diluted net loss per share                                    |  | $                           | (0.01      | ) |                           | $ | (0.01      | )    |  | $ | (0.01      | ) |  | $ | (0.01      | )
|                                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Number of shares used in computing diluted net loss per share |  |                             | 52,375,653 |   |                           |   | 52,375,653 |      |  |   | 52,375,653 |   |  |   | 52,375,653 |  

The accompanying notes
are part of these unaudited condensed consolidated financial statements.



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ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                          |  |                           |          |   |      |   |            |  
|----------------------------------------------------------------------------------------- |  | ------------------------- | -------- | - | ---- | - | ---------- | -
|                                                                                          |  | Six Months EndedJune 
30, |         
|                                                                                          |  | 2010                      |          |   | 2009 |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                 |  |                           |          |   |      |   |            |  
|Cash flows from operating activities:                                                     |  |                           |          |   |      |   |            |  
|Net loss                                                                                  |  | $                         | (221,753 | ) |      | $ | (282,484   | )
|Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |                           |          |   |      |   |            |  
|Bad debt expense                                                                          |  |                           |         |   |      |   | (50,000    | )
|Depreciation and amortization                                                             |  |                           | 111,254  |   |      |   | 153,983    |  
|Stock-based compensation                                                                  |  |                           | 15,700   |   |      |   | 53,000     |  
|Deferred revenue                                                                          |  |                           | 61,590   |   |      |   | 173,475    |  
|Changes in assets and liabilities:                                                        |  |                           |          |   |      |   |            |  
|Accounts receivable                                                                       |  |                           | (638,495 | ) |      |   | 1,669,399  |  
|Prepaid expenses and other current assets                                                 |  |                           | (94,726  | ) |      |   | (101,930   | )
|Accounts payable, accrued expense and accrued compensation and benefits                   |  |                           | 312,094  |   |      |   | (1,350,006 | )
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Net cash (used in) provided by operating activities                                       |  |                           | (454,336 | ) |      |   | 265,437    |  
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Cash flows from investing activities:                                                     |  |                           |          |   |      |   |            |  
|Purchase of furniture, fixtures, equipment and improvements                               |  |                           | (3,721   | ) |      |   | (21,033    | )
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Net cash used in investing activities                                                     |  |                           | (3,721   | ) |      |   | (21,033    | )
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Cash flows from financing activities:                                                     |  |                           |          |   |      |   |            |  
|Net proceeds (repayments) under revolving loan                                            |  |                           | 471,389  |   |      |   | (748,722   | )
|Principal payments on notes payable and capital lease obligations                         |  |                           | (9,751   | ) |      |   | (365,666   | )
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Net cash provided by (used in) financing activities                                       |  |                           | 461,638  |   |      |   | (1,114,388 | )
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                      |  |                           | 3,581    |   |      |   | (869,984   | )
|Cash and cash equivalents  Beginning                                                     |  |                           | 89,068   |   |      |   | 1,100,224  |  
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|CASH AND CASH EQUIVALENTS  Ending                                                        |  | $                         | 92,649   |   |      | $ | 230,240    |  
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Supplemental disclosure of cash flow information:                                         |  |                           |          |   |      |   |            |  
|Cash paid during the period for:                                                          |  |                           |          |   |      |   |            |  
|Interest                                                                                  |  | $                         | 167,668  |   |      | $ | 151,954    |  
|                                                                                          |  |                           |          |   |      |   |            |  
|                                                                                          |  |                          
|Income taxes                                                                              |  | $                         | 5,829    |   |      | $ | 8,184      |  
|                                                                                          |  |                           |          |   |      |   |            |  

The accompanying notes are part of these unaudited condensed consolidated financial statements.



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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, 2010 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2010. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2009 financial statements and footnotes thereto
included in the Companys Annual Report on Form 10-K.



|2. | Income Per Share:
|-- | -----------------

Basic
net income per share is based on the average number of shares outstanding during the period, while fully-diluted net income per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be
outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options to purchase common stock. For the three and six months ended June 30, 2010 and 2009, options to purchase common stock were
excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

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



|                                       |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|-------------------------------------- |  | -------------------------- | ---------- | - | ------------------------ | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                       |  | Three months endedJune 30, |            |   | Six months
endedJune 30, |  
|                                       |  | 2010                       |            |   | 2009                     |   |            | 2010 |  |   | 2009       |  
|Numerator:                             |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Net loss                               |  | $                          | (84,613    | ) |                          | $ | (166,381   | )    |  | $ | (221,753   | ) |  | $ | (282,484   | )
|                                       |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|                                       |  |                            |            |  
|Denominator:                           |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Weighted average of shares outstanding |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |            |  
|Basic                                  |  |                            | 52,375,653 |   |                          |   | 52,375,653 |      |  |   | 52,375,653 |   |  |   | 52,375,653 |  
|Diluted                                |  |                            | 52,375,653 |   |                          |   | 52,375,653 |      |  |   | 52,375,653 |   |  |   | 52,375,653 |  
|Basic loss per share                   |  | $                          | (0.01      | ) |                          | $ | (0.01      | )    |  | $ | (0.01      | ) |  | $ | (0.01      | )
|Diluted loss per share                 |  | $                          | (0.01      | ) |                          | $ | (0.01      | )    |  | $ | (0.01      | ) |  | $ | (0.01      | )



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

The Company accounts for stock-based compensation under the provisions of FASB ASC Topic 718, Compensation-Stock Compensation. This
statement requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period in which the employee is
required to provide service in exchange for the award, which is usually the vesting period.

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



|                                                                     |  |          |   |  |          |  
|-------------------------------------------------------------------- |  | -------- | - |  | -------- | -
|                                                                     |  | June 30, |  
|                                                                     |  | 2010     |   |  | 2009     |  
|Risk-free interest rate                                              |  | 3.42     | % |  | 3.45     | %
|Dividend yield                                                       |  | 0        | % |  | 0        | %
|Volatility factors of the expected market price for our common stock |  | 347      | % |  | 246      | %
|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.



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

On
April 1, 2005, the Company and Ableco Finance LLC (Ableco) as lender and agent entered into an Amended and Restated Financing Agreement, dated April 1, 2005 (the Amended Credit Agreement). The credit facility is
secured by a first lien on all of our tangible and intangible assets. The Amended Credit Agreement originally provided for a Term Loan B and a revolving credit facility. As of December 31, 2009, the Amended Credit Facility, as a result of
subsequent amendments, provided for a revolving loan facility of $3,101,822, of which $601,822 was used to repay the outstanding balance of Term Loan B as of that date. The interest rate applicable to the revolving credit facility under the Amended
Credit Agreement is currently 4.50% over the Reference Rate per annum. For purposes of the Amended Credit Agreement, the Reference Rate is equal to the greater of (a) the prime rate, or (b) 7.75% per annum. The revolving loan facility
expires on December 31, 2010. The Amended Credit Facility, as amended through December 31, 2009, reduced the availability under the revolving loan facility on the first business day of each month, commencing on January 1, 2010, by
(i) for the month of January 2010, $11,822, (ii) for the months of February, March and April, 2010, $10,000, and (iii) for each month thereafter, $45,000.

On April 29, 2010, the Company and Ableco entered into a further amendment to the Amended Credit Agreement that modified the amount
at which the availability under the revolving loan facility is reduced, such that on the first business day of each month the availability will be reduced by: (i) for the months of May and June 2010, $15,000, and (ii) for each month
thereafter, by $45,000. On June 28, 2010, the Company and Ableco entered into a further amendment to the Amended Credit Agreement that modified the monthly amount by which the Additional Availability under the revolving loan will be reduced,
such that on the first business day of each month the Additional Availability will be reduced by (i) for the months of July, August and September 2010, $15,000, and (ii) for each month thereafter, by $45,000.

As of June 30, 2010 and December 31, 2009, the balance outstanding under the revolving credit facility was $2,166,465 and
$1,695,076, respectively.



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

The
Company has federal and state net operating loss carry forwards that begin to expire in 2020. As a result of the Companys merger with Dynax Solutions, Inc. (Dynax) on April 1, 2005, the amount of prior years net
operating loss carry forwards available to be utilized in reduction of future taxable income is 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. Accordingly, the remaining federal net operating loss carry forward available to the Company at June 30, 2010 was approximately $14.7 million. 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.

Income tax expense for the three and six months ended June 30, 2010 and 2009 was comprised of state taxes which are not based on
earnings.



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##### Table of Contents

|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. (enherent or 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, 2009.

Overview

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, advanced analytics, enterprise content management, infrastructure solutions 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 Arrow Electronics, 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.

The Company continued to be adversely affected by the broad economic downturn
that began in 2008. The Company believes that customer concerns about the economy resulted in a change in customer buying patterns, which in turn have had a significant adverse effect on the Companys revenues and results of operations.
Beginning in the second quarter of 2010, however, the Company has begun to see some signs of improvement in customer buying patterns, particularly in the area of staffing services. Notwithstanding this positive development, overall demand remains
substantially below the levels experienced by the Company prior to the beginning of the economic downturn. At this time, the Company is unable to predict how long the economic downturn will continue to impact the Companys revenues and results
of operations.

enherents principal offices are located at 100 Wood Avenue South, Suite 116, Iselin, New Jersey 08830
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 unaudited 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. The Company reduces revenue
for estimated customer discounts. 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 will 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 of 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, FASB ASC Topic 350, Intangibles  Goodwill and Other was issued. Under ASC 350, goodwill is no longer amortized after
December 31, 2001, however, goodwill must be evaluated for impairment at least annually and any losses due to impairment are recognized in earnings. ASC 350 became effective for the Company on January 1, 2002. The Companys goodwill
and other intangibles were evaluated for impairment as of March 31, 2010. The Company determined that these assets had not been impaired and no losses should be recognized based on this evaluation.

In August 2001, FASB ASC Topic 360, Property, Plant and Equipment was issued. Under ASC 360, 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.

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of FASB ASC Topic 718, Compensation  Stock Compensation. This
statement requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period in which the employee is
required to provide service in exchange for the award, which is usually the vesting period.

In determining the estimated fair
value of its stock options as of the date of grant, the Company uses the Black-Scholes option pricing model. 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.



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##### Table of Contents

Deferred Income Taxes

The Company has federal and state net operating loss carry forwards that begin to expire in 2020. As a result of the Companys merger
with Dynax on April 1, 2005, the amount of prior years net operating loss carry forwards available to be utilized in reduction of future taxable income is 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. Accordingly, the remaining federal net operating loss carry forward available to the Company at June 30, 2010 was approximately $14.7 million. 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 three and six months ended June 30, 2010 and 2009, except for certain state and local taxes which are not based on current earnings.

Results of Operations:

Six
Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009

Service Revenues:

Service revenues decreased 31.5 % to $3.9 million for the six months ended June 30, 2010 from $5.8 million for the six months
ended June 30, 2009. The decrease was attributable primarily to fewer billable consultants deployed at customer accounts.

Gross profit from service revenues decreased 23.5% to $1.2 million for the six months ended June 30, 2010 from $1.5 million for the
six months ended June 30, 2009. The decrease in gross profit was attributable primarily to lower revenue generated from the decrease in billable consultants deployed at certain key customers, which was partially offset by higher bill rates on
certain client engagements.

Gross profit as a percentage of service revenues increased to 29.3% for the six months ended
June 30, 2010 from 26.2% for the six months ended June 30, 2009. The increase in gross profit percentage was attributable primarily to higher bill rates on certain client engagements.

Equipment and Software Revenues:

Equipment and software revenues increased 1.4% to $420,000 for the six months ended June 30, 2010 from $414,000 for the six months
ended June 30, 2009. The increase in equipment and software revenues was attributable primarily to the Company closing two large transactions during the six-month period ended June 30, 2010.

Gross profit from equipment and software revenues decreased 9.6% to $77,000 for the six-month period ended June 30, 2010 from
$84,000 for the six-month period ended June 30, 2009. The decrease in gross profit was attributable primarily to lower margin products sold, as well as decrease in vendor rebates and incentive program fees, during the six-month period ended
June 30, 2010.

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 the Company, 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 18.3% for the six months ended June 30, 2010 from 20.3%
for the six months ended June 30, 2009, as a result of the mix of products sold including lower margins on individual deals, as well as a decrease in vendor rebates and incentive program fees.

Operating Expenses:

Operating expenses decreased 28.1% to $1.2 million for the six months ended June 30, 2010 from $1.7 million for the six months ended
June 30, 2009. The decrease was due primarily to cost reductions made by the Company that resulted in a relative decrease in sales, general and administrative payroll costs.

Interest Expense:

Interest expense increased 19.4% to $262,000 for the six months ended June 30, 2010 from $219,000 for the six months ended
June 30, 2009. The increase was due primarily to increases in borrowings and in the effective rate of interest on the revolving line of credit.



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Provision for Income Taxes:

For the six months ended June 30, 2010 and 2009, the provision for income taxes related primarily to revenue-based and minimum state
taxes.

Net Loss:

Net loss decreased by $60,000 to a net loss of $222,000 for the six months ended June 30, 2010 from a net loss of $282,000 for the
six months ended June 30, 2009. The change in net loss was due primarily to the reduction in operating expenses for the six months ended June 30, 2010.

Net Loss Per Share:

The
net loss per share data is based on the Companys weighted average outstanding shares for the six-month period ended June 30, 2010 and June 30, 2009. Outstanding stock options were anti-dilutive and not considered in the calculation
of loss per share for that period.

Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009

Service Revenues:

Service revenues decreased 19.4% to $2.0 million for the three months ended June 30, 2010 from $2.5 million for the three months
ended June 30, 2009. The decrease was attributable primarily to fewer billable consultants deployed at customer accounts.

Gross profit from service revenues decreased 14.1% to $572,000 for the three months ended June 30, 2010 from $666,000 for the three
months ended June 30, 2009. The decrease in gross profit was attributable primarily to lower revenue generated from the decrease in billable consultants deployed at certain key customers, which was partially offset by higher bill rates on
certain client engagements.

Gross profit as a percentage of service revenues increased to 28.1% for the three months ended
June 30, 2010 from 26.3% for the three months ended June 30, 2009. The increase in gross profit percentage was attributable primarily to higher bill rates on certain client engagements.

Equipment and Software Revenues:

Equipment and software revenues increased 17.1% to $131,000 for the three months ended June 30, 2010 from $112,000 for the three
months ended June 30, 2009. The increase in equipment and software revenues was attributable primarily to an increase in equipment and software sales during the quarter.

Gross profit from equipment and software revenues increased 9.1% to $25,000 for the three-month period ended June 30, 2010 from
$23,000 for the three -month period ended June 30, 2009. The increase in gross profit was attributable primarily to an increase in equipment and software sales during the three-month period ended June 30, 2010.

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 the Company, 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 18.8% for the three months ended June 30, 2010 from
20.2% for the three months ended June 30, 2009. The decrease in gross profit was attributable primarily to the mix of products sold including lower margins on individual deals, as well as a decrease in vendor rebates and incentive program fees.

Operating Expenses:

Operating expenses decreased 26.5% to $544,000 for the three months ended June 30, 2010 from $739,000 for the three months ended
June 30, 2009. The decrease was due primarily to cost reductions made by the Company that resulted in a relative decrease in sales, general and administrative payroll costs.



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Interest Expense:

Interest expense increased 19.5% to $134,000 for the three months ended June 30, 2010 from $112,000 for the three months ended
June 30, 2009. The increase was due primarily to an increase in borrowings and the effective rate of interest on the revolving line of credit.

Provision for Income Taxes:

For the three months ended June 30, 2010 and 2009, the provision for income taxes related primarily to revenue-based and minimum
state taxes.

Net Loss:

Net loss decreased by $81,000 to a net loss of $85,000 for the three months ended June 30, 2010 from a net loss of $166,000 for the
three months ended June 30, 2009. The change in net loss was due primarily to the reduction in operating expenses for the three months ended June 30, 2010.

Net Loss Per Share:

The
net loss per share data is based on the Companys weighted average outstanding shares for the three-month period ended June 30, 2010 and June 30, 2009. Outstanding stock options were anti-dilutive and not considered in the calculation
of loss per share for that period.

Liquidity and Capital Resources:

On April 1, 2005, the Company and Ableco Finance LLC (Ableco) as lender and agent entered into an Amended and Restated
Financing Agreement, dated April 1, 2005 (the Amended Credit Agreement). The credit facility is secured by a first lien on all of our tangible and intangible assets. The Amended Credit Agreement originally provided for a Term Loan B
and a revolving credit facility. As of December 31, 2009, the Amended Credit Facility, as a result of subsequent amendments, provided for a revolving loan facility of $3,101,822, of which $601,822 was used to repay the outstanding balance of
Term Loan B as of that date. The interest rate applicable to the revolving credit facility under the Amended Credit Agreement is currently 4.50% over the Reference Rate per annum. For purposes of the Amended Credit Agreement, the Reference Rate is
equal to the greater of (a) the prime rate, or (b) 7.75% per annum. The revolving loan facility expires on December 31, 2010. The Amended Credit Facility, as amended through December 31, 2009, reduced the availability under
the revolving loan facility on the first Business day of each month, commencing on January 1, 2010, by (i) for the month of January 2010, $11,822, (ii) for the months of February, March and April, 2010, $10,000, and (iii) for
each month thereafter, $45,000. On April 29, 2010, the Company and Ableco entered into a further amendment to the Amended Credit Agreement that modified the amount at which the availability under the revolving loan facility is reduced, such
that on the first business day of each month the availability will be reduced by: (i) for the months of May and June 2010, $15,000, and (ii) for each month thereafter, by $45,000. On June 28, 2010, the Company and Ableco entered into
a further amendment to the Amended Credit Agreement that modified the monthly amount by which the Additional Availability under the revolving loan will be reduced, such that on the first business day of each month the Additional Availability will be
reduced by (i) for the months of July, August and September 2010, $15,000, and (ii) for each month thereafter, by $45,000.

The loan agreement requires that the Company maintain certain financial covenants.

At June 30, 2010 and December 31, 2009, the balance outstanding under the revolving credit facility was $2,166,465 and
$1,695,076, respectively.

There was no outstanding principal balance of Term Loan B at June 30, 2010 and
December 31, 2009.

The holders of the enherent Preferred Stock immediately prior to the merger of enherent and Dynax 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 with Dynax, on April 1, 2005, all of the shares of outstanding Preferred Stock were 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 $1,600,500. According to the terms of three of the promissory notes held by three former holders
of enherent Preferred Stock (the Preferred Stockholders) (having an aggregate principal amount of $1,412,500), 6% interest on the amount outstanding shall be payable in arrears. These three notes had an original term of five years and no
principal payments were due in the first twenty-nine months ended September 1, 2007. Thereafter, semi-annual principal payments of $177,000 were due for the following two years and for the last year semi-annual principal payments of $353,000
are due. Effective August 10, 2007, the Company and the former Preferred Stockholders agreed to amend and restate the promissory notes. The three amended and restated notes having an aggregate principal amount of $1,412,500 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. No payments have been made to the Preferred Stockholders since the inception of the notes. At June 30, 2010 and December 31, 2009, the outstanding principal balance on the
three notes was $1,412,500. The fourth note was paid in full in 2008.



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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 revolving 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 were 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 revolving credit facility.

The Company has three subordinated notes relating to prior Dynax acquisitions bearing
interest rates of between prime and prime plus 1%. At June 30, 2010 and December 31, 2009, the outstanding principal balance outstanding was $456,830. 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.

At June 30, 2010, after giving effect to the amendments to the Amended Credit Agreement discussed above, the Companys
long-term obligations with maturities of less than one year totaled $3.2 million and consisted primarily of the Ablecos revolving asset-based credit facility of $2.1 million and $1.1 million of principal obligations to promissory notes held by
former holders of enherent Preferred Stock.

Cash and cash equivalents were $93,000 at June 30, 2010 compared to $89,000
at December 31, 2009.

In general, the Company requires cash for working capital, capital expenditures, debt repayment
and interest. Our working capital requirements increase when we experience strong incremental demand for our services. Our management assesses the future cash needs of our business by considering a number of factors, including:



| |  |  | our historical earnings and cash flow performance;
| | - |  | --------------------------------------------------



| |  |  | our assessment of future working capital needs;
| | - |  | -----------------------------------------------



| |  |  | our current and projected debt service expenses;
| | - |  | ------------------------------------------------



| |  |  | planned capital expenditures; and
| | - |  | ---------------------------------



| |  |  | our ability to borrow funds under the terms of our revolving credit facility.
| | - |  | -----------------------------------------------------------------------------

If the Company experiences a deficiency in revenue, earnings or operating cash flow with respect to its fixed charges and operating
expenses in the future, it would need to fund the fixed charges and operating expenses from borrowings from its revolving credit facility. If borrowings from the Companys credit facility are insufficient to fund its operations, debt service
and capital expenditures, it may need to seek additional sources of capital through means such as the issuance of equity or subordinated debt. In addition, it may not be able to obtain additional debt or equity financing on terms acceptable to it,
or at all. If the Company is not able to secure additional capital, it could be required to delay paying its account payables or forego business opportunities.

Cash flow used in operations was $454,000 for the six months ended June 30, 2010. The cash flow used by operations was attributable
primarily to financing costs, an increase in accounts receivable due in part to slower customer collections and an increase in prepaid expenses, offset by an increase in accounts payable and an increase in deferred revenue.

Cash used in investing activities for the six-month period ended June 30, 2010 was $4,000 related to the purchase of computers and
office equipment.

Cash provided by financing activities for the six months ended June 30, 2010 was $462,000 consisting
primarily of net proceeds from the revolving credit facility of $472,000, partially offset by net payments of $10,000 on capital lease obligations.

The Companys accounts receivable were $2.0 million at June 30, 2010 and $1.4 million at December 31, 2009,
respectively. Billed days sales outstanding (DSO), net of allowance for doubtful accounts, were 85 days as of June 30, 2010 and 47 days as of December 31, 2009. The increase in DSO was primarily the result of slower payments from certain
key customers during the three-month period ended June 30, 2010.

The Companys working capital deficiency was $4.1
million and $3.7 million as of June 30, 2010 and December 31, 2009, respectively.

The Companys accounts
payable and accrued expenses were $2.3 million and $2.3 million at June 30, 2010 and December 31, 2009, respectively.

The Company has reduced cash required for operations by reducing operating costs and reducing staff levels. In addition, the Company is
working to manage its current liabilities while it continues to make changes in operations to improve its cash flow and liquidity position.



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The Companys ability to survive current financial difficulties resulting from its
working capital deficiency is dependent on its capacity to generate revenues from the sale of its services and products. Nevertheless, by managing the Companys operations, management believes that the Company will have sufficient capital
resources to meet projected cash flow requirements through 2010. If during fiscal 2010 the Company is not successful in generating sufficient liquidity from operations, it will seek to raise additional financing. Additional financing transactions
may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of the Companys common stock and the downturn in the U.S. stock and debt markets could make it more
difficult to obtain financing through the issuance of equity or debt securities. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights,
preferences or privileges senior to those of existing holders of the Companys common stock. If additional financing is not available or is not available on acceptable terms, the Companys operations will be negatively impacted.

Inflation

Management does not believe that inflation has had a material effect on the Companys business, financial condition or results of
operations. If the Companys costs were to become subject to significant inflationary pressures, the Company may not be able to fully offset such higher costs through price increases. The Companys inability or failure to do so could
adversely affect its business, financial condition and results of operations.

Off-Balance Sheet Arrangement:

There are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships of the
Company with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources
of the Company.

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 discussed under Risk Factors in the Companys Form 10-K for the year ended December 31, 2009, as well as in any
subsequent Company filings with the Securities and Exchange Commission.



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

For the period ended June 30, 2010, 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, 2009.



|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 VP of Finance, 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 VP of Finance, 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, 2010. Based upon that evaluation, the Companys Chief Executive Officer and VP of Finance concluded that the Companys disclosure controls and procedures were effective as of June 30,
2010.



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##### Table of Contents

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, 2010 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



13



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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, 2009 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 2010.



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

None



|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 9, 2010 |  | BY:            |  | /s/ Pamela A. Fredette                         
|                    |  |                |  | Pamela A. Fredette                             
|                    |  |                |  | Chairman, Chief Executive Officer and President
|                    |  |               
|DATE August 9, 2010 |  | BY:            |  | /s/ Arunava De                                 
|                    |  |                |  | Arunava De                                     
|                    |  |                |  | Principal Financial and Accounting Officer     



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EXHIBIT INDEX



|         |  |                                                                                                                                                                                                                                                                                                 
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item No. |  | Description                                                                                                                                                                                                                                                                                     
|         | 
|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 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 Form 10-Q filed November 15, 2004).                                                               
|         | 
|3.1     |  | Restated Certificate of Incorporation (Incorporated by referenced 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 enherent Corp. (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
Exhibit 3.1 of the Companys Current Report on Form 8-K filed 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
Exhibit 3.2 of the Companys Current Report on Form 8-K filed 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 Form 10-Q filed November 15, 2004).                                                                    
|         | 
|*10.1   |  | Employment Agreement dated 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   |  | 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).                                                                                          
|         | 
|*10.3   |  | 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).                                                                                 
|         | 
|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
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 Form 10-Q filed November 15,
2004).                                                                                                            
|         | 
|10.8    |  | Amended and Restated Credit Agreement by and 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 April 6, 2005).
|         | 
|10.9    |  | 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 April 6, 2005).   
|         | 
|*10.10  |  | 2005 Stock Incentive Plan, adopted June 2, 2005, including forms of Grant Agreements (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on
Form 8-K filed June 7, 2005).                                                                                                
|         | 
|*10.11  |  | 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 June 10, 2005).                                                                 



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|         |  |                                                                                                                                                                                                                                                                                                                                                          
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item No. |  | Description                                                                                                                                                                                                                                                                                                                                              
|         | 
|*10.12  |  | 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).                                                                                                                                                                     
|         | 
|*10.13  |  | 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).                                                                                                                                                                                   
|         | 
|*10.14  |  | 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 September 22, 2005).                                                                                                                  
|         | 
|*10.15  |  | Amendment to Agreement by and between enherent Corp. 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 January 6, 2006).                                                                                                                               
|         | 
|*10.16  |  | 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).                                                                                                                  
|         | 
|10.17   |  | 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).                           
|         | 
|*10.18  |  | 2005 Stock Incentive Plan, as amended and restated as of May 23, 2006 (Incorporated by reference to Annex C of the Companys Definitive Proxy Statement filed April 26, 2006)                                                                                                                                                                            
|         | 
|10.19   |  | Waiver, Consent and Third Amendment to Amended and Restated Financing Agreement, dated as of August 27, 2007, by and among the Company, certain subsidiaries listed therein, Ableco
Finance, LLC and certain lenders party thereto (Incorporated by reference to Exhibit 10.26 of the Companys Quarterly Report on Form 10-Q filed on November 9, 2007).
|         | 
|10.20   |  | Fourth Amendment to Amended and Restated Financing Agreement, dated as of September 6, 2007, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC
and certain lenders party thereto. (Incorporated by reference to Exhibit 10.27 of the Companys Quarterly Report on Form 10-Q filed on November 9, 2007).                 
|         | 
|*10.21  |  | First Amendment to Employment Agreement dated December 3, 2007 between Pamela A. Fredette and the Company (Incorporated by reference to Exhibit 10.27 of the Companys Annual
Report on Form 10-K filed on March 27, 2008).                                                                                                                              
|         | 
|*10.22  |  | Agreement by and between the Company and Thomas Minerva dated as of January 2, 2007. (Incorporated by reference to Exhibit 10.28 of the Companys Quarterly Report on Form 10-Q
filed on May 14, 2008).                                                                                                                                                  
|         | 
|*10.23  |  | 2005 Stock Incentive Plan, as amended and restated as of May 22, 2008 (Incorporated by reference to Annex A of the Companys Definitive Proxy Statement filed
April 22, 2008).                                                                                                                                                                           
|         | 
|*10.24  |  | Second Amendment to Employment Agreement by and between the Company and Pamela A. Fredette dated as of December 1, 2008 (Incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed on December 9, 2008).                                                                                                               
|         | 
|10.25   |  | Fifth Amendment to Amended and Restated Financing Agreement, dated as of February 3, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and
certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on February 9, 2009).                        
|         | 
|10.26   |  | Sixth Amendment to Amended and Restated Financing Agreement, dated as of April 8, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain
lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on April 9, 2009).                              
|         | 
|*10.27  |  | Third Amendment to Employment Agreement, dated as of May 14, 2009, by and between the Company and Pamela A. Fredette. (Incorporated by reference to Exhibit 10.27 of the
Companys Quarterly Report on Form 10-Q filed on May 15, 2009).                                                                                                                 
|         | 
|*10.28  |  | First Amendment to Employment Agreement, dated as of May 14, 2009, by and between the Company and Lori Stanley (Incorporated by reference to Exhibit 10.28 of the Companys
Quarterly Report on Form 10-Q filed on May 15, 2009).                                                                                                                        
|         | 
|*10.29  |  | Marketing Agreement by and between the Company and Douglas Mellinger, dated as of May 15, 2009 (Incorporated by reference to Exhibit 10.28 of the Companys Quarterly Report on
Form 10-Q filed on May 15, 2009).                                                                                                                                        
|         | 
|10.30   |  | Seventh Amendment to Amended and Restated Financing Agreement, dated as of July 2, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and
certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on July 2, 2009).                              
|         | 
|10.31   |  | Eighth Amendment to Amended and Restated Financing Agreement, dated as of October 2, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and
certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on October 6, 2009).                         
|         | 
|10.32   |  | Ninth Amendment to Amended and Restated Financing Agreement, dated as of December 31, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and
certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on January 6, 2010).                        



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|         |  |                                                                                                                                                                                                                                                                                                                               
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item No. |  | Description                                                                                                                                                                                                                                                                                                                   
|         | 
|10.32   |  | Tenth Amendment to Amended and Restated Financing Agreement, dated as of April 29, 2010, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and
certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on May 3, 2010).    
|         | 
|10.32   |  | Eleventh Amendment to Amended and Restated Financing Agreement, dated as of June 28, 2010, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and
certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on June 29, 2010).
|         | 
|31.1    |  | Section 302 Certification of Chief Executive Officer (certification required pursuant to Rule 13a-14(a) and 15d-14(a)) (filed herewith).                                                                                                                                                                                      
|         | 
|31.2    |  | Section 302 Certification of Principal Financial Officer (certification required pursuant to Rule 13a-14(a) and 15d-14(a)) (filed herewith).                                                                                                                                                                                  
|         | 
|32.1    |  | Section 906 Certification of Chief Executive Officer (certification required pursuant to 18 U.S.C. 1350) (filed herewith).                                                                                                                                                                                                    
|         | 
|32.2    |  | Section 906 Certification of Principal Financial Officer (certification required pursuant to 18 U.S.C. 1350) (filed herewith).                                                                                                                                                                                                



|* | Denotes management contract or compensatory plan or arrangement.
|- | ----------------------------------------------------------------



E-3