The following discussion and analysis of our financial condition and results of operations should be read with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009.

Critical Accounting Policies

The following discussion and analysis of our unaudited condensed financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to revenue recognition and concentration of credit risk. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that of the significant accounting policies used in the preparation of our unaudited condensed financial statements (see Note 2 to the Financial Statements included in the Company's Annual Report), the following are critical accounting policies, which may involve a higher degree of judgment, complexity and estimates.

Revenue Recognition

We recognize revenues associated with our software products in accordance with the provisions of the American Institute of Certified Public Accountants' Statement of Position 97-2, "Software Revenue Recognition." We license our software products under non-exclusive, non-transferable license agreements. Because these arrangements do not require significant production, modification or customization, revenue is recognized when the license agreement has been signed, the software product has been delivered, the related fee is fixed or determinable and collection of such fee is probable.

In certain instances, we license our software on a transactional fee basis in lieu of an up-front licensing fee. In these arrangements, the customer is charged a fee based upon the number of items processed by the software and we recognize revenue as these transactions occur. The transaction fee also includes the provision of standard maintenance and support services, as well as product upgrades should such upgrades become available.

If professional services are provided in connection with the installation of the software licensed, revenue is recognized when those services have been provided.

In certain instances, the Company will recognize revenue on a percent of completion basis for the portion of professional services related to customized customer projects that have been completed but are not yet deliverable to such customer.

For license agreements that include a separately identifiable fee for contracted maintenance services, such revenues are recognized on a straight-line basis over the life of the maintenance agreement noted in the license agreement, but following any installation period of the software.

Goodwill

The goodwill recorded on our books is from the acquisition of US Dataworks, Inc. in fiscal year 2001, which remains our single reporting unit. Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets," requires goodwill for each reporting unit of an entity to be tested for impairment by comparing the fair value of each reporting unit with its carrying value. Fair value is determined using a combination of the discounted cash flow, market multiple and market capitalization valuation approaches. Significant estimates used in the methodologies include estimates of future cash flows, future short-term and long-term growth rates, weighted average cost of capital and estimates of market multiples for each reportable unit. On an ongoing basis, absent any impairment indicators, we perform impairment tests annually during the fourth quarter.

SFAS No. 142 requires goodwill to be tested annually, typically performed during the fourth quarter, and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of the reportable unit below its carrying amount. The Company did not record an impairment of goodwill for the year ended March 31, 2009.

Estimates

The preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk

We extend credit to our customers and perform ongoing credit evaluations of our customers. We do not obtain collateral from our customers to secure our accounts receivables. We evaluate our accounts receivable on a regular basis for collectibility and provide for an allowance for potential credit losses as deemed necessary.

Two of our customers accounted for 58% and 13% of our net revenues for the three months ended June 30, 2009. Two of our customers accounted for 51% and 20% of our net revenues for the three months ended June 30, 2008.

At June 30, 2009, amounts due from significant customers accounted for 77% of accounts receivable. At June 30, 2008, amounts due from significant customers accounted for 68% of accounts receivable.

Results of Operations

The results of operations reflected in this discussion include our operations
for the three month periods ended June 30, 2009 and 2008.

We generate revenues from (a) licensing software with fees due at the initial
term of the license, (b) licensing and supporting software with fees due on a
transactional basis, (c) providing maintenance, enhancement and support for
previously licensed products, and (d) providing professional services.

Revenues

                                         For the Three Months
                                                 Ended
                                               June 30,
                                         2009            2008          Change

Software transactional revenues, net   $   521,243     $   537,749         -3.1 %
Software licensing revenues                      ¾          30,000       -100.0 %
Software maintenance revenues              212,371         228,874         -7.2 %
Professional service revenues            1,274,847       1,272,426          0.2 %
Total revenues                         $ 2,008,461     $ 2,069,049         -2.9 %

Revenues decreased by 2.9% for the three months ended June 30, 2009 compared to the three months ended June 30, 2008. We had no licensing revenue for the quarter ended June 30, 2009, and maintenance revenues declined 7.2% due to the non renewal of certain maintenance agreements. We believe that we will continue to see maintenance and licensing revenues decline slowly as we continue our transition to a more transactional based revenue model. We expect our transactional revenue to grow as more of our current customers, along with new customers, begin to run more of their processing through our software products.

Cost of Sales

Costs of sales include the cost of the Thomson Financial EPICWare™ software and other third party software resold in connection with our software, as well as personnel costs associated with our software maintenance, support, training and installation services. Cost of sales increased by $20,648, or 3.8%, to $558,142 for the three months ended June 30, 2009 from $537,494 for the three months ended June 30, 2008. This increase was principally due to an increase of $43,000 in the cost of third party software purchased for resale offset by a $23,000 decrease in the labor cost associated with our professional services and maintenance personnel as compared to the same period in the prior fiscal year.

Operating Expenses

Total operating expenses decreased by $215,654, or 15.1%, to $1,208,753 for the three months ended June 30, 2009 from $1,424,407 for the three months ended June 30, 2008.

General and administrative expenses decreased $181,987 and was attributable to a $127,175 decrease in general and administrative personnel expenses associated with the ongoing benefits of the restructuring in staffing undertaken in the last year, $95,627 decrease in accounting and legal fees, a $10,963 decrease in insurance expense offset by an increase of $31,390 in the use of outside consultants and services expenses in the first quarter of 2009, as compared to the same period in the prior fiscal year.

The slight increase in research and development expenses of $18,000 is primarily related to increased personnel expenses of the R & D staff, while the decrease in sales and marketing of $47,265 is related to a decrease in personnel expenses associated with the restructuring in staff undertaken in the last year.

In our effort to promote our brand name, increase our client base and expand our relationship with existing clients, we expect our operating expenses in both research and development and sales and marketing to increase.

Other Expenses

Other expenses, including interest expense and financing costs, increased $48,848, or 22.5%, to $265,477 for the three months ended June 30, 2009 from $216,629 for the three months ended June 30, 2008. The increase was primarily due to an increase in interest expense - related parties of $144,970, associated with two of the Company's directors refinancing of the outstanding debt, the absence of $56,914 of other income, and absence of $41,080 of derivative gain from the prior year period, offset by a reduction of interest expense paid to holders of the promissory note of November 13, 2007 which was paid off in the prior year.

Net Loss

Net loss decreased by $85,570, or 78.2%, to a net loss of $23,911 for the three months ended June 30, 2009 from a net loss of $109,481 for the three months ended June 30, 2008. For details related to this loss see the preceding discussions related to revenues, to cost of sales, operating expenses and other income sections above.

Liquidity and Capital Resources

Because of our ability to increase revenue while at the same time reducing general and administrative expenses, we experienced positive operating cash flow from operations in fiscal 2009 and in the first quarter of fiscal 2010 and expect to continue to achieve enough positive operating cash flow from operations in the future to operate and grow our business. However, due to our history of experiencing negative cash flow from operations and the debt financing that we put in place to cover this historical negative cash flow, we find ourselves in the position of having approximately $4.2 million of debt coming due on July 1, 2010 that we may not be able to repay from our operating cash flow. While we currently expect to be able to refinance this debt or reach an agreement to extend the maturity date of this debt, there can be no assurances that this will in fact occur. Failure to refinance or extend the maturity date of this debt will have a material adverse effect on our financial condition and our ability to continue as a going concern (see "Item 1A. Risk Factors").

In addition, while we expect to be able to fund our operations from cash flow, if that is not the case, our long term viability will again depend on our ability to obtain adequate sources of debt or equity funding to fund the continuation of our business operations and to ultimately achieve adequate profitability and cash flows to sustain our operations. We will need to increase revenues from software licenses, transaction-based software license contracts and professional services agreements to become profitable.

Cash and cash equivalents increased by $96,187 to $500,050 at June 30, 2009 from $403,863 at March 31, 2009. Cash provided by operating activities was $105,006 in the three months ended June 30, 2009 compared to $172,745 in the same period in the prior fiscal year.

No cash was used for investing activities in the three months ended June 30, 2009 nor in the three month period ended June 30, 2008.

Financing activities used cash of $8,819 in the three months ended June 30, 2009 and financing activities used cash of $8,820 in the three months ended June 30, 2008.

As a result of our increased level of transactional revenues achieved in fiscal 2009, and the expected increase in revenues to be received from recently received contracts, we believe we currently have adequate capital resources to fund our anticipated cash needs through March 31, 2010. However, an adverse business or legal development could require us to raise additional financing sooner than anticipated. We recognize that we may be required to raise such additional capital, at times and in amounts, which are uncertain, especially under the current capital market conditions. If we are unable to acquire additional capital or are required to raise it on terms that are less satisfactory than we desire, it may have a material adverse effect on our financial condition. In the event we raise additional equity, these financings may result in dilution to existing shareholders.