Exhibit 99.1

SAJAN, INC., SUBSIDIARIES AND AFFILIATE (RIVER VALLEY BUSINESS CENTER, LLC)

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED
DECEMBER 31, 2009 AND 2008

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders, Audit Committee and Board of Directors
Sajan, Inc.
River Falls, WI

We have audited the accompanying consolidated balance sheets of Sajan, Inc., Subsidiaries and Affiliate (River Valley Business Center, LLC) as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of its internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sajan, Inc., Subsidiaries and Affiliate (River Valley Business Center, LLC) as of December 31, 2009 and 2008 and the results of their operations and cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 14 of the consolidated financial statements, the Company has restated its consolidated balance sheet as of December 31, 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2008.

/s/ Baker Tilly Virchow Krause, LLP

Minneapolis, Minnesota
February 23, 2010

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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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NATURE OF BUSINESS

Sajan, Inc. originally organized as a Wisconsin corporation in March 1998 and reorganized as a Minnesota corporation in October 2001. Sajan, Inc. (the Company or Sajan) provides language translation and technology solutions to companies located throughout the world, particularly in the technology, consumer products, medical and life sciences, financial services, manufacturing, government, and retail industries that are selling products into global markets. The Company is located in River Falls, Wisconsin.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Sajan, Inc. and its wholly-owned subsidiary, Sajan Software Ltd, and majority-owned subsidiary (94% ownership), Sajan India Software Private Ltd, from the effective date of their acquisition or formation during 2009. The non-controlling interest in subsidiary on the consolidated balance sheets and consolidated statements of operations represents the 6% of Sajan India Software Private Ltd held by third parties. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

River Valley Business Center, LLC (River Valley), is a limited liability company that owns real estate leased to Sajan, Inc. River Valley is owned by Shannon Zimmerman and Angela Zimmerman, each of whom is an executive officer and director of the Company, and who collectively own a majority of the Company’s outstanding voting common stock. Due to the lease between the related parties and Sajan being the primary beneficiary of River Valley, the financial statements include both Sajan and subsidiaries and River Valley. The accompanying consolidated financial statements are consolidated based on a requirement for variable interest entities to be consolidated by their primary beneficiary when certain circumstances exist. The primary beneficiary is the entity that holds the majority of the beneficial interests in the variable interest entity (VIE). A VIE is a legal entity used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. At December 31, 2009 and 2008, Sajan was the primary beneficiary of River Valley, requiring consolidation with the Company. All significant intercompany accounts and transactions have been eliminated in the consolidation.

ACCOUNTS RECEIVABLE

The Company extends unsecured credit to customers in the normal course of business. The Company provides an allowance for doubtful accounts when appropriate, the amount of which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions, on an individual customer basis. Normal accounts receivable are due 30 days after issuance of the invoice. Receivables are written off only after all collection attempts have failed, and are based on individual credit evaluation and specific circumstances of the customer. Accounts receivable have been reduced by an allowance for uncollectible accounts of approximately $10,000 at both December 31, 2009 and 2008. Management believes all accounts receivables in excess of the allowance are fully collectible. The Company does not accrue interest on accounts receivable.

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PROPERTY AND EQUIPMENT

Property and equipment are stated at costs and are comprised of furniture and office equipment, computer software and equipment, vehicles, and leasehold improvements. Depreciation is computed using the straight-line method over the remaining useful lives of those assets ranging from three to seven years, including assets acquired by capital leases. Building and building improvements are stated at costs and are depreciated over their estimated useful lives using the straight-line method ranging from five to thirty-nine years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Repairs and maintenance costs are charged to expense when incurred.

The Company reviews its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future net cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

INTANGIBLE ASSETS

Intangible assets at December 31, 2009 and 2008 consist of capitalized payments for licensing costs, net of amortization and potential patent rights. The Company has filed a patent application covering a number of components that make up the GCMS solution suite and tools that create value in the pre-translation process of authoring or content creation. If obtained, the Company will begin amortizing the patent costs of $20,520 over the term of the patent.

Components of intangible assets are as follows at December 31:

Amortization of intangibles was $130,371 and $34,073 for the years ended December 31, 2009 and 2008, respectively. Estimated amortization expense of intangible assets for the years ending December 31, 2010, 2011, and 2012 is $154,191, $126,952, and $35,320, respectively. The weighted average remaining life of the intangibles is 2 years. The Company amortizes the software licenses over their estimated useful lives of 36 months.

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OTHER ASSETS

Other assets include debt issuance costs of $28,550, which are being amortized over the life of the corresponding note payables of 240 months using the straight-line method, which approximates the interest method. Amortization expense of $952 for both of the years ended December 31, 2009 and 2008 is included in interest expense on the consolidated statements of operations.

INCOME (LOSS) PER COMMON SHARE

Basic earnings per share is computed based on the weighted average number of common shares outstanding. Diluted earnings per share is computed based on the weighted average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive shares of common stock include unexercised stock options and warrants. Basic per share amounts are computed, generally, by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted per share amounts assume the conversion, exercise or issuance of all potential common stock instruments unless their effect is anti-dilutive, thereby reducing the loss or increasing the income per common share. In calculating diluted weighted average shares and per share amounts, we included stock options (see Note 10) with exercise prices below average market prices, for the respective fiscal years in which they were dilutive, using the treasury stock method. The Company calculated the number of additional shares by assuming the outstanding stock options were exercised and that the proceeds from such exercises were used to acquire common stock at the average market price during the year. As of December 31, 2009 and 2008, we excluded options to purchase 945,000 shares and warrants to purchase 415,250 shares from the diluted weighted average share outstanding calculation as the effect of these options is anti-dilutive. The effect of all options and warrants outstanding during the year ended December 31, 2009 was anti-dilutive.

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A reconciliation of the denominator in the basic and diluted income or loss per share is as follows:

CAPITALIZED SOFTWARE DEVELOPMENT COSTS

Sajan capitalizes software costs incurred during the application development stage for software that is internally developed solely to meet the entity’s internal needs and when no substantive plans exist or are being developed to market the software externally. Costs capitalized include external direct costs of materials and services and internal payroll and payroll-related costs. Any costs during the preliminary project stage or related to training or maintenance are expensed as incurred. Capitalization ceases when the software project is substantially complete and ready for its intended use. The capitalization and ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life.

When the projects are ready for their intended use, the Company amortizes such costs over their estimated useful lives of three years. Costs capitalized were $566,961 and $590,441 for the years ended December 31, 2009 and December 31, 2008, respectively. Amortization expense on software development costs were $531,626 and $390,689 for the years ended December 31, 2009 and 2008, respectively. Estimated amortization expense for capitalized software costs are $478,062, $306,396, and $92,659 for the years ending December 31, 2010, 2011, and 2012, respectively.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred. Research and development costs include costs expensed related to software projects with the intent to sell or market where technological feasibility has not been established.

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The Company measures and recognizes compensation expense for all stock-based compensation at fair value. The Company recognizes stock-based compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. For the years ended December 31, 2009 and 2008, total stock-based compensation expense was $112,414 ($0.02 per share) and $36,500 ($0.01 per share), respectively. As of December 31, 2009, there was $403,786 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Company’s 2001 Stock Option Plan. That cost is expected to be recognized over a weighted-average period of four years. This is an estimate based on options currently outstanding, and therefore this projected expense could be more in the future.

The Company’s determination of fair value of share-based compensation awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of variables. These variables include, but are not limited to, the Company’s expected stock price volatility, and actual and projected stock option exercise behaviors and forfeitures. An option’s expected term is the estimated period between the grant date and the exercise date of the option. As the expected term increases, the fair value of the option and the compensation cost will also increase. The expected-term assumption is generally calculated using historical stock option exercise data. The Company does not have historical exercise data to develop such an assumption. In cases where companies do not have historical data and where the options meet certain criteria, SEC Staff Accounting Bulletin 107 (“SAB 107”) provides the use of a simplified expected-term calculation. Accordingly, the Company calculated the expected terms using the SAB 107 simplified method.

The Company calculates expected volatility for stock options and awards using an industry index and comparable companies, as the Company does not have sufficient information to utilize a historical volatility. The Company considers the Dow Jones software and computer services small cap technology index to be representative of the Company’s size and industry and has used the historical closing total return values of that index for the three years prior to the date of grant to estimate volatility. Management expects and estimates that substantially all employee stock options will vest, and therefore the forfeiture rate used was zero.

The risk-free rates for the expected terms of the stock options are based on the U.S. Treasury yield curve in effect at the time of grant.

In determining the compensation cost of the options granted during 2009 and 2008, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model, and the weighted average assumptions used in these calculations are summarized as follows:

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Using the Black-Scholes option pricing model, management has determined that the options and warrants issued in 2009 and 2008 have a weighted-average grant date fair value of $0.84 and $0.45 per share, respectively.

REVENUE RECOGNITION

The Company recognizes revenue as services are performed and amounts are earned. Sajan considers amounts to be earned when (1) persuasive evidence of an arrangement has been obtained; (2) services are delivered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of those fees.

Sajan’s agreements with its customers may informally provide the customer with a limited time period following delivery during which the Company will attempt to address any non-conformity to previously agreed upon objective specifications relating to the work. Revenue is recognized as services are delivered in accordance with the terms of the agreement with the customer, are not contingent, and are earned.

Management believes recognition of revenue at the time services are delivered is appropriate because its obligations under such provisions are limited in time, limited in scope, and historically have not involved significant costs. For the year ended December 31, 2009, the Company has had minimal revenues related to the sales of licenses.

Revenues recognized in excess of billings are recorded as unbilled services. Billings in excess of revenues recognized are recorded as deferred revenues until revenue recognition criteria are met.

COST OF REVENUES

Cost of revenues, excluding depreciation and amortization of $943,318 and $678,011 which is included in general and administrative expenses, for the years ended December 31, 2009 and 2008, respectively, consists primarily of expenses incurred for translation services provided by third parties as well as salaries and associated employee benefits for personnel related to client projects.

ADVERTISING COSTS

The majority of advertising costs are included in sales and marketing expenses and are expensed as incurred. Advertising costs totaled $59,189 and $55,645 for the years ended December 31, 2009 and 2008, respectively.

FOREIGN CURRENCY TRANSLATION

The functional currency for payment of accounts receivable for certain of the Company’s foreign customers is the local currency of the country in which the customer’s operations are based. Realized foreign currency translations gains or losses arising from exchange rate fluctuations on balances denominated in foreign currencies and unrealized foreign currency transaction gains or losses relating to accounts receivable balances were not material for the years ended December 31, 2009 and 2008.  Foreign assets and liabilities are translated using the year end exchange rates. Results of operations are

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translated using average rates throughout the year. Translation gains and losses are accumulated as a separate component of equity.

INCOME TAX

Current income taxes are recorded based on statutory obligations for the current operating period for the various countries in which the Company has operations.

Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

River Valley is a limited liability company, which provides that, in lieu of corporate income taxes, the members will separately account for their pro rata shares of River Valley’s income, losses, deductions and credits. Accordingly, there is no provision for River Valley for federal or Wisconsin income taxes.

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 and disclosure of contingent 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.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash, receivables, accounts payable and accrued liabilities approximates fair value because of the short maturity of these instruments. The fair value of capital lease obligations and long-term debt approximates the carrying amounts based upon the Company’s expected borrowing rate for debt with similar remaining maturities and comparable risk.

Note 2     CONCENTRATIONS OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.

Cash Concentration – Cash and cash equivalents include all highly liquid investment assets with a maturity of ninety days or less at the time of purchase. The Company places its cash at financial institutions with balances that, at times, may exceed federally insured limits. The Company evaluates the creditworthiness of these financial institutions in determining the risk associated with these deposits. The Company has not experienced any losses on such accounts.

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Accounts receivable concentration – Concentrations of credit risk with respect to trade accounts receivable are limited due to the dispersion of customers across different industries and geographic regions. The largest customers accounted for approximately 18%, 17%, and 12% of accounts receivable at December 31, 2009 and 21%, 12%, and 12% of accounts receivable at December 31, 2008.

Sales concentration – The Company’s largest customers accounted for 14% and 12% of net revenues for the year ended December 31, 2009, and 12% and 10% of net revenues for the year ended December 31, 2008.

Note 3     PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

Depreciation and amortization expense was $281,322 and $287,323 for the years ended December 31, 2009 and 2008, respectively.

Note 4     CAPITALIZED SOFTWARE DEVELOPMENT COSTS

Capitalized software development costs consist of the following at December 31:

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Note 5     RELATED PARTY TRANSACTIONS

Note payable and accrued interest to related party was $316,388 and $336,391 at December 31, 2009 and 2008, respectively, represented an unsecured promissory note payable to officers and stockholders of the Company, Shannon and Angela Zimmerman, which is due on demand and includes accrued interest payable at the variable applicable federal interest rate equal to .69% (.69% and 1.36% at December 31, 2009 and 2008, respectively). Interest expense for the years ended December 31, 2009 and 2008 was $2,707 and $7,269, respectively.

Sajan leases its office space from River Valley under two non-cancelable operating leases. The first lease was entered into during 2005 and expires in January 2026. The second lease was entered into during 2008 and expires in January 2026. Subsequent to December 31, 2009, the lease terms were amended to expire on January 31, 2017. These lease agreements require the Company to pay a minimum monthly rental plus certain operating expenses. Payment of rent under these leases is secured by goods, chattels, fixtures and personal property of the Company. See Note 13 for future minimum lease payments.

Related party rental income and expense for the office leases of approximately $338,640 and $326,640 have been eliminated from the consolidated financial statements for the years ended December 31, 2009 and 2008, respectively.

Note 6     DEBT

LINE OF CREDIT

The Company had $1,000,000 outstanding at December 31, 2009 under a $1,000,000 bank line of credit and $700,000 outstanding at December 31, 2008 under a $1,350,000 bank line of credit. The line of credit was due in December 2009 and was extended to mature in March 2010. Interest is payable monthly at the prime rate, not to exceed 8% or go below 5% (interest rate of 5% at both December 31, 2009 and 2008, respectively). The average interest rate for the years ended December 31, 2009 and 2008 was 5%.

The line of credit is collateralized under a security agreement granting the bank a security interest in the accounts receivable of the Company. The line of credit agreement contains representations and warranties as well as certain affirmative and negative covenants made by the Company to the bank, including the requirement to maintain a current margin ratio of no less than 1.3:1 and a debt to net worth ratio exceeding 1.3:1. As of December 31, 2009, the Company was not in compliance with both of the financial covenants and had received a waiver from the financial institution.

The line of credit is guaranteed by a certain officer and stockholders of the Company, as well as assignment of a $500,000 insurance policy on the life of an officer and stockholder of the Company.

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LONG-TERM DEBT

Long-term debt consists of the following at December 31: