Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this report. References to "we", "us", "our" or the "Company" are to Universal Business Payment Solutions Acquisition Corporation, except where the context requires otherwise.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION AND

SUBSIDIARIES

(A Company in the Development Stage)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

(Unaudited)

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading "Risk Factors" in our Annual report on Form 10-K for fiscal year ended September 30, 2011 filed on December 29, 2011. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission ("SEC") filings.

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our Annual report on Form 10-K for fiscal year ended September 30, 2011 filed on December 29, 2011 and the unaudited consolidated financial statements and the related notes thereto included in Item 1 hereto. We assume no obligation and do not intend to update these forward-looking statements, except as required by law.

Overview

We are a blank check company in the development stage, formed on November 12, 2010 to serve as a vehicle to acquire through a merger, share exchange, asset acquisition, stock purchase, plan of arrangement, recapitalization, reorganization or other similar business combination, one or more operating businesses (a "Business Combination"). Although we are not limited to a particular geographic region or industry, we intend to focus on acquiring an operating business.

We presently have no revenue, have had losses since inception from incurring formation costs and have no operations other than (after the consummation of our initial public offering), the active solicitation of an acquisition target. We have relied upon the sale of our securities and loans from our officers and directors to fund our operations.

On May 13, 2011 we consummated an initial public offering (the "Public Offering") of 12,000,000 units at a price of $6.00 per unit. Simultaneously with the Public Offering, certain of our initial stockholders and the underwriters of the Public Offering purchased 6,960,000 Warrants at $0.50 per warrant (for an aggregate purchase price of $3,480,000) from the Company (the "Warrant Offering"). We raised aggregate gross proceeds of $75,480,000 from the Public Offering and Warrant Offering, of which $72,720,000 ($68,807,968 as adjusted for repurchases through June 30, 2012 under the Company's Share Repurchase Plan is being held in a trust account for our benefit (the "Trust Account"). We intend to use this cash, our capital stock, incurred debt, or a combination of cash, capital stock, and debt, in effecting our initial Business Combination.

On June 25, 2012, the JetPay Merger Sub, the FMS Merger Sub and the ADC Merger Sub were formed in Delaware for the purposes of the transaction more fully described below.

The Acquisition Agreements

On July 6, 2012, the Company entered into the Acquisition Agreements to acquire each of JetPay, EMS and ADC, and their respective subsidiaries. (See Note 3 in
Section 1for further information about these companies).

JetPay Merger

• Pursuant to the JetPay Agreement, the JetPay Merger Sub will merge with and into JetPay, with JetPay surviving the merger as a wholly owned subsidiary of the Company.

• In exchange, the Company will pay to WLES $28,000,000 in cash, subject to certain adjustments relating to the net working capital, cash and indebtedness, and 2,000,000 shares of common stock, of which $10,000,000 and 1,666,667 shares of common stock will be placed into an escrow account maintained by JP Morgan Chase Bank, N.A. as partial security to the Company for the obligations of WLES under the JetPay Agreement.
• WLES will also be entitled to receive up to an aggregate of $5,000,000 in cash and 833,333 shares of common stock in the event certain stock price targets for common stock are achieved and upon a redemption of the warrants issued in the Offering.

EMS Merger

• Pursuant to the EMS Agreement, the EMS Merger Sub will merge with and into EMS, with EMS surviving the merger as a wholly owned subsidiary of the Company. Immediately subsequent to the EMS Merger, EMS will acquire all of the outstanding interests of an affiliated entity, BizFunds, LLC, pursuant to a unit purchase agreement, which is attached as an exhibit to the EMS Agreement.

• In exchange, the Company will pay to the EMS Stockholders $60,000,000 in cash, subject to certain adjustments relating to the net working capital, cash and indebtedness, and 3,333,333 shares of common stock. An additional $10,000,000 will be placed in an escrow account maintained by JP Morgan Chase Bank, N.A. as partial security to the Company for the obligations of the EMS Stockholders under the EMS Agreement. Any amounts remaining in the escrow account on the 18 month anniversary of the closing will be distributed to the EMS Stockholders, subject to retention of any amounts related to pending claims.
• Additionally, the EMS Stockholders will be entitled to receive $5,000,000 in cash and 1,666,666 shares of common stock when the Company becomes entitled to redeem the warrants issued in the Offering.

ADC Merger

• Pursuant to the ADC Agreement, the ADC Merger Sub will merge with and into ADC, with ADC surviving the merger as a wholly owned subsidiary of the Company.

• In exchange, the Company will pay to stockholders of ADC $16,000,000 in cash, subject to certain adjustments relating to the net working capital, cash and indebtedness.
• The ADC stockholders will also be entitled to receive $2,000,000 in cash on the 24 month anniversary of the closing.

In connection with the Transaction, the holders of the Public Shares which were sold in the Offering may request redemption of their shares of our common stock for cash in an amount equal to their pro rata share of the aggregate amount on deposit in a trust account holding the proceeds of the Offering.

Pursuant to its Restated Certificate of Incorporation, the Company intends to seek stockholder approval of the Transaction through the filing of a proxy statement with the SEC.

Results of Operations

We have not conducted any operations nor generated any revenues to date. Our entire activity since inception up to the closing of our Public Offering was in preparation for that event. After the Public Offering, our activity has been limited to the evaluation of business combination candidates, and we have not been and will not be generating any operating revenues until the closing and completion of our initial Business Combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.

We incurred a net loss of $155,222 for the three-month period ended and a net loss of $537,592 for the nine-month period ended June 30, 2012, respectively. These compare to losses of $38,416 for the three-months ended June 30, 2011 and $39,953 for the period from November 12, 2010 (inception) through June 30, 2011. The Company lost $627,548 for the period from November 12, 2010 (inception) through June 30, 2012. The Company's expenses in the three and nine months ended June 30, 2012 reflected increased costs related to our search for an acquisition, along with, in the three months ended June 30, 2012 annual costs related to taxes and membership costs. Until we enter into a Business Combination, we will not have revenues other than interest earned on the funds held in the Trust Account.

Liquidity and Capital Resources

As of June 30, 2012, we had $6,967 in our operating bank account. On May 13, 2011, after the consummation of the Public Offering, approximately $600,000 was placed into our operating bank account to be available for use by management to cover operating costs and the costs associated with identifying a target business and negotiating a Business Combination. Of this amount, approximately $340,000 was used to pay accrued offering costs and $125,000 was used to repay notes held by certain of our initial stockholders.

We intend to use the approximately $7,000 of remaining net proceeds not held in the Trust Account plus the interest earned on the funds held in the Trust Account that may be released to us to fund our working capital requirements. As of June 30, 2012, U.S Treasury Bills with maturities less than six month were yielding under approximately .09%. We believe such rate is representative of those we may receive on the balance of the Trust Account.

During the nine months ended June 30, 2012, the Company issued to UBPS Services, LLC, an entity controlled by Bipin Shah, our Chairman and Chief Executive Officer various notes aggregating in the principal amount of $232,500. These notes are non-interest bearing and are payable on the earlier of their anniversary, or the consummation of an initial Business Combination.

Over the next seven months, we will be using these funds to carry out the necessary actions to consummate the transactions contemplated by the Acquisition Agreements, including preparing a proxy statement relating thereto and soliciting stockholder approval. Our actual costs may be higher or lower than these estimates. We anticipate that in order to fund our working capital requirements, we will need to use all of the remaining funds not held in trust, the interest earned on the funds held in the Trust Account, as well as entering into contingent fee arrangements with our vendors. We may need to raise additional capital through loans or additional investments from our initial stockholders, officers, directors, or third parties. None of our initial stockholders, officers or directors is under any obligation to advance funds to, or invest in, us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and controlling overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern.

The net proceeds from our Public Offering, after deducting offering expenses of approximately $473,000 and underwriting discounts of $2,160,000, were approximately $69,366,894. Of this amount, $69,240,000, plus the $3,480,000 we received from the Warrant Offering, was placed in the Trust Account ($68,807,968 as adjusted for repurchases through June 30, 2012 under the Company's Share Repurchase Plan). The remaining net proceeds not in trust is being used for working capital purposes. We intend to use the net proceeds of the Warrant Offering and our Public Offering, representing our funds held in the Trust Account, to acquire a target business and to pay our expenses relating thereto, including $2,070,000 payable to EarlyBirdCapital, Inc. ("EBC") upon consummation of an initial Business Combination for acting as our non-exclusive investment banker for structuring and negotiating such Business Combination. To the extent that our capital stock is used in whole or in part as consideration to effect a Business Combination, the remaining proceeds held in the Trust Account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target's business operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders' fees, which we had incurred prior to the completion of our Business Combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

Off-Balance Sheet Arrangements

Our Company did not have any off-balance sheet arrangements as of June 30, 2012.