10-Q/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of 1934

For The Quarterly Period Ended June 30, 2012

Commission File Number: 0-52589

ANCHOR FUNDING SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-5456087
(State of jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

10801 Johnston Road. Suite 210 Charlotte, NC (Address of Principal Executive Offices) 28226 (Zip Code)

(866) 789-3863              

(Registrant's telephone number)

Not Applicable

(Former name, address and 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 website, if any, every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T during the 12 preceding months (or such shorter period that the registrant was required to submit and post such file). 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 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]

As of June 30, 2012, the Company had a total of 18,634,369 shares of Common Stock outstanding, excluding 376,387 outstanding shares of Series 1 Preferred Stock convertible into 1,919,574 shares of Common Stock.

1

Explanatory Note

The sole purpose of this Amendment to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2012 (the “10-Q”), is to furnish the Interactive Data File exhibits required by Item 601(b)(101) of Regulation S-K. No other changes have been made to the 10-Q, and this Amendment has not been updated to reflect events occurring subsequent to the filing of the 10-Q.

2

ITEM 6.                 EXHIBITS:

31.1	Rule 13a-14(a) Certification – Principal Executive Officer *
31.2	Rule 13a-14(a) Certification – Principal Financial Officer *
32.1	Section 1350 Certification – Principal Executive Officer *
32.2	Section 1350 Certification – Principal Financial Officer *
101.INS	XBRL Instance Document,XBRL Taxonomy Extension Schema *
101.SCH	Document, XBRL Taxonomy Extension *
101.CAL	Calculation Linkbase, XBRL Taxonomy Extension Definition *
101.DEF	Linkbase,XBRL Taxonomy Extension Labels *
101.LAB	Linkbase, XBRL Taxonomy Extension *
101.PRE	Presentation Linkbase *
	___________________
	* Filed herewith.

3

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	ANCHOR FUNDING SERVICES, INC.
Date:  August 21, 2012	By:	/s/ Morry F. Rubin
		Morry F. Rubin
		Principal Executive Officer

Date: August 21, 2012	By:	/s/ Brad Bernstein
		Brad Bernstein
		President and Principal Financial Officer

4

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Morry F. Rubin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of Anchor Funding Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

DATE: August 21, 2012	By:	/s/ MORRY F. RUBIN
		Morry F. Rubin
		Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Brad Bernstein, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of Anchor Funding Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

DATE: August 21, 2012	By:	/s/ BRAD BERNSTEIN
		Brad Bernstein
		President and Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18U.S.C. SECTION 1350

In connection with the Quarterly Report of Anchor Funding Services, Inc. (the “Company”) on Form 10-Q/A for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Morry Rubin, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ MORRY F. RUBIN
	Morry F. Rubin
	Principal Executive Officer
	August 21, 2012

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18U.S.C. SECTION 1350

In connection with the Quarterly Report of Anchor Funding Services, Inc. (the "Company") on Form 10-Q/A for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brad Bernstein, President and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ BRAD BERNSTEIN
	Brad Bernstein,
	President and Principal Financial Officer
	August 21, 2012

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DUE TO FINANCIAL INSTITUTION (Detail Textuals) (USD $)			1 Months Ended					1 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Dec. 31, 2011 Senior Accounts Receivable Credit Facility	Nov. 30, 2011 Senior Accounts Receivable Credit Facility	Nov. 30, 2009 Senior Accounts Receivable Credit Facility	Nov. 30, 2009 Senior Accounts Receivable Credit Facility Maximum	Nov. 30, 2009 Senior Accounts Receivable Credit Facility Minimum	Nov. 30, 2011 Commercial Bank Line of Credit
Line of Credit Facility [Line Items]
Rediscount credit facility with a commercial bank						$ 9,000,000	$ 7,000,000	$ 10,000,000
Advance credit facility percentage								80.00%
Annual Interest Rate			Prime Rate plus 9.0	Prime Rate plus 8.0	Prime Rate plus 2.0			90 Day Libor Rate plus 6.25
Basis Spread On Prime Rate			9.00%	8.00%	2.00%			6.25%
Ratio of debt to tangible net worth								4:1
Notice period to bank								60 days
Due to financial institution	6,686,886	4,427,343
Percentage of face value for each invoice funded for the first 30 days					0.50%
Percentage of face value for each invoice funded after 30 days until collected					0.016%
Total company fund to use first					1,000,000
Gurantee amount					$ 250,000

XML

WARRANTS (Details Textuals)	Jun. 30, 2012	Dec. 07, 2007	Mar. 31, 2007 Warrant
Class of Warrant or Right [Line Items]
Warrants granted (in shares)	1,342,500	2,000,004	1,342,500
Exercise price of warrants (in dollars per share)	1.10	1	1.10

XML

EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details Textuals) (2007 Omnibus Equity Compensation Plan)	Oct. 31, 2009	Jan. 31, 2007
2007 Omnibus Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares authorized for issuance	4,200,000	2,100,000

XML

WARRANTS (Details Textuals 1) (USD $)	0 Months Ended	6 Months Ended
	Dec. 07, 2007	Jun. 30, 2012
Warrants [Abstract]
Proceeds from sale of common stock shares	$ 500,002
Number of common stock shares sold	500,002
Purchase of warrants	2,000,004	1,342,500
Term	10 years	6 years
Exercise price of warrants (in dollars per share)	1	1.10

XML

EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details 1) (Stock Options, USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012 Maximum	Jun. 30, 2012 Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price (in dollars per share)		$ 1.25	$ 0.17
Term	10 years
Volatility		2.50%	0.41%
Dividends	0.00%
Discount rate		4.75%	0.08%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals 2) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Accounting Policies [Abstract]
Total advertising costs	$ 67,400	$ 58,500	$ 135,700	$ 114,200
Uncollectible Retained Interest In Purchased Accounts Receivable	24,500		24,500		17,500
Maximum Percentage Of Advances On Purchase Order			100.00%
Accounts receivable purchased over 90 days old	$ 106,000		$ 106,000
Period Of Account Receivable Due			90 days

XML

CONCENTRATIONS (Details Textuals 1) (Customer Concentration Risk)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Customer Concentration Risk
Concentration Risk [Line Items]
Revenues from food service company percentage	10.00%	10.00%

XML

CAPITAL STRUCTURE (Tables)

6 Months Ended

Jun. 30, 2012

Stockholders Equity Note [Abstract]

Schedule of conversions of convertible preferred stock and common stock

	Series 1 Convertible		Common
	Preferred Stock		Stock
Balance, December 31, 2011		376,387		18,634,369
Preferred Stock Conversions		-		-
Common Stock Issuances		-		-
Balance June 30, 2012		376,387		18,634,369

XML

EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details Textuals 2) (B Bernstein Employment Agreement, USD $)	1 Months Ended	6 Months Ended	1 Months Ended
	Mar. 31, 2012	Jun. 30, 2012	Feb. 28, 2009 2007 Omnibus Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Officers' annual salary		$ 240,000
Bonus Equivalent To Annual Net Income Percentage		5.00%
Net Income Before Tax Threshold Limit For Salary Revision		200,000
Monthly automobile allowance		$ 1,000
Option to purchase	250,000		950,000
Shares exercisable (in dollars per share)	$ 0.17		$ 1.25
Term of options	10 years		10 years

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CAPITAL STRUCTURE (Detail Textuals) (USD $)	1 Months Ended
	Jan. 31, 2007
Preferred stock, shares authorized (in shares)	10,000,000
Preferred stock, par value	$ 0.001
Preferred stock conversion into Series 1 Convertible Preferred Stock (in shares)	2,000,000
Common stock, shares authorized (in shares)	65,000,000
Common stock, par value (in dollars per share)	$ 0.0001
Series 1 Convertible Preferred Stock
Preferred stock conversion ratio	5.1
Dividend rate on Series 1 Convertible Preferred Stock	8.00%

XML

PROPERTY AND EQUIPMENT (Details) (USD $)			6 Months Ended				6 Months Ended				6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Maximum	Jun. 30, 2012 Minimum	Jun. 30, 2012 Furniture and Fixtures	Dec. 31, 2011 Furniture and Fixtures	Jun. 30, 2012 Furniture and Fixtures Maximum	Jun. 30, 2012 Furniture and Fixtures Minimum	Jun. 30, 2012 Computers and Software	Dec. 31, 2011 Computers and Software	Jun. 30, 2012 Computers and Software Maximum	Jun. 30, 2012 Computers and Software Minimum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 221,486	$ 217,292			$ 44,731	$ 44,731			$ 176,755	$ 172,561
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(210,257)	(200,262)
PROPERTY AND EQUIPMENT, net	$ 11,229	$ 17,030
Estimated Useful Lives			7 years	2 years			5 years	2 years			7 years	3 years

XML

WARRANTS (Details)	0 Months Ended	6 Months Ended
	Dec. 07, 2007	Jun. 30, 2012
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	1	1.10
Term	10 years	6 years
Volatility		42.00%
Dividends		0.00%
Discount rate		0.05%

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INCOME TAXES (Details Textuals) (USD $)	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Operating Loss Carryforwards	$ 4,000,000

XML

EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details 2) (Stock Options, USD $)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fully vested stock options
Unvested portion of stock options	5,327	2,378
Share Based Compensation Arrangement By Share Based Payment Award Options Fully Vested and Unvested In Period Fair Value	5,327	2,378
Benefit for expired stock options		(1,131)
Provision	$ 5,327	$ 1,247

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RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE

6 Months Ended

Jun. 30, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Abstract]

RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE

3. RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE:

Retained interest in purchased accounts receivable consists of the following:

	June 30, 2012			December 31, 2011
Purchased accounts receivable outstanding	$	11,534,102		$	7,655,933
Purchase order advances		46,884			105,000
Reserve account		(2,212,486	)		(1,412,277	)
Allowance for uncollectible invoices		(24,449	)		(17,500	)
	$	9,344,051		$	6,331,156

Retained interest in purchased accounts receivable consists, excluding the allowance for uncollectible invoices, of United States companies in the following industries:

	June 30, 2012		December 31, 2011
Staffing	$	389,005	$	548,031
Transportation		1,648,505		1,831,051
Apparel		1,343,216		-
Service		4,505,066		3,969,574
Other		1,482,708		-
	$	9,368,500	$	6,348,656

Total purchased invoices were as follows:

	For the three months ended June 30,				For the six months ended June 30,
	2012		2011		2012		2011
Purchased invoices	$	28,101,603	$	20,920,248	$	48,346,720	$	41,109,126
Purchase order advances		115,231		653,660		211,961		1,987,791
	$	28,216,834	$	21,573,908	$	48,558,681	$	43,096,917

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COMMITMENTS AND CONTINGENCIES (Details Textuals) (USD $)	1 Months Ended
	May 31, 2012 Charlotte Leases	Nov. 30, 2009 Boca Raton
Property Subject to or Available for Operating Lease [Line Items]
Number Of Leases	2
Monthly rent	$ 2,340	$ 1,313
Term Of Lease		24 months
Lease Renewal Term		2 years

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RELATED PARTY TRANSACTION (Details Textuals) (Line Of Credit Promissory Note, USD $)	0 Months Ended
	Jun. 05, 2012
Morry Rubin
Related Party Transaction [Line Items]
Promissory Notes, Face Amount	$ 200,000
Major Shareholder
Related Party Transaction [Line Items]
Promissory Notes, Face Amount	200,000
Morry Rubin and Major Shareholders
Related Party Transaction [Line Items]
Promissory Notes, Face Amount	400,000
Interest rate of Promissory note	15.00%
Rediscount credit facility with a commercial bank	$ 10,000,000
Term of Promissory Note	90 days

XML

SUPPLEMENTAL DISCLOSURES OF CASH FLOW (Tables)

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Elements [Abstract]

Schedule Of Interest Paid In Cash

	For the six months ending June 30,
	2012		2011
To a financial institution	$	220,854	$	288,437
To a related party		-		16,669
Total	$	220,854	$	305,106

XML

CONCENTRATIONS (Tables)

6 Months Ended

Jun. 30, 2012

Risks and Uncertainties [Abstract]

Schedule Of Revenue From Different Industries

	For the three months ended  June 30,				For the six months ended June 30,
	2012		2011		2012		2011
Apparel	$	59,388	$	-	$	61,182	$	-
Transportation		171,240		181,669		330,039		327,511
Staffing		17,798		34,806		46,545		70,350
Service		387,970		417,315		737,940		697,572
Other		76,353		98,058		79,539		134,287
Publishing		-		-		-		89,420
	$	712,749	$	731,848	$	1,255,245	$	1,319,140

XML

CONCENTRATIONS (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue By Different Industries [Line Items]
Revenues by industries	$ 712,749	$ 731,848	$ 1,255,245	$ 1,319,140
Apparel
Revenue By Different Industries [Line Items]
Revenues by industries	59,388		61,182
Transportation
Revenue By Different Industries [Line Items]
Revenues by industries	171,240	181,669	330,039	327,511
Staffing
Revenue By Different Industries [Line Items]
Revenues by industries	17,798	34,806	46,545	70,350
Service
Revenue By Different Industries [Line Items]
Revenues by industries	387,970	417,315	737,940	697,572
Other
Revenue By Different Industries [Line Items]
Revenues by industries	76,353	98,058	79,539	134,287
Publishing
Revenue By Different Industries [Line Items]
Revenues by industries				$ 89,420

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RELATED PARTY TRANSACTION (Details Textuals 1) (MGM Funding, LLC, Rediscount Credit Facility, USD $)	1 Months Ended	6 Months Ended
	Apr. 26, 2011	Jun. 30, 2012	Jun. 30, 2011
MGM Funding, LLC | Rediscount Credit Facility
Related Party Transaction [Line Items]
Rediscount credit facility with a commercial bank	$ 2,000,000
Line of credit facility, condition minimum required funds employed	5,000,000
Line of credit facility, additional condition minimum purchase order fundings	1,000,000
Line of credit facility condition interest rate	20.00%
Interest Paid		$ 0	$ 2,240
Interest rate of Promissory note	11.00%

XML

BACKGROUND AND DESCRIPTION OF BUSINESS (Details Textuals) (Brookridge Funding Services Llc, USD $)	Oct. 06, 2010
Brookridge Funding Services Llc
Noncontrolling Interest [Line Items]
Book value of Anchor's interest in Brookridge	$ 783,000
Percentage of interest in subsidiary Brookridge Funding Services, LLC	80.00%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) (Brookridge Funding Services Llc)	Oct. 06, 2010
Brookridge Funding Services Llc
Noncontrolling Interest [Line Items]
Percentage of interest in subsidiary Brookridge Funding Services, LLC	80.00%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of Anchor Funding Services, Inc. and, its wholly owned subsidiary, Anchor Funding Services, LLC (continuing operations). Anchor’s former 80% interest in Brookridge Funding Services, LLC is reflected in the consolidated statements of operations for the three and six months ended June 30, 2011 and the consolidated statements of cash flows for the six months ended June 30, 2011 as discontinued operations.

Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition – The Company charges fees to its customers in one of two ways as follows:

1) Fixed Transaction Fee. Fixed transaction fees are a fixed percentage of the purchased invoice and purchase orderadvance. This percentage does not change from the date the purchased invoice is funded until the date the purchasedinvoice is collected.

2) Variable Transaction Fee. Variable transaction fees are variable based on the length of time the purchased invoiceand purchase order advance is outstanding. As specified in its contract with the client, the Company charges variableincreasing percentages of the purchased invoice or purchase order advance as time elapses from the purchase date to the collection date.

For both fixed and variable transaction fees, the Company recognizes revenue by using one of two methods depending on the type ofcustomer. For new customers the Company recognizes revenue using the cost recovery method. For established customers theCompany recognizes revenue using the accrual method.

Under the cost recovery method, all revenue is recognized upon collection of the entire amount of purchased accounts receivable.

The Company considers new customers to be accounts whose initial funding has been within the last three months or less. Management believes it needs three months of history to reasonably estimate a customer’s collection period and accrued revenues. If three months of history has a limited number of transactions, the cost recovery method will continue to be used until a reasonable revenue estimate can be made based on additional history. Once the Company obtains sufficient historical experience, it will begin using the accrual method to recognize revenue.

For established customers the Company uses the accrual method of accounting. The Company applies this method by multiplying the historical yield, for each customer, times the amount advanced on each purchased invoice outstanding for that customer, times the portion of a year that the advance is outstanding. The customers’ historical yield is based on the Company’s last six months of experience with the customer along with the Company’s experience in the customer’s industry, if applicable.

The amounts recorded as revenue under the accrual method described above are estimates. As purchased invoices and purchase order advances are collected, the Company records the appropriate adjustments to record the actual revenue earned on each purchased invoice and purchase order advance. Adjustments from the estimated revenue to the actual revenue have not been material.

Retained Interest in Purchased Accounts Receivable – Retained interest in purchased accounts receivable represents the gross amount of invoices purchased and advances on purchase orders from clients less amounts maintained in a reserve account. For factoring transactions, the Company purchases a customer’s accounts receivable and advances them a percentage of the invoice total. The difference between the purchase price and amount advanced is maintained in a reserve account. The reserve account is used to offset any potential losses the Company may have related to the purchased accounts receivable. For purchase order transactions, the company advances and pays for up to 100% of the product’s cost.

The Company’s factoring and security agreements with their customers include various recourse provisions requiring the customers to repurchase accounts receivable if certain conditions, as defined in the factoring and security agreement, are met.

Senior management reviews the status of uncollected purchased accounts receivable and purchase order advances monthly to determine if any are uncollectible. The Company has a security interest in the accounts receivable and inventory purchased and, on a case-by-case basis, may have additional collateral. The Company files security interests in the property securing their advances. Access to this collateral is dependent upon the laws and regulations in each state where the security interest is filed. Additionally, the Company has various types of personal guarantees from their customers relating to the purchased accounts receivable and purchase order advances.

Management considered approximately $24,500 of their June 30, 2012 and $17,500 of their December 31, 2011 retained interest in purchased accounts receivable to be uncollectible.

Management believes the fair value of the retained interest in purchased accounts receivable approximates its recorded value because of the relatively short term nature of the purchased receivable and the fact that the majority of these invoices have been subsequently collected. As of June 30, 2012, accounts receivable purchased over 90 days old and still accruing fees totaled approximately $106,000.

Property and Equipment – Property and equipment, consisting of furniture and fixtures and computers and software, are stated at cost. Depreciation is provided over the estimated useful lives of the depreciable assets using the straight-line method. Estimated useful lives range from 2 to 7 years.

Advertising Costs – The Company charges advertising costs to expense as incurred. Total advertising costs were approximately $67,400 and $58,500 for the quarters ended June 30, 2012 and 2011, respectively, and $135,700 and $114,200 for the six months ended June 30, 2012 and June 30, 2011, respectively.

Earnings per Share – Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Dilutive earnings per share include the potential impact of dilutive securities, such as convertible preferred stock, stock options and stock warrants. The dilutive effect of stock options and warrants is computed using the treasury stock method, which assumes the repurchase of common shares at the average market price.

Under the treasury stock method, options and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options or warrants. For the quarters and six months ending June 30, 2012 and 2011, the average price of common stock was less than the exercise price of the options and warrants.

Stock Based Compensation - The fair value of transactions in which the Company exchanges its equity instruments for employee services (share-based payment transactions) must be recognized as an expense in the financial statements as services are performed.

Compensation expense is determined by reference to the fair value of an award on the date of grant and is amortized on a straight-line basis over the vesting period. We have elected to use the Black-Scholes-Merton (BSM) pricing model to determine the fair value of all stock option awards.

See Note 9 for the impact on operating results for the three months and six months ended June 30, 2012 and 2011.

Fair Value of Financial Instruments – The carrying value of cash equivalents, retained interest in purchased accounts receivable, due to financial institution, accounts payable and accrued liabilities approximates their fair value.

Cash and Cash Equivalents – Cash and cash equivalents consist primarily of highly liquid cash investment funds with original maturities of three months or less when acquired.

Income Taxes – The Company is a “C” corporation for income tax purposes. In a “C” corporation income taxes are provided for the tax effects of transactions reported in the financial statements plus deferred income taxes related to the differences between financial statement and taxable income.

The primary differences between financial statement and taxable income for the Company are as follows:

· Compensation costs related to the issuance of stock options

· Use of the reserve method of accounting for bad debts

· Differences in basis of property and equipment between financial and income tax reporting

· Net operating loss carryforwards.

The deferred tax asset represents the future tax return consequences of utilizing these items. Deferred tax assets are reduced by a valuation reserve, when management is uncertain if the net deferred tax assets will ever be realized.

The Company applied guidance for accounting for uncertainty in income tax positions to all its tax positions, including tax positions taken and those expected to be taken, under the transition provision of the interpretation. For the six months ended June 30, 2012 and 2011, the Company recognized no liability for uncertain tax positions.

The Company classifies interest accrued on unrecognized tax benefits with interest expense. Penalties accrued on unrecognized tax benefits are classified with operating expenses.

Recent Accounting Pronouncements

In April 2011, Financial Accounting Standards Board, or FASB, issued Accounting Standards Update 2011-02 – A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring, or ASU 2011-02. This standard amends previous guidance provided in Accounting Standards Codification 310-40-Receivables-Troubled Debt Restructurings by Creditors. ASU 2011-02 provides additional guidance and criteria on how companies should determine whether a restructuring or refinancing of an existing financial receivable represents a troubled debt restructuring. Companies must assess whether the restructuring or refinancing of an existing financial receivable is a troubled debt restructuring in order to determine how to account for the remaining unamortized portion of certain fees, such as origination fees, associated with the original debt investment. ASU-2011-02 is effective for the first interim period beginning on or after June 15, 2011. We adopted this standard beginning with the quarter ended September 30, 2011. Our adoption of this update did not have a material impact on our financial position or results of operations.

In May 2011, the Financial Accounting Standards Board (“FASB”) issued an update to Topic 820—Fair Value Measurements and Disclosures of the Accounting Standards Codification. This update provides guidance on how fair value accounting should be applied where its use is already required or permitted by other standards. The guidance does not extend the use of fair value accounting. We adopted this guidance effective January 1, 2012, as required, and the adoption did not have a significant impact to our consolidated financial statements.

In June 2011, the FASB issued an update to Topic 220—Comprehensive Income of the Accounting Standards Codification. The update is intended to increase the prominence of other comprehensive income in the financial statements. The guidance requires that we present components of comprehensive income in either one continuous or two separate, but consecutive, financial statements and no longer permits the presentation of comprehensive income in the Consolidated Statement of Shareholders’ Equity. We adopted this new guidance effective January 1, 2012, as required. The adoption did not have a significant impact on our consolidated financial statements. We are now presenting components of comprehensive income on one statement, our unaudited Consolidated Statements of Income and Other Comprehensive Income.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals 1)	6 Months Ended
	Jun. 30, 2012
Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	7 years
Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	2 years
Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Depreciation Methods	straight-line method
Furniture and Fixtures | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years
Furniture and Fixtures | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	2 years
Computers and Software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Depreciation Methods	straight-line method
Computers and Software | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	7 years
Computers and Software | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years

XML

DUE TO PARTICIPANT (Details Textuals) (USD $)	3 Months Ended	6 Months Ended
	Aug. 11, 2012	Jun. 30, 2012
Due To Participant [Abstract]
Interest sold In account to participant, Percentage		50.00%
Annual percentage fee on average outstanding balance due to participant		21.00%
Fee paid included in interest expense - financial institutions	$ 13,457	$ 13,457
Due to participant		$ 683,729

XML

WARRANTS (Details 1)	6 Months Ended
	Jun. 30, 2012	Dec. 07, 2007
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	1.10	1
Number Outstanding	3,342,504
Number Of Warrant Exercisable	3,342,504
Warrant | Dollar 1.10
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	1.10
Number Outstanding	1,342,500
Weighted Average Remaining Contractual Life	1 year
Number Of Warrant Exercisable	1,342,500
Warrant | Dollar 1
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	1.00
Number Outstanding	2,000,004
Weighted Average Remaining Contractual Life	8 years
Number Of Warrant Exercisable	2,000,004

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2012	Dec. 31, 2011
CURRENT ASSETS:
Cash	$ 820,115	$ 306,571
Retained interest in purchased accounts receivable, net	9,344,051	6,331,156
Earned but uncollected fee income	202,154	157,070
Prepaid expenses and other	75,805	70,924
Total current assets	10,442,125	6,865,721
PROPERTY AND EQUIPMENT, net	11,229	17,030
SECURITY DEPOSITS	5,486	5,486
Total Assets	10,458,840	6,888,237
CURRENT LIABILITIES:
Due to financial institution	6,686,886	4,427,343
Due to participant	683,729
Promissory notes payable - related party	400,000
Accounts payable	62,066	45,376
Accrued payroll and related taxes	53,289	60,918
Accrued expenses	33,374	29,609
Collected but unearned fee income	31,166	36,939
Total current liabilities	7,950,510	4,600,185
COMMITMENTS AND CONTINGENCIES
PREFERRED STOCK, net of issuance costs of $1,209,383	671,409	671,409
COMMON STOCK	1,863	1,863
ADDITIONAL PAID IN CAPITAL	7,480,295	7,465,386
ACCUMULATED DEFICIT	(5,645,237)	(5,850,606)
Total Stockholders' Equity	2,508,330	2,288,052
Total Liabilities and Stockholder's Equity	$ 10,458,840	$ 6,888,237

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EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding	3,110,000
Number Exercisable	2,961,250
Stock Options | Dollar 1.25
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share)	$ 1.25
Number Outstanding	1,885,000
Remaining Contractual Life	6 years
Number Exercisable	1,883,750
Stock Options | Dollar 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share)	$ 1.00
Number Outstanding	45,000
Remaining Contractual Life	8 years
Number Exercisable	17,500
Stock Options | Dollar 0.62
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share)	$ 0.62
Number Outstanding	500,000
Remaining Contractual Life	8 years
Number Exercisable	500,000
Stock Options | Dollar 0.17
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share)	$ 0.17
Number Outstanding	500,000
Remaining Contractual Life	10 years
Number Exercisable	500,000
Stock Options | Dollar 0.25
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price (in dollars per share)	$ 0.25
Number Outstanding	180,000
Remaining Contractual Life	10 years
Number Exercisable	60,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 205,369	$ 194,531
Loss from discontinued operations		(4,000)
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	9,995	10,181
Net compensation expense related to issuance of stock options and warrants	14,909	1,247
Allowance for uncollectible accounts	6,949
(Increase) decrease in retained interest in purchased accounts receivable	(3,019,844)	1,513,996
Decrease (increase) in earned but uncollected	(45,084)	49,851
Decrease (increase) in prepaid expenses and other	(4,881)	22,624
(Decrease) increase in accounts payable	16,690	(4,977)
Decrease in accrued payroll and related taxes	(7,629)	(6,435)
Increase (decrease) in collected but not earned	(5,773)	18,153
Increase (decrease) in accrued expenses	3,765	(40,322)
Net cash (used in) provided by operating activities	(2,825,534)	1,754,849
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(4,194)	(4,389)
Net cash used in investing activities	(4,194)	(4,389)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments to) financial institution, net	2,259,543	(1,375,304)
Payments to lender		(290,000)
Proceeds from participant	683,729
Proceeds from promissory notes	400,000
Net cash provided by (used in) financing activities	3,343,272	(1,665,304)
INCREASE IN CASH	513,544	85,156
CASH, beginning of period	306,571	163,320
CASH, end of period	$ 820,115	$ 248,476

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SUPPLEMENTAL DISCLOSURES OF CASH FLOW (Details) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Supplemental Cash Flow Elements [Abstract]
To a financial institution	$ 220,854	$ 288,437
To a related party		16,669
Total	$ 220,854	$ 305,106

XML

RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE (Details 1) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retained Interest In Purchased Accounts Receivable	$ 9,368,500	$ 6,348,656
Staffing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retained Interest In Purchased Accounts Receivable	389,005	548,031
Transportation
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retained Interest In Purchased Accounts Receivable	1,648,505	1,831,051
Apparel
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retained Interest In Purchased Accounts Receivable	1,343,216
Service
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retained Interest In Purchased Accounts Receivable	4,505,066	3,969,574
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retained Interest In Purchased Accounts Receivable	$ 1,482,708

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of Anchor Funding Services, Inc. and, its wholly owned subsidiary, Anchor Funding Services, LLC (continuing operations). Anchor’s former 80% interest in Brookridge Funding Services, LLC is reflected in the consolidated statements of operations for the three and six months ended June 30, 2011 and the consolidated statements of cash flows for the six months ended June 30, 2011 as discontinued operations.

Estimates

Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America  (“US GAAP”) requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition – The Company charges fees to its customers in one of two ways as follows:

1)           Fixed Transaction Fee. Fixed transaction fees are a fixed percentage of the purchased invoice and purchase orderadvance.  This percentage does not change from the date the purchased invoice is funded until the date the purchasedinvoice is collected.

2)           Variable Transaction Fee.  Variable transaction fees are variable based on the length of time the purchased invoiceand purchase order advance is outstanding.   As specified in its contract with the client, the Company charges variableincreasing percentages of the purchased invoice or purchase order advance as time elapses from the purchase date to the collection date.

For both fixed and variable transaction fees, the Company recognizes revenue by using one of two methods depending on the type   ofcustomer.  For new customers the Company recognizes revenue using the cost recovery method.  For established customers theCompany recognizes revenue using the accrual method.

Under the cost recovery method, all revenue is recognized upon collection of the entire amount of purchased accounts receivable.

The Company considers new customers to be accounts whose initial funding has been within the last three months or less.  Management believes it needs three months of history to reasonably estimate a customer’s collection period and accrued revenues.  If three months of history has a limited number of transactions, the cost recovery method will continue to be used until a reasonable revenue estimate can be made based on additional history.  Once the Company obtains sufficient historical experience, it will begin using the accrual method to recognize revenue.

For established customers the Company uses the accrual method of accounting.  The Company applies this method by multiplying the historical yield, for each customer, times the amount advanced on each purchased invoice outstanding for that customer, times the portion of a year that the advance is outstanding.  The customers’ historical yield is based on the Company’s last six months of experience with the customer along with the Company’s experience in the customer’s industry, if applicable.

The amounts recorded as revenue under the accrual method described above are estimates.  As purchased invoices and purchase order advances are collected, the Company records the appropriate adjustments to record the actual revenue earned on each purchased invoice and purchase order advance. Adjustments from the estimated revenue to the actual revenue have not been material.

Retained Interest in Purchased Accounts Receivable

Retained Interest in Purchased Accounts Receivable – Retained interest in purchased accounts receivable represents the gross amount of invoices purchased and advances on purchase orders from clients less amounts maintained in a reserve account.  For factoring transactions, the Company purchases a customer’s accounts receivable and advances them a percentage of the invoice total.  The difference between the purchase price and amount advanced is maintained in a reserve account.  The reserve account is used to offset any potential losses the Company may have related to the purchased accounts receivable.  For purchase order transactions, the company advances and pays for up to 100% of the product’s cost.

The Company’s factoring and security agreements with their customers include various recourse provisions requiring the customers to repurchase accounts receivable if certain conditions, as defined in the factoring and security agreement, are met.

Senior management reviews the status of uncollected purchased accounts receivable and purchase order advances monthly to determine if any are uncollectible.  The Company has a security interest in the accounts receivable and inventory purchased and, on a case-by-case basis, may have additional collateral.  The Company files security interests in the property securing their advances.  Access to this collateral is dependent upon the laws and regulations in each state where the security interest is filed.  Additionally, the Company has various types of personal guarantees from their customers relating to the purchased accounts receivable and purchase order advances.

Management considered approximately $24,500 of their June 30, 2012 and $17,500 of their December 31, 2011 retained interest in purchased accounts receivable to be uncollectible.

Management believes the fair value of the retained interest in purchased accounts receivable approximates its recorded value because of the relatively short term nature of the purchased receivable and the fact that the majority of these invoices have been subsequently collected. As of June 30, 2012, accounts receivable purchased over 90 days old and still accruing fees totaled approximately $106,000.

Property and Equipment

Property and Equipment – Property and equipment, consisting of furniture and fixtures and computers and software, are stated at cost.  Depreciation is provided over the estimated useful lives of the depreciable assets using the straight-line method.  Estimated useful lives range from 2 to 7 years.

Advertising Costs

Advertising Costs – The Company charges advertising costs to expense as incurred.  Total advertising costs were approximately $67,400 and $58,500 for the quarters ended June 30, 2012 and 2011, respectively, and $135,700 and $114,200 for the six months ended June 30, 2012 and June 30, 2011, respectively.

Earnings per Share

Earnings per Share – Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period.  Dilutive earnings per share include the potential impact of dilutive securities, such as convertible preferred stock, stock options and stock warrants.  The dilutive effect of stock options and warrants is computed using the treasury stock method, which assumes the repurchase of common shares at the average market price.

Under the treasury stock method, options and warrants will have a dilutive effect when the average price of common stock during the period exceeds the exercise price of options or warrants.  For the quarters and six months ending June 30, 2012 and 2011, the average price of common stock was less than the exercise price of the options and warrants.  

Stock Based Compensation

Stock Based Compensation - The fair value of transactions in which the Company exchanges its equity instruments for employee services (share-based payment transactions) must be recognized as an expense in the financial statements as services are performed.

Compensation expense is determined by reference to the fair value of an award on the date of grant and is amortized on a straight-line basis over the vesting period. We have elected to use the Black-Scholes-Merton (BSM) pricing model to determine the fair value of all stock option awards.

See Note 9 for the impact on operating results for the three months and six months ended June 30, 2012 and 2011.

Fair Value of Financial Instruments

Fair Value of Financial Instruments – The carrying value of cash equivalents, retained interest in purchased accounts receivable, due to financial institution, accounts payable and accrued liabilities approximates their fair value.

Cash and Cash Equivalents

Cash and Cash Equivalents – Cash and cash equivalents consist primarily of highly liquid cash investment funds with original maturities of three months or less when acquired.

Income Taxes

Income Taxes – The Company is a “C” corporation for income tax purposes.  In a “C” corporation income taxes are provided for the tax effects of transactions reported in the financial statements plus deferred income taxes related to the differences between financial statement and taxable income.

The primary differences between financial statement and taxable income for the Company are as follows:

· Compensation costs related to the issuance of stock options

· Use of the reserve method of accounting for bad debts

· Differences in basis of property and equipment between financial and income tax reporting

· Net operating loss carryforwards.

The deferred tax asset represents the future tax return consequences of utilizing these items.   Deferred tax assets are reduced by a valuation reserve, when management is uncertain if the net deferred tax assets will ever be realized.

The Company applied guidance for accounting for uncertainty in income tax positions to all its tax positions, including tax positions taken and those expected to be taken, under the transition provision of the interpretation. For the six months ended June 30, 2012 and 2011, the Company recognized no liability for uncertain tax positions.

The Company classifies interest accrued on unrecognized tax benefits with interest expense.  Penalties accrued on unrecognized tax benefits are classified with operating expenses.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In April 2011, Financial Accounting Standards Board, or FASB, issued Accounting Standards Update 2011-02 – A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring, or ASU 2011-02. This standard amends previous guidance provided in Accounting Standards Codification 310-40-Receivables-Troubled Debt Restructurings by Creditors. ASU 2011-02 provides additional guidance and criteria on how companies should determine whether a restructuring or refinancing of an existing financial receivable represents a troubled debt restructuring. Companies must assess whether the restructuring or refinancing of an existing financial receivable is a troubled debt restructuring in order to determine how to account for the remaining unamortized portion of certain fees, such as origination fees, associated with the original debt investment. ASU-2011-02 is effective for the first interim period beginning on or after June 15, 2011. We adopted this standard beginning with the quarter ended September 30, 2011. Our adoption of this update did not have a material impact on our financial position or results of operations. 

In May 2011, the Financial Accounting Standards Board (“FASB”) issued an update to Topic 820—Fair Value Measurements and Disclosures of the Accounting Standards Codification. This update provides guidance on how fair value accounting should be applied where its use is already required or permitted by other standards. The guidance does not extend the use of fair value accounting. We adopted this guidance effective January 1, 2012, as required, and the adoption did not have a significant impact to our consolidated financial statements.

In June 2011, the FASB issued an update to Topic 220—Comprehensive Income of the Accounting Standards Codification. The update is intended to increase the prominence of other comprehensive income in the financial statements. The guidance requires that we present components of comprehensive income in either one continuous or two separate, but consecutive, financial statements and no longer permits the presentation of comprehensive income in the Consolidated Statement of Shareholders’ Equity. We adopted this new guidance effective January 1, 2012, as required. The adoption did not have a significant impact on our consolidated financial statements. We are now presenting components of comprehensive income on one statement, our unaudited Consolidated Statements of Income and Other Comprehensive Income.

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RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE (Details 2) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Loans, Notes, Trade and Other Receivables Disclosure [Abstract]
Purchased invoices	$ 28,101,603	$ 20,920,248	$ 48,346,720	$ 41,109,126
Purchase order advances	115,231	653,660	211,961	1,987,791
Purchase Invoices	$ 28,216,834	$ 21,573,908	$ 48,558,681	$ 43,096,917

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PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2012

Property, Plant and Equipment [Abstract]

Schedule Of Property and equipment

	Estimated Useful Lives	June 30, 2012			December 31, 2011
Furniture and fixtures	2-5 years	$	44,731		$	44,731
Computers and software	3-7 years		176,755			172,561
			221,486			217,292
Less: accumulated depreciation			(210,257	)		(200,262	)
		$	11,229		$	17,030

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BACKGROUND AND DESCRIPTION OF BUSINESS

6 Months Ended

Jun. 30, 2012

Business Description and Basis Of Presentation [Abstract]

BACKGROUND AND DESCRIPTION OF BUSINESS

1. BACKGROUND AND DESCRIPTION OF BUSINESS:

The consolidated financial statements include the accounts of Anchor Funding Services, Inc. (the “Company”) and its wholly owned subsidiary, Anchor Funding Services, LLC (“Anchor”). On October 6, 2010, we completed the rescission of our acquisition of certain assets of Brookridge Funding, LLC that occurred on December 7, 2009. On October 6, 2010, the Minority members of our 80% owned subsidiary Brookridge Funding Services, LLC (“Brookridge”) purchased Anchor’s interest in Brookridge at book value of approximately $783,000. The consolidated statements of operations for the three and six months ended June 30, 2011 and the consolidated statements of cash flows for the six months ended June 30, 2011 reflect the historical operations of Brookridge as discontinued operations. Accordingly, we have generally presented the notes to our consolidated financial statements on the basis of continuing operations which has caused certain reclassifications within the financial statements and related footnotes. In addition, unless stated otherwise, any reference to income statement items in these financial statements refers to results from continuing operations.

Anchor Funding Services, Inc. is a Delaware corporation. Anchor Funding Services, Inc. has no operations; substantially all operations of the Company are the responsibility of Anchor Funding Services, LLC.

Anchor Funding Services, LLC is a North Carolina limited liability company. Anchor Funding Services, LLC was formed for the purpose of providing factoring and back office services to businesses located throughout the United States of America.

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CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Statement Of Financial Position [Abstract]
Preferred stock, Issuance cost (in dollars)	$ 1,209,383	$ 1,209,383

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CONCENTRATIONS

6 Months Ended

Jun. 30, 2012

Risks and Uncertainties [Abstract]

CONCENTRATIONS

11. CONCENTRATIONS:

Revenues – The Company recorded revenues from United States companies in the following industries as follows:

	For the three months ended June 30,				For the six months ended June 30,
	2012		2011		2012		2011
Apparel	$	59,388	$	-	$	61,182	$	-
Transportation		171,240		181,669		330,039		327,511
Staffing		17,798		34,806		46,545		70,350
Service		387,970		417,315		737,940		697,572
Other		76,353		98,058		79,539		134,287
Publishing		-		-		-		89,420
	$	712,749	$	731,848	$	1,255,245	$	1,319,140

Major Customers – For the three months ended June 30, 2012, the Company did not have a customer that accounted for 10% or more of its revenues.

For the six months ended June 30, 2012, the Company did not have a customer that accounted for 10% or more of its revenues.

Cash – The Company places its cash and cash equivalents on deposit with financial institutions in the United States. All funds in a “Non interest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation (“FDIC”) from December 31, 2010 through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC’s general deposit insurance rules. Currently all of the Company’s domestic cash balances meet these criteria.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Anchor Funding Services, Inc.
Entity Central Index Key	0001397047
Trading Symbol	afng
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	18,634,369
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

XML

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

12. SUPPLEMENTAL DISCLOSURES OF CASH FLOW:

Cash paid for interest was as follows:

	For the six months ending June 30,
	2012		2011
To a financial institution	$	220,854	$	288,437
To a related party		-		16,669
Total	$	220,854	$	305,106

Non-cash financing and investing activities consisted of the following:

For the three months ending June 30, 2012

None.

For the three months ending June 30, 2011

None.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
FINANCE REVENUES	$ 712,749	$ 731,848	$ 1,255,245	$ 1,319,140
INTEREST EXPENSE - financial institutions	(143,499)	(138,693)	(233,822)	(287,287)
INTEREST EXPENSE - related party	(4,110)	(14,429)	(4,110)	(16,669)
NET FINANCE REVENUES	565,140	578,726	1,017,313	1,015,184
(PROVISION) BENEFIT FOR CREDIT LOSSES	14,104	(207)	14,104	(175)
FINANCE REVENUES, NET OF INTEREST EXPENSE AND CREDIT LOSSES	579,244	578,519	1,031,417	1,015,009
OPERATING EXPENSES	410,644	405,025	826,048	820,478
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	168,600	173,494	205,369	194,531
INCOME TAXES
INCOME FROM CONTINUING OPERATIONS	168,600	173,494	205,369	194,531
LOSS FROM DISCONTINUED OPERATIONS				(4,000)
NET INCOME	$ 168,600	$ 173,494	$ 205,369	$ 190,531
BASIC EARNINGS PER COMMON SHARE:
INCOME FROM CONTINUING OPERATIONS (in dollars per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01
LOSS FROM DISCONTINUED OPERATIONS (in dollars per share)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDER (in dollars per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01
DILUTED EARNINGS PER COMMON SHARE:
INCOME FROM CONTINUING OPERATIONS (in dollars per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01
LOSS FROM DISCONTINUED OPERATIONS (in dollars per share)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDER (in dollars per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic (in shares)	18,634,369	17,763,618	18,634,369	17,763,618
Dilutive (in shares)	20,516,132	20,572,341	20,516,132	20,572,341

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DUE TO PARTICIPANT

6 Months Ended

Jun. 30, 2012

Due To Participant [Abstract]

DUE TO PARTICIPANT

6. DUE TO PARTICIPANT:

On May 25, 2012, Anchor entered into a Participation Agreement with a funding company (Participant) whereby it sold an interest in one of its accounts so that it could accommodate the account's funding requirements and also mitigate some of Anchor’s credit exposure in the account. Anchor sold a 50% interest in the account to the Participant. Provided Anchor follows a standard of care as agreed to in the Participation Agreement, any credit losses, if they occur, would be shared equally between Anchor and the Participant. The Participant’s fee is paid monthly and is charged at the rate of 21% per annum of the average outstanding balance due to the Participant. The fee paid for the three and six months ended June 30, 2012 was $13,457 and is included in interest expense - financial institutions.  Anchor owed the Participant $683,729 as of June 30, 2012.

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DUE TO FINANCIAL INSTITUTION

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

DUE TO FINANCIAL INSTITUTION

5. DUE TO FINANCIAL INSTITUTION:

On November 8, 2011, Anchor entered into a Rediscount Credit Facility with a Commercial Bank that was effective November 30, 2011 and replaced its prior credit facility. The maximum amount that can be borrowed under the facility is $10 million and the Bank will advance up to 80% of Anchor's advances to its clients. Anchor pays interest on advances monthly at the 90 Day Libor Rate plus 6.25% and various other monthly fees as defined in the agreement. The agreement requires that Anchor maintain at all times a ratio of debt to tangible net worth of no more than four to one (4:1). The agreement contains customary representations and warranties, events of default and limitations, among other provisions. The agreement is collateralized by a first lien on all Anchors' assets. The agreement’s anniversary date is November 30, 2012 and automatically renews each year for an additional year provided that the Company has not provided 60 days’ notice to the Bank in advance of the anniversary date. This facility contains certain standard covenants, representations and warranties for loans of this type. In the event that we fail to comply with the covenant(s) and the lender does not waive such non-compliance, we could be in default of our credit facility, which could subject us to penalty rates of interest and accelerate the maturity of the outstanding balances in addition to other legal remedies, including foreclosure on collateral. The Company’s President and CEO have provided validity guarantees to the Bank. Anchor owed this financial institution $6,686,886 as of June 30, 2012 and $4,427,343 as of December 31, 2011.

On, November 30, 2009, Anchor Funding Services, LLC, entered into a $7 million senior Accounts Receivable (A/R) Credit Facility with a maximum amount of up to $9 million with lender approval. This funding facility was based upon Anchor's submission and approval of eligible accounts receivable. This facility replaced Anchor’s revolving credit facility from another financial institution. Anchor paid .5% for the first 30 days of the face value for each invoice funded and .016% for each day thereafter until collected. In addition, interest on advances was paid monthly at the Prime Rate plus 2.0%. Anchor paid the financial institution various other monthly fees as defined in the agreement. The agreement required that Anchor use $1,000,000 of its own funds first to finance its clients. The agreement contained customary representations and warranties, events of default and limitations, among other provisions. The agreement was collateralized by a first lien on all Anchors’ assets. Borrowings on this agreement were partially guaranteed by the Company’s President and Chief Executive Officer. The partial guarantee was $250,000 each. On February 10, 2011, Anchor’s agreement with this financial institution was amended such that beginning February 10, 2011, Anchor would no longer pay discount fees and Anchor would pay interest on advances at the Prime Rate plus 8.0% through November 30, 2011 and at the Prime Rate plus 9.0% thereafter. On September 22, 2011, Anchor gave notice to this financial institution that it was electing not to renew the facility when it expired at the end of its current term on November 30, 2011, so that it could enter into the Rediscount Credit Facility described above.

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RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE (Tables)

6 Months Ended

Jun. 30, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Abstract]

Schedule Of Retained Interest In Purchased Accounts Receivable

	June 30, 2012			December 31, 2011
Purchased accounts receivable outstanding	$	11,534,102		$	7,655,933
Purchase order advances		46,884			105,000
Reserve account		(2,212,486	)		(1,412,277	)
Allowance for uncollectible invoices		(24,449	)		(17,500	)
	$	9,344,051		$	6,331,156

Schedule Of Retained Interest In Purchased Accounts Receivable Excluding Allowance For Uncollectible Invoices

	June 30, 2012		December 31, 2011
Staffing	$	389,005	$	548,031
Transportation		1,648,505		1,831,051
Apparel		1,343,216		-
Service		4,505,066		3,969,574
Other		1,482,708		-
	$	9,368,500	$	6,348,656

Schedule Of Purchase Invoices

	For the three months ended June 30,				For the six months ended June 30,
	2012		2011		2012		2011
Purchased invoices	$	28,101,603	$	20,920,248	$	48,346,720	$	41,109,126
Purchase order advances		115,231		653,660		211,961		1,987,791
	$	28,216,834	$	21,573,908	$	48,558,681	$	43,096,917

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INCOME TAXES

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES:

As of December 31, 2011, the Company had approximately $4 million of net operating loss carryforwards (“NOL”) for income tax purposes. The NOL’s expire in various years from 2022 through 2025. The Company’s use of operating loss carryforwards is subject to limitations imposed by the Internal Revenue Code. Management believes that the deferred tax assets as of March 31, 2012 do not satisfy the realization criteria and has recorded a valuation allowance for the entire net tax asset. By recording a valuation allowance for the entire amount of future tax benefits, the Company has not recognized a deferred tax benefit for income taxes in its statements of operations.

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EMPLOYMENT AND STOCK OPTION AGREEMENTS

6 Months Ended

Jun. 30, 2012

Employment and Stock Option Agreements [Abstract]

EMPLOYMENT AND STOCK OPTION AGREEMENTS

9. EMPLOYMENT AND STOCK OPTION AGREEMENTS:

On January 31, 2007, the Board adopted our 2007 Omnibus Equity Compensation Plan (the “Plan”), with 2,100,000 common shares authorized for issuance under the Plan. In October 2009 the Company's stockholders approved an increase in the number of shares covered by the Plan to 4,200,000 shares.

The general purpose of the plan is to provide an incentive to the Company’s employees, directors and consultants by enabling them to share in the future growth of the business.

At closing of the exchange transaction described above, M. Rubin and Brad Bernstein (“B. Bernstein”), the President of the Company, entered into employment contracts and stock option agreements. Additionally, at closing two non-employee directors entered into stock option agreements.

The following summarizes M. Rubin’s employment agreement and stock options:

· The employment agreement with M. Rubin currently retains his services as Co-chairman and Chief Executive Officer through January 31, 2013.

· An annual salary of $1 until, the first day of the first month following such time as the Company, shall have, within any period beginning on January 1 and ending not more than 12 months thereafter, earned pre-tax net income exceeding $1,000,000, M. Rubin’s base salary shall be adjusted to an amount, to be mutually agreed upon between M. Rubin and the Company, reflecting the fair value of the services provided, and to be provided, by M. Rubin taking into account (i) his position, responsibilities and performance, (ii) the Company’s industry, size and performance, and (iii) other relevant factors. M. Rubin is eligible to receive annual bonuses as determined by the Company’s compensation committee. M. Rubin shall be entitled to a monthly automobile allowance of $1,500.

· 10-year options to purchase 650,000 shares exercisable at $1.25 per share, pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. As of February 28, 2009, these options are fully vested.

· In March 2012, M. Rubin received 10 year options to purchase 250,000 shares of the Company’s Common Stock at an exercise price of $.17 per share.

The following summarizes B. Bernstein’s employment agreement and stock options:

· The employment agreement with B. Bernstein currently retains his services as President through January 31, 2013.

· An annual salary of $240,000. The Board may periodically review B. Bernstein’s base salary and may determine to increase (but not decrease) the base salary in accordance with such policies as the Company may hereafter adopt from time to time. The Board approved an annual bonus program for Mr. Bernstein commencing with the 2011 fiscal year and ending with the 2014 fiscal year. The annual bonus is equal to 5% of annual net income provided net income is equal to or greater than $200,000. The bonus is calculated on the Company’s audited US GAAP financial statements. B. Bernstein shall be entitled to a monthly automobile allowance of $1,000.

· 10-year options to purchase 950,000 shares exercisable at $1.25 per share, pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. As of February 28, 2009, these options are fully vested.

· In March 2012, Brad Bernstein received 10 year options to purchase 250,000 shares of the Company’s Common Stock at an exercise price of $.17 per share.

The following summarizes employee stock option agreements entered into with five employees:

· 10-year options to purchase 50,000 shares exercisable at prices of $1.00 and $1.25 per share, pursuant to the Company’s 2007 Omnibus Equity Compensation Plan. The grant dates range from September 28, 2007 to November 30, 2009. Vesting periods range from one to four years. If any employee ceases being employed by the Company for any reason, all vested and unvested options shall terminate immediately.

The following table summarizes information about stock options as of June 30, 2012:

Exercise		Number		Remaining	Number
Price		Outstanding		Contractual Life	Exercisable
$	1.25		1,885,000	6 years		1,883,750
$	1.00		45,000	8 years		17,500
$	0.62		500,000	8 years		500,000
$	0.17		500,000	10 years		500,000
$	0.25		180,000	10 years		60,000
			3,110,000			2,961,250

The Company recorded the issuance of these options in accordance with ASC 718. The following information was input into a BSM.

Exercise price		$0.17 to $1.25
Term	10 years
Volatility	.41 to 2.50
Dividends		0	%
Discount rate	0.08% to 4.75		%

The pre-tax fair value effect recorded for these options in the statement of operations for the quarters ending June 30, 2012 and 2011 was as follows:

	2012		2011
Fully vested stock options	$	-	$	-
Unvested portion of stock options		5,327		2,378
		5,327		2,378
Benefit for expired stock options		-		(1,131)
Provision, net	$	5,327	$	1,247

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SUPPLEMENTAL DISCLOSURES OF CASH FLOW (Details Textuals) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Supplemental Cash Flow Elements [Abstract]
Non-cash financing and investing activities

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CAPITAL STRUCTURE

6 Months Ended

Jun. 30, 2012

Stockholders Equity Note [Abstract]

CAPITAL STRUCTURE

7. CAPITAL STRUCTURE:

The Company’s capital structure consists of preferred and common stock as described below:

Preferred Stock – The Company is authorized to issue 10,000,000 shares of $.001 par value preferred stock. The Company’s Board of Directors determines the rights and preferences of its preferred stock.

On January 31, 2007, the Company filed a Certificate of Designation with the Secretary of State of Delaware. Effective with this filing, 2,000,000 preferred shares became Series 1 Convertible Preferred Stock. Series 1 Convertible Preferred Stock will rank senior to Common Stock.

Series 1 Convertible Preferred Stock is convertible into 5.1 shares of the Company’s Common Stock. The holder of the Series 1 Convertible Preferred Stock has the option to convert the shares to Common Stock at any time. Upon conversion all accumulated and unpaid dividends will be paid as additional shares of Common Stock.

The dividend rate on Series 1 Convertible Preferred Stock is 8%. Dividends were paid annually on December 31st in the form of additional Series 1 Convertible Preferred Stock unless the Board of Directors approved a cash dividend. Dividends on Series 1 Convertible Preferred Stock ceased to accrue on the earlier of December 31, 2009, or the date they were converted to Common Shares. Thereafter, the holders of Series 1 Convertible Preferred Stock have the same dividend rights as holders of Common Stock, as if the Series 1 Convertible Preferred Stock had been converted to Common Stock.

Common Stock – The Company is authorized to issue 65,000,000 shares of $.0001 par value Common Stock. Each share of Common Stock entitles the holder to one vote at all stockholder meetings. Dividends on Common Stock will be determined annually by the Company’s Board of Directors.

The shares issued for Series 1 Convertible Preferred Stock and Common Stock as of June 30, 2012 and December 31, 2011 is summarized as follows:

	Series 1 Convertible		Common
	Preferred Stock		Stock
Balance, December 31, 2011		376,387		18,634,369
Preferred Stock Conversions		-		-
Common Stock Issuances		-		-
Balance June 30, 2012		376,387		18,634,369

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RELATED PARTY TRANSACTION

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTION

8. RELATED PARTY TRANSACTIONS:

Promissory notes payable

On June 5, 2012, upon approval of the Board, Anchor entered into two Promissory Notes totaling $400,000, one with Morry Rubin and the other with a major shareholder of the company. Each Promissory Note is for $200,000, has a 90 day term, and earns interest (payable monthly) at 15% per annum. At its option, Anchor may renew the Promissory Notes for an additional ninety days.The Promissory Notes are to assist Anchor in providing factoring and purchase order funding facilities to some of its clients. The Promissory Notes are subordinate to and supplement Anchor's $10 Million Rediscount Credit Facility with a Commercial Bank.

Due to Lender

On April 26, 2011, upon approval of the Board, Anchor entered into a Promissory Note for up to $2 million from MGM Funding, LLC (MGM). Morry Rubin is the managing member of MGM. The money to be borrowed under the note was subordinate to Anchor’s accounts receivable credit facility with a senior lender, which required funds employed to be no less than $5,000,000 before Anchor borrowed funds from MGM. The Promissory Note was to assist Anchor in providing factoring and purchase order funding facilities to some of its clients and it replaced an earlier agreement between the parties. This facility was to supplement Anchor's $10 Million Rediscount Credit Facility with a Commercial Bank. The MGM Promissory Note was a demand note payable together with interest at the rate of 11% per annum. If mutually agreed upon in writing by Anchor and MGM, and if Anchor's purchase order fundings exceeded $1 Million, then interest could accrue on the portion of the unpaid balance of this Note that is funding purchase order advances that are in excess of $1 Million at a rate equal to twenty percent (20%) per annum. This note was paid in full as of December 31, 2011 and is no longer available to Anchor. Anchor paid $0 and $2,240 of interest to MGM for the six months ended June 30, 2012 and 2011, respectively.

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WARRANTS

6 Months Ended

Jun. 30, 2012

Warrants [Abstract]

WARRANTS

10. WARRANTS

In March, 2007, the placement agent was issued warrants to purchase 1,342,500 shares of the Company’s common stock. These warrants were due to expire on January 31, 2012, but were extended by the Company for an additional year. The following information was input into BSM to compute a per warrant price of $.240:

Exercise price	$	1.10
Term	6 years
Volatility		42	%
Dividends		0	%
Discount rate		.05	%

On December 7, 2009, the Company received gross proceeds of $500,002 from the sale of 500,002 shares of common stock and ten year warrants to purchase 2,000,004 shares of common stock exercisable at $1.00 per share. The Black Scholes option pricing model was used to compute the fair value of the warrants.

The following table summarizes information about stock warrants as of June 30, 2012:

				Weighted Average
Exercise		Number		Remaining	Number
Price		Outstanding		Contractual Life	Exercisable
$	1.10		1,342,500	1 year		1,342,500
$	1.00		2,000,004	8 years		2,000,004
			3,342,504			3,342,504

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ACQUSITION AND DISCONTINUED OPERATIONS (Details Textuals) (USD $)	6 Months Ended
	Jun. 30, 2011
Acqusition and Discontinued Operations [Abstract]
Expenses related to discontinued operations	$ 4,000

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COMMITMENTS AND CONTINGENCIES (Details Textuals 1) (USD $)	1 Months Ended	6 Months Ended
	Oct. 22, 2010	Jun. 30, 2012	Jun. 30, 2011
Commitments and Contingencies Disclosure [Abstract]
Rental expense		$ 22,300	$ 21,880
Principal amount, sought value	$ 485,000

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RETAINED INTEREST IN PURCHASED ACCOUNTS RECEIVABLE (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Loans, Notes, Trade and Other Receivables Disclosure [Abstract]
Purchased accounts receivable outstanding	$ 11,534,102	$ 7,655,933
Purchase order advances	46,884	105,000
Reserve account	(2,212,486)	(1,412,277)
Allowance for uncollectible invoices	(24,449)	(17,500)
Retained interest in purchased accounts receivable, net	$ 9,344,051	$ 6,331,156

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EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details Textuals 3) (Five Employee Employment Agreement, USD $)	26 Months Ended
	Nov. 30, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of options	10 years
Option to purchase	50,000
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares exercisable (in dollars per share)	1.25
Vesting period of options	4 years
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares exercisable (in dollars per share)	1.00
Vesting period of options	1 year

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ACQUSITION AND DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2012

Acqusition and Discontinued Operations [Abstract]

ACQUSITION AND DISCONTINUED OPERATIONS

15. ACQUSITION AND DISCONTINUED OPERATIONS:

On October 6, 2010, Anchor Funding Services, Inc. entered into a Rescission Agreement with the Minority Members, namely, John A. McNiff, III and Michael P. Hilton (collectively the "Buyers") of Brookridge Funding Services, LLC ("Brookridge"). Any Brookridge transactions are reclassified as discontinued operations in the Consolidated Financial Statements for the six months ended June 30, 2012 and 2011. For the six months ended June 30, 2012 and 2011 there were $0 and $4,000 of expenses related to discontinued operations, respectively.

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EMPLOYMENT AND STOCK OPTION AGREEMENTS (Tables)

6 Months Ended

Jun. 30, 2012

Employment and Stock Option Agreements [Abstract]

Schedule of stock options

Exercise		Number		Remaining	Number
Price		Outstanding		Contractual Life	Exercisable
$	1.25		1,885,000	6 years		1,883,750
$	1.00		45,000	8 years		17,500
$	0.62		500,000	8 years		500,000
$	0.17		500,000	10 years		500,000
$	0.25		180,000	10 years		60,000
			3,110,000			2,961,250

Schedule of option input into a Black Scholes option pricing model

Exercise price		$0.17 to $1.25
Term	10 years
Volatility	.41 to 2.50
Dividends		0	%
Discount rate	0.08% to 4.75		%

Schedule of pre-tax fair value effect recorded for options in statement of operations

	2012		2011
Fully vested stock options	$	-	$	-
Unvested portion of stock options		5,327		2,378
		5,327		2,378
Benefit for expired stock options		-		(1,131)
Provision, net	$	5,327	$	1,247

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EMPLOYMENT AND STOCK OPTION AGREEMENTS (Details Textuals 1) (M Rubins Employment Agreement, USD $)	1 Months Ended	6 Months Ended	1 Months Ended
	Mar. 31, 2012	Jun. 30, 2012	Feb. 28, 2009 2007 Omnibus Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Officers' annual salary		$ 1
Net Income Before Tax Threshold Limit For Salary Revision		1,000,000
Monthly automobile allowance		$ 1,500
Term of options	10 years		10 years
Option to purchase	250,000		650,000
Shares exercisable (in dollars per share)	$ 0.17		$ 1.25

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CAPITAL STRUCTURE (Details)	1 Months Ended	6 Months Ended
	Jan. 31, 2007	Jun. 30, 2012 Series 1 Convertible Preferred Stock	Jun. 30, 2012 Common Stock
Balance (in shares)		376,371	18,634,369
Preferred stock conversion into Series 1 Convertible Preferred Stock (in shares)	2,000,000
Common Stock Issuances (in shares)
Balance (in shares)		376,371	18,634,369

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $)	Preferred Stock	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2011	$ 671,409	$ 1,863	$ 7,465,386	$ (5,850,606)	$ 2,288,052
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Provision for compensation expense related to issued stock options			5,327		5,327
Provision for compensation expense related to issued warrants			9,582		9,582
Net income				205,369	205,369
Balance (unaudited) at Jun. 30, 2012	$ 671,409	$ 1,863	$ 7,480,295	$ (5,645,237)	$ 2,508,330

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2012

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

4. PROPERTY AND EQUIPMENT:

	Estimated Useful Lives	June 30, 2012			December 31, 2011
Furniture and fixtures	2-5 years	$	44,731		$	44,731
Computers and software	3-7 years		176,755			172,561
			221,486			217,292
Less: accumulated depreciation			(210,257	)		(200,262	)
		$	11,229		$	17,030

Depreciation expense was $4,954 and $5,139 for the quarters ended June 30, 2012 and 2011, respectively and $9,995 and $10,181 for the six months ended June 30, 2012 and 2011, respectively.

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CONCENTRATIONS (Details Textuals 2) (USD $)	Jun. 30, 2012
Risks and Uncertainties [Abstract]
Depository account maximum amount covered by FDIC	$ 250,000

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WARRANTS (Tables)

6 Months Ended

Jun. 30, 2012

Warrants [Abstract]

Schedule of Warrants, Valuation Assumptions

Exercise price	$	1.10
Term	6 years
Volatility		42	%
Dividends		0	%
Discount rate		.05	%

Schedule Of Share Based Compensation Stock Warrants Activity

				Weighted Average
Exercise		Number		Remaining	Number
Price		Outstanding		Contractual Life	Exercisable
$	1.10		1,342,500	1 year		1,342,500
$	1.00		2,000,004	8 years		2,000,004
			3,342,504			3,342,504

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PROPERTY AND EQUIPMENT (Details Textuals) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Property, Plant and Equipment [Abstract]
Depreciation	$ 4,954	$ 5,139	$ 9,995	$ 10,181

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES:

Lease Commitments

The Company has lease agreements for office space in Charlotte, NC, and Boca Raton, FL. All lease agreements are with unrelated parties.

There are two Charlotte leases for adjoining spaces that expire on May 31, 2013 and may be renewed for an additional year. The monthly rent for the combined space is approximately $2,340.

Beginning November 1, 2009, the company entered into a 24 month lease for office space in Boca Raton, FL. The monthly rental is approximately $1,313. On October 6, 2011, this lease was renewed for an additional two years.

The rental expense for the six months ended June 30, 2012 and 2011 was approximately $22,300 and $21,880, respectively.

Contingencies

We are not a party to any pending material legal proceedings except as described below. To our knowledge, no governmental authority is contemplating a legal proceeding in which we would be named as a party.

On October 22, 2010, the Company filed a complaint in the Superior Court of Stamford/Norwalk, Connecticut against the Administrators of the Estate of David Harvey (“Harvey”) to recoup a credit loss incurred by the Company’s former subsidiary, Brookridge Funding Services, LLC. Harvey was the owner of a Company that caused the credit loss and the Company is pursuing its rights under the personal guarantee that Harvey provided. The Complaint is demanding principal of approximately $485,000 plus interest and damages.