Mr. Benjamin continued, "While the economic environment has been challenging, we believe there is strong demand for our services and solutions as healthcare providers search for ways to reduce administrative and patient care costs. We continue to experience increased customer inquiries for our solutions and have been successful in converting several of these inquires into new projects. We believe that we are making strides in the telehealth arena and we have made a positive impact in awareness of our solutions given the rise in inquiries received in recent months. We continue to monitor significant opportunities in our marketplace and will update shareholders as they develop. In the interim, we believe we are well positioned for the remainder of fiscal 2011 and, while no assurances can be given, we believe we have sufficient working capital and available resources to fund our operations for the next 12 months as we focus on our various growth opportunities for our Inscrybe® Healthcare, hospital discharge and ExpressMD products and services."

Total revenue for the three months ended December 31, 2010 was approximately $1,578,000 compared to $1,528,000 for the same period last year. These results reflect an increase of approximately 12% in U.S. revenues from increases in transaction volumes and new customer projects which was partially offset by a decrease in revenues from our German operations due primarily to the timing of certain contract awards and project implementations and, to a lesser extent, a shift to more transaction-based software-as-a-service projects. Compared to the first quarter of fiscal 2011, total revenue increased approximately 16% reflecting higher revenues in both the U.S. and Germany for the current period.

Net loss for the second quarter of fiscal 2011, including a non-cash goodwill impairment charge of $5,400,000 related to our German operations, increased to $7,275,000, or $0.16 per share, compared to $2,819,000, or $0.08 per share, for the prior year period. The net loss for the period reflects higher U.S. revenues and lower expenses from our cost management activities, which were offset by the goodwill impairment charge and lower revenues from our German operations. The prior year period included a non-cash expense of $533,000 to amortize deferred financing costs.

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