Trading Update - September 2008

CashFac reports another good trading year with service contract revenues increasing by over 50% as at September 2008.

More banks than ever are now marketing CashFac Virtual Bank Technology as we begin to extend our partnering programme into Europe. Our bank partners include the top 4 British clearing banks which have marketing licences to distribute VBT in successful deposit generating strategies. We signed up more of the leading businesses in our target markets.

All trading signals continue to be positive for CashFac with turnover ahead, continuing positive cash flow, more cash in the bank and no debt, and ongoing service contract revenues increasing more than 50%. This service contract income, which does not include any consultancy, covered 67% of our ongoing operating costs at year end.

Staff numbers increased in all areas excepting administration. There has been a particular focus on increasing team strength in customer service areas.

CashFac expanded its product investment programme funded fully through operating cash flows. We spend over 20% of gross revenues on R&D which is fully expensed as incurred.

We invested more in CashFac Managed Services in Scotland where our product investment achieved more technology breakthroughs in the virtualization of banking and in the launch of A2Pay as a shared payment and reconciliation platform for corporate payers and payees including payment aggregation and Predictive Reconciliation® for the payee.

We doubled our spend on sales and marketing.

The outlook as at October 2008 continues to be positive as we work with our partner banks to help corporate customers to manage client money and as we help our partner banks to increase their stable deposit base.