enherent 10Q 2009 Q2 Quarterly report

enherent (ENHT) Inactive 10-Q2009 Q2 Quarterly report

Content analysis

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[Mark One]

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-23315

enherent Corp.

(Exact name of Registrant as Specified in Its Charter)

Delaware

No. 13-3914972

(State or Other Jurisdiction

of Incorporation)

(I.R.S. Employer

Identification No.)

33 Wood Avenue South, Suite 400

Iselin, NJ 08830

(Address of Principal Executive Offices)

(732) 603-3859

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ¨ NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class		Shares outstanding as of August 4, 2009
Common stock, par value $.001		52,375,653

enherent Corp. and Subsidiaries

INDEX


		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008		1
Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008		2
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008		3
Notes to Unaudited Condensed Consolidated Financial Statements		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		6
Item 3. Quantitative and Qualitative Disclosures about Market Risk.		12
Item 4. Controls and Procedures.		12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.		13
Item 4. Submission of Matters to a Vote of Security Holders		13
Item 5. Other Information		13
Item 6. Exhibits.		13
Signatures		S-1

Exhibit Index		E-1

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements.

ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2009 (Unaudited)			December 31, 2008 (Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	230,240		$	1,100,224
Accounts receivable, net		1,479,464			3,098,862
Prepaid expenses and other current assets		240,752			139,563

Total current assets		1,950,456			4,338,649
Furniture, equipment and improvements, net		125,523			163,926
Goodwill		3,619,278			3,619,278
Other intangibles, net		75,000			125,000
Deferred financing costs, net		102,131			146,678
Other assets		41,112			40,370

TOTAL	$	5,913,500		$	8,433,901


LIABILITIES
Current liabilities:
Revolving credit facility	$	1,257,348		$	2,006,070
Current portion of long-term debt		1,259,912			1,013,317
Accounts payable and accrued expenses		2,102,910			3,259,926
Deferred revenue		343,190			169,715
Accrued compensation and benefits		377,131			570,113

Total current liabilities		5,340,491			7,019,141
Long-term liabilities:
Long-term debt, net of current portion above		1,345,338			1,957,605

Total liabilities		6,685,829			8,976,746


STOCKHOLDERS’ (DEFICIENCY)
Preferred stock, $.001 par value; authorized—10,000,000 shares, issued—none		—			—
Common stock, $.001 par value, authorized—101,000,000 shares, issued and outstanding – 52,375,653 as of June 30, 2009 and December 31, 2008		52,376			52,376
Additional paid-in capital		27,800,974			27,747,974
Accumulated deficit		(28,625,679	)		(28,343,195	)

Total stockholders’ (deficiency)		(772,329	)		(542,845	)

TOTAL	$	5,913,500		$	8,433,901

The accompanying notes are part of these unaudited condensed consolidated financial statements.

ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Revenues:
Service revenue	$	2,528,502		$	6,307,124		$	5,786,604		$	12,749,256
Equipment and software revenue		111,796			889,426			414,322			1,492,473

Total revenue		2,640,298			7,196,550			6,200,926			14,241,729

Cost of revenues:
Cost of services		1,862,564			4,753,304			4,268,731			9,751,073
Cost of equipment and software		89,185			738,015			330,412			1,267,770

Cost of revenues		1,951,749			5,491,319			4,599,143			11,018,843

Gross profit		688,549			1,705,231			1,601,783			3,222,886

Operating expenses:
Selling, general and administrative		673,279			1,438,776			1,505,162			2,661,213
Depreciation and amortization expense		66,186			85,972			153,986			171,584

Total operating expenses		739,465			1,524,748			1,659,148			2,832,797

Operating income (loss)		(50,916	)		180,483			(57,365	)		390,089
Interest expense		(112,465	)		(147,345	)		(219,119	)		(280,225	)

Income (loss) before income taxes		(163,381	)		33,138			(276,484	)		109,864
Provision for income taxes		(3,000	)		5,931			(6,000	)		2,070

NET INCOME (LOSS)	$	(166,381	)	$	39,069		$	(282,484	)	$	111,934

Basic net income (loss) per share	$	(0.01	)	$	0.00		$	(0.01	)	$	0.00

Number of shares used in computing basic net income (loss) per share		52,375,653			52,375,653			52,375,653			52,375,653

Diluted net income (loss) per share	$	(0.01	)	$	0.00		$	(0.01	)	$	0.00

Number of shares used in computing diluted net income (loss) per share		52,375,653			53,090,201			52,375,653			53,075,948

The accompanying notes are part of these unaudited condensed consolidated financial statements.

ENHERENT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2009			2008
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Net (loss) income	$	(282,484	)	$	111,934
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad Debt Expense		(50,000	)		—
Depreciation and amortization		153,983			171,584
Stock based compensation		53,000			82,000
Deferred revenue		173,475			(44,903	)
Changes in assets and liabilities:
Accounts receivable		1,669,399			(812,243	)
Prepaid expenses and other current assets		(101,930	)		(182,553	)
Accounts payable, accrued expense and accrued compensation and benefits		(1,350,006	)		777,765

Net cash provided by operating activities		265,437			103,584

Cash flows from investing activities:
Purchase of furniture, fixtures, equipment and improvements		(21,033	)		(35,875	)

Net cash used in investing activities		(21,033	)		(35,875	)

Cash flows from financing activities:
Net (payment) proceeds under revolving loan		(748,722	)		594,727
Principal payments on notes payable and capital lease obligations		(365,666	)		(328,881	)

Net cash (used in) provided by financing activities		(1,114,388	)		265,846

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(869,984	)		333,555
Cash and cash equivalents – January 1,		1,100,224			1,121,694

CASH AND CASH EQUIVALENTS – June 30,	$	230,240		$	1,455,249

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	151,954		$	215,406

Income taxes	$	8,184		$	8,450

Noncash investing and financing transactions:
Equipment acquired under capital leases	$	—		$	16,155

The accompanying notes are part of these unaudited condensed consolidated financial statements.

ENHERENT CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Basis of Presentation:

The unaudited condensed consolidated financial statements of enherent Corp. (the “Company”) presented herein have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Item 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring entries) considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the six-month period ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2008 financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K.

2.	Income Per Share:

Basic net income per share is based on the average number of shares outstanding during the period, while fully-diluted net income per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options to purchase common stock.

The following table sets forth the computation of basic and diluted income per share:


	Three months ended June 30,					Six months ended June 30,
	2009			2008		2009			2008
Numerator:
Net income (loss)	$	(166,381	)	$	39,069	$	(282,484	)	$	111,934

Denominator:
Weighted average of shares outstanding
Basic		52,375,653			52,375,653		52,375,653			52,375,653
Diluted		52,375,653			53,090,201		52,375,653			53,075,948
Basic income (loss) per share	$	(0.01	)	$	0.00	$	(0.01	)	$	0.00
Diluted income (loss) per share	$	(0.01	)	$	0.00	$	(0.01	)	$	0.00

Dilution is caused by issued and outstanding options. For the 2009 period in which the Company incurred a net loss, the computation for net loss per share excludes the effect of stock options as they were antidilutive.

3.	Stock-Based Compensation:

The Company accounts for stock-based compensation under the provisions of SFAS 123R, Share-Based Payment (“SFAS 123R”). This statement requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually the vesting period.

In determining the estimated fair value of its stock options, the Company used the Black-Scholes option pricing model with the following assumptions:


	June 30,
	2009		2008
Risk-free interest rate	3.45	%	3.74	%
Dividend yield	0	%	0	%
Volatility factors of the expected market price for our common stock	246	%	102	%
Weighted average expected life of options	10 years		10 years

The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in the Company’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s employee stock options.

4.	Contingencies:

In the normal course of business, various claims are made against the Company. At this time, in the opinion of management, there are no pending claims the outcome of which are expected to result in a material adverse effect on the consolidated financial position or results of operations of the Company.

5.	Notes Payable

On February 3, 2009, the Company and Ableco Finance LLC (“Ableco”), as lender and agent, entered into a Fifth Amendment to Amended and Restated Financing Agreement (the “Fifth Amendment”) that further amended the Amended and Restated Financing Agreement dated as of April 1, 2005 by and between the Company and Ableco (the “Amended Credit Agreement”). The Fifth Amendment: (a) extended the revolving loan maturity date under the Amended Credit Agreement from April 1, 2009 to April 1, 2010, (b) amended the amortization of Term Loan B set forth in Section 2.03 of the Amended Credit Agreement, the aggregate amount outstanding of which was $1,062,500, to provide that the first installment of $212,500 became due upon the effective date of the Fifth Amendment, twelve consecutive monthly installments of $47,000 payable commencing on April 1, 2009, and the last installment of $286,000 will be due on April 1, 2010, and (c) modified financial covenants set forth in Section 6.03 of the Amended Credit Agreement relating to the Fixed Charge Coverage Ratio and Consolidated EBITDA.

On April 8, 2009, the Company and Ableco, as lender and agent, entered into a Sixth Amendment to Amended and Restated Financing Agreement (the “Sixth Amendment”) that further amended the Amended Credit Agreement. The Sixth Amendment modified financial covenants set forth in Section 6.03 of the Amended Credit Agreement relating to the Fixed Charge Coverage Ratio and Consolidated EBITDA. In addition, the Sixth Amendment modified the interest rates applicable to the Revolving Loan and Term Loan B set forth in Section 2.03 of the Amended Credit Agreement as follows: (i) the interest rate on Term Loan B increased from a rate of 3% per annum to a rate equal to 0.25% over the Reference Rate per annum; and (ii) the interest rate on the Revolving Loan increased from a rate equal to 3% over the Reference Rate per annum to a rate equal to 4% over the Reference Rate per annum. For purposes of the Amended Credit Agreement, the Reference Rate is equal to the greater of (a) the prime rate, or (b) 7.75% per annum. Finally, the Sixth Amendment gives the Company the option, subject to certain conditions specified in the Sixth Amendment, to elect to have the interest rate on all or a portion of Term Loan B be based on LIBOR rather than the Reference Rate (the “LIBOR Option”). At any time that the Company elects the LIBOR Option with respect to all or a portion of Term Loan B, the interest rate on the portion of Term Loan B covered by the Company’s election of the LIBOR Option for each interest period will be equal to the LIBOR Rate per annum for that interest period plus 4%. The LIBOR Rate will be based on the London Interbank Offered Rate, adjusted as provided in Section 1.2(a) of the Amendment, but will not be less than 4%.

On July 2, 2009, the Company and Ableco, as lender and agent, entered into a Waiver, Consent and Seventh Amendment to Amended and Restated Financing Agreement (the “Seventh Amendment”) that further amends the Amended Credit Agreement. The Seventh Amendment (a) reduces the revolving credit facility from $4.5 million to $2.5 million; (b) modifies the Term Loan B set forth in Section 2.03 of the Amended Credit Agreement, the aggregate amount outstanding of which was $662,000, to provide for the repayment of such amount in consecutive monthly installments on the first day of each month, commencing on August 1, 2009 until the Term Loan B Maturity Date, with each such monthly installment in an aggregate amount equal to (i) in the case of August, September and October of 2009, $10,000, (ii) for each monthly payment through March 1, 2010, $47,000 and (iii) a final installment equal to the remaining balance on April 1, 2010; and (c) provides a waiver to the Company for not meeting the Consolidated EBITDA and Fixed Charge Coverage Ratio covenants in the Amended Credit Agreement for the period ended June 30, 2009.

6.	Income Taxes:

Income tax expense for the six months ended June 30, 2009 and 2008 was comprised of state taxes which are not based on earnings. For the six months ended June 30, 2009, no other income taxes were recorded on the earnings as a result of the utilization of the carry forwards. All or a portion of the remaining valuation allowance may be reduced in future periods based on an assessment of earnings sufficient to fully utilize these potential tax benefits.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides information that management believes is relevant to an assessment and an understanding of the operations and financial condition of enherent Corp. (the “Company”). This discussion should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

Overview

enherent is an information technology services firm with a primary focus of providing clients with: (a) consultative resources including technology staffing; and (b) teams of technical consultants trained in the delivery of solutions related to systems integration, network and security, advanced analytics, enterprise content management, infrastructure solutions and application services. Our consultative resource services allow clients to use enherent consultants to address strategic technology resource demands. Our solutions services offerings combine project management, technical and industry expertise, and as required, software product licenses and computer equipment to deliver business value. enherent’s core competencies are project management, business requirements definition, technical application, data architecture, system design, application code development, test strategy, planning, execution and deployment.

enherent is an IBM premier business partner. enherent leverages the IBM partnership to train and certify sales personnel in the IBM solutions selling process and the functions, features and benefits of IBM products. enherent leverages IBM’s technical training to train and certify its consultants in the IBM products that we use to support our application and system integration solutions. enherent purchases equipment products for resale from Arrow Electronics, an IBM value added distributor. IBM offers several incentive programs to its partners including purchase discounts, vendor incentive programs and sales rebates. Incentive programs are at the discretion of IBM and usually require achievement of a specific sales volume or growth rate within a specified time period to qualify for all, or some, of the incentive programs.

For the first six months of 2009, the Company continued to be adversely affected by the broad economic downturn that began in 2008. The Company believes that customer concerns about the economy have resulted in a change in customer buying patterns, which in turn have had a significant adverse effect on the Company’s revenues and results of operations.

Management expects that global economic conditions will continue to present a challenging operating environment for at least the rest of the year. To the extent permitted by working capital resources, management intends to continue making targeted investments in strategic operating and growth initiatives. Working capital management will continue to be a high priority for the remainder of 2009. Given the uncertainty in world economies and the possibility of continued weakness in markets served, management has contingency plans to appropriately respond to conditions as they develop, but there can be no assurance that those contingency plans will be successful.

The Company believes that it will be able to meet its working capital needs through December 31, 2009. However, if during that period or thereafter, it is not successful in generating new business and/or sufficient capital resources, on terms acceptable to it, this could have a material adverse effect on the Company’s business, results of operations, liquidity and financial condition.

enherent’s principal offices are located at 33 Wood Avenue South, Suite 400, Iselin, New Jersey 08830 and its client base is concentrated in Connecticut, New York and New Jersey.

Critical Accounting Policies

Use of Estimates

As described in Note 1 thereto, the unaudited condensed consolidated financial statements presented elsewhere in this document have been prepared in conformity with generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Item 10-01 of Regulation S-X. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

In preparing the Company’s condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States, the Company uses certain estimates and assumptions that affect the reported amounts and related disclosures. The Company considers the following accounting policies as those most important to the portrayal of its financial condition and those that require the most subjective judgment. Although the Company believes that its estimates and assumptions are reasonable, actual results may differ, and such differences could be significant to its financial results.

Revenue Recognition

The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, the product has been shipped or the services have been provided to the customer, the sales price is fixed or determinable and collectibility is reasonably assured. The Company reduces revenue for estimated customer discounts. In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue:

Consulting Services: The terms of service contracts generally are for periods of less than one year. Revenue from time and material service contracts is recognized as the services are provided. Revenue from services requiring the delivery of unique products and/or services is recognized based on the completion of milestones. Provisions for losses are recognized during the period in which the loss first becomes apparent. Revenue from service maintenance is recognized over the contractual period or as the service is performed. In some of the Company’s services contracts, the Company bills the customer prior to performing the service. This situation gives rise to deferred income. In other services contracts, the Company performs services prior to billing the customer. This situation gives rise to unbilled accounts receivable, which are included in accounts receivable in the consolidated balance sheet. In these circumstances, billing usually occurs shortly after the Company performs the services.

Software: Revenue from the sale of one-time charge licensed software is recognized at the inception of the license term.

Equipment: Revenue from the sale of equipment is recognized when the product is shipped to the customer and there are no unfulfilled Company obligations that affect the customer’s final acceptance of the equipment.

Accounts Receivable — Allowance for Doubtful Accounts

The Company’s accounts receivable balance is reported net of allowances for amounts not expected to be collected from clients. The Company regularly evaluates the collectibility of amounts owed to it based on the ability of the debtor to make payment. In the event the Company’s evaluation indicates that a customer will be unable to satisfy its obligation, the Company will record a reserve to reflect this anticipated loss. The Company periodically reviews the requirements, and adequacy of the reserve, for doubtful accounts.

Fixed Assets

Fixed assets are stated at cost, and depreciation of furniture and equipment, computer equipment and software is calculated on the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset. The Company evaluates long-lived assets for impairment and records charges in operating results when events and circumstances indicate that assets may be impaired. The impairment charge is determined based upon the amount by which the net book value of the asset exceeds its estimated fair market value or undiscounted cash flow. No impairment charges have been recognized in any of the periods presented herein.

Goodwill and Other Intangible Assets

In June 2001, Statement of Financial Accounting Standards No. 142 (“SFAS 142”) “Goodwill and Other Intangible Assets” was issued. Under SFAS 142, goodwill is no longer amortized after December 31, 2001, however, goodwill must be evaluated for impairment at least annually and any losses due to impairment are recognized in earnings. SFAS 142 became effective for the Company on January 1, 2002. The Company’s goodwill and other intangibles were evaluated for impairment as of March 31, 2009. The Company determined that these assets had not been impaired and no losses should be recognized based on this evaluation.

In August 2001, Statement of Financial Accounting Standards No. 144 (“SFAS 144”) “Accounting for the Impairment or Disposal of Long-Lived Assets” was issued. Under SFAS 144, the Company is required to test long-lived assets other than goodwill for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

Stock Based Compensation

In determining the estimated fair value of its stock options as of the date of grant, the Company uses the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in the Company’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s employee stock options.

Deferred Income Taxes

The Company has federal and state net operating loss carry forwards that begin to expire in 2019. As a result of the Company’s merger with Dynax on April 1, 2005, the amount of prior years’ net operating loss carry forwards available to be utilized in reduction of future taxable income is approximately $660,000 annually pursuant to the change in control provisions of Section 382 of the Internal Revenue Code, plus any losses incurred after the merger. Accordingly, the remaining federal net operating loss carry forward available to the Company at June 30, 2009 was approximately $12.7 million. Due to the uncertainty of its ability to utilize the deferred tax assets relating to the loss carry forwards and other temporary differences between tax and financial reporting purposes, the Company has recorded a valuation allowance equal to the related deferred tax assets. If the Company generates U.S. taxable income in future periods, reversal of this valuation allowance could have a significant positive impact on net income. As a result of the existence of the valuation allowance, no tax provision was required for the three month and six months ended June 30, 2009 and 2008, except for certain state and local taxes which are not based on current earnings.

Results of Operations:

Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008

Service Revenues:

Service revenues decreased 54.6 % to $5.8 million for the six months ended June 30, 2009 from $12.7 million for the six months ended June 30, 2008. The decrease was attributable primarily to fewer billable consultants deployed at customer accounts due to changes in client buying patterns and concerns about a weakening economy.

Gross profit from service revenues decreased 49.4% to $1.5 million for the six months ended June 30, 2009 from $3.0 million for the six months ended June 30, 2008. The decrease in gross profit was attributable primarily to lower revenue generated from the decrease in billable consultants deployed at certain key customers, which was partially offset by higher bill rates on certain time and material based client engagements.

Gross profit as a percentage of service revenues increased to 26.2% for the six months ended June 30, 2009 from 23.5% for the six months ended June 30, 2008. The increase in gross profit percentage was attributable primarily to higher bill rates on certain time and material based client engagements, as well as a reduction in associated costs.

Equipment and Software Revenues:

Gross profit as a percentage of revenue depends on various factors outside of the Company’s control. These factors may include vendor rebates, incentive programs and the number of clients utilizing third-party leasing arrangements to finance their purchase. When a client purchases equipment directly from the Company, the Company recognizes the gross revenue from the sale and its associated cost. If a client utilizes a third party leasing arrangement to finance its purchase, the Company recognizes only the net commission revenue versus the gross revenue.

Equipment and software revenues decreased 72.2% to $414,000 for the six months ended June 30, 2009 from $1.5 million for the six months ended June 30, 2008. The decrease in equipment and software revenues was attributable primarily to the Company closing fewer transactions during the six-month period ended June 30, 2009 as a result of changes in client buying patterns and concerns about a weakening economy.

Gross profit from equipment and software revenues decreased 62.7% to $84,000 for the six-month period ended June 30, 2009 from $225,000 for the six-month period ended June 30, 2008. The decrease in gross profit was attributable primarily to the decrease in equipment and software sales during the six-month period ended June 30, 2009.

Gross profit as a percentage of equipment and software revenues increased to 20.3% for the six months ended June 30, 2009 from 15.1% for the six months ended June 30, 2008, as a result of the mix of products sold including higher margin products, as well as an increase in vendor rebates and incentive program fees.

Operating Expenses:

Operating expenses decreased 41.4% to $1.7 million for the six months ended June 30, 2009 from $2.8 million for the six months ended June 30, 2008. The decrease was due primarily to cost reductions made by the Company that resulted in a relative decrease in sales, general and administrative payroll costs, partially offset by increases in costs of approximately $226,000 in developing our Text Analytics Solutions Practice during the six months ended June 30, 2009.

Interest Expense:

Interest expense decreased 21.8% to $219,000 for the six months ended June 30, 2009 from $280,000 for the six months ended June 30, 2008. The decrease was due primarily to reductions in the average balance on the revolving line of credit and long-term debt obligations.

Provision for Income Taxes:

For the six months ended June 30, 2009, the provision for income taxes related primarily to revenue-based and minimum state taxes. For the six months ended June 30, 2008, the income tax credit includes the benefit of prior years state tax refunds of approximately $10,000 not previously recorded, less state income taxes for the current year which are not based on earnings. During the six months ended June 30, 2008, the Company was positively impacted by the availability of net operating loss carry forwards, not previously recognized for financial accounting purposes.

Net Income (Loss):

Net income decreased by $394,000 to a loss of $282,000 for the six months ended June 30, 2009 from income of $112,000 for the six months ended June 30, 2008. The change in net income was due primarily to the decrease in gross profit from service revenues and from equipment and software revenues partially offset with a reduction in operating expenses during the six months ended June 30, 2009.

Net Income (Loss) Per Share:

The net loss per share data is based on the Company’s weighted average outstanding shares for the six-month period ended June 30, 2009. Outstanding stock options were anti-dilutive and not considered in the calculation of loss per share for that period. The net income per share data for the six-month period ended June 30, 2008 is based on the Company’s weighted average outstanding shares for the period (basic) plus its dilutive outstanding stock options for that period (fully-diluted).

Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008

Service Revenues:

Service revenues decreased 60.0% to $2.5 million for the three months ended June 30, 2009 from $6.3 million for the three months ended June 30, 2008. The decrease was attributable primarily to fewer billable consultants deployed at customer accounts due to changes in client buying patterns and concerns about a weakening economy.

Gross profit from service revenues decreased 57.1% to $666,000 for the three months ended June 30, 2009 from $1.6 million for the three months ended June 30, 2008. The decrease in gross profit was attributable primarily to lower revenue generated from the decrease in billable consultants deployed at certain key customers, which was partially offset by higher bill rates on certain time and material based client engagements.

Gross profit as a percentage of service revenues increased to 26.3% for the three months ended June 30, 2009 from 24.6% for the three months ended June 30, 2008. The increase in gross profit percentage was attributable primarily to higher bill rates on certain time and material based client engagements, as well as a reduction in associated costs.

Equipment and Software Revenues:

Equipment and software revenues decreased 87.4% to $112,000 for the three months ended June 30, 2009 from $889,000 for the three months ended June 30, 2008. The decrease in equipment and software revenues was attributable primarily to the Company closing fewer transactions during the quarter as a result of changes in client buying patterns and concerns about a weakening economy.

Gross profit from equipment and software revenues decreased 85.1% to $23,000 for the three-month period ended June 30, 2009 from $151,000 for the three -month period ended June 30, 2008. The decrease in gross profit was attributable primarily to the decrease in equipment and software sales during the three-month period ended June 30, 2009.

Gross profit as a percentage of equipment and software revenues increased to 20.2% for the three months ended June 30, 2009 from 17.0% for the three months ended June 30, 2008. The increase in gross profit was attributable primarily to the Company’s sales personnel closing equipment sales at higher margins.

Operating Expenses:

Operating expenses decreased 51.5% to $739,000 for the three months ended June 30, 2009 from $1.5 million for the three months ended June 30, 2008. The decrease was due primarily to cost reductions made by the Company that resulted in a relative decrease in sales, general and administrative payroll costs, partially offset by increases in costs of approximately $110,000 in developing our Text Analytics Solutions Practice during the three months ended June 30, 2009.

Interest Expense:

Interest expense decreased 23.4% to $112,000 for the three months ended June 30, 2009 from $147,000 for the three months ended June 30, 2008. The decrease was due primarily to reductions in the average balance on the revolving line of credit and in long term debt obligations.

Provision for Income Taxes:

For the three months ended June 30, 2009, the provision for income taxes relates primarily to revenue-based and minimum state taxes. For the three months ended June 30, 2008, the income tax credit includes the benefit of prior year’s state tax refunds of approximately $10,000 not previously recorded, less state income taxes for the current year which are not based on earnings. During the three months ended June 30, 2008, the Company was positively impacted by the availability of net operating loss carry forwards, not previously recognized for financial accounting purposes.

Net Income:

Net income decreased by $205,000 to a loss of $166,000 for the three months ended June 30, 2009 from income of $39,000 for the three months ended June 30, 2008. The change in net income was due primarily to the decrease in gross profit from service revenues and from equipment and software revenues partially offset by a reduction in operating expenses during the three months ended June 30, 2009.

Net Income Per Share:

The net loss per share data is based on the Company’s weighted average outstanding shares for the three-month period ended June 30, 2009. Outstanding stock options were anti-dilutive and not considered in the calculation of loss per share for that period. The net income per share data for the three-month period ended June 30, 2008 is based on the Company’s weighted average outstanding shares for the period (basic) plus its dilutive outstanding stock options for that period (fully-diluted).

Liquidity and Capital Resources:

On April 1, 2005, following the consummation of the enherent and Dynax merger, the Company entered into an Amended and Restated Financing Agreement (the “Amended Credit Agreement”) with Ableco Finance LLC (“Ableco”). The Amended Credit Agreement provided the Company with a three-year extension of the revolving credit facility previously outstanding and an increase in the revolving credit facility from $4.0 million to $6.0 million. The Amended Credit Agreement also amended the terms of the Term Loan B previously outstanding. The loans are collateralized by all the tangible and intangible assets of the Company. Borrowings under the revolving credit facility bear interest at 3% above the greater of (a) the prime rate or (b) 7.75% a year, payable monthly and are limited in general to 85% of eligible accounts receivable and 80% of the net amount of unbilled accounts receivable. The Amended Credit Agreement requires that the Company maintain certain financial covenants.

On September 6, 2007, the Company and Ableco, as lender and agent, entered into a Fourth Amendment to Amended and Restated Financing Agreement (the “Fourth Amendment”) that further amended the Amended Credit Agreement. The Fourth Amendment: (a) decreased the revolving credit commitment under the Amended Credit Agreement from $6,000,000 to $4,500,000 at any time outstanding, and (b) extended the revolving loan maturity date under the Amended Credit Agreement from April 1, 2008 to April 1, 2009.

On February 3, 2009, the Company and Ableco, as lender and agent, entered into a Fifth Amendment to Amended and Restated Financing Agreement (the “Fifth Amendment”) that further amended the Amended Credit Agreement. The Fifth Amendment: (a) extended the revolving loan maturity date under the Amended Credit Agreement from April 1, 2009 to April 1, 2010, (b) amended the amortization of Term Loan B set forth in Section 2.03 of the Amended Credit Agreement, the aggregate amount outstanding of which was $1,062,500, to provide that the first installment of $212,500 became due upon the effective date of the Fifth Amendment, twelve consecutive monthly installments of $47,000 payable commencing on April 1, 2009, and the last installment of $286,000 will be due on April 1, 2010, and (c) modified financial covenants set forth in Section 6.03 of the Amended Credit Agreement relating to the Fixed Charge Coverage Ratio and Consolidated EBITDA.

At June 30, 2009 and December 31, 2008, the revolving credit facility balance outstanding was $1,257,348 and $2,006,070 respectively. At June 30, 2009 and December 31, 2008, the outstanding principal balance of the Term Loan B was $709,000 and $1,062,500, respectively.

The holders of the enherent Preferred Stock immediately prior to the merger of enherent and Dynax (the “Preferred Stockholders”) had a redemption right, exercisable at their option, after January 16, 2006, at a value of $1.00 per share. With the consummation of the merger, on April 1, 2005, all of the shares of outstanding Preferred Stock were converted in a non-cash exchange for an aggregate of 8,500,000 shares of enherent common stock and four subordinated secured notes in the aggregate

principal amount of $1,600,000. The Company entered into an Intercreditor and Subordination Agreement dated April 1, 2005 among the Company, certain subsidiaries listed therein, Ableco and the Preferred Stockholders to define the rights of and evidence the priorities among those creditors (the “Intercreditor Agreement”). The revolving credit facility is secured by a first lien on all tangible and intangible assets of the Company. The Term Loan B and the notes issued to the Preferred Stockholders are secured on a pari passu basis by liens on all tangible and intangible assets of the Company, which liens are subordinated to the lien securing the revolving credit facility.

One of the promissory notes issued to the Preferred Stockholders was paid in full in August 2008. According to the terms of the remaining three promissory notes issued to the Preferred Stockholders (having an aggregate principal amount of $1,412,500), 6% interest on the amount outstanding was payable in arrears. These three notes had an original term of five years and no principal payments were due in the first twenty-nine months ended September 1, 2007. Thereafter, semi-annual principal payments of $177,000 were due for the following two years and for the last year semi-annual principal payments of $353,000 were due. Effective August 10, 2007, the Company and the former Preferred Stockholders agreed to amend and restate the promissory notes. The three amended and restated notes having an aggregate principal amount of $1,412,000 have a maturity date of July 1, 2011, with no principal payments due until January 1, 2009. Thereafter, semi-annual principal payments of $177,000 are due for the following two years and for the last year semi-annual principal payments of $353,000 are due. Interest continues to accrue at 6% and is payable at maturity. The terms of the Intercreditor Agreement currently prohibit the Company from making payments on the three outstanding promissory notes issued to the Preferred Stockholders. As a result, as of June 30, 2009, the Company has not paid the first annual installment of $177,000 which was originally due on January 1, 2009. The terms of the Intercreditor Agreement also prohibit the Preferred Stockholders from declaring a default, or accelerating payment, of the promissory notes as a result of the Company’s failure to pay the installment due January 1, 2009. At June 30, 2009 and December 31, 2008, the outstanding principal balance on the three notes was $1,412,000.

The Company has three subordinated notes relating to prior Dynax acquisitions bearing interest rates of between prime and prime plus 1%. At June 30, 2009 and December 31, 2008, the outstanding principal balance outstanding was $457,000. The acquisition notes are subordinated to Ableco. Any payments of principal or interest on the indebtedness will be subordinated in accordance with the terms and conditions of the senior secured lender. No payments were made subsequent to March 31, 2004.

Cash and cash equivalents were $230,240 at June 30, 2009 compared to $1,100,224 at December 31, 2008.

In general, the Company requires cash for working capital, capital expenditures, debt repayment and interest. Our management assesses the future cash needs of our business by considering a number of factors, including:

•

our historical earnings and cash flow performance;

•

our assessment of future working capital needs;

•

our current and projected debt service expenses;

•

planned capital expenditures; and

•

our ability to borrow funds under the terms of our revolving credit facility.

If the Company experiences a deficiency in revenue, earnings or operating cash flow with respect to its fixed charges and operating expenses in the future, it would need to fund the fixed charges and operating expenses from borrowings from its revolving credit facility. If borrowings from the Company’s credit facility are insufficient to fund its operations, debt service and capital expenditures, it may need to seek additional sources of capital through means such as the issuance of equity or subordinated debt. In addition, it may not be able to obtain additional debt or equity financing on terms acceptable to it, or at all. If the Company is not able to secure additional capital, it could be required to delay paying its account payables or forego business opportunities. It is also possible that the Company would no longer have the capital necessary to operate its business as a going concern.

Cash flow provided by operations was $265,000 during the six months ended June 30, 2009. The cash provided by operations during the six months ended June 30, 2009 was attributable primarily to customer collections resulting in a significant decrease in accounts receivable, partially offset by a significant decline in accounts payable, as well as to an increase in deferred revenue.

Cash used in investing activities for the six-month period ended June 30, 2009 was $21,000 related to the purchase of computers and office equipment.

Cash used in financing activities for the six months ended June 30, 2009 was $1.1 million, consisting of net payment of the revolving credit facility of $749,000 and principal repayments of long-term debt and capital leases of $366,000.

The Company’s accounts receivable were $1.5 million at June 30, 2009 and $3.1 million at December 31, 2008, respectively. The decline in accounts receivable was a result primarily of collections from customers and a decline in revenues. Billed days sales outstanding (DSO), net of allowance for doubtful accounts, were 51 days as of June 30, 2009 and 41 days as of December 31, 2008. The increase in DSO was primarily the result of slower collections during the six-month period ended June 30, 2009 from certain clients and to the decline in revenues.

The Company’s accounts payable and accrued expenses were $ 2.1 million at June 30, 2009 and $3.3 million at December 31, 2008, respectively. The decrease of $1.2 million was primarily the result of paying accounts payable and accrued expenses and a decrease in associated operating costs as revenues declined.

The Company’s working capital deficiency was $3.4 million as of June 30, 2009 and $2.7 million as of December 31, 2008.

The Company has reduced cash required for operations by reducing operating costs and reducing staff levels. In addition, the Company is working to manage its current liabilities while it continues to make changes in operations to improve its cash flow and liquidity position.

While the Company has been able to manage its working capital needs with the current credit facilities, additional financing is likely required in order to meet its current and projected cash flow requirements from operations. Additional financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of the Company’s common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of the Company’s common stock. If additional financing is not available or is not available on acceptable terms, the Company’s operations will be negatively impacted.

Inflation

Management does not believe that inflation has had a material effect on the Company’s business, financial condition or results of operations. If the Company’s costs were to become subject to significant inflationary pressures, the Company may not be able to fully offset such higher costs through price increases. The Company’s inability or failure to do so could adversely affect its business, financial condition and results of operations.

Off-Balance Sheet Arrangement:

There are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships of the Company with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.

Forward-looking and Cautionary Statements:

This report contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements include information about possible or assumed future results of enherent’s operations. Statements made in this SEC filing that are qualified with words such as“anticipates,” “would”, “believes,” “expects,” “estimate,” “predict,” “plan,”, “project,” “will,” “should,” “intend” and similar expressions as they relate to enherent or its management are intended to identify such forward-looking statements. Many possible events or factors could affect enherent’s future financial results and performance, causing enherent’s results or performance to differ materially from those expressed in enherent’s forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company’s plans and results of operations will be affected by the Company’s ability to manage its growth and resources; (iii) competition in the industry and the impact of competition on pricing, revenues and margins; (iv) the Company’s ability to recruit and retain IT professionals; and (v) other risks and uncertainties discussed under “Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2008, as well as in any subsequent Company filings with the Securities and Exchange Commission.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

For the period ended June 30, 2009, the Company did not experience any material changes in market risk exposures that affect the quantitative and qualitative disclosures presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Item 4.

Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and VP of Finance, as appropriate, to allow timely decisions regarding required disclosure. Such controls and procedures, by their nature, can provide only reasonable assurance regarding management’s control objectives.

The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and VP of Finance, on the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of June 30, 2009. Based upon that evaluation, the Company’s Chief Executive Officer and VP of Finance concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2009.

There was no change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings.

Item 1A.

Risk Factors.

The Company’s Annual Report on Form 10-K filed for the fiscal year ended December 31, 2008 includes a detailed discussion of the Company’s risk factors. There have been no material changes to the risk factors that were included in the Form 10-K during the first six months of fiscal 2009.

Item 4.

Submission of Matters to a Vote of Security Holders.

The Company held its annual meeting of stockholders on May 21, 2009. Faith Griffin was elected as a Class III director at the annual meeting with a term expiring in 2012.

Director Election Results.


Class II I Director	Affirmative Votes	Withheld Votes
Faith Griffin	34,758,988	4,124,652

Other directors whose terms continued after the annual meeting and their term expiration date:


Director		Term
Thomas Minerva		Expires 2010
Douglas Mellinger		Expires 2010
Pamela Fredette		Expires 2011
William Cary		Expires 2011

In addition to the Election of Directors, the following two matters were voted upon by the Company’s stockholders at the 2009 Annual Meeting:

(i)

Amendment and Restatement of enherent Corp.’s Restated Certificate of Incorporation that would effect a one-for- ten reverse split of enherent’s Common Stock. The proposal was approved when holders of 27,127,629 shares voted for this proposal; holders of 10,673,230 shares voted against this proposal and holders of 1,082,780 shares abstained or did not vote with respect to this proposal; and

(ii)

Amendment and Restatement of enherent Corp.’s Restated Certificate of Incorporation that would change the name of the Company from enherent Corp. to NextGen Analytics, Inc. This proposal was approved when holders of 34, 736, 865 shares voted for this proposal; holders of 4, 138, 589 shares voted against this proposal and holders of 8,185 shares abstained or did not vote with respect to this proposal.

The Board of Directors (“Board”) of the Company reserved its right to elect not to proceed with the reverse stock split and/or the Company name change, if it determines, in its sole discretion, that these proposals are no longer in the best interests of the Company, provided that the Board shall not elect to proceed with either the reverse stock split or the name change any later than December 31, 2009.

Item 5.

Other Information

None

Item 6.

Exhibits.

See Exhibit Index.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	enherent Corp.

DATE August 11, 2009	BY:	/s/ Pamela A. Fredette
		Pamela A. Fredette
		Chairman, Chief Executive Officer and President

DATE August 11, 2009	BY:	/s/ Arunava De
		Arunava De
		Principal Financial and Accounting Officer

S-1

EXHIBIT INDEX


Item No.		Description
2.1 —		Agreement and Plan of Merger dated as of October 12, 2004, by and between the Company and Dynax Solutions, Inc. (Incorporated by reference to Exhibit 2.1 of the Company’s Form 10-Q filed November 15, 2004).

2.2 —		First Amendment to Agreement and Plan of Merger dated as of November 4, 2004, by and between the Company and Dynax Solutions, Inc. (Incorporated by reference to Exhibit 2.2 of the Company’s Form 10-Q filed November 15, 2004).

3.1 —		Restated Certificate of Incorporation (Incorporated by referenced to Exhibit 4.1 of the Company’s Form S-8 filed January 22, 1998).

3.2 —		Certificate of Amendment of Restated Certificate of Incorporation of enherent Corp. (Incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K filed April 4, 2001).

3.3 —		Certificate of Amendment of Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on April 1, 2005 (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed April 6, 2005).

3.4 —		Certificate of Merger merging Dynax Solutions, Inc. into the Company as filed with the Secretary of State of Delaware on April 1, 2005 (Incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed April 6, 2005).

3.5 —		Amended and Restated Bylaws, as amended through April 22, 2005 (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed April 27, 2005).

4.1 —		Form of Certificate of Common Stock (Incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K filed March 22, 2002).

4.2 —		Securities Purchase Agreement dated as of April 13, 2000, by and among the Company and the Investors named therein (Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed April 14, 2000).

4.3 —		Preferred Stock Agreement dated as of October 28, 2004, by and among the Company and the Preferred Stockholders named therein (Incorporated by reference to Exhibit 4.5 of the Company’s Form 10-Q filed November 15, 2004).

*10.1 —		Employment Agreement dated April 1, 2006 between Lori Stanley and the Company (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed August 14, 2006).

*10.2 —		Agreement by and between the Company and Thomas Minerva dated as of January 9, 2006 (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 13, 2006).

*10.3 —		Amended and Restated 1996 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Company’s Form S-8 filed January 22, 1998).

10.4 —		Stock Purchase Agreement dated as of April 1, 2004, by and between the Company and Primesoft, LLC (Incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed May 7, 2004).

10.5 —		Promissory Note dated April 1, 2004, by and between the Company and Primesoft, LLC (Incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q filed May 7, 2004).

*10.6 —		Non-Qualified Stock Option Agreement dated September 14, 2004, by and between the Company and Douglas Mellinger (Incorporated by reference to Exhibit 10.4 of the Company’s Form 10-Q filed November 15, 2004).

E-1


Item No.		Description
*10.7 —		Agreement dated September 14, 2004, by and between the Company and Douglas Mellinger (Incorporated by reference to Exhibit 10.5 of the Company’s Form 10-Q filed November 15, 2004).

10.8 —		Amended and Restated Credit Agreement by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto dated as of April 1, 2005 (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed April 6, 2005).

10.9 —		Intercreditor and Subordination Agreement among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto dated as of April 1, 2005 (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed April 6, 2005).

*10.10 —		2005 Stock Incentive Plan, adopted June 2, 2005, including forms of Grant Agreements (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed June 7, 2005).

*10.11 —		Employment Agreement executed on June 8, 2005, but effective April 1, 2005 between Pamela Fredette and the Company (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed June 10, 2005).

*10.12 —		2005 Management Incentive Compensation Plan, adopted May 10, 2005 (Incorporated by reference to Exhibit 10.15 of the Company’s Quarterly Report on Form 10-Q filed August 12, 2005).

*10.13 —		Director Compensation Plan, adopted May 10, 2005 (Incorporated by reference to Exhibit 10.16 of the Company’s Quarterly Report on Form 10-Q filed on August 12, 2005).

*10.14 —		Form of Indemnification Agreement between the Company and each of its directors entered into as of September 20, 2005 (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed September 22, 2005).

*10.15 —		Amendment to Agreement by and between enherent Corp. and Douglas K. Mellinger dated as of December 31, 2005 (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 6, 2006).

*10.16 —		Non-Qualified Stock Option Award Agreement by and between the Company and Thomas Minerva dated as of January 9, 2006 (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on January 13, 2006).

10.17 —		First Amendment to Amended and Restated Financing Agreement, dated as of March 6, 2006, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto (Incorporated by reference to Exhibit 10.24 of the Company’s Quarterly Report on Form 10-Q filed on May 15, 2006).

*10.18 —		2005 Stock Incentive Plan, as amended and restated as of May 22, 2008 (Incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed April 22, 2008).

10.19 —		Waiver, Consent and Third Amendment to Amended and Restated Financing Agreement, dated as of August 27, 2007, by and among the Company, certain subsidiaries listed therein, Ableco Finance, LLC and certain lenders party thereto. (Incorporated by reference to Exhibit 10.26 of the Company’s Quarterly Report on Form 10-Q filed on November 9, 2007).

10.20 —		Fourth Amendment to Amended and Restated Financing Agreement, dated as of September 6, 2007, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto. (Incorporated by reference to Exhibit 10.27 of the Company’s Quarterly Report on Form 10-Q filed on November 9, 2007).

E-2


Item No.		Description
*10.21 —		First Amendment to Employment Agreement dated December 3, 2007 between Pamela A. Fredette and the Company (Incorporated by reference to Exhibit 10.27 of the Company’s Annual Report on Form 10-K filed on March 27, 2008).

*10.22 —		Agreement by and between the Company and Thomas Minerva dated as of January 1, 2008 (Incorporated by reference to Exhibit 10.28 of the Company’s Quarterly Report on Form 10-Q filed on May 15, 2008).

*10.23 —		2005 Stock Incentive Plan, as amended and restated as of May 22, 2008. (Incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed April 22, 2008).

*10.24 —		Second Amendment to Employment Agreement by and between the Company and Pamela A. Fredette dated as of December 1, 2008. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on December 9, 2008).

10.25 —		Fifth Amendment to Amended and Restated Financing Agreement, dated as of February 3, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 9, 2009).

10.26 —		Sixth Amendment to Amended and Restated Financing Agreement, dated as of April 8, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on April 9, 2009).

*10.27 —		Third Amendment to Employment Agreement, dated as of December 1, 2008, by and between the Company and Pamela A. Fredette (Incorporated by reference to Exhibit 10.27 of the Company’s Quarterly Report on form 10-Q filed on May 15, 2009).

*10.28 —		First Amendment to Employment Agreement, dated as of April 1, 2006 by and between the Company and Lori Stanley (Incorporated by reference to Exhibit 10.28 of the Company’s Quarterly Report on form 10-Q filed on May 15, 2009).

*10.29 —		Marketing Agreement by and between the Company and Douglas Mellinger, dated as of May 15, 2009 (Incorporated by reference to Exhibit 10.29 of the Company’s Quarterly Report on form 10-Q filed on May 15, 2009).

10.30 —		Waiver, Consent and Seventh Amendment to Amended and Restated Financing Agreement, dated as of July 2, 2009, by and among the Company, certain subsidiaries listed therein, Ableco Finance LLC and certain lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on July 2, 2009.)

31.1 —		Section 302 Certification of Chief Executive Officer (certification required pursuant to Rule 13a-14(a) and 15d-14(a)) (filed herewith).

31.2 —		Section 302 Certification of Principal Financial Officer (certification required pursuant to Rule 13a-14(a) and 15d-14(a)) (filed herewith).

32.1 —		Section 906 Certification of Chief Executive Officer (certification required pursuant to 18 U.S.C. 1350) (filed herewith).

32.2 —		Section 906 Certification of Principal Financial Officer (certification required pursuant to 18 U.S.C. 1350) (filed herewith).

*	Denotes management contract or compensatory plan or arrangement.

E-3

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. junior Avg

Larger Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company