Q2 and Half Year Results -8-

+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Weighted average |          |         |          |         | |          |          |         | 
| shares           |          |         |          |         | |          |          |         | 
| outstanding:     |          |         |          |         | |          |          |         | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Basic            |          | 157,851 |          | 154,991 | |  157,705 |          | 154,991 | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Effect of        |          |       - |          |       - | |        - |          |       - | 
| dilutive stock   |          |         |          |         | |          |          |         | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Diluted          |          | 157,851 |          | 154,991 | |  157,705 |          | 154,991 | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Net loss per     |          |         |          |         | |          |          |         | 
| share            |          |         |          |         | |          |          |         | 
| attributable to  |          |         |          |         | |          |          |         | 
| CBaySystems      |          |         |          |         | |          |          |         | 
| Holdings Limited |          |         |          |         | |          |          |         | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Basic            | $        |  (0.01) | $        |  (0.00) | $|   (0.01) | $        |  (0.03) | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
| Diluted          | $        |  (0.01) | $        |  (0.00) | $|   (0.01) | $        |  (0.03) | 
+------------------+----------+---------+----------+---------+-+----------+----------+---------+ 
 
The computation of diluted net income (loss) per share does not assume 
conversion, exercise or issuance of shares that would have an anti-dilutive 
effect.  Potentially dilutive shares having an anti-dilutive effect and 
therefore excluded from the calculation of diluted net income (loss) per share, 
totaled 63,994, 62,460, 60,580 and 60,580 shares,  for the three months and six 
months ended June 30, 2010 and 2009, respectively. The net income (loss) for the 
purpose of the basic loss per share is adjusted for the amounts payable to the 
Company's majority shareholder amounting to $688 and $1,375, respectively, for 
the three months and six months ended June 30, 2010 and 2009, under the 
management services agreement, see Note 7. 
4.  Accrued Expenses and Other Current Liabilities 
 
Accrued expenses and other current liabilities consisted of the following: 
+------------------------------------+--+----------+--+-----------+ 
|                                    |  |          |  |           | 
+------------------------------------+--+----------+--+-----------+ 
|                                    |  | June 30, |  |  December | 
|                                    |  |     2010 |  |  31, 2009 | 
+------------------------------------+--+----------+--+-----------+ 
| Customer accommodations            |$ |   11,477 |$ |    11,635 | 
+------------------------------------+--+----------+--+-----------+ 
| Other (no item exceeds 5% of       |  |   28,718 |  |    18,168 | 
| current liabilities)               |  |          |  |           | 
+------------------------------------+--+----------+--+-----------+ 
| Total accrued expenses and other   |$ |   40,195 |$ |    29,803 | 
| current liabilities                |  |          |  |           | 
+------------------------------------+--+----------+--+-----------+ 
 
In November 2003, one of the employees of MedQuist raised allegations that it 
had engaged in improper billing practices. In response, the board of directors 
of MedQuist undertook an independent review of these allegations (Review). In 
response to MedQuist's customers concern over its public disclosure of the 
certain findings from the Review, it made the decision in the fourth quarter of 
2005 to take action and try to avoid litigation and preserve and solidify its 
customer business relationships by offering a financial accommodation to certain 
of its customers. 
 
In connection with MedQuist's decision to offer financial accommodations to 
certain of its customers (Accommodation customers), MedQuist analyzed its 
historical billing information and the available report level data to develop 
individualized accommodation offers to be made to Accommodation Customers 
(Accommodation Analysis). Based on the Accommodation Analysis, MedQuist's board 
of directors authorized management to make cash or credit accommodation offers 
to Accommodation Customers in the aggregate amount of $75,818.  By accepting 
MedQuist's accommodation offer, the customer agreed, among other things, to 
release MedQuist from any and all claims and liability regarding the billing 
related issues. MedQuist is unable to predict how many customers, if any, may 
accept the outstanding accommodation offers on the terms proposed by it, nor is 
it able to predict the timing of the acceptance (or rejection) of any 
outstanding accommodation offers. Until any offers are accepted, MedQuist may 
withdraw or modify the terms of the accommodation program or any outstanding 
offers at any time. In addition, MedQuist is unable to predict how many future 
offers, if made, will be accepted on the terms proposed by it. MedQuist 
regularly evaluates whether to proceed with, modify or withdraw the 
accommodation program or any outstanding offers. 
 
The following is a summary of the financial statement activity related to the 
customer accommodation. 
 
+------------------------------------+--+------------+----------+----------+ 
|                                    |  | Six months |          |     Year | 
|                                    |  |      ended |          |    ended | 
+------------------------------------+--+------------+----------+----------+ 
|                                    |  |   June 30, |          | December | 
|                                    |  |       2010 |          | 31, 2009 | 
+------------------------------------+--+------------+----------+----------+ 
| Beginning balance                  |$ |     11,635 |        $ |   12,055 | 
+------------------------------------+--+------------+----------+----------+ 
| Payments and other adjustments     |  |      (158) |          |    (317) | 
+------------------------------------+--+------------+----------+----------+ 
| Credits                            |  |          - |          |    (103) | 
+------------------------------------+--+------------+----------+----------+ 
| Ending balance                     |$ |     11,477 |        $ |   11,635 | 
+------------------------------------+--+------------+----------+----------+ 
 
As of June 30, 2010, $1.1 million of the balance is related to the Kaiser 
Litigation (see Note 7). 
 
2010 Restructuring Plan 
 
During the second quarter of 2010, management's ongoing cost reduction 
initiatives, including process improvement, combined with the acquisition of 
Spheris resulted in a restructuring plan involving staff reductions and other 
actions designed to maximize operating efficiencies. The affected employees are 
entitled to receive severance benefits under existing established severance 
policies.  The employees were primarily in the operations and administrative 
functions. This initial action under the plan was approved during second quarter 
of 2010. 
 The table below reflects the financial statement activity related to the 2010 
restructuring plan: 
+--------------------------------------------------+----------+------------+ 
|                                                  |          | Six months | 
|                                                  |          |      ended | 
+--------------------------------------------------+----------+------------+ 
|                                                  |          |   June 30, | 
|                                                  |          |       2010 | 
+--------------------------------------------------+----------+------------+ 
| Beginning balance                                |        $ |          - | 
+--------------------------------------------------+----------+------------+ 
| Charge                                           |          |        846 | 
+--------------------------------------------------+----------+------------+ 
| Cash paid                                        |          |      (194) | 
+--------------------------------------------------+----------+------------+ 
| Ending balance                                   |        $ |        652 | 
+--------------------------------------------------+----------+------------+ 
 
The Company expects that restructuring activities may continue in 2010 as 
management identifies opportunities for synergies resulting from the acquisition 
of Spheris including the elimination of redundant functions. 
 
2009 Restructuring Plan 
 
During the third and fourth quarters of 2009, as a result of management's 
continued planned process improvement and technology development investments 
MedQuist committed to an exit and disposal plan which includes projected 
employee severance for planned reduction in headcount. Because of plan 
development in late 2009 and execution of the plan over multiple quarters in 
2009 and 2010, not all personnel affected by the plan know of the plan or its 
impact. The plan includes costs of $2.5 million for employee severance and $0.4 
million for vacating operating leases. The table below reflects the financial 
statement activity related to the 2009 restructuring plan: 
 
+--------------------------------+----------+-------------+----------+--------------+