According to the U.S. Centers for Medicare & Medicaid Services, or CMS, spending on healthcare in the United States was estimated to be $2.1 trillion in 2006, or 16% of United States Gross Domestic Product, or GDP. Healthcare spending is projected to grow at a rate of 6.9% per annum, and reach over $4.1 trillion by 2016, or 19.6% of GDP. In 2006, spending on hospital care was estimated to be $650 billion, representing the single largest component, or 31% of the $2.1 trillion in total health expenditures. The U.S. healthcare market has approximately 5,700 acute care hospitals, of which approximately 2,700 are part of health systems.

A health system is a healthcare provider with a range of facilities and services designed to deliver care more efficiently and to compete more effectively to increase market share. Health systems account for nearly two-thirds of short-term beds, admissions and total surgeries. The non-acute care market consists of over 500,000 healthcare facilities and providers, including outpatient medical centers and surgery centers, medical and diagnostic laboratories, imaging and diagnostic centers, home healthcare service providers, long term care providers, and physician practices.

In 2005, community hospitals had a shortfall of $15.5 billion and $9.8 billion relative to the cost of providing care to Medicare and Medicaid beneficiaries, respectively, according to the American Hospital Association. Furthermore, according to the U.S. Census Bureau, there are presently approximately 37.2 million Americans aged 65 or older in the U.S., comprising approximately 12% of the total U.S. population. By the year 2030, the number of this Medicare-eligible population is expected to climb to 71.5 million, or 20% of the total population. This demographic trend, combined with a declining number of workers per Medicare beneficiary is expected to result in significant Medicare budgetary pressures leading to increasing reimbursement shortfalls for hospitals relative to the cost of providing care.

The Company’s Revenue Cycle Management segment provides a comprehensive suite of products and services that span what has traditionally been viewed as the hospital revenue cycle. Progressing from a traditional revenue cycle solution, the Company has expanded the scope of revenue cycle to include clinical administrative functions.

The Company’s data management and compliance tools are an integral part of its revenue cycle management solutions. These tools provide the analytics and processes necessary to enable hospitals to make data-driven pricing decisions.

The Company’s business intelligence and decision support software provides customers with an integrated suite of tools designed to facilitate hospital decision-making by integrating clinical, financial and operational information into a common data set for accuracy and ease of use across the organization.

The Company’s Spend Management segment helps the customers manage their non-labor expense categories through a combination of group purchasing, performance improvement consulting, including PPI cost and utilization management and service line consulting, and business intelligence tools.

The cornerstone of the Company’s spend management solutions is its group purchasing organization, which utilizes a national contract portfolio consisting of over 1,300 contracts with more than 1,000 manufacturers, distributors and other vendors, a custom and local contracting function and aggregated group buys, to efficiently connect manufacturers, distributors and other vendors with the Company’s healthcare provider customers.

The Company’s management consulting services use a combination of data and performance analysis, demonstrated best practices and experienced consultants to reduce clinical costs and increase operational efficiency.

The Company’s data management and business intelligence tools are an integral part of its spend management solutions. These tools provide transparency into expenses, identify performance deficiencies and areas for operational improvement, and allow for monitoring and measuring results.

Cost of revenue for the six months ended June 30, 2007 was $9.0 million, or 10.6% of total revenue, an increase of $2.1 million, or 30.2%, from cost of revenue of $6.9 million, or 9.7% of total revenue, for the six months ended June 30, 2006.

Product development expenses for the six months ended June 30, 2007 were $3.7 million, or 4.3% of total revenue, a decrease of $0.1 million, or 2.0%, from product development expenses of $3.8 million, or 5.2% of total revenue, for the six months ended June 30, 2006.

Selling and marketing expenses for the six months ended June 30, 2007 were $18.7 million, or 21.9% of total revenue, an increase of $2.6 million, or 16.1%, from selling and marketing expenses of $16.1 million, or 22.4% of total revenue, for the six months ended June 30, 2006.

Interest expense for the six months ended June 30, 2007 was $7.4 million, an increase of $2.7 million, or 57.0%, from interest expense of $4.7 million for the six months ended June 30, 2006.