----

----

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

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

----

| INDIANA                         | 20-2803889             |
|---------------------------------|------------------------|
| (State or other jurisdiction of | (IRS Employer          |
| incorporation or organization)  | Identification Number) |

| 6402 Corporate Drive                     | 46278      |
|------------------------------------------|------------|
| Indianapolis, IN                         | (Zip Code) |
| (Address of principal executive offices) |       |

| Large accelerated filer o                | Accelerated filer  o   |
|-----------------------------------------------|----------------------------------|
| Non-accelerated filer  o            | Smaller reporting company x |
| (Do not check if a smaller reporting company) |                             |

----

|   | · | Part I, Item 1.  Consolidated Balance Sheets, Consolidated Statements of Changes in Shareholders’ Equity and Note 3. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

| Consolidated Balance Sheets:              |   | December 31, 2010 |    |
|-----------------------------------------------------|--------|-----------------------------|---------|
|                                                |   | As Previously               |    |   |   |   |
|                                                |   | Reported                    |    |   | Restated |   |
| Additional Paid-in Capital and Warrants Outstanding |   | $                           | 20,126  |   |   | $ | 20,376 |   |
| Accumulated Deficit                                 |   | $                           | (30,016 | ) |   | $ | (30,266 | ) |
|                                                |   |                        |    |   |   |   |   |   |
|                                                |   | June 30, 2010               |    |
|                                                |   | As Previously               |    |   |   |   |   |
|                                                |   | Reported                    |    |   | Restated |   |
| Additional Paid-in Capital and Warrants Outstanding |   | $                           | 19,515  |   |   | $ | 19,765 |   |
| Accumulated Deficit                                 |   | $                           | (30,544 | ) |   | $ | (30,794 | ) |

|                                                                             |   | December 31, 2010 |    |
|----------------------------------------------------------------------------------|--------|-----------------------------|---------|
|                                                                             |   | As Previously          |    |   |   |   |
|                                                                             |   | Reported                    |    |   | Restated |   |
| Consolidated Statements of Changes in Shareholders’ Equity:                |   |                        |    |   |   |   |
| Balance at June 30, 2010/Additional Paid-in Capital and Warrants Outstanding     |   | $                           | 19,515  |   |   | $ | 19,765 |   |
| Balance at June 30, 2010/Accumulated Deficit                                     |   | $                           | (30,544 | ) |   | $ | (30,794 | ) |
| Balance at December 31, 2010/Additional Paid-in Capital and Warrants Outstanding |   | $                           | 20,126  |   |   | $ | 20,376 |   |
| Balance at December 31, 2010/Accumulated Deficit                                 |   | $                           | (30,016 | ) |   | $ | (30,266 | ) |

----

|                                                                                                                                            |   | Page   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| PART I.    Financial Information                                                                                            |   |   |   |
| ITEM 1.  Financial Statements                                                                                                         |   |   |   |
| Consolidated Balance Sheets as of December 31, 2010 (unaudited, restated) and June 30, 2010 (restated)                                          |   |   | 2      |   |
| Consolidated Statements of Operations for the three and six month periods ended December 31, 2010 (unaudited) and December 31, 2009 (unaudited) |   |   | 4      |   |
| Consolidated Statement of Changes in Shareholders’ Equity for the six month period ended December 31, 2010 (unaudited, restated)          |   |   | 5      |   |
| Consolidated Statements of Cash Flows for the six month periods ended December 31, 2010 (unaudited) and December 31, 2009 (unaudited)           |   |   | 6      |   |
| Notes to the Unaudited Interim Consolidated Financial Statements                                                                                |   |   | 8      |   |
| ITEM 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations                                        |   |   | 11     |   |
| ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                                                                   |   |   | 16     |   |
| ITEM 4.  Controls and Procedures                                                                                                      |   |   |   |   |
| PART II.    Other Information                                                                                               |   |   |   |   |
| ITEM 1.  Legal Proceedings                                                                                                            |   |   | 16     |   |
| ITEM 1A. Risk Factors                                                                                                                           |   |   | 16     |   |
| ITEM 2.   Unregistered Sales of Equity Securities and Use of Proceeds                                                            |   |   | 16     |   |
| ITEM 3    Defaults Upon Senior Securities                                                                                   |   |   | 16     |   |
| ITEM 4.   (Removed and Reserved)                                                                                                 |   |   | 16     |   |
| ITEM 5.    Other Information                                                                                                |   |   | 16     |   |
| ITEM 6.    Exhibits                                                                                                         |   |   | 17     |   |
| Signatures                                                                                                                                      |   |   | 18     |   |

----

|                                                                                  |   | December 31                |   |   | June 30,                 |   |
|---------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|--------------------------|--------|
|                                                                                  |   | 2010                       |   |   | 2010                     |   |
|                                                                                  |   | (Unaudited, Restated) |   |   | (Audited, Restated) |   |
|                                                                                  |   |                       |   |   |                     |   |
| ASSETS                                                                                |   |                       |   |   |                     |   |
| CURRENT ASSETS                                                                        |   |                       |   |   |                     |   |
| Cash and equivalents                                                                  |   | $                          | 2,816  |   |                     | $      | 2,324 |   |
| Restricted cash (Note 1)                                                              |   |                       | 2,452  |   |                     |   | 2,820 |   |
| Accounts receivable, net of allowance for doubtful accounts of $9 and $29             |   |                       | 3,182  |   |                     |   | 2,247 |   |
| Deferred tax asset                                                                    |   |                       | 1,750  |   |                     |   | 1,750 |   |
| Prepaid expenses and other current assets                                             |   |                       | 853    |   |                     |   | 943 |   |
| Assets of discontinued operations, net                                                |   |                       | -      |   |                     |   | 8 |   |
| Total Current Assets                                                                  |   |                       | 11,053 |   |                     |   | 10,092 |   |
|                                                                                  |   |                       |   |   |                     |   |   |   |
| OTHER ASSETS                                                                          |   |                       |   |   |                     |   |   |   |
| Property, plant & equipment, net of accumulated depreciation of $1,650 and $2,353 |   |                       | 312    |   |                     |   | 455 |   |
| Term note receivable related party                                                    |   |                       | -      |   |                     |   | 2,536 |   |
| Deferred tax asset                                                                    |   |                       | 1,000  |   |                     |   | 1,000 |   |
| Goodwill                                                                              |   |                       | 12,339 |   |                     |   | 12,339 |   |
| Other intangible assets, net of accumulated amortization of $1,999 and $1,796         |   |                       | 2,654  |   |                     |   | 2,857 |   |
| Other long-term assets                                                                |   |                       | 55     |   |                     |   | 62 |   |
| Total Other Assets                                                                    |   |                       | 16,360 |   |                     |   | 19,249 |   |
|                                                                                  |   |                       |   |   |                     |   |   |   |
| TOTAL ASSETS                                                                          |   | $                          | 27,413 |   |                     | $      | 29,341 |   |

----

|                                                                                    |   | December 31                |    |   | June 30,                 |   |
|-----------------------------------------------------------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                                                                                    |   | 2010                       |    |   | 2010                     |   |
|                                                                                    |   | (Unaudited, Restated) |    |   | (Audited, Restated) |   |
|                                                                                    |   |                       |    |   |                     |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                    |   |                       |    |   |                     |   |
| CURRENT LIABILITIES                                                                     |   |                       |    |   |                     |   |
| Short-term debt and current maturities of long-term debt (Note 3)                       |   | $                          | 500     |   |                     | $      | 511 |   |
| Accounts payable                                                                        |   |                       | 628     |   |                     |   | 909 |   |
| Health and workers' compensation reserves                                               |   |                       | 1,801   |   |                     |   | 1,696 |   |
| Customer deposits                                                                       |   |                       | 214     |   |                     |   | - |   |
| Accrued expenses                                                                        |   |                       | 5,823   |   |                     |   | 5,530 |   |
| Other current liabilities                                                               |   |                       | 45      |   |                     |   | 234 |   |
| Total Current Liabilities                                                               |   |                       | 9,011   |   |                     |   | 8,880 |   |
|                                                                                    |   |                       |    |   |                     |   |   |   |
| LONG-TERM LIABILITIES                                                                   |   |                       |    |   |                     |   |   |   |
| Health and workers' compensation reserves                                               |   |                       | 592     |   |                     |   | 435 |   |
| Long-term debt, less current maturities (Note 3)                                        |   |                       | 167     |   |                     |   | 417 |   |
| Total Long-Term Liabilities                                                             |   |                       | 759     |   |                     |   | 852 |   |
|                                                                                    |   |                       |    |   |                     |   |   |   |
| Total Liabilities                                                                       |   |                       | 9,770   |   |                     |   | 9,732 |   |
|                                                                                    |   |                       |    |   |                     |   |   |   |
| SHAREHOLDERS' EQUITY (NOTE 5)                                                           |   |                       |    |   |                     |   |   |   |
| Common stock, $0.10 par value; 150,000,000 authorized;                                  |   |                       |    |   |                     |   |   |   |
|    12,235,790 and 12,224,290 issued and outstanding at December 31, 2010 |   |                       |    |   |                     |   |   |   |
|     and June 30, 2010, respectively                                 |   |                       | 1,224   |   |                     |   | 1,206 |   |
| Series C Preferred stock, $0.10 par value; 1,000,000 authorized;                        |   |                       |    |   |                     |   |   |   |
|    296,180 issued and outstanding at December 31, 2010                   |   |                       |    |   |                     |   |   |   |
|    and June 30, 2010, respectively                                       |   |                       | 27,118  |   |                     |   | 29,618 |   |
| Treasury stock, at cost, 214,444 and 48,263 shares at                                   |   |                       |    |   |                     |   |   |   |
| December 31, 2010 and June 30, 2010, respectively                                       |   |                       | (809    | )      |                     |   | (186 | ) |
| Additional paid-in capital and warrants outstanding                                     |   |                       | 20,376  |   |                     |   | 19,765 |   |
| Accumulated deficit                                                                     |   |                       | (30,266 | )      |                     |   | (30,794 | ) |
| Total Shareholders' Equity                                                              |   |                       | 17,643  |   |                     |   | 19,609 |   |
|                                                                                    |   |                       |    |   |                     |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                              |   | $                          | 27,413  |   |                     | $      | 29,341 |   |

----

|                                                  |   | Three Month Period Ended |       |   | Six Month Period Ended |   |
|-------------------------------------------------------|--------|--------------------------|------------|--------|------------------------|--------|
|                                                  |   | December 31,             |       |   | December 31,           |   |   | December 31, |   |   | December 31, |   |
|                                                  |   | 2010                     |       |   | 2009                   |   |   | 2010 |   |   | 2009 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |
| REVENUES                                              |   | $                        | 15,860     |   |                   | $      | 14,985 |   |   | $ | 31,431 |   |   | $ | 29,814 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| DIRECT COSTS                                          |   |                     | 12,716     |   |                   |   | 11,799 |   |   |   | 25,089 |   |   |   | 23,227 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| GROSS PROFIT                                          |   |                     | 3,144      |   |                   |   | 3,186 |   |   |   | 6,342 |   |   |   | 6,587 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                    |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expenses          |   |                     | 2,615      |   |                   |   | 2,707 |   |   |   | 5,168 |   |   |   | 5,383 |   |
| Depreciation and amortization                         |   |                     | 167        |   |                   |   | 182 |   |   |   | 341 |   |   |   | 383 |   |
| Total Operating Expenses                              |   |                     | 2,782      |   |                   |   | 2,889 |   |   |   | 5,509 |   |   |   | 5,766 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING INCOME                                      |   |                     | 362        |   |                   |   | 297 |   |   |   | 833 |   |   |   | 821 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                       |   |                     | 33         |   |                   |   | 28 |   |   |   | 61 |   |   |   | 56 |   |
| Interest expense                                      |   |                     | (17        | )      |                   |   | (4 | ) |   |   | (27 | ) |   |   | (8 | ) |
| Other income                                          |   |                     | -          |   |                   |   | - |   |   |   | 3 |   |   |   | - |   |
| Total Other Income (Expense)                          |   |                     | 16         |   |                   |   | 24 |   |   |   | 37 |   |   |   | 48 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME BEFORE PROVISION FOR INCOME TAXES              |   |                     | 378        |   |                   |   | 321 |   |   |   | 870 |   |   |   | 869 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income tax expense (benefit)            |   |                     | 2          |   |                   |   | (21 | ) |   |   | 37 |   |   |   | (292 | ) |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME FROM CONTINUING OPERATIONS                 |   |                     | 376        |   |                   |   | 342 |   |   |   | 833 |   |   |   | 1,161 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| DISCONTINUED OPERATIONS                               |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from discontinued operations                     |   |                     | (2         | )      |                   |   | (8 | ) |   |   | (9 | ) |   |   | (19 | ) |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                            |   |                     | 374        |   |                   |   | 334 |   |   |   | 824 |   |   |   | 1,142 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends                             |   |                     | 148        |   |                   |   | 148 |   |   |   | 296 |   |   |   | 296 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS           |   | $                        | 226        |   |                   | $      | 186 |   |   | $ | 528 |   |   | $ | 846 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Basic Income Per Common Share-Continuing Operations   |   | $                        | 0.02       |   |                   | $      | 0.02 |   |   | $ | 0.04 |   |   | $ | 0.07 |   |
| Basic Loss Per Common Share-Discontinued Operations   |   |                     | -          |   |                   |   | - |   |   |   | - |   |   |   | - |   |
| BASIC INCOME PER COMMON SHARE                         |   | $                        | 0.02       |   |                   | $      | 0.02 |   |   | $ | 0.04 |   |   | $ | 0.07 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Basic Weighted Average Shares Outstanding             |   |                     | 12,235,790 |   |                   |   | 12,192,859 |   |   |   | 12,228,997 |   |   |   | 12,141,124 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted Income Per Common Share-Continuing Operations |   | $                        | 0.02       |   |                   | $      | 0.01 |   |   | $ | 0.04 |   |   | $ | 0.06 |   |
| Diluted Loss Per Common Share-Discontinued Operations |   |                     | -          |   |                   |   | - |   |   |   | - |   |   |   | - |   |
| DILUTED INCOME PER COMMON SHARE                       |   | $                        | 0.02       |   |                   | $      | 0.01 |   |   | $ | 0.04 |   |   | $ | 0.06 |   |
|                                                  |   |                     |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted Weighted Average Shares Outstanding           |   |                     | 14,752,603 |   |                   |   | 14,703,022 |   |   |   | 14,744,310 |   |   |   | 14,651,287 |   |

----

|                                               |   |   |   |   |     |   |   |      |   |   | Additional      |   |   |        |   |   |          |   |
|----------------------------------------------------|--------|--------|--------|--------|----------|--------|--------|-----------|--------|--------|-----------------|--------|--------|-------------|--------|--------|---------------|--------|
|                                               |   |   |   |   |     |   |   |      |   |   | Paid-in Capital |   |   |        |   |   | Total         |   |
|                                               |   | Common |   |   | Treasury |   |   | Preferred |   |   | and Warrants    |   |   | Accumulated |   |   | Shareholders' |   |
|                                               |   | Stock  |   |   | Stock    |   |   | Stock     |   |   | Outstanding     |   |   | Deficit     |   |   | Equity        |   |
| BALANCE AT JUNE 30, 2010 (Audited, Restated)       |   | $      | 1,206  |   |     | $      | (186   | )         |   | $      | 29,618          |   |   | $           | 19,765 |   |          | $      | (30,794 | ) |   | $ | 19,609 |   |
|                                               |   |   |   |   |     |   |   |      |   |   |            |   |   |        |   |   |          |   |   |   |   |   |   |   |
| Issuance of 11,500 shares of common                |   |   |   |   |     |   |   |      |   |   |            |   |   |        |   |   |          |   |   |   |   |   |   |   |
| stock for compensation                             |   |   | 1      |   |     |   | -      |      |   |   | -               |   |   |        | 5      |   |          |   | - |   |   |   | 6 |   |
| Purchase of 166,181 shares of common stock         |   |   | 17     |   |     |   | (623   | )         |   |   | -               |   |   |        | 606    |   |          |   | - |   |   |   | - |   |
| for treasury at cost                               |   |   |   |   |     |   |   |      |   |   |            |   |   |        |   |   |          |   |   |   |   |   |   |   |
| Related party note receivable securitized by       |   |   |   |   |     |   |   |      |   |   |            |   |   |        |   |   |          |   |   |   |   |   |   |   |
| preferred stock                                    |   |   | -      |   |     |   | -      |      |   |   | (2,500          | )      |   |        | -      |   |          |   | - |   |   |   | (2,500 | ) |
| Net income                                         |   |   | -      |   |     |   | -      |      |   |   | -               |   |   |        | -      |   |          |   | 824 |   |   |   | 824 |   |
| Preferred stock dividends                          |   |   | -      |   |     |   | -      |      |   |   | -               |   |   |        | -      |   |          |   | (296 | ) |   |   | (296 | ) |
|                                               |   |   |   |   |     |   |   |      |   |   |            |   |   |        |   |   |          |   |   |   |   |   |   |   |
| BALANCE AT DECEMBER 31, 2010 (Unaudited, Restated) |   | $      | 1,224  |   |     | $      | (809   | )         |   | $      | 27,118          |   |   | $           | 20,376 |   |          | $      | (30,266 | ) |   | $ | 17,643 |   |

----

|                                                        |   | Six Months Ended |   |   |         |   |
|-------------------------------------------------------------|--------|------------------|--------|--------|--------------|--------|
|                                                        |   | December 31,     |   |   | December 31, |   |
|                                                        |   | 2010             |   |   | 2009         |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                        |   |             |   |   |         |   |
| Net Income                                                  |   | $                | 824    |   |         | $      | 1,142 |   |
| Adjustments to reconcile net income to net cash provided by |   |             |   |   |         |   |   |   |
| operating activities:                                       |   |             |   |   |         |   |   |   |
| Depreciation and amortization                               |   |             | 341    |   |         |   | 383 |   |
| Provision for losses on accounts receivable                 |   |             | (20    | )      |         |   | 13 |   |
| Stock based compensation                                    |   |             | 6      |   |         |   | 79 |   |
| Deferred income taxes                                       |   |             | -      |   |         |   | (250 | ) |
| Changes in certain operating assets and liabilities:        |   |             |   |   |         |   |   |   |
| Restricted cash                                             |   |             | 368    |   |         |   | (200 | ) |
| Accounts receivable                                         |   |             | (915   | )      |         |   | (170 | ) |
| Prepaid assets and other current assets                     |   |             | 90     |   |         |   | 283 |   |
| Assets of discontinued operations                           |   |             | 8      |   |         |   | (57 | ) |
| Other long-term assets                                      |   |             | 43     |   |         |   | - |   |
| Accounts payable                                            |   |             | (281   | )      |         |   | 3 |   |
| Health and workers' compensation reserves                   |   |             | 262    |   |         |   | (1,452 | ) |
| Customer deposits                                           |   |             | 214    |   |         |   | - |   |
| Accrued expenses and other current liabilities              |   |             | 352    |   |         |   | 2,151 |   |
| Liabilities of discontinued operations                      |   |             | -      |   |         |   | (1 | ) |
| Net Cash Provided by Operating Activities                   |   |             | 1,292  |   |         |   | 1,924 |   |
|                                                        |   |             |   |   |         |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                        |   |             |   |   |         |   |   |   |
| Capital expenditures                                        |   |             | (50    | )      |         |   | (43 | ) |
| Proceeds from sale of assets                                |   |             | 55     |   |         |   | - |   |
| Net Cash Provided by (Used in) Investing Activities         |   |             | 5      |   |         |   | (43 | ) |
|                                                        |   |             |   |   |         |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                        |   |             |   |   |         |   |   |   |
| Payments on term debt                                       |   |             | (261   | )      |         |   | (12 | ) |
| Repurchase of common stock for treasury                     |   |             | (248   | )      |         |   | - |   |
| Dividends paid on preferred stock                           |   |             | (296   | )      |         |   | (49 | ) |
| Net Cash Used in Financing Activities                       |   |             | (805   | )      |         |   | (61 | ) |
|                                                        |   |             |   |   |         |   |   |   |
| NET INCREASE IN CASH AND EQUIVALENTS                        |   |             | 492    |   |         |   | 1,820 |   |
|                                                        |   |             |   |   |         |   |   |   |
| CASH AND EQUIVALENTS                                        |   |             |   |   |         |   |   |   |
| Beginning of Period                                         |   |             | 2,324  |   |         |   | 1,686 |   |
|                                                        |   |             |   |   |         |   |   |   |
| End of Period                                               |   | $                | 2,816  |   |         | $      | 3,506 |   |

----

|                     |   | Six Months Ended |   |   |         |   |
|--------------------------|--------|------------------|--------|--------|--------------|--------|
|                     |   | December 31,     |   |   | December 31, |   |
|                     |   | 2010             |   |   | 2009         |   |
| SUPPLEMENTAL DISCLOSURES |   |             |   |   |         |   |
| Interest paid            |   | $                | 28     |   |         | $      | 8 |   |
|                     |   |             |   |   |         |   |   |   |
| Income taxes paid        |   | $                | 37     |   |         | $      | 48 |   |

----

----

| Level 1 | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 2 | Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 3 | Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques. |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

NOTE 3 - DEBT ARRANGEMENTS

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|                                        |   | Revenue for the        |   |   | Operating income for the |   |
|---------------------------------------------|--------|------------------------|--------|--------|--------------------------|--------|
|                                        |   | Three Months Ended     |   |   | Three Months Ended       |   |
|                                        |   | December 31,           |   |   | December 31,             |   |   | December 31, |   |   | December 31, |   |
|                                        |   | 2010                   |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
|                                        |   | (Dollars in thousands) |   |   |                     |   |   |   |   |
| Business Solutions                          |   | $                      | 15,860 |   |                     | $      | 14,985 |   |   | $ | 362 |   |   | $ | 297 |   |
| Holding Company                             |   |                   | -      |   |                     |   | - |   |   |   | - |   |   |   | - |   |
| Segment Totals                              |   | $                      | 15,860 |   |                     | $      | 14,985 |   |   | $ | 362 |   |   | $ | 297 |   |
|                                        |   |                   |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net Income Available to Common Shareholders |   |                   |   |   |                     |   | $ | 226 |   |   | $ | 186 |   |

|                                        |   | Revenue for the        |   |   | Operating income for the |   |
|---------------------------------------------|--------|------------------------|--------|--------|--------------------------|--------|
|                                        |   | Six Months Ended       |   |   | Six Months Ended         |   |
|                                        |   | December 31,           |   |   | December 31,             |   |   | December 31, |   |   | December 31, |   |
|                                        |   | 2010                   |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
|                                        |   | (Dollars in thousands) |   |   |                     |   |   |   |   |   |   |
| Business Solutions                          |   | $                      | 31,431 |   |                     | $      | 29,814 |   |   | $ | 833 |   |   | $ | 821 |   |
| Holding Company                             |   |                   | -      |   |                     |   | - |   |   |   | - |   |   |   | - |   |
| Segment Totals                              |   | $                      | 31,431 |   |                     | $      | 29,814 |   |   | $ | 833 |   |   | $ | 821 |   |
|                                        |   |                   |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net Income Available to Common Shareholders |   |                   |   |   |                     |   | $ | 528 |   |   | $ | 846 |   |

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|                                |   | Three-Month Period Ended |   |   | Six-Month Period Ended |   |
|-------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|
|                                |   | December 31, 2010        |   |   | December 31, 2009      |   |   | December 31, 2010 |   |   | December 31, 2009 |   |
|                                |   | (Dollars in thousands)   |   |   |                   |   |   |   |   |   | (Dollars in thousands) |   |   |   |   |   |   |   |
| Revenues                            |   | $                        | 15,860 |   |                   |   | 100 | % |   | $ | 14,985 |   |   |   | 100 | % |   | $ | 31,431 |   |   |   | 100 | % |   | $ | 29,814 |   |   |   | 100 | % |
| Cost of revenues                    |   |                     | 12,716 |   |                   |   | 80.2 | % |   |   | 11,799 |   |   |   | 78.7 | % |   |   | 25,089 |   |   |   | 79.8 | % |   |   | 23,227 |   |   |   | 77.9 | % |
| Gross profit                        |   |                     | 3,144  |   |                   |   | 19.8 | % |   |   | 3,186 |   |   |   | 21.3 | % |   |   | 6,342 |   |   |   | 20.2 | % |   |   | 6,587 |   |   |   | 22.1 | % |
|                                |   |                     |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                  |   |                     |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative |   |                     | 2,615  |   |                   |   | 16.5 | % |   |   | 2,707 |   |   |   | 18.1 | % |   |   | 5,168 |   |   |   | 16.4 | % |   |   | 5,383 |   |   |   | 18.1 | % |
| Depreciation and amortization       |   |                     | 167    |   |                   |   | 1.1 | % |   |   | 182 |   |   |   | 1.2 | % |   |   | 341 |   |   |   | 1.1 | % |   |   | 383 |   |   |   | 1.3 | % |
| Total operating expenses            |   |                     | 2,782  |   |                   |   | 17.5 | % |   |   | 2,889 |   |   |   | 19.3 | % |   |   | 5,509 |   |   |   | 17.5 | % |   |   | 5,766 |   |   |   | 19.3 | % |
|                                |   |                     |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment operating income            |   | $                        | 362    |   |                   |   | 2.3 | % |   | $ | 297 |   |   |   | 2.0 | % |   | $ | 833 |   |   |   | 2.7 | % |   | $ | 821 |   |   |   | 2.8 | % |

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| 31.1   |   | Rule 15d-14(a) Certification of CEO |
|--------|--------|-------------------------------------|
|   |   |                                |

| 31.2   |   | Rule 15d-14(a) Certification of CFO |
|--------|--------|-------------------------------------|
|   |   |                                |

| 32.1   |   | Section 1350 Certification of CEO |
|--------|--------|-----------------------------------|
|   |   |                              |

| 32.2 |   | Section 1350 Certification of CFO |
|------|--------|-----------------------------------|

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|                          | Fortune Industries, Inc.(Registrant) |                    |
|-------------------------------|--------------------------------------|-------------------------|
|                          |                                 |                    |   |
| Date:  May 13, 2011 | By:                                  | /s/ Tena Mayberry       |   |
|                          |                                 | Tena Mayberry,          |   |
|                          |                                 | Chief Executive Officer |   |
|                          |                                 |                    |   |
|                          |                                 |                    |   |
| Date:  May 13, 2011 | By:                                  | /s/ Randy E. Butler     |   |
|                          |                                 | Randy E. Butler,        |   |
|                          |                                 | Chief Financial Officer |   |

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