UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: ~~September~~June 2330, ~~2012~~2013

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: 000-50373

Horne International, Inc.

(Exact name of registrant as specified in its charter)

Delaware		90-0182158
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3975 University Drive, Suite 100,
Fairfax, Virginia		22030
(Address of principal executive offices)		(Zip Code)

703-641-1100

(Registrant’s telephone number, including area code)

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, and (2) has been subject to such filing requirements for the past 90 days.

Yes ~~¨ No~~ x No ¨

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

Yes x No ¨

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

Large Accelerated filer ¨ Accelerated Filer¨ Non-Accelerated Filer ¨ Smaller Reporting Company x (Do not check if Smaller Reporting Company)

(Do not check if Smaller Reporting Company)

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

Yes ¨ No x

As of ~~November~~August 218, ~~2012,~~2013 there were 47,306,054 shares of the issuer’s common stock, par value $0.0001 per share, outstanding.

HORNE INTERNATIONAL, INC.

TABLE OF CONTENTS

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets (Unaudited) as of June 30, 2013 and December 31, 2012	2

Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2013 and June 24, 2012	3

Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited) for the six months ended June 30, 2013	4

Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2013 and June 24, 2012	5

Notes to Consolidated Financial Statements (Unaudited)	6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3. Quantitative and Qualitative Disclosures about Market Risk	16

Item 4. Controls and Procedures	17

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	18

Item 1A. Risk Factors	18

Item 6. Exhibits	19

Signatures	20

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited) as of September 23, 2012 and December 25, 2011	2
Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 23, 2012 and September 25, 2011	3
Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited) for the nine months ended
September 23, 2012	4
Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 23, 2012 and September 25, 2011	5
Notes to Consolidated Financial Statements (Unaudited)	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	16
Item 4. Controls and Procedures	17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	18
Item 1A. Risk Factors	18
Item 6. Exhibits	19

Horne International, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars shown in ~~000’s~~thousands except share amounts)

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

	September 23,			December 25,
	June 30,			December 31,
	2012			2011
	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	44		$	152
Cash	$	1		$	8
Receivables, net		~~888~~1,033			1,~~100~~116
Prepaid expenses and Other current assets		37			29
Prepaid expenses and other current assets		45			30
Total current assets		~~969~~1,079			1,~~281~~154
Property and equipment, net		9-			326
Other assets		19-			19
TOTAL ASSETS	$	~~997~~1,079		$	1,~~332~~179
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	~~933~~682		$	~~1,053~~695
Accrued expenses		939			646
Line of credit		-			118
Debt, net of discount		792			475
Accrued expenses		1,379			1,345
Current liabilities of discontinued operations		-			7
Debt, net of discount		1,523			1,069
Total current liabilities		2,664			2,181
Other current liabilities		-			7
Long-term liabilities:
Total current liabilities		3,584			3,234
Non-current portion of debt		-			4
Total Liabilities		3,584			3,234
TOTAL LIABILITIES		2,664			2,185
Commitments and contingencies (Note 9)		-			-
Stockholders' deficit
Preferred stock, $0.0001 par value; 20,000,000 shares authorized, none issued		-			-
Preferred stock, $.0001 par value; 20,000,000 shares authorized, none issued		-			-
Common stock, $0.0001 par value; 80,000,000 shares authorized, 47,306,054 (2012) and 44,506,054 (2011) issued and outstanding		5			4
Common stock, $0.0001 par value; 80,000,000 shares authorized,		-			-
Additional paid-in capital		80,191			79,757
47,306,054 issued and outstanding		5			5
Accumulated deficit		(81,863	)		(80,614	)
Additional paid-in capital		80,281			80,200
Total stockholders' deficit		(1,667	)		(853	)
Accumulated deficit		(82,791	)		(82,260	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	997		$	1,332
Total stockholders' deficit		(2,505	)		(2,055	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,079		$	1,179

See accompanying notes to consolidated financial statements (unaudited).

~~HORNE~~Horne ~~INTERNATIONAL~~International, ~~INC~~ Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars shown in ~~000’s~~thousands except share and per share amounts)

	Three months ended						~~Nine~~Six months ended
	September 23,			September 25,			September 23,			September 25,
	June 30,			June 24,			June 30,			June 24,
	2012			2011			2012			2011
	2013			2012			2013			2012
Revenues	$	~~1,001~~25		$	~~1,469~~974		$	~~3,405~~50		$	32,~~812~~404
Cost of revenues		~~843~~22			~~1,339~~827			~~2,947~~64			32,~~373~~104
Gross profit		~~158~~3			~~130~~147			~~458~~(14	)		~~439~~300
Operating expenses		~~488~~120			~~433~~506			~~1,432~~374			~~1,303~~944
Operating loss		(330	)		(303	)		(974	)		(864	)
											871
Non-operating (expense) income, net		(74	)		(15	)		(272	)		(63	)
Operating loss		(117	)		(359	)		(388	)		(644	)
Loss before provision for income taxes		(404	)		(318	)		(1,246	)		(927	)
Non-operating expense, net		(98	)		(147	)		(143	)		(198	)
Income tax (expense) benefit		(3	)		-			(3	)		1
Loss before income taxes		(215	)		(506	)		(531	)		(842	)
Loss from continuing operations		(407	)		(318	)		(1,249	)		(926	)
Income tax (expense) benefit		-			-			-			-
Income from discontinued operations		0			3			0			1,084
Net Loss	$	(215	)	$	(506	)	$	(531	)	$	(842	)
Net (Loss) Income	$	(407	)	$	(315	)	$	(1,249	)	$	158
Weighted average common shares outstanding:
Weighted average common shares outstanding: Basic and diluted		47,306,045			44,319,895			46,474,060			43,538,190
Basic and diluted		47,306,054			47,126,697			47,306,054			46,069,433
Basic and diluted loss per share:
Basic and diluted net loss per share	$	(0.00	)	$	(0.01	)		(0.01	)	$	(0.02	)
Loss from continuing operations		(0.01	)		(0.01	)		(0.03	)		(0.02	)
Income from discontinued operations		0.00			0.00			0.00			0.02
Total basic and diluted (loss) income per share	$	(0.01	)	$	(0.01	)		(0.03	)	$	0.00

See accompanying notes to consolidated financial statements (unaudited).

~~HORNE~~Horne ~~INTERNATIONAL~~International, ~~INC~~ Inc.

Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited)

For the ~~Nine~~Six Months Ended ~~September~~June 2330, ~~2012~~ 2013

(Dollars ~~shown~~ shown in ~~000’s~~thousands except share amounts)

	Common Stock						Accumulated
	Shares		Amount		APIC		Deficit			Total
Balance as of December 25, 2011		44,506,054	$	4	$	79,757	$	(80,614	)	$	(853	)
Balance as of December 31, 2012		47,306,054	$	5	$	80,200	$	(82,260	)	$	(2,055	)
Net loss				-		-		(~~1,249~~531	)		(~~1,249~~531	)
Stock based compensation						80					80
Stock-based compensation				-		18		-			18
Beneficial conversion on debt						75					75
Debt discount for beneficial conversion feature				-		63		-			63
Restricted stock issuances		2,800,000		1		279					280
Balance as of June 30, 2013		47,306,054	$	5	$	80,281	$	(82,791	)	$	(2,505	)
Balance as of September 23, 2012		47,306,054	$	5	$	80,191	$	(81,863	)	$	(1,667	)

See accompanying notes to the consolidated financial statements (unaudited).

Horne International, Inc.

Consolidated ~~Statement~~StatementS of Cash Flows (Unaudited)

For The ~~Nine~~Six Months Ended ~~September~~June 2330, ~~2012~~2013 and ~~September~~June 2524, ~~2011~~2012

	Nine Months Ended
	September 25,			September 30,
	2012			2011
Cash flows from operating activities:
Continuing Operations
Net loss from continuing operations	$	(1,249	)	$	(926	)
Cash used in operating activities
Stock-based compensation		89			38
Issuance of common stock for services		-			122
Depreciation and amortization		23			28
Non-Cash impact of debt discount		28			-
Change in balance sheet items
Receivables, net		204			(566	)
Prepaid expenses		13			-
Other assets		-			40
Accounts payable		(120	)		869
Accrued expenses		218			(185	)
Deferred revenue		-			(3	)
Net cash used in continuing operations		(794	)		(583	)
Discontinued Operations
Net income from discontinued operations		-			1,084
Cash used in discontinued operations		-			(202	)
Net cash provided by discontinued operations		-			882
Net cash (used in) provided by operations		(794	)	$	299
Cash flows from investing activities:		-
Purchase of property and equipment		-			(2	)
Net cash used in investing activities		-			(2	)
Cash flows from financing activities
Proceeds from issuance of common stock		250
Principal repayments on capital lease obligations		(9	)		(7	)
Net payments on lines of credit		-			(140	)
Principal payments on debt		(245	)		(340	)
Proceeds from debt		690			310
Net cash provided by (used in) financing activities		686			(177	)
Net (decrease) increase in cash and cash equivalents		(108	)		120
Cash and cash equivalents at beginning of period		152			62
Cash and cash equivalents at end of period		44			182
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	62
Cash paid for taxes	$	-		$	1
Supplemental schedule of non cash financing activities:
Provisions for debt discount	$	75		$	-
Prepayment of service through common stock issuance	$	30		$	-

(Dollars shown in thousands)

	Six Months Ended
	June 30,			June 24,
	2013			2012
Cash flows from operating activities:
Net loss	$	(531	)	$	(842	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		18			55
Depreciation and amortization		6			17
Bad debt recovery, net		(81	)		-
Note default penalty		29
Amortization of debt discount included in interest expense		45			19
Changes in assets and liabilities
Receivables, net		164			(1	)
Prepaid expenses and other current assets		21			(20	)
Accounts payable		94			241
Accrued expenses		79			(213	)
Net cash used in operations		(156	)		(744	)

Cash flows from financing activities:
Proceeds from issuance of debt		216			155
Proceeds from convertible notes		58			-
Proceeds from issuance of common stock		-			280
Net proceeds (payments) on lines of credit		(118	)		260
Principal payments on other debt		(7	)		(88	)
Net cash provided by financing activities		149			607

Decrease in cash		(7	)		(137	)
Cash a at beginning of period		8			152
Cash at end of period	$	1		$	15

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	3
Cash paid for taxes	$	-		$	-
Supplemental schedule of non-cash activities:
Provision for debt discount	$	63		$	75
Conversion of account payable to note payable	$	151		$	-
Reclassification of accrued liability to accounts payable	$	45		$	-
Addition to other current assets and accounts payable	$	18		$	-
Addition of prepaid expenses and notes payable	$	19		$	-
Use of rent deposit in lieu of payment	$	19		$	-

See accompanying notes to the consolidated financial statements (unaudited).

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

For the Six Months Ended June 30, 2013 and June 24, 2012

1. organization and nature of business and uncertainty

Horne International, Inc. (the “Company” or “weHorne”~~, “us”, “our” or similar terms~~), headquartered in Fairfax, Virginia, is an engineering services company ~~focused~~which onhas ~~the~~historically ~~provision~~focused on ofproviding integrated, systems approach -based solutions to the energy and environmental sectors. The Company’s solutions are sustainable, agile, and provide immediate, as well as long term results. ~~The Company’s service and product offerings encompass engineering, environment, and energy solutions.~~ We provide products and services to both the United ~~commercial~~States ~~customers~~Government and to ~~the~~commercial ~~United States Government~~customers.

~~Discontinued~~The ~~operations~~Company’s ~~include~~independent registered public accountants stated in their report on the ~~results~~ consolidated financial statements of ~~our~~the ~~Spectrum~~Company ~~subsidiary~~for the years ended December 31, 2012 and December 25, 2011, that wethe ~~decided~~Company has had recurring operating losses that raise substantial doubt about its ability to ~~close~~continue inas a going concern. For the six months ended June ~~2008~~30, 2013, the Company experienced a major decrease in revenue, incurred a net loss of approximately $531,000 and had a stockholders’ deficit of approximately $2,505,000 as of that date.

The ~~Company’s independent registered public accountants stated in their report on the~~ consolidated financial statements ~~of the Company for the fiscal year ended December~~presented ~~25,~~above ~~2011,~~and ~~that~~ the ~~Company~~accompanying ~~has~~Notes ~~had~~have ~~recurring~~been ~~operating~~prepared ~~losses~~on ~~that raise substantial doubt about its ability to continue as~~ a going concern. ~~For the nine months ended September 23~~basis, ~~2012,~~which contemplates the ~~Company~~realization ~~incurred a loss from continuing operations~~ of ~~approximately $1,249~~assets ~~million~~ and discharge ~~had a stockholders’ deficit~~ of ~~approximately~~liabilities ~~$1,667~~in ~~million~~the asnormal course of ~~that~~business ~~date.~~for ~~The~~the ~~consolidated~~foreseeable ~~financial statements~~future, doand does not include any adjustments ~~related~~ to reflect possible future effects on the ~~recovery~~recoverability and classification of ~~recorded~~ assets, or the amounts and classification of liabilities that may ~~might~~result befrom ~~necessary~~the inoutcome ~~the~~of ~~event~~any ~~the~~extraordinary ~~Company~~regulatory ~~cannot~~action, which would affect our ability to continue as a going concern.

~~The~~Due ~~Company~~to isthe ~~dependent~~conditions ~~upon available cash~~ and ~~operating~~events ~~cash~~discussed above, ~~flow~~there inis ~~addition~~substantial todoubt ~~financing~~about ~~cash~~the ~~inflows to meet its capital needs. The~~ Company’s isability ~~considering all strategic options~~ to ~~improve~~continue ~~its liquidity and provide it with working capital to fund its continuing business operations which include equity offerings, assets sales or debt financing~~ as ~~alternatives~~a togoing ~~improve its cash requirements~~concern.

~~During~~The ~~2008, the~~ Company ~~entered~~is ~~into~~dependent aupon operating ~~loan~~cash ~~agreement~~flow ~~with~~in ~~Darryl~~addition K.to ~~Horne,~~financing ~~the~~cash ~~Company’s~~inflows ~~President~~to ~~and~~meet ~~Interim~~its ~~Chief~~working ~~Executive~~capital ~~Officer~~needs. The ~~loan~~Company ~~permitted~~is ~~the Company~~considering all strategic options to ~~borrow~~generate uprevenue and thereby improve its liquidity and provide it with working capital to ~~$525~~fund its continuing business operations,~~000~~ including atdebt 8%service ~~interest.~~obligations, Aswhich ofinclude ~~September~~developing 23new business opportunities to generate revenue, ~~2012~~equity offerings, and ~~the~~debt ~~principal~~financings ~~outstanding~~from ~~balance~~related isparties ~~$493~~and others. At June 30,~~507~~ ~~and~~2013, the Company’s aggregate obligation for amounts borrowed, ~~accrued~~before ~~interest~~discounts, ~~balance~~amounted isto $941,~~523~~579,000, of which $1,238,000 represented borrowings from related parties.

InOn ~~February~~May ~~2011~~21, 2013, the Company ~~entered~~received ~~into~~notification athat ~~financing~~its ~~agreement~~failure ~~with United Capital Funding Corporation under which the Company is able~~ to ~~factor~~file ~~certain~~this ~~eligible~~Form ~~accounts receivable. The~~10-Q ~~agreement calls~~ for athe ~~minimum~~quarter ~~fee~~ended ofJune ~~0.425%~~30, of2013 ~~the~~with ~~invoice amount for~~ the ~~first~~Securities ~~five~~& ~~day~~Exchange ~~period~~Commission ~~and~~(“SEC”) anon ~~additional~~a ~~0.425%~~timely ~~for~~basis ~~each~~had ~~five~~resulted ~~day~~in ~~period~~an ~~thereafter~~Event ~~until~~of ~~the~~Default, ~~invoice~~as isdefined, ~~paid. The~~under ~~Company~~a iscertain ~~able~~security topurchase ~~receive~~agreement, ~~80% of~~which ~~any~~was ~~invoices~~not ~~factored~~cured within to the ~~lender.~~5-day Asperiod ofallowed. ~~September~~See ~~23,~~Note ~~2012,~~5 ~~the~~– ~~outstanding~~Related ~~balance~~Party isDebt ~~zero.~~and ~~The~~Other ~~loan~~Borrowings isfor ~~not~~a ~~convertible into~~further ~~any Company securities~~description.

~~In March 2011~~Furthermore, the Company ~~entered~~failed ~~into~~to make a ~~receivables~~payment ~~financing~~of ~~agreement~~principal ~~with~~and ~~Evan~~interest ~~Auld-Susott,~~to ~~the~~a ~~Company’s~~creditor ~~former~~due ~~Chief~~on ~~Executive~~August ~~Officer~~1, as2013, ~~agent~~which offailure ~~the~~constituted ~~Susott Family~~a ~~Limited~~default ~~Partnership~~under ~~(FLP). Under~~ the ~~terms~~note ~~of the~~ agreement~~, Mr~~. ~~Auld-Susott agreed to finance specific accounts receivable~~ ~~under~~See aNote ~~line~~5 of– ~~credit~~Related ~~for~~Party upDebt ~~to $500,000 at an interest rate of 13 percent. As of September 23, 2012, the outstanding balance is $190,000~~ and ~~the~~Other ~~accrued~~Borrowings ~~interest~~for ~~balance~~a isfurther ~~$24,323~~description. ~~The loan is not convertible into any Company securities.~~

On December 29, 2011, the Company entered into a Loan Agreement with Trevor Foster pursuant to which the Company borrowed One Hundred Thousand Dollars ($100,000) from Mr. Foster in exchange for a promissory note in the principal amount of One Hundred Thousand Dollars ($100,000). The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning March 31, 2012. The note is unsecured. On May 7, 2012 an amendment was made to the Loan Agreement that permits Mr. Foster to convert the entire principal loan balance into Company common stock at a conversion price equal to $.10 per share. As of September 23, 2012, the outstanding balance of the loan is $100,000 and the accrued interest balance is $5,221.

Horne International, Inc.

Notes to Consolidated Financial Statements (Unaudited)

On December 29, 2011, the Company entered into a Loan Agreement with Darryl K. Horne, the Company’s President and Interim Chief Executive Officer, pursuant to which the Company borrowed Fifty Thousand Dollars ($50,000) from Mr. Horne in exchange for a Promissory Note in the principal amount of Fifty Thousand Dollars ($50,000). The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning March 31, 2012. The note is unsecured. On May 7, 2012 an amendment was made to the Loan Agreement that permits Mr. Horne to convert the entire principal loan balance into Company common stock at a conversion price equal to $.10 per share. As of September 23, 2012, the outstanding balance is $50,000 and the accrued interest balance is $2,610.48.

On January 3, 2012, 91 Hill, LLC, an entity affiliated with Evan Auld-Susott, the Company’s former Chief Executive Officer, exercised 500,000 of its stock options at the exercise price of $0.10 per share, and received 500,000 shares of the Company common stock.

On March 6, 2012, the Company notified Intelligent Decisions, Inc. of the termination of the Stock Option Agreement and Restricted Stock Agreement between the Company and Intelligent Decisions. The Company cancelled 4,166,667 options associated with the agreements. As of June 24, 2012, the Company cancelled the remaining 4,166,667 options of stock associated with the agreement. This action has resulted in the possibility of a contingent liability and pending litigation. See Note 9 – Contingent Liabilities below.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

~~The~~Prior ~~consolidated~~to ~~financial~~the ~~statements~~end of ~~Horne~~ ~~International~~fiscal year 2012, ~~Inc~~the fiscal year for the Company was either a 52-or 53-week period ending on the last Sunday in each December. ~~include~~Effective ~~accounts~~December of31, 2012, the Company ~~and~~changed to a calendar year basis for its ~~wholly-owned~~fiscal ~~subsidiaries~~year and quarterly reporting. ~~Intercompany~~Accordingly, ~~transactions~~the ~~and~~end ~~balances~~of the second ~~are~~quarter ~~eliminated~~of infiscal ~~consolidation~~2013 was June 30, 2013.

The ~~accompanying unaudited~~ consolidated financial statements ~~for the nine month periods ended September 23, 2012, and September 25, 2011 have been prepared in accordance~~include ~~with accounting principles generally accepted in~~ the ~~United~~accounts ~~States~~ of ~~America~~Horne ~~for interim financial information~~ and ~~pursuant~~its ~~to the rules and regulations of the Securities and Exchange Commission for Form 10-Q and Rule 8-03 of Regulation S-X~~subsidiaries. ~~Accordingly, they~~All dosignificant ~~not~~intercompany ~~include~~accounts ~~all of the information~~ and ~~disclosures~~transactions ~~required~~have bybeen ~~generally accepted accounting principles for complete financial statements~~eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation of the Company's financial position, results of operations, and cash flows as of and for the periods presented.

The results of operations for the nine month period ended September 23, 2012 are not necessarily indicative of the results that may be expected for the year. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2011.6

Horne International, Inc.

Notes to Consolidated Financial Statements

For the Six Months Ended June 30, 2013 and June 24, 2012

The accompanying unaudited consolidated financial statements for the six-month periods ended June 30, 2013, and June 24, 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation of the Company's financial position, results of operations, and cash flows as of and for the periods presented.

The results of operations for the three and six month periods ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Revenue Recognition

~~Revenues~~Historically, revenues ~~are~~have been derived from three sources:

(i) Government ~~Contracts~~and ~~Services~~private sector service fees, ~~related~~under tocontracts for professional services and reimbursable travel and training. Revenues from cost reimbursable contracts are recorded as reimbursable costs are incurred, including an estimated share of the applicable contractual fees earned. For performance-based fees under cost reimbursable contracts, we recognize the relevant portion of the expected fee to be awarded by the client at the time such fee can be reasonably estimated, based on factors such as prior award experience and communications with the client regarding performance. For cost reimbursable contracts with performance-based fee incentives, we recognize the relevant portion of the fee upon customer approval. For time-and-materials contracts, revenue is recognized based on billable rates times hours delivered plus materials and other reimbursable costs incurred.

(ii)

License, installation and maintenance fees, as an agent of implementation of network services. We recognize revenue on a net basis excluding taxes collected from customers and remitted to government authorities.

(iii)

Reselling of hosted module leased equipment to retain ownership. Revenue is recognized once delivery has occurred.

In all cases, revenue is only recognized when persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred or services have been rendered, and collection of the resulting receivable is reasonably assured.

Use of Estimates

The preparation of the consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, results could differ from those estimates and assumptions.

Significant Customers and Credit Risks

Due to the nature of the Company’s business and the relative size of certain contracts, it is not unusual for a significant customer in one year to be insignificant in the next. However, it is possible that the loss of any single significant customer could have a material adverse effect on the Company’s results from operations. The Company’s primary customers are government entities. In December 2012, the Company was notified that one of its two principal contracts would not be renewed, while the second one ended as of December 31, 2012. These two contracts represented approximately 84% of the Company’s 2012 revenues, causing a significant loss of future revenue. For the six months ended June 30, 2013, the Company added no significant customers in terms of revenue contribution.

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

~~(iii)~~For ~~Reselling~~the ofSix ~~hosted~~Months ~~module~~Ended ~~leased~~June ~~equipment~~30, to2013 ~~retain~~and June ~~ownership.~~24, ~~Revenue is recognized once delivery has occurred.~~2012

InConcentration ~~all cases, revenue is only recognized when persuasive evidence~~ of anCredit arrangement exists, the price is fixed and determinable, delivery has occurred or services have been rendered, and collection of the resulting receivable is reasonably assured. The Company estimates an allowance for services provided.Risk

As of June 30, 2013, the Company had one customer that accounted for approximately 89% of its accounts receivable. As of December 31, 2012, the Company had one customer that accounted for approximately 82% of its receivables, net.

In determining the allowance for doubtful accounts, the Company analyzes the aging of the accounts receivable, historical bad debts, customer creditworthiness, and specific situations involving its customers. As the majority of the Company’s work is government related, the risk of uncollectible debt is greatly reduced. The Company records specific bad debt reserves when it considers its ability to collect an amount to be in doubt.

Property and Equipment

All property and equipment are carried at their cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the underlying assets. The lives have historically ranged from 3 to 10 years depending on asset type. Routine maintenance and repairs are expensed as incurred. Major replacements and improvements are capitalized. Leasehold improvements are amortized over the shorter of their useful life or the lease term.

Income Taxes

The Company accounts for income taxes utilizing the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax ~~basis~~bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company adopted Accounting Standards Codification topic 740, subtopic 10 on January 1, 2007, which requires financial statement benefits to be recognized for positions taken for tax return purposes when it is more-likely-than-not that the position will be sustained. There has been no change in our financial position and results of operation due to the adoption of this standard.

The Company currently has a net operating loss carry forward of approximately $5556.9 million at ~~September~~June 2330, ~~2012~~2013. The Company has not recorded ~~any~~this ~~related~~ federal tax benefit in the accompanying consolidated financial statements, due to the possibility that the net operating loss carry forward may not be utilized, for various reasons, particularly including the potential that the Company might not have sufficient profits toin future years to use all or a portion of the carry forward , or the carry forward may be limited as a result of changes in the Company’s equity ownership. The Company adopted Accounting Standards Codification topic 740, subtopic 10 on January 1, 2007, which requires financial statement benefits to be recognized for positions taken for tax return purposes when it is more-likely-than-not that the position will be sustained. There has been no change in our financial position and results of operation due to the adoption of this standard.

Loss Per Share

Basic loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted loss per share is computed in a manner consistent with that of basic loss per share while giving effect to the impact of common stock equivalents. The Company’s common stock equivalents consist of employee, director, and consultant stock options to purchase common stock. Common stock equivalents of 2435,~~960,380,~~001 and 73,~~654~~080,~~600~~380 were not included in the computation of diluted (loss) ~~income~~ per share for the ~~nine~~six months ended ~~September 23,~~June ~~2012~~30, 2013 and ~~September~~June 2524, ~~2011~~2012, respectively, as the inclusion of these common stock equivalents would ~~have~~be ~~been~~ anti-dilutive as the Company is in a net loss position and including such shares would reduce the net loss per share.

Stock-based Compensation

The fair values of stock option awards are determined using the Black-Sholes option pricing model. The compensation expense is recognized on a straight-line basis over the vesting period. The Company, beginning in 2006, has included a vesting period for most options granted. See Note 7 for a detailed discussion of the Company’s stock option plan. The Company accounts for stock incentive plans by measurement and recognition of compensation expense for all share-based awards on estimated fair values, net of estimated and actual forfeitures, on a straight line basis over the period during which the employee is required to provide services in exchange for the award.

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued expenses approximates fair value because of the short-term nature of those instruments. The carrying amount and fair market value of the Company’s short-term investments are the same since short-term investments are recorded at fair value. Debt is recorded at the cash settlement value of the underlying notes and is not revalued.

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

~~Use~~For ofthe ~~Estimates~~Six Months Ended June 30, 2013 and June 24, 2012

~~The~~Foreign ~~preparation~~Currency of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, results could differ from those estimates and assumptions.Translation

The Company’s functional currency is the U.S. dollar.

Stock-Based Compensation

Recent Accounting Pronouncements

Management does not believe that any recent adopted or proposed accounting pronouncements will have a material effect on ~~the~~their ~~Company’s consolidated~~ financial statements.

3. RECEIVABLES, NET (in thousands)

Receivables, net primarily comprise of amounts due to the Company for work performed on contracts directly related to commercial and government customers. The Company has a nominal bad debt reserve as most of our contracts are with governmental entities.

Unbilled receivables represent recoverable costs and estimated earnings consisting principally of contract revenues that have been recognized for accounting purposes but are not yet billable to the customer based upon the respective contract terms.

	June 30,			December 31,
	2013			2012
Receivables, net
Billed	$	119		$	291
Unbilled		925			917
Allowance for uncollectable account		(11	)		(92	)
Total Receivables, Net	$	1,033		$	1,116

4. Property and equipment (in thousands)

	June 30,			December 31,
	2013			2012
Property and Equipment
Buildings and Improvements	$	18		$	18
Furniture and Fixtures		35			35
Office Equipment		117			117
Total	$	170		$	170
Accumulated Depreciation		(170	)		(164	)
Property and Equipment, net	$	-		$	6

5. RELATED PARTY DEBT AND OTHER BORROWINGS

The Company’s borrowings, consisting of related party receivable financing, unsecured notes, and other borrowings net of discount, were approximately $1,523,000 as of June 30, 2013 and 1,069,000 as of December 31, 2012. The rates on the related party notes are 13%, 7% and 8%.

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

~~3. RECEIVABLES~~For the ~~(000’s)~~Six Months Ended June 30, 2013 and June 24, 2012

Receivables primarily comprise of amounts due to the Company for work performed on contracts directly related to commercial and government customers. The Company has a nominal bad debt reserve as most of our contracts are with governmental entities.

	September 23,			December 25,
Accounts Receivable	2012			2011
Billed	$	483		$	752
Unbilled		497			349
Allowance for uncollectable account		(92	)		(1	)
Total Accounts Receivable, Net	$	888		$	1,100

4. Property and equipment (000’s)

	September 23,			December 25,
	2012			2011
Buildings and Improvements	$	5		$	5
Furniture and Fixtures		11			11
Office Equipment		304			304
Total	$	320		$	320
Accumulated Depreciation		(311	)		(288	)
Property and Equipment, net	$	9		$	32

5. DEBT ReLated Party AND OTHER BORROWINGS

The Company’s borrowings, consisting of related party receivable financing, unsecured notes, and other borrowings net of discount, were approximately $792,000 as of September 23, 2012 and $479,000 as of December 25, 2011. The rates on the related party notes are 13%, 7% and 8%.

Darryl Horne Notes

During 2008, the Company entered into a ~~loan~~an ~~agreement~~initial Loan Agreement with Darryl K. Horne, the Company’s ~~President~~Founder and ~~Interim~~current ~~Chief Executive Officer~~Chairman. The ~~agreement~~Loan Agreement permitted the Company to borrow up to $525,000 at an 8% interest ~~rate~~. ~~The~~On ~~interest~~January is15, ~~payable~~2013, ~~quarterly~~the ~~beginning~~Loan inAgreement ~~July~~was amended to permit borrowing up to $1,000,000. ~~2008~~As of June 30, ~~with~~ 2013, the aggregate outstanding principal ~~payable~~balance ~~upon~~due ~~demand~~to Mr. ~~This~~Horne ~~note~~under isthe ~~unsecured~~Loan Agreement amounts to $980,000 and is ~~not~~comprised ~~convertible~~of ~~into~~11 ~~any~~notes ~~Company~~in ~~securities.~~amounts Asranging offrom ~~September~~$50,000 23to $195,000, ~~2012~~including one note for $25,000 issued in ~~the~~April ~~total~~2013. ~~outstanding~~The ~~balance~~interest rate on such notes is 8%. Further, one additional note with Mr. Horne in the amount of $~~493~~50,~~507~~000, ~~and~~with an interest rate of 7%, is convertible into Company common stock at an exercise price of $.10 per share. The related accrued interest balance at June 30, 2013 for all the aforementioned notes issued to Mr. Horne is 94$149,~~523~~000.

OnEvan ~~December~~Auld-Susott 29, 2011, the Company entered into a Loan Agreement with Mr. Darryl K. Horne, the Company’s President and Interim Chief Executive Officer, pursuant to which the Company borrowed Fifty Thousand Dollars ($50,000) from Mr. Horne in exchange for a promissory note in the principal amount of Fifty Thousand Dollars ($50,000). The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning March 31, 2012. The note is unsecured. The Note has been amended to be convertible into common stock at Mr. Horne’s option at a per share price equal to $.10 per share.

In March 2011, the Company entered into a receivables financing agreement with Evan Auld-Susott, the Company’s former Chief Executive Officer, as agent of the Susott Family Limited Partnership (FLP). Under the terms of the agreement, Mr. Auld-Susott agreed to finance specific accounts receivable under a line of credit for up to $500,000 at an interest rate of 13%. As of June 30, 2013, the outstanding balance is $209,000 and the accrued interest balance is $43,000. The loan is not convertible into any of the Company’s equity securities.

Trevor Foster Note

On December 29, 2011, the Company entered into a Loan Agreement with Trevor Foster pursuant to which the Company borrowed $100,000 from Mr. Foster in exchange for a promissory note. The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning June 30, 2012. No such principal and interest payments have been made by the Company. The note is unsecured. On May 7, 2012 an amendment was made to the Loan Agreement that permits Mr. Foster to convert the entire principal loan balance into Company common stock at a conversion price equal to $.10 per share. As of June 30, 2013, the outstanding balance of the loan is $100,000 and the accrued interest balance is $11,000.

Other Borrowings

On February 19, 2013, the Company entered into a security purchase agreement with Asher Enterprises, Inc. (“Asher”). The Company issued a convertible note with a principal amount of $58,000 and maturity date of November 21, 2013. The note bears interest of 8%, payable at maturity, or earlier in the event of prepayment, and is convertible into common stock at a Variable Conversion Price of 58% multiplied by the Market Price. The Market Price is defined as the average of the lowest three trading prices during a ten day period prior to conversion. The issuance of the Note was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. The Company had the right to prepay the obligation at any time prior to August 18, 2013 with a payment of principal, a premium ranging up to 44% of principal and accrued and unpaid interest.

On May 21, 2013, the Company received notification that its failure to file this Form 10-Q for the quarter ended June 30, 2013 with the Securities & Exchange Commission (“SEC”) on a timely basis had resulted in an Event of Default, as defined, under the security purchase agreement with Asher, which was not cured within the 5-day period allowed. Accordingly, in accordance with the terms of the convertible note, the principal amount increased to 150% of the original note amount, or $87,000 (“Default Amount”), the interest rate of 8% increased to a default interest rate of 22%, and the obligation of $87,000 and accrued interest thereon became payable on demand and convertible upon the sole election of Asher. Until such time as this Form 10-Q for the quarter ended June 30, 2013 is filed with the SEC, the obligation remains payable upon demand.

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

~~Evan~~For ~~Auld-Susott~~the ~~Notes~~Six Months Ended June 30, 2013 and June 24, 2012

InThe ~~March~~convertible notes ~~2011~~of $50,000, ~~the~~$100,000 ~~Company~~and ~~entered~~$58,000 ~~into a~~issued ~~receivables~~to ~~financing~~Mr. ~~agreement~~Horne, ~~with~~Mr. ~~Evan~~Foster ~~Auld-Susott~~and Asher, ~~the~~respectfully, ~~Company’s~~contain ~~former~~a ~~Chief~~"beneficial ~~Executive~~conversion" feature ~~Officer~~that required separate recognition, asat ~~agent~~issuance, of ~~the~~a ~~Susott Family~~portion ~~Limited~~of ~~Partnership.~~the ~~Under~~proceeds equal to the ~~terms~~intrinsic value of the ~~agreement,~~feature as ~~Mr.~~additional ~~Auld~~paid-~~Susott~~in-capital. ~~agreed~~This to"discount" ~~finance~~is ~~specific~~being ~~accounts~~amortized ~~receivable~~using ~~under a~~the ~~line~~effective ofinterest ~~credit~~method ~~for~~through upa charge to ~~$500,000~~interest atexpense anover ~~interest~~the ~~rate~~term of ~~13%~~the notes. The ~~outstanding~~notes ~~balance~~with Mr. Horne and ~~accrued~~Mr. ~~interest~~Foster isare ~~$190,000~~convertible ~~and~~into ~~$24~~up to 1,~~323~~500,000 shares ~~respectively,~~of ascommon stock. The maximum number of ~~September~~shares ~~23,~~into ~~2012.~~which ~~The~~the ~~receivable~~note with Asher could be converted is not ~~convertible~~quantifiable ~~into~~as ~~any~~the Variable ~~Company~~Conversion ~~securities~~Price is unknown.

~~Other~~On ~~Borrowings~~March 12, 2013, the Company entered into a note agreement with a creditor to finance an outstanding liability in the amount of $153,498. Monthly principal payments in the amount of $25,583 plus interest of 6% are scheduled to begin August 1, 2013 with a final balloon payment of $51,166 to be made on December 1, 2013. The Company did not make the August 1, 2013 principal and interest payment; accordingly, this note is in default. See Note 9 – Subsequent Events.

On December 29, 2011, the Company entered into a Loan Agreement with Trevor Foster pursuant to which the Company borrowed one hundred thousand dollars ($100,000) from Mr. Foster in exchange for a promissory note in the principal amount of one hundred thousand dollars ($100,000). The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning March 31, 2012. The note is unsecured. In May 2012 the note was amended to be payable, at the option of Mr. Foster, by conversion into common stock at a per share price equal to $.10 per share. Mr. Foster has agreed to defer the quarterly payments. As of September 23, 2012, the outstanding balance of the loan is $100,000 and the interest balance is $5,221.

The convertible notes issued to Mr. Horne and Mr. Foster contain a "beneficial conversion" feature that required separate recognition, at issuance, of a portion of the proceeds equal to the intrinsic value of the feature as additional paid-in-capital. This "discount" is being amortized using the effective interest method through a charge to interest expense over the term of the notes. The notes are convertible into 1,500,000 shares of common stock.

Line of Credit

In April 2011, the Company entered into a financing agreement with United Capital Funding under which the Company iscan ~~able~~elect to factor certain eligible accounts receivable. The Company is able to receive up to 85 percent of the amount of any invoices factored to the lender. The agreement calls for a minimum factoring fee of 4.25% for the first five days and 4.25% for each additional five day period. At June 30, 2013, the amount borrowed and payable under this facility is $0.

7. common stock and STock Option plan

On March 22, 2010, the Company entered into a strategic partnership and related Stock Option Agreement and Restricted Stock Agreement with Intelligent Decisions, Inc. (“Intelligent”). Intelligent is an information technology services company headquartered in Ashburn, Virginia, servicing both commercial and government customers. The ~~agreement~~partnership between the parties ~~provide~~provides for Intelligent to provide business support services to the Company. On March 6, 2012, the Company notified Intelligent ~~Decisions, Inc.~~ of the termination of ~~the~~a Stock Option Agreement and Restricted Stock Agreement between the ~~Company and~~two parties which pertained to certain Business Services, as defined, that Intelligent ~~Decisions~~is to ~~and~~provide to the Company as requested. The Company unilaterally cancelled 4,166,667 options associated with the agreements. AsFurther, as of June 24, 2012, the Company unilaterally cancelled the remaining 4,166,667 options of stock associated with the ~~agreements~~agreement. As ~~This~~a ~~has~~result ~~resulted~~of inthese actions the Company faced the possibility of a contingent liability and ~~legal~~pending litigation. ~~See~~The ~~Note~~Company 9is –currently ~~Commitments~~in ~~and~~negotiations ~~Contingent~~with ~~Liabilities~~Intelligent ~~below~~to resolve this matter.

On January 3, 2012, 91 Hill, LLC, ~~Evan~~an entity owned by Darryl Horne , the Company’s Chairman, and an affiliate of Evan Auld-Susott, the Company’s former Chief Executive Officer, exercised 500,000 shares of its stock ~~options~~option to purchase up to 2,000,000 common shares at the exercise price of $0.10 per share,. ~~and~~Such ~~received~~shares ~~500,000~~were ~~shares~~sold in May 2013. The remainder of the ~~Company~~option to purchase 1,500,000 common ~~stock~~shares expired on December 31, 2012.

The Company has a stock option plan available to eligible employees, non-employee directors, consultants and advisors to acquire proprietary interests in the Company by providing eligible persons an additional incentive to promote the success of the Company as deemed appropriate by senior management. This is accomplished by providing for the granting of Non-Statutory Stock Options to employees, non-employee directors, consultants and advisors. During the ~~first~~six ~~nine~~ months ofended ~~2012~~June 30, 2013, the Company did not make any option grants.

The fair values of stock option awards are determined using the Black-Sholes option pricing model. The related compensation expense is recognized on a straight-line basis ~~over~~ over the vesting period. The Company, beginning in 2006, has ~~included~~provided for a vesting period for most options granted.

The table below summarizes our stock option activity during the ~~nine~~six months ended ~~September~~June 2330, ~~2012~~2013.

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Life (yrs)		Aggregate Intrinsic Value
Options Outstanding 12/25/2011		7,799,660		$	0.12		3.52	$	226,666
Granted		-
Exercised		(500,000	)	$	0.10
Cancelled		(4,339,280	)	$	0.09
Options Outstanding 9/23/2012		2,960,380		$	0.15		0.93	$	0
Options Exercisable 9/23/2012		1,975,043		$	0.12		0.58	$	0

For the Six Months Ended June 30, 2013 and June 24, 2012

8. Discontinued Operations

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Life (yrs)		Aggregate Intrinsic Value
Options Outstanding 12/31/2012		566,790		$	0.22		1.30	$	0
Granted		-
Exercised		-
Forfeited		(131,789	)	$	0.25
Options Outstanding 06/30/2013		435,001		$	0.21		0.80	$	0
Options Exercisable 06/30/2013		208,916		$	0.22		0.71	$	0

~~The Company made the strategic decision to close operations of its Spectrum Sciences and Software, Inc~~8. ~~(SSSI)~~COMMITMENTS inAND ~~early 2008.~~CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases office space at one location in the United States. Rent expense totaled approximately $~~102~~72,~~283~~000 and $7369,~~000~~500 for the ~~nine~~six ~~months~~month periods ending ~~September~~June 2330, ~~2012~~2013 and ~~September~~June 2524, ~~2011~~2012, respectively. The ~~Company~~lease ~~also~~termination ~~enters~~date ~~into~~of ~~various~~August ~~other~~31, ~~non-cancellable~~2013 ~~leases~~ for this office ~~equipment~~space was renegotiated to terminate ~~and~~June ~~vehicles~~30, as2013 ~~necessary~~after which the Company will rent a reduced amount of space on a month to month basis.

The table below summarizes our future annual minimum lease payments under non-cancellable agreements with an initial term of greater than one year at inception. (000’s)

		2012				2013				2014
Operating Leases		$	34			$	90			$	-

Capital Leases

The Company updated its corporate office phone system in March 2010. The Company entered into a three-year lease agreement with a $1 buyout option for the phone system with AVAYA Financial Services. This lease requires a monthly payment of $1,010 plus all applicable taxes.

The table below summarizes our future annual minimum lease payments under this non-cancellable agreement with an initial term of greater than one year at inception. (000’s)

		2012				2013				2014
Capital Leases		$	3			$	3			$	-

Contingent Liabilities

The Company, through its Horne Engineering Services subsidiary, was a member of Weskem, LLC a ~~limited liability~~ company that specialized in environmental remediation. In 2011 the Company received notice of an outstanding legal liability of $10,000 associated with ~~the~~activities ~~investment~~of Weskem. There may be future liabilities but at this time such liabilities are not quantifiable.

SUBSEQUENT EVENT

The Company failed to make a payment of principal and interest to a creditor due on August 1, 2013, which failure constituted a default under the note agreement.

Horne International, Inc.

Notes to Consolidated Financial Statements ~~(Unaudited)~~

OnFor ~~March 6, 2012,~~ the ~~Company~~Six ~~notified Intelligent~~Months ~~Decisions,~~Ended ~~Inc.~~June ~~of the termination of the Stock Option Agreement and Restricted Stock Agreement between the Company and Intelligent Decisions~~30, ~~Inc.~~2013 ~~The Company has terminated 8,333,333 stock options associated with this agreement in 2011~~ and ~~2012.~~ ~~The~~June ~~Company is also disputing invoices in the amount of $36~~24,~~000,~~ ~~under the terms of the Agreement, which payments by the Company are made in restricted common stock of the Company, equals 400,000 shares of restricted stock. In~~ 2012 ~~the Company received a letter from Intelligent Decisions counsel disputing the Company’s right to terminate the Agreement and the stock options.~~

10. SUBSEQUENT EVENTS

Management has evaluated all events that occurred after the balance sheet date through the date when these financial statements were issued and determined that the following subsequent event was required to be disclosed:

On December 19, 2012, the company through its Horne Engineering Services subsidiary was notified of the failure to win a re-compete on a prime government contract, U.S. Army Procurement to Support Regional Environmental and Energy Offices (REEOs) W91WAW-08-C0012, expiring on December 14, 2012, with an estimated $1.3 million in revenue.

Horne International, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. MANAGEMENT’S DISCUSSION AND analysis of financial condition and results of operations

The following discussion provides information which management believes is relevant to an assessment and an understanding of the Company’s operations and financial condition. This discussion should be read in conjunction with the attached unaudited consolidated financial statements and accompanying notes as well as our annual report on Form 10-K for the fiscal year ended December 2531, ~~2011~~2012.

FORWARD-LOOKING STATEMENTS

The matters discussed in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, activity levels, performance or achievements to be materially different from any future results, activity levels, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “could”, “expect”, “estimate”, “may”, “potential”, “will”, and “would”, or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to predict or control accurately. The factors listed in the section captioned “Risk Factors,” contained in our Annual Report of Form 10-K for the fiscal year ended December 2531, ~~2011~~2013, as well as any cautionary language in this Form 10-Q, provide examples of risks, uncertainties, and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, activity levels, performance or achievements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-Q. Subsequent events and developments may cause our views to change. While we may elect to update the forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

Description of the Company

The Company provides a variety of services through its wholly-owned subsidiaries; Horne Engineering Services LLC, Hornet LLC, and BEES LLC.

Horne Engineering Services, LLC, focuses on providing program engineering, energy solutions, occupational safety and health, environmental sciences, acquisition and procurement, business process engineering, public outreach, and product solutions. Our primary customer in this segment is the U.S. Government, with specific focus within the Departments of Homeland Security, Defense, Transportation and other civilian agencies.

On February 6, 2012 the Company incorporated Hornet, LLC. The Company focuses on cloud based technology, by providing hosted voice services, application and infrastructure management, and security solutions with the anticipation of having both Government and Commercial accounts.

On February 6, 2012, the Company incorporated BEES, LLC to expand its current Efficiency Solutions business. The Company expects that BEES, LLC will provide services to maximize building energy efficiency with a focus on Commercial and Government customers. As of June 30, 2013, BEES LLC did not have any business operations.

As of September 23, 2012, BEES, LLC did not have any business operations.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly in deciding how to allocate resources and in assessing performance.

1413

Horne International, Inc.

~~Management's~~Notes ~~Discussion~~to ~~and~~Consolidated ~~Analysis of~~ Financial ~~Condition and Results of Operations~~Statements

For the Six Months Ended June 30, 2013 and June 24, 2012

Critical Accounting Policies and estimates

In our Form 10-K for the fiscal year ended December 2531, ~~2011~~2012, our most critical accounting policies and estimates upon which our financial status depends were identified as those relating to revenue recognition, stock-based compensation, and net operating losses and tax credit carryforwards~~, and impairment of long-lived assets~~. We reviewed our policies and determined that those policies remain our most critical accounting policies for the ~~nine~~six months ended ~~September~~June 2330, ~~2012~~ 2013.

Comparison of THREE Months Ended ~~September~~June 2330, ~~2012,~~2013 and ~~September~~JUNE 2524, ~~2011~~2012

The following discussion and analysis should be read in conjunction with the unaudited financial statements (and notes thereto) and other financial information of the Company appearing elsewhere in this report.

Consolidated Overview (~~000’s~~in thousands)

	September 23, 2012					September 25, 2011
	Three Months Ended
Total revenue	$	1,001		100.0	%	$	1,469		100.0	%
	June 30, 2013					June 24, 2012
Gross profit		158		15.8	%		130		8.8	%
Revenue	$	25		100.0	%	$	974		100.0	%
Operating loss	$	(330	)	-33.0	%		(303	)	-20.6	%
Gross profit		3		12.0	%		147		15.1	%
Net operating loss	$	(117	)	(468.0	)%		(359	)	(36.9	)%

Revenue for the quarter ended ~~September~~June 30, 232013, ~~2012,~~ decreased byto ~~approximately~~ $~~469~~25,000, asfrom ~~compared~~$974,000 toin the quarter ended ~~September~~June 2524, ~~2011~~2012, a decrease of approximately $949,000. The ~~main~~principal reason ~~driver~~for ofthe ~~revenue~~ decrease was athe ~~decline~~termination of the Company’s two major contracts in ~~task~~effect ~~orders~~in ~~under~~2012, ~~our~~with ~~Army~~no ~~Corps~~new ofcontracts entered ~~Engineers~~into ~~(ACE)~~in ~~contract.~~the ~~Gross~~quarter ~~profit~~ended June 30, 2013, nor in the prior quarter, as anew ~~percentage~~sources of revenue ~~increased~~. ~~due~~Gross profit decreased due to athe substantial decrease in ~~low~~revenue. ~~margin~~Compared ~~deliverables~~to ~~offset~~the byfirst ~~higher~~quarter ~~margin~~of ~~contracts.~~2012, ~~The~~the ~~overall~~lower operating loss ~~increased~~ in the ~~third~~current quarter is ofprincipally ~~2012~~due ~~compared~~ to ~~the~~a ~~second~~significant ~~quarter~~decrease ofin ~~2011~~general ~~primarily~~and ~~due~~administrative expenses to $121,000 in the ~~costs~~current ~~associated~~period ~~with~~from ~~investments~~$506,000 in the year ago period, or $385,000, partially offset by a $144,000 reduction in ~~new~~gross profit that resulted from the decrease in ~~business~~revenue. ~~areas~~The decrease in general and administrative expenses was principally the result of lower compensation and related costs.

Comparison of ~~Nine~~SIX Months Ended ~~September~~JUNE 2330, ~~2012,~~2013 ~~and~~AND ~~September~~JUNE 2524, ~~2011~~2012

Consolidated Overview (~~000’s~~in thousands)

	September 23, 2012					September 25, 2011
	Six months ended
Total revenue	$	3,405		100.0	%	$	3,812		100.0	%
	June 30, 2013					June 24, 2012
Gross profit		458		13.5	%		439		11.5	%
Total revenue	$	50		100.0	%	$	2,404		100.0	%
Operating loss		(974	)	-28.6	%		(864	)	-22.7	%
Gross profit		(14	)	(28.0	)%		300		11.5	%
Operating loss		(388	)	(776.0	)%		(644	)	(22.7	)%

Revenue for the ~~nine~~six months ended ~~September~~June 30, 232013, ~~2012,~~ decreased byto ~~approximately~~ $~~408~~50,000, asfrom ~~compared~~$2,404,000 toin the ~~nine~~six months ended ~~September~~June 2524, ~~2011~~2012, a decrease of $2,354,000. The ~~main~~principal ~~driver~~reason for ofthe ~~revenue~~ decrease was the ~~task~~termination ~~orders~~of ~~revenue~~the ~~under~~Company’s ~~our~~two ~~Army~~major ~~Corps~~contracts ofin ~~Engineers~~effect ~~(ACE)~~in ~~contract~~2012, with no new contracts entered into in the ~~first~~six ~~quarter~~months ~~2012.~~ended ~~Gross~~June ~~profit~~30, 2013, as a ~~percentage~~new sources of revenue. ~~increased~~Gross profit decreased due to athe substantial decrease in revenue. ~~low~~Compared ~~margin~~to ~~deliverables.~~the ~~The~~first ~~overall~~six months of 2012, the lower operating loss ~~increased~~ in the ~~first~~current quarter is principally due to a significant ~~nine~~decrease ~~months~~in ofgeneral ~~2012~~and ~~compared~~administrative expenses to $375,000 in the ~~first~~current ~~nine~~period ~~months~~from of$944,000 ~~2011~~in ~~primarily~~the ~~due~~year toago ~~increased~~period, ~~stock~~or ~~option~~$569,000, partially ~~expense~~offset ~~and~~by ~~low~~a ~~margin~~$314,000 ~~revenues~~ reduction in ~~third~~gross ~~quarter~~profit ~~2012~~that ~~and~~resulted ~~investments~~from the decrease in ~~new~~revenue. ~~business~~The ~~areas~~decrease in general and administrative expenses was principally the result of lower compensation and related costs.

~~Discontinued Operations~~14

~~Discontinued~~Horne ~~operations include the results of Spectrum Sciences & Software~~International, Inc. ~~subsidiary that was closed in June 2008.~~

Notes to Consolidated Financial Statements

For the Six Months Ended June 30, 2013 and June 24, 2012

Liquidity and Capital Resources

~~Cash~~The ~~totaled~~cash ~~approximately~~balance ~~$44,000~~ at ~~September 23~~June 30, ~~2012.~~2013 was $1,000. During the ~~nine~~six months ended ~~September~~June 2330, ~~2012~~2013 cash decreased by ~~approximately~~ $~~108~~7,000 ofprincipally ~~cash predominantly~~ due to ~~$795,~~ ~~000~~the ~~used~~operating inloss ~~operations~~sustained of $388,000, offset by net collections of $~~685~~164,000 ~~provided~~on byreceivable, net, and a net increase in debt financing ~~activities~~of $149,000.

The Company’s independent registered public accountants stated in their report on the consolidated financial statements of the Company for the year ended December 31, 2012, that the Company has had recurring operating losses that raise substantial doubt about its ability to continue as a going concern. For the six months ended June 30, 2012, the Company experienced a major decrease in revenue, incurred a net loss of $531,000 and had a stockholders’ deficit of $2,505,000 million as of that date.

The consolidated financial statements presented above and the accompanying Notes have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of any extraordinary regulatory action, which would affect our ability to continue as a going concern.

Due to the conditions and events discussed above, there is substantial doubt about the Company’s ability to continue as a going concern.

The Company is dependent upon available cash and operating cash flow in addition to financing cash inflows to meet its working capital needs. The Company is considering strategic options to generate revenue and thereby improve its liquidity and provide it with working capital to fund its continuing business operations, including debt service obligations, which includes developing new business opportunities to generate revenue, equity offerings and debt financings from related parties and others as alternatives to improve its cash requirements.

The Company anticipates that its future funding sources would primarily be in the form of notes from related parties or non-traditional, non-banking sources or equity financings. Given our past financial performance, the costs and fees associated with funding sources may be more expensive than the Company has historically paid.

The Company has no present binding commitments for additional financing. There is no guarantee that such additional financing will be available to the Company on commercially reasonable terms, or at all.

Horne International, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

In February 2011, the Company entered into a financing agreement with United Capital Funding Corporation under which the Company is able to factor certain eligible accounts receivable. The agreement calls for a minimum fee of 4.25% of the invoice amount for the first five day period and an additional 4.25% for each five day period thereafter until the invoice is paid. The Company is able to receive 80% of any invoices factored to the lender. As of September 23, 2012, the outstanding balance was zero.

During 2008, the Company entered into a loan agreement with Darryl K. Horne, the Company’s President and Interim Chief Executive Officer. The loan permitted the Company to borrow up to $525,000 at 8% interest.

On December 29, 2011, the Company entered into a Loan Agreement with Mr. Darryl K. Horne, the Company’s President and Interim Chief Executive Officer, pursuant to which the Company borrowed Fifty Thousand Dollars ($50,000) from Mr. Horne in exchange for a promissory note in the principal amount of Fifty Thousand Dollars ($50,000). The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning March 31, 2012. The note is unsecured. The Note has been amended to be convertible into common stock at Mr. Horne’s option at a per share price equal to $.10 per share.

As of September 23, 2012, the aggregate outstanding principal balance to Mr. Horne is $493,507 and the accrued interest is $94,523 for both notes.

In March 2011, the Company entered into a receivables financing agreement with Evan Auld-Susott, the Company’s former Chief Executive Officer, as agent of the Susott Family Limited Partnership (FLP). Under the terms of the agreement, Mr. Auld-Susott agreed to finance specific accounts receivable under a line of credit for up to $500,000 at an interest rate of 13%. As of September 23, 2012, the outstanding balance is $190,000 and interest outstanding is $24,323. The loan is not convertible into any Company securities.

On December 29, 2011, the Company entered into a Loan Agreement with Mr. Trevor Foster pursuant to which the Company borrowed One Hundred Thousand Dollars ($100,000) from Mr. Foster in exchange for a promissory note in the principal amount of One Hundred Thousand Dollars ($100,000). The note is payable on a quarterly basis and fully due and payable December 29, 2013. The Loan Agreement and Promissory Note provide for interest at a rate of 7% per annum on the outstanding principal, payable quarterly beginning March 31, 2012. The note is unsecured. The note has been amended to be payable, at the option of the lender, by conversion into common stock at a per share price equal to $.10 per share. As of September 23, 2012, the outstanding balance is $100,000 and interest of $4,221 and Mr. Foster waived the quarterly payments.

As discussed in our 2010 Form 10-K, the Company has substantial liquidity challenges. While we continue to work towards profitability, there is a significant uncertainty that the Company will have sufficient cash flow to sustain its operations.

The Company continues to pursue additional funding sources in the event that funds from operations and financing are not sufficient to provide for our operations. The Company anticipates that these funding sources would primarily be in the form of notes from related parties or non-traditional, non-banking sources. Given our past financial performance, the costs and fees associated with funding sources may be more expensive than the Company has historically paid. The Company cannot determine if the funds available from operations will be sufficient for any acquisitions or facility expansions that may be undertaken during the year. Should the Company make any acquisitions or expansions, other sources of financing may be required.

The Company has no present commitments for additional financing. There is no guarantee that such additional financing will be available to the Company on commercially reasonable terms or at all.

HORNE INTERNATIONAL, INC.

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk

In addition to the risks inherent in our operations, we are exposed to contractual, financial, market, political and economic risks. The following discussion provides additional detail regarding our exposure to interest rates and foreign exchange rates.

Government Contracts

The funding of U.S. government programs is subject to Congressional appropriations. Although multi-year contracts may be authorized in connection with major procurements, Congress generally appropriates funds on a fiscal-year basis, even though a program may continue for many years. Consequently, programs are often only partially funded initially, and additional funds are committed only as Congress makes further appropriations. Provisions in these contracts permit termination, in whole or in part, without prior notice, at the government’s convenience or upon contractor default under the contract. Compensation in the event of a termination, if any, is limited to work completed at the time of termination. In the event of termination for convenience, the contractor may receive a certain allowance for profit on the work performed.

Foreign Exchange Risk

We currently do not have any foreign currency risk and accordingly, estimate that an immediate 10 percent change in foreign exchange rates would have no impact on our reported ~~net~~results ~~loss~~of operations. We do not currently utilize any derivative financial instruments to hedge foreign currency risks.

1716

Horne International, Inc.

Controls and Procedures

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, management carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15 (e) under the Securities Exchange Act of 1934). In designing and evaluating its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated can provide only reasonable, but not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based upon that evaluation, management concluded that these disclosure controls and procedures were not effective as of the end of the period covered in this report.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing using criteria described in Internal Control-~~integrated~~Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We have identified material weaknesses in our internal control over financial reporting, which, if not remedied effectively, could have an adverse effect on the trading price of our common stock and otherwise seriously harm our business. Management through, in part, the documentation and assessment of our internal control over financial reporting and pursuant to the rules promulgated by the SEC under Section 404 of the Sarbanes-Oxley Act of 2002 and item 308 of Regulation S-K has concluded that our internal control over financial reporting had material weaknesses, as of ~~September~~June 2330, ~~2012~~2013. Management of the Company does not have the ability to effectively and efficiently prepare consolidated ~~financial~~ financial statements in accordance with generally accepted accounting principles or pursuant to the rules and regulations of the ~~Securities~~ Securities and Exchange Commission Form l0-Q. We have taken certain actions to begin to address the material weaknesses. Our inability to to remedy such material weaknesses promptly and effectively could have a material adverse effect on our business, results of operations and financial condition, as well as impair our ability to meet our quarterly and annual reporting requirements in a timely manner.

Changes in Internal Control Over Financial Reporting

During the ~~fiscal~~six ~~quarter~~months ended ~~September 23~~June 30, ~~2012~~2013 there has been no change in our internal control over financial reporting (as defined in ~~Rule~~ rule 13 a-Ii 5(f under the ~~Exchange Act~~exchange act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

1817

Horne International, Inc.

Other Information

PART II - OTHER INFORMATION

ITEM 1.

Item 1A. Risk Factors.

There have been no material changes in our risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 2531, ~~2011~~2012.

1918

Horne International, Inc.

EXHIBITS

ITEM 6. EXHIBITS

Exhibit Number	Description	~~Description~~
3.1	Certificate of Incorporation, filed August 28, 1998 (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).	~~Certificate of Incorporation, filed August 28, 1998 (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).~~
3.2	Certificate of Renewal and Revival, filed March 24, 2003 (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).	Certificate of Renewal and Revival, filed March 24, 2003 (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).
3.3	Certificate of Amendment of Certificate of Incorporation, filed April 8, 2003 (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).	Certificate of Amendment of Certificate of Incorporation, filed April 8, 2003 (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).
3.4	Certificate of Merger filed with the Delaware Secretary of State (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).	Certificate of Merger filed with the Delaware Secretary of State (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).
3.5	Articles of Merger filed with the Florida Secretary of State (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).	Articles of Merger filed with the Florida Secretary of State (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).
3.6	Amended and Restated Bylaws of Spectrum Sciences & Software Holdings Corp., as amended (previously filed on Form 10-Q, filed with the Securities and Exchange Commission on November 14, 2005).	~~Amended and Restated Bylaws of Spectrum Sciences & Software Holdings Corp., as amended (previously filed on Form 10-Q, filed with the Securities and Exchange Commission on November 14, 2005).~~
3.7	Amended and Restated Bylaws of Spectrum Sciences & Software Holdings Corp., as amended (previously filed on Form 8-K, filed with the Securities and Exchange Commission on May 2, 2006).	~~Amended and Restated Bylaws of Spectrum Sciences & Software Holdings Corp., as amended (previously filed on Form 8-K, filed with the Securities and Exchange Commission on May 2, 2006).~~
3.8	Amended Articles of Incorporation of Horne International, Inc. (previously filed on Form 8-K, filed with the Securities and Exchange Commission on September 6, 2006).	~~Amended Articles of Incorporation of Horne International, Inc. (previously filed on Form 8-K, filed with the Securities and Exchange Commission on September 6, 2006).~~
4.1	Specimen Certificate of Common Stock (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).	~~Specimen Certificate of Common Stock (previously filed in registration statement on Form 10-SB File No. 1-31710, filed with the Securities and Exchange Commission on June 10, 2003).~~
10.1	Amended Notes of Darryl K. Horne and Trevor R. Foster (previously filed on Form 8-K, filed with the Securities and Exchange Commission on May 10, 2012).	~~Amended Notes of Darryl K. Horne and Trevor R. Foster (previously filed on Form 8-K, filed with the Securities and Exchange Commission on May 10, 2012).~~
14.1	Code of Ethics (previously filed on Form 10-KSB, filed with the Securities and Exchange Commission on April 13, 2004).	~~Code of Ethics (previously filed on Form 10-KSB, filed with the Securities and Exchange Commission on April 13, 2004).~~
31.1*	Certification of Chief Executive Officer and Interim Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	~~Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer & Interim Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer & Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document.
101.INS**		XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.SCH**		XBRL Taxonomy Extension Schema Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

20* Filed herewith. ** To be filed by amendment.

Horne International, Inc.

EXHIBITS

* Filed herewith.

** Furnished herewith.

Horne International, Inc.

SIGNATURES

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

	Horne International, Inc.
January 2, 2013	By:	/s/ Darryl K. Horne
Date		Darryl K. Horne
		Interim Chief Executive Officer
January 2, 2013	By:	/s/ Marla Perdue
Date		Marla Perdue
		Interim Chief Financial Officer

Horne International, Inc.

August 20, 2013	By:	/s/ Dallas Evans
Date	Dallas Evans
	Chief Executive Officer (Principal Executive Officer)
	Interim Chief Financial Officer (Principal Accounting Officer)

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