ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion provides an analysis of the financial condition and results of operations of the Company and should be read in conjunction with the Unaudited Financial Statements and Notes thereto appearing elsewhere herein and our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31, 2007.

The discussion below contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the Company's filings with the Security and Exchange Commission, including its Annual Report on Form 10-KSB for the year ended December 31, 2007, filed on March 28, 2008.

Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and we cannot assure you that our future results, levels of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

SUMMARY

Our mission is to provide solutions through the use of mobile information systems in the distribution market segment within the product supply chain. We design, market, sell, and service computerized systems used to automate the collection, processing, and communication of information related to product sales and inventory control. Our products and services include application-specific software, data communication, handheld computers, related peripherals, and accessories, as well as associated education and support.

From the very beginning we designed our software solution based on the customer's unique specifications. Our first entry into the market was a DOS-based Route Accounting software solution named RouteRider(R) which we developed in 1988. The RouteRider software, running on our first generation of rugged handheld Datacomputer(R) ("Datacomputer") the DC3.0, was originally designed and built for an office coffee service company. Since that time multiple generations of Datacomputers (DC3X, DC4 and DC4CE) were designed and brought to market and our software application was improved customer by customer and market by market. To date we have provided dependable solutions for distribution markets such as baking, dairy, beer, soda, water, wine and spirits.

Although our Datacomputers running our original RouteRider software are still available for purchase, we have now channeled all of our experience into a new portable and highly parameterized Route Accounting solution software named RouteRider LE(R), ("RRLE"). RRLE is a mobile sales force automation application designed to increase efficiency, improve productivity and make companies more profitable and competitive by allowing sales and distribution personnel to gather, enter and share data at the point of work. It has been designed

to run on the very latest industry standard Microsoft(TM) operating systems and architectures which increases our market potential by running on industry preferred operating systems and handheld devices.

During 2006 we divested ourselves from our audit business to better concentrate our efforts on our new Route Accounting solution. The hand-held route solution, interfacing with the J.D. Edwards system, we delivered in 2006 to an internationally recognized company in the food services industry has been successful and the company has continued to deploy additional routes in Europe. During the last quarter of 2007, we contracted to deliver a comprehensive RRLE Direct Store Delivery solution to a major national bakery, and also to a major bottling company. The combined orders have a value of approximately $2,000,000 with delivery scheduled in 2008.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2008 COMPARED TO THREE MONTHS ENDED MARCH 31, 2007.

For the three months ended March 31, 2008, we reported a net loss of $67,553 compared to a net loss of $248,210 for the three months ended March 31, 2007. The improved results were a direct result of higher revenues combined with lower expenses.

REVENUE AND GROSS PROFIT

Total revenues increased 40% to $417,192 for the three months ended March 31, 2008 from $297,693 for the three months ended March 31, 2007. Total product revenues increased 109% to $139,271 for the three months ended March 31, 2008 from $66,728 for the comparable prior period. The increase was due to higher sales of our new route software product, RRLE, offset by decreased sales of our Datacomputers. Total service revenues increased 20% to $277,921 for the three months ended March 31, 2008 from $230,965 for the comparable prior period. The increase is a direct result of higher billings of our professional services for implementation projects that began during the end of 2007.

Gross profit was $178,083 or 43% of revenues for the three months ended March 31, 2008, compared to $90,329, or 30% of revenues for the prior comparable period. The increased profit is a direct result of higher revenues and lower labor costs.

OPERATING EXPENSES

Total operating expenses decreased 27% to $247,404 for the three months ended March 31, 2008 from $340,528 for the comparable prior period.

Selling and marketing expenses for the three months ended March 31, 2008 were $59,070 compared to $84,548 for the prior comparable period, a decrease of $25,478 or 30%. The decrease is due primarily to lower payroll cost resulting from reduced manpower.

General and administrative expenses for the three months ended March 31, 2008 were $188,334 compared to $255,980 for the prior comparable period, a decrease of $67,646 or 26%. The decrease is a result of reduced legal and directors' fees combined with lower payroll costs resulting from reduced manpower.

LIQUIDITY AND CAPITAL RESOURCES

We used cash of $11,592 and $145,247 for operating activities for the three months ended March 31, 2008 and 2007, respectively. For the three months ended March 31, 2008, our principal operating cash was used to fund our loss from operations combined with a decrease in accounts payable, along with an increase in accounts receivable, deferred hardware and software cost and prepaid expenses, offset by an increase in deferred revenues related to new orders for RRLE scheduled for completion in the later part of 2008. For the three months ended March 31, 2007, our principal operating cash was used to fund our loss from operations combined with an increase in accounts receivable, deferred hardware and software costs and prepaid expenses, offset by an increase in accounts payable and deferred revenues.

We used cash of $12,257 and $12,270 for investing activities from continuing operations for the three months ended March 31, 2008 and 2007, respectively. The cash was used for the purchase of capital equipment. As of March 31, 2008, we had no material commitments for capital expenditures.

We used cash of $12,326 and generated cash of $250,050 for financing activities for the three months ended March 31, 2008 and 2007, respectively. During the three months ended March 31, 2008, cash was used to make payments on obligations under our notes payable and capital leases. During the three months ended March 31, 2007, we raised capital, net of expenses, in the amount of $262,165 and made payments on obligations under our notes payable and capital leases.

We have an accumulated deficit of approximately $16,504,000 through March 31, 2008. As a result of our deficit and our cash position, the report of our independent registered public accounting firm relating to the financial statements as of and for the year ended December 31, 2007 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. We have taken numerous steps to address this situation. During the fiscal year ended December 31, 2006, we divested ourselves of our audit business line in connection with a transaction relating to shares of our preferred and common stock held by a majority holder of our capital stock. On November 29, 2006, we entered into an arrangement with A.S.T., Inc. ("AST") and Phyle Industries, Inc. ("Phyle") pursuant to which we sold our audit business line to AST in exchange for 4,150 shares of our preferred stock (representing all of our issued and outstanding preferred stock).

During January 2007 acting as agent for certain new investors interested in purchasing shares of our common stock, we caused the transfer of 30,339,236 shares of our common stock, together with accrued but unpaid stock dividends (representing approximately 90% of our common stock in the aggregate) that Phyle had previously purchased from Capital Bank Grawe Gruppe AG ("CapitalBank"). These investors paid Phyle $250,000 for the purchase of our common stock and agreed to also provide us $350,000 to be used as working capital.

We continue exploring all opportunities to improve our financial condition by aggressively pursuing potential revenues. There is a possibility that we may not realize adequate revenues in the near future to meet cash flow requirements, and therefore might require us to implement further cost saving action or attempt to obtain additional financing. We believe that based on our current revenue expectations, the expected timing of such revenues, and our current level of expenses we have sufficient cash to fund our operations through the end of 2008. There can be no assurance that such financing, if required, will be available on reasonable terms, if at all.

COMMITMENTS, CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

Our only off-balance sheet arrangements are non-cancelable operating leases entered into in the ordinary course of business, as discussed in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

As of March 31, 2008, there are no material changes in our contractual obligations as disclosed in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

USE OF ESTIMATES

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

REVENUE RECOGNITION

We recognize the majority of our revenue in accordance with SEC Staff Accounting Bulletin No. 104, "REVENUE RECOGNITION IN FINANCIAL STATEMENTS". Revenue related to product sales is recognized upon shipment provided that title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured and customer acceptance criteria, if any, have been successfully demonstrated. Where the criteria cannot be demonstrated prior to shipment, or in the case of new products, revenue is deferred until acceptance has been received. Our sales contracts provide for the customer to accept title and risk of loss at the time of delivery of the product to a common carrier.

Our transactions sometimes involve multiple elements (i.e. systems and services). Revenue under multiple arrangements is recognized in accordance with Emerging Issues Task Force ("EITF") Issue No. 00-21, "ACCOUNTING FOR REVENUE ARRANGEMENTS WITH MULTIPLE DELIVERABLES". Under this method, if an element is determined to be a separate unit of accounting, the revenue for the element is based on fair value and determined by verifiable objective evidence, and recognized at time of delivery. If the arrangement has an undeliverable element, we ensure that we have objective and reliable evidence of the fair value of the undeliverable element. Fair value is determined based upon the price charged when the element is sold separately.

We recognize revenue for software licenses in accordance with the American Institute of Certified Public Accountants ("AICPA")'s Statement of Position 97-2, "SOFTWARE REVENUE RECOGNITION" ("SOP 97-2"). The application of SOP 97-2 requires judgment, including whether a software arrangement includes multiple elements. License revenue is recognized upon customer acceptance, provided that persuasive evidence of an arrangement exists, no significant obligations with regards to installation or implementation remain, fees are fixed or determinable, and collectibility is probable.

Hardware and software maintenance is marketed under annual and multi-year arrangements and revenue is recognized ratably over the contract maintenance term.

ACCOUNTS RECEIVABLE

The Company records trade receivables at their principal amount, adjusted for write-offs and allowances for uncollectible amounts. The Company reviews its trade receivables monthly, and determines, based on management's knowledge and the customer's payment history, any write-off or allowance that may be necessary. The Company follows the practice of writing off uncollectible amounts against the allowance provided for such accounts.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. The Company evaluates its inventories to determine excess or slow moving products based on quantities on hand, current orders and expected future demand. For those items in which the Company believes it has an excess supply or for those items that are obsolete, the Company estimates the net amount that the Company expects to realize from the sale of such products and records an allowance.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method. Leasehold improvements are amortized over the shorter of the useful lives or the remaining terms of the related leases. Maintenance and repair costs are charged to operations as incurred.

CAPITALIZED SOFTWARE RESEARCH AND DEVELOPMENT COSTS.

Costs associated with the development of computer software are charged to operations prior to the establishment of technological feasibility, as defined by Statement of Financial Accounting Standards (SFAS) No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed". Costs incurred subsequent to the establishment of technological feasibility and prior to the general release of the products are capitalized.

Capitalized software costs are amortized on a product-by-product basis. The annual amortization is the greater of the amount computed using (a) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenues for that product or (b) the straight-line method over the remaining estimated economic life of the product. Amortization begins when the product is available for general release to the customer.

STOCK-BASED COMPENSATION

The Company accounts for share-based compensation according to the provisions of SFAS No. 123(R), "Share-based Payment", which establishes accounting for equity instruments exchanged for employee services. Under SFAS
123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity grant).

NET LOSS PER SHARE

Basic and diluted loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding.

WARRANTY AND RETURN POLICY

The Company's warranty policy provides 90-day coverage on all parts and labor on all products. The policy with respect to sales returns provides that a customer may not return inventory except at the Company's option. The Company's warranty costs have historically been insignificant.

SHIPPING AND HANDLING COSTS

Shipping and handling costs are classified as a component of cost of goods sold. The Company accounts for shipping and handling costs passed on to customers as revenues.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, "FAIR VALUE MEASUREMENTS". SFAS 157 prescribes a single definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The adoption of SFAS No. 157 with respect to financial assets and liabilities in the first quarter of 2008 had no effect on the Company's results of operations or financial position. In addition, the Company is evaluating the impact of SFAS No. 157 for measuring nonfinancial assets and liabilities on future results of operations and financial position.

In February 2007, the FASB issued SFAS No. 159, "THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES." This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The adoption of SFAS No. 159 in the first quarter of 2008 did not have an impact on the Company's results of operations or financial position.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations," which changes how business acquisitions are accounted. SFAS No. 141R requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard will, among other things, impact the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration); exclude transaction costs from acquisition accounting; and change accounting practices for acquired contingencies, acquisition-related restructuring costs, in-process research and development, indemnification assets and tax benefits. SFAS No. 141R is effective for the Company for business combinations and adjustments to an acquired entity's deferred tax asset and liability balances occurring after December 31, 2008. The Company is currently evaluating the future impacts and disclosures of this standard.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No. 51." This statement is effective for fiscal years, and interim periods

within those fiscal years, beginning on or after December 15, 2008. SFAS No. 160 requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent's equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement. SFAS No. 160 amends certain of ARB No. 51's consolidation procedures for consistency with the requirements of SFAS No. 141(R). This statement requires changes in the parent's ownership interest of consolidated subsidiaries to be accounted for as equity transactions. This statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. The Company is currently evaluating the future impacts and disclosures of this standard.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities," which changes the disclosure requirements for derivative instruments and hedging activities. SFAS No. 161 requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This statement's disclosure requirements are effective for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the future impacts and disclosures of this standard.