The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto as filed with this report.

Overview

Since 1991, PSMI has been a retail mortgage origination firm and, since 2008, has also conducted business as a mortgage lender using warehouse lines of credit. Our revenue model is based on bank margin on loan funding and administrative fees. Our loans are purchased off of our warehouse lines by several investors. As a mortgage banking firm, we have the freedom to "broker" loans immediately to third parties or leverage our warehouse lines to "bank" the loans and then sell them on the secondary market. Historically, PrimeSource funds or "banks" more than 90% of our loans with several wholesale relationships available for our offices to take advantage of in order to provide the consumer with the lowest monthly payment and lowest rate available to them in the marketplace.

In April 2012, management restructured the Company by merging PSMI into UCMC and changing the domicile of UCMC from the State of New Jersey to the State of Delaware, and changed the name of UCMC to PSMI, a Delaware corporation. As a result of the restructuring, PSMH has a single operating wholly-owned subsidiary, PSMI, which has undergone a name change, and conducts all business operations under that name. Based upon our current production, we estimate approximately 75% of loan applications are generated from business contacts and previous client referrals at each of the branch offices. Realtor referrals generate another 15% and the remaining 10% come from other advertising and marketing efforts, including Nationwide By Owner, Inc. ("NWBO") and the Costco lending platform.

We have retail offices located around the United States from which we derive revenue based on the aforementioned business factors (e.g. fees, margin and splits) resulting from the loan origination volume from these offices. We are able to leverage the Company's warehouse lines of credit relationships with related parties in order to provide the consumer with more competitive rates and fees while increasing our gross profits. With a growing national retail platform, it is important to remain competitive in targeted regions around the country whose market dynamics vary from one another. It is for this reason, a healthy mixture of wholesale and correspondent relationships exist from within our Company in order to ensure both service quality and competitive pricing for our clients. Presently, PSMI has approximately 20 offices around the country.

On April 14, 2006, we entered into a renewable license agreement with Nationwide By Owner, Inc. ("Nationwide"), a Texas based company engaged in the business of marketing real estate property for sale by owners and others. In the course of its business, Nationwide operates a proprietary system which produces a database of sales leads containing home buyer and home seller information for persons seeking financing on the purchase or refinancing of real property. The license agreement permits us exclusive use of the database which we use to generate leads for the origination of mortgage applications for submission to us. The agreement with Nationwide renewed for an additional five years on April 14, 2011, is automatically renewable for two successive three-year periods and thereafter for successive one-year terms, unless either party notifies the other of its intent not to renew the agreement prior to the third automatic renewal term.

Our company was approved as one of ten lenders designated as preferred mortgage lenders on the Costco Mortgage Services Platform (the "MSP") that began in January 2010, and is operated and managed by First Choice Bank. PSMI's office in Tulsa, Oklahoma, began providing mortgage services on December 1, 2011 to Costco members. Initially, PSMI has serviced leads originated in Oklahoma, Texas, New Mexico and Missouri. Management anticipates that other states will likely be added in the future. PSMI has initially committed to take approximately 1,000 leads per month for the Costco MSP, but expects to increase this significantly in the last half of 2012 and 2013. PSMI believes it can manage this level of leads with its current infrastructure. Margins on loans originated under the Costco MSP are expected to be lower than those on loans originated under the new business model.

As will be discussed below, the Company acquired five strong, seasoned mortgage operations during the fiscal years ended June 30, 2012 and 2011. During the last quarter ended June 30, 2012, loan production doubled from the prior year and the Company experienced an approximately $1,000,000 turnaround in the Company's operating bottom line for the quarter ended June 30, 2012.

Regulatory changes from Federal and State authorities have placed a significant amount of pressure on mortgage companies across the United States. These changes have been the contributing factor towards the growth of PrimeSource this calendar year, as well as the planned growth in 2012 and 2013. The regulatory changes have applied a significant amount of operational pressure for deeper and more disciplined internal processes, changes that have made it difficult for small to mid market mortgage brokerage and/or banking firms to continue functioning as independent businesses. This regulatory effect has driven many stable and profitable companies to join more established mortgage firms. Furthermore, companies who are most susceptible to these market dynamics are increasingly challenged by reduced profit margins as a result of required changes in technology; increased staffing needs to meet more complex compliance requirements and increased net worth requirements of HUD. As a result, industry research has shown that approximately 80% of mortgage brokerage firms and 40% of mortgage lending firms across the United States have gone out of business. This industry shift has left the remaining mortgage businesses forced to either make the financial investments in their business to operate in today's environment or become part of a more stable, mature operation that is better suited to compete in a contracting market. Operating as a public company since 2005, we are fully accustomed to operating in a highly regulatory environment and therefore, many of the accounting and technology related investments were underway during the market and economic shifts of 2007. As a result, the maturity, preparedness and consumer oriented public culture of our Company has become a highly attractive, viable and competitive option for mortgage professionals across the United States.

In January 2011, we further invested in an enterprise origination retail technology to govern the production, operations and regulatory needs of our Company. Since January 2011, our operational efforts have leveraged this technology to improve a more scalable business platform to report, manage and grow existing offices around the United States.

In addition to significant upgrades in technology, we have brought on board, a number of nationally recognized mortgage executives to implement additional processes and systems with the intent to facilitate an increasingly aggressive acquisition and growth strategy of our Company. As a result of these additions to the Company's technology and management, we expect to continue our extraordinary growth. Since the beginning of calendar 2011, we have completed five acquisitions. These acquisitions began on March 15, 2011 with the acquisition of United Community Mortgage Corp., a New Jersey corporation, then on July 1, 2011, the acquisitions of Founders Mortgage LLC, a Missouri corporation and Brookside Mortgage LLC, an Oklahoma corporation, then on August 1, 2011, acquisition of Fidelity Mortgage Company, a Colorado corporation, and finally on November 1, 2011, acquisition of Iowa Mortgage Professionals, Inc., an Iowa corporation There are several acquisitions that are scheduled for consideration and completion in the fiscal year ending June 30, 2013. The changing market dynamics have acted as a catalyst to PSMI's expansion.

The following table represents a production matrix reflecting our past production by number of Units and Dollar Volume:

Fiscal Year Ended June 30, Number of Units Dollar Production

           2010                  890         $149,628,816
           2011                  851         $139,059,839
           2012                 2,290        $392,734,294

As a result of the market consolidation in the mortgage banking industry, we continue to recruit and acquire new entities and work with existing offices to increase their production. With the Company's new investments in technology that are built to sustain scalable growth, it is expected that the growth in revenue will be realized at an accelerated rate over and above the costs to support it. The net result will be a larger, more efficient and profitable enterprise.

As a result of continued investments in accounting and technology infrastructure, we did not realize profit in the fiscal year ended June 30, 2012. These investments were anticipated and necessary as a result of the Company's positioning for these changes taking place. However the increase in production and resulting revenues do reflect a significant turnaround in the final quarter ending June 30, 2012. Favorable market conditions supported by favorable rates and a reduction in competitive pressures, the Company laid down the foundation for unit and revenue growth in the balance of 2012 and 2013.

Given the significant investment in infrastructure, along with the continued aggressive growth strategy, it is management's opinion that the increase in production levels and associated revenue will continue to increase through 2013 and beyond.

Results of Operations

Our consolidated results of operations for the twelve months ended June 30, 2012 include the operating results of our wholly-owned subsidiary WWYH, Inc. and results of operations of PrimeSource Mortgage, Inc. since its acquisition effective March 16, 2011.

We reported a net loss of $3,360,788 for the year ended June 30, 2012 compared to a loss of $2,077,425 for the same period ended June 30, 2011. The increase in loss of $1,283,363 (62%) was principally attributable to the non-cash share-based stock awards issued to the officers and employees for their past services, valued at $1,377,764 offset by an increase in revenues and operating expenses as more fully explained below.

Revenues

Total revenues increased by $10,320,860 (267%) to $14,184,306 for the year ended June 30, 2012, as compared to $3,863,446 for the same period in 2011 (the "comparable prior year period"). Revenues for the year ended June 30, 2012 increased primarily due to a combination of net increase resulting from four acquisitions in the current year's operations and the value of the loans closed as compared to the comparable prior year period. We closed 2,290 loans for a total loan production of $392,734,294 during the year ended June 30, 2012 as compared to 851 loans for a total production of $139,059,839 for the year ended June 30, 2011. Some of the existing branches also increased their production during this time period as their business matured. Management believes that adding strong producing branches is a viable way to continue to grow our business and increase revenues. Presently, our network can expect to add 3 to 5 new acquisitions with no added management expense.

Operating Expenses

Operating expenses consist primarily of selling, general and administrative expenses incurred by us for the development costs associated with adding new branch offices and servicing existing branch offices, legal and professional fees related to us maintaining our public company status, and the costs of putting on our annual convention. The annual convention provides training for our branch managers and markets our company to potential branch managers that attend. Administrative overhead expenses include wages, rent of office space, licensing fees and other administrative expenses relating to the branch offices.

Total operating expenses increased by $11,509,311 (195%) to $17,406,310 for the year ended June 30, 2012, as compared to $5,896,999 for the comparable prior year period. The increase in operating expenses was primarily due to the increase in payroll, commissions and stock bonus paid to the officers and employees for the year ended June 30, 2012 amounting to $11,773,847 as compared to $4,609,603 for the prior year comparable period. Payroll expense increased in 2012 due to the increase in headcount and hiring of professional managers and support staff as a result of acquisition of four mortgage businesses. We paid non-cash share based stock awards valued at $1,377,764 to our officers and employees for their past services during the year ended June 30, 2012 as compared to non-cash stock awards of $662,602 paid to our officers, directors and employees for the comparable prior period. Advertising expense increased by $597,425 to $600,321 for the year ended June 30, 2012 as compared to $2,895 for the prior year comparable period due to the Company creating its name and market awareness in the new areas where it opened its branches. Investor and public relations expense increased by $488,664 to $680,664 for the year ended June 30, 2012 as compared to $192,000 for the prior year comparable period. The Company had a private placement to raise capital, and expended funds on road shows and mailers to attract new investors, and creating market awareness of its mortgage products to educate potential new homeowners. Rent expense increased by $626,733 to $685,161 for the year ended June 30, 2012 as compared to $58,428 for the prior year comparable period, due to the acquisition of new branches and their respective offices. Professional, legal and consulting fees increased by $211,958 to $582,928 for the year ended June 30, 2012 as compared to $370,970 for the prior year comparable period due to the legal costs incurred for acquisitions of business entities, and retaining third party consultants to help smooth the transition of acquisitions. Depreciation and amortization expense increased by $158,393 to $239,395 for the year ended June 30, 2012 as compared to $81,002 for the prior year comparable period due to the acquisition of property and equipment of four entities acquired during the year ended June 30, 2012 and due to the change in the amortization period from 5 years to 8 years of identifiable intangible assets (customer lists) acquired as a result of four acquisitions.

Non-operating income (expense)

Our net non-operating income increased by $63,481 to $100,611 for the year ended June 30, 2012 as compared to $37,130 for the prior year comparable period. The overall increase was primarily due to the receipts of contributions, sponsorships and advertising funds received amounting to $65,298 for our annual trade conference in 2012 as compared to the prior year comparable period. Our interest expense increased by $1,237 to $8,133 for the year ended June 30, 2102 as compared to $6,896 for the prior year comparable period primarily due to the interest charged on the outstanding balance on our credit card during the year ended June 30, 2012 as compared to the comparable prior year period. Our interest and dividend income increased by $4,477 to $11,422 for the year ended June 30, 2012 compared to $6,945 for the prior year comparable period. Interest income is earned on the promissory note receivable of $360,000 from a third party, and interest earned on loan receivable of $88,898 from Nationwide. Our realized gain on sale of securities was $0 for the year ended June 30, 2012 as compared to the realized gain of $5,057 for the comparable prior year period.

Other comprehensive gain or loss

Unrealized loss on marketable securities for the year ended June 30, 2012, was $0 as compared to an unrealized loss of $2,666 for the comparable prior year period. Unrealized gains and losses result due to the increase or decrease in fair value of the marketable securities held at June 30, 2012 and 2011, respectively.

Liquidity and Capital Resources

Cash and cash equivalents were $355,421 at June 30, 2012. As shown in the accompanying consolidated financial statements, we recorded a net loss of $3,360,788 for the year ended June 30, 2012, compared to a net loss of $2,077,425 for the comparable prior year period. Our current assets exceeded our current liabilities by $433,175 at June 30, 2012, and net cash used in operating activities for the year ended June 30, 2012 was $1,251,791. Due to the acquisition of UCMC and attaining "full-eagle" status in March 2011, we have acquired four profitable mortgage companies since July 2011, raised $925,738 from sale of our stock to third party investors, and raised $500,000 from exercising outstanding warrants during the year ended June 30, 2012. Furthermore, we have multiple warehouse lines of credit available to purchase the loans we close for our customers. We believe that we will have sufficient operating funds to conduct our business operations for the next operating cycle of 12 months. In addition to the four previously mentioned acquisitions, we expect to acquire at least three additional mortgage companies prior to June 30, 2013. Management believes that the net cash flows generated from all existing and additional acquisitions will be sufficient to provide for total operations. However, should additional capital be needed, the Company may need to sell additional shares of our common stock.

Operating Activities

Net cash used in operating activities for the year ended June 30, 2012 was $1,251,791 resulted due to an increase in accounts receivables of $1,071,132, increase in prepaid expenses of $252,743, decrease in other assets of $27,209, increase in accounts payable of $607,612 and increase in accrued liabilities of $648,043. We experienced a net loss from operations of $3,360,788 for the year ended June 30, 2012, as compared to a net loss from operations of $2,077,425 for the comparable prior year period. The losses were primarily attributable due to non-cash share based stock awards valued at $1,377,763 paid to our employees, officers and directors for their past services, stock issued to third parties for services valued at $1,220,415, increase in payroll expense due to increase in headcount as a result of acquisition of four entities, increase in brokerage commissions, increase in advertising and investor relations expense, and increase in rent expense due to opening of additional branch offices. Management believes that we can become more profitable from the increased revenue that will be achieved by adding additional branches.

Investing Activities

Net cash provided by investing activities for the year ended June 30, 2012, was $180,004 primarily as a result of net cash acquired amounting to $170,000 as part of acquisition of four mortgage entities, $7,921 of cash received from employee advances, purchase of property and equipment of $2,992, and cash proceeds for security deposits of $4,225. We do not currently have material commitments for capital expenditures and do not anticipate entering into any such commitments during the next twelve months.

Financing Activities

Net cash provided by financing activities for the year ended June 30, 2012, was $1,405,738 consisting of cash proceeds of $925,738 received from sale of common stock to accredited investors, cash proceeds of $500,000 received from exercise of warrants, cash proceeds on loan of $100,000 from a related party, and cash payments of $120,000 to repay a loan received from a related party. The officers and directors have supported our operations in the past with cash but are not obligated to do so.

As a result of the above activities, we experienced a net increase in cash of $333,951 for the year ended June 30, 2012. Our ability to continue as a going concern is still dependent on our success in acquiring profitable and stable mortgage companies, expanding the business of our existing branches, capitalizing the leads from mortgage bankers and NWBO and closing them into mortgage loans, obtaining additional financing from mortgage bankers with increased warehouse credit lines, and from sale of our securities to accredited investors.

Critical Accounting Policies and Estimates

Management's discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. Our financial statements reflect the selection and application of accounting policies which require management to make estimates and judgments. (See Note 1 to our consolidated financial statements, "Summary of Significant Accounting Policies"). We believe that the following paragraphs reflect accounting policies that currently affect our financial condition and results of operations:

Share Based Payment Plan

Under the 2012 Stock Incentive Plan, the Company can grant stock or options to employees, related parties, and unrelated contractors in connection with the performance of services provided to the Company by the awardees. The Branch Owner Stock Program provides for issuance of stock to branch owners for outstanding performance. The Company uses the fair value method to account for employee stock compensation costs and to account for share based payments to non-employees.

Revenue Recognition

Our revenue is derived primarily from revenue earned from the origination of mortgage loans that are funded by third parties. Revenue is recognized as earned on the earlier of the settlement date or the funding date of the loan. In addition, we receive supplemental compensation from our warehouse line providers based on achieving certain production levels which is recognized as revenue when the loans are sold off the warehouse lines.

Recent Accounting Pronouncements

The Company has evaluated the possible effects on it financial statements of the following accounting pronouncements:

Accounting Standards Update 2011-08 - Testing Goodwill for Impairment The objective of this Update is to simplify how entities, both public and nonpublic, test goodwill for impairment. The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent.

The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The Company has not adopted this accounting standard as of June 30, 2012 and does not expect to have a significant impact on its financial statements when adopted.

Accounting Standards Update 2011-04 - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Some of the amendments clarify the Board's intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820.

The amendments in this update are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. For nonpublic entities, the amendments are effective for annual periods beginning after December 15, 2011. Early application by public entities is not permitted. Nonpublic entities may apply the amendments in this Update early, but no earlier than for interim periods beginning after December 15, 2011. The Company has not adopted this accounting standard as of June 30, 2012 and does not expect to have a significant impact on its financial statements when adopted.

Accounting Standards Update 2010-29 - Disclosure of Supplementary Pro Forma Information for Business Combinations
The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.

The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company has adopted this accounting standard as of June 30, 2012.

Accounting Standards Update 2010-28 - When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts The amendments in this update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance and examples in paragraph 350-20-35-30, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Upon adoption of the amendments, an entity with reporting units that have carrying amounts that are zero or negative is required to assess whether it is more likely than not that the reporting units' goodwill is impaired. If the entity determines that it is more likely than not that the goodwill of one or more of its reporting units is impaired, the entity should perform Step 2 of the goodwill impairment test for those reporting unit(s). Any resulting goodwill impairment should be recorded as a cumulative-effect adjustment to beginning retained earnings in the period of adoption. Any goodwill impairments occurring after the initial adoption of the amendments should be included in earnings as required by Section 350-20-35.

For public entities, the amendments in this update are effective for fiscal . . .