10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended September 30, 2007

OR

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

For the transition period from:                      to                     

Commission file number : 0-16569

CAM COMMERCE SOLUTIONS, INC.

(Exact name of registrant as specified in its Charter)

Delaware (State or other jurisdiction of incorporation or organization)	95-3866450 (I.R.S. Employer Identification No.)
17075 Newhope Street, Suite A Fountain Valley, California (Address of Principal Executive Offices)	92708 (Zip Code)

Registrant’s telephone number, including area code: (714) 241-9241

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock $.001 par value

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. o Yes þ No

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 þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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

Large Accelerated Filer o      Accelerated Filer o      Non-accelerated Filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 1b-2 of the Act). o Yes þ No

The aggregate market value of voting stock held by non-affiliates of the Registrant as of March 31, 2007 was approximately $68,539,000.

As of November 9, 2007, there were 4,112,290 outstanding shares of common stock of the Registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Part II Annual Report to Stockholders for
fiscal year ended September 30, 2007

TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9AT. CONTROLS AND PROCEDURES
	ITEM 9B. OTHER INFORMATION
PART III
	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
	ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
	ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
SIGNATURES
ITEM 15(a)
EXHIBIT INDEX
EXHIBIT 13(a)
EXHIBIT 23(a)
EXHIBIT 23(b)
EXHIBIT 31(a)
EXHIBIT 31(b)
EXHIBIT 32(a)

PART I

Cautionary Statement

All statements included or incorporated by reference in this Report on Form 10-K, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be subject to the safe harbor provisions of such act. Examples of forward-looking statements include, but are not limited to, future competition and market conditions, new products, new system sales, statements concerning projected revenue, expenses, gross profit, gross margin and income, our accounting estimates, assumptions and judgments, the impact of our adoption of new rules on accounting, the future effectiveness of our expense and cost control and reduction efforts, the future market acceptance and performance of our products, implications of our lengthy sales cycle, and our future capital requirements. These forward-looking statements are based on our current expectation, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us. Forward—looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “potential,” “continue,” and similar expressions, as well as variations or negatives of these words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements speak only as of the date of this Report and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward—looking statements as a result of various factors, some of which are set forth in “Risk Factors,” below. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

ITEM 1. BUSINESS

The Company

CAM Commerce Solutions, Inc. was incorporated in California in 1983, and reincorporated in Delaware in 1987. Our principal business is to provide total commerce solutions for small to medium size, traditional retailers and Web retailers. We offer complete retailing systems, consisting of software, hardware, installation, training, technical support services and web hosting services. We also offer comprehensive payment processing solutions and services that integrate with our retailing systems as well as other suppliers’ systems. These solutions are based on our open architecture software products for managing inventory, point of sale, sales transaction processing, accounting and payment processing. Sales, service, research, and development staff are located in California and Nevada, while our customers are located throughout the United States.

Payment Processing Services (X-Charge)

We market payment processing services to our customers. Our customers utilize our X-Charge software to process credit card transactions. The payment processing services are provided by a third party credit card payment processor. This generates revenues for us based on the number of credit card transactions processed for our customers.

X-Charge is integrated with our point of sale software, which allows our customers to integrate their payment processing with their point of sale system. This integration means they no longer need stand alone credit card terminals. When one of our retailers who is using X-Charge rings up a sale at the cash register and selects to take payment with a credit card, the X-Charge software automatically processes the transaction. It asks the operator to swipe the card on the cash register and then handles the approval, printing of the customer receipt on the cash register and all settlement functions and reporting. Thus, the sale takes place for the customer and the retailer in one transaction rather than the two transactions it would take to separately ring up the credit card on a stand alone credit

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card terminal in addition to ringing up the sale on the cash register. Transactions are faster and more efficient with X-Charge.

Our X-Charge customer accounts can be broken up into two types. First, there are customers who have our own retailing solutions, such as Retail ICE, Retail Star, CAM-32, Profit$ or MicroBiz. Second, there are the customers of our resellers who are using a business software solution that the reseller has developed for their customers.

The revenues from X-Charge accounted for approximately 50%, 39%, and 26% of our total revenues for the fiscal years ended September 30, 2007, 2006 and 2005, respectively.

The Systems

We offer the following turnkey systems:

(1)	CAM32 — designed for hard goods retailers whose inventory is re-orderable in nature.
(2)	Profit$ — designed for apparel and shoe retailers whose inventory is seasonable in nature, and color and size oriented.
(3)	Retail STAR — a Windows-based system designed to incorporate multiple functions of both the CAM and Profit$ systems.
(4)	Retail ICE — single-user derivative of Retail STAR.
(5)	MicroBiz — a Windows-based system designed for single-store, hard goods retailers that are generally smaller in size than customers that utilize the CAM32 system.

Our systems offer the ability to obtain: (i) automated pricing of each item; (ii) billing for charge account customers; (iii) printing of a customer invoice; (iv) tracking of inventory count on an item by item basis; (v) computation of gross profit, dollars and/or percentage of each item; and (vi) tracking of sales by clerk and department by day and/or month. In addition, our systems provide full management reporting, including zero sales reports, inventory ranking, overstock and understock, sales analysis, inventory valuation (last cost, average cost and retail) and other reports. The systems can also provide integrated or interfaced accounting functions including accounts receivable, accounts payable, and general ledger. Our systems integrate Intel-based personal computers, computer point of sale stations, hand-held and table top barcode laser scanners, computer workstations, laser printers, and our software. Each system is configured to meet the customer’s particular needs and, as a result, the components included in each system, including the personal computer, printer, point of sale station and our software, depend on the needs, the size and the industry type of the customer.

We provide to each customer a turnkey system, which includes all of the hardware and the software as well as installation of the system at the customer’s premises, which is optional to the customer. All systems, except the MicroBiz and Retail ICE systems, are capable of handling multiple stores. In a multiple-store system, we either install a computer network or work with the existing network infrastructure of the customer. The server computer at each store communicates with the server computer at the customer’s main office. The main server computer compiles all information from the other locations for processing and reporting.

Inventory Management

We believe that inventory control is the most important and time consuming task facing the management of retail stores. Each of our systems was designed to address the retailer’s need for simpler and yet more accurate means of controlling a large and diverse inventory. All inventory information, once entered into the system, is updated for each sale that is transmitted from the point-of-sale station to the server computer. The following managerial reports are examples of the type of reporting that the systems are capable of providing:

(1)

Popularity Ranking. The systems will report on the popularity of each item in the store by producing a report listing each item of inventory ranked according to the number of sales of each item. The report is generated automatically or manually, and can produce a list of daily, weekly, monthly, year-to-date and/or trailing 12 or 13 months of sales. The systems will also analyze popularity data and indicate to the retailer which particular items of inventory are needed and which items are overstocked.

(2)

Zero Sales Report. The systems provide a sales analysis on a monthly and year-to-date basis for inventory items for which no sales have been made. The analysis can be reported on a total sales basis or on a departmental or item level basis.

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(3)	Inventory Tabulation and Valuation. The systems provide reports listing all inventory on hand, the valuation of such inventory on a cost and retail basis, the average cost of each item in inventory, and all items of inventory on order but not yet received.
(4)	Automatic Purchasing. The systems provide a report listing all items that should be ordered based upon historical data stored in the system, including the number of items in inventory, the number on the shelf, the number on order and the minimum quantities required. Certain systems can also automatically provide a purchase order if desired.
(5)	Pricing. The systems are capable of producing price stickers in various label formats, assigning Uniform Purchase Code numbers and printing barcodes directly upon the price labels for reading by laser scanners. In addition, if there is a price change, the systems will automatically update the pricing information and, if desired, print new pricing labels.
(6)	Reports. The systems permit the retailer to produce customized reports and forms utilizing data in the system.

Accounting Management

We have developed our own accounting software called Retail STAR Accounting, which is integrated with Retail STAR and Retail ICE software products. The accounting modules include Sales Order, Accounts Receivable, Accounts Payable, General Ledger, and Bank Reconciliation.

i.STAR

We provide retailers the ability to set up an Internet storefront with our i.STAR software that is integrated with Retail STAR and CAM32 systems. The Internet storefront is established within the system as a virtual store location in a chain of stores. The integrated accounting features (i.e., order processing and accounts receivable) are used to process, track, and ship the orders that are received from the Internet storefront. As a one source solution for our customers, we also provide a Web hosting service for i.STAR.

Service and Support

Customer service and support is a critical element in maintaining customer satisfaction. For a monthly fee, each purchaser of a system receives service and support from us. The service and support we provide includes:

(1)	Technical Phone Support and Software Enhancements. We provide technical support by troubleshooting the customer’s systems problems via the telephone and via modem. We do not customize our software for particular customers, but we are receptive to comments from customers concerning our software. Such comments, together with planned enhancements to the software, result in improvements, which are provided without additional cost to all customers on a service contract.
(2)	Installation and Training. In order to assure customers that they will be able to properly integrate our system into their business, we offer on-site installation and training on the use and application of our systems to each customer. The training can take place at our in-house training facilities or at the customer’s location. The amount of training required depends upon the knowledge and experience of the user plus the complexity of the business at which the system is being implemented. We also offer training to our customers via the telephone.
(3)	Hardware Service. We offer hardware service to our customers on a time and materials billing basis. Our service representatives are trained to determine the source of the problem or malfunction in the hardware and, once determined, replace the defective component. Defective components are either repaired at our facility or sent to a manufacturer’s authorized service center for repair.

Marketing

Direct Sales

We market our systems and services primarily through our direct sales force consisting of 51 salespersons and sales associates, all of whom work exclusively for us. Our marketing efforts extend nationwide with offices in the states of California, Nevada, Washington, Georgia, Florida, Missouri, Massachusetts, Texas and New Jersey. Each salesperson is assigned a specific geographical territory and is responsible for following up on sales leads in that territory. Each salesperson is provided with a sales kit and demonstration equipment. Each salesperson is trained by us to be able to define the needs of the potential customer, recommend a system configuration, and provide

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appropriate price quotes. Upon the execution of a typical sales contract, we are generally able to ship and install an entire system within four to six weeks. We are paid directly by the customer. Compensation for salespeople is based on a percentage of contract prices for each system sold.

Brochures, Trade Shows, and Advertising Media

We market our systems by advertising in trade journals, on the Internet, and in other print media targeted at retail businesses, by attending industry specific trade shows, by using sales promotional DVDs, and by direct mail advertising.

Sources of Supply

The computer hardware, which make up our systems, consist primarily of standard components purchased by us from outside distributors and includes products such as Intel-based personal computers, Hewlett-Packard printers, Symbol Technologies hand-held laser scanners and portable data terminals, and Epson receipt printers. For most computer hardware components, we have more than one source of supply. We do not maintain a significant inventory of hardware component parts.

Customers

We have a wide base of customers with no single customer accounting for 10% or more of our revenues.

Backlog

We purchase component hardware for our systems based upon system purchase orders and our forecast of demand for our products. Orders from customers are usually shipped by us pursuant to an agreed upon schedule. Orders, however, may be canceled or rescheduled by the customer with a minimal penalty. For this reason, we believe backlog information is not indicative of our future sales or business trends and is subject to fluctuation. However, as of September 30, 2007, backlog was approximately $471,000, as compared to $719,000 on September 30, 2006. This backlog is based upon purchase orders placed with us which we believe are firm orders that will be filled during fiscal year 2008.

Competition

The industry in which we operate is highly competitive. We compete with suppliers dedicated to servicing just one type of business and software suppliers that provide functions similar to our software to a variety of types of businesses. Most competitors sell their products through independent dealers on a regional and national basis. We sell our systems on a direct sales basis.

We consider our systems to have greater capabilities for the small and medium size retailers than suppliers of other systems. We believe that we offer unique software features, including i.STAR (fully integrated Web store), gift card processing, and integrated accounting software. Included among such capabilities are ongoing software enhancements and a service organization in place to support the customer after the initial sale, if a support contract was purchased. We compete on the basis of product features, customer support, and our direct sales force against competitors that typically compete on the basis of lower pricing.

We also compete with vertical market suppliers of automated retail systems, which include hardware and software intended for use by a particular retail industry segment. Some of these suppliers compete with us on the basis of lower pricing.

Our ability to meet competition will depend upon, among other things, our ability to maintain our marketing effort, increase the capabilities of our systems through ongoing enhancements and improvements, and obtain financing when, and if, needed.

Intuit and Microsoft both offer competing point of sale software products. These products were either acquired or licensed from existing competitors in our marketplace. We have successfully competed against these products in the past. We believe our software products with their strong feature set will allow us to continue to compete successfully against Intuit and Microsoft’s products, but there is no assurance of this because of the significant financial resources available to Intuit and Microsoft and their ability to market and modify their products.

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Patents and Trademarks

We have obtained federal trademark registration for the following trademarks: Retail STAR, Retail ICE, A-Trade and X-Charge. We are not aware of any infringement on our trademarks, nor of any claim that our trademarks infringe on the rights of any other party.

We rely on a combination of trade secrets, copyright laws, and technical measures to protect our proprietary software. The software included in a system is not accessible by customers for purposes of revisions or copying, because we do not release the software source code to customers. We do not hold any patents and believe that our competitive position is not materially dependent upon patent protection. We believe that most of the technology used in the design and manufacture of most of our products is generally known and available to others. Consequently, there are no assurances that others will not develop, market and sell products substantially equivalent to our products, or utilize technologies similar to those used by us.

Seasonality

We experience a decline in demand for new systems from late November through early January because many retailers are reluctant to purchase and implement a point-of-sale system during their busy season. To offset our slow season for system sales, we have built a base of recurring revenue from existing customers primarily through our X-Charge payment processing service. The revenue from this service increases during the retailers’ busy season because of the increase in credit card sales.

Software Development

We develop our software using a modular approach, wherever possible, which allows a programmer to incorporate, replace or delete parts of an existing computer software program into a new program without affecting the operation of the remaining parts of the program. The incorporation of existing software, which has already been fully tested, into new product designs reduces the time and expense that we would otherwise incur in developing and enhancing our products.

We spent approximately $1,963,000, $1,808,000, and $1,706,000 on software development, including amounts capitalized during the years ended September 30, 2007, 2006, and 2005, respectively. We anticipate we will continue to incur software development costs in connection with enhancements and improvements of our software and the development of new products. These activities may require an increase in our programming and technical staff.

Employees

As of September 30, 2007, we had 196 full time employees, including 18 employed in finance, administration and executive officers, 22 in programming and quality assurance, 61 in sales and marketing, 20 in training and installation, 67 in technical support and customer service, and 9 in operations.

None of our employees are represented by a labor union and we believe that we enjoy harmonious relationships with our employees.

Environmental Regulations

There has been no material effect on us from compliance with environmental regulations.

Foreign Operations

We do not engage in business outside of the United States.

Information Available on Our Website and Elsewhere

We make available free of charge on our internet website at www.camcommerce.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). Our SEC filings, as well as those of other companies that file electronically with the SEC, are available at the SEC’s

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Internet website at www.sec.gov. You may also read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549. Information on the operation of the public reference room may be obtained by calling the SEC at 1-800-SEC-0330.

ITEM 1A. RISK FACTORS

Before deciding to buy, hold or sell our common stock, you should carefully consider the risks described below, in addition to the other information contained in this Report and in our other filings with the Securities and Exchange Commission, including our reports on Forms 10-Q and 8-K. The risks and uncertainties described below are what we consider our most significant risks, but they are not the only ones we face. Additional risks and uncertainties not presently known or that are currently deemed immaterial may also affect our business. If any of these known or unknown risks or uncertainties actually occurs, they could have a material adverse effect on our business, financial condition, results of operations, and cash flows. In that event, the market price for our common stock could decline and you may lose all or part of your investment.

The growth in our X-Charge payment processing business is primarily the result of adding new customers.

The revenue from our payment processing services grew by approximately 51% from fiscal 2006 to fiscal 2007 and accounted for approximately 50% of all revenue in fiscal 2007. This growth was due primarily to adding new customers, rather than increases in revenue from existing customers. We may not be able to continue to add new customers at the same rate in the future, in which case, our revenue growth may slow down substantially.

We would be adversely affected by the loss of a single payment processor.

Global Payments processes the payment transactions for our merchants, which represents about 95% of our total payment processing revenues. If Global Payments were to cease doing business with us for any reason, we would have to attempt to move these merchants to a new payment processor or processors. This would be extremely disruptive to our business and we could lose a substantial number of X-Charge accounts to our competitors in the process. The disruption in business, which could include the inability to collect revenues from Global Payments on payment processing transactions, could have a material adverse effect on our operating results.

Our original core business of computer system sales is in decline.

The sales of turnkey computer systems for the retail market declined by approximately 8% in fiscal 2007. This decline is due to market factors outside of our control and may continue. We cannot predict if and when a turn around in our system sales will occur. In response to this decline, we have shifted our business emphasis to the processing of credit card payments and other similar transactions, but still continue to strive for improvement in our system sales.

The population of our target customers is declining.

Our target customers are small-to-medium size retailers. These target customers are under intense competitive pressure from large retail chains such as Wal-Mart and others. These large retailers are gaining market share at the expense of our target customers. This intense competition causes some small retailers to go out of business, and others to consolidate with other small regional retail chains. This results in a shrinking population of our target customers. This also causes our target customers to be more cautious about capital spending for their retail business. These factors can cause substantial fluctuations in our revenues and in our results of operations. This current trend in the retail industry may exist indefinitely and could seriously impact our revenue and harm our business, financial condition and results of operations.

Our stock is thinly traded. Accordingly, you may not be able to resell your shares of common stock at or above the price you paid for them.

Our common stock has historically maintained a low trading volume of shares per day. This trend is likely to continue.

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We face intense competition in the retail point of sale industry, which could reduce our market share.

Intuit and Microsoft both offer competing point of sale software products. These products were either acquired or licensed from our competitors. Although we have successfully competed against these products in the past, both Intuit and Microsoft have significant financial resources to market and modify their products, and, therefore, we may not be able to continue to successfully compete against them in the future.

We may face patent or proprietary rights litigation in the future.

Although we believe that our products do not infringe on any third party’s patents, we may become involved in litigation involving patents or proprietary rights. Patent and proprietary rights litigation entails substantial legal and other costs, and we may not have the necessary financial or management resources to defend or prosecute our rights in connection with any litigation.

Other factors which may affect operating results include:

• the availability and pricing of competing products and the resulting effects on sales;

• the effectiveness of expense and cost control efforts;

• the ability to develop and deliver software products to market in a timely manner;

• the rate at which present and future customers adopt our new products and services in our target markets;

• the effects of new and emerging technologies;

• the ability to retain and hire key executives, management, technical personnel and other employees that are needed to implement business and product plans;

• the level of orders received that can be shipped in a fiscal quarter.

Due to all of the foregoing factors, and the other risks discussed in this report, you should not rely on past operating results as an indication of future performance.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We lease approximately 26,000 square feet of space in Fountain Valley, California. This facility houses our corporate headquarters, which includes executive and administrative offices, service and support staff, system integration staff, and our inventory warehouse. The lease will expire on March 31, 2010.

In addition, we lease approximately 20,500 square feet of office space in Henderson, Nevada from our Chief Executive Officer pursuant to a ten-year lease that expires on March 31, 2017. The facility houses our research and development team, our inside sales team and X-Charge group. We also have various immaterial leases for sales offices throughout the country.

ITEM 3. LEGAL PROCEEDINGS

Other than the ordinary routine litigation incidental to our business that we are involved in or threatened with from time to time, there are no material pending legal proceedings to which we are a party or to which any of our properties are subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

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PART II

Pursuant to General Instruction G (2), Items 5, 6, 7, and 8 have been omitted since the required information is contained in our 2007 Annual Report to Stockholders pursuant to Rule 14a-3(b), which is filed as an exhibit and incorporated herein by reference below.

FORM 10-K	ANNUAL REPORT TO STOCKHOLDERS
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER’S MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	PAGE 27: STOCK AND DIVIDEND DATA PAGES 21-24: SHARE-BASED COMPENSATION
ITEM 6: SELECTED FINANCIAL DATA	PAGE 28: SELECTED FINANCIAL DATA SEE NOTE (A) BELOW
ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	PAGES 4-11: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	SEE NOTE (B) BELOW

Note (A) The selected financial data incorporated herein by reference to our 2007 Annual Report to Stockholders as of September 30, 2007 and 2006 and for each of the years in the three-year period ended September 30, 2007, have been derived from our audited financial statements included elsewhere in this report by reference. The selected financial data as of September 30, 2005 and for the years ended September 30, 2004 and 2003 have been derived from our audited financial statements not included herein. The data is qualified in its entirety by reference to, and should be read in conjunction with our financial statements and related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report by incorporation by reference.

Note (B) Information for Item 8 is included in our financial statements as of September 30, 2007 and 2006, and for each of the years in the three-year period ended September 30, 2007, and our unaudited quarterly financial data for the two years ended September 30, 2007 and 2006, on pages 12 through 24 and page 28, respectively, of our 2007 Annual Report to Stockholders which is hereby incorporated by reference. The reports of the independent registered public accounting firms are included on pages 25 and 26 of the Annual Report to Stockholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

At September 30, 2007 and 2006, our cash and cash equivalents were approximately $22,047,000 and $15,196,000, respectively. At September 30, 2007 and 2006, we also held $6,388,000 and $8,457,000, respectively, of marketable available-for-sale securities consisting of debt instruments and certificate of deposits that bear interest rate risk. We place substantially all of our interest bearing investments with major financial and corporate institutions to limit risk. A 10% decline in interest rate yields would have resulted in a decrease in interest income of approximately $132,000 and $97,000 for the years ended September 30, 2007 and 2006, respectively.

Equity Price Risk

We do not invest in available-for-sale equity securities, and, therefore, are not subject to significant equity price risk.

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Foreign Exchange Rate Risk

We do not operate internationally and, therefore, are not subject to market risk from changes in foreign exchange rates.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9AT. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our fourth quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our executive officers and directors and their ages are as follows:

Name	Age		Position with the Company
Geoffrey D. Knapp		49	Chief Executive Officer, Director, Chairman of the Board, and Secretary
Paul Caceres		47	Chief Financial Officer and Chief Accounting Officer
Walter W. Straub		64	Director
David A. Frosh		49	Director
Donald A. Clark		57	Director

     Geoffrey D. Knapp, founder of the company, has been a director, and the Chief Executive Officer of the company since its organization in September 1983. Mr. Knapp received a bachelor’s degree in marketing from the University of Oregon.

     Paul Caceres has been our Chief Financial Officer and Chief Accounting Officer since July 1987. Mr. Caceres is a Certified Public Accountant, licensed in the state of California. He received a bachelor’s degree in business administration from the University of Southern California.

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     Walter W. Straub has been a director of the company since May 1989. From 1984 to 2004, he served as the President, Chief Executive and Director of Rainbow Technologies, Inc., a public company engaged in the business of designing, developing, manufacturing and marketing of proprietary computer related security products. Mr. Straub was a Director of SafeNet, Inc., a public company that merged with Rainbow Technologies, Inc. in 2004. In October 2006, Mr. Straub was named Chairman of the Board and interim CEO of SafeNet, Inc. until April 2007 when SafeNet was acquired. Mr. Straub received a bachelor’s degree in electrical engineering and a master’s degree in finance from Drexel University. In May 1993, Mr. Straub was elected to the Board of Trustees of Drexel University. Mr. Straub serves on the Concordia University President’s Advisory Council.

     David A. Frosh has been a member of the Board of Directors since August 1991. Mr. Frosh is currently a business consultant. From 2001 to 2006, he served as the President of Sperry Van Ness, a commercial real estate brokerage firm, which he resigned in December 2006. Mr. Frosh was employed by the company as President from June 1996 to March 2001. From June 1990 to June 1996, Mr. Frosh was employed as sales executive for the national accounts division of Automatic Data Processing “ADP.” ADP provides computerized transaction processing, data communications and information services. Mr. Frosh is a Professor of Marketing at Pepperdine University and Member of Pepperdine’s board of trustees. He is also a Director for Nexregen, a real estate investment trust, and serves on the advisory board of Therapy Solutions, a provider of technology based solutions for chronic muscular and skeletal disorders. Mr. Frosh received a bachelor’s degree in marketing from Central Michigan University and a master’s degree in business administration from Claremont Graduate School.

     Donald A. Clark has been a member of the Board of Directors since November 2002. Mr. Clark has over 30 years of experience in retail operations and selling to retail businesses. He presently is the President and CEO of C&C Companies, a private, diversified apparel marketing and manufacturing company. Mr. Clark has held various executive positions with C&C Companies since 1983. C&C Companies designs, manufactures, markets and distributes apparel and accessories under the brand names of Rusty and Sanuk USA. The company directly distributes products in the USA and Canada. Mr. Clark attended the University of Arizona as a marketing and business major.

The terms of office of directors expire at the next Annual Meeting of Stockholders, or at such time as their successors have been duly elected and qualified. There are no arrangements or understandings by or between any director or executive officer and any other person(s), pursuant to which he or she was or is to be selected as a director or officer, respectively.

Beginning in fiscal 2006, our directors who are not officers each receive $5,000 for every Board meeting they attend. Prior to fiscal 2006, they received an option to purchase 7,500 shares of common stock at fair market value on the date of grant when they are elected at the annual stockholders meeting each year. Directors are entitled to an expense reimbursement for attending meetings. Subject to the terms of the employment agreements described in Item 11 below, officers serve at the discretion of the Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than ten percent of our common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Officers, directors, and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such reports furnished to us, we believe all Section 16(a) filing requirements applicable to all such persons were complied with during the fiscal year covered by this report.

Certain Significant Employees

We do not have any significant employees who are not officers.

Family Relationships

There are no family relationships by or between any of our directors and officers.

Code of Ethics

We have adopted a Code of Ethics that applies to directors, officers, and employees. This Code of Ethics is publicly available on our website at www.camcommerce.com.

10

Audit Committee and Audit Committee Financial Expert

We have a separately-designated standing Audit Committee, which consists of Walter W. Straub, David A. Frosh and Donald A. Clark, each of whom meets the independence requirements of the NASDAQ Stock Market. The Board of Directors has determined that Walter Straub is an “audit committee financial expert” as defined under applicable rules of the Securities and Exchange Commission.

Stockholder Nominees

There have been no material changes to the procedures by which stockholders may recommend nominees to our Board of Directors since our last proxy statement.

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

Our Compensation Committee has responsibility for setting our overall compensation strategy and aligning it with our business goals. This includes determining the compensation of our chief executive officer and other executive officers, overseeing our equity incentive plans and other benefit plans and ensuring that our compensation programs are fair, reasonable and competitive. In determining compensation, the Compensation Committee seeks to ensure that the compensation of our executive officers that aligns their interests with the interests of our stockholders. The Compensation Committee must also review and approve all forms of deferred compensation and incentive compensation, including stock option grants, stock grants, and other forms of incentive compensation granted to our executive officers.

Compensation Philosophy and Program Objectives

Our executive compensation program is designed (i) to attract and retain outstanding executive officers capable of leading the company to fulfillment of its business objectives, and (ii) to establish an appropriate link between executive compensation and achievement of our strategic and financial performance goals, including the enhancement of shareholder value. Our compensation program is specifically designed to reward our executive officers for individual performance, years of experience, contributions to our financial success, and creation of stockholder value. Our compensation philosophy is to provide overall compensation levels that (i) are sufficient to attract and retain talented executives and to motivate those executives to achieve superior results, (ii) align executives’ interests with our corporate strategies, our business objectives, and the long-term interests of our stockholders, (iii) enhance executives’ incentives to increase our stock price and maximize stockholder value, and (iv) are consistent with our constant focus on controlling costs. In many instances we build our compensation elements around long term retention and development together with annual rewards based on specific focus areas.

In hiring and retaining executive management, we compete with a variety of companies, including larger companies with greater resources. Accordingly, the Compensation Committee believes it is appropriate to offer executives, subject to performance goals being met, long-term incentive compensation that is intended to align their interests more closely with those of all stockholders. These long-term equity incentive grants are generally targeted to a composite group of companies. Based upon its deliberations and analysis, the Compensation Committee believes that within the framework defined above our executive compensation practices provide an overall level of compensation that is competitive with the level of compensation of companies of similar size, complexity, revenue and growth potential, and that its executive compensation practices recognize the caliber, level of experience and performance of our management.

Assessing Executive Performance and Results

The Compensation Committee assesses the performance of the chief executive officer and it works with the chief executive officer in determining the performance assessments of the other executive officers. Performance is assessed and recognized through the annual planning and budget process. During this process, key strategies and

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objectives are established for both the short and long term. During the initial planning meeting and then each quarter, results are reviewed against the plan and budget. We do not use specific quantitative targets or formulas to assess executive performance or determine compensation.

Although the compensation process is managed and driven and decisions made by the Compensation Committee, the views of certain of our executive officers are taken into account in connection with setting the compensation of other executive officers. Executive officers participate in the preparation of materials requested by the Compensation Committee for use and consideration at Compensation Committee meetings and the Compensation Committee has the opportunity to meet with each of the executive officers at various times during the year to assess performance. In assessing the performance of the executive officers, the Compensation Committee does not assign specific weights to the factors considered.

Our chief executive officer prepares recommendations regarding the individual and corporate performance goals and objectives of our other officers that are periodically established. Additionally, the chief executive officer recommends compensation and other terms of employment for these officers. The Compensation Committee reviews and considers these recommendations in its deliberations, taking into account the officer’s success in achieving his or her individual performance goals and objectives and the corporate performance goals and objectives deemed relevant to the officer as established by the Compensation Committee. The chief executive officer may be present during these deliberations, but does not vote.

The same criteria are key elements in the assessment of the chief executive officer’s performance by the Compensation Committee. The Board of Directors determines, in its sole discretion, the compensation and other terms of employment of our chief executive officer, based on the Compensation Committees’ recommendation and evaluation of the chief executive officer’s performance in light of relevant corporate performance goals and objectives. The chief executive officer is not present for the discussion and does not participate in the decisions regarding his compensation.

Elements of Compensation

Our executive compensation program has two major elements, fixed salary and incentive compensation. Incentive compensation consists of cash bonuses and non-qualified stock options. Our compensation program also consists of providing our senior executive officers with employee benefits that are generally available to all of our employees including, matching contributions to a defined contribution (401(k)) retirement plan and health insurance benefits. The mix of fixed salary and incentive compensation is determined by the Compensation Committee to provide the right balance of market competitiveness and align the executive’s incentive compensation with business performance and stockholder return.

Salary

Salary is intended to compensate executive officers at a level which is appropriate for an executive in his or her position, consistent with experience and capabilities and in an amount which is competitive with the level of compensation paid by companies of similar size, complexity, revenues and growth potential. The Compensation Committee reviews the salary information of a broader survey group of similar sized companies in the industry and a peer group of companies and uses such information as a guideline in establishing the salary for each executive officer. We believe that offering competitive salaries gives us the opportunity to attract and retain talented managerial employees.

Incentive Bonuses

The Compensation Committee believes that the relative portion of an executive officer’s compensation that is variable rather than fixed should increase as the scope and level of the individual’s business responsibilities increase. This allows us to more closely match total compensation with our actual performance. Accordingly, the calculation of annual incentive bonus payments under our senior management incentive plan for executive officers is determined based on the company’s actual performance measured against objective performance criteria approved by the Compensation Committee as described below.

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Performance goals are established on an annual basis in connection with our budgeting process. These measures are believed to best reflect the short-term performance of the company, as they are directly influenced by management’s actions and exclude investment income and other non-operating factors that affect pre-tax income. For fiscal 2007, achievement of the target bonus was based on achieving specified pre-tax income goal. The Compensation Committee believes the goals set are challenging, but achievable. When appropriate, the Compensation Committee will subsequently consider adjusting the targets to take into account developments which occur after the budget process has concluded.

Bonuses are based on achievement of pre-tax income goals and are intended to motivate short-term financial performance of the company. It is intended that high levels of achievement will provide executives with above average levels of current compensation, and that lower levels of achievement will provide executives with below average levels of current compensation.

Stock Options Compensation

We no longer grant stock options to executives as a form of compensation.

Employee Benefit Programs

Our 401(k) plan is based on employee contributions and partial company matching. The Compensation Committee believes that the contribution levels to the 401(k) plan are typical and necessary to recruit and retain qualified executives.

We cover the cost of health care benefits for executives and their families. The terms of our health care programs for both current employees and retirees do not discriminate in scope, term or operation in favor of our executive employees.

All salaried employees are entitled to payment of salary for any accumulated but unused vacation days upon termination of employment.

Deferred Compensation Plan

We do not have a deferred compensation plan.

Miscellaneous Benefits

We do not provide special perquisites and benefits to executive officers. Executive officers are compensated through salary and incentive compensation only. We do not provide cars, private air travel, family travel reimbursement or other special travel benefits to executive officers. Except for the 401(k) plan described above, we have no pension or retirement plan. We do not maintain lodging for the benefit of executive officers or reimburse executive officers for lodging expenses except in connection with business travel, including company requested relocations. We do not provide tax planning assistance, financial planning or other personal services to executive officers nor do we reimburse executive officers for any such services. Except for the tax gross ups in connection with a change in control described below, we do not provide tax assistance to executive officers. We do not provide club memberships or other personal social or entertainment benefits to executive officers, nor do we reimburse executive officers for any such costs. We do not make loans or provide guarantees to executive officers.

Allocations Between Forms of Compensation

Executive compensation is designed to be comprised of 55% to 65% of fixed salary and 35% to 45% of variable compensation based on performance factors.

CEO Performance and Compensation

Within the framework described above, the Compensation Committee evaluates the performance of our chief

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executive officer and determines the officer’s salary and bonus on an annual basis. The Compensation Committee sets qualitative objectives and responsibilities for the chief executive officer consistent with our business model. These include creating shareholder value through revenue and profit growth, strategic planning and new product development, enhancement of stockholder value and effective Board and stockholder communications.

Accounting and Tax Implications

Section 162(m) of the Internal Revenue Code limits deductions for executive compensation in excess of $1 million, except for certain compensation which qualifies for a performance-based exception. Certain types of compensation in excess of $1 million are deductible by us if performance criteria are specified in detail and are contingent on stockholder approval of the compensation arrangement. The equity grants under our stock option plans are not subject to deduction limit. Cash compensation paid to our named executive officers did not exceed the Section 162(m) thresholds in fiscal 2007.

While the Compensation Committee will continue to consider deductibility under Section 162(m) with respect to future compensation arrangements with executives, deductibility will not be the only factor used in ascertaining appropriate levels or modes of compensation. Since corporate objectives may not always be consistent with the requirements for full deductibility, it is possible that the Compensation Committee may, in the future, enter into compensation arrangements where the payments are not fully deductible under Section 162(m).

Beginning on October 1, 2005, we began accounting for stock-based compensation in accordance with the requirements of SFAS 123(R).

Change in Control agreements

We have change in control agreements in place with Geoffrey Knapp, our Chief Executive Officer, and Paul Caceres, our Chief Financial Officer. The agreements require each officer’s position, duties, title, authority and responsibilities to be at least commensurate with those held prior to any change in control. If after a change in control the executive is terminated without cause or resigns due to a reduction in authority and responsibilities, the officer will receive payments equal to 299% of their base salary and a bonus based on their compensation from the fiscal year ended prior to the year in which the termination takes place. The agreements include a provision for participation in the Company’s benefit plans, including medical, disability and life insurance, and fringe benefits, for 18 months following termination other than for cause after a change of control. The agreements also include provisions to gross up payments made following termination of employment after a change in control in order to eliminate, to the extent possible, the effect of the excise tax on such payments that might be imposed by Sections 280G and 4999 of the Internal Revenue Code to the extent possible. If a triggering event of a change in control was to occur on the last business day of the most recently completed fiscal year, the agreement calls for a lump sum payment of $1,360,000 to Mr. Knapp and $900,000 to Mr. Caceres, in addition to the applicable gross up payments. Each agreement is for a term of 12 months and automatically renews on an annual basis.

A “Change of Control” shall be deemed to have occurred if: (i) a third person, including a “group” as defined in Article 13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of shares of the company (a) having 30% or more of the total number of votes that may be cast for the election of directors of the company in 1996; and (b) having 30% or more of the total number of votes that may be cast for the election of directors of the company in 1997 and thereafter; or (ii) as the result of, or in connection with, any cash tender or exchange offer, merger of other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the company before the Transaction shall cease to constitute a majority of the Board of Directors (the “Board”) of the company or any successor to the company.

Compensation of Directors

The compensation plan for non-employee directors has changed. Beginning in fiscal 2006, they each receive $5,000 for every Board meeting they attend. Prior to fiscal 2006, they were each granted options to purchase 7,500 shares of common stock when they were elected at the annual stockholders meeting each year. The non-employee directors are Walter Straub, David Frosh, and Donald Clark. These directors were also eligible to be reimbursed for their expenses in attending meetings of the Board of Directors and committees of the Board. Directors who are employees of the company receive no compensation for serving on the Board of Directors.

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The following table sets forth information concerning compensation paid by us for services rendered to us during fiscal year ended September 30, 2007 to our non-employee directors.

DIRECTOR COMPENSATION

									Change in Pension
									Value and
									Nonqualified
	Fees Earned						Non-Equity		Deferred
	or Paid		Stock		Option		Incentive Plan		Compensation		All Other
Name	in Cash		Awards		Awards		Compensation		Earnings		Compensation		Total
Walter Straub	$	20,000		—		—		—		—		—	$	20,000
David Frosh	$	20,000		—		—		—		—		—	$	20,000
Donald Clark	$	20,000		—		—		—		—		—	$	20,000

Employment agreements

Geoffrey Knapp, Chief Executive Officer, and Paul Caceres, Chief Financial Officer, each have 12-month employment agreements that renew automatically on an annual basis. On December 20, 2006, the Company amended the employment agreements. Other than each executive’s base salary, the terms of the employment agreements are substantially identical. Severance payment for termination other than for cause was increased in 2006 from 100% of the executive’s base salary and annual bonus in the fiscal year prior to the year in which the termination occurred to 299% of such amount. In addition to terminations for good reason by the executive because of a breach of the employment agreement by the company or substantial adverse change in his authority or responsibilities, the executive may also terminate the agreement and receive the severance payment if he is required to be based or perform services at an office or location other than the one he is based at immediately prior to a change of control, except for reasonable travel requirements. The agreements provide a minimum annual base salary of $326,500 for Mr. Knapp and $207,000 for Mr. Caceres. The agreements also include a provision for annual bonuses to be paid based on achieving annual performance goals.

The following table sets forth information concerning compensation paid by us for services rendered to us during fiscal year ended September 30, 2007, and the prior two fiscal years, to our Chief Executive Officer and each additional executive officer whose total compensation exceeded $100,000 (each a “Named Executive Officer”):

SUMMARY COMPENSATION TABLE

											Non-Equity		Non-Qualified
Name and Principal	Fiscal				(1)		Stock		Option		Incentive Plan		Deferred		All Other
Position	Year		Salary		Bonus		Awards		Awards		Compensation		Compensation Earnings		Compensation		Total
Geoffrey Knapp		2007	$	332,000	$	237,000	$	0	$	0		0		$0		$0	$	569,000
Chairman of the		2006	$	317,000	$	138,000	$	0	$	0		0		$0		$0	$	455,000
Board and CEO		2005	$	305,000	$	94,000	$	0	$	0		0		$0		$0	$	399,000
Paul Caceres		2007	$	210,000	$	150,000	$	0	$	0		0		$0		$0	$	360,000
CFO and CAO		2006	$	201,000	$	88,000	$	0	$	0		0		$0		$0	$	289,000
		2005	$	193,000	$	59,000	$	0	$	0		0		$0		$0	$	252,000

(1) Bonuses paid to the Named Executive Officers are pursuant to annual incentive compensation programs established each year for selected employees, including executive officers. Under this program, performance goals, relating to such matters as income before taxes , were established each year. Incentive

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compensation, in the form of cash bonuses, was awarded based on the extent to which the company and the individual achieved or exceeded the performance goals.

Stock Options Granted and Exercised During Fiscal 2007

There were no stock options granted to executive officers during the fiscal year covered by this report.

The following tables set forth certain information concerning options exercised by the Named Executive Officers during the fiscal year covered by this report, and outstanding options at the end of such year held by the Named Executive Officers.

OUTSTANDING EQUITY AWARDS AT SEPTEMBER 30, 2007

OPTION AWARDS

STOCK AWARDS

Number of

Equity Incentive

Equity Incentive

Securities

Plan Awards: # of

Plan Awards: # of

Underlying

Securities

Market Value of

Unearned Shares,

Value of Unearned

Unexercised Options

Underlying

Option

Options

# of Shares or

Shares or Units of

Units or Other

Shares, Units or

Exercisable/

Unexercised

Exercise

Expiration

Units of Stock That

Stock That Have Not

Rights That Have

Other Rights That

Name

Unexercisable

Unearned Options

Price

Date

Have Not Vested

Vested

Not Vested

Have Not Vested

Geoff Knapp

50,000/0

—

$

5.38

8/2/2010

—

—

—

—

Paul Caceres

15,000/0

—

$

5.38

8/2/2010

—

—

—

—

15,000/0

$

3.56

4/26/2011

5,000/0

$

4.98

8/20/2013

OPTION EXERCISES AND STOCK VESTED

OPTION AWARDS					STOCK AWARDS
	# of Shares		Value		# of Shares		Value
	Acquired on		Realized on		Acquired on		Realized on
Name	Exercise		Exercise (1)		Vesting		Vesting
Geoff Knapp		20,000	$	373,200		—		—
Paul Caceres		—		—		—		—

(1) Market value of the underlying securities of the exercised options at the exercise date minus the exercise price of the options.

Report of the Compensation Committee

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this annual report. Based on this review and the discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this annual report.

     Compensation Committee

     Walter Straub, Donald Clark, and David Frosh
     November 1, 2007

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The Report of the Compensation Committee will not be deemed to be incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Act of 1934, except to the extent we specifically incorporate the report by reference.

Compensation Committee Interlocks and Insider Participation

As noted above, the members of the Compensation Committee during the fiscal year ended September 30, 2007 were Walter Straub, Donald Clark, and David Frosh. Neither Walter Straub nor Donald Clark has ever been an officer or employee of our company. David Frosh was formerly employed by our company as President from June 1996 to March 2001. None of our executive officers served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of such committee, the entire Board of Directors) or as an executive officer of another entity during the fiscal year ended September 30, 2007.

No member of the Compensation Committee had, or will have, a direct or indirect material interest in any transaction or series of similar transactions that have occurred since the beginning of our fiscal year ended September 30, 2007, or in any currently proposed transaction or series of similar transactions to which we were or are to be a party in which the amount involved exceeds $120,000.

1993 Stock Option Plan

In April 1993, our stockholders approved our 1993 Stock Option Plan (the “1993 Plan”) under which non-statutory options may be granted to key employees and individuals who provide services to us, at a price not less than the fair market value at the date of grant. The options are exercisable based on vesting periods as determined by the Board of Directors and expire ten years from the date of grant. The 1993 Plan expired in April 2003. At the time, options exercisable for all 1,200,000 shares of our common stock authorized for issuance under the 1993 Plan had been granted.

2000 Stock Option Plan

In April 2000, our Board of Directors approved our 2000 Stock Option Plan (the “2000 Plan”) under which non-statutory options may be granted to key employees and individuals who provide services to us, at a price not less than the fair market value at the date of grant. The options are exercisable based on vesting periods as determined by the Board of Directors and expire ten years from the date of grant. The 2000 Plan was not formally approved by our stockholders. The 2000 Plan allows for the issuance of an aggregate of 750,000 shares of our common stock. The 2000 Plan term is unlimited in duration. Options for 538,000 shares of our common stock have been granted under the 2000 Plan as of September 30, 2007.

Information required to be disclosed for options, warrants and rights is hereby incorporated by reference to our 2007 Annual Report on pages 21-24; footnote 5 “Share-Based Compensation.”

401(k) Plan

In July 1991, we adopted a contributory profit-sharing plan under Section 401(k) of the Internal Revenue Code, which covers substantially all employees. Under the plan, eligible employees are able to contribute up to 15% of their compensation. Our contributions are at the discretion of the Board of Directors. We made a matching contribution of $176,000 for the fiscal year ended September 30, 2007.

Stock Price Performance Graph

The following graph shows a comparison of cumulative total returns for our company, the NASDAQ Composite Stock Market Index and the NASDAQ Computer and Data Processing Services Index, during the period commencing on September 30, 2002 and ending on September 30, 2007. The comparison assumes $100 was invested on September 30, 2002 in each of our common stock, the NASDAQ Stock Market Composite Index, and the NASDAQ Computer and Data Processing Services Stock Index and assumes the reinvestment of all dividends, if any.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth as of September 30, 2007, certain information regarding ownership of our common stock by (i) each person that we know is the beneficial owner of more than 5% of our outstanding common stock, (ii) each of our directors, director nominees, and executive officers who owns common stock and (iii) all directors and officers as a group.

		Shares Beneficially Owned
	Name and Address of	Amount & Nature of
Title of Class	Beneficial Owner	Beneficial Owner (4)	Percentage of Class (4)
Common Stock	Geoffrey D. Knapp, Chairman of the Board and CEO (1)	467,000	11.2%
Common Stock	Paul Caceres, Chief Financial Officer (1)	35,000	*
Common Stock	Walter W. Straub, Director (1)	123,000	2.9%
Common Stock	David Frosh, Director (1)	22,000	*
Common Stock	Donald Clark, Director (1)	26,000	*
Common Stock	Ken Templeton, Beneficial Owner (2)	620,000	15.1%
Common Stock	Bares Capital Management, Beneficial Owner (3)	394,000	9.6%
Common Stock	All Directors and Officers as a Group (of 5 persons)	673,000	15.6%

* less than 1%

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(1)	The address of each beneficial owner is in care of CAM Commerce Solutions, Inc., 17075 Newhope Street, Fountain Valley, California 92708.
(2)	Address of beneficial owner is 3311 S. Rainbow Blvd., Las Vegas, NV 89146.
(3)	The address of the beneficial owner is 221 W. 6th Street, Suite 1225, Austin, TX 78701.
(4)	Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable, or will become exercisable within 60 days from September 30, 2007, are deemed outstanding, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person. The total amount of these shares with respect to which all of the above have rights to acquire beneficial ownership in sixty (60) days are as follows: Geoffrey Knapp 50,000; Paul Caceres 35,000; Walter Straub 70,000; David Frosh 22,000; and Donald Clark 26,000. To our knowledge, each person named in the table has the sole voting and investment power with respect to all shares of common stock shown as beneficially owned by such person or entity.

We do not know of any arrangements, including any pledge of our securities by any person, the operation of which may at a subsequent date result in a change in control of the company.

The following table sets forth the number of shares to be issued upon exercise of outstanding options, the weighted- average exercise price of such options, and the number of shares remaining available for issuance as of the end of the company’s most recently completed fiscal year.

					(c)
			(b)		Number of securities
	(a)		Weighted-average exercise		remaining available for
	Number of securities to be		price of		future issuance under
	issued upon exercise of		outstanding		equity compensation plans
	outstanding options,		options, warrants		(excluding securities
Plan Category	warrants and rights		and rights		reflected in column (a))
1993 Stock Option Plan approved by security holders		118,000	$	4.60		—
2000 Stock Option Plan not approved by security holders		242,000	$	8.34		212,000

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

On December 19, 2006, we renewed a lease agreement with our Chief Executive Officer, Geoffrey D. Knapp, for approximately 20,500 square feet of office space in Henderson, Nevada. The lease is for a ten-year term that commences upon the completion of the building expansion space, which occurred on April 13, 2007. The initial rent of $25,949 per month is subject to annual percentage increases equal to the increases, if any, in the Consumer Price Index. No rent adjustment, however, shall be less than two percent (2%) nor greater than four percent (4%).

In accordance with our written Related Party Transactions Policy, out Audit Committee reviewed and approved this related party transaction, finding that the lease is on terms no less favorable to the company than those generally available from third parties. Pursuant to our Related Party Transactions Policy, our Audit Committee is responsible for reviewing and approving the terms and conditions of all related party transactions. Any material financial transaction with an officer, director, 5% or more shareholder or immediate family member of any of the foregoing would need to be approved by our Audit Committee.

In determining whether to approve or ratify a related party transaction, our Related Party Transactions Policy requires the Audit Committee to review the material facts of the transaction and take into account, among other factors the Audit Committee may deem appropriate, whether the transaction is on terms no less favorable than terms

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generally available to or from an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction.

There were no transactions required to be reported under applicable Securities and Exchange Commission rules since October 1, 2006 where our related party transactions policies and procedures did not require review, approval or ratification or where such policies and procedures were not followed.

Our Board of Directors consists of Geoffrey Knapp, Walter Straub, David A. Frosh and Donald A. Clark. Mr. Straub, Mr. Frosh and Mr. Clark meet the criteria for independence as required by NASDAQ Global Market listing standards. These three individuals are the members of our Audit, Compensation and Nominating Committees.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The aggregate audit fees incurred for services provided for fiscal 2007 and fiscal 2006 were as follows:

Category	Fiscal 2007			Fiscal 2006
Audit Fees (1)	$	158,000	(3)	$	121,000
Audit-Related Fees (2)		—			23,000
Tax Fees		—			—
All Other Fees		—			—

(1)	Includes annual audit and quarterly reviews.
(2)	Fees for work related to our SFAS123R adoption and compliance with Section 404 of the Sarbanes- Oxley Act.
(3)	Breakdown of the total fees is as follow: Ernst & Young LLP-$106,000 and McGladrey & Pullen, LLP- $52,000

We appointed Ernst & Young LLP as our new independent registered public accounting firm in June 2007. McGladrey & Pullen, LLP was our independent registered public accounting firm for the 2005 fiscal year through June 2007.

Audit Committee Pre-Approval Policies

Our Audit Committee has adopted detailed pre-approval policies and procedures pursuant to which audit, audit-related and tax services, and all permissible non-audit services, are pre-approved by category of service. All of these services were pre-approved in fiscal years 2006 and 2007. The fees are budgeted, and actual fees versus the budget are monitored throughout the year. During the year, circumstances may arise when it may become necessary to engage the independent accountant for additional services not contemplated in the original pre-approval. In those instances, we will obtain the specific pre-approval of the Audit Committee before engaging the independent accountant. The policies require the Audit Committee to be informed of each service, and the policies do not include any delegation of the Audit Committee’s responsibilities to management. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated will report any pre-approval decisions to the Audit Committee no later than at its next scheduled meeting.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report.

     1. Financial Statements

The financial statements required by Item 8 of this report are incorporated by reference to our 2007 Annual Report to Stockholders (See Index to Financial Statements and Financial Statement Schedule on page 23) .

20

     2. Financial Statement Schedule

See the Index to Financial Statements and Financial Statement Schedule on page 23.

     3. Exhibits

3(a) Certification of Incorporation, as amended (incorporated by reference to Exhibit 3(a) to the 1988 Annual Report on Form 10-K filed on January 12, 1989).

3(b) By-Laws, as amended (incorporated by reference to Exhibit 3(b) to Form 10-Q for the period ended March 31, 2004, filed on May 13, 2004).

10(a) 1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8 Registration Statement filed on June 21, 1993 — SEC File No. 333-121541).

10(b) Employment Agreement and Change in Control Agreement for Geoffrey D. Knapp, amended on December 20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).

10(c) Employment Agreement and Change in Control Agreement for Paul Caceres, amended on December 20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).

10(d) Amendment to 1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8 Registration Statement filed on June 26, 1998 — SEC File No. 333-57907).

10(e) 2000 Stock Option Plan (incorporated by reference to Exhibit 10(i) to the 2000 Annual Report on Form 10-K filed on December 21, 2000).

10(f) Fountain Valley New Office Lease Agreement (incorporated by reference to Exhibit 10(j) to the 2001 Annual Report on Form 10-K filed on December 20, 2001).

10(g) Indemnity Agreements (incorporated by reference to Form 8-K, filed on November 18, 2004)

10(h) Form of the Stock Option Agreement for the 2000 Plan (incorporated by reference to Exhibit 10(h) to the 2004 Annual Report on Form 10-K filed on December 21, 2004)

10(i) Fountain Valley Office Lease Extension Agreement Letter, dated May 26, 2005 (incorporated by reference to Exhibit 10(i) to Form 10-Q filed on August 12, 2005)

10(j) Henderson, Nevada Office Lease Agreement (incorporated by reference to the Form 8-K filed on December 19, 2006)

13(a) Annual Report to Stockholders for the fiscal year ended September 30, 2007

23a Consent and Report on Schedule of Independent Registered Public Accounting Firm

23b Consent and Report on Schedule of Independent Registered Public Accounting Firm

31 (a) Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

31 (b) Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

The company’s SEC File No. for all SEC filings referenced, other than the S-8 filings, is 000-16569.

21

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 filed on its behalf by the undersigned, thereunto duly authorized.

CAM COMMERCE SOLUTIONS, INC.
By:	/s/ Geoffrey D. Knapp
	Geoffrey D. Knapp,
	Chief Executive Officer
By:	/s/ Paul Caceres
	Paul Caceres,
	Chief Financial Officer and Chief Accounting Officer
Date: November 19, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Geoffrey D. Knapp Geoffrey D. Knapp	Chief Executive Officer and Chairman of the Board	November 19, 2007
/s/ David Frosh David Frosh	Director	November 19, 2007
/s/ Walter W. Straub Walter W. Straub	Director	November 19, 2007
/s/ Donald Clark Donald Clark	Director	November 19, 2007

22

CAM COMMERCE SOLUTIONS, INC.
INDEX TO
FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE

ITEM 15(a)

	Page Reference
	Annual Report
	to Stockholders		Form 10-K
Reports of Independent Registered Public Accounting Firms		25-26
Balance Sheets at September 30, 2007 and 2006		12
Statements of Income for the Years Ended September 30, 2007, 2006 and 2005		13
Statements of Cash Flows for the Years Ended September 30, 2007, 2006 and 2005		14
Statements of Stockholders’ Equity for the Years Ended September 30, 2007, 2006 and 2005		15
Notes to Financial Statements		16-24
Schedule II. Valuation and Qualifying Accounts for the Years Ended September 30, 2007, 2006 and 2005				24
Consent and Report on Schedule of Independent Registered Public Accounting Firm			Exhibit 23a
Consent and Report on Schedule of Independent Registered Public Accounting Firm			Exhibit 23b

All other financial statement schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

23

CAM Commerce Solutions, Inc.
Schedule II — Valuation and Qualifying Accounts
Years Ended September 30, 2007, 2006, and 2005

					Deductions/Accounts
	Balance at		Additions Charged		Written Off Net of		Balance at End of
	Beginning of Year		to Income		Recoveries		Year
Allowance for Doubtful Accounts Receivable
2007	$	154,000	$	21,000	$	53,000	$	122,000
2006	$	146,000	$	37,000	$	29,000	$	154,000
2005	$	155,000	$	178,000	$	187,000	$	146,000

24

EXHIBIT INDEX

Exhibit	Description
3(a)	Certification of Incorporation, as amended (incorporated by reference to Exhibit 3(a) to the 1988 Annual Report on Form 10-K filed on January 12, 1989).
3(b)	By-Laws, as amended (incorporated by reference to Exhibit 3(b) to Form 10-Q for the period ended March 31, 2004, filed on May 13, 2004).
10(a)	1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8 Registration Statement filed on June 21, 1993 — SEC File No. 333-121541).
10(b)	Employment Agreement and Change in Control Agreement for Geoffrey D. Knapp, amended on December 20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).
10(c)	Employment Agreement and Change in Control Agreement for Paul Caceres, amended on December 20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).
10(d)	Amendment to 1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8 Registration Statement filed on June 26, 1998 — SEC File No. 333-57907).
10(e)	2000 Stock Option Plan (incorporated by reference to Exhibit 10(i) to the 2000 Annual Report on Form 10-K filed on December 21, 2000).
10(f)	Fountain Valley New Office Lease Agreement (incorporated by reference to Exhibit 10(j) to the 2001 Annual Report on Form 10-K filed on December 20, 2001).
10(g)	Indemnity Agreements (incorporated by reference to Form 8-K, filed on November 18, 2004)
10(h)	Form of the Stock Option Agreement for the 2000 Plan (incorporated by reference to Exhibit 10(h) to the 2004 Annual Report on Form 10-K filed on December 21, 2004)
10(i)	Fountain Valley Office Lease Extension Agreement Letter, dated May 26, 2005 (incorporated by reference to Exhibit 10(i) to Form 10-Q filed on August 12, 2005)
10(j)	Henderson, Nevada Office Lease Agreement (incorporated by reference to the Form 8-K filed on December 19, 2006)
13(a)	Annual Report to Stockholders for the fiscal year ended September 30, 2007
23a	Consent and Report on Schedule of Independent Registered Public Accounting Firm
23b	Consent and Report on Schedule of Independent Registered Public Accounting Firm
31 (a)	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31 (b)	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

The company’s SEC File No. for all SEC filings referenced, other than the S-8 filings, is 000-16569.

25

EX-13.(A)

Exhibit 13(a)

Letter to Stockholders

Dear Stockholder,

It is with great pleasure that I am able to report that fiscal 2007 was without a doubt the best year in our company’s history and a significant improvement over last fiscal year’s record results. The bottom line to shareholders was a 71% increase in the price of our stock from the end of last fiscal year to the end of this one, marking our 5^th straight year of double digit shareholder returns and total returns over the 5 year period exceeding 900%, not counting the additional $1.59 per share in dividends we have paid over the last 10 quarters. I don’t see us slowing down now! It is not a coincidence that the past 5 years have coincided with the launch and development of our X-Charge payment processing business, which had no meaningful revenue until 2002. Revenue from this business grew 51% in fiscal 2007 over 2006 and was the driver behind the overall 18% revenue increase for the company and the 74% increase in pre-tax profit. The increase in the stock price of 71% is directly in line with the increase in pre-tax profit of 74%. The key point being that it is our results that are driving shareholder value in rationale proportion to what we have accomplished.

Payment processing is now our primary business based on revenue and we are quickly succeeding at making the transition to a payment processing company that also provides retailing software and systems rather than a retailing software and systems company that also provides payment processing. The benefit of this to our shareholders is the significantly better valuations given to payment processing companies as a result of the high margin, recurring revenue.

While we can always do better, there isn’t much to complain about this year. Pre-tax profit margins rose to 23% for the year and hit 28% in the 4^th quarter. This is the 4^th straight year of increasing profit margins. Even systems sales stabilized over the last 3 quarters of the year. It is also probably not a coincidence that we had a new Vice President of Sales in place for the last three quarters, but not the first quarter. The good news is that we did stop the trend of declining sales we had seen over the past few years in this part of our business.

Another important trend we continued to establish during the year was our dividend story. Our quarterly dividends declared based on the quarterly results of this fiscal year were $0.18, $0.20, $0.24 and $0.30 for a total of $0.92 a share and a run rate of $1.20 based on the 4^th quarter dividend of $0.30. If you bought the stock on the first day of the fiscal year at $20 per share that dividend yield looks pretty good. At the same time we were paying out 75% or more of our earnings in dividends, per our stated earnings based dividend plan, we still saw our cash, cash equivalents and marketable securities increase during the year by nearly $5 million to $28.4 million at September 30, 2007.

Now I will discuss the performance and outlook for the primary revenue drivers of our business. I would like to refer any new investors to the investor presentation on our website at camcommerce.com to get a better understanding of our business model. We update this presentation with current information with the release of each quarterly report.

Systems Sales

Last year I said we were working very hard to find the answer to getting our systems business going in the right direction, and I think we did make some progress there as noted above. It appears that at least part of the answer may have been getting some new focus at the management level with a new person in charge. We will continue to look for ways to improve the business and I know the person who is running our sales group now is pushing with lots of new ideas for driving business that we did not see in recent years. Systems sales declined during the year, but stabilized over the last 3 quarters of the year. We also hired a very capable Vice President of Software Development and Visa/MC Compliance who started at the end of August 2007. I had been running development for the past few years, so this move puts someone far more capable than me in an important role and frees me up to focus even more on growing the business. So there is reason to be optimistic that system sales will remain stable or improve. For planning purposes, while hopeful they will grow, we are expecting them to remain flat.

Service Revenue

Service revenue was up 7% in fiscal 2007 over fiscal 2006, resulting primarily from an increase in our I.Star Web hosting service revenue. After more than 24 years in business, our system customer base has grown to a size that we are not able to add enough new service accounts to offset those lost to normal attrition without an increase in system sales, resulting in the flat revenue trend.

1

Letter to Stockholders cont.

X-Charge Payment Processing

In fiscal 2007, we installed 6,347 new X-Charge accounts, a 58% increase, compared to 4,020 in fiscal 2006. This was the result of more resellers, existing resellers that were more productive and additional X-Charge sales people we hired during the year. This is the formula we plan to continue with to grow the acquisition rate of new accounts in fiscal 2008.

As I mentioned last year, we have done a good job predicting our growth and building the business and that still applies. We have excellent controls in place that will allow us to grow efficiently and effectively. Attrition appears to be under control and our enviably low attrition rates by industry standards seem to be holding. The net growth rate of our processing portfolio after attrition is currently in the $1 to $1.2 billion per year range, representing a $5.5 million to $6.5 million annual growth rate in X-Charge payment processing revenues. By the end of calendar 2007, our processing portfolio of more than 13,000 accounts should approach $4 billion in annual payment processing volume and we expect it to increase to $5 billion at the end of 2008. We expect payment processing revenues of approximately $5.5 million per year, for each billion in processing volume.

At this point in our development with our X-Charge business, there is no doubt the model works and works well. It is our goal this year to push harder through making rationale investments in sales and marketing, primarily the addition of 10 to 15 new sales people, bringing the size of our inside sales force to 35 to 40. As of this writing, we have 27 sales people, of which 7 have been hired within the last few months. I believe we have both existing and new opportunities with our resellers to warrant the addition of this many sales people or more. We are not counting on seeing the same level of productivity from the additional sales people as we have experienced for the existing group as quickly as we expect there will be less “low hanging fruit” to harvest.

Dividends and Cash Flow

We continue to deliver our promise to pay to shareholders 75% or more of our net profit in dividends, delivering $0.92 per share in declared dividends based on our results for fiscal 2007, as compared to $0.59 per share in declared dividends on our fiscal 2006 results. Although the decision to pay a dividend will be evaluated quarterly, it is our intent to continue our dividend policy in fiscal 2008 and beyond.

As stated last year, one of the driving factors behind our dividend policy is our large cash position, combined with our strong and predictable cash flow, which our Board determined was far more than adequate to fund our current growth strategy. Our judgment was and continues to be that further growing our cash balance does not benefit shareholders as much as returning the earnings to them, given the current low tax rates on dividend income. Our dividend policy creates visibility for the company in the public markets given our unique approach and our growing track record of substantially increasing dividends. Our dividend policy is a way for us to stand out in the financial markets and build our “CADA Brand”. Our dividend policy in no way impacts our opportunities as a growth company. Yet even with paying the dividend, our cash position still grew by $4.8 million in fiscal 2007 to a current balance of $28.4 million, or $6.93 per outstanding share, at the end of fiscal 2007.

Stock performance

Creating shareholder value continues to be one of my top priorities. Our stock price began fiscal 2007 at $20 per share and closed the fiscal year at $34 per share. It had been trading 10% to 15% higher both before and after September 30^th so that date turned out to be a bit of a low point for that trading period, but nevertheless the closing share price of $34 represents a 71% increase and you can add the dividends paid to get another 4%. This follows years of 13%, 24%, 150% and 68% going back sequentially to 2003. By any standard we have done a great job for shareholders over the past 5 years. We will work hard to try to continue this trend in 2008.

Treating our stock as a brand

Knowing that we are a very small company in a big world of public companies, we recognize we have to be different to be noticed. We have been at this too long as a small public company to have any illusions about who will be interested in us. The share count is what it is and so the trading volume is going to be limited by that. Big firms are not going to be interested in us, analysts generally won’t cover us due to the small float and some firms that hold conferences to attract business don’t invite us because we are not a candidate for a “transaction” since we don’t need any money. And none of that is a problem for us as long as we recognize it and focus on what we can control and building our own investor niche, which I think we have.

2

Letter to Stockholders cont.

It starts with treating our stock as a product or a brand and our shareholders as customers. It means focusing on building the reputation and image of that brand as you would a product. As stated, we know there is a large portion of the market that won’t ever be interested in a small company like us, and that is OK because we don’t need that many people to be interested in us to have a successful brand. We have identified the type of investor who would be interested and have gone about building a product for them. This type of investor likes the combination of growth and relative safety compared to our peers and is willing to be patient, a necessary component given the liquidity isn’t always optimal. They appreciate our conservative approach to our balance sheet and know they won’t wake up one day and find we did some crazy deal that destroys value in their investment. To make it attractive to be patient, we offer the dividend and a meaningful one at that, that will grow with our improving results. We don’t split the stock because besides the fact that I view it in most cases as little more than a “parlor trick” (I know many people disagree with me), I believe the higher stock price promotes a quality image and attracts investors less likely to be looking to “trade” the stock. Too many short term holders create volatility and volatility has been proven to hurt the share price long term. In the end, what matters most is good results and we are certainly doing our best to keep them coming and have every expectation of doing so.

As always, I would like to thank our hard working and dedicated CAM employees who make the extra effort for our customers and drive the success of our company.

All the best,

/s/ Geoff Knapp

Geoff Knapp
CEO & Chairman
CAM Commerce Solutions, Inc.

3

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

Cautionary Statement

You should read the following discussion and analysis with our Audited Financial Statements and related Notes thereto contained elsewhere in this Report. We urge you to carefully review and consider the various disclosures made in this report and in our other reports filed with the Securities and Exchange Commission (“SEC”).

The section entitled “Risk Factors” set forth in our Form 10-K Report, and similar discussions in our other SEC filings, discuss some of the important risk factors that may affect the business, results of operations, financial condition, and cash flows. You should carefully consider those risks, in addition to the other information in this Report and in our other filings with the SEC, before deciding to purchase, hold or sell our common stock.

All statements included or incorporated by reference in this Report, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be subject to the safe harbor provisions of such act. Examples of forward-looking statements include, but are not limited to, future competition and market conditions, new products, new system sales, statements concerning projected revenue, expenses, gross profit, gross margin and income, our accounting estimates, assumptions and judgments, the impact of our adoption of new rules on accounting for goodwill and other intangible assets, the future effectiveness of our expense and cost control and reduction efforts, the future market acceptance and performance of our products, implications of our lengthy sales cycle, and our future capital requirements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “potential,” “continue,” and other similar expressions, including variations or negatives of these words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements speak only as of the date of this Report and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors, some of which are set forth in “Risk Factors” in our Form 10-K Report. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

Overview

We design, develop, market, install and service highly integrated retailing and payment processing solutions for small to medium size traditional and eCommerce businesses based on our open architecture software. These integrated solutions include inventory management, point of sale, accounting, credit and debit card processing, Internet sales, gift card and customer loyalty programs, and extensive management reporting. Payment processing services are provided on a transaction based business model.

Our revenues are derived from systems sales, service and support payments, and payment processing fees through our X-Charge system, which represent approximately 32%, 18%, and 50%, respectively, of our fiscal 2007 revenues. Our customer base consists of small to medium size retailers located throughout the United States.

We provide integrated retailing and payment processing solutions for small to medium retailers both on direct basis and through a growing network of resellers that market to their customers. We offer a payment processing software program, called X-Charge, that can be integrated with our point-of-sale systems and our resellers’ systems. This allows our customers to process a sale and credit card payment in one transaction using just the point-of-sale system, eliminating the need to separately process the credit card on a stand alone credit card terminal. X-Charge is integrated with our five turnkey systems, consisting of: CAM32, which is designed for hard goods retailers whose inventory is re-orderable in nature; Profit$, which is designed for apparel and shoe retailers whose inventory is seasonal in nature, and color and size oriented; Retail STAR, which is designed to incorporate multiple functions of both the CAM32 and Profit$ systems; Retail ICE, which is a single-user derivative of Retail STAR; and MicroBiz, which is designed for single-store, hard goods retailers that are generally smaller in size than customers that utilize the CAM32 system.

4

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

Contracts and Commitments

During the twelve month period ended September 30, 2007, there were no material changes outside of our ordinary business in our long term debt, capital leases, operating leases, purchase obligations, or other long term obligations reflected on our balance sheet at September 30, 2007.

The following table summarizes payment obligations for long-term debt, capital leases, operating leases, purchase obligations and other long term obligations for future fiscal years.

	Payments Due By Period
			Less						More
			Than 1		1-3		3-5		Than 5
	Total		Year		Years		Years		Years
Long-term debt	$	—	$	—	$	—	$	—	$	—
Capital lease obligations		—		—		—		—		—
Operating leases		4,381		757		1,665		1,043		916
Purchase obligations		—		—		—		—		—
Other long term obligations		—		—		—		—		—
Total	$	4,381	$	757	$	1,665	$	1,043	$	916

Off Balance Sheet Arrangements

There are no off balance sheet items as of September 30, 2007.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of net revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions related to revenue recognition, receivables and inventory, capitalized software, allowances for doubtful accounts, intangible asset valuations, deferred income tax asset valuation allowances, accounting for share-based compensation related to Statement of Financial Accounting Standards No. 123R, Share Based Payments (“SFAS 123R”), and other contingencies. The estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent there are material differences between our estimates and the actual results, our future results of operations will be affected.

We believe the following critical accounting policies require us to make significant judgments and estimates in the preparation of the consolidated financial statements:

Revenue Recognition

Our revenue recognition policy is significant because revenue is a key component of results of operations. In addition, revenue recognition determines the timing of certain expenses such as commissions. Specific guidelines are followed to measure revenue, although certain judgments affect the application of our revenue policy. We recognize revenue in accordance with Statement of Position 97-2 (SOP 97-2), “Software Revenue Recognition,” as amended and interpreted by Statement of Position 98-9, “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions,” and Staff Accounting Bulletin No. 104 (SAB 104) “Revenue Recognition.” SAB 104 provides further interpretive guidance for public companies on the recognition, presentation, and disclosure of revenue in financial statements.

We derive revenue from payment processing services, the sale of computer hardware, licensing of computer software, post contract support (“PCS”), and installation and training services. We recognize payment processing revenues in the period the service is performed. Revenues are estimated based on the accumulation of sufficient historical information required to analyze trends and formulate a reasonable estimate. The significant historical information required to formulate a reliable estimate are the total dollar volume of credit card transactions processed and the related revenue for these credit card transactions. System revenue from hardware sales and software licensing is recognized when a system purchase agreement has been signed, the hardware and software has been shipped, there are no uncertainties surrounding product acceptance, the pricing is fixed and determinable, and collection is considered probable. If a sales transaction contains an undelivered element, the vendor-specific objective evidence (“VSOE”) of fair value of the undelivered element is deferred and the revenue recognized once the element is delivered. The undelivered elements are primarily installation and training services. Revenue related to these services are deferred and recognized when the services have been provided. VSOE of

5

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

fair value for installation and training services are based upon standard rates charged since those services are always sold separately. Installation and training services are separately priced, are generally available from other suppliers and not essential to the functionality of the software products. Payments for our hardware and software are typically due with an initial deposit payment upon signing the system purchase agreement, with the balance due upon delivery, although established relationship customers in good credit standing receive thirty day payment terms. VSOE of fair value for PCS is the price the customer is required to pay since it is sold separately. PCS services are billed on a monthly basis and recorded as revenue in the applicable month, or on an annual basis with the revenue being deferred and recognized ratably over the support period.

Receivables

We have accounts receivable from customers who were given extended payment terms for goods and services rendered. Extended payment terms are generally provided only to established relationship customers in good credit standing, and generally represent net 30 day terms. Payment for goods and services are typically due with an initial deposit payment upon signing the purchase agreement, with the balance due upon the delivery.

An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances could be required. Actual losses have traditionally been minimal and within our expectations.

Inventory

We write down inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs could be required. Historically, inventory write-downs have been minimal and within our expectations.

Capitalized Software

We capitalize costs incurred to develop new marketable software and enhance our existing systems software. Costs incurred in creating the software are charged to expense when incurred as research and development until technological feasibility has been established through the development of a detailed program design. Once technological feasibility has been established, software production costs are capitalized and reported at the lower of amortized cost or net realizable value.

The value of our capitalized software costs could be impacted by future adverse changes such as (i) any future declines in our operating results, or (ii) any failure to meet our future performance projections. An annual impairment review will be performed if indicators of impairment exist. In the process of the annual impairment review, we use the income approach methodology of valuation that includes both the undiscounted and discounted cash flow methods as well as other generally accepted valuation methodologies to determine the fair value of our assets. Significant management judgment is required in the forecast of future operating results that are used in the discounted cash flow method of valuation. The estimates used are consistent with the plans and estimates that we use to manage our business. It is reasonably possible, however, that certain of our products will not gain or maintain market acceptance, which could result in estimates of anticipated future net revenue differing materially from those used to assess the recoverability of these assets. In that event, revenue and cost forecasts will not be achieved, and we could incur impairment charges.

Deferred Taxes

We utilize the liability method of accounting for income taxes as set forth in Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS 109). We do not carry a valuation allowance for our deferred tax assets. In assessing the need for a valuation allowance, we consider all positive and negative evidence, including projected future taxable income, and recent financial performance. We currently have an Internal Revenue Service audit in process for the years ended September 30, 2004 and 2005.

6

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

Results of Operations

The following table summarizes the fluctuation analysis of results of our operations for fiscal 2007 compared with fiscal 2006.

	Years Ended September 30,						Variance
	2007			2006			Amount			%
Net payment processing revenues	$	16,185		$	10,689		$	5,496			51	%
Net hardware, software and installation revenues		10,325			11,199			(874	)		(8	%)
Net service revenues		5,719			5,324			395			7	%
Total net revenues		32,229			27,212			5,017			18	%
Cost of payment processing revenues		703			533			170			32	%
Cost of hardware, software and installation		4,960			5,967			(1,007	)		(17	%)
Cost of service revenues		2,572			2,465			107			4	%
Total cost of revenues		8,235			8,965			(730	)		(8	%)
Selling, general and administrative expenses		16,264			13,393			2,871			21	%
Research and development expenses		1,579			1,537			42			3	%
Interest income		(1,317	)		(969	)		(348	)		36	%
Total costs and expenses		24,761			22,926			1,835			8	%
Income before provision for income taxes		7,468			4,286			3,182			74	%
Provision for income taxes		2,745			1,639			1,106			67	%
Net income	$	4,723		$	2,647		$	2,076			78	%
Gross margin on payment processing revenues		96	%		95	%
Gross margin on hardware, software and installation revenues		52	%		47	%
Gross margin on service revenues		55	%		54	%
Gross margin on total net revenues		74	%		67	%

The following table summarizes the fluctuation analysis of results of our operations for fiscal 2006 compared with fiscal 2005.

	Years Ended September 30,						Variance
	2006			2005			Amount			%
Net payment processing revenues	$	10,689		$	6,556		$	4,133			63	%
Net hardware, software and installation revenues		11,199			13,006			(1,807	)		(14	%)
Net service revenues		5,324			5,374			(50	)		(1	%)
Total net revenues		27,212			24,936			2,276			9	%
Cost of payment processing revenues		533			422			111			26	%
Cost of hardware, software and installation		5,967			6,580			(613	)		(9	%)
Cost of service revenues		2,465			2,276			189			8	%
Total cost of revenues		8,965			9,278			(313	)		(3	%)
Selling, general and administrative expenses		13,393			11,993			1,400			12	%
Research and development expenses		1,537			1,417			120			8	%
Interest income		(969	)		(559	)		410			73	%
Total costs and expenses		22,926			22,129			797			4	%
Income before provision for income taxes		4,286			2,807			1,479			53	%
Provision for income taxes		1,639			1,033			606			59	%
Net income	$	2,647		$	1,774		$	873			49	%
Gross margin on payment processing revenues		95	%		94	%
Gross margin on hardware, software and installation revenues		47	%		49	%
Gross margin on service revenues		54	%		58	%
Gross margin on total net revenues		67	%		63	%

7

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

Significant Trends

Fiscal 2007 was the best year in our company’s history, with significant improvement over prior years record results. Pre-tax profit margins increased to 23% for the fiscal year 2007 and reached 28% for the 4th quarter ended September 30, 2007, compared to 16% and 19%, respectively, for the corresponding periods of fiscal 2006. Pre-tax earnings for fiscal year ended September 30, 2007 was a record at $7,468, a 74% increase over last fiscal year. The continued growth in recurring, high margin X-Charge payment processing revenues was the primary contribution of these results. Payment processing is now our primary business based on revenue. Payment processing revenues comprise 50% of our total net revenues for this fiscal year ended September 30, 2007, compared to 39% for the year ended September 30, 2006. X-Charge payment processing revenues increased $5.5 million, or 51%, compared to last fiscal year. Our reseller channel continued to be our main source for new processing accounts. During fiscal 2007, we installed a record 6,347 new X-Charge accounts, which was a 58% increase from fiscal 2006.

Our system revenues for fiscal 2007 declined 8%, in comparison to last fiscal year. However, systems sales have stabilized over the last three quarters of fiscal 2007. We expect systems revenues to remain flat.

Service revenues for fiscal 2007 increased 7%, compared to fiscal 2006, primarily as a result of an increase in web hosting service revenue and a price increase at the beginning of the fiscal year. We expect a flat trend for service revenues in fiscal 2008.

Results of Operations

Fiscal 2007 Compared with Fiscal 2006

Net revenues

Net revenues for the fiscal year ended September 30, 2007 increased 18% to $32,229, consisting of a 51% increase in X-Charge payment processing revenues, a 8% decrease in systems revenues, and a 7% increase in service revenues, compared to $27,212 for fiscal year 2006. Payment processing revenues continued to increase year over year due to the increase in the number of X-Charge payment processing accounts generated from our successful reseller channel program. The decrease in systems revenues was due to a decline in sales to both new and existing customers. Service revenues increased primarily as a result of an increase in I.Star Web hosting service revenue and an increase in service pricing in October 2006.

Gross margin

Gross margin on net revenues for the twelve months ended September 30, 2007 increased to 74%, compared to 67% for the same period of last fiscal year. Gross margin on payment processing revenues for fiscal 2007 was relatively flat at 96%, compared to 95% for fiscal 2006. We generate the highest margins from payment processing revenues due to low cost structure. Gross margin on system revenues for the fiscal year ended September 30, 2007 increased to 52%, compared to 47% for the same period of last fiscal year. Gross margin on service revenues for the fiscal year ended September 30, 2007 was relatively flat at 55%, compared to 54% for the same period of fiscal 2006. The increase in gross margin on system revenues was primarily due to an increase in high margin software sales.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses consist primarily of salaries, sales commissions, employee benefits, marketing, advertising and tradeshow expenses, facilities expense, telephone, travel, insurance, and depreciation expense. Selling, general and administrative expenses expressed as a percentage of net revenues was relatively flat at 50% for the year ended September 30, 2007, as compared to 49% for the same period of fiscal 2006. Selling, general and administrative expenses for the year ended September 30, 2007 increased to $16,264, compared to $13,393 for the year ended September 30, 2006. The increase was mainly attributable to higher X-Charge commissions paid on higher payment processing revenues and an increase in salaries for the additional headcount in administrative and sales personnel needed for X-Charge growth.

8

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

Research and Development Expense

Research and development expense consists primarily of salaries and related costs of employees engaged in design, development, and quality assurance activities to develop new software products and to enhance existing software products. Research and development expense for fiscal 2007 increased slightly to $1,579, compared to $1,537 for the year ended September 30, 2006, due to lower capitalizable payroll expense.

Interest Income

Interest income reflects interest earned on average cash and cash equivalents and marketable available-for-sale debt securities. Interest income for the year ended September 30, 2007 was $1,317, a 36% increase, compared to $969 for the year ended September 30, 2006. The increase resulted primarily from an increase in invested cash balances and higher yields.

Income Taxes

Provision for state and federal income taxes for fiscal year 2007 was $2,745, compared to $1,639 for the year ended September 30, 2006. The effective tax rate for the twelve months ended September 30, 2007 was 37%, compared to 38% for the same period of the prior fiscal year. The lower effective tax rate for the fiscal year 2007 included the benefit from the retroactive renewal of the R&D credit by Congress in December of 2006.

Results of Operations

Fiscal 2006 Compared with Fiscal 2005

Net revenues

Net revenues for the fiscal year ended September 30, 2006 increased 9% to $27,212, compared to $24,936 for fiscal year 2005. This increase consisted of a 63% increase in X-Charge payment processing revenues, a 14% decrease in system revenues, and a 1% decrease in service revenues from fiscal 2005 to fiscal 2006. The significant increase in payment processing revenues resulted from an increase in X-Charge processing sign-ups contributed primarily from the successful reseller channel program. The decrease in system revenues was due to a decline in sales to both new and existing customers. Service revenues were relatively flat as a result of new support contracts sold and an increase in i.Star web hosting revenues offset by support contract cancellations and a loss of a high-dollar support contract, which occurred in the second quarter of fiscal 2005.

Gross margin

Gross margin on net revenues for the twelve months ended September 30, 2006 increased to 67%, compared to 63% for the same period of last fiscal year. Gross margin on payment processing revenues for fiscal 2006 was relatively flat at 95%, compared to 94% for fiscal 2005. We generate the highest margins from payment processing revenues due to low cost structure. Gross margin on system and service revenues for the fiscal year ended September 30, 2006 decreased slightly to 47% and 54%, respectively, compared to 49% and 58%, respectively, for the same period of 2005. The decrease in gross margin on system revenues was primarily due to a decrease in software sales. Gross margin on service revenues decreased as a result of an increase in labor costs.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses consist primarily of salaries, sales commissions, employee benefits, marketing, advertising and tradeshow expenses, facilities expense, telephone, travel, insurance, and depreciation expense. Selling, general and administrative expenses expressed as a percentage of net revenues increased slightly to 49% for the fiscal year ended September 30, 2006 as compared to 48% for the same period of 2005. Selling, general and administrative expenses for the fiscal year ended September 30, 2006 increased to $13,393, compared to $11,993 for the fiscal year ended September 30, 2005. The increase was mainly attributable to higher X-Charge commissions paid on higher payment processing revenues and an increase in salaries for the additional

9

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

headcount in administrative and sales personnel needed for X-Charge payment processing growth. X-Charge commission expense is expected to continue to increase, correlating to the expected increase in payment processing revenues generated from the growth of our reseller base.

Research and Development Expense

Research and development expense consists primarily of salaries and related costs of employees engaged in design, development, and quality assurance activities to develop new software products and to enhance existing software products. Research and development expense for fiscal 2006 increased to $1,537, compared to $1,417 for the fiscal year ended September 30, 2005. This increase was due to the lower rate of software capitalization.

Interest Income

Interest income reflects interest earned on average cash and cash equivalents and marketable available-for-sale debt securities. Interest income for the fiscal year ended September 30, 2006 was $969, a 73% increase, compared to $559 for the fiscal year ended September 30, 2005. The increase resulted primarily from an increase in invested cash balances and higher yields.

Income Taxes

The effective tax rate for the fiscal year ended September 30, 2006 was 38% compared to 37% for the prior fiscal year. The higher effective tax rate was due to the non-renewal of the R&D credit by congress in 2006.

Liquidity and Capital Resources

Our cash and cash equivalents plus marketable securities increased $4,782 to $28,435 at September 30, 2007, compared to $23,653 on September 30, 2006. The increase resulted primarily from cash provided from operations. We generated $6,622 from operations, expended $992 for fixed assets and capitalized software development, used $4,145 for marketable securities investments and $2,777 for dividend payments, and received $6,216 from maturity of investments and $716 from the proceeds of stock options exercised during the twelve months ended September 30, 2007, compared to $3,800 generated from operations, $511 used for fixed assets and capitalized software development, used $8,700 for marketable securities purchase and $2,028 for dividend payments, and received $5,562 from maturity of investments and $594 from the proceeds of stock options exercised during the twelve months ended September 30, 2006.

At September 30, 2007 cash and cash equivalents plus marketable securities made up 88% of our total current assets. Our current ratio at September 30, 2007 was 5.8.

In August 2005, the Board of Directors approved a new dividend policy, which pays stockholders a variable dividend based on the quarterly results. During the twelve months ended September 30, 2007, the Board of Directors declared the following dividends:

	Per Share		Record		Total		Payment
Declaration Date	Dividend		Date		Amount		Date
11/16/06	$	0.16		01/05/07	$	643		01/16/07
02/07/07	$	0.18		04/04/07	$	726		04/16/07
05/02/07	$	0.20		07/06/07	$	814		07/16/07
08/07/07	$	0.24		10/05/07	$	986		10/15/07

The Company did not pay dividends for quarterly results prior to the third quarter of fiscal 2005.

The decision to pay a dividend will be re-evaluated quarterly based on our earnings performance, regulatory limitations and other conditions which may affect our desire to pay dividends in the future and is subject to approval by the Board of Directors. Other than performance, there are no restrictions that currently materially limit or that we reasonably believe are likely to limit materially the future payment of dividends.

The Company has no significant commitments for expenditures. Management believes the Companys existing working capital, coupled with funds generated from the Companys operations will be sufficient to fund its presently anticipated working capital requirements for the foreseeable future.

Inflation has had no significant impact on the Company’s operations.

10

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unless otherwise indicated, all dollar figures in thousands except per share data)

Related Party Transactions

We lease the office building located in Nevada from our Chief Executive Officer. The lease has a ten-year term and will expire on March 31, 2017. The payment due for the lease for fiscal year 2008 is $315. Our Audit Committee has reviewed and approved this related party finding that the lease is on terms no less favorable than those generally available.

Recently Issued Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (the “FASB”) issued FASB Interpretation No. 48, Accounting for In come Tax Uncertainties, an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for income tax uncertainties and defines the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also prescribes a two-step approach for evaluating tax positions and requires expanded disclosures at each interim and annual reporting period. FIN 48 is effective for fiscal years beginning after December 15, 2006 and will require that differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption are to be accounted for as cumulative-effect adjustments to beginning retained earnings. We plan to adopt FIN 48 in the first quarter of fiscal 2008 and are currently evaluating the impact on our financial statements.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The SEC staff has stated that registrants should quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB 108 became effective for fiscal years ending on or after November 15, 2006. The Company’s adoption of SAB 108 in the first quarter of fiscal 2007 did not have a material impact on its financial condition, results of operations, or cash flows.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. SFAS 157 is effective for fiscal years beginning after November 15, 2007. We will be required to adopt SFAS 157 in the first quarter of fiscal 2009. Management is currently evaluating the requirements of SFAS 157 and has not yet determined the impact on the financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is evaluating the impact that the adoption of SFAS 159 will have on its results of operations and financial condition.

In June 2006, the FASB ratified the consensus reached in EITF Issue No. 06-3, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).” EITF 06-3 is effective in interim and annual periods beginning after December 15, 2006. The scope of this issue includes any tax assessed by a governmental authority that is imposed concurrently on a specific revenue-producing transaction between seller and a customer. The Board requires the amount of those taxes that is recognized on a gross basis (included in revenues and cost) in interim and annual financial statements for each period for which an income statement is presented to be disclosed if those amounts are significant. We currently and will continue to present sales taxes on a net basis (excluded from revenues) in our income statement.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not or are not believed by management to have a material impact on our present or future financial statements.

11

Balance Sheets (In thousands, except per share data)

	September 30,
	2007			2006
Assets
Current assets:
Cash and cash equivalents	$	22,047		$	15,196
Marketable available-for-sale securities		6,388			8,457
Accounts receivable, net of an allowance for doubtful accounts of $122 in 2007 and $154 in 2006		2,688			1,936
Inventories		295			391
Deferred income taxes — short term		625			991
Other current assets		182			138
Total current assets		32,225			27,109
Deferred income taxes — long term		—			56
Property and equipment, net		748			484
Intangible assets, net		544			445
Other assets		72			51
Total assets	$	33,589		$	28,145
Liabilities & Stockholders’ Equity
Current liabilities:
Accounts payable	$	713		$	301
Accrued compensation and related expenses		1,877			1,255
Deferred service revenue and customer deposits		1,622			1,499
Cash dividends payable		986			594
Other accrued liabilities		372			103
Total current liabilities		5,570			3,752
Commitments and contingencies (note 4)
Stockholders’ equity:
Common stock, $.001 par value, 12,000 shares authorized, 4,105 shares issued and outstanding in 2007 and 3,961 shares in 2006		4			4
Paid-in capital in excess of par value		23,702			21,634
Accumulated other comprehensive loss		(2	)		(6	)
Retained earnings		4,315			2,761
Total stockholders’ equity		28,019			24,393
Total liabilities and stockholders’ equity	$	33,589		$	28,145

See accompanying notes.

12

Statements of Income (In thousands, except per share data)

	Years Ended September 30,
	2007			2006			2005
Revenues
Net payment processing revenues	$	16,185		$	10,689		$	6,556
Net hardware, software and installation revenues		10,325			11,199			13,006
Net service revenues		5,719			5,324			5,374
Total net revenues		32,229			27,212			24,936
Costs and Expenses
Cost of payment processing revenues		703			533			422
Cost of hardware, software and installation (1)		4,960			5,967			6,580
Cost of service revenues (1)		2,572			2,465			2,276
Total cost of revenues		8,235			8,965			9,278
Selling, general and administrative expenses (1) (2)		16,264			13,393			11,993
Research and development expenses (1)		1,579			1,537			1,417
Interest income		(1,317	)		(969	)		(559	)
Total costs and expenses		24,761			22,926			22,129
Income before taxes		7,468			4,286			2,807
Provision for income taxes		2,745			1,639			1,033
Net income	$	4,723		$	2,647		$	1,774
Basic net income per share	$	1.17		$	0.68		$	0.46
Diluted net income per share	$	1.12		$	0.64		$	0.44
Shares used in computing basic net income per share		4,035			3,906			3,817
Shares used in computing diluted net income per share		4,231			4,154			4,045
Cash dividends declared per common share	$	0.78		$	0.57		$	0.10
(1)       Includes stock-based employee compensation expense as follows:
Cost of hardware, software and installation revenues	$	12		$	16		$	—
Cost of service revenues	$	20		$	22		$	—
Selling, general, and administrative expenses	$	83		$	99		$	—
Research and development expenses	$	26		$	35		$	—

⁽²⁾ Includes $234, $164, and $158 for the twelve months ended September 30, 2007, 2006, and 2005, respectively, for building rent to a related party, Geoff Knapp, officer and director of CAM Commerce Solutions, Inc.

See accompanying notes.

13

Statements of Cash Flows(In thousands)

	Years Ended September 30,
	2007			2006			2005
Operating activities:
Net income	$	4,723		$	2,647		$	1,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		629			659			873
Provision for doubtful accounts		21			37			178
Change in deferred income taxes		2,744			848			507
Income tax deduction from excercise of stock options		—			—			464
Share-based compensation		141			172			—
Excess tax benefits from share-based payment arrangements		(1,211	)		(716	)		—
Changes in operating assets and liabilities:
Accounts receivable		(773	)		(43	)		(189	)
Inventories		96			(85	)		55
Other current assets		(65	)		(6	)		5
Other assets		—			—			29
Accounts payable		412			(144	)		(105	)
Accrued compensation and related expenses		622			101			61
Deferred service revenue and customer deposits		123			(229	)		100
Other accrued liabilities		(840	)		559			(97	)
Cash provided by operating activities		6,622			3,800			3,655
Investing activities:
Purchase of property and equipment		(608	)		(240	)		(343	)
Capitalized software		(384	)		(271	)		(289	)
Purchase of marketable securities		(4,145	)		(8,700	)		(4,311	)
Proceeds from maturity of marketable securities		6,216			5,562			100
Cash provided by (used in) investing activities		1,079			(3,649	)		(4,843	)
Financing activities:
Proceeds from exercise of stock options and warrants		716			594			360
Excess tax benefits from share-based payment arrangements		1,211			716			—
Dividends paid on common stock		(2,777	)		(2,028	)		—
Cash provided by (used in) financing activities		(850	)		(718	)		360
Net increase (decrease) in cash and cash equivalents		6,851			(567	)		(828	)
Cash and cash equivalents at beginning of year		15,196			15,763			16,591
Cash and cash equivalents at end of year	$	22,047		$	15,196		$	15,763

See accompanying notes.

14

Statements of Stockholders’ Equity
Years Ended September 30, 2007, 2006, and 2005 (In thousands)

							Accumulated
					Capital in		other
	Common Stock				excess of par		comprehensive			Retained
	Shares		Amount		value		income (loss)			earnings			Total
Balance at September 30, 2004		3,754		4		19,328		2			962			20,296
Issuance of common stock upon exercise of stock options		92		—		360		—			—			360
Tax benefit from exercise of stock options		—		—		464		—			—			464
Dividends declared		—		—		—		—			(385	)		(385	)
Net income		—		—		—		—			1,774			1,774
Other comprehensive loss:
Net unrealized loss on marketable securities		—		—		—		(20	)		—			(20	)
Comprehensive income														1,754
Balance at September 30, 2005		3,846		4		20,152		(18	)		2,351			22,489
Issuance of common stock upon exercise of stock options		115		—		594		—			—			594
Tax benefit from exercise of stock options		—		—		716		—			—			716
Dividends declared		—		—		—		—			(2,237	)		(2,237	)
Share-based compensation		—		—		172		—			—			172
Net income		—		—		—		—			2,647			2,647
Other comprehensive income:
Net unrealized gain on marketable securities		—		—		—		12			—			12
Comprehensive income														2,659
Balance at September 30, 2006		3,961		4		21,634		(6	)		2,761			24,393
Issuance of common stock upon exercise of stock options		144		—		716		—			—			716
Tax benefit from exercise of stock options		—		—		1,211		—			—			1,211
Dividends declared		—		—		—		—			(3,169	)		(3,169	)
Share-based compensation		—		—		141		—			—			141
Net income		—		—		—		—			4,723			4,723
Other comprehensive income:
Net unrealized gain on marketable securities		—		—		—		4			—			4
Comprehensive income														4,727
Balance at September 30, 2007		4,105	$	4	$	23,702	$	(2	)	$	4,315		$	28,019

See accompanying notes.

15

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

1. Summary of significant accounting policies

Organization, business, and presentation

CAM Commerce Solutions Inc., (“the Company”), designs, develops, markets, installs and services highly integrated retailing and payment processing solutions for small to medium size traditional and eCommerce businesses based on the Company’s open architecture software. These integrated solutions include inventory management, point of sale, accounting, credit and debit card processing, Internet sales, gift card and customer loyalty programs, and extensive management reporting. Payment processing services are provided on a transaction based business model.

Cash equivalents

Cash equivalents represent highly liquid investments with original maturities of three months or less.

Marketable securities

All investment securities are considered to be available-for-sale and are carried at fair value. Management determines the classification at the time of purchase and re-evaluates its appropriateness at each balance sheet date. The Company’s marketable securities at September 30, 2007 consisted of debt instruments and certificates of deposits that bear interest at various rates and mature in two years or less. The gross unrealized losses on securities available-for-sale at September 30, 2007 and 2006 were $(4) and $(10), respectively. There were no realized gains (losses) for the three years ended September 30, 2007, 2006 and 2005. Amortized cost of the Company’s marketable securities at September 30, 2007 and 2006 were $6,313 and $8,350, respectively.

Fair value of financial instruments

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable and accounts payable. The Company believes all of the financial instruments’ recorded values approximated their fair values at September 30, 2007 and 2006.

Accounts receivable and allowance for doubtful accounts

The Company has accounts receivable from customers who were given extended payment terms for goods and services rendered. Extended payment terms are generally provided only to established relationship customers in good credit standing, and generally represent net 30 day terms. Payment for goods and services are typically due with an initial deposit payment upon signing the purchase agreement, with the balance due upon the delivery.

Management evaluates accounts receivable on a regular basis to charge off any accounts deemed uncollectible at the time. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments, based on assessment of the collectibility of specific accounts, the aging of accounts receivable, and the Company’s history of bad debts.

Concentrations of credit risk

The Company sells its products primarily to small to medium size retailers located domestically. Credit is extended based on an evaluation of the customer’s financial condition and collateral is generally not required. Credit losses have traditionally been minimal and such losses have been within management’s expectations.

Inventories

Inventories are stated at the lower of cost determined on a first-in, first-out basis, or net realizable value, and are composed of finished goods electronic point of sale hardware and computer equipment used in the sale and service of the Company’s products.

Property and equipment

Property and equipment is stated at cost and is composed of the following:

	September 30,
	2007		2006
Computer equipment, leasehold improvements, and furniture	$	2,238	$	1,978
Automobiles		38		38
Demonstration and loaner equipment		86		106
		2,362		2,122
Less accumulated depreciation		1,614		1,638
	$	748	$	484

Depreciation is provided on the straight-line method over the estimated useful lives (primarily three to five years) of the respective assets. Depreciation expense for the years ended September 30, 2007, 2006, and 2005 was $343, $366, and $371, respectively.

Long-lived assets

The Company reviews for impairment of all long-lived assets on a regular basis. The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might

16

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.

Use of estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of net revenue and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to revenue recognition, receivables and inventory, capitalized software, allowances for doubtful accounts, intangible asset valuations, deferred income tax asset valuation allowances, accounting for share-based compensation related to SFAS 123R, and other contingencies. The estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent there are material differences between estimates and the actual results, future results of operations will be affected.

Revenue recognition policy

The Company’s revenue recognition policy is significant because revenue is a key component of results of operations. In addition, revenue recognition determines the timing of certain expenses such as commissions. Specific guidelines are followed to measure revenue, although certain judgments affect the application of our revenue policy. The Company recognizes revenue in accordance with Statement of Position 97-2 (SOP 97-2), “Software Revenue Recognition,” as amended and interpreted by Statement of Position 98-9, “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions,” and Staff Accounting Bulletin No. 104 (SAB 104) “Revenue Recognition.” SAB 104 provides further interpretive guidance for public companies on the recognition, presentation, and disclosure of revenue in financial statements.

The Company derives revenue from payment processing services, the sale of computer hardware, licensing of computer software, post contract support (“PCS”), and installation and training services. The Company recognizes payment processing revenues in the period the service is performed. Revenues are estimated based on the accumulation of sufficient historical information required to analyze trends and formulate a reasonable estimate. The significant historical information required to formulate a reliable estimate are the total dollar volume of credit card transactions processed and the related revenue for these credit card transactions. System revenue from hardware sales and software licensing is recognized when a system purchase agreement has been signed, the hardware and software has been shipped, there are no uncertainties surrounding product acceptance, the pricing is fixed and determinable, and collection is considered probable. If a sales transaction contains an undelivered element, the vendor-specific objective evidence (“VSOE”) of fair value of the undelivered element is deferred and the revenue recognized once the element is delivered. The undelivered elements are primarily installation and training services. Revenue related to these services are deferred and recognized when the services have been provided. VSOE of fair value for installation and training services is based upon standard rates charged since those services are always sold separately. Installation and training services are separately priced, are generally available from other suppliers and not essential to the functionality of the software products. Payments for the Company’s hardware and software are typically due with an initial deposit payment upon signing the system purchase agreement, with the balance due upon delivery, although established relationship customers in good credit standing receive thirty day payment terms. VSOE of fair value for PCS is the price the customer is required to pay since it is sold separately. PCS services are billed on a monthly basis and recorded as revenue in the applicable month, or on an annual basis with the revenue being deferred and recognized ratably over the support period.

17

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

Per share information

Basic net income per share is based upon the weighted average number of common shares outstanding for each period presented. Diluted net income per share is based upon the weighted average number of common shares and common equivalent shares outstanding for each period presented. Common equivalent shares include stock options and warrants assuming conversion under the treasury stock method. Common equivalent shares are excluded from diluted income per share if their effect is anti-dilutive. For the fiscal years ended September 30, 2007, 2006 and 2005, there were no options and warrants excluded from the computation. All warrants expired in fiscal 2005.

The computation of basic and diluted earnings per share for the three years ended September 30, 2007, 2006, and 2005 is as follows:

	Years Ended September 30,
	2007		2006		2005
Numerator:
Net income for basic and diluted net income per share	$	4,723	$	2,647	$	1,774
Denominator:
Weighted-average shares outstanding		4,035		3,906		3,817
Denominator for basic net income per share — weighted-average shares		4,035		3,906		3,817
Effect of dilutive securities:
Stock options and warrants		196		248		228
Denominator for diluted net income per share — weighted-average shares and assumed conversions		4,231		4,154		4,045
Basic net income per share	$	1.17	$	0.68	$	0.46
Diluted net income per share	$	1.12	$	0.64	$	0.44

Advertising

The Company expenses the costs of advertising as incurred. Advertising expenses for the years ended September 30, 2007, 2006, and 2005 were $578, $593 and $550, respectively.

Shipping and handling

Shipping and handling fees and costs are included in the statement of operations under the line items titled “Net hardware, software and installation revenues” and “Cost of hardware, software and installation.”

Dividends declared

In August 2005, the Board of Directors approved a new dividend policy, which pays stockholders a variable dividend based on the quarterly results. During the twelve months ended September 30, 2007, the Board of Directors declared the following dividends:

	Per
	Share		Record		Total		Payment
Declaration Date	Dividend		Date		Amount		Date
11/16/06	$	0.16		01/05/07	$	643		01/16/07
02/07/07	$	0.18		04/04/07	$	726		04/16/07
05/02/07	$	0.20		07/06/07	$	814		07/16/07
08/07/07	$	0.24		10/05/07	$	986		10/15/07

The Company did not pay dividends for quarterly results prior to the third quarter of fiscal 2005.

The decision to pay a dividend will be re-evaluated quarterly based on our earnings performance, regulatory limitations and other conditions which may affect our desire to pay dividends in the future and is subject to approval by the Board of Directors. Other than performance, there are no restrictions that currently materially limit or that we reasonably believe are likely to limit materially the future payment of dividends.

Segments

The Company separately discloses its principal operations in accordance with SFAS No. 131, “Disclosure about Segments of an Enterprise and Related Information.” The Company classifies its business operations into three segments: 1) Hardware, software and installation; 2) Service; and 3) Payment processing. Net revenues and the related cost of revenues by segment are as disclosed on the accompanying Statement of Income. The Company does not allocate selling, general and administrative or research and development expenses, including depreciation and amortization, to segments nor are there any segment reconciling items between the amounts reported on the Statement of Income and income before taxes. In addition, the Company does not separately account for segment assets or liabilities.

Net hardware, software, and installation revenues reported in financial statements include revenue for installation services of $1,366, $1,585 and $1,668 and sales of hardware and software product of $8,959, $9,614 and $11,338 for fiscal years 2007, 2006, and 2005, respectively.

18

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

Reclassifications

Certain reclassifications have been made to the fiscal 2006 and 2005 financial statements to conform with the fiscal 2007 presentation.

Recently issued accounting pronouncements

In June 2006, the Financial Accounting Standards Board (the “FASB”) issued FASB Interpretation No. 48, Accounting for Income Tax Uncertainties, an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for income tax uncertainties and defines the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also prescribes a two-step approach for evaluating tax positions and requires expanded disclosures at each interim and annual reporting period. FIN 48 is effective for fiscal years beginning after December 15, 2006 and will require that differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption are to be accounted for as cumulative-effect adjustments to beginning retained earnings. The Company plans to adopt FIN 48 in the first quarter of fiscal 2008 and management is currently evaluating the impact on the financial statements.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The SEC staff has stated that registrants should quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB 108 became effective for fiscal years ending on or after November 15, 2006. The Company’s adoption of SAB 108 in the first quarter of fiscal 2007 did not have a material impact on its financial condition, results of operations, or cash flows.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The Company will be required to adopt SFAS 157 in the first quarter of fiscal 2009. Management is currently evaluating the requirements of SFAS 157 and has not yet determined the impact on the financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is evaluating the impact that the adoption of SFAS 159 will have on its results of operations and financial condition.

In June 2006, the FASB ratified the consensus reached in EITF Issue No. 06-3, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).” EITF 06-3 is effective in interim and annual periods beginning after December 15, 2006. The scope of this issue includes any tax assessed by a governmental authority that is imposed concurrently on a specific revenue-producing transaction between seller and a customer. The Board requires the amount of those taxes that is recognized on a gross basis (included in revenues and cost) in interim and annual financial statements for each period for which an income statement is presented to be disclosed if those amounts are significant. The Company currently and will continue to present sales taxes on a net basis (excluded from revenues) in our income statement.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not or are not believed by management to have a material impact on our present or future financial statements.

2. Intangible assets

The Company capitalizes costs incurred to develop new marketable software and enhance the Company’s existing systems software. Costs incurred in creating the software are charged to expense when incurred as research and development until technological feasibility has been established through the development of a detailed program design. Once technological feasibility has been established, software production costs are capitalized and reported at the lower of amortized cost or net realizable value.

Capitalized software costs are amortized on the straight-line method over estimated useful lives ranging from three to five years. Amortization of capitalized software costs commence when the products are available for general release to customers.

19

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

Intangible assets are stated at cost and consist of the following:

	September 30,
	2007			2006
Capitalized software:
Gross carrying amount	$	4,211		$	3,827
Accumulated amortization		(3,667	)		(3,382	)
		544			445
Purchased intangible assets:
Gross carrying amount		843			843
Accumulated amortization		(843	)		(843	)
		—			—
Total intangible assets	$	544		$	445

During the fiscal years 2007 and 2006, the Company capitalized $384 and $271, respectively, in software costs related to the CAM and Star products.

Amortization of capitalized software costs and purchased intangible assets, charged to cost of hardware, software and installation, and expense for the fiscal years ended September 30, 2007, 2006 and 2005, were $286, $293, and $501, respectively.

Amortization expense of intangible assets for the fiscal years ended September 30, 2008, 2009 and 2010 are estimated at $277, $181 and $86, respectively.

3. Income Taxes

The Company utilizes the liability method of accounting for income taxes whereby deferred taxes are determined based on differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the period in which the differences are expected to affect taxable income.

The provision for income taxes consists of the following:

	Years Ended September 30,
	2007		2006		2005
Current:
Federal	$	1,871	$	36	$	26
State		449		40		29
		2,320		76		55
Deferred:
Federal		405		1,339		797
State		20		224		181
		425		1,563		978
Total provision	$	2,745	$	1,639	$	1,033

A reconciliation of taxes computed at the statutory federal income tax rate to income tax expense is as follows:

	Years Ended September 30,
	2007			2006			2005
Income tax at statutory rate	$	2,539		$	1,457		$	954
Increases (decreases) in taxes resulting from:
Change in valuation allowance		—			—			—
Research and development tax credit		(111	)		(4	)		(163	)
State income taxes, net of federal benefit		312			185			141
Meals and entertainment		5			3			4
Other, net		—			(2	)		97
Total provision	$	2,745		$	1,639		$	1,033

Deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their bases for financial reporting purposes. Temporary differences and net operating loss carryforwards which give rise to deferred tax assets and liabilities are as follows:

	September 30,
	2007			2006			2005
Deferred tax assets:
Accruals not currently deductible for tax	$	383		$	223		$	272
Non cash stock based compensation		87			65			—
Goodwill		125			142			155
Tax credit carryforwards		219			713			667
Net operating loss carryforwards		30			59			937
Total deferred tax assets		844			1,202			2,031
Deferred tax liabilities:
Book depreciation in excess of tax depreciation		(2	)		25			57
Software costs capitalized		(218	)		(180	)		(186	)
Net deferred tax asset	$	624		$	1,047		$	1,902
Current deferred tax asset	$	624		$	991		$	1,188
Non-current deferred tax asset		—			56			714
Net deferred tax asset	$	624		$	1,047		$	1,902

Income taxes paid were $821, $111, and $36 during the fiscal years ended September 30, 2007, 2006 and 2005, respectively.

20

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

At September 30, 2007, state net operating loss carryforwards were $502. The majority of state net operating loss carryforwards begin to expire in 2015. The Company has federal Research and Development Credits of $65 that begin to expire in 2019. The Company has Alternative Minimum Tax Credit carryforwards of $150 that can be carried forward indefinitely until fully utilized.

The Company is currently undergoing an Internal Revenue Service audit for the years ended September 30, 2004 and 2005.

4. Commitments and Contingencies

The Company is committed at September 30, 2007 under various operating leases for office facilities and equipment through March 2017. Minimum payments due under these leases, including amounts due to a related party as discussed below, are as follows:

Years ending September 30,
2008	$	757
2009		763
2010		561
2011		342
2012		341
2013		348
2014		354
2015		362
2016		367
2017		186
	$	4,381

Total rent expense for the fiscal years ended September 30, 2007, 2006 and 2005 was $761, $667 and $645, respectively.

On December 19, 2006, the Company renewed a lease agreement with its Chief Executive Officer, Geoffrey D. Knapp, for approximately 20,500 square feet of office space in Henderson, Nevada. The lease is for a ten-year term that commences upon the completion of the building expansion space, which occurred on April 13, 2007. The initial rent of $25,949 per month is subject to annual percentage increases equal to the increases, if any, in the Consumer Price Index. No rent adjustment, however, shall be less than two percent (2%) nor greater than four percent (4%). Rent expense incurred under this lease for the fiscal years ended September 30, 2007, 2006 and 2005 totaled $234, $164, and $158, respectively.

On May 26, 2005, the Company signed a letter agreement with its landlord extending for three years the term of the lease of its corporate headquarters located at 17075 Newhope Street, Fountain Valley, California. The new expiration date of the lease is March 6, 2010. All other terms and provisions of the lease originally entered into on December 12, 2000, including rent and the annual adjustment thereof as provided in the lease, shall remain in full force and effect. The monthly rent is subject to annual percentage increases equal to the increases, if any, in the Consumer Price Index. No rent adjustment, however, shall be less than three percent (3%).

Because of the nature of its business, the Company is from time to time threatened or involved in legal actions that are ordinary, routine litigation incidental to the business of the Company. The Company does not believe any actions now pending against it will have a material adverse effect on it.

5. Share-Based Compensation

The Company adopted the Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), “Share-Based Payment” effective October 1, 2005. Prior to October 1, 2005, the Company followed the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS 123), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” and, accordingly, accounted for its stock-based compensation plans using the intrinsic value method under Accountnig Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations.

SFAS 123R requires share-based payments, including grants of employee stock options, to be recognized in the Statement of Income as an expense, based on their grant date fair values with such fair values amortized over the estimated service period. The Company elected to utilize the modified prospective method for the transition to SFAS 123R. Under the modified prospective method, SFAS 123R applies to all awards granted or modified after the date of adoption. In addition, under the modified prospective method, compensation expense will be recognized for all stock-based compensation awards granted prior to, but not yet vested as of October 1, 2005, based on grant-date fair values estimated in accordance with the original provisions of SFAS 123.

On November 10, 2005, the FASB issued FASB Staff Position No. FAS 123(R)-3, “Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards” (the FSP). The FSP provides that companies may elect to use a specified simplified method to calculate the historical pool of windfall tax benefits upon adoption of SFAS 123R. The

21

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

Company has elected to use this simplified method to calculate the historical pool of windfall tax benefits, and has elected to use one accounting pool for the windfall tax benefits related to employees and non-employees on a combined basis.

No stock-based employee compensation cost and related tax benefits was recognized in the Statement of Income for the fiscal year ended September 30, 2005, as all options granted under those plans had an exercise price equal to the market value for the underlying common stock on the date of grant. In accordance with the modified prospective method of transition to SFAS 123R, prior periods were not restated to reflect the impact of adopting the new standard.

Under SFAS 123 the Company based its expense calculation for the stock compensation pro forma footnote disclosure on actual forfeitures; however, SFAS 123R requires an estimate of forfeitures be used in the calculation. Upon adoption of SFAS 123R the Company changed its methodology to include an estimate of forfeitures.

Share-based compensation expense included in expenses for the fiscal years ended September 30, 2007 and 2006 were $141 and $172, respectively, and the related tax benefits were $54 and $66, respectively. In addition, in connection with the adoption of SFAS 123R, net cash provided by operations decreased and net cash provided by financing activities increased by $1,211 for the twelve months ended September 30, 2007 and $716 for the same period ended September 30, 2006, related to excess tax benefits from share-based payment arrangements. Income before income taxes and net income decreased by $141 and $87, respectively, for the fiscal year ended September 30, 2007, and $172 and $106, respectively, for the fiscal year ended September 30, 2006, as a result of the share-based compensation expense and the related tax benefits recognized in the Statement of Income, as required by SFAS 123R.

Prior to the adoption of SFAS 123R, the Company presented all tax benefits of deductions resulting from the exercise of stock options as operating cash flows in the Statement of Cash Flows. SFAS 123R requires the cash flows related to the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. The excess tax benefit classified as a financing cash inflow would have been classified as an operating cash inflow if the Company had not adopted SFAS 123R.

At September 30, 2007, there was $79 of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 0.5 years.

The pro forma line items in the following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation for periods prior to adoption of SFAS 123R.

	Year Ended September 30
	2005
Reported net income	$	1,774
Add: Share-based compensation expense included in reported net income, net of related tax effects		—
Deduct: Share-based compensation expense determined under fair-value method for all awards, net of related tax effects		(250	)
Pro forma net income	$	1,524
Earnings per share:
Basic — as reported	$	0.46
Basic — pro forma	$	0.40
Diluted — as reported	$	0.44
Diluted — pro forma	$	0.38

In 1993, the stockholders of the Company approved the Company’s 1993 Stock Option Plan (the “1993 Plan”) under which nonstatutory options may be granted to key employees and individuals who provide services to the Company, at an exercise price not less than the fair market value of the stock at the date of grant, and expire ten years from the date of grant. The options are exercisable based on vesting periods as determined by the Board of Directors. The 1993 Plan allowed for the issuance of an aggregate of 1,200 shares of the Company’s common stock. The 1993 Plan had a term of ten years. There have been 1,200 options granted under the 1993 Plan as of September 30, 2007. The Company currently has 118 shares reserved for issuance related to the options that remain outstanding under the 1993 Plan.

In April 2000, the Company’s Board of Directors approved the Company’s 2000 Stock Option Plan (the “2000 Plan”) under which nonstatutory options may be granted to key employees and individuals who provide services to the Company, at an exercise price not less than the fair market value of the stock at the date of grant, and expire ten years from the date of grant. The options are exercisable based on vesting periods as determined by the Board of Directors. The plan allows for the issuance of an aggregate of 750 shares of the Company’s common stock. The term of the plan is unlimited in duration. There have been 538 options granted under the plan as of September 30, 2007. The Company has 455 shares reserved for issuance related to the options that remain outstanding and yet to be issued under the 2000 Plan.

22

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

Outstanding unvested stock options generally vest ratably over four years based upon continuous service. The Company accounts for these grants as single grants and recognizes share-based compensation cost using the straight-line method.

The Company’s stock option plans provide for accelerated vesting of unvested options in the event of a change in control. A change in control provision meets the criteria of a performance condition under SFAS 123R. All outstanding unvested options at September 30, 2007 are subject to accelerated vesting under this provision.

A summary of changes in the stock option plans for the twelve months ended September 30, 2007 is as follows:

					Weighted
					Average
			Weighted		Remaining
	Number		Average		Contractual		Aggregate
	of		Exercise		Term		Intrinsic
	Options		Price		(In Years)		Value
Options outstanding at September 30, 2006		507	$	6.54		4.7	$	7,340
Granted		—		N/A		N/A		N/A
Exercised		144	$	4.96		N/A	$	3,268
Forfeited		3		N/A		N/A		N/A
Expired		—		N/A		N/A		N/A
Options outstanding at September 30, 2007		360	$	7.12		4.4	$	9,688
Vested and expected to vest at September 30, 2007		356	$	7.05		4.4	$	9,597
Options exercisable at September 30, 2007		347	$	6.89		4.3	$	9,410
Options that would become exerciseable at September 30, 2007 pursuant to the Company’s option plans in the event of a change in control		360	$	7.12		4.4	$	9,688

For the twelve-month period ended September 30, 2007, the amount of cash received from the exercise of stock options was $716 and the related tax benefit was $1,211.

For options exercised during the twelve-month periods ended September 30, 2007, 2006 and 2005, newly issued shares were issued.

The Company uses the Black-Scholes-Merton option valuation model to determine the weighted average fair value of options. The Company utilizes assumptions on expected life, risk-free rate, expected volatility, and dividend yield to determine such values.

The Company did not disclose assumptions for the twelve months ended September 30, 2007, 2006, and 2005 because there were no grants in these periods. If grants were to occur, the expected life of options granted would be derived from historical data on employee exercise and post-vesting termination behavior. The risk-free rate would be based on treasury instruments in effect at the time of grant whose terms are consistent with the expected life of the Company’s stock options. Expected volatility would be based on historical volatility of the Company’s stock. The dividend yield would be based on historical experience and expected future changes.

A summary of the grant-date fair value and intrinsic value information for the twelve months ended September 30, 2007, 2006 and 2005 is as follows:

	Years ended September 30,
	2007		2006		2005
Weighted-average grant-date fair value per share	$	—	$	—	$	6.22
Intrinsic value of options exercised		3 ,268		1,884		1,205
Total fair value of shares vested during the year		139		177		389

23

Notes to Financial Statements
September 30, 2007 (In thousands, except per share data)

The following table summarizes information about stock options outstanding at September 30, 2007:

			Weighted Average
			Remaining		Weighted
	Number		Contractual		Average
Outstanding:	Outstanding		Life		Exercise Price
Range of Exercise Prices
$2.38 to $3.00		19		0.9	$	2.77
$3.1 3 to $4.70		97		4.0		3.75
$4.7 1 to $6.38		141		3.5		5.24
$7.15 to $11.56		17		6.7		8.70
$14. 41 to $15 .21		86		6.9		14.70
		360		4.4	$	7.12

			Weighted
	Number		Average
Exercisable:	Exercisable		Exercise Price
Range of Exercise Prices
$2.38 to $3.00		19	$	2.77
$3.13 to $4.70		97		3.75
$4.71 to $6.38		141		5.24
$7.15 to $11.56		14		8.33
$14.41 to $15.21		76		14.72
Total:		347	$	6.96

The weighted-average remaining contractual life of stock options outstanding at September 30, 2007, 2006 and 2005 was 4.4 years, 4.7 years and 5.5 years, respectively.

6. Benefit plan

The Company sponsors a 401(k) Plan for all eligible employees. The costs for the benefit plan totaled $12 for the year ended September 30, 2007. The Company made a matching contribution of $176 in fiscal 2007, $136 in fiscal 2006, and $73 in fiscal 2005.

24

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
CAM Commerce Solutions, Inc.

We have audited the accompanying balance sheet of CAM Commerce Solutions, Inc. as of September 30, 2007, and the related statements of income, stockholders’ equity, and cash flows for the year ended September 30, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CAM Commerce Solutions, Inc. at September 30, 2007, and the results of its operations and its cash flows for the period ended September 30, 2007, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst  & Young LLP

Orange County, California
November 14, 2007

25

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
CAM Commerce Solutions, Inc.

We have audited the balance sheet of CAM Commerce Solutions, Inc. as of September 30, 2006, and the related statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended September 30, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CAM Commerce Solutions, Inc. as of September 30, 2006, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2006, in conformity with U.S. generally accepted accounting principles.

/s/ McGladrey & Pullen, LLP

Irvine, California
December 7, 2006

26

Stock and Dividend Data

The common stock of CAM Commerce Solutions, Inc., is traded on the NASDAQ Global Market under the NASDAQ symbol CADA. The quarterly market price information shown below represents the high and low sales prices for the periods.

Fiscal Year Ended September 30, 2007
Quarter Ended:	High		Low
December 31	$	26.30	$	20.03
March 31		27.44		23.50
June 30		28.65		21.32
September 30		40.00		27.85

Fiscal Year Ended September 30, 2006
Quarter Ended:	High		Low
December 31	$	21.40	$	16.22
March 31		24.99		20.13
June 30		24.90		21.20
September 30		22.19		19.16

As of November 2, 2007, there were approximately 1,000 holders of record of the Company’s common stock.

In August 2005, the Board of Directors approved a new dividend policy, which pays stockholders a variable dividend based on the quarterly results. During the twelve months ended September 30, 2007, the Board of Directors declared the following dividends:

	Per Share
Declaration Date	Dividend		Record Date	Total Amount		Payment Date
November 15, 2006	$	0.16	January 5, 2007	$	643	January 16, 2007
February 7, 2007	$	0.18	April 4, 2007	$	726	April 16, 2007
May 2, 2007	$	0.20	July 6, 2007	$	814	July 16, 2007
August 7, 2007	$	0.24	October 5, 2007	$	986	October 15, 2007

During the twelve months ended September 30, 2006, the Board of Directors declared the following dividends:

	Per Share
Declaration Date	Dividend		Record Date	Total Amount		Payment Date
November 16, 2005	$	0.14	January 3, 2006	$	541	January 12, 2006
February 14, 2006	$	0.14	April 4, 2006	$	549	April 14, 2006
May 2, 2006	$	0.14	July 5, 2006	$	553	July 14, 2006
August 8, 2006	$	0.15	October 5, 2006	$	594	October 16, 2006

The Company did not pay dividends for quarterly results prior to the third quarter of fiscal 2005.

The decision to pay a dividend will be re-evaluated quarterly based on our earnings performance, regulatory limitations and other conditions which may affect our desire to pay dividends in the future and is subject to approval by the Board of Directors. Other than performance, there are no restrictions that currently materially limit or that we reasonably believe are likely to limit materially the future payment of dividends.

During the last fiscal year ended September 30, 2007, the Company did not repurchase any equity securities or sell any registered or unregistered equity securities.

27

Selected Quarterly Financial Data (Unaudited)

	2007 Fiscal Quarter Ended
In thousands, except per share data.	Dec 31		Mar 31		June 30		Sept 30
Net revenues	$	7,172	$	7,347	$	8,498	$	9,212
Gross profit		5,221		5,293		6,377		7,103
Income before taxes		1,480		1,366		2,020		2,602
Net income		968		854		1,267		1,634
Basic net income per share		0.24		0.21		0.31		0.40
Diluted net income per share		0.23		0.20		0.30		0.38

	2006 Fiscal Quarter Ended
In thousands, except per share data.	Dec 31		Mar 31		June 30		Sept 30
Net revenues	$	6,986	$	6,483	$	6,770	$	6,973
Gross profit		4,609		4,242		4,613		4,783
Income before taxes		1,180		678		1,127		1,301
Net income		742		417		686		802
Basic net income per share		0.19		0.11		0.17		0.20
Diluted net income per share		0.18		0.10		0.16		0.19

Selected Financial Data

For The Five Years Ended September 30, 2007

In thousands, except per share data.	2007		2006		2005		2004		2003
Net revenues	$	32,229	$	27,212	$	24,936	$	23,634	$	20,129
Income (loss) before taxes		7,468		4,286		2,807		2,341		(110	)
Net income (loss)		4,723		2,647		1,774		2,241		(134	)
Basic net income (loss) per share		1.17		0.68		0.46		0.63		(0.04	)
Diluted net income (loss) per share		1.12		0.64		0.44		0.57		(0.04	)
Total assets		33,589		28,145		26,461		23,924		15,941
Working capital		26,655		23,357		20,647		18,118		11,095
Long-term debt		—		—		—		—		—
Cash dividends declared per common share		0.78		0.57		0.10		—		—
Stockholders’ equity	$	28,019	$	24,393	$	22,489	$	20,296	$	13,018
Shares used in computing net income (loss) per share:
Basic		4,035		3,906		3,817		3,543		3,143
Diluted		4,231		4,154		4,045		3,937		3,143

28

Company Information

Board of Directors
Geoffrey D. Knapp
Chairman and Chief Executive Officer
CAM Commerce Solutions, Inc.

David Frosh
Consultant

Walter Straub
Consultant

Donald A. Clark
Chief Executive Officer
C & C Companies

Officers

Geoffrey D. Knapp
Chief Executive Officer

Paul Caceres Jr.
Chief Financial Officer

Corporate Office

17075 Newhope Street
Fountain Valley, CA 92708
(714) 241-9241
Facsimile: (714) 241-9893
Internet address: http://www.camcommerce.com

Registrar and Transfer Agent

American Stock Transfer Company
59 Maiden Lane
New York, NY 10007

Independent Registered Public
Accounting Firm

Ernst & Young LLP
18111 Von Karman Avenue, Suite 1000
Irvine, CA 92612

Securities Counsel

Haddan & Zepfel LLP
500 Newport Center Drive, Suite 580
Newport Beach, CA 92660

General Counsel

Lundell & Spadafore
1065 Asbury Street
San Jose, CA 95126

Form 10-K

A copy of the Company’s annual report on Form 10-K, (without exhibits), as filed with the Securities and Exchange Commission, and Code of Ethics, will be furnished to any stockholder free of charge upon written request to the Company’s Corporate Finance Department 17075 Newhope Street, Suite A, Fountain Valley, CA 92708.

29

EX-23.(A)

Exhibit 23a

CONSENT AND REPORT ON SCHEDULE OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Annual Report (Form 10-K) of CAM Commerce Solutions, Inc. of our report dated November 14, 2007, with respect to the financial statements of CAM Commerce Solutions, Inc., included in the 2007 Annual Report to Stockholders of CAM Commerce Solutions, Inc.

Our audit also included the financial statement schedule of CAM Commerce Solutions, Inc. listed in Item 15(a). This schedule is the responsibility of CAM Commerce Solutions, Inc.’s management. Our responsibility is to express an opinion based on our audit. In our opinion, as to which the date is November 14, 2007, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We consent to the incorporation by reference in the following Registration Statements (Form S-8 Nos. 333-64856, 333-57907, 333-52782 and 333-121541) of our report dated November 14, 2007, with respect to the financial statements of CAM Commerce Solutions, Inc. incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedule of CAM Commerce Solutions, Inc. included in this Annual Report (Form 10-K) of CAM Commerce Solutions, Inc.

/s/ ERNST & YOUNG LLP

Orange County, California
November 14, 2007

EX-23.(B)

Exhibit 23b

CONSENT AND REPORT ON SCHEDULE OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Board of Directors
CAM Commerce Solutions, Inc.
Fountain Valley, California

We consent to the incorporation by reference in the previously filed Registration Statements on Form S-8 (File Nos. 333-64856, 333-57907, 333-52782, and 333-121541) of CAM Commerce Solutions, Inc. of our report dated December 7, 2006 relating to our audits of the financial statements as of and for each of the two years in the period ended September 30, 2006, appearing in the 2007 Annual Report to Stockholders and incorporated by reference in the Annual Report on Form 10-K of CAM Commerce Solutions, Inc. for the year ended September 30, 2007.

Our audits of the financial statements referred to in our aforementioned report also included the financial statement schedule of CAM Commerce Solutions, Inc. for each of the two years in the period ended September 30, 2006, listed in Item 15(a). This financial statement schedule is the responsibility of CAM Commerce Solutions, Inc.’s management. Our responsibility is to express an opinion based on our audits of the financial statements. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ MCGLADREY & PULLEN, LLP

Irvine, California
November 14, 2007

EX-31.(A)

Exhibit 31 (a)

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Geoffrey D. Knapp, certify that:

1. I have reviewed this Annual Report on Form 10-K of CAM Commerce Solutions, 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)) 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) [Reserved]

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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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.

Dated: November 19, 2007

By:	/s/ Geoffrey D. Knapp
	Geoffrey D. Knapp
	Chief Executive Officer

EX-31.(B)

Exhibit 31 (b)

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul Caceres, certify that:

1. I have reviewed this Annual Report on Form 10-K of CAM Commerce Solutions, 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)) 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) [Reserved]

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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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.

Dated: November 19, 2007

By:	/s/ Paul Caceres
	Paul Caceres
	Chief Financial and Accounting Officer

EX-32.(A)

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), each of the undersigned officers of CAM Commerce Solutions, Inc. (the “Company”), does hereby certify with respect to the Annual Report of the company on Form 10-K for the year ended September 30, 2007 as filed with the Securities and Exchange Commission (the “10-K Report”) that to their knowledge:

(1)	the 10-K 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 10-K Report fairly presents, in all material respects, the financial condition and results of operations of the company.

/s/ Geoffrey D. Knapp  

Geoffrey D. Knapp 

Chief Executive Officer
November 19, 2007 

/s/ Paul Caceres  

Paul Caceres 

Chief Financial and Accounting Officer
November 19, 2007 

This certification accompanies this 10-K Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the company for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended.