ATOSS Software AG — Earnings Release 2010

May 17, 2010

2010.1 Quarterly Report Q1.2010

"Our goal is to sharpen our customers' competitive edge with modern workforce management solutions."

Dear Shareholders,

Ladies and Gentlemen,

The first quarter of 2010 has seen a continuation of the successful pattern of development achieved over the past four years. With sales matching the record level set in 2009, we have once again substantially increased our profitability. The operating margin of 23 percent represents a new all-time high!

And let us not forget that in the years 2007 and 2008 ATOSS grew at a rate that far outpaced the market, and continued to do so in the face of challenging conditions in 2009. The IT market slumped by 5 percent in 2009, whereas our sales increased by 8 percent. We were successful in decoupling ATOSS from the general trend and gaining additional market share.

This growth is founded on our strategy which combines sustained investment in research and development with the acquisition of prime reference customers and a stable financial policy. In the first quarter this strategy proved successful once again, as we acquired prominent new clients, concluded further international installations with and for our customers and developed our network of partners.

With sales unchanged relative to last year at EUR 7.1 million, the operating result increased by 9 percent to EUR 1.7 million. Also worthy of note was the cash flow generated in the first quarter. Recorded at EUR 3.1 million, it was more than enough to compensate for the outflow of liquidity for the purchase of real estate at the beginning of the year. On March 31, 2010 ATOSS was able to report liquidity in the amount of EUR 20.2 million and an equity ratio unchanged at 57 percent despite the increase in the balance sheet total.

For the current financial year as a whole we have set ourselves the target of matching the record results achieved in 2009, while at the same time increasing our investment in research and development.

Vast potential to add value

For some years now the attention of corporate decisionmakers has been increasingly drawn to the demand-driven deployment of human resources as a means of obtaining a strategic competitive advantage in the battle for profitability and market share. Workforce management is no longer a niche market.

Our business is to exploit the unused potential to add value. For our corporate clients this potential is vast. It is never a question of simply addressing the challenges of today, but rather of meeting the continuously rising demands of tomorrow. What's more, when deploying workforce management it is essential to take not only account of business aspirations in connection with legal requirements and negotiated pay agreements, but also to factor in employee interests. We give our clients the right tools to deal with the complexity they face and to benefit from this by turning it into increased productivity.

In the first quarter alone ATOSS has added three prominent retail enterprises to its client list. All of them were convinced by the performance of our products and solutions, the competence of our staff and the security of their investment.

Our objectives for the current year 2010 are clear. As a matter of priority we will expand our technology and product leadership and continue to acquire reference customers in specific sectors. We will further deepen our sector-specific expertise, and we will maintain our successful financial strategy.

A look beyond the year 2010

With an expected growth rate of 8.5 percent and a volume of 1.52 billion US dollars, the workforce management market will be a growth market in 2011. We intend to participate in this development and we shall therefore accelerate our endeavors aimed at international expansion.

There is still considerable potential for growth in the German-speaking territories. We enjoy a first-class position in these regions, where we are clearly distinguished by our financial stability, references, consulting skills and technology. We therefore expect to continue to prevail in the face of competition and add to our share of the market. What's more, our products are already in use in 23 countries within and outside of Europe, in a total of eight languages. In the premium market in particular we see great potential in the medium term for ATOSS to pursue international growth. We shall maintain our proven practice of accompanying our customers as they expand abroad, and we will consciously continue to waive the establishment of costly representative offices. This procedure has served us supremely well to date.

The profitability we have achieved in the first quarter with a margin of 23 percent clearly shows that our medium-term aspiration expressed in past years to record sustained margins in excess of 20 percent is realistic. Consequently, we will not deviate from our strategy. Our expenditure on research and development will be maintained at the high level of 20 percent of sales in order to ensure that ATOSS remains able to grasp the huge opportunities presented by the market for workforce management, now and in future. Therefore, we will continue to create the potential to add value, for our clients as well as for ATOSS Software AG and its employees and shareholders.

The employees of ATOSS play their part each day in ensuring that our company consolidates and expands its position as the specialist in workforce management with products that lead the field in technology and with outstanding sector-specific expertise and solutions. We would like to express our thanks to them, and we look forward to what will surely be an exciting financial year 2010. Our thanks are due in equal measure to our customers and shareholders for their confidence in us.

Letter to Shareholders

Andreas F.J. Obereder and Christof Leiber, ATOSS Software AG

Yours truly,

Andreas F.J. Obereder Christof Leiber Chief Executive Officer Member of the

Board of Management

Facts Overview

Economic background

Economy on course for moderate recovery ICT sector expects to see global growth of 4.6% Software market forecast to put on 4.9%

ATOSS Software AG

Further substantial increase in profitability with continuing record sales Target: 2010 results on a par with last year's record level

CONSOLIDATED OVERVIEW AS PER IFRS: 3-MONTH COMPARISON IN EUR '000	01.01.2010	Proportion of	01.01.2009	Proportion of	Change
	- 31.03.2010	total revenues	- 31.03.2009	total revenues	2010 / 2009
Software	4,352	61%	4,188	59%	4%
Software licenses	1,628	23%	1,575	22%	3%
Software maintenance	2,724	38%	2,613	37%	4%
Consulting	1,889	26%	1,992	28%	-5%
Hardware	540	8%	564	8%	-4%
Others	367	5%	388	5%	-5%
Total sales revenues	7,148	100%	7,132	100%	0%
EBITDA	1,785	25%	1,610	23%	11%
EBIT	1,663	23%	1,520	21%	9%
EBT	1,693	24%	1,607	23%	5%
Net income	1,153	16%	1,080	15%	7%
Cash flow	3,116	44%	2,782	39%	12%
Liquidity 1,2	20,249		16,680		21%
EPS (EUR)	0.29		0.27		7%
Employees 3	236		220		7%
		CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPARISON IN EUR '000
	Q1/10	Q4/09	Q3/09	Q2/09
Software	4,352				Q1/09
Software licenses		4,331	4,090	4,162	4,188
Software maintenance	1,628	1,590	1,425	1,551	1,575
	2,724	2,741	2,666	2,612	2,613
Consulting	1,889	2,382	1,986	2,157	1,992
Hardware	540	726	666	345	564
Others	367	257	491	361	388
Total sales revenues	7,148	7,696	7,233	7,026	7,132
EBITDA	1,785	1,239	1,557	1,498	1,610
EBIT	1,663	1,132	1,463	1,405	1,520
EBIT margin	23%	15%	20%	20%	21%
EBT	1,693	1,260	1,516	1,472	1,607
Net income	1,153	867	1,023	995	1,080
Cash flow	3,116	386	3,695	748	2,782
Liquidity 1,2	20,249	19,328	19,182	15,549	16,680

	01.01.2010 - 31.03.2010	Proportion of total revenues	01.01.2009 - 31.03.2009	Proportion of total revenues	Change 2010 / 2009
Software	4,352	61%	4,188	59%	4%
Software licenses	1,628	23%	1,575	22%	3%
Software maintenance	2,724	38%	2,613	37%	4%
Consulting	1,889	26%	1,992	28%	-5%
Hardware	540	8%	564	8%	-4%
Others	367	5%	388	5%	-5%
Total sales revenues	7,148	100%	7,132	100%	0%
EBITDA	1,785	25%	1,610	23%	11%
EBIT	1,663	23%	1,520	21%	9%
EBT	1,693	24%	1,607	23%	5%
Net income	1,153	16%	1,080	15%	7%
Cash flow	3,116	44%	2,782	39%	12%
Liquidity 1,2	20,249		16,680		21%
EPS (EUR)	0.29		0.27		7%
Employees 3	236		220		7%
			CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPARISON IN EUR '000
	Q1/10	Q4/09	Q3/09	Q2/09	Q1/09
Software	4,352	4,331	4,090	4,162	4,188
Software licenses	1,628	1,590	1,425	1,551	1,575
Software maintenance	2,724	2,741	2,666	2,612	2,613
Consulting	1,889	2,382	1,986	2,157	1,992
Hardware	540	726	666	345	564
Others	367	257	491	361	388
Total sales revenues	7,148	7,696	7,233	7,026	7,132
EBITDA	1,785	1,239	1,557	1,498	1,610
EBIT	1,663	1,132	1,463	1,405	1,520
EBIT margin	23%	15%	20%	20%	21%
EBT	1,693	1,260	1,516	1,472	1,607
Net income	1,153	867	1,023	995	1,080
Cash flow	3,116	386	3,695	748	2,782
Liquidity 1,2	20,249	19,328	19,182	15,549	16,680
EPS (EUR)	0.29	0.22	0.26	0.26	0,27
Employees 3	236	234	232	224	220

¹ Cash and marketable securities; ² Dividend of EUR 0.44 per share paid on 04.05.2009; ³ At the end of the quarter

Consistent positive performance – ATOSS looks back on 10 years on the stock market

ATOSS Software AG shares were first listed on the Neuer Markt, as it was then known, some 10 years ago on March 21, 2000. In the three years that followed, the company and its shareholders initially experienced the drastic destruction of value that spread throughout the entire market segment; whereas in recent years despite the financial crisis and the ensuing recession our share price has developed strongly and substantially outperformed the relevant benchmarks.

Having put on 68 percent in 2009, with a marked increase in liquidity in Xetra trading and on the floor in Frankfurt, the share price has performed well with buoyant turnover in the first quarter of 2010. By March 31 the price had risen over 24 percent to EUR 15.25.

Since the beginning of last year the price of ATOSS stock has now doubled, compared with growth of just 44 percent of the DAXsubsector Software Performance Index.

Transparent and dependable dividend policy

Early in 2003, ATOSS announced a long-term dividend policy to which the company has adhered to this day. Our shareholders are rewarded with a substantial share in the company's success. In times of barely measurable returns on money market investments and high-grade bonds, an attractive dividend is all the more important and lends the stock a certain degree of stability.

ATOSS has achieved its early goal and established itself as a technology stock with a strong dividend yield. Let us not forget that in 2003 the Management Board was treading new ground with its professed intention. A software company with generous liquidity that paid a dividend was at odds with the spirit of the times. For all the negative experiences notched up by investors, the "in" thing to do was to retain every euro to finance growth, fund acquisitions by raising capital in kind or borrowing money, and avoid accruing liquidity in order not to reduce the return on equity.

Analysts continue to take a positive view, media response remains strong

SES Research GmbH, a Warburg Group company, published its latest analysis of ATOSS in April 2010 in a note which stressed the company's outstanding development. The analysts repeated their unchanged buy recommendation, lifting the upside target from EUR 16 to EUR 19. SES emphasizes the fact that a weak economy necessitates the optimization of staff deployment as an important aid to business suc-

Investor Relations

cess – which is why ATOSS in recent years has broadened its customer base so substantially. Despite the crisis in 2009 the company once again reported growth in sales and earnings, and occupies a leading position in the software segment for workforce management and personnel resource planning. Among the factors that give ATOSS an advantage over its competitors is the sheer number of our customer references, our specialization in solutions tailored to specific sectors and the fact that our products are non-manufacturer-dependent and compatible with a wide variety of software environments.

The very extensive and positive attention that ATOSS has enjoyed from the press and stock market services has continued in the first quarter of 2010. As it does every year, the company has again included a contact form in the printed version of the agenda for the annual general meeting on April 30, 2010. This practice has been welcomed by shareholders, and inquiries confirm that ATOSS has in this way gained many new investors. Not only has considerable interest been expressed by private individuals, we are also aware of new commitments by institutional investors.

Long-term success is reserved for those who can afford not to chase short-term profits

If one considers how the capital markets and the global economy have developed in the 10 years since ATOSS came to the stock market, it is clear that the excesses and overheated anomalies have consistently been driven by greed and the quest for ultra-short term profits. ATOSS by contrast pursues a strategy geared to the long term. That includes resisting pressures that run counter to our convictions and not submitting to short-term fashion trends.

For investors who can identify with this approach, the investment in ATOSS has proven worthwhile. Share price gains, largely tax-free special distributions and a dividend that has risen steadily over the years have collectively delivered a high return.

The company will stand by its strategy. It comprises the factors that have contributed to our success in recent years: Profitable growth, conservative accounting, highly transparent reporting and excellent figures. Dependability for employees, customers and shareholders.

CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPARISON IN EUR
	Q1/10	Q4/09	Q3/09	Q2/09	Q1/09
High	15.49	13.80	12.65	10.00	7.80
Low	11.85	11.60	8.85	7.42	6.80
Share price at end of quarter	15.25	12.15	12.65	9.20	7.52
Treasury stock	64,099	65,099	65,099	72,099	73,099
Dividend paid per share	0.00	0.00	0.00	0.44	0.00
Cash flow per share	0.79	0.10	0.93	0.19	0.70
Liquidity per share	5.11	4.80	4.85	3.93	4.22
EPS	0.29	0.22	0.26	0.26	0.27
EPS (diluted)	0.29	0.22	0.26	0.26	0.27

"ATOSS Software AG has continued to consistently develop its market position in the first quarter of the current fiscal year. Our customers profit from our consulting skills and solutions, as well as from our in-depth experience garnered from around 4,000 projects."

Group Management Report

4. Product development

ATOSS continues to intensively pursue the development of both new and existing products. Research and development costs rose by 4 percent in the first three months to stand at EUR 1.4 million. R&D costs as a proportion of overall sales amounted to 20 percent (previous year: 19 percent).

The company continues to refrain from capitalizing the expense of developing new products. All expenditure for this purpose is recognized in the income statement in the period in which it is incurred.

5. Employees

Over the past twelve months the number of employees has risen by 7 percent from 220 to 236. On March 31, 2010 ATOSS employed 96 software developers (previous year: 86), with a further 68 staff employed in consulting (previous year: 64), 35 in sales and marketing (previous year: 33) and 37 in administration (previous year: 37).

Personnel costs for the first three months of the current financial year increased slightly to EUR 3.6 million (previous year: EUR 3.5 million).

6. Risks associated with future development

There has been no change in the company's risk structure relative to the description contained in the consolidated financial statements to December 31, 2009.

As in the past, the company's investment policy continues to focus on preserving the value of freely available resources.

7. Events after the reporting period

The annual general meeting on April 30, 2010 adopted the proposal put forward by the Management and Supervisory Boards and approved a dividend of EUR 0.50 per share in circulation which was duly paid on May 3, 2010. The total distribution amounted to EUR 2.0 million.

There have been no further reportable events of particular significance since March 31, 2010.

1. Business and conditions: Confidence returning at high-tech SMEs

According to the OECD Economic Outlook interim report for the G7 group of industrialized nations, the German economy has weathered the crisis. Germany, France and Italy are reportedly recording slow but steady growth. The OECD forecasts that growth in the second quarter is likely to accelerate from 0.9 to 1.9 percent.

The Spring 2010 Joint Economic Forecast published by the Ifo Institute also speaks of a progressive recovery in the global economy and describes the crisis as gradually overcome. The Ifo business climate index for Germany's manufacturing industry once again improved strongly in April. Companies are substantially more confident about their present business situation than was previously the case. This is the second consecutive such improvement. The Ifo Institute estimates that gross domestic product will grow by 0.9 percent in 2010, and by 1.3 percent in 2011.

High-tech SMEs also view the economic situation with greater confidence. According to the quarterly survey by industry association BITKOM, the mood in the high-tech sector has brightened considerably. 59 percent of IT and telecoms companies in Germany expected their sales to increase in the first quarter of 2010.

The BITKOM sector index has jumped 41 points since the previous quarter to stand at plus 35, indicating a clear perception of rising demand in the information technology business in particular.

BITKOM is forecasting an increase of 1.4 percent in IT sales in Germany in 2010. Software industry sales are forecast to grow by 0.9 percent. The deciding factor is that the investment backlog has now eased and companies are once again investing in new IT systems.

While these trends both in the economy as a whole and in the IT environment reflect increases as compared to considerably lower figures of the preceding year, ATOSS has recorded substantial growth in the past year. Against this background, the company expects business developments in 2010 to match the levels reached last year, with companies still reticent in their investment decisions.

2. Earnings situation: Last year's record level achieved

In the first quarter of 2010 in a repeat of last year's record performance ATOSS recorded sales revenues totaling EUR 7.1 million (previous year: EUR 7.1 million). Sales of software licenses rose by 4 percent from EUR 4.2 million to EUR 4.4 million. Software maintenance, too, continued to develop positively with turnover also increasing by 4 percent from EUR 2.6 million to EUR 2.7 million.

By comparison the strong growth in consulting seen in previous years has eased, with revenues slipping 5 percent from EUR 2.0 million to EUR 1.9 million.

The operating profit (EBIT) at EUR 1.7 million developed strongly, increasing by 9 percent over the previous year's figure of EUR 1.5 million.

Earnings after taxes to March 31, 2010 came in at EUR 1.2 million, representing growth of 7 percent relative to the EUR 1.1 million recorded in the same period last year. Earnings per share accordingly rose from EUR 0.27 to EUR 0.29.

Orders on hand for software licenses on March 31, 2010 amounted to EUR 3.5 million, slightly below last year's figure of EUR 3.7 million. Despite the difficult economic environment, by long-term comparison the strong order remains in record territory and serves as a guarantee of a continuing sound and stable business situation.

3. Net assets and financial position

Operating cash flow developed strongly during the first three months, rising to EUR 3.1 million compared with EUR 2.8 million last year. Liquidity (cash and marketable securities) was increased from EUR 19.3 million to EUR 20.2 million, despite the outflow of EUR 2.1 million at the beginning of January to cover the purchase of our business premises in Meerbusch.

Liquidity per share on March 31, 2010 accordingly stood at EUR 5.11 (previous year: EUR 4.22).

In addition to net earnings, positive factors impacting cash flow included in particular an increase in deferred revenues due to the invoicing of maintenance charges and a reduction in trade accounts receivable. Compared with last year receivables have declined by EUR 1.4 million, falling from EUR 4.3 million in 2009 to EUR 2.9 million this year.

As a result of the gratifying development in business, the equity ratio amounts to 57 percent of total capital. The company thus remains extremely well capitalized, with solvency assured at all times.

8. Outlook

In view of the continuing positive development in all of the company's performance indicators both in the fourth quarter of 2009 and in the first three months of 2010, the Management Board expects business to match the level set last year. On the other hand, the Board does not expect to see any improvement in the collective corporate appetite for investment in the coming quarters, on the contrary the order intake is more likely to decline.

CONSOLIDATED BALANCE SHEET TO 31.03.2010 IN EUR
Assets	31.03.2010	31.12.2009
Non-current assets
Tangible fixed assets (net)	2,887,334	794,681
Intangible assets (net)	97,091	113,214
Deferred taxes	165,980	249,984
Total non-current assets	3,150,405	1,157,879
Current assets
Inventories	8,611	8,712
Trade accounts receivable (net)	2,889,621	4,281,893
Other current assets	1,512,474	923,700
Cash and cash equivalents	20,248,852	19,328,060
Total current assets	24,659,558	24,542,365
Total assets	27,809,963	25,700,244
Equity and liabilities	31.03.2010	31.12.2009
Capital and reserves
Subscribed capital	4,025,667	4,025,667
Capital reserve	-309,793	-301,013
Treasury stock	-478,284	-491,034
Unappropriated net income	12,631,192	11,478,130
Total equity	15,868,782	14,711,750
Non-current liabilities
Convertible bonds	15,000	16,000
Pension provisions	1,891,563	1,882,275
Deferred taxes	1,097,717	753,508
Total non-current liabilities	3,004,280	2,651,783
Current liabilities
Trade accounts payable	579,974	685,546
Short-term accruals	2,015,438	3,735,599
Deferred revenues	5,699,375	3,204,066
Tax provisions	102,489	100,129
Other current liabilities	539,625	611,371
Total current liabilities	8,936,901	8,336,711
Total equity and liabilities	27,809,963	25,700,244

Balance Sheet

Cash Flow Statement

CONSOLIDATED CASH FLOW STATEMENT FROM 01.01. TO 31.03.2010 IN EUR

	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Net profit	1,153,062	1,080,107
Depreciation of fixed assets	122,225	89,794
Gain/loss on the disposal of fixed assets	511	-42,188
Changes in deferred taxes	428,213	39,970
Change in pension provision	9,289	-8,914
Change in net current assets
Trade accounts receivable	1,392,271	-644,763
Inventories and other current assets	-588,673	-360,277
Trade accounts payable	392,025	-138,638
Short-term accruals	-1,720,163	-1,275,394
Deferred revenues	1,997,713	3,729,191
Tax provisions	2,360	22,915
Other current liabilities	-72,746	291,159
Cash flow generated through business operations (1)	3,116,087	2,781,961
Cash flow from investment activities
Acquisition of tangible and intangible assets	-2,199,265	-114,397
Disposal of tangible fixed assets	0	42,200
Cash flow generated through investment activities (2)	-2,199,265	-72,197
Cash flow from financing activities
Expenditure for the purchase of treasury stock	0	-30,416
Income from the sale of treasury stock	3,970	0
Dividend payments	0	0
Cash flow generated through financing activities (3)	3,970	30,416
Changes in liquidity 1 – total of (1) to (3)	920,792	2,679,348
Liquidity 1 at the beginning of the period	19,328,060	14,000,411
Liquidity 1 at the end of the period	20,248,852	16,679,759

CONSOLIDATED INCOME STATEMENT FROM 01.01. TO 31.03.2010 IN EUR
		Quarterly report		3-month report
	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Sales revenues	7,147,867	7,131,508	7,147,867	7,131,508
Cost of sales	-2,144,403	-2,096,940	-2,144,403	-2,096,940
Gross profit on sales	5,003,464	5,034,568	5,003,464	5,034,568
Selling costs	-1,286,461	-1,448,660	-1,286,461	-1,448,660
Administration costs	-646,661	-612,700	-646,661	-612,700
Research and development costs	-1,425,741	1,369,191	-1,425,741	1,369,191
Other operating income	26,627	22,208	26,627	22,208
Other operating expenses	-8,378	-105,744	-8,378	-105,744
Operating result (EBIT)	1,662,850	1,520,481	1,662,850	1,520,481
Interest and similar income	49,527	96,631	49,527	96,631
Interest and similar expenses	-19,046	-10,550	-19,046	-10,550
Earnings before taxes	1,693,331	1,606,562	1,693,331	1,606,562
Taxes on income and earnings	-540,269	-526,455	-540,269	-526,455
Net profit	1,153,062	1,080,107	1,153,062	1,080,107
Earnings per share (undiluted)	0.29	0.27	0.29	0.27
Earnings per share (diluted)	0.29	0.27	0.29	0.27
Average number of shares in circulation (undiluted)	3,960,979	3,952,979	3,960,979	3,952,979
Average number of shares in circulation (diluted)	3,976,568	3,976,979	3,976,568	3,976,979

Income Statement

Statement of Comprehensive Income

¹ CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FROM 01.01. TO 31.03.2010 IN EUR Liquidity: Cash and marketable securities

	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Net income for the year	1,153,062	1,080,107
Change in equity not recognized in profit or loss	3,970	-30,416
Other income for the period after taxes	3,970	-30,416
Comprehensive income after taxes	1,157,032	1,049,691

CHANGES IN CONSOLIDATED EQUITY AS OF 31.03.2010 IN EUR
	Subscribed capital	Capital reserve	Treasury stock	Unapp. ret. earnings	Total
As of 01.01.2009	4,025,667	-248,453	-562,618	9,252,962	12,467,558
Net profit	0	0	0	1,080,107	1,080,107
Sale of treasury stock	0	0	0	0	0
Purchase of treasury stock	0	0	0	0	0
Dividend	0	0	-30,416	0	-30,416
As of 31.03.2009	4,025,667	-248,453	-593,034	10,333,069	13,517,249
As of 01.01.2010	4,025,667	-301,013	-491,034	11,478,130	14,711,750
Net profit	0			1,153,062	1,153,062
Sale of treasury stock	0	-8,780	12,750		3,970
Purchase of treasury stock	0
Dividend	0
As of 30.03.2010	4,025,667	-309,793	-478,284	12,631,192	15,868,782

One share represents 1 euro of subscribed capital.

Statement of Changes in Equity

1. General

The present report has been prepared in accordance with International Financial Reporting Standards (IFRS) in compliance with IAS 1.14. In particular the report complies with the provisions contained in IAS 34 "Interim Financial Reporting". The requirements contained in German Accounting Standard (DRS) No. 6 regarding interim reporting have likewise been fulfilled.

In accordance with IAS 34.20, the present statements include a consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated cash flow statement, a statement of changes in consolidated equity and explanatory notes to the consolidated statements.

The same financial accounting, valuation and computation methods have been applied as in the case of the annual financial statements.

The Management Board is satisfied that the impression of the economic situation of the company, its net assets, financial position, earnings situation and cash flow conveyed by the present quarterly financial statements accords with the true facts. This interim report has not undergone an auditor's inspection or statutory audit.

2. Reporting period

The present interim report was prepared to March 31, 2010, for the reporting period from January 1, 2010 to that date.

1. Currency

All figures are stated in euro. Figures are rounded up to whole euro units.

1. Group of consolidated companies In addition to the parent company ATOSS Software AG, Munich, the consolidated financial statements to March 31, 2010 also include all subsidiary companies:

ATOSS CSD Software GmbH, Cham, Germany ATOSS Software Ges.mbH, Vienna, Austria ATOSS Software AG, Zurich, Switzerland

ATOSS Software S.R.L., Timisoara, Romania

These companies are fully consolidated.

5. Changes in equity

The development in equity is evident from the statement of changes in consolidated equity.

Notes to the Consolidated Financial Statements

"ATOSS prevails with a sustained strategy that is mirrored in both our superlative financial strength as well as our outstanding powers of innovation."

6. Treasury stock

In the first three months of the financial year 1,000 treasury shares were dispensed in response to the exercise of convertible bonds. On March 31, 2010 the company held 64,099 treasury shares acquired at an average price of EUR 7.46. Treasury stock is reported as a separate equity item at cost of acquisition.

7. Sales revenues

The company's sales revenues were composed as follows:

EUR	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Software licenses	1,628,030	1,575,022
Software maintenance	2,723,883	2,612,598
Total software	4,351,913	4,187,620
Consulting	1,888,504	1,992,286
Hardware	540,064	563,534
Others	367,386	388,068
Total sales revenues	7,147,867	7,131,508

The geographic breakdown of sales revenues was as follows:

EUR	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Germany	6,472,072	6,713,483
Austria	398,370	236,843
Switzerland	129,164	103,432
German-speaking territories in total	6,999,606	7,053,758
Other countries	148,261	77,750
Total sales revenues	7,147,867	7,131,508

8. Personnel costs

The consolidated personnel costs to March 31, 2010 were composed as follows:

EUR	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Wages and salaries	2,948,451	2,909,169
Social security contributions and expenditure on retirement pensions and welfare	661,803	550,933
Total personnel costs	3,610,254	3,460,102

9. Other operating income and expenses

In the first three months of the current financial year the company recorded other operating income in the amount of EUR 26,627 (previous year: EUR 22,208). This was essentially comprised of rental income and income from differences in exchange rates. The other operating expenses amounting to EUR 8,378 (previous year: EUR 105,744) essentially concerned expenses of exchange rate differences and bad debts.

10. Financial investment income and expenditure

In the first three months of the current financial year the company recorded income in the amount of EUR 49,527 (previous year: EUR 96,631) from financial investments. This essentially comprised interest on fixed-term deposits.

Also in the first three months of 2010 the company recorded expenditure on financial investments in the amount of EUR 19,046 (previous year: EUR 10,550). This essentially concerned expenditure in connection with pension provisions.

11. Tax expenses

Consolidated tax expenses to March 31, 2010 were comprised as follows:

EUR	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Pre-tax earnings as per IFRS	1,693,331	1,606,562
Expected tax charge (2009: 32.98%, 2008: 32.98%)	-558,461	-529,844
Non-deductible operating expenses	-3,788	-20,695
Tax refunds for previous years	3,858	0
Differences in tax rates at consolidated companies	18,122	24,084
Actual group tax charge	-540,269	-526,455

12. Earnings per share

The figure for earnings per share is arrived at by dividing the result for the period in the amount of EUR 1,153,062 by the weighted average number of shares outstanding. From January 1 to March 31, 2010 there were an average of 3,960,979 shares in circulation. Thus earnings per share for this period amounted to EUR 0.29, in comparison with EUR 0.27 in the first three months of last year.

In order to calculate diluted earnings per share, the result for the period must be adjusted to allow for the interest cost relating to convertible bonds in the amount of EUR 78 (previous year: EUR 120). In addition the average number of shares outstanding is increased with the inclusion of shares potentially issued as a result of convertible bonds. From January 01 to March 31, 2010 there were an average of 15,000 convertible bonds in circulation. Thus the diluted earnings per share for this period amounted to EUR 0.29, in comparison with EUR 0.27 in the preceding year.

13. Segment reporting

The company has only one uniform business segment which comprises the creation, sale and implementation of software solutions directed towards the efficient deployment of personnel.

The individual software solutions comprise:

ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE):

ASES and ASE are worforce management and personnel resource planning solutions for customers of all sizes in all industries. These software solutions are generally accompanied by other services covering implementation and training. In addition consulting services are rendered with the object of making meaningful use of the available scope and developing optimum solutions for the efficient deployment of personnel under specific operating conditions and in consideration of works agreements and industry-wide pay deals. The company also sells hardware components for time recording and access control purposes. ASES/ASE software is used in conjunction with all major standard system platforms and databases. Moreover thanks to the extensive facility to define customer-specific parameters these solutions are capable of satisfying even the most sophisticated requirements of customers of all sizes in all industries.

ATOSS Time Control (ATC):

ATC offers a software solution to workforce management and personnel resource planning for small and medium-sized customers as well as large but decentrally organized clients. Likewise in conjunction with ATC, ATOSS offers software implementation and training as well as consulting services. Merchandise including hardware and recording media is also available. ATC software is installed on the Microsoft Windows system platform in association with standard SQL databases and is particularly user-friendly and convenient for small to medium-sized customers as well as large decentralized organizations.

EUR	01.01.2010 - 31.03.2010	01.01.2009 - 31.03.2009
Sales revenues
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	6,577,824	6,647,451
ATOSS Time Control (ATC)	570,043	484,057
Total sales revenues	7,147,867	7,131,508
Operating result (EBIT)
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	1,584,037	1,522,014
ATOSS Time Control (ATC)	78,813	-1,533
Total operating result (EBIT)	1,662,850	1,520,481

14. Employees

On March 31, 2010 the company had 236 employees.

	31.03.2010	31.03.2009
Development	96	86
Consulting	68	64
Sales and marketing	35	33
Administration	37	37
Total	236	220

15. Board of Management

The company's Management Board continued to comprise two members:

Andreas F.J. Obereder	Chief Executive Officer
Christof Leiber	Member of the Board of Management

16. Supervisory Board

The company's Supervisory Board as of March 31, 2010 comprised three members:

Peter Kirn	Chairman
Fritz Fleischmann	Deputy Chairman
Rolf Baron Vielhauer von Hohenhau	Member of the Supervisory Board

17. Shares held by board members

On the reporting date of March 31, 2010 board members held the following numbers of ATOSS shares:

	31.03.2010	31.12.2009	30.09.2009	30.06.2009	31.03.2009
Andreas F.J. Obereder	1,981,184	1,981,184	1,981,184	1,981,184	1,981,184
Peter Kirn	19,760	19,760	19,760	29,760	29,760

18. Convertible bonds held by board members

On March 31, 2010 board members held the following number of bonds convertible into ATOSS shares:

	31.03.2010	31.12.2009	30.09.2009	30.06.2009	31.03.2009
Christof Leiber	0	0	0	5,000	5,000

19. Convertible bonds

In the first three months of financial year 2010 some 1,000 convertible bonds were exercised. As of March 31, 2010 there were 15,000 convertible bonds outstanding.

Details of outstanding convertible bonds held by board members and employees are summarized in the following table:

	Exercise price in EUR	Outstanding options	Contractual validity in years	Possible rights remaining to be exercised as of 31.03.2010
Employees
	3.52	4,000	0.5	4,000
	3.97	2,000	1.6	2,000
	6.18	9,000	1.2	9,000
Total		15,000		15,000

20. Notifiable participating interests

In the first three months of financial year 2010 the company received no notifications regarding changes in participating interests pursuant to Sections 21 ff. of the German Securities Trading Act.

21. Business transactions with closely related persons

Payment in the amount of EUR 2,050,000 plus ancillary costs was made in January 2010 for the purchase of the real estate property acquired in the preceding year from the wife of the Chief Executive Officer. An expert report was obtained to ascertain the value of the property. The purchase of this property and the resulting positive impact on results were discussed at a meeting of the Supervisory Board on December 1, 2010. The Supervisory Board passed a resolution approving the purchase. Ownership and liability transferred to the company on January 1, 2010 at which point in time the lease came to an end.

Moreover the wife of the Chief Executive Officer provides services to the company. In the first three months of the financial year 2010 the value of these services amounted to EUR 2,236 (previous year: EUR 2,184).

The company is satisfied that the terms agreed for these transactions are standard market terms.

22. Events after the reporting period

The annual general meeting of ATOSS Software AG took place on April 30, 2010. The meeting adopted the proposal put forward by the Management and Supervisory Boards and approved a dividend of EUR 0.50 per share which was duly paid on May 3, 2010. The total distribution amounted to EUR 1,980,784.

We hereby give an assurance to the best of our knowledge and belief that in accordance with the applicable interim reporting standards these interim consolidated financial statements convey an impression of the net assets, financial position and earnings situation of the Group which accords with the true facts; and that the development in business including the results and the situation of the Group are so described in the interim consolidated management report as to convey an impression which likewise accords with the true facts; and that the essential opportunities and risks associated with the anticipated development of the Group in the remainder of the financial year are so described.

This report contains forward-looking statements that are based on the conviction of the Management Board of ATOSS Software AG and reflect current assumptions and estimations. These forward-looking statements are subject to risks and uncertainties. Many facts that cannot currently be predicted may cause the actual performance and earnings of ATOSS Software AG to develop in a different manner. This could for example include the non-acceptance of newly introduced products or services, changes in the general economic and business climate, a failure to achieve efficiency and cost-reduction targets or changes in business strategy.

The Management Board is firmly convinced that the expectations embodied in these forward-looking statements are sound and realistic. Should, however, the above-mentioned or other unforeseeable risks materialize, ATOSS Software AG Munich, May 17, 2010 cannot guarantee that the expressed expectations will prove to be correct.

Andreas F.J. Obereder Christof Leiber Chief Executive Officer Member of the Board

of Management

Declaration by the Disclaimer Legal Representatives

OTHER OFFICES Düsseldorf

Fon +49.21 50.9 65-0

Frankfurt Fon +49.69.66 05 99-0

Hamburg Fon +49.40.27 81 63-0

Stuttgart Fon +49.711.7 28 73 20-0

SUBSIDIARIES Germany ATOSS CSD Software GmbH, Cham Fon +49.99 71.85 18-0

26.07.2010	Press release announcing the 6-monthly statements	RESPONSIBLE
13.08.2010	Publication of the 6-monthly financial statements	ATOSS Software AG Am Moosfeld 3
25.10.2010	Press release announcing the 9-monthly statements	D-81829 Munich
		Fon +49.89.4 27 71-0
15.11.2010	Publication of the 9-monthly financial statements	Fax +49.89.4 27 71-100
03.05.2011	Annual General Meeting	www.atoss.com
		INVESTOR RELATIONS CONTACT
		ATOSS Software AG
		Investor Relations
		Christof Leiber
		Fon +49.89.4 27 71-0
		Fax +49.89.4 27 71-100
		Christof.Leiber@atoss.com

Austria ATOSS Software Ges.mbH, Vienna Fon +43.1.7 17 28-334

Switzerland ATOSS Software AG, Zurich Fon +41.44.308 39-56

Romania ATOSS Software SRL, Timisoara Fon +40.356.71 01 82

Corporate Calendar Imprint

PHOTOGRAPHY Customers of ATOSS Software AG P. 10: MPREIS / Thomas Jantscher

ATOSS Software AG

Am Moosfeld 3 D-81829 Munich Fon +49.89.4 27 71-0 Fax +49.89.4 27 71-100

info@atoss.com www.atoss.com