Critical Accounting Policies and Procedures The Company believes its critical accounting policies (see Note 1 to the consolidated financial statements) are revenue recognition, software development costs, accounting for research and development expenses, accounting for convertible securities with beneficial conversion features and share based payments under accounting principles generally accepted in the United States and that they are adhered to in the accompanying consolidated financial statements.

Revenue Recognition
The Company's primary revenue is derived by delivering software as a service, or hosted solutions for its clients. Revenue derived from the sale of these services are billed monthly or quarterly and is recognized in accordance with Statement of Position 97-2 (as amended), Software Revenue Recognition, over the term of the agreement . The Company bills for its service in advance; payments from customers received in advance of the month of usage are reflected as deferred revenue until the month of usage, when they are recognized as earned revenue. In addition to the software license revenue the company derives revenue from professional services fees associated with custom software development and project management services it provides to customers.

Software Development Costs
The Company capitalizes internally generated software development costs in accordance with Statement of Financial Accounting Standards ("SFAS") No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed. Capitalization of software development costs begins when a product's technological feasibility is established. Costs incurred for research and development of products where technological feasibility has not yet been established are expensed as incurred. Costs eligible for capitalization have been immaterial for the periods presented.

Receivables
Receivables consist of amounts due to the Company from normal business activities generated from contracts with its clients for the use of its software. Customers are invoiced in the month preceding the use of the service. Many of the Company's customers remit payment for the subsequent month's services during the month billed for the use of the software. The collected funds are recognized as deferred revenue in the Company's financial statements until the actual month of service at which time they are classified as revenue. Accounts receivable thus include only funds due from customers who have not paid for the monthly service provided.

Insurance
The Company carries Directors and Officers Liability insurance, comprehensive liability insurance on its assets both at its main offices and at the data hosting service center and mandatory worker compensation on its employees.

Results of Operations - Fiscal Year Ended June 30, 2009 compared to Fiscal Year Ended June 30, 2008

Revenues: The Company's primary revenues are derived by delivering software as a service, or hosted solutions for its clients billed on a monthly basis for each location serviced or from solutions developed at specific customer's requests. Customers are billed on a monthly basis for each location serviced or at a project's completion. For the year ended June 30, 2009, the Company generated $1,978,231 in revenues compared to $1,457,884 in the prior year. This increase in revenues is primarily attributable to the licensing of the Company's solutions by additional customers, an additional license fee with a major customer and professional service fees.

In 2008 and 2007, the Company had received payments under contracts for the development of two of its solutions, subject to a multi-year licensing agreement, that is recognized under Statement of Position 97-2 (as amended), Software Revenue Recognition, over the term of the licensing fee agreement. The Company recognized $84,000 in 2009 and $40,000 in 2008, respectively, under the terms of these multi-year licensing agreements.

Cost of Revenues: The costs for the year ended June 30, 2009 were $561,531 compared to $534,562 in the prior year. Excluding the non-cash compensation in 2008 of $47,474 under SFAS 123R, Share-Based Payments, our costs for personnel, related payroll costs and technical support to our customers increased by $70,200 due to one additional support person, increased salary rates and a greater allocation of time from existing personnel to this category. The other major increased expense was license fees that were attributable to our increased revenues under our license agreements in the amount of $9,300 that was offset by the reduction of our data hosting center and telecommunication expenses in the amount of $10,800. All of the other operational costs minimally increased by approximately $5,800 as management continue to maximize its operating efficiencies.

Research and Development: Research and development costs are charged to operations as incurred and consist primarily of personnel and related benefit costs. The costs for the year ended June 30, 2009 of $541,856 compared to $777,034 in the prior year. Excluding the non-cash compensation in 2008 of $329,168, under SFAS 123R, Share-Based Payments, our costs for personnel, related payroll costs and technical support to our customers increased by approximately $41,200 due to increased salary rates, a greater allocation of time from existing personnel to this category. In 2009, the Company increased outside contractor use in the amount of $49,400 to assist in the integration of various systems with our business intelligence solution for new franchise operations. Other costs increased by approximately $3,400. The Company's research and development is part of its strategic plan to provide enhancements to its existing software and integration into new franchise operations in the hospitality market.

Marketing and Selling: The costs for the year ended June 30, 2009 were $339,434 compared to $478,954 in the prior year. Excluding the non-cash compensation in 2008 of $154,415, under SFAS 123R, Share-Based Payments, our costs for personnel, related payroll costs and technical support to our customers increased by approximately $19,000 due to increased salary rates, and an increased allocation of time from existing personnel to this category. The Company incurred increased costs for marketing materials and other sales related costs approximating $10,500, offset by a reduction in trade show expenses of $14,700. In 2010, the Company expects to continue to expand its customer base through trade shows, direct sales and referrals from its relationship with existing clients.

General and Administrative: The Company's general and administrative costs consist primarily of executive salaries and related benefits, professional fees for attorneys, independent auditor, rent, expenses related to being a public company and other operating costs. The costs for the year ended June 30, 2009 were $430,924 compared to $806,740 in the prior year. Excluding the non-cash compensation in 2008 of $384,154, under SFAS 123R, Share-Based Payments, our costs for personnel, related payroll costs and technical support to our customers increased by approximately $19,500 due to increased salary rates, offset by a decreased allocation of time from existing personnel to this category. The Company incurred increased occupancy and administrative costs at it new location of $34,100 offset by reduced professional fees and insurance cost of $45,300.

Interest Expense: Interest expense consists of the following:

Fiscal Year Ended June 30,                                             2009               2008
Accrued interest on convertible debentures                     $       65,794     $       65,305
Amortization of the discount of the beneficial conversion
feature in the convertible debentures                                   2,500             52,010
Accrued interest on loan payable                                        7,000              7,000
Interest incurred from the deferred credits issued to
consortium members                                                      9,342              9,974
Insurance finance costs                                                    81                580
Interest income earned on cash and cash equivalents                    (2,970 )           (5,291 )
Net interest expense                                           $       81,747     $      129,578

Actual cash paid for interest during the fiscal years ended June 30, 2009 and 2008 was $50,081 and $35,656, respectively.

Net Profit (Loss): The net profit for the year ended June 30, 2009 was $786,508 compared to a net loss of ($1,268,984) in the prior year. The increase was primarily attributable to the reduction in the debt obligation of $763,769 that was previously expensed in prior years. The Company reached its first profitable year from operations due to increased revenues resulting from the delivery of our business intelligence software to an increased number of customer's stores, licensed its new Profit and Loss Benchmarking Solution, increased its revenue from professional services and other fees and maintained its operating and interest costs as discussed above. The prior year's operating loss included a non-cash compensation expense under SFAS 123R, Share-Based Payments of $915,191 that did not have a comparable item in the current year.

Liquidity and Capital Resources

General
The Company believes it will continue its profitable operating results in 2010. While the Company continues developing a significant pipeline of business opportunities that include multi-unit, full service and casual dining restaurants within the hospitality industry and did achieve the opportunities identified in last year's pipeline, there can be no assurances that this year's results will be indicative of future results.

In October 2008, the Company entered into an agreement with its patent counsel to settle its obligation for their professional services that included an issuance of one million shares of XFMY's common stock, cash payments that extend over 48 months and additional debt reduction payments upon the Company achieving certain revenue targets. In the current year, the Company did not achieve the initial target and thus reduced the maximum payout value to $815,000 in full settlement of the Company's obligation of approximately $1,579,000. Due to its debt service requirement reached with this creditor and the payment of interest on the debentures, the Company did not achieve positive cash flow this past year. As of June 30 2009, there was an accumulated deficit of $8,740,761 and the Company's cash position was $14,262.

The Company may need additional financing and there is no assurance that such financing will be available, if at all, at terms acceptable to the Company. If additional funds are raised by the issuance of debt or equity securities, stockholders may experience dilution of their ownership interest and these securities may have rights senior to those of holders of the common stock. If adequate funds are not available or not available on acceptable terms, it could have a material adverse effect on the Company's financial condition and results of operation.

Finance
The Company continues to review capitalization alternatives, including various debt and equity instruments. The Company may need to raise between $1,000,000 and $5,000,000 in new capital over the next 12 months. The use of funds includes operating capital for general corporate purposes, expansion of the sales, marketing and software development staff, equipment and a strengthened balance sheet. If additional funds are raised by the issuance of debt or equity securities, stockholders may experience dilution of their ownership interest and these securities may have rights senior to those of holders of the common stock. As of the date of this Report, there are no agreements, commitments or arrangements for any future financing, and no assurance can be given that future financing can be achieved.

Legal Issues
There are no material legal proceedings that management is aware of that affect the Company.

Convertible Debentures
Under the revised term sheet, the Company may still issue an additional $176,865 of its 9% convertible debentures to accredited investors to be used as working capital. See the provisions of these debentures in Item 9 of the Consolidated Financial Statement.

Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Tabular Disclosure of Contractual Obligations

                       Payments due by period

                                                   Less                                                   More Than
                                   Total           Than 1 Year       1 - 3 Years        3 - 5 Years       5Years
Contractual Obligations
 Long-Term Debt Obligations
  Debt Reduction Agreement         $   585,000     $    120,000     $      465,000     $            -     $         -
  Note Payable                         118,667                -            118,667                  -               -
  Convertible Debentures               733,635          733,635                  -                  -               -
 Operating Lease Obligations
  Lease on Dallas, TX office           237,875           53,426            169,776             14,673               -
  Lease on Northbrook, IL office         5,200            5,200                  -                  -               -
 Other long-Term Liabilities
  Deferred Revenues                    183,116          119,671             63,445                  -               -
  Deferred Credits                     176,326           14,462             47,979             55,727          58,158

Total                              $ 2,039,819     $  1,046,394     $      864,867     $       70,400     $    58,158