Forward Looking Statements

Except for the historical information contained herein, the matters discussed in this Report on Form 10-Q may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic and market conditions and our ability to successfully identify and thereafter consummate one or more acquisitions.

Critical Accounting Policies

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report. A discussion of our critical accounting policies and estimates is included in Management's Discussion and Analysis of Financial Condition and Results of Operations (the "MD&A") in our Annual Report. There have been no material changes to the critical accounting policies or estimates reported in the MD&A section of our Annual Report.

Results of Operations - Three and Nine Months ended December 31, 2011 and 2010

Revenues for the three months ended December 31, 2011 were $903,817, an increase of approximately 8.0% from the $836,830 reported for the three month period ended December 31, 2010. Revenues generated for school staffing services to charter schools accounted for the majority of the increase with revenues of $573,024 during the three months ended December 31, 2011 compared to $463,270 in the corresponding period in the prior fiscal year.

Revenues for the nine months ended December 31, 2011 were $2,249,468, an increase of approximately 10.5% over the $2,035,904 reported for the nine months ended December 31, 2010 due to increases in school staffing and SEIT services of approximately 31.7% and 20.5%, respectively, over the comparable periods in the prior fiscal year. However, during the nine months ended December 31, 2011, revenues from early intervention ("EI") services decreased $216,964 from EI revenues recorded in the nine month period ended December 31, 2010. New York City will not be granting EI contracts to any new providers in the upcoming request for proposal process and our agreement to subcontract our services to another approved provider has not been renewed.

Cost of services as a percentage of revenues for the three and nine month periods ended December 31, 2011 were approximately 66.7% and 67.7%, respectively. During the three and nine months ended December 31, 2010, cost of services as a percentage of revenues were approximately 70.0% and 67.1%, respectively. In the prior fiscal year, we experienced an increase in workers compensation premiums caused by a re-categorization of our clinicians into classifications that are associated with higher premium costs. The Company challenged this action and has successfully reversed this reclassification effective with its policy renewal in September 2011. The decrease in the cost of services as a percentage of revenues in the current three month period is in part a result of this reclassification.

Selling, general and administrative expenses for the quarterly periods ended December 31, 2011 and 2010 were $439,112 and $437,538, respectively. Selling, general and administrative expenses for the nine months ended December 31, 2011 and 2010 were $1,426,240 and $1,413,084, respectively. During the nine months ended December 31, 2011, the Company recorded stock-based compensation expense totaling $91,017 related to the issuance of stock options and warrants as compared to $12,900 of stock-based compensation recorded in the nine months ended December 31, 2010.

Interest income for the three and nine month periods ended December 31, 2011 was $4,333 and $15,564, respectively. Interest income for the three and nine months ended December 31, 2010 was $1,017 and $3,391, respectively. The increase in interest income was a result of the payment of interest on the note receivable and on delinquent receivables by certain charter schools in the current fiscal periods.

Liquidity and Capital Resources

At December 31, 2011, we had working capital of $3,445,083 as compared to working capital of $3,577,376 at March 31, 2011. We believe that we have sufficient liquidity to meet our needs for beyond the next twelve months.

During the nine months ended December 31, 2011, net cash provided by operating activities was $107,569, predominately attributable to the operating activities of discontinued operations totaling $557,457 offset by an operating loss of $655,610.

Cash flows from investing activities for the nine months ended December 31, 2011 included $120,000 of proceeds received from collections of the note receivable.

The Company completed a private placement of 164,715 shares of the Company's common stock to non-affiliated accredited investors at a price of $1.80 per share on June 30, 2011. Total aggregate proceeds of $296,487 were received by the Company.

Future minimum lease payments under non-cancelable operating leases and subleases, exclusive of future escalation charges, for the remainder of the fiscal year ending March 31, 2012 and fiscal years ending thereafter are as follows:

                               Operating
                                 Leases
2012                           $   42,000
2013                              168,000
2014                               73,000
2015                               47,000
2016                               51,000
Thereafter                        143,000
Total minimum lease payments   $  524,000

The Company remains liable under a lease for office space located in East Syracuse, NY which expires in April 2013. Since the Upstate Region has been classified as a discontinued operation, a provision of $36,424, net of matching payments to be made by the purchaser of the assets of the Upstate Region, has been recorded in the accompanying financial statements at December 31, 2011.

We are not aware of any pending or threatened legal action arising from the operations of our business that could have a material adverse effect on our consolidated financial condition or results of operations.

While we have not experienced any significant impact on our net revenues and profitability from the general slowdown of the economy or current global credit crisis, the continuing economic deterioration could have a negative impact in future periods.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.