United eSystems 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended September 30, 2008

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

Commission file number 000-49745

UNITED ESYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Nevada	91-2150635
(State or other jurisdiction	(IRS Employer Identification No.)
of incorporation or organization)

15431 O’Neal Road

Gulfport, MS 39503

228-832-1597

(Address and telephone number of principal executive offices and principal place of business)

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

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 last practicable date:  As of November 13, 2008, 34,091,667 shares of the registrant’s common stock, $0.001 par value, were issued and outstanding.

UNITED ESYSTEMS, INC.

FORM 10-Q

September 30, 2008

INDEX

Part I – Financial Information		Page
Item 1.	Financial Statements
	Consolidated Balance Sheets	4
	Consolidated Statements of Income	5
	Consolidated Statements of Changes in Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	9 – 14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative And Qualitative Disclosures About Market Risk	20
Item 4(T).	Controls And Procedures	20
Part II – Other Information
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Submission of Matters to a Vote of Security Holders	21
Item 5.	Other Information	21
Item 6.	Exhibits	21
	Signatures	23

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INTRODUCTORY NOTE

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 about United eSystems, Inc. (the “Company”) and our subsidiaries, United Check Services, L.L.C. (United) and Netcom Data Southern Corp. (NDS), that are subject to risks and uncertainties.  Forward-looking statements include information concerning future financial performance, business strategy, projected plans and objectives.  Statements preceded by, followed by or that otherwise include the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “may increase,” “may fluctuate” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” and “could” are generally forward-looking in nature and not historical facts.  Actual results may differ materially from those projected, implied, anticipated or expected in the forward-looking statements.  Readers of this quarterly report should not rely solely on the forward-looking statements and should consider all uncertainties and risks throughout this report. The statements are representative only as of the date they are made.  The Company, United, and NDS (sometimes referred to herein on a consolidated basis as the Company, we, us, or similar phrasing) undertakes no obligation to update any forward-looking statement.

These forward-looking statements, implicitly and explicitly, include the assumptions underlying the statements and other information with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, financial condition, results of operations, future performance and business, including management's expectations and estimates with respect to revenues, expenses, return on equity, return on assets, efficiency ratio, asset quality and other financial data and capital and performance ratios.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, these statements involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond the control of the Company. The following factors, among others, could cause the Company's results or financial performance to differ materially from its goals, plans, objectives, intentions, expectations and other forward-looking statements:

· general economic and industry conditions;

· our capital requirements and dependence on the sale of our equity securities;

· the liquidity of the Company’s common stock will be affected by the lack of a trading market;

· intense industry competition;

· fluctuations in the prevailing industry prices of check processing services;

· shortages in availability of qualified personnel;

· legal and financial implications of unexpected catastrophic events;

· regulatory or legislative changes effecting check processing operations; and

· reliance on, and the ability to attract, key personnel.

For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s 2007 Annual Report filed on Form 10-KSB with the SEC, which is available on the SEC’s website at www.sec.gov.  All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this Quarterly Report on Form 10-Q to reflect events or circumstances after the date hereof.  New factors emerge from time to time, and it is not possible for us to predict which factors, if any, will arise.  In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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PART I.    FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

UNITED ESYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2008, (Unaudited)		December 31, 2007 (Audited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents	$	358,065	$	283,988
Restricted Cash		368,289		531,343
Trade Receivables, net		209,371		81,490
Prepaid Interest		96,000		--
Prepaid Expenses		17,684		24,476
Total Current Assets		1,049,409		921,297
PROPERTY AND EQUIPMENT, NET		65,752		60,735
OTHER ASSETS
Intangible Assets		5,789,154		--
Prepaid Expenses, Non-current		134,000		--
Other		63,315		62,620
Total Assets	$	7,101,630	$	1,044,652
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACH Settlements Payable	$	309,413	$	514,969
Current Portion Long-Term Debt		638,750		70,000
Accounts Payable and Accrued Liabilities		154,125		34,036
Customers’ Deposits		58,876		16,374
Total Current Liabilities		1,161,164		635,379
LONG TERM LIABILITIES
Notes Payable		4,706,250		--
Total Liabilities		5,867,414		635,379
STOCKHOLDERS' EQUITY
Common Stock - $.001 Par Value; 75,000,000 Shares Authorized,   34,091,667 Shares Issued and Outstanding in 2008 and 18,291,667 in 2007		34,092		18,292
Additional Paid-In Capital		823,640		49,440
Retained Earnings		376,484		341,541
Total Stockholders' Equity		1,234,216		409,273
Total Liabilities and Stockholders' Equity	$	7,101,630	$	1,044,652

The accompanying notes are an integral part of these financial statements.

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UNITED ESYSTEMS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

		Three Months Ended September 30,						Nine Months Ended September 30,
		2008			2007			2008			2007
Revenues	$	498,191		$	297,603		$	1,073,690		$	934,366
Cost of Revenues		175,390			188,537			478,540			566,427
Gross Profit		322,801			109,066			595,150			367,939
Expenses:
Operating
Personnel costs		35,700			32,520			97,092			90,848
Travel		10,477			2,083			24,691			11,561
Other		96,278			28,052			150,662			96,413
Total Operating Expenses		142,455			62,655			272,445			198,822
Selling, General & Administrative
Personnel costs		69,065			18,750			104,546			66,301
Legal and accounting		13,121			3,660			48,958			34,565
Marketing		15,554			6,900			34,694			29,550
Consulting		--			--			32,500			--
Other		8,837			958			13,069			7,598
Total Selling, General & Administrative		106,577			30,268			233,767			138,014
Total Expenses		249,032			92,923			506,212			336,836
Income from operations		73,769			16,143			88,938			31,103
Other Income (expense):
Interest Expense		(40,661	)		(1,750	)		(44,196	)		(6,315	)
Net Income before income taxes		33,108			14,393			44,742			24,788
Income tax expense		7,284			2,305			9,798			4,651
Net Income	$	25,824		$	12,088		$	34,944		$	20,137
Net Income per Share	$	.01		$	.01		$	.01		$	.01
Weighted Average Common Shares Outstanding		22,815,580			18,291,667			19,816,209			18,291,667

The accompanying notes are an integral part of these financial statements.

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United eSystems, Inc.

Consolidated Statements of Changes in Stockholders' Equity

Nine Months Ended September 30, 2008 and 2007

	Common Stock				Additional Paid-In		Retained		Stockholders'
	Shares		Amount		Capital		Earnings		Equity
Balance at January 1, 2007		18,291,667	$	18,292	$	49,440	$	333,541	$	401,273
Issuance of Common Stock		-		-		-		-		-
Net Income		-		-		-		20,137		20,137
Balance at September 30, 2007		18,291,667	$	18,292	$	49,440	$	353,678	$	421,410
Balance at January 1, 2008		18,291,667	$	18,292	$	49,440	$	341,541	$	409,273
Issuance of Common Stock for Acquisition of Netcom Data Southern, Inc.		7,800,000		7,800		382,200		-		390,000
Issuance of Common Stock for Acquisition of Credit Card Portfolio		3,200,000		3,200		156,800		-		160,000
Issuance of Common Stock in exchange for "Non-interest" bearing loan		4,800,000		4,800		235,200		-		240,000
Net Income		-		-		-		34,944		34,944
Balance at September 30, 2008		34,091,667	$	34,092	$	823,640	$	376,485	$	1,234,217

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UNITED ESYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended September 30,
		2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	34,944		$	20,137
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
Depreciation and Amortization		64,555			20,836
Decrease in Trade Receivables		16,872			23,430
Decrease in Prepaid Expenses		6,792			--
Decrease in Prepaid Interest		10,000			--
Decrease in Restricted Cash		163,054			142,372
Increase in Other Assets		(695	)		(6,466	)
Decrease in ACH Settlements Payable		(205,556	)		(143,372	)
Decrease in Accounts Payable and Accrued Liabilities		(9,981	)		(28,841	)
Increase in Customer Deposits		42,502			1,000
Net Cash Provided by Operating Activities		122,487			29,096
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Property and Equipment		(13,053	)		(20,489	)
Cash paid in conjunction with acquisition of NDS		(314,741	)		--
Cash paid in conjunction with acquisition of Portfolio Asset		(2,275,616	)		--
Increase in Deposits		--			(50,000	)
Net Cash Used in Investing Activities		(2,603,410	)		(70,489	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		2,625,000			--
Principal paid on notes payable		(70,000	)		(46,000	)
Net Cash Provided by (Used in) Financing Activities		2,555,000			(46,000	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		74,077			(87,393	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD		283,988			384,830
CASH AND CASH EQUIVALENTS – END OF PERIOD	$	358,065		$	297,437
SUPPLEMENTAL DISCLOSURES
Cash Paid During the Period for Interest	$	15,966		$	6,315

The accompanying notes are an integral part of these financial statements.

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UNITED ESYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended September 30,
		2008			2007
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITES
Acquisition of Netcom Data Southern, Inc. (NDS)
Identifiable Intangible Assets Acquired	$	3,395,556		$	--
Net Tangible Assets Acquired:
Accounts Receivable		144,752			--
Property and Equipment		14,503			--
Accounts Payable and Other Current Liabilities		(130,070	)		--
Net Tangible Assets Acquired		29,185			--
Total Assets Acquired		3,424,741			--
Less:
Fair Value of stock issued		(390,000	)		--
Promissory Note Issued to Stockholder of NDS		(2,720,000	)		--
Net Cash Paid for Acquisition of NDS	$	314,741		$	--
Purchase of Credit Card Portfolio
Value of Credit Card Portfolio Acquired	$	2,435,616		$	--
Less Value of Stock Issued for Purchase		(160,000	)		--
Net Cash Paid for Purchase of Credit Card Portfolio	$	2,275,616		$	--
Stock Issued in Exchange for "Interest-Free" Loan; Recognized as Prepaid Interest on Consolidated  Balance Sheet	$	240,000		$	--

The accompanying notes are an integral part of these financial statements.

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UNITED ESYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A — PLAN OF REORGANIZATION AND CONTRIBUTION AGREEMENT

On March 30, 2005, Riverbend Telecom, Inc. (Riverbend) entered into an Agreement and Plan of Reorganization (the “Spin-Off Agreement”) between Riverbend and Riverbend Holdings, Inc. (Holdings), its wholly owned subsidiary, pursuant to which Riverbend transferred all of its assets, liabilities and other obligations to Holdings in consideration for Holdings common stock.  In addition, Riverbend distributed all of Holdings common stock to the then-existing four Riverbend stockholders (the “Spin-Off”), on a pro rata basis, one share of Holdings common stock for each Riverbend share held by the stockholders.  Holdings was formed for the purpose of effecting the reorganization of Riverbend and the subsequent distribution of all of the Holdings common stock to Riverbend’s current stockholders.  Holdings had previously filed a Form 10-SB with the Securities and Exchange Commission regarding its common stock under Section 12(g) of the Securities Exchange Act of 1934.

Upon consummation of the Spin-Off, Riverbend completed the contribution transaction with United Check Services, L.L.C. (United), a Louisiana limited liability company, according to the terms of a Contribution Agreement entered into on July 14, 2004, as amended by a Letter Agreement dated August 5, 2004 (collectively, the “Contribution Agreement”).  Pursuant to the Contribution Agreement, the equity owners of United contributed all of their limited liability membership interests in United to Riverbend in exchange for 15,315,000 shares of Riverbend’s common stock.  As a result of this transaction, United became a wholly-owned subsidiary of Riverbend, and the members of United became the majority stockholders of Riverbend, and the transaction was accounted for as a reverse acquisition.  As a result of the Spin-Off, the current telecommunications business of Riverbend is now carried on by Holdings, and the automated clearing house services business of United is now carried on by Riverbend, through its 100% ownership interest of United.

On June 13, 2005, Riverbend effected a name change from Riverbend Telecom, Inc. to United eSystems, Inc. to better reflect the change in business operations as a result of the consummation of the Plan of Reorganization and the Contribution.

NOTE B — NATURE OF RECENT ACQUISITON AND PORTFOLIO ASSET PURCHASE

Acquisition of Netcom Data Southern Corp.

On August 22, 2008, United eSystems, Inc. (“eSystems”, “Company”) entered into a Stock Purchase Agreement (“Agreement”) with Netcom Data Southern Corp. (“NDS”), in which eSystems acquired all of the common stock of NDS.  The transaction was reported on Form 8-K on August 28, 2008, and the details of the transaction together with agreement between eSystems and NDS are included therein.

The Company entered into the transaction as means to diversify its electronic payments business.  Prior to the transaction, the majority of the Company’s revenue was derived from providing ACH payment services for business merchants.  Upon completion of the transaction, the Company’s gross revenues are now approximately 45% from its ACH payments business and 55% from credit card merchant processing services which are provided through contracts that NDS has with several sponsor banks in the United States.  The Board of Directors and management believe that the acquisition of NDS provides the opportunity to improve operating results and the possibility of creating future value.

Pursuant to the Agreement, the Company acquired all of the outstanding stock of NDS in exchange for $320,000 cash at closing, an unsecured promissory note payable of $2,720,000, and 7,800,000 shares of the Company’s restricted common stock which had an estimated fair value at the date of the acquisition of $.05 per share.  As a result of the transaction, all of the Company’s sales and marketing activities, as well as all of the customer service duties to manage the credit card merchant accounts of NDS will be conducted through NDS, which is now a wholly owned subsidiary of the Company.

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A summary of the purchase price of NDS is as follows:
Cash paid to stockholders of NDS	$	320,000
Direct acquisition costs paid by the Company		27,960
Promissory note issued to stockholders of NDS		2,720,000
Fair value of 7,800,000 shares of stock issued		390,000
Total purchase price	$	3,457,960

The preliminary allocation of the NDS purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed are based on eSystems’ estimate of fair values and remaining economic lives as of the acquisition date and are summarized below:

Tangible assets acquired and liabilities assumed
Cash	$	33,219
Accounts receivable		144,752
Property and equipment		14,503
Accounts payable and other current liabilities		(130,070	)
Net tangible assets acquired		62,404
Identifiable intangibles
Customer relationships and contracts		3,395,556
Total purchase price	$	3,457,960

The value allocated to customer relationships and contracts created as a result of the acquisition of NDS will be amortized over its estimated useful life of ten years.  Amortization expense for the three and nine months ended September 30, 2008, was $32,650.

Portfolio Asset Purchase

On September 17, 2008, the Company, through its wholly owned subsidiary NDS, entered into and closed an Asset Purchase Agreement (the “Agreement”) with Netcom Data Corp. of N.Y. and American Timeshare Associates, Inc. (collectively the “Sellers”).  Under the terms of the Agreement the Company paid $2,275,000 in cash, plus 3,200,000 shares of its restricted common stock, in exchange for the assignment all of the Seller’s rights under a certain Independent Sales Organization Agreement (the “Bank Agreement”) with LaSalle Bank, N.A., a subsidiary of Bank of America (the “Bank”).  The terms of the Bank Agreement allow merchant customers of the Seller to utilize the credit card merchant processing services provided by the Bank.  As a result of the assignment of the Bank Agreement, NDS will perform certain services previously provided by the Sellers under the Bank Agreement and will receive all payments due therefore from the Bank.

The Company accounted for this transaction as an asset purchase and the purchase price, which is based upon the total consideration paid, is included on its consolidated balance sheet as Intangible Assets.  The purchase price is amortized over a ten year period, commencing September 17, 2008.  Amortization expense for the three and nine months ended September 30, 2008, was $9,368.

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NOTE C — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

As described in Notes A and B, UNITED ESYSTEMS, INC. (Company) serves as the holding company for United Check Services, L.L.C. (United) and Netcom Data Southern Corp (NDS).  United provides automated clearing house (ACH) services to businesses throughout the United States.  NDS is an independent sales organization that obtains merchant customers that utilize credit card processing services through several NDS sponsored banks.  NDS receives a portion of the fees charged for such services in exchange for acquiring the merchants and maintaining certain customer service functions.  The Company’s headquarters and ACH operations center are located in Gulfport, Mississippi, and the operations of NDS are conducted at its offices in Roswell, Georgia.

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, United and NDS.  All significant intercompany balances and transactions have been eliminated in consolidation.

The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of financial information for the interim periods presented.  These adjustments are of a normal recurring nature and include appropriate estimated provisions.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Revenue Recognition

United charges customers a per transaction fee for its ACH services.  For these transactions, United recognizes only the fees generated as revenue.  United recognizes these fees as revenue when United has provided the service to its customers.  Fees for ACH services are based on contractually determined rates with each individual customer.  Settlements paid to customers for ACH transactions are submitted to the customer net of fees due to United.

NDS receives a portion of the fees generated from credit card merchant processing services which are provided through its contractual agreements with various sponsor banks.  Under these agreements the merchants’ transaction activity is reported and NDS’ portion of the fees are paid during the month following the month in which the transactions occurred.  Accordingly, NDS recognizes its revenue in the month in which such transactions are reported and payable, which is consistent with industry practices within the United States of America.

Basis of Accounting

The books and records of the Company are kept on the accrual basis of accounting, whereby revenues are recognized when earned and expenses are recognized when incurred.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.  Depreciation is computed using primarily straight-line methods over the estimated useful lives of the related assets, which ranges from three to seven years.

Income Taxes

Since United is a single-member limited liability company, it is treated as a disregarded entity for federal income tax reporting purposes.  As such, the Company includes the revenues and expenses of United in its Federal income tax return.

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Since NDS is a wholly-owned corporation of the Company, it reports its income taxes as a wholly owned subsidiary of the Company under a consolidated Federal tax return.

Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method.  Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to change in tax rates and laws.

Advertising

Advertising costs are charged to operations when incurred.

Statement of Cash Flow Information

For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

NOTE D — RESTRICTED CASH

Restricted cash consists primarily of funds maintained in United’s primary bank account to facilitate ACH transactions.  The Company has restricted this cash from operations in order to ensure that sufficient funds are maintained to process and settle customer’s ACH transactions.

NOTE E — NOTES PAYABLE

In September of 2004, the two existing members of United agreed to take a distribution for the amount of undistributed earnings accumulated by United through June 30, 2004, which amounted to $156,000.  In order to ease the cash flow requirements on United, the members agreed to accept a note for the amount of the distribution.  The amount of the distribution was combined with the amount of advances due to United’s members of $100,000, and notes payable due to United’s members for the total amount of $256,000 were established.  On August 20, 2008, the outstanding principal balance of these notes of $70,000 was paid in full.  On September 4, 2008, and September 8, 2008, the Company entered into two new notes payable with two existing shareholders of the Company for a total principal amount of $70,000.  The notes provide for interest only payments at a rate of 10% per annum payable monthly thereafter, with the entire principal balances due and payable two years from inception of the notes.

On August 22, 2008, as part of the acquisition of NDS, the Company issued an unsecured note (the “Share Purchase Note”) payable to the shareholders of NDS.  The Share Purchase Note bears interest at 5.5% for the first twelve months and 9.5% for the following twenty-four months, when the Share Purchase Note is due in full.  Pursuant to the terms of the Share Purchase Note, the Company will make interest only payments each month and will make three principal payments during the term of the Share Purchase Note.  The Company shall pay $180,000 towards principal on the first and the second anniversary of the issue date of the Share Purchase Note and one final balloon payment representing the then outstanding principal and accrued interest on the third anniversary of the issue date of the Share Purchase Note.

On August 22, 2008, in order to facilitate the cash payment due at the closing of the acquisition of NDS, the Company issued a non-interest bearing secured promissory note (the “Sorrentino Note”) and entered into and closed a security agreement (the “Security Agreement”) with Robert J. Sorrentino.  The terms of the Sorrentino Note provide that the Company may draw up to $500,000 from Sorrentino with advanced written notice to and subject to the approval of Sorrentino for a period of up to seven months.  The Company drew $280,000 immediately upon issuance of the Sorrentino Note.  Commencing on the seven-month anniversary of the issue date of the Sorrentino Note, the Company will make twenty-four equal monthly installments in an amount sufficient to repay the entire outstanding principal balance during such twenty-four month period.  The Sorrentino Note is secured by the Security Agreement, which grants Sorrentino a security interest in all of the assets existing, owned, or hereafter acquired by the Company.

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On September 17, 2008, in order to facilitate the cash payment due at the closing of the purchase of the portfolio of credit card merchant services accounts from Netcom Data Corp. of N.Y. and American Timeshare Associates, Inc., the Company, NDS, and United (collectively the “Debtors”) borrowed $2,128,500 from Thermo Credit, LLC, a Colorado limited liability company (the “Lender”) pursuant to a Loan, Pledge, and Security Agreement (the “Loan Agreement”) and a Promissory Note (the “Note”) which provide for interest at the greater of 15% per annum or 8% in excess of the prime rate, plus other fees.  Accrued and unpaid interest on the outstanding principal balance of the Note is due and payable monthly commencing on October 31, 2008 and the Note matures and becomes due in full on March 17, 2009, with the Company having the right to extend the maturity to September 17, 2009 with Lender’s approval (not to be unreasonably withheld or delayed).  In the event of such extension, the Note is payable as follows:  (a) one payment of accrued and unpaid interest on March 31, 2009;  (b) five monthly payments of principal plus accrued and unpaid interest thereon in an amount necessary to amortize the outstanding principal balance of the Note as of March 17, 2009 over a period of 24 months commencing on April 30, 2009 and continuing on the same day of each calendar month thereafter (or if no such corresponding date, on the last date of such calendar month); and (c) a final payment of all principal plus accrued and unpaid interest on September 17, 2009.  The Loan Agreement grants the Lender a security interest in all of the assets, now owned, or hereafter acquired by the Debtors, and pledges all of the outstanding common stock of NDS and all of the outstanding membership interests of UCS to the Lender.

NOTE F — STOCK OPTIONS

On March 30, 2005, the Company entered into a non-qualified stock option agreement, whereby the Company granted 312,000 options to its CFO.  On February 15, 2006, the Company entered into non-qualified stock option agreements with four key employees, granting a total of 90,000 options, which included 32,500 options to its CFO.  All of the options have an exercise price of $.03 per share, and were fully vested as of the date of the grant.  The option agreements terminate five years from the date they were granted.  No options were exercised in 2008 nor in 2007.

On August 20, 2008, the Board of Directors adopted the 2008 Incentive Stock Plan and granted at total of 1,157,000 options to employees of United.  All of the options have an exercise price of $.05 per share and were fully vested as of the date of the grant.  The options terminate five years from the date granted.  None of these options have been exercised.

NOTE G — SIGNIFICANT CONCENTRATIONS

Cash

At September 30, 2008 and December 31, 2007, the Company maintained balances with financial institutions in excess of FDIC insured limits.

Major Customers

During the three months and nine months ended September 30, 2008, the Company had transactions with one customer that amounted to approximately 21.8% and 33.5%, respectively, of the Company’s revenue.  This customer was not affiliated with the Company through common ownership.

NOTE H — COMMITMENTS

Operating Leases

On April 1, 2008, United extended its prior three year agreement to lease office facilities at its present location for an additional twelve months at $2,400 per month, with an option to further extend its lease for an additional two years.

NOTE I — RELATED PARTY TRANSACTIONS

As disclosed in Note E, the Company has notes payable totaling $70,000 at September 30, 2008 and December 31, 2007.  The notes payable at December 31, 2007, were due to majority stockholders of the Company for funds advanced to United in prior years and for the amount of the distributions due to the former members of United and were

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repaid on August 20, 2008.  The notes payable at September 30, 2008, are due to two minority shareholders of the Company.

NOTE J — EARNINGS PER SHARE

For earnings per share calculations, the weighted average common shares outstanding amounted to 22,815,580 and 19,816,209 for the three months and nine months ended September 30, 2008.  Options to purchase 402,000 shares at $.03 per share, and options to purchase 1,157,000 shares at $.05 per share were outstanding during the three months and nine months ended September 30, 2008, but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the estimated market price of the common shares.

NOTE K — SUBSEQUENT EVENTS

Departure of Chief Executive Officer

On October 14, 2008, the Board of Directors replaced Jeffery C. Swank as the Company’s Chief Executive Officer and President.  On that same date, the Board of Directors appointed Walter R. Green, Jr., the Company’s current Chief Financial Officer, Secretary, and Treasurer to also serve as Chief Executive Officer and President commencing October 14, 2008.

Amendments to Articles of Incorporation or Bylaws

On October 14, 2008, the Board of Directors of the Company approved the adoption of the First Amended Bylaws of the Company effective immediately to reflect the Company’s current name as United eSystems, Inc. (formerly Riverbend Telecom, Inc.) and delete Section 13(d) of Article III from the Bylaws which prohibited the Company from taking certain actions by the written consent of the Company’s shareholders.  The amendment allows the Company, when permitted by Nevada law, to take action without the necessity of holding either an annual or special meeting if the Company has received the necessary shareholder consents to take action.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Executive Summary

The Company is an electronic payments service provider headquartered in Gulfport, Mississippi, that caters mostly to small and medium size businesses who handle significant volumes of electronic transactions as an integral part of their business.  Since 1998, we have provided electronic ACH (Automated Clearing House) payments via our internet-based, encrypted systems, to assist merchants in the collection of their sales and accounts receivables.  Our processing systems may also be used to transmit payments such as loan proceeds, customer refunds, travel expenses, commission payments, and payroll direct deposits. We act as the merchant’s ACH processor and clear transactions electronically through the Federal Reserve Banking System.  We are paid based on a fee per each ACH transaction we process, and typically receive our fees at the time we are settling collected proceeds electronically to each of our merchants.

The ACH Network has been in use for in excess of 30 years, serving a variety of customers, including over 20,000 financial institutions, 3.5 million businesses, and 135 million individuals.  According to the National ACH Association (NACHA), in 2006, there were nearly 16 billion ACH payments made, an increase of approximately 15.4% over the prior year, and valued at approximately $30.3 trillion.  It also estimated that for 2006 in excess of 7.5 billion consumer bills were collected via the ACH Network which included 3.3 billion pre-authorized debits, 1.8 billion internet payments, and 2.8 billion checks converted into ACH payments, representing increases of 6.1%, 35%, and 32% respectively, compared to 2005.  Overall, ACH payment volume continues to double every five years as merchants and financial service providers recognize the value and efficiencies that ACH payments provide.

The ACH business is divided between traditional banks, large “in-house” processors, and independent processors.  We currently concentrate on independent processors service customers that utilize electronic commerce but find that outsourcing to be a more cost effective solution.  The independent processors find they are able to provide custom tailored solutions and better transaction pricing than the merchants could individually obtain from traditional banks.  We have established ourselves as a quality provider of ACH processing services with proven results utilizing state of-the-art technology.

In addition, the Company, through its acquisition of NDS, now offers additional services including credit and debit card processing, real-time account verification, and identity verification services.  Such services are complimentary to our ACH payment services and with their addition it allows us to provide a more comprehensive line of services to our existing and prospective business customers.

Results of Operations

In this section, we provide more detailed information about our operating results and changes in financial position.  This section should be read in conjunction with the financial statements and related notes include in this Form 10-Q, and in conjunction with our Form 10-KSB previously filed for the year ended December 31, 2007.

Three Months and Nine Months Ended September 30, 2008 compared to the Three Months and Nine Months Ended September 30, 2007.

Our revenue is generated by providing payment services which include Automated Clearing House (ACH) processing services as well as earning residual revenue from credit card merchant services for business customers.  We also provide electronic account verification services.  The majority of our customers utilize our services to collect their gross receipts or accounts receivable electronically.  However, ACH processing services may also be utilized for other purposes, including direct deposit of employee payroll, employee travel advances, and intercompany transfers.  We recognize our ACH revenue upon completion of the service being provided and residual credit card services revenue upon receipt from our sponsoring banks which is consistent with industry practices within the United States of America.

For the three months ended September 30, 2008, revenues were $498,191, compared to $297,603 for the three months ended September 30, 2007, representing an increase of $200,588, or approximately 67.4%.  For the nine months ended September 30, 2008, revenues were $1,073,690, compared to $934,366 for the nine months ended

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September 30, 2007, representing an increase of $139,324, or approximately 14.9%.  On August 22, 2008, we completed the acquisition of NDS, and on September 17, 2008 we completed the purchase of a portfolio of credit card service accounts.  As a result of these transactions, our revenues increased for both the three months and nine months ended September 30, 2008 as compared to the same periods a year ago.

Cost of revenues includes the costs incurred in conjunction with the items processed as well as costs associated with the residual credit card revenue we now receive through NDS, our wholly owned subsidiary.  These costs include the direct transactional costs incurred with respect to ACH processing and software as well as direct costs associated with the revenue generated from credit card merchant processing services.

For the three months ended September 30, 2008, cost of revenues was $175,390, compared to $188,537 for the three months ended September 30, 2007, representing a decrease of $13,147, or approximately 7.0%.  For the nine months ended September 30, 2008, cost of revenues was $478,540, compared to $566,427 for the nine months ended September 30, 2007, representing a decrease of $87,887, or approximately 15.5%.  The decreases in cost of revenues in the current quarter and the nine months ended September 30, 2008, reflect the elimination earlier in 2008 of certain marginally profitable ACH accounts which were only partially offset by the cost of sales related to the operations of NDS.

For the three months ended September 30, 2008, the Company’s gross profit was $322,801, compared to $109,066 for the three months ended September 30, 2007, representing an increase of $213,735, or approximately 195.9%.  For the nine months ended September 30, 2008, the Company’s gross profit was $595,150, compared to $367,939 for the nine months ended September 30, 2007, representing an increase of $227,211, or approximately 61.7%.  The increase in gross profits for the three months and nine months ended September 30, 2008, is mostly related to the increase in revenue associated with the acquisition of NDS as previously described.  Because the acquisition was completed during the current quarter, the positive effective on revenue and gross profit is more substantial for the current quarter than for the year-to-date gross profit.

Operating expenses include costs of personnel, computers, supplies, internet services, delivery charges, telecommunications expenses, travel, and other costs associated with the Company’s payment services business.

For the three months ended September 30, 2008, operating expenses were $142,455, compared to $62,655 for the three months ended September 30, 2007, representing an increase of $79,800, or approximately 127.4%.  The increase in operating personnel costs of $3,180 was related to the addition of ACH transaction processing personnel during 2008 compared to the prior period.  Increases in travel costs of $8,394 and other operating costs of $68,226 related mostly to the effect on operations from the acquisition of NDS during the three months ended September 30, 2008.  The increase in travel related to planning and managing the combined operations of the Company and NDS in conjunction with the Company’s acquisition of NDS.  The increases in other operating costs include amortization expense of $42,018 associated with the acquisition of NDS and our portfolio asset purchase, together with office expense of $5,734, telephone and internet expenses of $4,309, office leases of $4,000, and equipment expenses of $3,507 related to the operations of NDS.

For the nine months ended September 30, 2008, operating expenses were $272,445, compared to $198,822 for the nine months ended September 30, 2007, representing an increase of $73,623, or approximately 37.0%.  The increase operating personnel costs of $6,244 was related to the addition of ACH transaction processing personnel during 2008 compared to the prior period.  Increases in travel costs of $13,130 were partially due to costs earlier in the year associated with enhancements to our ACH processing systems at out-of-state locations where we maintain redundant systems, reimbursable travel costs incurred by consultants that provided professional services to the Company, together with increases in travel costs during the current quarter associated with planning and managing the combined operations between the Company and NDS, our newly acquired subsidiary.  Increases in other operating costs of $54,249 related mostly to the effect on operations from the acquisition of NDS during the three months ended September 30, 2008.  The increases in other operating costs include amortization expense of $42,018 associated with the acquisition of NDS and our portfolio asset purchase, together with office expense of $5,734, telephone and internet expenses of $4,309, office leases of $4,000, and equipment expenses of $3,507 related to the operations of NDS.  The increases in other operating costs for the nine months ended September 30, 2008, were partially offset by decreases in computer maintenance expenses of $1,399, office expenses of $1,394, and other operating expenses $10,500.  The maintenance and office expenses decreased in conjunction with efficiencies gained during 2008 from the improvements we made to our computer workstations and ACH processing servers in late

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2007.  The decrease in other operating expenses related to the cost of uncollected returned ACH transactions previously paid to one of our customers that discontinued operations and for which we were unable to collect in the prior year.

For the three months ended September 30, 2008, the Company’s selling, general, and administrative expenses were $106,577, compared to $30,268 for the three months ended September 30, 2007, representing an increase of $76,309, or approximately 252.1%.  This relates mostly to increases in personnel costs of $50,315, legal and accounting expenses of $9,461, marketing expenses of $8,654, and other selling, general and administrative expenses of $7,879.  The increase in personnel costs represent the inclusion of the sales and administrative staff of NDS within our consolidated financial statements following our acquisition of NDS.  The increase in legal and accounting expenses relate to costs associated with our acquisition of NDS and the related portfolio purchase which were not capitalized as part of the purchase price.  The increase in marketing expenses represents a combination of marketing costs of NDS included following the acquisition together with our share of certain joint marketing costs incurred with NDS prior to the completion of the acquisition.  The increases in other selling, general, and administrative costs represent office supplies and expenses of NDS which are included in our consolidated financial statements following the acquisition date.

For the nine months ended September 30, 2008, the Company’s selling, general, and administrative expenses were $233,767, compared to $138,014 for the nine months ended September 30, 2007, representing an increase of $95,753, or approximately 69.4%.  This increase is due to the increase in personnel costs of $38,245, legal and accounting expenses of $14,393, marketing of $5,144, consulting of $32,500, and other selling, general and administrative costs of $5,471.  Personnel costs increased as a result of consolidating the costs of NDS staff which was partially offset by decreases in our ACH staff earlier in 2008 prior to when we obtained additional ACH processing personnel.  Legal and accounting expenses increased in conjunction with non-capitalized costs associated with our acquisition of NDS together with costs incurred earlier in 2008 while conducting our search and preliminary efforts to find a suitable acquisition.  Increases in marketing expenses related to the consolidation during the current quarter of NDS expenses into our financial statements.  Increases in consulting reflect the utilization of professional consultants at the beginning of the year which were discontinued by the second calendar quarter of 2008.  The increases in other selling, general and administrative expenses represent increases in office supplies and expenses related to the consolidation of NDS expenses into our financial statements.

Net income for the three months ended September 30, 2008, was $25,824 compared to $12,088 for the three months ended September 30, 2007, representing an increase of $13,736, or approximately 113.6%.  For the nine months ended September 30, 2008, our net income was $34,944 compared to $20,137 for the nine months ended September 30, 2007, representing an increase of $14,807, or approximately 73.5%.  The results for the three months ended September 30, 2007, reflect the net positive effect from the acquisition of NDS, together with improvements we made within our ACH processing business related to eliminating marginally profitable accounts earlier in the year.

The results for the nine months ended September 30, 2008, reflect the overall improvement in revenues and the resulting net income as a result of our acquisition of NDS together with improvements made in our ACH processing business with respect to eliminating marginal accounts.  These improvements were partially offset by approximately $39,000 of costs for consultants during the first half of 2008 in our efforts to obtain either suitable processing payment portfolios or acquisitions.  These costs were not critical to our ongoing operations and are not of a recurring nature.

Liquidity and Capital Resources

Per the Company’s Consolidated Statements of Cash Flows, net cash provided by operating activities for the nine months ended September 30, 2008, was $122,487, compared to $29,096 for the nine months ended September 30, 2007, or an increase of $93,391.  This increase is mostly due to the increase in net income of $14,807, together with various adjustments necessary to reconcile net income to net cash used in operations for each of the respective periods reported.

For the nine months ended September 30, 2008, adjustments that increased our net income of $34,944 included depreciation and amortization expense of $64,555, together with decreases in trade receivables of $16,872, prepaid expenses of $6,792, prepaid interest of $10,000 and  increases in customer deposits of $42,502.  These increases to net income were offset by adjustments that reduced net income such as the decrease in accounts payable and accrued

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liabilities of $9,981.  The adjustments for depreciation and amortization included $42,018 of amortization expense related the acquisition of NDS and purchase of the portfolio asset previously described.  The decrease in trade receivables related to improvements made in our ACH business related to marginal accounts.  The decrease in prepaid expenses related mostly to prepaid insurance.  The decrease in prepaid interest related to recognition of certain interest costs that are amortized over the term of one of the credit facilities we obtained and utilized to finance the acquisition of NDS and the portfolio asset purchase.  The reduction in accounts payable and accrued liabilities was related to a change in the way we paid some of our vendors which reduced turnaround time with these payments.

For the nine months ended September 30, 2007, adjustments increasing our net income of $20,137 included depreciation expense of $20,836, the decrease in trade receivables of $23,430, offset by adjustments that decreased our net income, such as the increase in prepaid expenses of $6,466, and the decrease in accounts payable and accrued liabilities of $28,841.  The increase in prepaid expenses related mostly to prepaid insurance.  The reductions in accounts payable and accrued liabilities relate mostly to payments for income taxes.

Net Cash used in investing activities was $2,603,410 for the nine months ended September 30, 2008, compared to $70,489 for the nine months ended September 30, 2007.  Cash used in investing activities for the nine months ended September 30, 2008, consisted primarily of cash used in the acquisition of NDS and the portfolio asset purchase as previously described, together with the acquisition of property and equipment as part of our continued improvements to our computer workstations and software systems related to our ACH processing business.  Cash used in investing activities for the nine months ended September 30, 2007, consisted primarily of deposits we maintain at certain banks in conjunction with our ACH processing business, together with acquisitions of property and equipment representing the improvements we made to our workstations and ACH processing hardware and software during the prior year.

Net Cash provided by financing activities was $2,555,000 for the nine months ended September 30, 2008, representing proceeds from notes payable we utilized to finance the acquisition of NDS and the portfolio asset purchase previously described.  Net Cash used in financing activities was $46,000 for the nine months ended September 30, 2007, representing principal payments made on notes payable to the majority shareholders.

As described in Note A of our financial statements included in this report, and in our Form 10-KSB for the year ended December 31, 2007, on July 14, 2004, United executed a Contribution Agreement to effect a reverse acquisition with Riverbend Telecom, Inc., a reporting company under the Securities and Exchange Act of 1934, for the purpose of becoming a public company to enhance the planned expansion of our operations.  On this date, the members of United agreed to take a distribution for the amount of undistributed earnings accumulated by us through July 14, 2004, which amounted to $156,000.  In order to ease our cash flow requirements, the members agreed to accept a note for the amount of the distribution.  The amount of the distribution was combined with the amount of advances due to the members of $100,000, and notes payable due to the members for the total amount of $256,000 were established.  The notes required monthly interest-only payments at an annual percentage rate of 10% and were due on demand.  On August 20, 2008, the remaining principal balance on these notes totaling $70,000 was repaid.

On September 4, 2008, and September 8, 2008, the Company entered into two new notes payable with two existing shareholders of the Company for a total principal amount of $70,000.  The notes provide for interest only payments at a rate of 10% per annum payable monthly thereafter, with the entire principal balances due and payable two years from inception of the notes.

As described in Note B of our financial statements included with this report, the Company entered into two significant transactions, the acquisition of NDS and the asset purchase of a portfolio of credit card services accounts, which were completed on August 22, 2008, and September 17, 2008, respectively.  The cash portion of the purchase of NDS was $320,000 and the cash portion of the asset portfolio purchase was $2,275,000.  The cash portion of these transactions was partially financed with a $500,000 credit facility the Company established with one of its existing shareholders, together with a credit facility of $2,128,500 established with Thermo Credit LLC.  As of September 30, 2008, the outstanding balance of these credit facilities was $426,500, and $2,128,500, respectively.

To date the Company has financed its capital expenditure needs from cash flows generated from its operations.  At this time, management believes it has sufficient operations and existing non-restricted cash to fund its needs for the next twelve months.

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Our future expansion is planned from two sources.  First, we plan to continue to expand our use of independent sales organizations (ISO’s) to assist in the growth of our ACH, credit card, and verification service businesses through our newly acquired subsidiary NDS.  We have and plan to continue to structure the sales compensation plans offered by NDS based mostly on commissions, and employ the use of independent sales representatives already engaged in selling financial products and/or services that are complementary to payment services.  Accordingly, we believe we can continue to expand our sales activities from our internally generated cash flow.

Second, we believe we will continue to expand future operations through acquisitions of companies and/or account portfolios which are accretive to our current earnings.  Going forward, we expect our public company status to enhance our ability to attract qualified personnel, obtain additional working capital, and facilitate acquisitions more effectively than could be accomplished by remaining a private, closely-held entity.

As disclosed in Note G of our financial statements included with this report, we have disclosed certain concentrations with significant customers.  During the three months and nine months ended September 30, 2008, the Company had transactions with one customer that amounted to approximately 21.8% and 33.5%, respectively, of the Company’s revenue.  This customer was not affiliated with the Company through common ownership.

Recent General Economic Conditions

In light of the recent slowdown in the economy and challenges within the financial sector and credit markets it has become more difficult for many companies to evaluate their future operations.  Although we were able to complete our recent financing transactions which facilitated the acquisition of NDS on August 22, 2008, and the purchase of the portfolio asset on September 17, 2008, we believe that access to future financing may become more difficult until such time as general economic conditions improve.  At this time we have not experienced any material negative impact from recent economic conditions, but we believe it is reasonable to expect that our payment processing business, both for ACH and for credit card transactions could be negatively impacted by these conditions.  Accordingly, we believe that the following factors should be taken into consideration:

· We may experience reductions in the amount of payments we process for merchants as a result of a downturn in consumer activity and consumer confidence.

· We may be negatively impacted in our credit card processing business if consumers are unable to maintain existing credit card limits or have credit card services terminated.

· We may experience difficulties in maintaining or re-financing our existing credit facilities at either equivalent or more favorable rates.

· New sources of borrowed capital may become more expensive or unavailable which may inhibit our ability to grow.

· Competition may become more intense and we may be required to reduce pricing to maintain the business we have and/or to obtain new business through our existing sales force.

Inflation

Inflation has not had a material effect on the operations of the Company in the past.  At the present time there is a substantial doubt that such conditions will adversely affect the Company for the foreseeable future.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company, the Company is not required to provide the information required by this Item.

ITEM 4(T). CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Management is responsible for maintaining effective disclosure controls and procedures.  As of the end of the period covered by this Quarterly Report on Form 10-Q, management evaluated the effectiveness and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)).  Based on that evaluation, both the Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in reports that are filed or submitted under the Exchange Act are recorded, processed, summarized and reported to management within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in internal controls over financial reporting during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

We are not engaged in any material legal proceedings which involve us, any of our subsidiaries or any of our properties.

ITEM 1A.  RISK FACTORS.

As a smaller reporting company, the Company is not required to provide the information required by this Item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the quarter ended September 30, 2008, we did not have any sales of securities in transactions that were not registered under the Securities Act of 1933, as amended, that have not been reported in a Form 8-K.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES.

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS.

3.1	First Amended Bylaws of United eSystems, Inc. (incorporated by reference to Exhibit 3.1 to our Form 8-K filed on October 14, 2008).
10.1	United eSystems, Inc. 2008 Incentive Stock Plan.*
10.2	NetCom Data Southern Corp. Share Purchase Agreement dated August 22, 2008 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on August 28, 2008).
10.3	Robert J. Sorrentino Secured Promissory Note dated August 22, 2008 (incorporated by reference to Exhibit 10.2 to our Form 8-K filed on August 28, 2008).
10.4	Robert J. Sorrentino Security Agreement dated August 22, 2008 (incorporated by reference to Exhibit 10.3 to our Form 8-K filed on August 22, 2008).
10.5	Purchase Agreement dated September 17, 2008 between Netcom Data Corp. and Net Com Data Corp of N.Y. and American Timeshare Associates, Inc. (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on September 23, 2008).
10.6	Promissory Note dated September 17, 2008 issued to Thermo Credit, LLC. (incorporated by reference to Exhibit 10.2 to our Form 8-K filed on September 23, 2008).
10.7	Loan, Pledge, and Security Agreement dated September 17, 2008 by and among Thermo Credit, LLC and United eSystems, Inc., Netcom Data Southern Corp., Netcom Data Corp. and United Check Services, L.L.C. (incorporated by reference to Exhibit 10.3 to our Form 8-K filed on September 23, 2008).
10.8	Subordination Agreement dated September 17, 2008 by and among Robert Sorrentino, Thermo Credit, LLC and United eSystems, Inc., Netcom Data Southern Corp, Netcom Data Corp. and United Check Services, L.L.C. (incorporated by reference to Exhibit 10.4 to our Form 8-K filed on September 23, 2008).
10.9	Pledge and Control Agreement dated September 17, 2008 by and among Thermo Credit, LLC and Leon Nowalsky and Robert Sorrentino (incorporated by reference to Exhibit 10.5 to our Form 8-K filed on September 23, 2008).

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10.10	Service Agreement dated July 31, 2008 between LaSalle Bank, N.A. and Netcom Data Corp. (incorporated by reference to Exhibit 10.6 to our Form 8-K filed on September 23, 2008).
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.*
32.1	Certification pursuant to Rule 13a-14(b) of the Securities Exchange Act and 18 U.S.C. §1350.*

_______________

* Filed herewith.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED ESYSTEMS, INC.
Date:   November 14, 2008	By: /s/ Walter Reid Green, Jr.
	Walter Reid Green, Jr.
	Chief Executive Officer, President and       Chief Financial Officer
	(Principal Executive Officer and Principal Financial Officer)

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