The following discussion is intended to assist in the understanding and assessment of significant changes and trends related to the results of operations and financial condition of ClearPoint Business Resources, Inc. together with its consolidated subsidiaries ("ClearPoint" or the "Company"). The information contained in Item 2 has been derived from, and should be read in conjunction with, the consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K/A filed on April 29, 2008 with the SEC.

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Some of the forward-looking statements can be identified by the use of forward-looking terms such as "believes," "expects," "may," "will," "should," "could," "seeks," "intends," "plans," "estimates," "anticipates" or other comparable terms. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. The risks and uncertainties discussed in "Risk Factors" included in the reports filed by the Company with the SEC including, but not limited to, this Quarterly Report on Form 10-Q, should be considered in evaluating the Company's forward-looking statements. The Company has no plans to update its forward-looking statements to reflect events or circumstances after the date hereof. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

Overview

The Company is a workforce management solutions provider to clients ranging from small businesses to Fortune 500 companies. The Company's workforce solutions create increased productivity and enable its clients to streamline and optimize the complex processes involved in the procurement and management of temporary labor.

ClearPoint's iLabor network is a proprietary, technology-based platform that provides its clients a comprehensive web-based portal to streamline the process involved in procurement and management of temporary labor through a network of ClearPoint-approved staffing suppliers. The iLabor platform provides a virtual marketplace for the electronic procurement ("e-procurement") of temporary labor and provides the client with one contract and one contact point to order temporary labor on a national scale. ClearPoint's proprietary suite of technologies provides an efficient human capital portal that allows its' clients to manage their workforce in one click. iLabor is an on-demand e-procurement solution that is hosted by ClearPoint which eliminates the need for clients to install and maintain costly hardware and software applications. The client can access iLabor through standard Internet connections and web browsers, which also eliminates the need for time consuming and costly systems integrations. The iLabor platform provides real time feedback on all posted positions and provides a centralized reporting mechanism for clients to review and monitor their spending on temporary labor on a national basis.

The introduction in 2007 of ClearPoint's iLabor technology has allowed the Company to position itself uniquely in the human capital industry. The iLabor network is a technology-based procurement method that provides a low cost and easy alternative for ClearPoint's clients, as well as traditional staffing companies in the industry, to procure temporary labor through a ClearPoint-approved staffing vendor network that has national coverage. It is the strength of ClearPoint's supplier base of temporary labor suppliers that enables the Company to effectively and efficiently meet the stringent demands of iLabor clients, often within very tight time constraints. The iLabor platform is a fully scalable product offering that can accommodate significant growth in transaction volumes for ClearPoint without significant increases to the Company's existing cost structure.

During the second half of 2007, the Company moved the majority of its branch offices to a franchise model, enabling the Company to focus on its technology platforms rather than the day to day recruitment and placement of temporary labor. Two franchisees, KOR Capital, LLC ("KOR"), a Florida limited liability company controlled by Kevin O'Donnell, a former officer of the Company, and TZG Enterprises, LLC ("TZG"), a Delaware limited liability company controlled by J. Todd Warner, a former officer of the Company, assumed responsibilities for operating and managing respective former branch offices. This effectively allowed ClearPoint to significantly reduce its fixed operating costs while maintaining a revenue stream from its client base.

In March 2008, the KOR franchise agreement was terminated and the associated customer contracts were sold to StaffChex, Inc. ("StaffChex"). StaffChex entered into an iLabor Network Supplier Agreement with CPR, whereby iLabor would be the technology for StaffChex to fulfill open positions for temporary labor. In return, CPR would receive a percentage (initially 2.25%, but subject to reduction based on achieving certain volume targets) of StaffChex's total collections from its total billings for temporary staffing services provided by StaffChex, regardless of whether such services were provided through the iLabor network.

In February 2008, the TZG franchise agreement was terminated and the operations and management of the associated customer contracts were licensed to Optos Capital, LLC ("Optos"), a company owned by Christopher Ferguson, a majority stockholder of the company, the former director, President and Secretary of the Company and CPR. On April 8, 2008, the license agreement with Optos was terminated. A new license agreement and a new temporary help services subcontract agreement was entered into with Koosharem Corp., a California corporation doing business as Select Staffing, ("Select"), where CPR is entitled to receive annually the first 10% of all gross billings of the subcontracted contracts up to $36,000 of gross billings ($3,600 per year to CPR) and whereby Select licensed use of CPR's iLabor network in exchange for a $1,200 payment ($900 on April 8, 2008 and $300 on July 1, 2008).

These significant transactions (see Note 18 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q) enabled ClearPoint to initiate a debt reduction strategy which included the outsourcing of workers' compensation insurance policies and the transfer of payroll funding obligations for temporary employees to StaffChex and Select.

Historically, the Company has funded its cash and liquidity needs through cash generated from operations and debt financing. Cash projected to be generated from operations will not be sufficient to fund operations and meet debt repayment obligations. In order to meet its cash and liquidity needs, the Company will be required to raise additional financing. There is no assurance that the Company will be successful in obtaining additional financing on terms which are satisfactory to the Company, if at all. If the Company can not raise additional financing and/or renegotiate the repayment terms of its convertible secured note, there is substantial doubt about the ability of the Company to continue as a going concern.

On May 28, 2008, the Company received a deficiency letter from The Nasdaq Stock Market LLC ("Nasdaq"), indicating that the Company failed to comply with certain listing standards (namely, stockholder's equity, market value and net income). On June 9, 2008, the Company received an additional deficiency letter noting that its bid price had closed below the minimum requirement of $1.00 per share for more than 30 consecutive business days. On June 13, 2008, the Company provided to Nasdaq a plan to achieve and sustain compliance with the stockholder's equity, market value and net income listing requirements, including the time frame for completion of the plan. Nasdaq has given the Company until December 8, 2008 to rectify the bid price listing requirement.

On July 16, 2008, the Staff notified the Company that it had reviewed the Company's plan and determined to delist the Company's securities from The Nasdaq Capital Market. On July 23, 2008, the Company requested an appeal of this determination. The appeal stays the suspension and delisting of the Company's securities from Nasdaq. There can be no assurance that the Company's request for continued listing will be granted.

Application of Critical Accounting Policies and Estimates

ClearPoint's discussion and analysis of its financial condition and results of operations are based on ClearPoint's condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with these principles in the United States of America requires ClearPoint to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using the estimates.

The SEC defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

ClearPoint's significant accounting policies are described in Note 2 to the Notes to ClearPoint's Consolidated Financial Statements for the year ended December 31, 2007, as set forth in the Annual Report on Form 10-K/A filed with the SEC on April 29, 2008 and additional policies are described in Note 3 to the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Seasonality

ClearPoint experiences fluctuation in revenue and operating results based on a number of factors including but not limited to competition in its markets, availability of qualified personnel and the personnel demands of its clients. Historically, ClearPoint has experienced a rise in demand from its transportation clients in the third and fourth quarter due to the increase in the shipment of products for the holiday season. Inclement weather can cause a slowdown in ClearPoint's business due to business shutdowns by its clients. The first quarter has been traditionally the slowest quarter from a revenue perspective due to national holidays and customer planning cycles. This revenue seasonality will also typically impact the Company's profitability as most operating expenses are spread evenly throughout the year.

Results of Operations (Unaudited)

                  Three Months Ended June 30, 2008 Compared to

                    Three Months Ended June 30, 2007 (000's)

The following summarizes select items of ClearPoint's condensed consolidated
statement of operations for the three months ended June 30, 2008 and June 30,
2007:



                                                           % of                    % of          %
$ (000's)                                      2008       Revenue       2007      Revenue      Change
Net revenues                                 $  3,291       100.0 %    54,394         100 %     (94.0 )%
Cost of services                                2,910        88.4 %    46,525        85.5 %     (93.8 )%

Gross profit                                      381        11.6 %     7,869        14.5 %     (95.2 )%
SG&A expenses                                   6,391       194.2 %     8,086        14.9 %     (21.0 )%
Restructuring expense                              -           -        2,852         5.2 %       N/A
Depreciation and amortization expense             163         4.9 %     1,387         2.5 %     (88.2 )%

(Loss) from operations                         (6,173 )    (187.6 )%   (4,456 )      (8.2 )%      N/A
Other income (expense)                            300         9.1 %        90         0.2 %       N/A
Interest (expense)                               (358 )     (10.9 )%     (537 )      (1.0 )%      N/A
Gain on restructuring of debt                     687        20.9 %        -           -          N/A
Gain (loss) on sale of subsidiary                 600        18.2 %        -           -          N/A

Net (loss) before income taxes                 (4,944 )    (150.2 )%   (4,903 )      (9.0 )%      N/A
Income tax expense (benefit)                       -           -       (2,918 )      (5.4 )%      N/A

Net (loss)                                   $ (4,944 )    (150.2 )%   (1,985 )      (3.6 )%      N/A

Net Revenues

ClearPoint's revenues for the three months ended June 30, 2008 and 2007 were $3,291 and $54,394, respectively, which represented a decrease of $51,103 or 94.0%. This decrease was due primarily to the changes in the Company's business model, as described in the Overview above, which resulted in the majority of revenues being recognized on a net fee basis such as royalty and license fees. The Company recorded $265 of royalties in net revenue during the three months ended June 30, 2008.

Cost of Services and Gross Profit

Cost of services consists of direct labor expenses for time charged directly to a client and related payroll taxes, unemployment and workers' compensation insurance expenses, employee benefits, and other out-of-pocket expenses directly associated with the performance of the service to the client. ClearPoint's cost of services for the three months ended June 30, 2008 and 2007 was $2,910 and $46,525, respectively, which represented a decrease of $43,615, or 93.8%. ClearPoint's gross profit for the three months ended June 30, 2008 and 2007 was $381 and $7,869, respectively, which represented a decrease of $7,488 or 95.2%. This decrease was due primarily to the changes in the Company's business model, as described in the Overview above, which resulted in the majority of revenues being recognized on a net fee basis such as royalty and license fees with limited cost of services. As a percentage of revenue for the three months ended June 30, 2008 and 2007, ClearPoint's gross profit was 11.6% and 14.5% respectively.

Selling, General, Administrative and Restructuring Expenses

ClearPoint's selling, general and administrative ("SG&A") expenses for the three months ended June 30, 2008 and 2007 were $6,391 and $8,086, respectively, which represented a decrease of $1,695 or 21.0%. The decrease was a direct result of the Company's 2007 restructuring and franchising of many of its branches, as the Company had substantially less SG&A expenses associated with the Company's branch based operations during the three months ended June 30, 2008 which include expenses related to salaries, employee benefits and rents. The decrease was partially offset by an additional allowance for doubtful accounts totaling $2,196. As a percentage of revenue for the three months ended June 30, 2008 and 2007, SG&A expenses were 194.2% and 14.9% respectively, largely as a result of reduced revenue recorded due to the recording of revenues and royalties on a net basis and the additional allowance for doubtful accounts.

Impairment of Goodwill and Depreciation and Amortization Expense

ClearPoint's depreciation and amortization expenses for the three months ended June 30, 2008 and 2007 were $163 and $1,387, respectively, which represented an decrease of $1,224 or 88.3%. The decrease was largely due to fixed asset and goodwill impairment charges incurred in the first quarter of 2008.

Interest Expense

ClearPoint's interest expense for the three months ended June 30, 2008 and 2007 was $358 and $537, respectively, which represented a decrease of $179, or 33.3%, primarily due to the reduced interest cost from the reduction in the company's overall debt.

Net loss

ClearPoint's net loss for the three months ended June 30, 2008 and 2007 was $4,944 and $1,985 respectively, which represented an increase of $2,959, or 149%. The net loss was due primarily to the reduced gross profit offset by reduced ongoing SG&A and interest expenses as a result of the factors discussed above. The loss from operations was partially offset by gains realized on the restructuring of debt and sale of a subsidiary totaling $687 and $600, respectively.

                   Six Months Ended June 30, 2008 Compared to

                     Six Months Ended June 30, 2007 (000's)

The following summarizes select items of ClearPoint's condensed consolidated
statement of operations for the six months ended June 30, 2008 and June 30,
2007:



                                                                % of                      % of          %
$ (000's)                                          2008        Revenue        2007       Revenue      Change
Net revenues                                     $  27,511       100.0 %      87,243         100 %     (68.5 )%
Cost of services                                    25,654        93.2 %      73,467        84.2 %     (65.1 )%

Gross profit                                         1,857         6.8 %      13,776        15.8 %     (86.5 )%
SG&A expenses                                       11,950        43.4 %      15,191        17.4 %     (21.3 )%
Restructuring expense                                2,100         7.6 %       2,852         3.3 %     (26.4 )%
Impairment of goodwill                              16,822        61.1 %          -           -          N/A
Fixed assets impairment expense, net                 1,022         3.7 %          -           -          N/A
Depreciation and amortization expense                  285         1.0 %       2,526         2.9 %     (88.7 )%

(Loss) from operations                             (30,322 )    (110.2 )%     (6,793 )      (7.8 )%      N/A
Other income (expense)                                 200         0.7 %         217         0.2 %       N/A
Interest (expense)                                    (906 )      (3.3 )%     (1,098 )      (1.3 )%       NA
Income on restructuring of debt                        687         2.5 %          -           -          N/A
Gain (loss) on sale of subsidiary                   (1,294 )      (4.7 )%         -           -          N/A
Prepayment penalty on early retirement of debt          -           -         (1,950 )      (2.2 )%      N/A

Net (loss) before income taxes                     (31,635 )    (115.0 )%     (9,624 )     (11.0 )%      N/A
Income tax expense (benefit)                         5,007        18.2 %      (3,392 )      (3.9 )%      N/A

Net (loss)                                       $ (36,642 )    (133.2 )%   $ (6,232 )      (7.1 )%      N/A

Net Revenues

ClearPoint's revenues for the six months ended June 30, 2008 and 2007 were $27,511 and $87,243, respectively, which represented a decrease of $59,732 or 68.5%. This decrease was due primarily to the changes in the Company's business model, as described in the Overview above, which resulted in more revenues being recognized on a net fee basis such as franchise, royalty and license fees. The Company recorded $1,568 of franchise royalties in net revenue during the six months ended June 30, 2008.

Cost of Services and Gross Profit

Cost of services consists of direct labor expenses for time charged directly to a client and related payroll taxes, unemployment and workers' compensation insurance expenses, employee benefits, and other out-of-pocket expenses directly associated with the performance of the service to the client. ClearPoint's cost of services for the six months ended June 30, 2008 and 2007 was $25,654 and $73,467, respectively, which represented a decrease of $47,813, or 65.1%. ClearPoint's gross profit for the six months ended June 30, 2008 and 2007 was $1,857 and $13,776, respectively, which represented a decrease of $11,919 or 86.5%. This decrease was due primarily to the changes in the Company's business model, as described in the Overview above, which resulted in more revenues being recognized on a net fee basis such as franchise, royalty and license fees with limited cost of services. As a percentage of revenue for the six months ended June 30, 2008 and 2007, ClearPoint's gross profit was 6.8% and 15.8% respectively.

Selling, General, Administrative and Restructuring Expenses

ClearPoint's selling, general, administrative ("SG&A") and restructuring expenses for the six months ended June 30, 2008 and 2007 were $11,950 and $15,191, respectively, which represented a decrease of $3,241 or 21.3%. The decrease was a direct result of the Company's 2007 restructuring and franchising of many of its branches, as the Company had substantially less SG&A expenses

associated with the Company's branch based operations during the six months ended June 30, 2008 which include expenses related to salaries, employee benefits and rents and partially offset by additional allowances for doubtful accounts. During the six months ended June 30, 2008, the Company recorded $1,605 in a provision for amounts due from the former franchisees that are no longer in operation and allowances for doubtful accounts totaling $5,185. As a percentage of revenue for the six months ended June 30, 2008 and 2007, SG&A expenses were 43.4% and 17.4% respectively, largely as a result of reduced revenue recorded due to the recording of franchise royalties on a net basis.

Effective March 12, 2008, the Company initiated an additional restructuring program of its field and administrative operations in order to further reduce its ongoing SG&A expenses. As part of the restructuring program, the Company closed its remaining branch and administrative office in Florida and eliminated approximately 20 positions. The Company incurred $2,100 in restructuring expenses related to these closures and position eliminations.

Impairment of Goodwill and Depreciation and Amortization Expense

ClearPoint's depreciation and amortization expenses for the six months ended June 30, 2008 and 2007 were $285 and $2,526, respectively, which represented a decrease of $2,241 or 88.7%. For the six months ended June 30, 2008, the Company recorded an impairment charge of $1,022 related to fixed assets as a result of the termination of franchise agreements described in Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. The Company removed $1,838 of fixed assets and $816 of accumulated depreciation as a result of this impairment. The Company also recorded an impairment of goodwill for the six months ended June 30, 2008 of $16,822 based upon management's determination that the carrying amount of the goodwill was less than its fair value.

Interest Expense

ClearPoint's interest expense for the six months ended June 30, 2008 and 2007 was $906 and $1,098, respectively, which represented a decrease of $192, or 17.5%, primarily due to the reduced interest cost from the reduction in the company's overall debt.

Net loss

ClearPoint's net loss for the six months ended June 30, 2008 and 2007 was $36,642 and $6,232 respectively, which represented an increase in the loss of $30,410 or 488%. The net loss was due primarily to the reduced gross profit offset by reduced ongoing SG&A, partially offset by the additional allowances for doubtful accounts recorded, and interest expenses as a result of the factors discussed above. The net loss was also a result of a number of non-cash items relating to the 2008 restructuring program of $2,100, the impairment charge of goodwill of $16,822, the impairment charge of fixed assets of $1,022, and the recording of the deferred tax assets valuation allowance of $5,007 to the provision for income taxes for deferred tax benefits recognized in prior periods.

Liquidity and Capital Resources

Historically, the Company has funded its cash and liquidity needs through cash generated by operating activities and through various forms of debt and equity financing. As of June 30, 2008, cash projected to be generated from operations may not be sufficient to fund operations and meet debt repayment obligations. There is no assurance that the Company will be successful in obtaining additional financing. If the Company can not raise additional financing, there is substantial doubt about the ability of the Company to continue as a going concern. (see Note 1 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q).

Based on the Company's cash position and working capital deficiency, it may need to raise additional financing in order to support its business operations. The amount of financing required will be determined by many factors, some of which are beyond the Company's control, and may require financing sooner than currently anticipated. The Company has no commitment for any additional financing and can provide no assurance that such financing will be available in an amount or on terms acceptable to the Company, if at all. If the Company is unable to obtain additional financing or if such funds cannot be obtained on terms favorable to the Company, it would adversely affect the Company's ability to continue as a going concern.

ClearPoint's traditional use of cash flow was for funding payroll in advance of collecting revenue, particularly during periods of economic upswings and growth and during periods in which sales are seasonally high throughout the year. Temporary personnel are generally paid on a weekly basis while payments from customers are generally received 30 to 60 days after billing.

As of March 31, 2008, ClearPoint's new iLabor-focused business model has essentially eliminated these funding requirements since the Company's main focus is no longer to act as the employer for the temporary personnel, but rather to be the facilitator, bringing together clients and suppliers of temporary labor, via ClearPoint's iLabor network. Revenue from the Company's iLabor network where it electronically procures and consolidates buying of temporary staffing for clients nationally is recognized on a net basis. The Company contracts directly with clients seeking to procure temporary staffing services through its iLabor portal. The Company also contracts directly with, and purchases from, temporary staffing suppliers, the temporary placement of workers which is then subsequently resold to its clients.

In addition, the Company entered into an agreement with StaffChex, (see Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q) whereby substantially all the revenues received from this agreement do not require any short term liquidity from the Company to fund the source of these revenues.

On April 8, 2008, ClearPoint Resources, Inc. ("CPR"), a wholly owned subsidiary . . .