EXHIBIT 99.3

BLUE HILL DATA SERVICES, INC. BUSINESS COMBINATION

Through a Stock Purchase Agreement, entered into as of October 10, 2007, the Company purchased the issued and outstanding capital stock of Blue Hill Data Services, Inc., a privately-held data center outsourcing services company, based in Pearl River, New York (“Blue Hill”).  At or about the closing date, the Company transferred approximately $11 million of value, as follows:  (i) cash payments to the current selling stockholders of approximately $6.6 million; (ii) a 15-month promissory note in the initial principal amount of $1 million, subject to offset in favor of the Company with respect to any claims for indemnity by the Company under the terms of the Stock Purchase Agreement; (iii) cash payment through Blue Hill in the amount of approximately $1.4 million to its former stockholder; and (iv) 2,666,666 shares of the Company’s restricted common stock valued at approximately $1.8 million (based upon the volume-weighted average closing bid price of the common stock during the ten consecutive trading days immediately preceding the closing).  The promissory note bears interest from and after January 1, 2009, at the rate of 9% per annum and is “secured” by a document to be held in escrow, styled as a confession of judgment.  The principal of the note, less any offsets, is, at the selling stockholders’ option, convertible into restricted shares of the Company’s common stock, the number of which is to be calculated in the same manner as the shares issued at closing were calculated.

The following unaudited pro forma financial information presents the combined results of operations of the Company and Blue Hill for the year ended December 31, 2006 and for the nine months ended September 30, 2007 as if the acquisition had occurred on January 1, 2006 and January 1, 2007, respectively.

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BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2006
(Unaudited)
									Pro forma
	BPO								BPO
	Management						Pro forma		Management
	Services, Inc.			Blue Hill			Adjustments		Services, Inc.
ASSETS
Current assets:
Cash and cash equivalents	$	706,197		$	12,161		$	-	$	718,358
Accounts receivable		743,114			1,025,235			-		1,768,349
Inventory consisting of finished goods		37,960			-			-		37,960
Income taxes receivable		250,000			-			-		250,000
Prepaid expenses and other current assets		123,165			144,798			-		267,963
Total current assets		1,860,436			1,182,194			-		3,042,630
Equipment		509,929			877,224			-		1,387,153
Goodwill		4,009,223						10,431,130		14,440,353
Intangible assets		1,114,698			-			-		1,114,698
Other Assets		146,723			45,208			-		191,931
	$	7,641,009		$	2,104,626		$	10,431,130	$	20,176,765
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	322,778		$	98,528		$	-	$	421,306
Current portion of capital lease obligations		170,976			-			-		170,976
Current portion of treasury stock loan payable		-			382,259			-		382,259
Accounts payable		1,381,243			162,906			-		1,544,149
Accrued expenses		725,935			133,408					859,343
Purchase price payable-short term		977,473			-			1,000,000		1,977,473
Line-of-credit		-			216,092			-		216,092
Deferred revenues		334,672			540,507			-		875,179
Related party notes payable		516,157			-			-		516,157
Severence obligations payable		543,291			-			-		543,291
Other current liabilities		25,491			-			-		25,491
Total current liabilities		4,998,016			1,533,700			1,000,000		7,531,716
Long-term debt, net of current portion		39,475			143,767			-		183,242
Treasury stock loan payable, net of current portion		-			1,320,397
Capital lease obligations, net of current portion		10,328			-			-		10,328
Purchase price payable-long term		179,579			-			-		179,579
Other long-term liabilities		33,115			-			-		33,115
Total liabilities		5,260,513			2,997,864			1,000,000		7,937,980
Stockholders equity:
Capital stock		125,594			-			26,667		152,261
Additional paid-in capital		6,462,928			(2,498,500	)		9,404,463		13,368,891
Retained earnings (deficit)		(4,100,706	)		1,605,262			-		(2,495,444	)
Accumulated other comprehensive loss, foreign currency translation adjustments		(107,320	)		-			-		(107,320	)
Total stockholders ' equity		2,380,496			(893,238	)		9,431,130		10,918,388
	$	7,641,009		$	2,104,626		$	10,431,130	$	18,856,368
Pro forma adjustments: The adjustments reflect the booking of goodwill which resulted from the difference between net
assets and net liabilities acquired with an entry for the purchase price payable, issuance of common stock and
a corresponding entry to equity. All intercompany balances have been eliminated.

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BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2006
(Unaudited)
								PRO FORMA
	BPO							BPO
	MANAGEMENT					PRO FORMA		MANAGEMENT
	SERVICES, INC.			BLUE HILL		ADJUSTMENTS		SERVICES, INC.
Revenues:
Enterprise content management	$	2,713,769		$	-	$	-	$	2,713,769
IT outsourcing services		1,833,052			6,826,667		-		8,659,719
Human resource outsourcing servicing		164,318			-		-		164,318
Total revenues		4,711,139			6,826,667		-		11,537,806
Operating expenses:
Cost of services provided		1,523,983			2,818,393		-		4,342,376
Selling, general and administrative		5,737,335			3,427,420		-		9,164,755
Research and development		19,491			-		-		19,491
Change in estimated severance liability		(223,726	)		-		-		(223,726	)
Share-based compensation		598,031			-		-		598,031
Total operating expenses		7,655,114			6,245,813		-		13,900,927
Income (loss) from operations		(2,943,975	)		580,854		-		(2,363,121	)
Interest expense (income)
Related parties		-			-		-		-
Amortization of related party debt discount		-			-		-		-
Other (net)		366,943			146,747		-		513,690
Other Expense (Income)		(10,732	)		-		-		(10,732	)
Total interest and other expense		356,211			146,747		-		502,958
Net income (loss)	$	(3,300,186	)	$	434,107	$	-	$	(2,866,079	)
Basic and diluted net income (loss) per share	$	(0.39	)	$	0.16	$	-	$	(0.26	)
Basic and diluted weighted average common		8,496,119			2,666,666				11,162,785

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BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007
(Unaudited)
									Pro forma
	BPO								BPO
	Management						Pro forma		Management
	Services, Inc.			Blue Hill			Adjustments		Services, Inc.
ASSETS
Current assets:
Cash and cash equivalents	$	6,102,487		$	35,571		$	-	$	6,138,058
Restricted cash		922,888			-			-		922,888
Accounts receivable		3,672,086			1,130,571			-		4,802,657
Inventory consisting of finished goods		184,220			-			-		184,220
Prepaid expenses and other current assets		287,628			52,272			-		339,900
Total current assets		11,169,309			1,218,414			-		12,387,723
Equipment		1,058,555			1,024,494			-		2,083,049
Goodwill		10,179,091			-			10,431,130		20,610,221
Intangible assets		960,751			-			-		960,751
Other Assets		33,155			51,000			-		84,155
	$	23,400,861		$	2,293,908		$	10,431,130	$	36,125,899
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	141,943		$	284,835		$	-	$	426,779
Current portion of capital lease obligations		132,263			-			-		132,263
Current portion of treasury stock loan payable		-			382,259
Accounts payable		2,327,226			230,027			-		2,557,252
Accrued expenses		1,266,252			56,594			-		1,322,846
Accrued interest-related party		9,450			-			-		9,450
Accrued dividend payable-related party		11,392			-			-		11,392
Amount due former shareholders of acquired companies		1,101,771			-			1,000,000		2,101,771
Income taxes payable		245,013			-			-		245,013
Deferred revenues		1,655,185			645,396			-		2,300,581
Related party notes payable		1,200,000			-			-		1,200,000
Severence obligations payable		272,912			-			-		272,912
Total current liabilities		8,363,407			1,599,111			1,000,000		10,580,259
Long-term debt, net of current portion		28,058			519,680			-		547,738
Treasury stock loan payable, net of current portion		-			1,036,536
Capital lease obligations, net of current portion		415,776			-			-		415,776
Total liabilities		8,807,241			3,155,327			1,000,000		11,543,773
Stockholders equity:
Capital stock		148,092			-			26,667		174,759
Additional paid-in capital		22,916,997			(2,498,500	)		9,404,463		29,822,960
Retained earnings (deficit)		(8,032,969	)		1,637,081			-		(6,395,888	)
Accumulated other comprehensive loss, foreign currency translation adjustments		(438,500	)		-			-		(438,500	)
Total stockholders ' equity		14,593,620			(861,419	)		9,431,130		23,163,331
	$	23,400,861		$	2,293,908		$	10,431,130	$	34,707,104
Pro forma adjustments: The adjustments reflect the booking of goodwill which resulted from the difference between net
assets and net liabilities acquired with an entry for the purchase price payable, issuance of common stock and
a corresponding entry to equity. All intercompany balances have been eliminated.

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BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007
(Unaudited)
									PRO FORMA
	BPO								BPO
	MANAGEMENT						PRO FORMA		MANAGEMENT
	SERVICES, INC.			BLUE HILL			ADJUSTMENTS		SERVICES, INC.
Revenues:
Enterprise content management	$	5,866,997		$	-		$	-	$	5,866,997
IT outsourcing services		2,861,891			5,640,064			-		8,501,955
Human resource outsourcing servicing		260,188			-			-		260,188
Total revenues		8,989,076			5,640,064			-		14,629,140
Operating expenses:
Cost of services provided		4,436,764			2,298,016			-		6,734,780
Selling, general and administrative		7,207,185			2,910,543			-		10,117,728
Research and development		261,738			-			-		261,738
Share-based compensation		258,861			-			-		258,861
Total operating expenses		12,164,548			5,208,559			-		17,373,107
Income (loss) from operations		(3,175,472	)		431,505			-		(2,743,967	)
Interest expense (income)
Related parties		89,819			-			-		89,819
Amortization of related party debt discount		594,029			-			-		594,029
Other (net)		76,045			119,111			-		195,156
Other Expense		(3,102	)		(14,051	)		-		(17,153	)
Total interest and other expense		756,791			105,060			-		861,851
Net income (loss)	$	(3,932,263	)	$	326,445		$	-	$	(3,605,818	)
Basic and diluted net income (loss) per share	$	(0.45	)	$	0.12				$	(0.32	)
Basic and diluted weighted average common		8,750,543			2,666,666					11,417,209

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