National Investment Managers Inc. - FORM 10-Q

Attached files

file	filename
EX-32 - National Investment Managers Inc.	v184738_ex32.htm
EX-31.2 - National Investment Managers Inc.	v184738_ex31-2.htm
EX-31.1 - National Investment Managers Inc.	v184738_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended March 31, 2010

		OR

¨		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

		For the transition period from ________________ to ________________

Commission file number: 333-160488

NATIONAL INVESTMENT MANAGERS INC.

(Exact name of registrant as specified in its charter)

Florida		59-2091510
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

485 Metro Place South, Suite 275, Dublin, Ohio		43017
(Address of principal executive offices)		(Zip Code)

(614) 923-8822

(Registrant’s telephone number, including area code)

[None]

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Shares		Outstanding at May 10, 2010
Common Stock, $0.001 par value per share		39,826,929 shares

NATIONAL INVESTMENT MANAGERS INC. AND SUBSIDIARIES

INDEX

		Page No.
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3

Condensed Consolidated Balance Sheets - March 31, 2010 (unaudited) and December 31, 2009 (audited)		3

Condensed Consolidated Statements of Operations - Three months ended March 31, 2010 and 2009 (unaudited)		4

Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2010 and 2009 (unaudited)		5-6

Notes to Condensed Consolidated Interim Financial Statements		7-22

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		23-36

Item 3. Quantitative and Qualitative Disclosures about Market Risks		37

Item 4. Controls and Procedures		37

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		38

Item 1A. Risk Factors		38

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		38

Item 3. Defaults upon Senior Securities		38

Item 4. (Removed and Reserved)		38

Item 5. Other Information		38

Item 6. Exhibits		39-54

SIGNATURES		55

Page 2

ITEM 1. Financial Statements

National Investment Managers Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	(Unaudited)			(Audited)
	March 31, 2010			December 31, 2009
ASSETS
Current assets:
Cash (includes restricted cash of $17,264 and $33,263)	$	138,374		$	274,956
Accounts receivable, net		5,132,807			5,128,127
Prepaid expenses and other current assets		962,712			893,864

Total current assets		6,233,893			6,296,947

Property and equipment, net		1,585,140			1,550,058

Other assets:
Goodwill		28,854,411			28,826,173
Customer lists/relationships, net		23,914,433			24,697,027
Other intangibles, net		3,656,358			4,258,586
Deferred financing costs		437,822			611,838

Total other assets		56,863,024			58,393,624

Total assets	$	64,682,057		$	66,240,629

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit	$	2,500,000		$	2,500,000
Long-term debt, current portion		25,721,436			3,352,743
Accounts payable		1,787,898			1,602,125
Unearned revenue		4,790,058			4,331,108
Accrued expenses and other current liabilities		3,647,045			3,851,586

Total current liabilities		38,446,437			15,637,562

Long-term liabilities:
Long-term debt, less current portion		224,657			23,116,367
Preferred dividends payable		8,341,876			7,849,920
Derivative financial instruments		1,495,588			1,724,219
Deferred tax liability		5,163,191			5,589,839

Total long-term liabilities		15,225,312			38,280,345

Total liabilities		53,671,749			53,917,907

Commitments and contingencies

Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized; 4,000,000 designated as Series A shares - 2,420,000 shares issued and outstanding as of March 31, 2010 and December 31, 2009 (liquidation preference $2,420,000 as of March 31, 2010 and December 31, 2009); 4,000,000 designated as Series B shares - 3,615,000 shares issued and outstanding as of March 31, 2010 and December 31, 2009 (liquidation preference $7,230,000 as of March 31, 2010 and December 31, 2009); 1,000,000 designated as Series C shares - 770,834 shares issued and outstanding as of March 31, 2010 and December 31, 2009 (liquidation preference $9,250,008 as of March 31, 2010 and December 31, 2009); 500,000 designated as Series D shares - 400,987 shares issued and outstanding as of March 31, 2010 and 409,500 shares issued and outstanding as of December 31, 2009 (liquidation preference $8,019,740 as of March 31, 2010 and $8,190,000 as of December 31, 2009); and 60,000 designated as Series E shares - 29,350 shares issued and outstanding as of March 31, 2010 and December 31, 2009 (liquidation preference $5,870,000 as of March 31, 2010 and December 31, 2009)		7,236			7,245
Common stock, $.001 par value, 100,000,000 shares authorized, 39,826,929 shares issued and outstanding as of March 31, 2010 and 39,656,669 shares issued and outstanding as of December 31, 2009.		39,827			39,657
Additional paid-in capital		35,858,098			35,840,231
Accumulated deficit		(24,894,853	)		(23,564,411	)

Total stockholders' equity		11,010,308			12,322,722

Total liabilities and stockholders' equity	$	64,682,057		$	66,240,629

See accompanying notes to condensed consolidated interim financial statements.

Page 3

National Investment Managers Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended			Three Months Ended
	March 31, 2010			March 31, 2009

Revenues:	$	11,174,971		$	12,643,246

Operating expenses
Selling, general and administrative expenses		9,673,675			10,640,688
Depreciation and amortization		1,591,926			1,926,048
Stock-based compensation		18,028			87,528

Total operating expenses		11,283,629			12,654,264

Net operating income (loss)		(108,658	)		(11,018	)

Other income (expenses):
Change in fair value of derivative financial instruments		228,631			194,471
Interest expense		(1,294,078	)		(1,039,444	)
Debt and other restructuring charges		(91,493	)		-
Interest, dividend and rental income		23,916			8,807

Total other expense, net		(1,133,024	)		(836,166	)

Net income (loss) before income tax benefit (expense)		(1,241,682	)		(847,184	)

Income tax benefit (expense)		403,196			578,730

Net income (loss) before preferred stock dividends		(838,486	)		(268,454	)

Preferred stock dividends		(491,956	)		(494,400	)

Net income (loss) available to common stockholders	$	(1,330,442	)	$	(762,854	)

Net income (loss) per common share - basic and diluted	$	(0.03	)	$	(0.02	)

Weighted average common shares outstanding - basic and diluted		39,821,000			39,557,000

See accompanying notes to condensed consolidated interim financial statements.

Page 4

National Investment Managers Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended			Three Months Ended
	March 31, 2010			March 31, 2009
Cash flows from operating activities:
Net income (loss) before preferred stock dividends	$	(838,486	)	$	(268,454	)
Adjustments to reconcile net income (loss) before preferred stock
dividends to net cash provided by (used in) operating activities:
Depreciation and amortization		1,591,926			1,926,048
Change in allowance for doubtful accounts		25,447			(1,118	)
Noncash interest		669,416			388,289
Stock-based compensation		18,028			87,528
Deferred income tax benefit		(426,648	)		(589,426	)
Change in fair value of derivative financial instruments		(228,631	)		(194,471	)
Increase (decrease) in cash attributable to changes
in operating assets and liabilities
Accounts receivable, net		(30,127	)		(831,805	)
Prepaid expenses and other current assets		(68,848	)		37,444
Accounts payable		185,773			839,652
Unearned revenues		458,950			20,336
Accrued expenses and other current liabilities		(148,605	)		368,408
Net cash provided by (used in) operating activities		1,208,195			1,782,431

Cash flows from investing activities:
Purchases of property and equipment		(242,187	)		(142,389	)
Acquisition of Alaska Pension Services		-			(1,476	)
Acquisition of Lamoriello Entities		-			(50,810	)
Acquisition of Alan N. Kanter & Associates		(94,175	)		(28,313	)
Acquisition of REPTECH Corp		-			(183,322	)
Acquisition of The Pension Group, Inc.		-			(1,288,269	)
Net cash provided by (used in) investing activities		(336,362	)		(1,694,579	)

Cash flows from financing activities:
Proceeds from revolving line of credit		-			1,272,008
Payments on long-term debt and notes		(1,008,415	)		(1,207,386	)
Net cash provided by (used in) financing activities		(1,008,415	)		64,622

Net increase (decrease) in cash		(136,582	)		152,474

Cash, beginning of period		274,956			531,446

Cash, end of period	$	138,374		$	683,920

Supplemental disclosure of cash flows information:
Cash paid during the period for interest	$	608,585		$	638,425

Cash paid during the period for taxes	$	14,430		$	100,520

Supplemental schedules of noncash investing and financing activites:
Accrued preferred dividends	$	491,956		$	494,400

Capitalization of accrued interest on secured term notes	$	195,863		$	93,274

Capitalization of deferred financing costs on secured term notes	$	-		$	100,625

(continued)

Page 5

Supplemental Disclosure of Non-Cash Investing and Financing Activities

The Company endeavors to structure its stock purchase agreements with acquisition candidates as cash and debt free transactions where the sellers retain all cash and outstanding liabilities. If any net liabilities remain at the closing date, they are settled as a reduction in the purchase proceeds. Proceeds paid to the sellers typically include, cash, notes payables issued to the sellers and the issuance of the common stock of the Company at the average of recent market values. The majority of liabilities assumed by the Company represent unearned revenues of the acquired company at the closing date and the deferred tax liability related to the recorded intangible assets.

The following schedule represents cumulative cash paid, notes and common stock issued and liabilities assumed since acquisition date.

2006:	Lamoriello Entities

Fair value of assets acquired	$	6,656,190
Cash paid		(3,354,190	)
Notes issued		-
Common stock issued		(1,500,000	)
Total liabilities assumed	$	1,802,000

	Alaska Pension			Alan N. Kanter
2008:	Services, Ltd.			& Associates, Inc.

Fair value of assets acquired	$	1,663,443		$	2,691,916
Cash paid		(935,761	)		(2,187,951	)
Due to sellers		-			-
Notes issued		(220,000	)		-
Common stock issued		(220,000	)		-
Total liabilities assumed	$	287,682		$	503,965

				The Pension
2008:	REPTECH Corp.			Group, Inc.

Fair value of assets acquired	$	5,001,218		$	6,315,702
Cash paid		(2,036,652	)		(3,636,807	)
Notes issued		(922,656	)		(617,500	)
Common stock issued		(715,104	)		(467,500	)
Total liabilities assumed	$	1,326,806		$	1,593,895

See accompanying notes to condensed consolidated interim financial statements.

Page 6

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Note 1. Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated interim financial statements included herein have been prepared in accordance with generally accepted accounting principles for interim period reporting in conjunction with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these statements do not include all of the information required by generally accepted accounting principles for annual financial statements. In the opinion of management, all known adjustments (consisting of normal recurring accruals and reserves) necessary to present fairly the financial position, results of operations and cash flows as of and for the interim periods have been included. It is suggested that these condensed consolidated interim financial statements be read in conjunction with the consolidated financial statements and related notes included in National Investment Managers Inc. Form 10-K for the year ended December 31, 2009.

The operating results for the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for the full year ending December 31, 2010.

All significant intercompany transactions and balances have been eliminated in consolidation.

Certain amounts in the 2009 condensed consolidated interim financial statements and disclosures have been reclassified to conform to the current year presentation.

The preparation of condensed consolidated interim 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 condensed consolidated interim financial statements as well as the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates.

Note 2. Background and Liquidity

The Company is in the principal business of acquiring and managing operating entities that offer a full array of pension plan administration services, including but not limited to plan design, consulting, installation, ongoing annual administration and pension actuarial services, financial and investment advisory services and sale of various insurance products to small and medium sized businesses and high-net worth individuals in the United States. As of March 31, 2010, the Company owned 22 operating units in fourteen states. The Company’s headquarters is located in Dublin, Ohio.

At March 31, 2010 and December 31, 2009, the Company's working capital deficit was approximately $32.2 million and $9.3 million, respectively and its accumulated deficit was approximately $24.9 million and $23.6 million, respectively. Further, for the three months ended March 31, 2010 and March 31, 2009, the Company's net loss before preferred stock dividends was approximately $0.8 million and $0.3 million, respectively and its cash flows from operations was approximately $1.2 million and $1.8 million, respectively.

Through its senior lending arrangements, the Company has access to a Revolving Line of Credit of up to $2.0 million, which was temporarily increased to $2.5 million through December 31, 2009 and further extended through February 28, 2010, to supplement its cash generated from operations. At March 31, 2010 and December 31, 2009, the Company had $2.5 million of principal outstanding under this arrangement. Effective April 26, 2010, the maximum principal amount available under the Revolving Line of Credit was increased to $4.0 million as a result of an amendment to its current senior lending arrangement as discussed in the Subsequent Events - Debt Amendments section of Note 5.

On April 12, 2010, in order to alleviate a lack of short-term liquidity, the Company obtained an additional loan of $0.5 million for short-term working capital purposes from its subordinated lenders due on May 15, 2010. On May 7, 2010, the Company used funds available from the increased Revolving Line of Credit to pay off the short-term working capital loan.

Management establishes an annual plan for operations and then utilizes the operating plan, current financial results, equity and credit market conditions, and other factors to forecast its quarterly and annual financial results and related cash flows from operations. Based upon management's cash forecast for revenues, operating expenses and debt services, the Company believes its cash resources will be adequate to fund operations through December 31, 2010.

The Company’s existing commitments for term notes from senior and subordinated senior lenders are currently exhausted. The Company has amended its current lending arrangements, with its existing lenders, beyond 2010 as discussed in the Subsequent Events - Debt Amendments section of Note 5. In the amendments, the Company has agreed that its senior or subordinated senior lenders may terminate its forbearance agreements if, in the lender’s reasonable judgment, the Company has not made adequate progress toward a reasonably satisfactory recapitalization initiative by July 15, 2010 or any date thereafter through the forbearance period. If the Company is not successful in its recapitalization or debt refinancing efforts, it will not have the ability to pay the senior and subordinated senior debt at the end of the forbearance period.

Page 7

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

As a result of the Company’s current capital position, general liquidity constraints, and its commitments in the amendments to its lending arrangements, management’s primary focus will be to dedicate significant time and efforts in 2010 towards the successful recapitalization or debt refinancing of the Company. Management will also continue to enhance operating efficiencies and increase the effectiveness of the current operating subsidiaries through the implementation of technology and operational upgrades. The Company expects further acquisition activity in 2010, if any, to be limited and only with the approval of its lenders.

Note 3. Adoption of New Accounting Pronouncements

In April 2009, the Financial Accounting Standards Board (“FASB”) issued guidance in the Financial Instruments and Interim Reporting Topics of the FASB Accounting Standards Codification (“ASC”). This guidance requires disclosures about fair value of financial instruments in interim financial statements. It requires that disclosures be included in both interim and annual financial statements of the methods and significant assumptions used to estimate the fair value of financial instruments. This guidance is effective for periods ending after June 15, 2009, with comparative disclosures required only for periods ending subsequent to initial adoption. The Company has disclosed the assumptions used to estimate the fair value of financial instruments in the notes to condensed consolidated interim financial statements.

In August 2009, the FASB issued guidance in the Fair Value Measurements and Disclosures Topic of FASB ASC. This guidance updates the fair value measurement of liabilities that provides clarification for circumstances in which a quoted price in an active market for the identical liability is not available; a reporting entity is required to measure fair value using alternative valuation techniques. This guidance provided in this update is effective for interim and annual periods beginning after August 27, 2009. Valuation techniques used by the Company are discussed in Note 10.

In January 2010, the FASB issued guidance in the Fair Value Measurements and Disclosures Topic of FASB ASC. The guidance requires reporting entities to make new disclosures about recurring and nonrecurring fair value measurements including significant transfers into and out of Level 1 and Level 2 fair value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. The guidance also clarified existing fair value measurement disclosure guidance about the level of disaggregation, inputs and valuation techniques. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuance, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The guidance does not have a material impact on the Company’s condensed consolidated interim financial statements.

Note 4. New Accounting Pronouncements

In September 2009, the FASB issued guidance in the Revenue Recognition Topic of FASB ASC. This guidance updates the accounting and expands disclosures for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit. The update will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Management is currently evaluating the impact of applying the update to the Company’s future consolidated financial statements.

Note 5. Long-term Debt and Derivative Liabilities

Long-term debt activity for the three months ended March 31, 2010 consisted of the following:

	(Audited)										(Unaudited)
	Balances at			Add:		Less:			Add:		Balances at
	December 31, 2009			New Debt		Payments			Amortization		March 31, 2010
Senior Term Note	$	12,000,000					(1,000,000	)			$	11,000,000
Subordinated Sr Note		12,992,542			195,863							13,188,405
Seller notes		2,868,489										2,868,489
Capitalized leases		62,254					(8,415	)				53,839
		27,923,285										27,110,733
Less: unamortized debt discount		(1,454,175	)							289,535		(1,164,640	)
		26,469,110										25,946,093
Less: current portion		(3,352,743	)									(25,721,436	)
	$	23,116,367									$	224,657

New debt on the Subordinated Senior Note includes noncash interest of $195,863.

Page 8

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Revolving Line of Credit and Senior Term Note

On November 30, 2007, the Company entered into (i) a Revolving Line of Credit and Term Loan Agreement (the "Senior Loan Agreement") with RBS Citizens Bank (“Senior Lender”) and (ii) a Securities Purchase and Loan Agreement (the "Subordinated Senior Agreement") with Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC and Lehman Brothers Commercial Bank (the “Subordinated Senior Lenders”). A principal amount of the proceeds generated from the two financings were used to retire existing debt. Pursuant to the Senior Loan Agreement, the Company entered into a Revolving Line of Credit in the initial amount of $1,000,000 (the "Revolver") and a Term Loan Promissory Note in the initial amount of $8,000,000 (the "Term Loan"). If certain conditions are satisfied, the Company may utilize additional financing under the Revolver up to $1,000,000 (the "Additional Revolver") and additional term loans up to $7,000,000 (the "Additional Term Loan") to fund future acquisitions (the Term Loan and the Additional Term Loan are collectively referred to as the “Senior Term Note”). On July 15, 2008, the Company borrowed an additional $2,358,375 on the Senior Term Note. As part of the transaction, the Company paid $22,992 in deferred financing costs which will be amortized over the remaining life of the loan. On October 2, 2008, the Company borrowed an additional $1,937,760 on the Senior Term Note. On November 26, 2008, the Company borrowed the remaining $2,703,865 on the Senior Term Note exhausting the availability of funds under the Senior Term Note. The Senior Term Note and the Revolving Line of Credit bear interest at the applicable LIBOR rate of interest. The Senior Term Note and the Revolving Line of Credit mature on July 31, 2010; but, were extended under the April 26, 2010 amendment discussed further in the Subsequent Events – Debt Amendments section of this Note 5. From closing through November 30, 2008, the Company was required to pay interest accruing on the Senior Term Note and the Revolving Line of Credit on the last day of the applicable LIBOR interest period. Subsequent to November 30, 2008, the Company is required to pay the applicable amount of interest owed on the Senior Term Note and the Revolving Line of Credit as well as a portion of the principal of the Senior Term Note based upon a five year straight line amortization schedule of $250,000 in principal on a monthly basis with the remaining outstanding principal balance to be paid in one lump sum on the date of maturity. Commencing January 1, 2008, the Company is obligated to pay an unused commitment fee on the first business day of each quarter for any amounts not used by the Company under the Additional Term Loan. The unused commitment fee to be paid is equal to one-quarter multiplied by the applicable basis point level, which is contingent upon the Company's ratio of total debt funded to EBITDA. The Senior Lender has a secured lien on all assets of the Company and its subsidiaries. The Company may prepay the Senior Term Note and the Revolving Line of Credit at anytime.

As of March 31, 2010, the outstanding principal balance on the Revolving Line of Credit and Senior Term Note was approximately $2.5 million and $11.0 million, respectively and the interest rate was 4.73%. As of December 31, 2009, the outstanding principal balance on the Revolving Line of Credit and Senior Term Note was approximately $2.5 million and $12.0 million, respectively and the interest rate was 4.73%.

Subordinated Senior Term Note

The Subordinated Senior Note bears interest at 15% of which 12% is due and payable on a monthly basis and 3% (the "Compounded Rate") is compounded monthly and added to the principal amount of the Subordinated Senior Note. The Subordinated Senior Note matures on the earlier of January 31, 2011, the occurrence of a capital transaction, or an event of default. A capital transaction includes the sale, disposition, dissolution or liquidation of the Company's assets or subsidiaries, the acquisition by any person of 30% or more of the Company's common stock or a public offering in the minimum amount of $20,000,000 (a "Capital Transaction"). The Subordinated Senior Lenders have a secured lien on all assets of the Company and its subsidiaries and would be entitled to foreclose on the Company's assets in the event of default, subject to the rights of the Senior Lender. The Company may prepay the Subordinated Senior Notes at any time after May 30, 2009.

At closing, the Company issued warrants (“Subordinated Senior Warrants”) to purchase an aggregate 5,742,789, 3,828,527 and 1,914,262 shares of common stock at $0.50, $1.00 and $1.50 per share, respectively. The Subordinated Senior Warrants are exercisable through November 2017 on a cash or cashless basis. Subsequent to January 31, 2011, the consummation of a Capital Transaction or an event of default, the Subordinated Senior Lenders may elect to sell to the Company all or a portion of the shares issuable upon exercise of the Subordinated Senior Warrants (the "Put"). The cash payment to be made by the Company shall be determined by dividing the value of the Company's common stock equity by the number of shares outstanding on a fully diluted basis (the "Repurchase Price"). In the event that a Capital Transaction is entered into during the six months following the closing of the Put, then the Company is obligated to make an additional payment to the Subordinated Senior Lenders to reflect the difference of the amount initially paid in connection with the Put and the amount that would have been paid had the Put been exercised pursuant to the second Capital Transaction.

The Subordinated Senior Lenders may elect to require the Company to pay an additional fee (the "Fee Agreement") as well as the Conditional Interest Payment ("CIP Payment") at (i) January 31, 2011, (ii) the date of consummation of a Capital Transaction, or (iii) an event of default. The Fee Agreement is based upon the Subordinated Senior Lenders ownership in the Company and the per share price of the Company's common stock. The CIP Payment is equal to 5% of the Company's equity value which is payable on the 90th day following receipt of such notice from the Subordinated Senior Lenders and an additional payment equal to 1.5% of the Company's equity value is payable on the end of each calendar quarter thereafter. The aggregate CIP Payment may not exceed 15% of the Company's equity value. At any time after the Subordinated Senior Lenders deliver notice with respect to the CIP Payment, the Company may elect to purchase the shares of common stock underlying the Subordinated Senior Warrants at the Repurchase Price.

Page 9

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

The Subordinated Senior Lenders have both demand and piggyback registration rights with respect to shares issuable upon conversion of the Subordinated Senior Warrants or any other shares held at the time of the request. The Company must use its best efforts in good faith to affect the registration of these shares.

On November 3, 2008, Woodside Capital Partners V, LLC and Woodside Capital Partners V QP, LLC (“Woodside Purchasers”) acquired all of the Subordinated Senior Notes and Subordinated Senior Warrants held by Lehman Brothers Commercial Bank (“Lehman”). Concurrent with the sale of the Subordinated Senior Notes and Subordinated Senior Warrants by Lehman, the Company and the Woodside Purchasers entered into a side letter agreement whereby the Woodside Purchasers agreed that in the event that a capital transaction is consummated on or prior to May 4, 2009, the Woodside Purchasers shall surrender each of the assigned Subordinated Senior Warrants held by it to the Company for cancellation and forfeit its right to receive its portion of the conditional interest payment and fee arrangement assigned to it by Lehman. The Woodside Purchasers together with the Woodside Capital Partners IV, LLC and Woodside Capital Partners IV QP, LLC are hereinafter referred to as the “Woodside Subordinated Senior Lenders”.

As of March 31, 2010 and December 31, 2009, approximately $13.2 million and $13.0 million, respectively, were outstanding under the Subordinated Senior Agreement.

In Connection with the April 26, 2010 amendments, discussed further in the Subsequent Events – Debt Amendments section of this Note 5, the Woodside Subordinated Senior Lenders agreed to surrender the Subordinated Senior Warrants and relinquish their rights to the CIP Payment and the Fee Agreement.

Covenant Compliance and Related Debt Amendments

Under the terms of the Senior Loan Agreement and the Subordinated Senior Agreement, the Company is subject to meeting certain restrictive quarterly financial covenants which, among other things, require the Company to maintain certain minimum Adjusted EBITDA and certain leverage and fixed charge coverage ratios. Adjusted EBITDA is a financial performance metric which is not recognized by accounting principles generally accepted in the United States of America.

As of December 31, 2008, the Company was not in compliance with certain covenants under the Senior Loan Agreement and the Subordinated Senior Agreement. The Company’s decline in asset based revenues, as a result of the dramatic decline in the U.S. equity markets in the second half of 2008, negatively impacted its ability to achieve Adjusted EBITDA targets as planned and three out of five related debt covenants presented below. As a result, management entered into Waiver and Amendment Agreements to the Senior Loan Agreement and the Subordinated Senior Agreement (“Waiver and Amendment Agreements”) in March 2009. Under the terms of the Waiver and Amendment Agreements, the Senior Lender and Woodside Subordinated Senior Lenders waived the existing defaults on the debt covenants at December 31, 2008 and revised future covenant calculations. In exchange, the Company is subject to an increase in the interest rates of 1.25% on the Senior Term Note and 1.75% on the outstanding Revolving Line of Credit, over the remaining term of the Senior Loan Agreement. In addition, the Company incurred one-time amendment fees totaling $100,625 (of which $60,000 was added to the Subordinated Senior Note) upon the effective date and is now subject to a 0.25% unused commitment fee on the Revolver which the Company does not expect to be material. The Senior Lender and the Woodside Subordinated Senior Lenders will also have approval rights for all future acquisitions and the Company will be subject to more frequent and timely compliance and reporting requirements with the Senior Lender.

On September 29, 2009, the Company and Senior Lender agreed to temporarily increase the maximum principal amount available under the Revolving Line of Credit to $2,500,000 through December 31, 2009 and later extended through February 28, 2010. At February 28, 2010, the Company is required to repay any amounts outstanding under the Revolving Line of Credit in excess of $2,000,000. As part of the transaction, the Company paid or accrued $61,583 in deferred financing costs associated with the original increase in the Revolving Line of Credit dated September 29, 2009, which will be amortized over the remaining life of the loan. The agreement was further amended as part of the April 26, 2010 amendment discussed further in the Subsequent Events – Debt Amendments section of this Note 5.

As of September 30, 2009, the Company was not in compliance with certain restrictive covenants in the Waiver and Amendment Agreements. As a result, the Senior Lender and the Woodside Subordinated Senior Lenders issued the Company reservation of rights letters, which notifies the Company of default under the Waiver and Amendment Agreements. The document indicates that this default entitles the Senior Lender and the Woodside Subordinated Senior Lenders to exercise certain rights and remedies under the Senior Loan Agreement and the Subordinated Senior Agreement through issuance of a Reservation of Rights letter. The Senior Lender and Woodside Subordinated Senior Lenders agreed to not exercise all their rights and remedies at this time; but, reserve the right to do so in the future. The Woodside Subordinated Senior Lenders exercised their right to increase the interest rate by 3% on the Subordinated Senior Note effective November 15, 2009. The increased interest is compounded monthly and added to the Subordinated Senior Note.

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National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

As of March 31, 2010 and December 31, 2009, the Company was not in compliance with certain restrictive covenants in the Waiver and Amendment Agreements. As a result, on April 26, 2010, the Senior and Woodside Subordinated Senior Lenders agreed to amend the existing loan agreements. Under the amendments, the Senior and Woodside Subordinated Senior Lenders agreed to forbear from exercising their rights and remedies for identified events of default and anticipated events of default during the forbearance period subject to certain terms and conditions which are discussed further in the Subsequent Events – Debt Amendments section of this Note 5.

The tabular presentation sets forth the Company’s most restrictive covenants for the trailing twelve month periods as amended by quarter for 2009 and 2010.

	Amended
	2009										2010
	Q1		Q2		Q3			Q4			Q1
Minimum Adjusted EBITDA (1)
Actual	$	8,798,069	$	9,638,281	$	8,780,797	*	$	8,884,905	**	$	8,515,679	**
Covenant	$	8,400,000	$	9,000,000	$	9,050,000		$	10,100,000		$	10,700,000

Maximum Leverage Ratio (2)
Actual		3.11		3.05		3.48	*		3.42	**		3.48	**
Covenant		3.25		3.25		3.25			2.75			2.60

Minimum Fixed Charge Coverage Ratio (3)
Actual		1.12		1.02		0.95	*		1.16	**		0.32	**
Covenant		1.05		1.00		1.00			1.20			1.25

Minimum Interest Coverage Ratio (4)
Actual		3.09		3.27		2.93			2.94			2.70
Covenant		2.25		2.25		2.25			2.50			2.50

Maximum Ratio of Total Funded Debt to Net Worth (5)
Actual		1.45		1.21		1.17			1.18			1.15
Covenant		2.00		2.00		2.00			2.00			2.00

* Reservation of rights issued by the Senior Lender and Subordinated Senior Lenders dated November 13, 2009.

** Under the Senior Loan Amendment and Subordinated Senior Amendment entered into on April 26, 2010, the Senior and Woodside Subordinated Senior Lenders agreed to forbear from accelerating or otherwise enforcing their rights and remedies with respect to the above covenant defaults under the Senior Loan and Subordinated Senior Amendments until January 2011.

(1) Minimum Adjusted EBITDA includes, for the trailing twelve month period, net loss plus the following items: consolidated interest expense, income taxes, depreciation, amortization, non-cash charges for stock based compensation, contractually specific charges to goodwill, and any non-cash extraordinary and unusual or non-recurring write downs or write offs.

(2) Maximum Leverage Ratio is total funded debt divided by the sum of Minimum Adjusted EBITDA and the trailing twelve months Adjusted EBITDA for acquisitions.

(3) Minimum Fixed Charge Coverage Ratio is the quotient of Operating cash flow and Debt Service. Operating cash flow is the sum of Minimum Adjusted EBITDA and the trailing twelve months of Adjusted EBITDA from acquisitions less taxes paid and capital expenditures during the trailing twelve month period. Debt Service is the sum of the current portion of all long term debt, except the Senior Term Note which if defined as $3,000,000 for this calculation, and the trailing twelve months of interest expense.

(4) Minimum Interest Coverage Ratio is the quotient of Minimum Adjusted EBITDA divided by the trailing twelve month interest expense.

(5) Maximum Ratio of Total Funded Debt to Net Worth is the quotient of funded debt divided by the total of assets, less liabilities plus the accumulated amortization of intangible assets recorded since November 30, 2007 (the date of debt agreement).

Page 11

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Following is a reconciliation of Minimum Adjusted EBITDA to net loss available to common stockholders:

	Period Ended
	March 31, 2010

Minimum Adjusted EBITDA for the trailing twelve months	$	8,515,679

Depreciation and amortization		(8,613,047	)

Stock based compensation		(363,627	)

Change in fair value of derivative financial instruments		820,805

Contractually specific charges to goodwill		137,814

Interest expense		(3,151,274	)

Debt and other restructuring charges		(151,493	)

Income tax expenses		(197,441	)

Deferred income tax benefit		1,956,297

Preferred stock dividends		(1,975,156	)

Second, third and fourth quarter 2009 net loss available to common stockholders		1,691,001

Net loss available to common stockholders	$	(1,330,442	)

Subsequent Events – Debt Amendments

On April 12, 2010, the Company entered into an agreement with the Woodside Subordinated Senior Lenders to receive an additional loan (“Short-Term Working Capital Loan”) of $500,000 to be used for short-term working capital needs. For use of the funds, the Company paid a fee of $5,000. The Short-Term Working Capital Loan accrues interest at 12% per annum. The principal amount and any accrued and unpaid interest is due on May 15, 2010. On May 7, 2010, the Company paid all outstanding principal and accrued interest.

On April 26, 2010, the Company entered into an amendment (“Senior Loan Amendment”) to the Senior Loan Agreement. In the Senior Loan Amendment, the Senior Lender agreed to forbear from accelerating or otherwise enforcing its rights and remedies with respect to identified events of default and anticipated events of default under the Senior Loan Agreement until January 2, 2011 (the “Forbearance Period”) and, in addition, extends the maturity of the indebtedness until January 2, 2011. During the Forebearance Period, the Senior Lender agreed to increase the maximum principal amount available under the Revolving Line of Credit to $4,000,000. All advances on the Revolving Line of Credit after the date of the Senior Loan Amendment, including any outstanding draws, will incur interest, payable on a monthly basis, at a rate of prime plus 6%. Also, the Senior Lender agreed to suspend the monthly principal payments of $250,000 on the Senior Term Note. The Company will continue to pay the applicable amount of interest owed on the Senior Term Note on the last day of each month.

In return, the Company agreed as part of the Senior Loan Amendment that, among other things, the Senior Lender may terminate the Senior Loan Amendment during the Forbearance Period if the Company does not (i) meet specified cash flow tests of its cash receipts and disbursements measured weekly on a rolling six week and forbearance period-to-date basis, as defined in the amendment and (ii) maintain a specified minimum cash and available Revolving Line of Credit balance of $500,000.

The Company engaged a financial advisor to assist in exploring, evaluating and implementing one or more strategic alternatives for the recapitalization of the Company (“Recapitalization Initiative”), including refinancing its current debt, raising capital, and/or sale of the Company to a third party. The Senior Lender may terminate the Forbearance Period if, in the Senior Lender’s reasonable judgment, the Company has not made adequate progress toward a reasonably satisfactory Recapitalization Initiative by July 15, 2010 or any date thereafter. The Company paid the financial advisor $60,000 upon the execution of an amendment to the loan agreements with Senior and Woodside Subordinated Senior Lenders and agreed to pay a monthly service fee of $30,000. In the event of a sale to a third party, the Company will pay the financial advisor a transaction fee of $950,000. In the case of a refinancing, the Company will pay the financial advisor a fee equal to (i) 1.5% of the total amount of senior debt raised, plus (ii) 3.0% of the total amount of any one-stop debt raised, plus (iii) 4.0% of the total amount of junior debt raised.

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National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

The Company agreed to pay the Senior Lender an amendment fee (“Amendment Fee”) of $250,000, of which $50,000 was paid on the amendment date with the remainder to be paid in $25,000 monthly installments beginning May 31, 2010 and ending December 31, 2010. The Company also agreed to pay the Senior Lender a monthly fee (“Monitoring Fee”) of $2,000 per month throughout the duration of the Forbearance Period and reimburse the Senior Lender for any legal fees in connection with the Senior Loan Amendment.

In addition, upon closing of a capital transaction, the Company is required to pay an additional fee to its Senior Lender. In the event of a sale to a third party, the Company will pay the Senior Lender a fee (“Borrower Sale Fee”) equal to the sum of $300,000 plus 0.75% of the excess of the gross purchase price paid for the Company over the Company’s outstanding indebtedness less any exit fees paid to the Woodside Subordinated Senior Lenders. In the case of a repayment in full or maturity, the Company will pay the Senior Lender a fee (“Borrower Refinancing Fee”) equal to 4% of the outstanding indebtedness to the Senior Lender. If a Company sale were to take place within six months after the maturity date or the repayment in full and if that sale transaction would result in a Borrower Sale Fee greater than $300,000, then the Company would pay the Senior Lender an amount equal to the difference between the Borrower Sale Fee and $300,000.

On April 26, 2010, in addition to the Senior Loan Amendment, the Company entered into an amendment (“Subordinated Senior Amendment”) to the Subordinated Senior Agreement with the Woodside Subordinated Senior Lenders. In the Subordinated Senior Amendment, the Woodside Subordinated Senior Lenders agreed to forbear from accelerating or otherwise enforcing its rights and remedies with respect to identified events of default and anticipated events of default under the Subordinated Senior Agreement until January 2, 2011 (the “Forbearance Period”). In addition, the Woodside Subordinated Senior Lenders agreed to surrender the Subordinated Senior Warrants and relinquish their rights to the CIP Payment and the Fee Agreement.

In return, the Company agreed as part of the Subordinated Senior Amendment that, among other things, the Woodside Subordinated Senior Lenders may terminate the Subordinated Senior Amendment during the Forbearance Period if the Company does not (i) meet specified cash flow tests of its cash receipts and disbursements measured weekly on a rolling six week and forbearance period-to-date basis, as defined in the agreements and (ii) maintain a specified minimum cash and available Revolving Line of Credit balance of $500,000.

The Subordinated Senior Note continues to bear interest at 18%; however, only 6% is due and payable on a monthly basis and 12% is compounded monthly and added to the principal amount of the Subordinated Senior Note. The Company agreed to pay the Woodside Subordinated Senior Lenders a fee (“Modification Fee”) of $250,000, which is to be paid on the earlier of January 31, 2011, a capitalization transaction, or an event of default. The Modification Fee shall constitute an additional debt obligation and accrues interest at 18% per annum, compounded monthly, payable at the date the Modification Fee is due.

In addition, the Company agreed to pay the Woodside Subordinated Senior Lenders a fee (“Exit Fee”) payable on the earlier of (i) a sale of the Company to a third party, (ii) repayment of all amounts due the Woodside Subordinated Senior Lenders (“Repayment Event”), or (iii) January 31, 2011 (“Maturity”). In the event of a sale transaction occurring prior to a Repayment Event, the Exit Fee will be $450,000 plus 1.5% of the excess of the gross purchase price paid for the Company over the Company’s outstanding indebtedness less any Borrower Sale Fee paid to the Senior Lender. Upon a Repayment event or Maturity, the Exit Fee shall be $450,000. If a Company sale were to take place within six months after a Repayment Event or Maturity and if that sale transaction would have resulted in an Exit Fee greater than $450,000, then the Company would pay the Woodside Subordinated Senior Lenders an amount equal to the difference between the greater Exit Fee and $450,000.

Seller Financing

In connection with the Company’s acquisition strategy, part of the purchase price is paid through seller financed instruments. As of March 31, 2010, total funds due to former owners were $2,868,489. Of this amount, $2,674,726 is due in the next twelve months and $193,763 is due thereafter. Seller financed instruments bear interest at 6% to 8% per annum. All seller financed instruments are uncollateralized. Under the terms of the Senior Loan Amendment and the Subordinated Senior Amendment, any subordinated payments, including seller financing, are not to be paid during the forbearance period unless otherwise approved by the Senior and Woodside Subordinated Senior Lenders. The Company will seek to amend and restructure certain unpaid seller notes during the forbearance period, although, there is no guarantee that this can be accomplished.

Page 13

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

On February 24, 2009, the Company executed a restructured promissory note (the “TPA Restructured Note Agreement”) with the sellers of The Pension Alliance, Inc. (“TPA”) under which the parties agreed to execute replacement notes superseding and terminating all existing promissory notes with the sellers of TPA. Under the TPA Restructured Note Agreement, the Company agreed to issue promissory notes for an aggregate of $837,500 payable in nine equal principal monthly installments of $93,056, plus accrued interest, beginning on July 1, 2009 and ending March 1, 2010 at an interest rate of 8% per annum. Interest accrued on superseded promissory notes was paid to the sellers within fifteen business days after the effective date of the TPA Restructured Note Agreement.

On February 28, 2009, the Company executed a restructured promissory note (the “Pentec Restructured Note Agreement”) with the seller of Pentec, Inc. (“Pentec”) and Pentec Capital Management, Inc. (“PCM”) under which the parties agreed to execute replacement notes superseding and terminating, the prior unpaid notes between the parties dated February 28, 2007. Under the Pentec Restructured Note Agreement, the Company agreed to issue a promissory note of $600,000 payable in six equal principal monthly installments of $100,000, plus accrued interest, beginning on July 1, 2009 and ending December 1, 2009 at an interest rate of 8% per annum. Any accrued interest on the remaining February 28, 2007 promissory notes was paid to the seller within fifteen business days after the effective date of the Pentec Restructured Note Agreement. At December 31, 2009, the Restructured Promissory Note was paid in full.

On March 16, 2009, the Company executed a restructured promissory note (“CIAS Restructured Note Agreement”) with the sellers of California Investment and Annuity Sales, Inc. (“CIAS”) under which the parties executed replacement notes superseding and terminating, the prior note between the parties dated April 3, 2008. Under the CIAS Restructured Note Agreement, the Company issued two promissory notes for an aggregate of $950,000 payable in eight monthly principal only installments of $70,000 beginning on August 15, 2009 and ending March 15, 2010, and three monthly installments of $130,000 plus all accrued interest, less any adjustments to the promissory notes under the CIAS agreement dated April 3, 2008, beginning on April 15, 2010 and ending on June 15, 2010. The notes pay interest at 8% per annum. Accrued interest on the April 3, 2008 promissory notes was paid to the CIAS Sellers within ten business days of the original scheduled payment date of June 3, 2009.

On March 24, 2009, the Company executed two promissory notes each for $75,000 payable to the sellers of The Pension Group, Inc. (“TPG”) in lieu of full payment of their portion of the additional payment for $467,500, prior to any adjustments, due at March 26, 2009 under the TPG purchase agreement (“TPG Agreement”) dated November 26, 2008, and was subject to interest of 8% per annum. The notes were paid on June 26, 2009.

On September 24, 2009, the Company executed Amendment No. 1 to the TPG Agreement with the sellers of TPG under which the sellers of TPG agreed to replace the maturity date and payment terms under the promissory notes, dated November 26, 2008, with installment payments to be made in twelve monthly principal installments of $38,958, plus accrued interest, beginning on July 25, 2010 and ending June 25, 2011 at an interest rate of 8% per annum beginning on October 1, 2009. Interest accrued on the promissory notes through September 30, 2009 was paid to the sellers of TPG within fifteen business days of January 25, 2010.

On September 25, 2009, the Company executed Amendment No. 1 to the REPTECH purchase agreement (“REPTECH Agreement”) with the sellers of Pension Technical Services, Inc. (“REPTECH”) under which the sellers of REPTECH agreed to replace the payments due under the promissory notes, dated October 2, 2008, with installment payments to be made in twelve monthly principal installments of $76,888, plus accrued interest, beginning on May 15, 2010 and ending April 15, 2011 at an interest rate of 8% per annum beginning on October 1, 2009. Interest accrued on the promissory notes through September 30, 2009 was paid to the sellers of REPTECH within fifteen business days of December 1, 2009.

On September 28, 2009, the Company executed Amendment No. 1 to the CIAS Restructured Note Agreement with the sellers of CIAS under which the sellers of CIAS agreed to replace the remaining monthly installment payments under the CIAS Restructured Note Agreement, dated March 16, 2009, with installment payments to be made in six monthly principal only installments of $70,000 beginning on April 15, 2010 and ending September 15, 2010, and three monthly principal installments of $130,000, plus all accrued interest, less any adjustments to the promissory notes under the CIAS agreement dated April 3, 2008, beginning on October 15, 2010 and ending December 15, 2010. The Senior and Woodside Subordinated Senior Lenders have not authorized payment of the principal or accrued interest of this note as of May 14, 2010.

On September 29, 2009, the Company executed Amendment No. 1 to the TPA Restructured Note Agreement with the sellers of TPA under which the sellers of TPA agreed to replace the remaining monthly principal installments of $93,056 plus accrued interest under the TPA Restructured Note Agreement, dated February 24, 2009, with a single principal payment of $558,333 on March 1, 2010 plus interest accrued from August 31, 2009. The Senior and Woodside Subordinated Senior Lenders have not authorized payment of the principal or accrued interest of this note as of May 14, 2010.

Page 14

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Derivative Liabilities

Pursuant to the Derivatives and Hedging Topic of FASB ASC, the Subordinated Senior Warrants and the Fee Agreement, meet the requirements of and are accounted for as a liability since they could require net-cash settlement by the Company. This option to net-cash settle is out of the Company’s control. The initial value of the Subordinated Senior Warrants and the Fee Agreement was treated as a discount to the corresponding note and recorded as a liability. The Company calculated the initial value of the Subordinated Senior Warrants to be $2,522,661 and the value of the Fee Agreement to be $654,575. The value of the Subordinated Senior Warrants and the Fee Agreement was determined using the formula outlined in section 11 of the Securities Purchase and Loan Agreement and section 1.3 of the Fee Agreement. The value of the derivative financial instruments are reassessed at each balance sheet date and marked to market as a derivative gain or loss until exercised or expiration. Upon exercise of the derivative financial instruments, the related liability is removed by recording an adjustment to additional paid-in-capital. At March 31, 2010 and December 31, 2009, the Subordinated Senior Warrants have a value of $0, and the Fee Agreement has a value of $1,444,838 and $1,635,321, respectively. Pursuant to the Subordinated Senior Amendment, dated April 26, 2010 and discussed in the Subsequent Events – Debt Amendments section of this Note 5, the Woodside Subordinated Senior Lenders have agreed to surrender the Subordinated Senior Warrants and relinquish their rights to the Fee Agreement.

In March 2005, as part of the since retired debt offering, the Company issued Laurus Master Fund, Ltd. (“Laurus”) a common stock purchase warrant (the "2005 Warrant") entitling Laurus to purchase up to 1,084,338 shares of NIVM common stock at a per share exercise price of $1.00, which was subsequently reduced to $.50, and a stock option (the "2005 Option") entitling Laurus to purchase up to 643,700 shares of common stock at a per share purchase price of $0.01.

On May 30, 2006, as part of another since retired debt offering, the Company issued Laurus a common stock purchase warrant to purchase 700,000 shares of common stock of the Company, at a purchase price of $0.01 per share, exercisable until May 30, 2011 (the "May 2006 Warrant"). On June 12, 2006, the Company and Laurus entered into an agreement pursuant to which the May 2006 Warrant was rescinded and a new common stock purchase warrant (the "New Warrant") was issued to Laurus. The New Warrant, dated May 30, 2006, entitles Laurus to purchase up to 700,000 shares of common stock of the Company, at an exercise price of $0.1667 per share, exercisable until May 30, 2011.

Pursuant to the Derivatives and Hedging Topic of FASB ASC, the 2005 Warrant, the 2005 Option and the New Warrant (collectively, “Laurus Derivative Financial Instruments”), meet the requirements of and are accounted for as a liability since they contain registration rights and the agreement is silent on how the contract would be settled and thus assumes net-cash settlement in the event that the Company is unable to deliver registered shares. The initial value of the Laurus Derivative Financial Instruments was treated as a discount to their corresponding notes and recorded as a liability. The Company calculated the initial value of the Laurus Derivative Financial Instruments on the closing date of the transactions as being $1,578,159. The value of the Laurus Derivative Financial Instruments was determined using a Black-Scholes option pricing model with the following assumptions: expected term - 3-8 years, volatility - 25%, risk free rate - 4%, and zero dividend yield. Using the Black-Scholes option-pricing method, the value of the Laurus Derivative Financial Instruments are reassessed at each balance sheet date and marked to market as a derivative gain or loss until exercised or expiration. Upon exercising the Laurus Derivative Financial Instruments, the related liability is removed by recording an adjustment to additional paid-in-capital. At March 31, 2010 and December 31, 2009, the Laurus Derivative Financial Instruments have a value of $50,750 and $88,898, respectively.

Note 6. Stockholders’ Equity

Series D Preferred Stock Conversion

On January 4, 2010, a holder of 8,513 shares of Series D Convertible Preferred Stock converted such shares into 170,260 shares of common stock.

Common Stock and Stock Options

On April 14, 2009 the Company issued a Stock Option Agreement to the President and COO granting him the option to purchase 600,000 shares of restricted common stock of the Company at a price of $0.20 per share as part of his April 14, 2009 employment agreement. These options may be exercised only if authorized shares are available.

On April 15, 2009 the Company issued a Stock Option Agreement to the Chief Financial Officer granting him the option to purchase 250,000 shares of restricted common stock of the Company at a price of $0.20 per share as part of his April 15, 2009 employment agreement. These options may be exercised only if authorized shares are available.

On July 8, 2009 the Company issued Stock Option Agreements to various members of management and staff granting them the option to purchase shares of restricted common stock of the Company at a price of $0.20 per share, of which, 600,000 were granted to the Chief Executive Officer. These options may be exercised only if authorized shares are available.

On December 31, 2009, the Company issued 100,000 shares of restricted common stock to the Chief Executive Officer as part of his November 30, 2007 employment agreement.

Page 15

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Note 7. Stock-Based Compensation

The Company complies with the fair value recognition provisions of the Compensation and Equity Topics of FASB ASC which requires compensation cost for all stock awards be calculated and recognized over the service period (generally equal to the vesting period). This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the grant date. An offsetting increase to stockholders' equity is recorded equal to the amount of the compensation expense charge. The fair value of issued stock options and warrants are estimated on the date of grant using the Black-Scholes option-pricing model including the following assumptions: expected volatility range of 25.0% to 60.0%, expected dividend yield rate of 0%, expected life over the term, generally, 5 or 7 years, and a range of risk-free interest rates of 1.55% to 4.19% which coincides with the expected life of the options and warrants at the time of issuance. During the three month periods ended March 31, 2010 and March 31, 2009, the Company recorded stock-based compensation of $18,028 and $87,528, respectively. There was no cash flow effect resulting from these arrangements.

The following is a summary of all option activity through March 31, 2010:

						Weighted
						Average
	Number of					Remaining		Aggregate
	Shares			Weighted		Term		Instrinsic
	Outstanding			Avg. Price		(in years)		Value

Outstanding, January 1, 2009		4,488,463		$	0.80		3.07	$	-
Granted		2,502,000		$	0.20
Exercised		-		$	-
Forfeited		(1,120,500	)	$	0.90
Expired		(25,000	)	$	1.00
Outstanding, January 1, 2010		5,844,963		$	0.53		3.13	$	-
Granted		-		$	-
Exercised		-		$	-
Forfeited		-		$	-
Expired		-		$	-
Outstanding, March 31, 2010		5,844,963		$	0.53		2.87	$	-

Exercisable, March 31, 2010		5,412,463		$	0.56		2.76	$	-

The Company settles stock option exercises with newly issued shares of common stock. For the periods ended March 31, 2010 and March 31, 2009, respectively, total compensation cost not yet recognized for non-vested awards of $13,236 and $182,665 have a weighted average period of 0.58 years and 0.77 years over which compensation expense is expected to be recognized.

Note 8. Earnings (Loss) Per Common Share

The Company complies with the accounting and reporting requirements of the Earnings Per Share Topic of FASB ASC. Basic net income (loss) per common share includes no dilution and is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net income per common share reflects, in the periods in which they have a dilutive effect, the dilution which would occur upon the exercise of stock options and warrants, and the conversion of convertible preferred stock and notes.

Unexercised stock options and warrants to purchase common stock and preferred stock convertible into common stock as of March 31, 2010 and 2009, respectively, are as follows:

	March 31, 2010		March 31, 2009

Options and warrants		27,383,323		27,060,519
Preferred stock		32,789,748		32,960,008
		60,173,071		60,020,527

For the periods ended March 31, 2010 and March 31, 2009, respectively, options and warrants include non-vested shares of 432,500 and 1,195,417.

Page 16

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

The foregoing common stock equivalents were excluded from the calculation of diluted net loss per common share for the three months ended March 31, 2010 and March 31, 2009, respectively, since their inclusion would be anti-dilutive.

Some employee options granted in 2009 may only be exercised if authorized common shares are available. Furthermore, the Company is not obligated to settle these options in cash.

Note 9. Income Taxes

The Company complies with the Income Taxes Topic of the FASB ASC, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized.

In accordance with the guidance of the Income Taxes Topic of the FASB ASC, there were no unrecognized tax benefits as of March 31, 2010 and 2009. This guidance prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax expense or benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at March 31, 2010 and 2009. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. The adoption of the provisions of this guidance did not have a material impact on the Company's condensed consolidated interim financial position, results of operations and cash flows.

Note 10. Fair Value Measurements

Fair Value Measurements and Disclosures Topic of FASB ASC establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – inputs to the valuation methodology are unobservable and are significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the liability. The liabilities measured at fair value on a recurring basis as of March 31, 2010 are as follows:

Fair Value at Reporting Date Using

Quoted Price in

Active Markets

Significant Other

Significant

for Indentical

Observable

Unobservable

Assets

Inputs

Description

March 31, 2010

(Level 1)

(Level 2)

(Level 3)

Derivative financial instruments

1,495,588

Page 17

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs as of March 31, 2010 is as follows:

	Fair Value
	Measurments
	Using Significant
	Unobservable
	Inputs
	(Level 3)

Beginning balance - January 1, 2010	$	1,724,219
Total (gains) losses (realized/unrealized)
Included in earnings (or changes in net liabilities)		(228,631	)

Ending balance - March 31, 2010	$	1,495,588

The amount of total (gains) losses for the period included
in earnings (or changes in net liabilities) attributable to the
change in unrealized (gains) losses relating to assets still
held at the reporting date	$	(228,631	)

The derivative liability measured at fair value of $1,495,588 consists of two components of stock options and warrants. The fair value assessment of 2,159,331 options and warrants equaling $50,750 are valued using the Black-Scholes option-pricing model based on assumptions for expected volatility, expected dividend yield rate, expected life, and risk-free interest rates. And, the fair value assessment of 11,485,578 warrants equaling $1,444,838 are valued using a contractually agreed upon formula, which utilizes the ending stock price of the Company and 100,000,000 fully diluted shares as of March 31, 2010 including certain adjustments to equate to a market capitalization as defined under the Subordinated Senior Warrants agreement.

The Company adopted this guidance for all non financial assets and liabilities that are measured at fair value on a non-recurring basis, such as goodwill and identifiable intangible assets. The assets measured at fair value on a non-recurring basis as of March 31, 2010 are as follows:

Fair Value Measurements Using

Quoted Prices in

Active Markets

Significant Other

Significant

for Indentical

Observable

Unobservable

Total

Assets

Inputs

Gains

Description

March 31, 2010

(Level 1)

(Level 2)

(Level 3)

(Losses)

Intangible assets - customer lists

633,000

The intangible assets measured at fair value of $633,000 consist of asset purchases of Standard Retirement Services, Inc. and Custom K, Inc. The fair value assessment of both asset purchases are valued using plan attrition rates, both known and anticipated, and historical annual revenues of the acquired assets to estimate fair value of the final purchase price at the end of the contingency period. The Company concluded that estimating a range of possible alternative inputs was not meaningful due to the significant unobservable inputs utilized in the fair value assessment.

In April 2009, the FASB issued guidance in the Fair Value Measurements and Disclosures Topic of FASB ASC which clarifies the determination on whether a market is active or a transaction is distressed. The guidance became effective for interim and annual periods ending after June 15, 2009. The Company concluded that it does not hold any distressed securities or securities in which the volume and level of activity has significantly decreased.

Note 11. Acquisitions of Subsidiaries and Other Assets

The Company has acquired numerous businesses since late 2004. The Company's strategy in purchasing these businesses is to acquire pension administration and investment service organizations with recurring revenue streams, and consolidate these businesses to take advantage of economies of scale, efficiencies, and synergies. The Company believes that these businesses have demonstrated stable revenue growth and cash flow with low client attrition rates prior to their acquisition. The Company plans to enhance revenues and profits in these acquired businesses through cross-selling additional retirement planning services, the introduction of higher-margin services through improved operations, offering non-traditional investment management services and products and higher client retention through improved service and national capabilities.

Page 18

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

The acquisition of each subsidiary is being accounted for under the acquisition method of accounting in accordance with the Business Combinations Topic of the FASB ASC. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values. The Company allocates the excess of purchase price over net assets acquired to customer relationships, covenants not to compete, employment contracts, trade name and goodwill. The Company amortizes intangibles such as customer relationships, covenants not to compete, employment contracts and trade name over their estimated useful lives. In accordance with Intangibles-Goodwill and Others Topic of the FASB ASC, the Company does not amortize goodwill.

The Company has incorporated contingent consideration into the structure of certain acquisitions completed. These arrangements generally result in the payment of additional consideration to the sellers upon the satisfaction of certain events.

For acquisitions prior to 2009, the additional cash payments or share issuances are contingent considerations and are considered to be additional purchase consideration and will be accounted for as part of the purchase price of the firms when the outcome of the contingency is determinable beyond a reasonable doubt.

For acquisitions beginning in 2009, the additional cash payments or share issuances are contingent consideration accounted for under the Business Combinations Topic of the FASB ASC and are considered to be additional purchase consideration as part of the purchase price of the firms at the time of acquisition. These contingencies will be reassessed on a periodic basis until the final outcome of the contingency is determinable but not longer than the measurement period, with the change recorded to goodwill or identifiable intangibles.

The acquisitions completed by the Company in 2009 are discussed further below:

Standard Retirement Services, Inc.

On October 28, 2009, the Company entered into an asset purchase agreement (“Standard Agreement”) to purchase certain assets of Standard Retirement Services, Inc (“Standard”). The final purchase price will be determined based on retention rates as of February 28, 2011 and annual revenues of the acquired assets. The Company paid $68,653 in cash at closing, which represented 10% of the purchase price. An additional 25% of the purchase price is due on August 15, 2010, and the final 65% of the purchase price due on March 15, 2011, less any adjustments in accordance with the Standard Agreement. The Company accrued $522,347 as an estimate for settling the remaining contingent payments.

The total purchase price for the acquisition of Standard was estimated to be about $591,000. It is being accounted for under the acquisition method of accounting in accordance with the Business Combinations Topic of the FASB ASC and is allocated as indicated:

	Standard
Assets acquired:
Customer lists/relationships	$	591,000
		591,000

Liabilities assumed:
Unearned revenue		-

Net purchase price	$	591,000

The identifiable intangible assets are amortized for book purposes over the estimated useful lives of the assets. Additional contingent consideration under the asset purchase agreement, if any, is considered to be additional purchase consideration as part of the purchase price of the firms at the time of acquisition. These contingencies will be reassessed on a periodic basis until the final outcome of the contingency is determinable but not longer than the measurement period, with the change recorded to identifiable intangibles.

The Company’s strategy in purchasing certain assets of Standard was to acquire the customer relationships of a retirement plan administration organization without incurring additional overhead expense. Standard was merged into the workflow at several of the Company’s subsidiaries.

Page 19

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Note 12. Unaudited Pro forma Interim Financial Information – Three months ended March 31, 2010 and 2009

The following unaudited pro forma information gives effect to the asset acquisitions of Standard Retirement Services, Inc. and Custom K, Inc. as if the acquisitions all took place on January 1, 2009. The Pro forma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during the periods presented.

	(Unaudited)			(Unaudited)
	Three Months Ended			Three Months Ended
	March 31, 2010			March 31, 2009

Revenues	$	11,174,971		$	12,898,325

Net loss available to common stockholders	$	(1,330,442	)	$	(530,382	)

Net loss per common stock - basic and diluted	$	(0.03	)	$	(0.01	)

Note 13. Separation Agreements

On January 30, 2009, the Company entered into a Separation Agreement with John Schroepfer, Interim Chief Financial Officer, under which the parties agreed that Mr. Schroepfer would resign as Interim Chief Financial Officer. The Agreement called for a continuation of his salary, as well as, his life, health and disability insurance through July 21, 2009.

On May 14, 2009, the Company entered into a Separation Agreement with Robert C. Thompson, Senior Vice President and National Sales Manager, under which the parties agreed that Mr. Thompson would resign as Senior Vice President and National Sales Manager. The Agreement called for a continuation of his salary, as well as, his life, health and disability insurance through August 15, 2009.

Note 14. Related Party Transactions

On November 6, 2008, the Company entered into a two year Management Agreement beginning October 1, 2008 with Nicholas J. Lamoriello and Stephen R. Zito (“Managers”) under which the Managers will provide business management services for three wholly-owned subsidiaries of the Company for a 24 month period. In exchange for the business management services, the Company will pay the Managers a management fee of $30,000 per month, plus out of pocket expenses while providing services to the Company. Both Nicholas J. Lamoriello and Stephen R. Zito are shareholders of the Company.

LAMCO Advisory Services, Inc. is the investment advisor on the Company’s 401(k) retirement plan and owned by Nicholas J. Lamoriello, a shareholder of the Company. The Company paid approximately $5,000 and $0 in advisor fees to LAMCO Advisory Service, Inc. as of March 31, 2010 and March 31, 2009, respectively.

Renee Conner and William Renninger, former owners of TPA and current employees and shareholders of the Company, collectively own 100% of Conner Management Group, LLC (“CMG”). TPA is a lessee under an office lease agreement with CMG and paid approximately $35,000 and $33,000 in rent to CMG as of March 31, 2010 and March 31, 2009, respectively, which approximates fair market value.

Stephen H. Rosen, former owner of Stephen H. Rosen & Associates, Inc. (“SHRA”) and current employee of the Company, owns an interest in 89 Haddon Avenue Associates, L.L.C. (“HAA”). SHRA is a lessee under an office lease agreement with HAA and paid approximately $42,000 and $56,000 in rent to HAA as of March 31, 2010 and March 31, 2009, respectively, which approximates fair market value.

Michael Callahan, former owner of Pentec and PCM and current employee and shareholder of the Company, owns 100% of MJM MILESTONE, LLC (“MJM”). Pentec and PCM are lessees under an office lease agreement with MJM and paid approximately $22,000 and $27,000 in rent to MJM as of March 31, 2010 and March 31, 2009, respectively, which approximates fair market value.

Page 20

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Note 15. Employment Agreements

On November 30, 2007, the Company entered into a new employment agreement with Steven J. Ross, the Company's CEO. The agreement provides for a term through December 31, 2009, which is automatically renewable for a period of one year unless either party provides the other with notice 30 days prior to the end of the term that the term shall not be extended. The employment agreement was extended through December 31, 2010 under the existing terms. The CEO is entitled to the following compensation pursuant to the employment agreement:

annual compensation in the amount of $475,000;

a bonus of 50% of the base salary if certain targets set by the Board of Directors are satisfied (the bonus shall be 65% during year two of the agreement);

700,000 shares of common stock issued on January 2, 2008, 100,000 shares of common stock issued on December 31, 2008 and 100,000 shares of common stock issued on December 31, 2009;

an option to receive 800,000 shares of common stock at an exercise price of $0.65 per share vesting half on December 31, 2008 and half on December 31, 2009; and

a housing and office allowance of $5,000 per month

On April 14, 2009, the Company entered into a new employment agreement with John M. Davis, the Company’s President and Chief Operating Officer. The employment agreement provides for a term through December 31, 2010, which is automatically renewable for a period of one year unless either party provides the other with notice 30 days prior to the end of the term that the term shall not be extended. Mr. Davis is entitled to receive the following compensation in accordance with his employment agreement:

Annual salary of $309,000;

For each year under the term of the employment agreement, Mr. Davis is eligible to receive a bonus equal to 50% of his annual salary based upon the achievement of performance targets and objectives as established by the Company’s Board of Directors.

Option grant to purchase 600,000 shares of common stock of the Company at $0.20 per share of which 300,000 shares vested on April 14, 2009, 150,000 shares vested on December 31, 2009 and 150,000 shares will vest on December 31, 2010. These options may be exercised only if authorized shares are available. Refer to Note 8;

A home office and car allowance of $1,000 per month; and

Continuation of health, life and disability insurance.

On April 15, 2009, the Company entered into an employment agreement with Christopher W. Larkin, the Company’s Chief Financial Officer. The employment agreement provides for a term through December 31, 2010, which is automatically renewable for a period of one year unless either party provides the other with notice 30 days prior to the end of the term that the term shall not be extended. Mr. Larkin is entitled to receive the following compensation in accordance with his employment agreement:

Annual salary of $200,000;

For each year under the term of the employment agreement, Mr. Larkin is eligible to receive a bonus equal to 35% of his annual salary based upon the achievement of performance targets and objectives as established by the Company’s Board of Directors.

Option grant to purchase 250,000 shares of common stock of the Company at $0.20 per share of which 150,000 shares vested on April 15, 2009, 50,000 shares vested on December 31, 2009 and 50,000 shares will vest on December 31, 2010. These options may be exercised only if authorized shares are available. Refer to Note 8; and

Continuation of health, life and disability insurance.

Page 21

National Investment Managers Inc. and Subsidiaries

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

Note 16. Other

On July 9, 2009, the Company filed a Form S-8 Registration Statement with the Securities and Exchange Commission registering shares of common stock underlying its 2005 Stock Incentive Plan.

On July 23, 2009, the Company filed Form 15 with the Securities and Exchange Commission which was a certification and notice of termination of registration of the Company’s common shares under section 12(g) of the Securities Exchange Act of 1934. The Company is required to continue to file reports with the Securities and Exchange Commission under section 15(d) of the Securities Exchange Act of 1934.

In July 2009, the Company executed a contract to sell the flex administration business to the Total Administrative Services Corporation (“TASC”) which is expected to be closed in the second quarter of 2010. As part of the contract, TASC will pay the Company a percentage of the annual revenues transferred sixty days after closing, a percentage of annual revenues based bonus payment if a target retention level is obtained nine months after closing and a percentage of ongoing revenues beginning thirteen months after closing. This transaction is not material to the financial statements and thus is not necessary to be disclosed separately in the condensed consolidated interim financial statements. In addition, this transaction does not meet the definition of a capital transaction as defined in Note 5.

Note 17. Subsequent Events

On April 26, 2010, the Company entered into amendments to the Senior Loan Agreement and Subordinated Senior Agreement with its Senior and Woodside Subordinated Senior Lenders. The terms of the amendments are discussed in the Subsequent Events - Debt Amendments section of Note 5. As a result of the amendments, the Company is restricted from paying any seller notes without the authorization of the Senior and Woodside Subordinated Senior Lenders as discussed in the Seller Financing section of Note 5.

Page 22

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis summarizes the significant factors affecting our condensed consolidated interim results of operations, financial condition and liquidity position for the three months ended March 31, 2010. This discussion and analysis should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for our year-ended December 31, 2009 and the condensed consolidated unaudited interim financial statements and related notes included elsewhere in this filing. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Actual results could differ materially from those discussed in the forward-looking statements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward looking statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report.

Overview

The Company is in the principal business of acquiring and managing operating entities that offer administration services of retirement plans, financial and investment advisory services and sale of various insurance products to small and medium sized businesses and high-net worth individuals in the United States of America. As of March 31, 2010, the Company owned 22 operating units in fourteen states. The wholly-owned subsidiaries are based in Lake Mary, FL; North Attleboro, MA; Haddonfield, NJ; Yorktown Heights, NY; New York, NY; Beaverton, OR; Horsham, PA; Wayne, PA; Warwick, RI; Houston, TX; Marina Del Rey, CA; Seattle, WA; Harrisburg, PA; Southington, CT; Pikesville, MD; Anchorage, AK; Denver, CO and Laguna Hills, CA. The Company’s corporate headquarters is located in Dublin, Ohio.

Page 23

Results of Operations

Three Month Period Ended March 31, 2010 Compared to March 31, 2009

	(Unaudited)						(Unaudited)
	Three Months Ended			% of			Three Months Ended			% of			$ Change			% Change
	March 31, 2010			Revenues			March 31, 2009			Revenues			2010 to 2009			2010 to 2009

Revenues	$	11,174,971			100.0	%	$	12,643,246			100.0	%	$	(1,468,275	)		-11.6	%

Operating expenses:
Selling, general and administrative expenses		9,673,675			86.6	%		10,640,688			84.2	%		(967,013	)		-9.1	%
Depreciation and amortization		1,591,926			14.2	%		1,926,048			15.2	%		(334,122	)		-17.3	%
Stock-based compensation		18,028			0.2	%		87,528			0.7	%		(69,500	)		-79.4	%

Total operating expenses		11,283,629			101.0	%		12,654,264			100.1	%		(1,370,635	)		-10.8	%

Net operating income (loss)		(108,658	)		-1.0	%		(11,018	)		-0.1	%		(97,640	)		886.2	%

Other income (expenses):
Change in fair value of derivative financial instruments		228,631			2.0	%		194,471			1.5	%		34,160			17.6	%
Interest expense		(1,294,078	)		-11.5	%		(1,039,444	)		-8.2	%		(254,634	)		24.5	%
Debt and other restructuring charges		(91,493	)		-0.8	%		-			0.0	%		(91,493	)
Interest, dividend and rental income		23,916			0.2	%		8,807			0.1	%		15,109			171.6	%

Total other expense, net		(1,133,024	)		-10.1	%		(836,166	)		-6.6	%		(296,858	)		171.6	%

Net income (loss) before income tax benefit (expense)		(1,241,682	)		-11.1	%		(847,184	)		-6.7	%		(394,498	)		35.5	%

Income tax benefit (expense)		403,196			3.6	%		578,730			4.6	%		(175,534	)		46.6	%

Net income (loss) before preferred stock dividends		(838,486	)		-7.5	%		(268,454	)		-2.1	%		(570,032	)		-30.3	%

Preferred stock dividends		(491,956	)					(494,400	)

Net income (loss) available to common stockholders	$	(1,330,442	)				$	(762,854	)

Revenues for the three months ended March 31, 2010 decreased $1,468,275 to $11,174,971 compared to the three months ended March 31, 2009 as shown in the table above. The decrease in revenues was due primarily to a decrease in revenue of $1,608,865 at our third party administration subsidiaries offset by an increase in revenue of $140,590 generated by the subsidiaries that provide financial planning, investment advisory and insurance products. Retirement plans are restated pursuant to The Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”), an Internal Revenue Service cycle that generally requires restatement of retirement plan documents every six years. The decrease in revenue from our third party administration subsidiaries is the result of a decrease in these retirement plan document restatement fees of approximately $815,000 as the restatement cycle for deferred compensation retirement plans was coming to an end as of March 31, 2010. The remainder is a decrease in recurring plan administration revenues resulting from plan terminations and reductions in pension plan participants, as well as, a decrease in one-time consulting revenue, resulting from the downturn in the U.S. economy. The revenue for the period ended March 31, 2010, was generated from three sources; third party administration, $10,184,729; financial planning and investment advisory fees, $856,246; and insurance commissions, $133,996. The revenue for the period ended March 31, 2009, was generated from three sources; third party administration, $11,793,594; financial planning and investment advisory fees, $745,011; and insurance commissions, $104,641.

Operating expenses for the three months ended March 31, 2010 decreased $1,370,635 to $11,283,629 over the prior year's comparable three month period. As a percentage of revenue, operating expenses increased to 101.0% for the three months ended March 31, 2010 as compared to 100.1% for the three months ended March 31, 2009.

Selling, general and administrative expenses for the three months ended March 31, 2010 decreased $967,013 to $9,673,675 over the prior year's comparable three month period. The decrease is the result of the Company’s efforts to enhance operating efficiencies and reduce operating costs.

Page 24

The March 31, 2010 and 2009 selling, general and administrative expenses consisted of the following:

	(Unaudited)		(Unaudited)
	Three Months Ended		Three Months Ended		$ Change 2010
	March 31, 2010		March 31, 2009		to 2009

Selling, general and administrative expenses:
Salaries and related payroll costs	$	6,439,804	$	7,323,571	$	(883,767	)
Rent and utilities		802,859		797,247		5,612
Professional fees		737,769		762,770		(25,001	)
Office expenses		473,756		526,460		(52,704	)
Insurance expense		517,225		524,933		(7,708	)
Computer related expense		202,279		177,279		25,000
Bad debt expense		53,171		34,911		18,260
Travel and entertainment		83,409		104,701		(21,292	)
Commission expense		75,171		68,203		6,968
Miscellaneous other expenses		288,232		320,613		(32,381	)
Total selling, general and administrative expenses	$	9,673,675	$	10,640,688	$	(967,013	)

As a percentage of revenue, selling, general and administrative expenses increased to 86.6% for the three months ended March 31, 2010 as compared to 84.2% for the three months ended March 31, 2009.

Depreciation and amortization for the three months ended March 31, 2010 decreased $334,122 to $1,591,926 over the prior year's comparable three month period primarily due to intangible assets acquired in prior acquisitions becoming fully amortized. As a percentage of revenue, depreciation and amortization decreased to 14.2% for the three months ended March 31, 2010 as compared to 15.2% for the three months ended March 31, 2009.

Stock-based compensation for the three months ended March 31, 2010 decreased $69,500 to $18,028 over the prior year's comparable three month period due primarily to 800,000 stock options issued in 2007 to the Chief Executive Officer as part of his November 30, 2007 employment agreement and 200,000 stock options issued in 2008 to the President and Chief Operating Office as part of his April 2008 employment agreement, both of which were still vesting and thus being expensed in first quarter 2009. As a percentage of revenue, stock based compensation decreased to 0.2% for the three months ended March 31, 2010 as compared to 0.7% for the three months ended March 31, 2009.

Net other expense was $1,133,024 for the three months ended March 31, 2010 as compared to $836,166 for the three months ended March 31, 2009. The increase was due primarily to an increase in interest expense of $254,634 and an increase in debt and other restructuring charges of $91,493, offset by an increase in the change of the fair value of the derivative financial instruments of $34,160 and an increase in interest and rental income of $15,109. The change in the fair value of derivative financial instruments increased as a result of the relative change in the value of the Company’s stock price. Interest expense increased as a result of an increase in amortization of debt discount resulting from the use of the effective interest rate method of amortization, additional borrowings on the Revolving Line of Credit, additional borrowings on the Subordinated Senior Term Note resulting from the capitalization of interest, a 3% increase in the borrowing rate on the Subordinated Senior Term Note from failing debt covenants at September 30, 2009 and higher average interest rates on the Senior Term Note.

Preferred stock dividends were $491,956 for the three months ended March 31, 2010 as compared to $494,400 for the three months ended March 31, 2009. The decrease was due to a conversion of 8,513 shares of Series D Convertible Preferred Stock into 170,260 shares of common stock during the first quarter of 2010.

Liquidity and Capital Resources

Through its senior lending arrangements, the Company has access to a Revolving Line of Credit of up to $2.0 million, which was temporarily increased to $2.5 million through December 31, 2009 and further extended through February 28, 2010, to supplement its cash generated from operations. At March 31, 2010 and December 31, 2009, the Company had $2.5 million of principal outstanding under this arrangement. Effective April 26, 2010, the maximum principal amount available under the Revolving Line of Credit was increased to $4.0 million as a result of an amendment to its current senior lending arrangement as discussed further in the Subsequent Events – Debt Amendments section of this ITEM 2 of the Management Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”).

Page 25

The Company’s existing commitments for term notes from senior and subordinated senior lenders are currently exhausted. The Company has amended its current lending arrangements, with its existing lenders, beyond 2010 as discussed in the Subsequent Events – Debt Amendments section of this ITEM 2 of the MD&A. In the amendments, the Company has agreed that its senior or subordinated senior lenders may terminate its forbearance agreements if, in the lender’s reasonable judgment, the Company has not made adequate progress toward a reasonably satisfactory recapitalization initiative by July 15, 2010 or any date thereafter through the forbearance period. If the Company is not successful in its recapitalization or debt refinancing efforts, it will not have the ability to pay the senior and subordinated senior debt at the end of the forbearance period.

Details of the changes in cash flows during the three month periods ended March 31, 2010 and 2009 are as follows:

	(Unaudited)			(Unaudited)
	Three Months Ended			Three Months Ended
	March 31, 2010			March 31, 2009
Cash flows from operating activities:
Net income (loss) before preferred stock dividends	$	(838,486	)	$	(268,454	)
Adjustments to reconcile net income (loss) before preferred stock
dividends to net cash provided by (used in) operating activities:
Depreciation and amortization		1,591,926			1,926,048
Change in allowance for doubtful accounts		25,447			(1,118	)
Noncash interest		669,416			388,289
Stock-based compensation		18,028			87,528
Deferred income tax benefit		(426,648	)		(589,426	)
Change in fair value of derivative financial instruments		(228,631	)		(194,471	)
Increase (decrease) in cash attributable to changes
in operating assets and liabilities
Accounts receivable, net		(30,127	)		(831,805	)
Prepaid expenses and other current assets		(68,848	)		37,444
Accounts payable		185,773			839,652
Unearned revenues		458,950			20,336
Accrued expenses and other current liabilities		(148,605	)		368,408
Net cash provided by (used in) operating activities		1,208,195			1,782,431

Cash flows from investing activities:
Purchases of property and equipment		(242,187	)		(142,389	)
Acquisition of Alaska Pension Services		-			(1,476	)
Acquisition of Lamoriello Entities		-			(50,810	)
Acquisition of Alan N. Kanter & Associates		(94,175	)		(28,313	)
Acquisition of REPTECH Corp		-			(183,322	)
Acquisition of The Pension Group, Inc.		-			(1,288,269	)
Net cash provided by (used in) investing activities		(336,362	)		(1,694,579	)

Cash flows from financing activities:
Proceeds from revolving line of credit		-			1,272,008
Payments on long-term debt and notes		(1,008,415	)		(1,207,386	)
Net cash provided by (used in) financing activities		(1,008,415	)		64,622

Net increase (decrease) in cash	$	(136,582	)	$	152,474

Page 26

2010 Cash Flow Analysis – Three Month Period Ended March 31, 2010

The Company had cash as of March 31, 2010 of $138,374, a decrease of $136,582 from December 31, 2009.

Net cash provided by operating activities of $1,208,195 was primarily due to a net loss before preferred stock dividends of $838,486, non-cash expenses of $1,649,538, an increase in accounts payable of $185,773 and an increase in unearned revenues of $458,950, offset by an increase in accounts receivable of $30,127, an increase in prepaid expenses of $68,848 and a decrease in accrued expenses and other current liabilities of $148,605.

The non-cash items were primarily composed of depreciation and amortization of $1,591,926 increase in the allowance for doubtful accounts of $25,447, noncash interest of $669,416, stock-based compensation of $18,028, offset by a decrease in the deferred tax liability of $426,648 and a decrease in the fair value of derivative financial instruments of $228,631.

Net cash of $336,362 used in investing activities was due to $94,175 in funds expended relating to the acquisitions of Alan N. Kanter & Associates and $242,187 used in the purchase of property and equipment.

Net cash of $1,008,415 used in financing activities was due to $1,008,415 in payments of long-term debt.

2009 Cash Flow Analysis – Three Month Period Ended March 31, 2009

The Company had cash as of March 31, 2009 of $683,920, an increase of $152,474 from December 31, 2008.

Net cash provided by operating activities of $1,782,431 was primarily due to a net loss before preferred stock dividends of $268,454 and non-cash expenses of $1,616,850, a decrease in prepaid expenses of $37,444, an increase in accounts payable of $839,652, an increase in unearned revenue of $20,336, and an increase in accrued expenses and current liabilities of $368,408, offset by an increase in accounts receivable of $831,805.

The non-cash items were primarily composed of depreciation and amortization of $1,926,048, noncash interest of $388,289, and stock-based compensation of $87,528, offset by a decrease in the allowance for doubtful accounts of $1,118, a decrease in the deferred tax liability of $589,426 and a decrease in the fair value of derivative financial instruments of $194,471.

Net cash of $1,694,579 used in investing activities was due to $1,501,380 in funds expended in the acquisitions of Alaska Pension Services Ltd, Alan N. Kanter & Associates, REPTECH Corp., and The Pension Group, Inc., $50,810 in funds expended in contingency payments for the Lamoriello Entities, and $142,389 used in the purchase of property and equipment.

Net cash of $64,622 provided by financing activities was due to $1,272,008 in proceeds from short-term debt offset by $1,207,386 in payments of long-term debt.

Debt Financing Arrangements

Revolving Line of Credit and Senior Term Note

On November 30, 2007, the Company entered into (i) a Revolving Line of Credit and Term Loan Agreement (the "Senior Loan Agreement") with RBS Citizens Bank (“Senior Lender”) and (ii) a Securities Purchase and Loan Agreement (the "Subordinated Senior Agreement") with Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC and Lehman Brothers Commercial Bank (the “Subordinated Senior Lenders”). A principal amount of the proceeds generated from the two financings were used to retire existing debt. Pursuant to the Senior Loan Agreement, the Company entered into a Revolving Line of Credit in the initial amount of $1,000,000 (the "Revolver") and a Term Loan Promissory Note in the initial amount of $8,000,000 (the "Term Loan"). If certain conditions are satisfied, the Company may utilize additional financing under the Revolver up to $1,000,000 (the "Additional Revolver") and additional term loans up to $7,000,000 (the "Additional Term Loan") to fund future acquisitions (the Term Loan and the Additional Term Loan are collectively referred to as the “Senior Term Note”). On July 15, 2008, the Company borrowed an additional $2,358,375 on the Senior Term Note. As part of the transaction, the Company paid $22,992 in deferred financing costs which will be amortized over the remaining life of the loan. On October 2, 2008, the Company borrowed an additional $1,937,760 on the Senior Term Note. On November 26, 2008, the Company borrowed the remaining $2,703,865 on the Senior Term Note exhausting the availability of funds under the Senior Term Note. The Senior Term Note and the Revolving Line of Credit bear interest at the applicable LIBOR rate of interest. The Senior Term Note and the Revolving Line of Credit mature on July 31, 2010; but, were extended under the April 26, 2010 amendment discussed further in the Subsequent Events – Debt Amendments section of this ITEM 2 of the MD&A. From closing through November 30, 2008, the Company was required to pay interest accruing on the Senior Term Note and the Revolving Line of Credit on the last day of the applicable LIBOR interest period. Subsequent to November 30, 2008, the Company is required to pay the applicable amount of interest owed on the Senior Term Note and the Revolving Line of Credit as well as a portion of the principal of the Senior Term Note based upon a five year straight line amortization schedule of $250,000 in principal on a monthly basis with the remaining outstanding principal balance to be paid in one lump sum on the date of maturity. Commencing January 1, 2008, the Company is obligated to pay an unused commitment fee on the first business day of each quarter for any amounts not used by the Company under the Additional Term Loan. The unused commitment fee to be paid is equal to one-quarter multiplied by the applicable basis point level, which is contingent upon the Company's ratio of total debt funded to EBITDA. The Senior Lender has a secured lien on all assets of the Company and its subsidiaries. The Company may prepay the Senior Term Note and the Revolving Line of Credit at anytime.

Page 27

Subordinated Senior Term Note

As of March 31, 2010 and December 31, 2009, approximately $13.2 million and $13.0 million, respectively, were outstanding under the Subordinated Senior Agreement.

In Connection with the April 26, 2010 amendments, discussed further in the Subsequent Events – Debt Amendments section of this ITEM 2 of the MD&A, the Woodside Subordinated Senior Lenders agreed to surrender the Subordinated Senior Warrants and relinquish their rights to the CIP Payment and the Fee Agreement.

Covenant Compliance and Related Debt Amendments

Page 28

Page 29

The tabular presentation sets forth the Company’s most restrictive covenants for the trailing twelve month periods as amended by quarter for 2009 and 2010.

	Amended
	2009										2010
	Q1		Q2		Q3			Q4			Q1
Minimum Adjusted EBITDA (1)
Actual	$	8,798,069	$	9,638,281	$	8,780,797	*	$	8,884,905	**	$	8,515,679	**
Covenant	$	8,400,000	$	9,000,000	$	9,050,000		$	10,100,000		$	10,700,000

Maximum Leverage Ratio (2)
Actual		3.11		3.05		3.48	*		3.42	**		3.48	**
Covenant		3.25		3.25		3.25			2.75			2.60

Minimum Fixed Charge Coverage Ratio (3)
Actual		1.12		1.02		0.95	*		1.16	**		0.32	**
Covenant		1.05		1.00		1.00			1.20			1.25

Minimum Interest Coverage Ratio (4)
Actual		3.09		3.27		2.93			2.94			2.70
Covenant		2.25		2.25		2.25			2.50			2.50

Maximum Ratio of Total Funded Debt to Net Worth (5)
Actual		1.45		1.21		1.17			1.18			1.15
Covenant		2.00		2.00		2.00			2.00			2.00

* Reservation of rights issued by the Senior Lender and Subordinated Senior Lenders dated November 13, 2009.

(2) Maximum Leverage Ratio is total funded debt divided by the sum of Minimum Adjusted EBITDA and the trailing twelve months Adjusted EBITDA for acquisitions.

(4) Minimum Interest Coverage Ratio is the quotient of Minimum Adjusted EBITDA divided by the trailing twelve month interest expense.

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Following is a reconciliation of Minimum Adjusted EBITDA to net loss available to common stockholders:

	Period Ended
	March 31, 2010

Minimum Adjusted EBITDA for the trailing twelve months	$	8,515,679

Depreciation and amortization		(8,613,047	)

Stock based compensation		(363,627	)

Change in fair value of derivative financial instruments		820,805

Contractually specific charges to goodwill		137,814

Interest expense		(3,151,274	)

Debt and other restructuring charges		(151,493	)

Income tax expenses		(197,441	)

Deferred income tax benefit		1,956,297

Preferred stock dividends		(1,975,156	)

Second, third and fourth quarter 2009 net loss available to common stockholders		1,691,001

Net loss available to common stockholders	$	(1,330,442	)

Subsequent Events – Debt Amendments

Page 31

Seller Financing

Page 32

Page 33

Future Contractual Obligations

The following table shows the Company's present and future contractual obligations as of March 31, 2010:

	(Unaudited)
	March 31, 2010
	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		Thereafter

Operating Lease Obligations	$	5,576,889	$	2,164,095	$	2,424,333	$	900,906	$	87,555

Employment Contracts	$	1,195,176	$	1,195,176	$	-	$	-	$	-

Revolving Line of Credit	$	2,500,000	$	2,500,000	$	-	$	-	$	-

Short and Long Term Debt	$	27,110,733	$	26,886,076	$	224,657	$	-	$	-

Total Contractual Cash Obligations	$	36,382,798	$	32,745,347	$	2,648,990	$	900,906	$	87,555

Page 34

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ significantly from those estimates. The policies below are considered by management to be critical to the understanding of the Company’s condensed consolidated interim financial statements because their application places a significant demand on management’s judgment, with financial reporting results relying on estimation about the effects of matters that are inherently uncertain.

Revenue Recognition

Management's Estimates

Goodwill / Intangible Assets

Share-based Payments

Revenue Recognition

The Company generates revenue primarily from the following sources:

Third party administration – The Company earns fees for the development and implementation of corporate and executive benefit programs, as well as fees for the duration that these programs are administered.

Financial planning and investment advisory fees and securities commissions – The Company receives commissions related to the sale of securities and certain investment-related insurance products as well as fees for offering financial advice through financial intermediaries and related services. These fees are based on a percentage of assets under management and are generally paid quarterly. The Company also charges fees for evaluations of the performance of portfolios.

Insurance commissions - Insurance and annuity commissions paid by insurance companies are paid to the Company for policies sold based on a percentage of the premium that the insurance company charges to the policyholder. First-year commissions are calculated as a percentage of the first twelve months premium on the policy and earned in the year that the policy is originated. In many cases, the Company receives renewal commissions for periods following the first year, if the policy remains in force.

Revenue is recognized only when all of the following are present: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee to the client is fixed or determinable, and collectability is reasonably assured. These criteria are in accordance with GAAP and the Revenue Recognition Topic of FASB ASC.

The Company recognizes revenue from these sources, as follows:

Third party administration:

Persuasive evidence of an arrangement between the Company and its clients exists;

Delivery of a completed product to the client has occurred or the service has been provided to the customer;

The price to the client is fixed and determinable;

Collectability of the sales price is reasonably assured.

Financial planning and investment advisory fees and securities:

As services are rendered;

Contingent commissions are recorded as revenue when earned and determinable and collection is reasonably assured.

Insurance:

The policy application is substantially complete;

The premium is paid;

The insured party is contractually committed to the purchase of the insurance policy.

Management's Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated interim financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated interim financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and related disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts for revenues and expenses during the reporting period. On an ongoing basis, management evaluates estimates, including those related to allowances for doubtful accounts, as described above, income taxes, bad debts, and contingencies. We base our estimates on historical data, when available, experience, and on various other assumptions that are believed to be reasonable under the circumstances, the combined results of which form the basis for making judgments approximating the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Page 35

Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the Intangibles-Goodwill and Other Topic of FASB ASC. Goodwill and other intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. This guidance also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with the provisions of the Property, Plant, and Equipment Topic of FASB ASC.

In accordance with the Property, Plant, and Equipment Topic of FASB ASC, long-lived assets, such as property and equipment and purchased intangible assets subject to amortization are reviewed for impairment 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 to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

No impairment losses have been recognized on goodwill and other intangible assets as of March 31, 2010 and December 31, 2009.

Share Based Payments

The Company complies with the fair value recognition provisions of the Compensation and Equity Topics of FASB ASC. This guidance requires that compensation cost for all stock awards be calculated and recognized over the service period (generally equal to the vesting period). This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the grant date. An offsetting increase to stockholders' equity is recorded equal to the amount of the compensation expense charge. The fair value of issued stock options and warrants are estimated on the date of grant using the Black-Scholes option-pricing model.

Inflation

While inflation has not had a material effect on our operations in the past, there can be no assurance that we will be able to continue to offset the effects of inflation on the costs of our services through price increases to our clients without experiencing a reduction in the demand for our services; or that inflation will not have an overall effect on the retirement market that would have a material effect on us.

Adoption of New Accounting Pronouncements

In April 2009, the FASB issued guidance in the Financial Instruments and Interim Reporting Topics of the FASB ASC. This guidance requires disclosures about fair value of financial instruments in interim financial statements. It requires that disclosures be included in both interim and annual financial statements of the methods and significant assumptions used to estimate the fair value of financial instruments. This guidance is effective for periods ending after June 15, 2009, with comparative disclosures required only for periods ending subsequent to initial adoption. The Company has disclosed the assumptions used to estimate the fair value of financial instruments in the notes to condensed consolidated interim financial statements.

New Accounting Pronouncements

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risks

As a “Smaller Reporting Company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) were effective as of March 31, 2010 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2010, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

The Company is from time to time subject to claims and suits arising in the ordinary course of business. Although the ultimate disposition of such proceedings is not presently determinable, management does not believe that the ultimate resolution of these matters will have a material adverse effect on the financial condition, results of operations or cash flows of the Company.

ITEM 1A. Risk Factors

As a “Smaller Reporting Company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 4, 2010, a holder of 8,513 shares of Series D Convertible Preferred Stock converted such shares into 170,260 shares of common stock.

The above issuances were made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933 and/or Rule 506 promulgated under Regulation D there under. The holders of the above securities are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933.

ITEM 3. Defaults Upon Senior Securities

As of March 31, 2010, the Company has not made a principal payment of $500,000 on the Revolving Line Credit with its Senior Lender and a principal and accrued interest payment of approximately $585,000 to the former owners of one of its acquired subsidiaries. On April 26, 2010, the Company and the Senior and Woodside Subordinated Senior Lenders entered into amendments in which the maturity date of the Revolving Line of Credit was extended until January 2, 2011 and the Senior and Woodside Subordinated Senior Lenders agreed to forbear from accelerating or otherwise enforcing its rights and remedies with respect to identified events of default and anticipated events of default under the loan agreements until January 2, 2011. As part of the amendments, the Senior Lender increased the maximum principal amount available under the Revolving Line of Credit to $4,000,000. Additionally, any subordinated payments, including seller financing, are not to be paid during the forbearance period unless otherwise approved by the Senior and Woodside Subordinated Senior Lenders. The Company intends to seek to amend and restructure certain unpaid seller notes during the forbearance period. There is no guarantee that the Company will successfully restructure any unpaid seller notes. See the Subsequent Events – Debt Amendment and Seller Financing sections of ITEM 2 of the MD&A.

ITEM 4. (Removed and Reserved)

ITEM 5. Other Information

On April 26, 2010, the Company entered into amendments to the Senior Loan Agreement and Subordinated Senior Agreement with its Senior and Woodside Subordinated Senior Lenders. The terms of the amendments are discussed further in the Subsequent Events – Debt Amendments section of ITEM 2 of the MD&A. As a result of the amendments, the Company is restricted from paying any seller notes without the authorization of the Senior and Woodside Subordinated Senior Lenders as discussed further in the Seller Financing section of ITEM 2 of the MD&A.

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ITEM 6. Exhibits

Exhibit

Number

Description

3.1	Articles of Incorporation of the Company, as amended (Incorporated by reference to Form S-18 filed with the Securities and Exchange Commission on October 7, 1985))

3.2	Amended and Restated Bylaws of the Company (Incorporated by reference to Form 8-K_filed with the Securities and Exchange Commission on April 19, 2005. (File No.333-124161))

3.3	Certificate of Designation of Preferences, Rights and Limitations of Series B Cumulative Convertible Preferred Stock (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 19, 2005. (File No.000-51252))

3.4	Certificate of Designation of Preferences, Rights and Limitations of Series C Cumulative Convertible Preferred Stock (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on November 14, 2005. (File No.000-51252))

3.5	Articles of Amendment to the Articles of Incorporation dated August19, 2004 (Incorporated by reference to Form SB-2 filed with the Securities and Exchange Commission on November 21, 2006 (File No. 333-136790))

3.6	Articles of Amendment to the Articles of Incorporation dated March 2, 2005 (Incorporated by reference to Form SB-2 filed with the Securities and Exchange Commission on November 21, 2006 (File No. 333-136790))

3.7	Articles of Amendment to the Articles of Incorporation dated March 15, 2005 (Incorporated by reference to Form SB-2 filed with the Securities and Exchange Commission on November 21, 2006 (File No. 333-136790))

3.8	Articles of Amendment to the Articles of Incorporation dated March 21, 2005 (Incorporated by reference to Form SB-2 filed with the Securities and Exchange Commission on November 21, 2006 (File No. 333-136790))

3.9	Certificate of Designation of Preferences, Rights and Limitations of Series D Cumulative Convertible Preferred Stock (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 27, 2006. (File No. 002-98138-A))

3.10	Certificate of Designation of Preferences, Rights and Limitations of Series E Cumulative Convertible Preferred Stock (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 26, 2006. (File No. 002-98138-A))

4.1	Securities Purchase Agreement dated March 9, 2005 by and between the Company and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.2	Secured Convertible Term Note dated March 9, 2005 issued by the Company to Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.3	Secured Convertible Term Note dated March 9, 2005 issued by the Company to Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.4	Common Stock Option dated March 9, 2005 issued by the Company to Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

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4.5

Master Security Agreement dated March 9, 2005 among Fast Eddie Racing Stables, Inc., Duncan Capital Financial Group, Inc., Pension Administration Services, Inc., Complete Investment Management Inc. of Philadelphia, MD Bluestein, Inc. and Laurus Master Fund, Ltd .(Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.6

Stock Pledge Agreement dated March 9, 2005 among Fast Eddie Racing Stables, Inc., Duncan Capital Financial Group, Inc., Pension Administration Services, Inc., Complete Investment Management Inc. of Philadelphia, MD Bluestein, Inc. and Laurus Master Fund, Ltd.(Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.7

Subsidiary Guaranty dated March 9, 2005 executed by Duncan Capital Group, Inc., Pension Administration Services, Inc., Complete Investment Management Inc. of Philadelphia, MD Bluestein, Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.8	Registration Rights Agreement dated March 9, 2005 by and between Fast Eddie Racing Stables, Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.9	Common Stock Purchase Warrant dated March 9, 2005 issued by Duncan Capital Financial Group, Inc. to Richard E. Stierwalt. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.10	Common Stock Purchase Warrant dated March 9, 2005 issued by Duncan Capital Financial Group, Inc. to Leonard Neuhaus. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005. (File No. 002-98138-A))

4.11	Form of Stock Option Agreement, dated March 9, 2005, between the Company and certain non-management directors. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 19, 2005.))

4.12	Securities Purchase Agreement dated November 30, 2005 entered by and between National Investment Mangers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 6, 2005. (File No.000-51252))

4.13	Securities Purchase Agreement dated November 30, 2005 entered by and between National Investment Mangers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 6, 2005. (File No.000-51252))

4.14	Securities Purchase Agreement dated November 30, 2005 entered by and between National Investment Mangers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 6, 2005. (File No.000-51252))

4.15	Convertible Promissory Note, dated August 2, 2005, issued by the Company to Stephen H. Rosen. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005.(File No.000-51252))

4.16	Convertible Promissory Note, dated August 2, 2005, issued by the Company to Elizabeth Davies. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

4.17	Common Stock Option, dated August 2, 2005, issued by the Company to Stephen H. Rosen. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

4.18	Common Stock Option, dated August 2, 2005, issued by the Company to Stephen H. Rosen. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

Page 40

4.19	Form of Subscription Agreement for Series B Cumulative Convertible Preferred Stock (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on October 20, 2005 (File No.000-51252))

4.20	Form of Subscription Agreement for Series C Cumulative Convertible Preferred Stock (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 14, 2005 (File No.000-51252))

4.21	Amendment Agreement entered by and between the Company and Laurus Master Fund Ltd. dated August 2006

4.22	Securities Purchase Agreement dated May 30, 2006 by and between National Investment Managers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 5, 2006 (File No.000-51252))

4.23	Secured Non-Convertible Term Note payable to Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 5, 2006 (File No.000-51252))

4.24	Secured Non-Convertible Term Note payable to Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 5, 2006 (File No.000-51252))

4.25	Registration Rights Agreement dated May 30, 2006 by and between National Investment Managers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 5, 2006 (File No.000-51252))

4.26	Letter Agreement dated May 30, 2006 by and between National Investment Managers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 5, 2006 (File No.000-51252))

4.27	Amendment dated May 30, 2006 by and between National Investment Managers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 5, 2006 (File No.000-51252))

4.28	Agreement dated June 14, 2006 by and between National Investment Managers Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2006 (File No.000-51252))

4.29	Common Stock Purchase Warrant dated May 30, 2006 issued to Laurus Master Fund, Ltd. (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2006 (File No.000-51252))

4.30	Letter from Laurus Master Fund, Ltd. to National Investment Managers Inc., dated June 14, 2006 (Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2006 (File No.000-51252))

4.31	Form of Subscription Agreement for Series D Cumulative Convertible Preferred Stock (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 27, 2006. (File No. 002-98138-A))

4.32	Form of Common Stock Purchase Warrant (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 27, 2006. (File No. 002-98138-A))

4.33	Form of Common Stock Purchase Warrant (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 27, 2006. (File No. 002-98138-A))

4.34	Form of Common Stock Purchase Warrant (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 26, 2006. (File No. 002-98138-A))

Page 41

4.35	Revolving Line of Credit and Term Loan Agreement by and between National Investment Managers Inc. and RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.36	Revolving Line of Credit Note issued by National Investment Managers Inc. issued to RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.37	Term Promissory Note issued by National Investment Managers Inc. issued to RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.38	Stock Pledge Agreement by and between National Investment Managers Inc. and RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.39	Security Agreement by and between National Investment Managers Inc. and RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.40	Form of Stock Pledge Agreement by and between the subsidiaries of National Investment Managers Inc. and RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252)

4.41	Form of Security Agreement by and between the subsidiaries of National Investment Managers Inc. and RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.42	Form of Guaranty by and between the subsidiaries of National Investment Managers Inc. and RBS Citizens, National Association dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.43

Securities Purchase and Loan Agreement by and between National Investment Managers Inc. and Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Lehman Brothers Commercial Bank and Woodside Agency Services, LLC, as collateral agent, dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.44

4.45

Form of Warrant exercisable at $0.50 per share issued by National Investment Managers Inc. to Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.46

Form of Warrant exercisable at $1.00 per share issued by National Investment Managers Inc. to Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

Page 42

4.47

Form of Warrant exercisable at $1.50 per share issued by National Investment Managers Inc. to Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.48

Registration Rights Agreement by and between National Investment Managers Inc. and Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.49

Contingent Interest Payment Agreement by and between National Investment Managers Inc. and Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.50

Fee Agreement by and between National Investment Managers Inc. and Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.51

Securities Pledge Agreement by and between National Investment Managers Inc. and Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, and Lehman Brothers Commercial Bank dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.52	Security Agreement by and between National Investment Managers Inc., its subsidiaries and Woodside Agency Services, LLC dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.53	Guaranty by and between National Investment Managers Inc., its subsidiaries and Woodside Agency Services, LLC dated November 30, 2007 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.54	Securities Purchase Agreement by and between National Investment Managers Inc. and Valens U.S. SPV I, LLC and Valens Offshore SPV I, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

4.55	Amendment No., 1 to Revolving Line of Credit and Term Loan Agreement by and between Citizens RBS, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008 (File No. 000-51252))

4.56

Consent and Amendment No. 1 to Securities Purchase and Loan Agreement by and among National Investment Managers Inc., Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Lehman Brothers Commercial Bank and Woodside Agency Services, LLC as collateral agent (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008 (File No. 000-51252))

4.57	Amendment No., 4 to Revolving Line of Credit and Term Loan Agreement by and between Citizens RBS, National Association, and National Investment Managers Inc.

4.58	Amendment No. 4 to Intercreditor and Subordination Agreement by and between RBS Citizens, National Association, and National Investment Managers Inc.

4.59

Letter Agreement entered into by and between National Investment Managers Inc., Woodside Capital Partners V, LLC, Woodside Capital Partners V QP, LLC, Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC and Woodside Agency Services LLC (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on November 7, 2008 (File No. 000-51252))

Page 43

4.60

Letter Agreement entered into by and between National Investment Managers Inc., Woodside Capital Partners V, LLC, Woodside Capital Partners V QP, LLC, Woodside Capital Partners IV, LLC and Woodside Capital Partners IV QP, LLC (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on November 7, 2008 (File No. 000-51252))

4.61	Stock Transfer Agreement dated November 3, 2008 among IBF Fund Liquidating LLC, National Investment Managers Inc., DCI Master LDC and Duncan Capital Group LLC (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on November 7, 2008 (File No. 000-51252))

4.62	Amendment No. 1 and Allonge to Revolving Line of Credit Note by and between Citizens RBS, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

4.63	Amendment No. 3 and Allonge to Term Promissory Note by and between Citizens RBS, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

4.64	Amendment No. 7 to Revolving Line of Credit and Term Loan Agreement by and between Citizens RBS, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

4.65

Amendment No. 7 to Intercreditor and Subordination Agreement by and between RBS Citizens, National Association, Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

4.66

Securities Purchase and Loan Agreement by and between National Investment Managers Inc. and Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

4.67	Amendment No. 2 and Allonge to Revolving Line of Credit Note by and between RBS Citizens, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

4.68	Amendment No. 9 to Revolving Line of Credit and Term Loan Agreement by and between RBS Citizens, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

4.69

Consent and Amendment No. 8 to Securities Purchase and Loan Agreement by and between Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

4.70	Reservation of rights by RBS Citizens, National Association (Incorporated by reference to Form 10Q Quarterly Report filed with the Securities and Exchange Commission on November 16, 2009 (File No. 333-160488))

Page 44

4.71

Reservation of rights by Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent (Incorporated by reference to Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 16, 2009 (File No. 333-160488))

4.72

Amendment No. 3 and Allonge to Revolving Line of Credit Note and Amendment No. 10 to Revolving Line of Credit and Term Loan Agreement by and between RBS Citizens, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 17, 2009. (File No. 333-160488))

4.73	2005 Stock Option Plan (Incorporated by reference to Form S-8 filed with the Securities and Exchange Commission on July 9, 2009. (File No. 333-160488))

4.74

Short-Term Working Capital Loan by and between Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 16, 2010. (File No. 333-160488))

4.75	Amendment No. 11 to Revolving Line of Credit and Term Loan Agreement by and between RBS Citizens, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

4.76	Amendment No. 4 and Allonge to Revolving Line of Credit Note by and between RBS Citizens, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

4.77	Amendment No. 4 and Allonge to Term Promissory Note by and between RBS Citizens, National Association, and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

4.78

Amendment No. 8 to Securities Purchase and Loan Agreement by and between Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

4.79

Amendment to Intercreditor and Subordination Agreement by and between RBS Citizens, National Association, Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

4.80

Side Letter Fee Arrangement by and between Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

Page 45

4.81

Side Letter Repayment of Short-Term Working Capital and Participation Arrangement by and between RBS Citizens, National Association, Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

4.82

Termination Agreement by and between Woodside Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Woodside Capital Partners V, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), Woodside Capital Partners V QP, LLC as assignee of Woodlands Commercial Bank (f/k/a Lehman Brothers Commercial Bank), and Woodside Agency Services, LLC, as collateral agent and National Investment Managers Inc. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on April 30, 2010. (File No. 333-160488))

10.1

Agreement and Plan of Reorganization, dated as of February 18, 2005 by and among Fast Eddie Racing Stables, Inc, Glenn A. Little, Duncan Capital Financial Group, Inc. and FERS Acquisition Corp. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on February 23, 2005)

10.2	Employment Agreement, dated as of December 23, 2004, between Duncan Capital Financial Group, Inc. and Richard E. Stierwalt. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005)

10.3	Employment Agreement, dated as of January 1, 2005, between Duncan Capital Financial Group, Inc. and Leonard Neuhaus. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 15, 2005)

10.4

12% Senior Secured Note, dated January 27, 2005, in the original principal amount of $350,000, delivered by Duncan Capital Financial Group, Inc. to CAMOFI Master LDC (formerly known as DCOFI Master LDC) (Incorporated by reference to Form SB-2 Registration Statement filed with the Securities and Exchange Commission on April 19, 2005. (File No.333-124161))

10.5	Securities Purchase Agreement, dated as of January 27, 2005, between Duncan Capital Financial Group, Inc. and CAMOFI Master LDC(Incorporated by reference to Form SB-2 filed with the Securities and Exchange Commission on April 19, 2005. (File No.333-124161))

10.6

Security Agreement, dated as of January 27, 2005, among Duncan Capital Financial Group, Inc., Pension Administration Services, Inc., Complete Investment Management Inc. of Philadelphia, MD Bluestein Inc. and CAMOFI Master LDC. (Incorporated by reference to Form SB-2_filed with the Securities and Exchange Commission on April 19, 2005. (File No.333-124161))

10.7

Subsidiary Guarantee, dated as of January 27, 2005, among Duncan Capital Financial Group, Inc., Pension Administration Services, Inc., Complete Investment Management Inc. of Philadelphia and MD Bluestein Inc. in favor of CAMOFI Master LDC. (Incorporated by reference to Form SB-2/A_filed with the Securities and Exchange Commission on June 17, 2005. (File No.333-124161))

10.8	12% Senior Secured Note, dated May 4, 2005, in the original principal amount of $150,000, delivered by Duncan Capital Financial Group, Inc. to CAMOFI Master LDC. (Incorporated by reference to Form SB-2/A_filed with the Securities and Exchange Commission on June 17, 2005. (File No.333-124161))

10.9	Agreement, dated as of June 15, 2005, between the Company and Richard Berman. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on June 17, 2005.)

Page 46

10.10

Asset Purchase Agreement between National Investment Mangers Inc. and American Benefit Resources, Inc. dated November 1, 2005 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on November 4, 2005. (File No.000-51252))

10.11

A/R Escrow Agreement by and among National Investment Mangers Inc., JP Morgan Chase Bank, N.A. and American Benefit Resources, Inc. dated November 30, 2005 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 6, 2005. (File No.000-51252)

10.12

Indemnification Escrow Agreement by and among National Investment Mangers Inc., JP Morgan Chase Bank, N.A. and American Benefit Resources, Inc. dated November 30, 2005 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 6, 2005. (File No.000-51252)

10.13

Registration Rights Agreement between National Investment Mangers Inc., American Benefit Resources, Inc. and Arthur J. Steinberg as manager of IBF Fund Liquidating LLC dated November 30, 2005 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 6, 2005. (File No.000-51252))

10.14

Stock Purchase Agreement, dated August 2, 2005, among the Company, Stephen H. Rosen Associates, Inc., Stephen H. Rosen and Elizabeth Davies. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

10.15

Stock Purchase Agreement, dated August 2, 2005, among the Company, Haddon Strategic Alliances, Inc. and John Ermilio. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

10.16

Employment Agreement, dated as of August 2, 2005, between the Company and Stephen H. Rosen. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

10.17

Noncompetition Agreement, dated as of August 2, 2005, between the Company and Stephen H. Rosen. (Incorporated by reference to Form 8-Kfiled with the Securities and Exchange Commission on August 5, 2005 (File No.000-51252))

10.18

Noncompetition Agreement, dated as of August 2, 2005, between the Company and John Ermilio. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 5, 2005. (File No.000-51252))

10.19

Agreement and Plan of Merger Dated as of January 4, 2006 by and among Jack C. Holland, Steven R. Eyer, Valley Forge Enterprises, Ltd., VFE Merger Corp. and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 12, 2006. (File No.000-51252))

10.20

Employment Agreement dated January 1, 2006 by and between Steven R. Eyer and Valley Forge Enterprises, Ltd (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 12, 2006. (File No.000-51252))

10.21

Employment Agreement dated January 1, 2006 by and between Jack C. Holland and Valley Forge Enterprises, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 12, 2006. (File No.000-51252))

10.22

Non-Competition, Non-Disclosure and Non-Solicitation Agreement dated January 1, 2006 by and between Steven R. Eyer and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 12, 2006. (File No.000-51252))

10.23

Non-Competition, Non-Disclosure and Non-Solicitation Agreement dated January 1, 2006 by and between Jack C. Holland and National Investment Managers Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 12, 2006. (File No.000-51252))

Page 47

10.24

Employment Agreement dated March 1, 2006 by and between Leonard Neuhaus and the Company (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2006. (File No.000-51252)

10.25

Consulting Agreement dated March 1, 2006 by and between Richard Stierwalt and the Company (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2006. (File No.000-51252))

10.26

Employment Agreement dated March 2006 by and between Steven Ross and the Company (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 17, 2006.)

10.27

Consulting Agreement dated January 1, 2006 by and between DC Associates LLC and the Company (Incorporated by reference to Form 10-KSB filed with the Securities and Exchange Commission on March 31, 2006.)

10.28

Put Agreement entered by and among American Benefit Resources, Inc., IBF Fund Liquidating LLC and Duncan Capital Group LLC

10.29

Exhibit number was intentionally not used.

10.30

Stock Purchase Agreement by and between National Investment Managers Inc., The LAMCO Group, Inc., Lamoriello & Co., Inc., Circle Pension, Inc., Southeastern Pension Services, Inc. and Nicholas J. Lamoriello (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.31

Stock Option issued to Nicholas J. Lamoriello (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.32

Escrow Agreement entered by and between National Investment Managers Inc. and The LAMCO Group, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.33

Cross Sales Agreement entered between National Investment Managers Inc. and The LAMCO Group, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.34

Technology Agreement entered between National Investment Managers Inc. and The LAMCO Group, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.35

Management entered between National Investment Managers Inc., Nicholas J. Lamoriello and Stephen R. Zito (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.36

Non-Competition, Non-Disclosure and Non-Solicitation Agreement between National Investment Managers Inc., Nicholas J. Lamoriello and The LAMCO Group, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.37

Joinder Agreement between Laurus Master Fund, Ltd., Lamoriello & Co. Inc., Circle Pension, Inc., and Southeastern Pension Services, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 10, 2006. (File No. 000-51252))

10.38

Employment Agreement dated October 24, 2006 by and between Steven Ross and the Company. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 26, 2006. (File No. 000-51252))

Page 48

10.39

Stock Purchase Agreement by and between National Investment Managers Inc., National Actuarial Pension Services, Inc., Charles McLeod and Mary H. McLeod (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2006. (File No. 000-51252))

10.40

Promissory Note issued by National Investment Managers Inc. to Charles McLeod and Mary H. McLeod (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2006. (File No. 000-51252))

10.41

10.42

10.43

Employment Agreement entered between National Investment Managers Inc. and Mary McLeod (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2006. (File No. 000-51252))

10.44

Non-Competition, Non-Disclosure and Non-Solicitation Agreement between National Investment Managers Inc. and Charles McLeod and Mary H. McLeod. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2006. (File No. 000-51252))

10.45

Joinder Agreement between Laurus Master Fund, Ltd. and National Actuarial Pension Services, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2006. (File No. 000-51252))

10.46

10.47

Agreement between National Investment Managers Inc. and Duncan Capital Group LLC, a Delaware limited liability company and DCI Master LDC. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 22, 2006. (File No. 000-51252))

10.48

Stock Purchase Agreement by and between National Investment Managers Inc., Benefit Dynamics, Inc., Jo Ann Massanova and Carmen Laverghetta (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.49

Form of Promissory Note issued by National Investment Managers Inc. payable March 2, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.50

Form of Promissory Note issued by National Investment Managers Inc. payable March 2, 2009 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.51

Employment Agreement entered between Benefit Dynamics, Inc. and Jo Ann Massanova (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.52

Employment Agreement entered between Benefit Dynamics, Inc. and Carmen Laverghetta (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.53

Non-Competition, Non-Disclosure and Non-Solicitation Agreement between National Investment Managers Inc. and Jo Ann Massanova (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

Page 49

10.54

10.55

Joinder Agreement between Laurus Master Fund, Ltd. and Benefit Dynamics, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.56

Stock Option Agreement entered by and between the Company and Jo Ann Massanova (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2007. (File No. 000-51252))

10.57

Stock Purchase Agreement by and between National Investment Managers Inc., Renee J. Conner, William Renninger and The Pension Alliance, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.58

Promissory Note issued by National Investment Managers Inc. to Renee J. Conner due April 28, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.59

Promissory Note issued by National Investment Managers Inc. to William Renninger due April 28, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.60

Promissory Note issued by National Investment Managers Inc. to Renee J. Conner due April 28, 2009 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.61

10.62

Employment Agreement entered between National Investment Managers Inc. and Renee J. Conner (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.63

10.64

10.65

Stock Purchase Agreement by and between National Investment Managers Inc., Pentec, Inc., Pentec Capital Management, Inc. and Michael E. Callahan (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.66

Promissory Note issued by National Investment Managers Inc. to Michael E. Callahan (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.67

Employment Agreement entered between Pentec, Inc., Pentec Capital Management, Inc. and Michael Callahan (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

10.68

Non-Competition, Non-Disclosure and Non-Solicitation Agreement between National Investment Managers Inc. and Michael Callahan (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 6, 2007. (File No. 000-51252))

Page 50

10.69

Addendum to Employment Agreement by and between the Company and Steven J. Ross (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 29, 2007. (File No. 000-51252))

10.70

Addendum to Employment Agreement by and between the Company and Leonard Neuhaus (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 29, 2007. (File No. 000-51252))

10.71

Employment Agreement by and between the Company and John Davis (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 29, 2007. (File No. 000-51252))

10.72

Second Omnibus Amendment and Waiver, dated as of May 2, 2007, by and between National Investment Managers, Inc. and Laurus Master Fund, Ltd. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on May 7, 2007. (File No. 000-51252))

10.73

10.74

10.75

Employment Agreement by and between National Investment Managers Inc. and Steven Ross (to be filed by amendment) (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

10.76

Agreement by and between National Investment Managers Inc. and DC Associates LLC (“DCA”), and Michael Crow (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

10.77

Amendment No. 1 to the Agreement, dated as of November 30, 2007 by and among National Investment Managers Inc. Duncan Capital Group LLC and DCI Master LDC (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 4, 2007. (File No. 000-51252))

10.78

Stock Purchase Agreement among National Investment Managers Inc., California Investment Annuity Sales, Inc., Richard L. Kaplan and Hana E. Kaplan Inter Vivos Trust Agreement dated 1/29/97 as amended and restated 1/10/03 and Anthony Delfino dated April 3, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

10.79

Employment Agreement by and between Richard L. Kaplan and VEBA Administrators, Inc. dated April 3, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

10.80

Consulting Agreement by and between Anthony S. Delfino and VEBA Administrators, Inc. dated April 3, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

10.81

Non-Disclosure and Non-Solicitation Agreement by and between Anthony S. Delfino and National Investment Managers Inc. dated April 3, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

10.82

Non-Disclosure and Non-Solicitation Agreement by and between Richard Kaplan and National Investment Managers Inc. dated April 3, 2008 (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

Page 51

10.83

Promissory Note payable to Anthony S. Delfino (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

10.84

Promissory Note payable to Richard Kaplan (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on April 8, 2008. (File No. 000-51252))

10.85

Settlement Agreement and Release by and between Renee J. Conner, William E. Renninger and National Investment Managers Inc. dated May 15, 2008. (Incorporated by reference to the Form 10Q Quarterly Report filed with the Securities and Exchange Commission on May 15, 2008. (File No. 000-51252))

10.86

Promissory Note issued by National Investment Managers, Inc. to Renee J. Conner and William E. Renninger due April 30, 2009 (Incorporated by reference to the Form 10Q Quarterly Report filed with the Securities and Exchange Commission on May 15, 2008. (File No. 000-51252))

10.87

Promissory Note issued by National Investment Managers, Inc. to Renee J. Conner and William E. Renninger due October 31, 2009 (Incorporated by reference to the Form 10Q Quarterly Report filed with the Securities and Exchange Commission on May 15, 2008. (File No. 000-51252))

10.88

Addendum to the Employment Agreement by and between National Investment Managers Inc. and John M. Davis (Incorporated by reference to the Form 10Q Quarterly Report filed with the Securities and Exchange Commission on August 14, 2008. (File No. 000-51252))

10.89

Agreement by and between National Investment Managers Inc. and Richard Berman.

10.90

Stock Purchase Agreement by and among National Investment Managers, Pension Technical Services, Inc., Ralph W. Shaw and Eileen A. Baldwin-Shaw (Incorporated by reference to Form 8-K filled with the Securities and Exchange Commission on October 6, 2008. (File No. 000-51252))

10.91

Promissory Note issued to Ralph W. Shaw and Eileen A. Baldwin-Shaw due December 2009 (Incorporated by reference to Form 8-K filled with the Securities and Exchange Commission on October 6, 2008. (File No. 000-51252))

10.92

Promissory Note issued to Ralph W. Shaw and Eileen A. Baldwin-Shaw due December 2010 (Incorporated by reference to Form 8-K filled with the Securities and Exchange Commission on October 6, 2008. (File No. 000-51252))

10.93

Employment Agreement entered by and between Pension Technical Services, Inc. and Ralph W. Shaw (Incorporated by reference to Form 8-K filled with the Securities and Exchange Commission on October 6, 2008. (File No. 000-51252))

10.94

Employment Agreement entered by and between Pension Technical Services, Inc. and Eileen A. Baldwin-Shaw (Incorporated by reference to Form 8-K filled with the Securities and Exchange Commission on October 6, 2008. (File No. 000-51252))

10.95

Stock Purchase Agreement by and among National Investment Managers, Peter R. Stephan, individually and as Trustee of The Stephan Family Trust Dated August 2, 1993, James R. Norman, Jr., individually and as Trustee of The Norman Living Trust Dated December 7, 2005, Rise Spiegel, individually and as Trustee of The Rise Norris Spiegel Trust Dated November 16, 2005 and the Pension Group, Inc. (Incorporated by reference to Form 8-K/A filed with the Securities and Exchange Commission on December 3, 2008. (File No. 000-51252))

10.96

Promissory Note issued to Peter R. Stephan, James R. Norman, Jr. and Rise Spiegel due January 2010 (Incorporated by reference to Forms 8-K and 8-K/A filed with the Securities and Exchange Commission on December 1, 2008 and December 3, 2008, respectively. (File No. 000-51252))

10.97

Promissory Note issued to Peter R. Stephan, James R. Norman, Jr. and Rise Spiegel due January 2011 (Incorporated by reference to Forms 8-K and 8-K/A filed with the Securities and Exchange Commission on December 1, 2008 and December 3, 2008, respectively. (File No. 000-51252))

Page 52

10.98

Employment Agreement entered by and between The Pension Group, Inc. and Peter R. Stephan (Incorporated by reference to Forms 8-K and 8-K/A filed with the Securities and Exchange Commission on December 1, 2008 and December 3, 2008, respectively. (File No. 000-51252))

10.99

Employment Agreement entered by and between The Pension Group, Inc. and James R. Norman, Jr. (Incorporated by reference to Forms 8-K and 8-K/A filed with the Securities and Exchange Commission on December 1, 2008 and December 3, 2008, respectively. (File No. 000-51252))

10.100

Employment Agreement entered by and between The Pension Group, Inc. and Rise Spiegel. (Incorporated by reference to Forms 8-K and 8-K/A filed with the Securities and Exchange Commission on December 1, 2008 and December 3, 2008, respectively. (File No. 000-51252))

10.101

Promissory Note issued by National Investment Managers, Inc. to Renee J. Conner and William E. Renninger due March 1, 2010. (Incorporated by reference to Form 10K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

10.102

10.103

Promissory Note issued by National Investment Managers, Inc. to Michael E. Callahan due December 1, 2009. (Incorporated by reference to Form 10K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

10.104

Promissory Note issued by National Investment Managers, Inc. to Richard Kaplan due June 15, 2010. (Incorporated by reference to Form 10K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

10.105

Promissory Note issued by National Investment Managers, Inc. to Anthony Delfino due June 15, 2010. (Incorporated by reference to Form 10K filed with the Securities and Exchange Commission on March 31, 2009. (File No. 000-51252))

10.106

Employment Agreement entered by and between the Company and John M. Davis dated April 14, 2009 (Incorporated by reference to the Form 10Q Quarterly Report filed with the Securities and Exchange Commission on May 15, 2009. (File No. 000-51252))

10.107

Employment Agreement entered by and between the Company and Christopher W. Larkin dated April 15, 2009 (Incorporated by reference to the Form 10Q Quarterly Report filed with the Securities and Exchange Commission on May 15, 2009. (File No. 000-51252))

10.108

Amendment No. 1 to Subordinated Promissory Notes by and between National Investment Managers Inc., James R. Norman, Jr., Peter R. Stephan and Rise Norris Spiegel due January 2010 and January 2011. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

10.109

Amendment No. 1 to Promissory Notes by and between National Investment Managers Inc., Ralph W. Shaw and Eileen A. Baldwin-Shaw due December 2009 and December 2010. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

10.110

Amendment No. 1 to Promissory Note by and between National Investment Managers Inc. and Richard L. Kaplan due June 15, 2010. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

10.111

Amendment No. 1 to Promissory Note by and between National Investment Managers Inc. and Anthony S. Delfino due June 15, 2010. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

10.112

Amendment No. 1 to Promissory Note by and between National Investment Managers Inc., Renee J. Conner and William E. Renninger due March 1, 2010. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on October 2, 2009. (File No. 333-160488))

Page 53

21.1	List of subsidiaries of the Company. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 30, 2009 (File No. 000-51252))

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1	Press Release dated November 3, 2009, referencing asset purchase from Standard Retirement Services (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on November 3, 2009. (File No. 333-160488))

Page 54

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NATIONAL INVESTMENT MANAGERS INC.

Registrant

Dated: May 14, 2010	/s/ Steven J. Ross
	Steven J. Ross
	Chief Executive Officer

Dated: May 14, 2010	/s/ Christopher W. Larkin
	Christopher W. Larkin
	Chief Financial Officer

Page 55

National Investment Managers Inc. - FORM 10-Q - May 14, 2010

Attached files

National Investment Managers Inc. Reports