UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                       ----------------------------------

                                   FORM 10-Q
                                 --------------

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

                  For the Quarterly Period Ended June 30, 2008

                         Commission File Number: 0-21683
                         -------------------------------
                               GraphOn Corporation
             (Exact name of registrant as specified in its charter)
              -----------------------------------------------------

           Delaware                                        13-3899021
(State or other jurisdiction of                          (IRS Employer
 incorporation or organization)                        Identification No.)

                          5400 Soquel Avenue, Suite A2
                              Santa Cruz, CA 95062
                    (Address of principal executive offices)

                  Registrant's telephone number: (800) 472-7466

      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 past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No [ ]

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

  Large accelerated filer [  ]              Accelerated filer [  ]

  Non-accelerated filer [   ]               Smaller reporting company [X]

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [  ] No |X|

      As of August 8, 2008 there were issued and outstanding 47,596,401 shares
of the issuer's common stock, par value $0.0001.

<PAGE>


                               GRAPHON CORPORATION

                                    FORM 10-Q

                                Table of Contents

<TABLE>
<CAPTION>
     PART I.       FINANCIAL INFORMATION                                                           PAGE
     ------------- ------------------------------------------------------------------------   ---------
<S>       <C>      <C>                                                                               <C>
     Item 1.       Financial Statements
                   Condensed Consolidated Balance Sheets as of June 30, 2008 (unaudited)
                      and December 31, 2007                                                           2
                   Unaudited Condensed Consolidated Statements of Operations for the
                      Three and Six Months Ended June 30, 2008 and 2007                               3
                   Unaudited Condensed Consolidated Statements of Cash Flows for the Six
                      Months Ended June 30, 2008 and 2007                                             4
                   Notes to Unaudited Condensed Consolidated Financial Statements                     5
     Item 2.       Management's Discussion and Analysis of Financial Condition and
                      Results of Operations                                                          13
     Item 3.       Quantitative and Qualitative Disclosures About Market Risk                        22
     Item 4T.      Controls and Procedures                                                           22

     PART II.      OTHER INFORMATION
     ------------- ------------------------------------------------------------------------
     Item 1.       Legal Proceedings                                                                 23
     Item 1A.      Risk Factors                                                                      23
     Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds                       23
     Item 3.       Defaults Upon Senior Securities                                                   23
     Item 4.       Submission of Matters to a Vote of Security Holders                               23
     Item 5.       Other Information                                                                 23
     Item 6.       Exhibits                                                                          23
                   Signatures                                                                        24

</TABLE>

<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements



                               GraphOn Corporation
                      Condensed Consolidated Balance Sheets
                      -------------------------------------

<TABLE>
<CAPTION>

                                                            (Unaudited)
   Assets                                                  June 30, 2008    December 31, 2007
   ------                                                ---------------    -----------------
   Current Assets
<S>                                                       <C>                <C>
   Cash and cash equivalents                              $    4,489,100     $      5,260,800
   Accounts receivable, net                                      749,200              886,600
   Prepaid expenses                                               77,900               42,600
                                                         ---------------    -----------------
   Total Current Assets                                        5,316,200            6,190,000
   Patents, net                                                2,296,700            2,741,300
   Other assets, net                                             207,200              143,100
                                                         ---------------    -----------------
   Total Assets                                           $    7,820,100     $      9,074,400
                                                         ===============    =================
   Liabilities and Stockholders' Equity
   ------------------------------------
   Current Liabilities
   Accounts payable and accrued expense                   $      780,200     $        867,200
   Deferred revenue                                            1,479,000            1,475,000
                                                         ---------------    -----------------
   Total Current Liabilities                                   2,259,200            2,342,200
   Deferred revenue                                            1,816,000            1,833,100
   Other long term liability                                      28,400                    -
                                                         ---------------    -----------------
   Total Liabilities                                           4,103,600            4,175,300
                                                         ---------------    -----------------

   Commitments and contingencies                                       -                    -

   Stockholders' Equity
   Common stock, $0.0001 par value,
    195,000,000 shares authorized,
    47,596,401 and 47,576,401 shares
    issued and outstanding at June 30, 2008
    and December 31, 2007, respectively                            4,800                4,800
   Additional paid-in capital                                 59,617,300           59,399,000
   Accumulated deficit                                       (55,905,600)         (54,504,700)
                                                         ---------------    -----------------
   Total Stockholders' Equity                                  3,716,500            4,899,100
                                                         ---------------    -----------------
   Total Liabilities and Stockholders' Equity             $    7,820,100     $      9,074,400
                                                         ===============    =================
</TABLE>


                      See accompanying notes to unaudited condensed
                         consolidated financial statements

<PAGE>

<TABLE>
<CAPTION>
                                                 GraphOn Corporation
                                   Condensed Consolidated Statements of Operations


                                              Three Months Ended June 30,             Six Months Ended June 30,
                                          ------------------------------------   ------------------------------------
                                                 2008                2007               2008                2007
                                             (Unaudited)         (Unaudited)        (Unaudited)         (Unaudited)
                                          ----------------   -----------------   ----------------    ----------------
<S>                                        <C>                <C>                 <C>                 <C>
Revenue                                    $     1,373,100    $      1,307,800    $     2,685,400     $     2,445,400
Costs of revenue                                   146,700             123,300            305,300             242,200
                                          ----------------   -----------------   ----------------    ----------------
Gross profit                                     1,226,400           1,184,500          2,380,100           2,203,200
                                          ----------------   -----------------   ----------------    ----------------
Operating expenses
  Selling and marketing                            427,200             420,900            835,700             853,400
  General and administrative                       945,100           1,137,400          1,910,500           2,111,400
  Research and development                         599,400             639,200          1,085,800           1,310,700
                                          ----------------   -----------------   ----------------    ----------------
Total operating expenses                         1,971,700           2,197,500          3,832,000           4,275,500
                                          ----------------   -----------------   ----------------    ----------------
Loss from operations                              (745,300)         (1,013,000)        (1,451,900)         (2,072,300)
                                          ----------------   -----------------   ----------------    ----------------
Other income, net                                   17,100              14,400             52,600              34,000
                                          ----------------   -----------------   ----------------    ----------------
Loss before provision for income tax              (728,200)           (998,600)        (1,399,300)         (2,038,300)
Provision for income tax                               800               2,200              1,600               3,900
                                          ----------------   -----------------   ----------------    ----------------
Net loss                                   $      (729,000)   $     (1,000,800)   $    (1,400,900)    $    (2,042,200)
                                          ================   =================   ================    ================
Basic and diluted loss per share           $         (0.02)   $          (0.02)   $         (0.03)    $         (0.04)
                                          ================   =================   ================    ================
Average weighted common shares
outstanding                                     47,096,401          46,247,401         47,093,104          46,242,822
                                          ================   =================   ================    ================

</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements

<PAGE>



<TABLE>
<CAPTION>
                              GraphOn Corporation
                 Condensed Consolidated Statements of Cash Flows
                 -----------------------------------------------

                                                        Six Months Ended June 30,
                                                   ---------------------------------
                                                         2008              2007
                                                     (Unaudited)       (Unaudited)
                                                   ---------------   ---------------
 Cash Flows Provided By (Used In) Operating
 Activities:
 ----------------------------------------------
<S>                                                 <C>               <C>
 Net Loss                                           $   (1,400,900)   $   (2,042,200)
 Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:
 Depreciation and amortization                             482,300           482,400
 Stock-based compensation expense                          214,700           262,200
 Provision for doubtful accounts                             4,600           115,900
 Other items                                                     -             1,000
 Changes in operating assets and liabilities
    Accounts receivable                                    132,800          (220,200)
    Prepaid expense                                        (35,300)          (11,200)
    Accounts payable and accrued expense                  (102,000)         (156,100)
    Deferred revenue                                       (13,100)          109,200
                                                   ---------------   ---------------
 Net Cash Used In Operating Activities                    (716,900)       (1,459,000)
                                                   ---------------   ---------------
 Cash Flows Used In Investing Activities:
 ----------------------------------------------
 Purchases of equipment                                    (58,200)          (43,200)
 Other assets                                                 (200)             (500)
                                                   ---------------   ---------------
 Net Cash Used In Investing Activities                     (58,400)          (43,700)
                                                   ---------------   ---------------
 Cash Flows Provided By Financing Activities:
 ----------------------------------------------
 Proceeds from sale of common stock - employee
 stock purchase plan                                         3,600             3,800
                                                   ---------------   ---------------
 Net Cash Provided By Financing Activities                   3,600             3,800
                                                   ---------------   ---------------
 Net Decrease in Cash and Cash Equivalents                (771,700)       (1,498,900)
 Cash and cash equivalents, beginning of period          5,260,800         2,937,100
                                                   ---------------   ---------------
 Cash and cash equivalents, end of period           $    4,489,100    $    1,438,200
                                                   ===============   ===============

</TABLE>

                     See accompanying notes to unaudited condensed
                         consolidated financial statements


<PAGE>

GraphOn Corporation
Notes to Unaudited Condensed Consolidated Financial Statements

1. Basis of Presentation

The unaudited condensed consolidated financial statements included herein have
been prepared in accordance with accounting principles generally accepted in the
United States ("GAAP") applicable to interim financial information and the rules
and regulations promulgated by the Securities and Exchange Commission (the
"SEC"). Accordingly, such financial statements do not include all information
and footnote disclosures required in annual financial statements.

The unaudited condensed consolidated financial statements included herein
reflect all adjustments, which include only normal, recurring adjustments, that
are, in the opinion of management, necessary to state fairly the results for the
periods presented. This Quarterly Report on Form 10-Q should be read in
conjunction with the audited consolidated financial statements of GraphOn
Corporation (the "Company") contained in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2007, which was filed with the SEC on
March 31, 2008 ("2007 10-KSB Report"). The interim results presented herein are
not necessarily indicative of the results of operations that may be expected for
the full fiscal year ending December 31, 2008, or any future period.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the amounts reported in
the unaudited condensed consolidated financial statements and accompanying
notes. While the Company believes that such estimates are fair when considered
in conjunction with the unaudited condensed consolidated financial statements
and accompanying notes, the actual amount of such estimates, when known, will
vary from those estimates.

Intercompany Accounts and Transactions

Significant intercompany accounts and transactions are eliminated upon
consolidation.

Revenue Recognition

The Company markets and licenses products through various means, such as;
channel distributors, independent software vendors ("ISVs"), value-added
resellers ("VARs") (collectively "resellers") and direct sales to enterprise end
users. Its product licenses are generally perpetual. The Company also separately
sells maintenance contracts, which are comprised of license updates and customer
service access, private-label branding kits, software developer kits and product
training services.

Generally, software license revenues are recognized when:

   o  Persuasive evidence of an arrangement exists, (i.e., when the Company
      signs a non-cancelable license agreement wherein the customer
      acknowledges an unconditional obligation to pay, or upon receipt of
      the customer's purchase order) and
   o  Delivery has occurred or services have been rendered and there are no
      uncertainties surrounding product acceptance (i.e., when title and
      risk of loss have been transferred to the customer, which generally
      occurs when the media containing the licensed programs is provided
      to a common carrier or, in the case of electronic delivery, when
      the customer is given access to the licensed programs) and
   o  The price to the customer is fixed or determinable, as typically
      evidenced in a signed non-cancelable contract, or a customer's
      purchase order, and
   o  Collectibility is probable. If collectibility is not considered
      probable, revenue is recognized when the fee is collected.

Revenue recognized on software arrangements involving multiple elements is
allocated to each element of the arrangement based on vendor-specific objective
evidence ("VSOE") of the fair values of the elements; such elements include
licenses for software products, maintenance, and customer training. The Company
limits its assessment of VSOE for each element to either the price charged when
the same element is sold separately or the price established by management
having the relevant authority to do so, for an element not yet sold separately.

                                       5
<PAGE>

If sufficient VSOE of fair values does not exist so as to permit the allocation
of revenue to the various elements of the arrangement, all revenue from the
arrangement is deferred until such evidence exists or until all elements are
delivered. If evidence of VSOE of all undelivered elements exists but evidence
does not exist for one or more delivered elements, then revenue is recognized
using the residual method. Under the residual method, the fair value of the
undelivered elements is deferred and the remaining portion of the arrangement
fee is recognized as revenue.

There are no rights of return granted to resellers or other purchasers of the
Company's software programs.

Revenue from maintenance contracts is recognized ratably over the related
contract period, which generally ranges from one to five years.

Long-Lived Assets

Long-lived assets, which consist primarily of patents, are assessed for possible
impairment whenever events or changes in circumstances indicate that the
carrying amounts may not be recoverable, whenever the Company has committed to a
plan to dispose of the assets or, at a minimum, as it relates to the Company's
patents, annually. Measurement of the impairment loss is based on the fair value
of the assets. Generally, fair value is determined based on appraisals, current
market value, comparable sales value, and undiscounted future cash flows, as
appropriate. Assets to be held and used affected by such impairment loss are
depreciated or amortized at their new carrying amount over the remaining
estimated life; assets to be sold or otherwise disposed of are not subject to
further depreciation or amortization. No such impairment charge was recorded
during either of the three or six-month periods ended June 30, 2008 or 2007.

Patents

The Company's patents are being amortized over their estimated remaining
economic lives, currently estimated to be until approximately December 31, 2010.
Costs associated with filing, documenting or writing method patents are expensed
as incurred. Contingent legal fees paid in connection with a patent lawsuit, or
settlements thereof, are charged to cost of goods sold. All other non-contingent
legal fees and costs incurred in connection with a patent lawsuit, or
settlements thereof, are charged to general and administrative expense.

3. Stock-Based Compensation

On January 1, 2006 the Company adopted the fair value recognition provisions of
Statement of Financial Accounting Standards No. 123R, "Share-Based Payment," and
related interpretations ("FAS123R") using the modified prospective transition
method. Under that method, compensation expense recognized in the three and
six-month periods ended June 30, 2008 and 2007 includes (a) compensation expense
for all stock-based awards granted prior to, but not yet vested as of January 1,
2006, based on the grant date fair value estimated in accordance with the
original provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("FAS123") and (b) compensation
expense for all stock-based awards granted on or subsequent to January 1, 2006,
based on the grant-date fair value estimated in accordance with the provisions
of FAS123R.

The valuation provisions of FAS123R apply to new awards and to awards that were
outstanding on the adoption date and subsequently modified or cancelled.
Estimated compensation expense for awards outstanding at the adoption date is
recognized over the remaining service period using the compensation expense
calculated for pro forma disclosure purposes under FAS123.

Results for periods prior to adoption were not restated.

Valuation and Expense Information under FAS123R

The Company recorded stock-based compensation expense of $89,600 and $123,300 in
the three-month periods ended June 30, 2008 and 2007, respectively, and $214,700
and $262,200 in the six-month periods ended June 30, 2008 and 2007,
respectively. As required by FAS123R, the Company estimates forfeitures of
employee stock-based awards and recognizes compensation cost only for those
awards expected to vest. Forfeiture rates are estimated based on an analysis of
historical experience and are adjusted to actual forfeiture experience as
needed.

The following table illustrates the stock-based compensation expense recorded
during the three and six-month periods ended June 30, 2008 and 2007 by income
statement classification:

                                       6
<PAGE>

<TABLE>
<CAPTION>

                                      Three months ended       Six months ended
                                            June 30,                June 30,
Income Statement                    ----------------------  ---------------------
Classification                         2008        2007        2008       2007
------------------------            ----------  ----------  ---------- ----------
<S>                                  <C>         <C>         <C>        <C>
Cost of revenue                      $   5,500   $   3,600   $  10,800  $   8,000
Selling and marketing expense            8,400       9,100      19,000     19,800
General andadministrative expense       46,300      84,900     121,200    177,400
Research and development expense        29,400      25,700      63,700     57,000
                                    ----------  ----------  ---------- ----------
                                     $  89,600   $ 123,300   $ 214,700  $ 262,200
                                    ==========  ==========  ========== ==========
</TABLE>

The Company estimated the fair value of each stock-based award granted during
the three and six-month periods ended June 30, 2008 and 2007, as of the date of
grant, using a binomial model with the assumptions set forth in the following
table:

<TABLE>
<CAPTION>
                                      Expected                 Risk-
                         Annualized    Option     Estimated    Free
            Estimated    Forfeiture     Term      Exercise   Interest
           Volatility      Rate        (Years)     Factor      Rate      Dividends
          -----------    ----------   --------   ----------  --------    ---------
For the three months ended June 30,
-----------------------------------
<S>     <C>    <C>         <C>           <C>       <C>        <C>              <C>
 2008       158.00%        4.00%         7.5       10.00%       3.46%          -
2007 (1)       -             -            -           -            -           -

For the six months ended June 30,
---------------------------------
 2008   158.00-159.00%     4.00%         7.5       10.00%     3.15-3.46%       -
 2007       154.44%        5.06%         7.5       10.00%       4.58%          -
<FN>

(1) No stock-based awards were granted during the three-month period ended
    June 30, 2007.
</FN>
</TABLE>

The Company also recognized compensation costs for common shares purchased under
its Employee Stock Purchase Plan ("ESPP") during the three and six-month periods
ended June 30, 2008 and 2007, applying the same variables as noted in the table
above to the calculation of such costs, except that the expected term was 0.5
years for each respective period. The time span from the date of grant of ESPP
shares to the date of purchase is six months.

The Company does not anticipate paying dividends on its common stock for the
foreseeable future. Expected volatility is based on the historical volatility of
the Company's common stock over the 7.5 year period ended on the end of each
respective quarterly reporting period noted in the above table.

The approximate risk free interest rate was based on the implied yield available
on U.S. Treasury issues with remaining terms equivalent to the Company's
expected term on its stock-based awards. The expected term of the Company's
stock-based option awards was based on historical award holder exercise patterns
and considered the market performance of the Company's common stock and other
items. The annualized forfeiture rate was based on an analysis of historical
data and considered the impact of events such as the work force reductions the
Company carried out during previous years. The estimated exercise factor was
based on an analysis of historical data and included a comparison of historical
and current share prices.

For stock-based awards granted during the three-month period ended June 30,
2008, exclusive of common shares purchased pursuant to the Company's ESPP, the
weighted average fair value was $0.28. No such awards were granted during the
three-month period ended June 30, 2007. For stock-based awards granted during
the six-month periods ended June 30, 2008 and 2007, exclusive of common shares
purchased pursuant to the Company's ESPP, the weighted average fair values were
$0.34 and $0.1458, respectively.

The weighted average fair values of common shares purchased pursuant to the
Company's ESPP during the six-month periods ended June 30, 2008 and 2007 were
$0.410 and $0.1605, respectively. No shares were purchased pursuant to the
Company's ESPP during the three-month periods ended June 30, 2008 or 2007.

                                       7
<PAGE>

The following table presents a summary of the status and activity of the
Company's stock option awards for the three and six-month periods ended June 30,
2008.

<TABLE>
<CAPTION>
                                                                                Weighted
                                                              Weighted           Average
                                                               Average          Remaining      Aggregate
                                             Number of        Exercise         Contractual     Intrinsic
                                               Shares           Price         Term (Years)       Value
                                            -------------    ------------    --------------   -----------
<S>                                            <C>            <C>                      <C>      <C>
Outstanding - December 31, 2007                6,569,286      $      0.46
Granted                                          915,000             0.38
Exercised                                              -                -
Forfeited or expired                                   -                -
                                            ------------

Outstanding - March 31, 2008                   7,484,286      $      0.45              6.86     $ 391,000
                                            ------------
Granted                                           15,000      $      0.32
Exercised                                              -                -
Forfeited or expired                                   -                -
                                            ------------
Outstanding - June 30, 2008                    7,499,286      $      0.45              6.57     $ 196,400
                                            ============
</TABLE>

Of the options outstanding as of June 30, 2008, 5,948,804 were vested, 1,488,840
were estimated to vest in future periods and 61,642 were estimated to be
forfeited prior to their vesting.

All options are exercisable immediately upon grant. Options vest, generally
ratably over a 33-month period commencing in the fourth month after the grant
date. The Company has the right to repurchase exercised options that have not
vested upon their forfeiture at the respective option's exercise price.

As of June 30, 2008, there was approximately $279,100 of total unrecognized
compensation cost, net of estimated forfeitures, related to stock-based
compensation. That cost is expected to be recognized over a weighted-average
period of approximately one year.

4. Revenue

Revenue for the three-month periods ended June 30, 2008 and 2007 was comprised
as follows:

<TABLE>
<CAPTION>
                                                                           2008 Over (Under) 2007
                                                                       --------------------------------
     Revenue                          2008                2007                Dollars          Percent
     ----------------------    ----------------    ----------------    -------------------   ----------
     Product Licenses
<S>                             <C>                 <C>                           <C>             <C>
     Windows                    $       476,100     $       584,000               (107,900)      -18.5%
     Unix                               353,000             313,900                 39,100        12.5%
                               ----------------    ----------------    -------------------
                                        829,100             897,900                (68,800)       -7.7%
                               ----------------    ----------------    -------------------
     Service Fees
     Windows                            248,400             172,200                 76,200        44.3%
     Unix                               274,800             237,700                 37,100        15.6%
                               ----------------    ----------------    -------------------
                                        523,200             409,900                113,300        27.6%
     Other                               20,800                   -                 20,800           na
                               ----------------    ----------------    -------------------
     Total Revenue              $     1,373,100     $     1,307,800     $           65,300         5.0%
                               ================    ================    ===================

</TABLE>

Revenue for the six-month periods ended June 30, 2008 and 2007 was comprised as
follows:

<TABLE>
<CAPTION>
                                                                             2008 Over (Under) 2007
                                                                       --------------------------------
     Revenue                          2008                2007                Dollars          Percent
     ----------------------    ----------------    ----------------    -------------------   ----------
     Product Licenses
<S>                             <C>                 <C>                 <C>                       <C>
     Windows                    $       905,700     $     1,016,800     $         (111,100)      -10.9%
     Unix                               701,200             487,100                214,100        44.0%
                               ----------------    ----------------    -------------------
                                      1,606,900           1,503,900                103,000         6.8%
                               ----------------    ----------------    -------------------
     Service Fees
     Windows                            492,100             391,300                100,800        25.8%
     Unix                               554,400             459,400                 95,000        20.7%
                               ----------------    ----------------    -------------------
                                      1,046,500             850,700                195,800        23.0%

                                       8
<PAGE>

     Other                               32,000              90,800                (58,800)      -64.8%
                               ----------------    ----------------    -------------------
     Total Revenue              $     2,685,400     $     2,445,400     $          240,000         9.8%
                               ================    ================    ===================

</TABLE>

5. Patents

Patents consisted of the following:

<TABLE>
<CAPTION>
                                  June 30,          December
                                    2008            31, 2007
                               --------------   ---------------
<S>                             <C>              <C>
     Patents                    $   5,340,400    $    5,340,400
     Accumulated amortization      (3,043,700)       (2,599,100)
                               --------------   ---------------
                                $   2,296,700    $    2,741,300
                               ==============   ===============
</TABLE>

Patent amortization, which aggregated $222,300 and $444,600 during each of
the three and six-month periods ended June 30, 2008 and 2007, respectively,
is a component of general and administrative expenses.

6. Accounts Receivable, Net

Accounts receivable were net of allowances totaling $233,600 and $229,000 as of
June 30, 2008 and December 31, 2007, respectively.

7. Other Long Term Liability

Other long term liability is comprised of the third of three principal payments
due under a three-year extended payment agreement (the "agreement") between the
Company and a software vendor, for software used internally by the Company as
well as a support contract and product training. A similar amount, representing
the second of three principal payments, which is due and payable during April
2009, has been accrued as a component of accrued expenses. The initial payment,
plus interest, was made during the three-month period ended June 30, 2008. See
Note 9.

Interest on the agreement, in the aggregate approximately $6,700 over the
three-year agreement, is expensed ratably upon payment.

8. Commitments and Contingencies

During May 2008, the Company's board for directors approved a Director Severance
Plan and a Key Employee Severance Plan.

Director Severance Plan: This agreement provides for accelerated vesting of a
director's stock options in the event of any transaction or series of
transactions that constitute a change in the ownership or effective control of
the Company, or in the ownership of a substantial portion of the assets of the
Company, as defined in regulations promulgated under Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"), and the termination of
the director.

Key Employee Severance Plan: This agreement provides for 12-month salary
continuation for key employees (24 months for certain senior management),
accelerated vesting of key employees' stock options, the payment of bonuses that
key employees would have been entitled to under the Company's incentive bonus
plan and provides key employees with certain health plan and other benefits in
the event of Involuntary Termination or Constructive Termination (as both terms
are defined in the Key Employee Severance Plan) upon any transaction or series
of transactions that constitute a change in the ownership or effective control
of the Company, or in the ownership of a substantial portion of the assets of
the Company, as defined in the Code.

The Company has the right to amend or terminate each of the above listed
severance plans; however, the plans may not be amended or terminated following
the occurrence of a change in control, or in the case of the Key Employee
Severance Plan, a relocation, as outlined above. In any event, each of the above
listed plans will terminate no later than December 31, 2010.

Juniper Networks, Inc. has petitioned the United States Patent and Trademark
Office (the "PTO") to reexamine two of the Company's patents, namely; U. S.
Patent Nos. 5,826,014 and 6,061,798 (the "'014" and "'798" patents,
respectively). The PTO has ordered the reexamination of the '798 patent, but has
not yet responded regarding the reexamination of the '014 patent. Such

                                       9
<PAGE>

reexaminations will result in the PTO either: confirming all of the patent's
claims, narrowing all, or some, of the patent's claims, or cancelling all of the
patent's claims. Pending completion of the reexamination process, the Company
does not believe such patent has been impaired.

9. Supplemental Disclosure of Cash Flow Information

The Company disbursed approximately $42,800 for the payment of income taxes
during each of the three and six-month periods ended June 30, 2008. The Company
disbursed approximately $2,000 for the payment of income taxes during each of
the three and six-month periods ended June 30, 2007.

The Company disbursed approximately $2,200 for the payment of interest expense
during each of the three and six-month periods ended June 30, 2008. The Company
disbursed no cash for the payment of interest expense during either the three or
six-month period ended June 30, 2007.

During the three-month period ended June 30, 2008, the Company capitalized
approximately $28,200 of fixed assets, related to software purchased for
internal use, and recorded approximately $15,200 of other assets, related to
future support services for the software purchased, for which no cash was
disbursed. The Company accrued $15,000 as a current liability and $28,400 as a
long term liability for these items. See Note 7.

10. Loss Per Share

Potentially dilutive securities have been excluded from the computation of
diluted loss per common share, as their effect is antidilutive. For the three
and six-month periods ended June 30, 2008 and 2007, 21,123,486 and 21,146,414
shares, respectively, of common stock equivalents were excluded from the
computation of diluted loss per share since their effect would be antidilutive.

11. Segment Information

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," establishes standards for reporting information about operating
segments. This standard requires segmentation based on the Company's internal
organization and reporting of revenue and operating income based on internal
accounting methods. The Company's financial reporting systems present various
data for management to operate the business prepared in methods consistent with
GAAP. The segments were defined in order to allocate resources internally.
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker, or the decision making group, in deciding how to
allocate resources and in assessing performance. The Company's chief operating
decision maker is its Chief Executive Officer. The Company has determined that
it operates its business in two segments: software and intellectual property.

Segment revenue was as follows:

<TABLE>
<CAPTION>
                                      Three Months Ended June 30,           Six Months Ended June 30,
                                   --------------------------------    --------------------------------
     Revenue                             2008              2007              2008               2007
     --------------------------    ---------------  ---------------    ---------------  ---------------
<S>                                 <C>              <C>                <C>              <C>
     Software                       $    1,373,100   $    1,307,800     $    2,685,400   $    2,445,400
     Intellectual Property                       -                -                  -                -
                                   ---------------  ---------------    ---------------  ---------------
     Consolidated Revenue           $    1,373,100   $    1,307,800     $    2,685,400   $    2,445,400
                                   ===============  ===============    ===============  ===============
</TABLE>

Segment loss from operations was as follows:

<TABLE>
<CAPTION>
                                          Three Months Ended June 30,            Six Months Ended June 30,
                                      ----------------------------------    ----------------------------------
     Loss From Operations                  2008               2007                2008               2007
     -----------------------------    ---------------    ---------------    ---------------    ---------------
<S>                                    <C>                <C>                <C>                <C>
     Software                          $     (337,600)    $     (470,300)    $     (585,100)    $   (1,082,600)
     Intellectual Property                   (407,700)          (542,700)          (866,800)          (989,700)
                                      ---------------    ---------------    ---------------    ---------------
     Consolidated Loss From
     Operations                        $     (745,300)    $   (1,013,000)    $   (1,451,900)    $   (2,072,300)
                                      ===============    ===============    ===============    ===============
</TABLE>

The Company does not allocate interest and other income, interest and other
expense or income tax to its segments.

As of June 30, 2008, segment fixed assets (long-lived assets) were as follows:

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                             Accumulated
                                                             Depreciation
     Fixed Assets                      Cost Basis           /Amortization         Net, as Reported
                                    ------------------    -------------------    ------------------
<S>                                  <C>                   <C>                    <C>
     Software                        $       1,231,800     $       (1,029,600)    $         202,200
     Intellectual Property                   5,340,400             (3,043,700)            2,296,700
     Unallocated                                 5,000                      -                 5,000
                                    ------------------    -------------------    ------------------
                                     $       6,577,200     $       (4,073,300)    $       2,503,900
                                    ==================    ===================    ==================
</TABLE>

The Company does not allocate other assets, which consists primarily of
deposits, to its segments.

Products and services provided by the software segment include all currently
available versions of GO-Global for Windows, GO-Global for Unix, OEM private
labeling kits, software developer's kits, maintenance contracts and product
training and support. The intellectual property segment provides licenses to our
intellectual property. The Company's two segments do not engage in cross-segment
transactions.

12. New Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS 162"),
which is intended to improve financial reporting by identifying a consistent
framework, or hierarchy, for selecting accounting principles to be used in
preparing financial statements that are presented in conformity with GAAP for
nongovernmental entities. SFAS 162 is effective 60 days following the SEC's
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, "The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles." The Company is currently evaluating the impact
of adoption of SFAS 162 and does not expect adoption to have a material impact
on results of operations, cash flows or financial position.

In April 2008, FASB issued FSP FAS 142-3, "Determination of the Useful Life of
Intangible Assets" ("FSP"), which amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
142 and the period of expected cash flows used to measure the fair value of the
asset under FASB Statement No. 141 (revised 2007), "Business Combinations," and
other accounting principles generally accepted in the United States. This FSP is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. The Company is currently evaluating the impact of adoption of
this FSP and does not expect adoption to have a material impact on results of
operations, cash flows or financial position.

In March 2008, FASB issued SFAS No. 161, "Disclosures about Derivatives
Instruments and Hedging Activities, an Amendment of FASB Statement No. 133"
("SFAS 161"). SFAS 161 requires enhanced disclosures about a company's
derivative and hedging activities. SFAS is effective for financial statements
issued for fiscal years beginning after December 15, 2008. The Company is
currently evaluating the impact of the adoption of SFAS 161 and does not expect
adoption to have a material impact on results of operations, cash flows or
financial position.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS 141R") which replaces SFAS No. 141, "Business
Combinations." SFAS 141R establishes principles and requirements for recognizing
and measuring identifiable assets and goodwill acquired, liabilities assumed and
any noncontrolling interest in a business combination at their fair value at
acquisition date. SFAS 141R alters the treatment of acquisition related costs,
business combinations achieved in stages (referred to as a step acquisition),
the treatment of gains from a bargain purchase, the recognition of contingencies
in business combinations, the treatment of in-process research and development
in a business combination as well as the treatment of recognizable deferred tax
benefits. SFAS 141R is effective for business combinations closed in fiscal
years beginning after December 15, 2008. The Company is currently evaluating the
impact of SFAS 141R and expects results of operations, cash flows or financial
position would only be impacted in relation to future business combination
activities, if any.

In February 2007, FASB issued SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities" ("SFAS 159") which permits entities to choose
to measure many financial instruments and certain other items at fair value. The
objective of SFAS 159 is to improve financial reporting by providing entities
with the opportunity to mitigate volatility in reported earnings caused by
measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions. SFAS 159 is effective as of an entity's


                                       11
<PAGE>

first fiscal year that begins after November 15, 2007. The adoption of SFAS 159
did not have a material impact on results of operations, cash flows or financial
position.

In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS
157") which defines fair value, establishes a framework for measuring fair value
in GAAP and expands disclosures about fair value measurements. SFAS 157 applies
under other accounting pronouncements that require or permit fair value
measurements, FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, SFAS 157 does not require any new fair value measurements, however,
for some entities; application of SFAS 157 will change current practice. SFAS
157 is effective for financial statements issued for the first fiscal year
beginning after November 15, 2007 and interim periods within those fiscal years.
In February 2008, FASB issued FASB Staff Position No. 157-2 that defers the
effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities,
except for items that are recognized or disclosed at fair value in the financial
statements on a recurring basis, to fiscal years beginning after November 15,
2008. In addition, FASB also agreed to exclude from the scope of FASB 157 fair
value measurements made for purposes of applying SFAS No. 13, "Accounting for
Leases" and related interpretive accounting pronouncements. The adoption of SFAS
157 did not have a material impact on results of operations, cash flows or
financial position.


                                       12
<PAGE>

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

Forward-Looking Statements

The following discussion of our financial condition and results of operations
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Actual results and the timing of certain events could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including:

   o  our history of operating losses, and expectation that those
      losses will continue;
   o  that a significant portion of our operating revenue has been and
      continues to be earned from a very limited number of significant
      customers;
   o  that our stock price has been volatile and you could lose your
      investment; and
   o  other factors, including those set forth under Item 6. "Management's
      Discussion and Analysis or Plan of Operation - Risk Factors" in our
      2007 10-KSB Report and in other documents we have filed with the
      Securities and Exchange Commission, could have a material adverse
      effect upon our business, results of operations and financial
      condition.

Overview

We are developers of business connectivity software, including Unix, Linux and
Windows server-based software, with an immediate focus on web-enabling
applications for use and/or resale by independent software vendors ("ISVs"),
corporate enterprises, governmental and educational institutions, and others.

Server-based computing, which is sometimes referred to as thin-client computing,
is a computing model where traditional desktop software applications are
relocated to run entirely on a server, or host computer. This centralized
deployment and management of applications reduces the complexity and total costs
associated with enterprise computing. Our software architecture provides
application developers with the ability to relocate applications traditionally
run on the desktop to a server, or host computer, where they can be run over a
variety of connections from remote locations to a variety of display devices.
With our server-based software, applications can be web-enabled, without any
modification to the original application software required, allowing the
applications to be run from browsers or portals. Our server-based technology can
web-enable a variety of Unix, Linux or Windows applications.

Critical Accounting Policies

We believe that several accounting policies are important to understanding our
historical and future performance. We refer to these policies as "critical"
because these specific areas generally require us to make judgments and
estimates about matters that are uncertain at the time we make the estimates,
and different estimates, which also would have been reasonable, could have been
used, which would have resulted in different financial results. Our critical
accounting policies are identified in our 2007 10-KSB Report, and included:
revenue recognition, the allowance for doubtful accounts, patents, long-lived
assets, capitalized software development costs, impairment of intangible assets,
loss contingencies and stock-based compensation expense. The following operating
results should be read in conjunction with our critical accounting policies.

Stock-Based Compensation

On January 1, 2006, we adopted the fair value recognition provisions of
Statement of Financial Accounting Standards No. 123R, "Share-Based Payment,"
("FAS123R") and related interpretations using the modified prospective
transition method. Under that method, compensation cost recognized in the three
and six-month periods ended June 30, 2008 and 2007 includes (a) compensation
cost for all stock-based awards granted prior to, but not yet vested as of
January 1, 2006 based on the grant date fair value estimated in accordance with
the original provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("FAS123") and (b) compensation cost
for all stock-based awards granted on or subsequent to January 1, 2006, based on
the grant-date fair value estimated in accordance with the provisions of
FAS123R.

The valuation provisions of FAS123R apply to new awards and to awards that were
outstanding on the adoption date and subsequently modified or cancelled.
Estimated compensation expense for awards outstanding at the adoption date is


                                       13
<PAGE>

recognized over the remaining service period using the compensation cost
calculated for pro forma disclosure purposes under FAS123.

The valuation of employee stock options is an inherently subjective process
since market values are generally not available for long-term, non-transferable
employee stock options. Accordingly, an option pricing model is utilized to
derive an estimated fair value. In calculating the estimated fair value of our
stock options, we used a binomial pricing model which requires the consideration
of the following variables for purposes of estimating fair value:

   o the expected volatility of our common stock,
   o the annualized forfeiture/termination rate,
   o the prior forfeiture/termination rate,
   o the expected term of the option,
   o the exercise factor for optionees,
   o the risk free interest rate for the expected option term, and
   o expected dividends on our common stock (we do not anticipate paying
     dividends for the foreseeable future).

Of the variables above, the selection of an expected term, an annualized
forfeiture rate and expected stock price volatility are the most subjective. Our
estimate of the expected term was derived based on our analysis of historical
data and future projections. We estimated forfeiture rate by analyzing our
historical forfeiture data, including consideration of the impact of certain
non-recurring events, such as reductions in work force. We estimated stock price
volatility by referencing our actual stock prices over the period commensurate
with the expected life of the options and ending on the balance sheet date, for
each period currently being reported. We believe that each of these estimates is
reasonable in light of the data we analyzed. However, as with any estimate, the
ultimate accuracy of these estimates is only verifiable over time.

We estimated the fair value of each stock-based award granted during the three
and six-month periods ended June 30, 2008 and 2007, as of the grant date, using
a binomial model with the assumptions set forth in the following table:

<TABLE>
<CAPTION>
                                      Expected                 Risk-
                         Annualized    Option     Estimated    Free
            Estimated    Forfeiture     Term      Exercise   Interest
           Volatility      Rate        (Years)     Factor      Rate      Dividends
          -----------    ----------   --------   ----------  --------    ---------
For the three months ended June 30,
-----------------------------------
<S>     <C>    <C>         <C>           <C>       <C>        <C>              <C>
 2008       158.00%        4.00%         7.5       10.00%       3.46%          -
2007 (1)       -             -            -           -            -           -

For the six months ended June 30,
---------------------------------
 2008   158.00-159.00%     4.00%         7.5       10.00%     3.15-3.46%       -
 2007       154.44%        5.06%         7.5       10.00%       4.58%          -
<FN>

(1) No stock-based awards were granted during the three-month period ended
    June 30, 2007.
</FN>
</TABLE>

We applied the same variables to the valuation of shares purchased under our
ESPP, except that the expected term was 0.5 years, as the time span from the
date of grant of ESPP shares to the date of purchase is six months.

The following table illustrates the stock-based compensation expense recorded
during the three and six-month periods ended June 30, 2008 and 2007 by income
statement classification:

<TABLE>
<CAPTION>

                                      Three months ended       Six months ended
                                            June 30,                June 30,
Income Statement                    ----------------------  ---------------------
Classification                         2008        2007        2008       2007
------------------------            ----------  ----------  ---------- ----------
<S>                                  <C>         <C>         <C>        <C>
Cost of revenue                      $   5,500   $   3,600   $  10,800  $   8,000
Selling and marketing expense            8,400       9,100      19,000     19,800
General andadministrative expense       46,300      84,900     121,200    177,400
Research and development expense        29,400      25,700      63,700     57,000
                                    ----------  ----------  ---------- ----------
                                     $  89,600   $ 123,300   $ 214,700  $ 262,200
                                    ==========  ==========  ========== ==========
</TABLE>

                                       14
<PAGE>

We expect that stock-based compensation expense will continue to have a material
impact on our financial results for the remainder of the fiscal year. For the
remainder of fiscal 2008 we expect to incur stock-based compensation expense of
approximately $134,200.

Results of Operations for the Three and Six-Month Periods Ended June 30, 2008
and 2007.

Revenue

Our software revenue has historically been primarily derived from product
licensing fees and service fees from maintenance contracts. Other sources of
software revenue include sales of software development kits and training.
Software development kits are tools that allow end users to develop, interface
and brand their own applications for use in conjunction with either our Windows
or Unix/Linux products. Currently, we do not generate a significant amount of
revenue from either the sale of software development kits or training, nor do we
anticipate generating a significant amount from their sale during 2008.

Revenue for the three-month periods ended June 30, 2008 and 2007 was as follows:

<TABLE>
<CAPTION>
                                                                           2008 Over (Under) 2007
                                                                       --------------------------------
     Revenue                          2008                2007                Dollars          Percent
     ----------------------    ----------------    ----------------    -------------------   ----------
     Product Licenses
<S>                             <C>                 <C>                           <C>             <C>
     Windows                    $       476,100     $       584,000               (107,900)      -18.5%
     Unix                               353,000             313,900                 39,100        12.5%
                               ----------------    ----------------    -------------------
                                        829,100             897,900                (68,800)       -7.7%
                               ----------------    ----------------    -------------------
     Service Fees
     Windows                            248,400             172,200                 76,200        44.3%
     Unix                               274,800             237,700                 37,100        15.6%
                               ----------------    ----------------    -------------------
                                        523,200             409,900                113,300        27.6%
     Other                               20,800                   -                 20,800           na
                               ----------------    ----------------    -------------------
     Total Revenue              $     1,373,100     $     1,307,800     $           65,300         5.0%
                               ================    ================    ===================

</TABLE>

Revenue for the six-month periods ended June 30, 2008 and 2007 was as follows:

<TABLE>
<CAPTION>
                                                                             2008 Over (Under) 2007
                                                                       --------------------------------
     Revenue                          2008                2007                Dollars          Percent
     ----------------------    ----------------    ----------------    -------------------   ----------
     Product Licenses
<S>                             <C>                 <C>                 <C>                       <C>
     Windows                    $       905,700     $     1,016,800     $         (111,100)      -10.9%
     Unix                               701,200             487,100                214,100        44.0%
                               ----------------    ----------------    -------------------
                                      1,606,900           1,503,900                103,000         6.8%
                               ----------------    ----------------    -------------------
     Service Fees
     Windows                            492,100             391,300                100,800        25.8%
     Unix                               554,400             459,400                 95,000        20.7%
                               ----------------    ----------------    -------------------
                                      1,046,500             850,700                195,800        23.0%
     Other                               32,000              90,800                (58,800)      -64.8%
                               ----------------    ----------------    -------------------
     Total Revenue              $     2,685,400     $     2,445,400     $          240,000         9.8%
                               ================    ================    ===================
</TABLE>

Our Windows and Unix-based product licenses revenue can vary from period to
period because a significant portion of this revenue has historically been
earned, and continues to be earned, from a limited number of significant
customers, most of whom are resellers. Consequently, if any of these significant
customers change their order level, or fail to order during the reporting
period, our product licensing revenue could be materially impacted. We expect
this situation to continue throughout the next several quarterly reporting
periods.

The decrease in Windows product license revenue for the three-month period ended
June 30, 2008, as compared with the same period of the prior year, was primarily
due to an aggregate $88,200 increase in the deferral of revenue arising from
individual transactions for which not all criteria necessary for recognizing
revenue were met. We anticipate such criteria will be met by the end of the
current year and this deferred revenue will be recognized.

                                       15
<PAGE>

The decrease in Windows product license revenue for the six-month period June
30, 2008, as compared with the same period of the prior year, was primarily due
to the aggregate deferral discussed in the preceding paragraph.

The balance of the decreases in Windows product license revenue for both the
three and six-month periods ended June 30, 2008, as compared to the same periods
of the prior year, resulted from aggregate decreases in order levels from other
customers.

The increase in Unix product license revenue for the three-month period ended
June 30, 2008, as compared with the same period of the prior year, was primarily
due to an approximate $117,000 increase in aggregate purchases, from three
customers, including; Alcatel-Lucent, our most significant Unix customer,
Ericsson, one of our strategic partners, and ARC Systems Telecomicacoes, a
Brazilian reseller. This aggregate increase was partially offset by decreases in
aggregate purchases from other customers whose historical purchases have been
sporadic.

The increase in Unix product license revenue for the six-month period ended June
30, 2008, as compared with the same period of the prior year, was primarily due
to an approximate $225,000 increase in aggregate purchases from Alcatel-Lucent,
Ericsson and ARC Systems Telecomicacoes, which was partially offset by aggregate
decreases from other customers.

Our customers typically purchase a maintenance contract at the time they license
our product. Such maintenance contracts vary in term from one to five years and
generally are renewed upon expiration. Service fees associated with maintenance
contracts are deferred and recognized as revenue ratably over the underlying
service period of the maintenance contract.

The increases in service fees for the three and six-month periods ended June 30,
2008, as compared with the same periods of the prior year, were primarily a
result of the continued growth of the number of licenses our end-user customers
have installed. Since our customers typically purchase maintenance contracts,
and, subsequently, renew them upon expiration, as end-user customers continue to
deploy more and more of our products, the revenue we are able to recognize from
the sale of such maintenance contracts increases. We expect aggregate service
fees revenue for 2008 to exceed those of 2007.

Segment Revenue

For the three and six-month periods ended June 30, 2008 and 2007 all of our
revenue was derived from our software segment. Revenues from our intellectual
property segment are non-predictable and are dependent upon the outcome of
pending litigation and the results of licensing discussions with companies
potentially infringing upon our patents. As a result, we expect all 2008 revenue
to be earned from our software segment.

Cost of Revenue

Cost of revenue is comprised primarily of service costs, which represent the
costs of customer service and product costs. We incur no shipping or packaging
costs as all of our deliveries are made via electronic means over the Internet.
Under accounting principles generally accepted in the United Sates ("GAAP"),
research and development costs for new product development, after technological
feasibility is established, are recorded as "capitalized software" on our
balance sheet. Such capitalized costs are subsequently amortized as cost of
revenue over the shorter of three years or the remaining estimated life of the
products. No such costs were capitalized during either of the three or six-month
periods ended June 30, 2008 or 2007.

Cost of revenue increased by $23,400, or 19.0%, to $146,700, for the three
months ended June 30, 2008, from $123,300 for the same period of 2007. Cost of
revenue was 10.7% and 9.4% of revenue for the three months ended June 30, 2008
and 2007, respectively.

Cost of revenue increased by $63,100, or 26.1%, to $305,300, for the six months
ended June 30, 2008, from $242,200 for the same period of 2007. Cost of revenue
was 11.4% and 9.9% of revenue for the six months ended June 30, 2008 and 2007,
respectively.

Factors contributing to the increases in cost of revenue included service costs,
which increased by $5,400 and $40,800 during the three and six-month periods
ended June 30, 2008, respectively, as compared with the same periods in 2007,
resulted primarily from increased engineering time spent performing customer
service in order to better meet the needs of our customers. We expect service
costs to remain higher throughout 2008, as compared with 2007, as we plan on
having a higher number of engineers providing such services.

                                       16
<PAGE>

Included in service costs for the three-month periods ended June 30, 2008 and
2007 was non-cash stock-based compensation costs aggregating approximately
$5,500 and $3,600, respectively. Included in service costs for the six-month
periods ended June 30, 2008 and 2007 was non-cash stock-based compensation costs
aggregating approximately $10,800 and $8,000, respectively.

Also contributing to the increased cost of revenue were product costs, which
increased by $18,000 and $22,300 during the three and six-month periods ended
June 30, 2008, respectively, as compared with the same periods in 2007. These
increases were primarily due to costs associated with the expansion of our
GO-Global for Unix product's ability to web-enable various Linux platforms as
well as increased costs from our supplier of certain licensing technology that
we incorporate into both GO-Global for Windows and GO-Global for Unix. We expect
product costs to remain higher throughout 2008, as compared with 2007 due to
these factors.

Selling and Marketing Expenses

Selling and marketing expenses primarily consist of employee costs (inclusive of
non-cash stock-based compensation expense), outside services and travel and
entertainment expense.

Selling and marketing expenses for the three-month period ended June 30, 2008
approximated those for the same period of 2007. Selling and marketing expenses
decreased by $17,700, or 2.1%, to $835,700, for the six-month period ended June
30, 2008, from $853,400 for the same period of 2007. Selling and marketing
expenses were 31.1% and 34.9% of revenue for the six-month periods ended June
30, 2008 and 2007, respectively.

Factors contributing to the decrease in selling and marketing expenses included
recruitment expense, tradeshow expense and travel and entertainment, which
decreased by $15,800, $13,700 and $7,400 during the six-month period ended June
30, 2008, as compared with the same period in 2007. Recruitment expense was
lower as no new sales representatives were hired during the six-month period
ended June 30, 2008. Tradeshow expense was lower as we did not incur costs
associated with shipping and exhibiting our booth during the six-months ended
June 30, 2008, as we did not participate at any tradeshows as an exhibitor,
whereas we exhibited at two tradeshows during the same period of 2007. The
decrease in travel and entertainment primarily reflected having one less sales
representative during the six-month period ended June 30, 2008, as compared with
the same period of 2007.

Partially offsetting these decreases were higher employee costs, which increased
by $9,000 during the six-month period ended June 30, 2008, as compared with the
same period in 2007, primarily as a result of higher commissions earned by a
sales representative as a result of achieving quota, which was partially offset
by having one fewer sales representative.

Included in employee costs were non-cash stock-based compensation costs
aggregating approximately $8,400 and $9,100, respectively, for the three-month
periods ended June 30, 2008 and 2007, and $19,000 and $19,800, respectively, for
the six-month periods ended June 30, 2008 and 2007.

Also offsetting these decreases was higher outside services costs, which
increased by $12,100 during the six-month period ended June 30, 2008, as
compared with the same period of 2007, primarily resulting from increased
marketing activities.

We currently expect our full-year 2008 sales and marketing expense will
approximate 2007 levels.

General and Administrative Expenses

General and administrative expenses primarily consist of employee costs
(inclusive of non-cash stock-based compensation expense), amortization and
depreciation, legal, professional and other outside services (including those
related to realizing benefits from our patent-related assets), travel and
entertainment, certain costs associated with being a publicly held corporation,
and bad debts expense.

General and administrative expenses decreased by $192,300, or 16.9%, to
$945,100, for the three-month period ended June 30, 2008, from $1,137,400 for
the same period of 2007. General and administrative expenses were approximately
68.8% and 87.0% of revenues for the three-month periods ended June 30, 2008 and
2007, respectively.

For the six-month period ended June 30, 2008, general and administrative
expenses decreased by $200,900, or 9.5%, to $1,910,500 from $2,111,400 for the
same period of 2007. General and administrative expenses were approximately
71.1% and 86.3% of revenues for the six-month periods ended June 30, 2008 and
2007, respectively.

                                       17
<PAGE>

Factors which contributed to the decrease in general and administrative expense
during the three-month period ended June 30, 2008, as compared with the same
period of 2007, included lower bad debts expense, which decreased by $111,300,
primarily as a result of a change during the three-month period ended June 30,
2007 related to a customer whose financial condition had deteriorated.

Also contributing to the decrease in general and administrative expense for the
three-month period ended June 30, 2008, as compared with the same period of
2007, was an aggregate $53,800 decrease in legal and accounting fees. During the
three-month period ended June 30, 2007 we made certain filings with the SEC that
were not required to be made during the same period of 2008, thus resulting in
lower legal and accounting fees during the same period of 2008.

Employee costs decreased by $38,100 during the three-month period ended June 30,
2008, as compared with the same period of 2007, primarily due to various options
becoming fully vested subsequent to the three-month period ended June 30, 2007.

Costs associated with other individual components of general and administrative
expense, notably depreciation and amortization, travel and entertainment
insurance, and rent, did not change significantly during the three-month period
ended June 30, 2008, as compared with the same period of the prior year.

The above-listed costs also were the significant factors leading to the overall
decrease in general and administrative expenses for the six-month period ended
June 30, 2008, as compared with the same period of the prior year.

Included in general and administrative employee costs were non-cash stock-based
compensation expense aggregating $46,300 and $84,900, respectively, for the
three-month periods ended June 30, 2008 and 2007, and $121,200 and $177,400,
respectively, for the six-month periods ended June 30, 2008 and 2007.

We currently expect 2008 general and administrative expenses to be significantly
lower than 2007 levels, primarily because we do not anticipate incurring
significant contingent legal fees in conjunction with any of our current patent
litigation prior to the end of the 2008, as we did during December 2007.

Research and Development Expenses

Research and development expenses consist primarily of employee costs (inclusive
of stock-based compensation expense), payments to contract programmers and rent.

Research and development expenses decreased by $39,800, or 6.2%, to $599,400,
for the three-month period ended June 30, 2008, from $639,200 for the same
period of 2007. Research and development expenses were approximately 43.7% and
48.9% of revenues for the three-month periods ended June 30, 2008 and 2007,
respectively.

Research and development expenses decreased by $224,900, or 17.2%, to
$1,085,800, for the six-month period ended June 30, 2008, from $1,310,700 for
the same period of 2007. Research and development expenses were approximately
40.4% and 53.6% of revenue for the six-month periods ended June 30, 2008 and
2007, respectively.

Under GAAP, all costs of product development incurred once technological
feasibility has been established, but prior to general release of the product,
are typically capitalized and amortized to expense over the estimated life of
the underlying product, rather than being charged to expense in the period
incurred. No such product development costs were capitalized during either of
the three or six-month periods ended June 30, 2008 or 2007.

Factors contributing to the decreases in research and developments costs were
primarily employee costs, which decreased by $132,100 and $298,900 during the
three and six-month periods ended June 30, 2008, respectively, as compared with
the respective periods of 2007, primarily due to having the equivalent of four
fewer engineers as a result of terminations that occurred at various times
subsequent to March 31, 2007, the hiring of two engineers during the six-month
period ended June 30, 2008 and the switching of a full-time engineer during the
prior year to part-time status in the current year.

Partially offsetting these decreases were increases in our use of outside
services for the three and six-month periods ended June 30, 2008, as compared
with the same period of the prior year, aggregating approximately $70,900 and
$53,300, respectively, as we increased research and development activity
principally surrounding GO-Global for Windows.

                                       18
<PAGE>

Included in employee costs were non-cash stock-based compensation costs
aggregating $29,400 and $25,700, respectively, for the three-month periods ended
June 30, 2008 and 2007, and $63,700 and $57,000, respectively, for the six-month
periods ended June 30, 2008 and 2007.

We currently expect 2008 research and development expenses to be higher as
compared with 2007 levels as we plan on increasing our engineering staff, use of
outside consultants and our overall investment in this area.

Segment Operating Loss

Segment operating loss for the three-and six month periods ended June 30, 2008
and 2007 was as follows:

<TABLE>
<CAPTION>
                                          Three Months Ended June 30,            Six Months Ended June 30,
                                      ----------------------------------    ----------------------------------
     Loss From Operations                  2008               2007                2008               2007
     -----------------------------    ---------------    ---------------    ---------------    ---------------
<S>                                    <C>                <C>                <C>                <C>
     Software                          $     (337,600)    $     (470,300)    $     (585,100)    $   (1,082,600)
     Intellectual Property                   (407,700)          (542,700)          (866,800)          (989,700)
                                      ---------------    ---------------    ---------------    ---------------
     Consolidated Loss From
     Operations                        $     (745,300)    $   (1,013,000)    $   (1,451,900)    $   (2,072,300)
                                      ===============    ===============    ===============    ===============
</TABLE>

The $132,700 decrease in the operating loss we experienced from our software
segment for the three-month period ended June 30, 2008, as compared with same
period of the prior year, was primarily due to a $65,300 increase in software
revenue and a $57,300 decrease in general and administrative expense.

The $497,500 decrease in operating loss we experienced from our software segment
for the six-month period ended June 30, 2008, as compared with the same period
of the prior year, was primarily due to a $240,000 increase in software revenue,
a $224,900 decrease in research and development expense and a $78,000 decrease
in general and administrative expense, which were partially offset by a $63,100
increase in cost of revenue.

The $135,000 and $122,900 decreases in the operating losses we experienced from
our intellectual property segment for the three and six-month periods ended June
30, 2008, as compared with the same periods of the prior year, was primarily due
to reductions in fees associated with our Autotrader.com legal dispute
aggregating $126,100 and $128,500, respectively, which were partially offset by
increases in fees incurred for the two lawsuits we initiated subsequent to June
30, 2007, which aggregated approximately $29,800 and $51,700, respectively.

Other Income

During the three and six-month periods ended June 30, 2008 and 2007, other
income consisted primarily of interest income on excess cash. During the
six-month period ended June 30, 2007, other income also included interest income
on note receivable - shareholder. The increases in other income were primarily
as a result of higher cash balances throughout the three and six-month periods
ended June 30, 2008, as compared with the same periods of 2007, as a result of
the Autotrader.com settlement that occurred in December 2007.

We anticipate that interest and other income for 2008 will exceed 2007 levels as
we anticipate having higher average cash balances for the remainder of the year.

Net Loss

As a result of the foregoing items, net loss for the three-month period ended
June 30, 2008 was $729,000, a decrease of $271,800, or 27.2%, from a net loss of
$1,000,800 for the same period of 2007 and $1,400,900 for the six-month period
ended June 30, 2008, a decrease of $641,300, or 31.4%, from a net loss of
$2,042,200 for the same period of 2007. We currently do not expect to be
profitable either during or for the year ended December 31, 2008.

Liquidity and Capital Resources

We are planning to increase investments in our operations during 2008 and to
fund these increases through our cash on hand as of June 30, 2008 and our 2008
anticipated revenue streams. We are continually looking at ways to improve our
revenue stream, including through the development of new products and further
acquisitions. We continue to review potential acquisition and other investment
opportunities as they present themselves to us. We believe that maintaining our
current revenue stream, coupled with our cash on hand, will be sufficient to
support our operational plans for the next twelve months.

                                       19
<PAGE>

During the six-month periods ended June 30, 2008 and 2007 our cash and cash
equivalents balances decreased by $771,700 and $1,498,900, respectively,
primarily as a result of our operations consuming approximately $716,900 and
$1,459,000 of cash during the respective periods. During the six-month periods
ended June 30, 2008 and 2007 our reported net losses of $1,400,900 and
$2,042,200 respectively, included two significant non-cash items, namely;
depreciation and amortization of $482,300 and $482,400, respectively, which were
primarily related to amortization of our patents, and stock-based compensation
expense of $214,700 and $262,200, respectively. Additionally, during the
six-month period ended June 30, 2007 we also incurred an additional non-cash
item related to an increase in our allowance for doubtful accounts, as discussed
elsewhere in this Form 10-Q, of $115,900.

During the six-month periods ended June 30, 2008 and 2007 we closely monitored
our investing activities, spending approximately a net $58,400 and $43,700,
respectively, in those activities. Our investing activities were primarily
comprised of fixed asset purchases, mainly office furniture and equipment.Our
financing activities for the periods ended June 30, 2008 and 2007 included
the sale of stock to our employees under the terms of our employee stock
purchase plan.

Cash and Cash Equivalents

As of June 30, 2008, cash and cash equivalents were $4,489,100, as compared with
$5,260,800 as of December 31, 2007, a decrease of $771,700, or 14.7%. The
majority of this decrease was due to the consumption of $716,900 of cash and
cash equivalents by our operations. We anticipate that our cash and cash
equivalents as of June 30, 2008, together with revenue from 2008 operations will
be sufficient to fund our anticipated expenses during the next twelve months.

Accounts Receivable, net

At June 30, 2008 and December 31, 2007, we had approximately $749,200 and
$886,600, respectively, in accounts receivable, net of allowances totaling
$233,600 and $229,000, respectively. From time to time, we could have
individually significant accounts receivable balances due us from one or more of
our significant customers. If the financial condition of any of these
significant customers should deteriorate, our operating results could be
materially affected.

Working Capital

As of June 30, 2008, we had current assets of $5,316,200 and current liabilities
of $2,259,200, which netted to working capital of $3,057,000. Included in
current liabilities was the current portion of deferred revenue of $1,479,000.

Segment Fixed Assets

As of June 30, 2008, segment fixed assets (long-lived assets) were as follows:

<TABLE>
<CAPTION>
                                                             Accumulated
                                                             Depreciation
     Fixed Assets                      Cost Basis           /Amortization         Net, as Reported
                                    ------------------    -------------------    ------------------
<S>                                  <C>                   <C>                    <C>
     Software                        $       1,231,800     $       (1,029,600)    $         202,200
     Intellectual Property                   5,340,400             (3,043,700)            2,296,700
     Unallocated                                 5,000                      -                 5,000
                                    ------------------    -------------------    ------------------
                                     $       6,577,200     $       (4,073,300)    $       2,503,900
                                    ==================    ===================    ==================
</TABLE>

Contingencies

During May 2008, our board of directors approved two severance plans, one of
which covers directors and one of which covers key employees. Each of these
plans provide for certain non-cash benefits to their respective plan
participants, principally the accelerated vesting of stock options, in the event
we experience a change of control in our company or our company's assets and the
participant terminates employment with us. The severance plan for key employees
contains certain cash benefits that would accrue to the key employees as a
result of termination following a change in control, including; salary
continuation, payment of bonuses earned under our incentive bonus plan and
health plan and other benefits.

                                       20
<PAGE>

Juniper Networks, Inc. has petitioned the United States Patent and Trademark
Office (the "PTO") to reexamine two of our patents, namely; U. S. Patent Nos.
5,826,014 and 6,061,798 (the "'014" and "'798" patents, respectively). The PTO
has ordered the reexamination of the '798 patent, but has not yet responded
regarding the reexamination of the '014 patent. Such reexaminations will result
in the PTO either: confirming all of the patent's claims, narrowing all, or
some, of the patent's claims, or cancelling all of the patent's claims. Pending
completion of the reexamination process, the Company does not believe such
patent has been impaired.

New Accounting Pronouncements

In May 2008, FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("SFAS 162"), which is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with GAAP for nongovernmental entities. SFAS 162 is
effective 60 days following SEC's approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles." We are currently
evaluating the impact of adoption of SFAS 162 and do not expect adoption to have
a material impact on results of operations, cash flows or financial position.

In April 2008, FASB issued FSP FAS 142-3, "Determination of the Useful Life of
Intangible Assets" ("FSP"), which amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
142 and the period of expected cash flows used to measure the fair value of the
asset under FASB Statement No. 141 (revised 2007), "Business Combinations," and
other accounting principles generally accepted in the United States. This FSP is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. We are currently evaluating the impact of adoption of this FSP
and do not expect adoption to have a material impact on results of operations,
cash flows or financial position.

In March 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
161, "Disclosures about Derivatives Instruments and Hedging Activities, an
Amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 requires enhanced
disclosures about a company's derivative and hedging activities. SFAS is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. We are currently evaluating the impact of the adoption of
SFAS 161 and do not expect adoption to have a material impact on results of
operations, cash flows or financial position.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS 141R") which replaces SFAS No. 141, "Business
Combinations." SFAS 141R establishes principles and requirements for recognizing
and measuring identifiable assets and goodwill acquired, liabilities assumed and
any noncontrolling interest in a business combination at their fair value at
acquisition date. SFAS 141R alters the treatment of acquisition related costs,
business combinations achieved in stages (referred to as a step acquisition),
the treatment of gains from a bargain purchase, the recognition of contingencies
in business combinations, the treatment of in-process research and development
in a business combination as well as the treatment of recognizable deferred tax
benefits. SFAS 141R is effective for business combinations closed in fiscal
years beginning after December 15, 2008. We are currently evaluating the impact
of SFAS 141R and expect that results of operations, cash flows or financial
position would only be impacted in relation to future business combination
activities, if any.

In February 2007, FASB issued SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities" ("SFAS 159") which permits entities to choose
to measure many financial instruments and certain other items at fair value. The
objective of SFAS 159 is to improve financial reporting by providing entities
with the opportunity to mitigate volatility in reported earnings caused by
measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions. SFAS 159 is effective as of an entity's
first fiscal year that begins after November 15, 2007. The adoption of SFAS 159
did not have a material impact on results of operations, cash flows or financial
position.

In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS
157") which defines fair value, establishes a framework for measuring fair value
in GAAP and expands disclosures about fair value measurements. SFAS 157 applies
under other accounting pronouncements that require or permit fair value
measurements, FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, SFAS 157 does not require any new fair value measurements, however,
for some entities; application of SFAS 157 will change current practice. SFAS
157 is effective for financial statements issued for the first fiscal year
beginning after November 15, 2007 and interim periods within those fiscal years.
In February 2008, FASB issued FASB Staff Position No. 157-2 that defers the
effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities,
except for items that are recognized or disclosed at fair value in the financial
statements on a recurring basis, to fiscal years beginning after November 15,
2008. In addition, FASB also agreed to exclude from the scope of FASB 157 fair


                                       21
<PAGE>

value measurements made for purposes of applying SFAS No. 13, "Accounting for
Leases" and related interpretive accounting pronouncements. The adoption of
SFAS 157 did not have a material impact on results of operations, cash flows or
financial position.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable

ITEM 4T. Controls and Procedures

Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period
covered by this report. Based upon that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures were effective as of June 30, 2008.

There has not been any change in our internal control over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended
June 30, 2008 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.




                                       22
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

On August 28, 2007, we filed a proceeding against Juniper Networks, Inc.
("Juniper") in the United States District Court in the Eastern District of Texas
(the "court") alleging that certain of Juniper's products infringe three of our
patents, namely; U.S. Patent Nos. 5,826,014, 6,061,798 and 7,028,336, (the
"'014," "'798" and "'336" patents, respectively) which protect our fundamental
network security and firewall technologies. We seek preliminary and permanent
injunctive relief along with unspecified damages and fees. Juniper filed its
Answer and Counterclaims on October 26, 2007 seeking a declaratory judgment that
it does not infringe the `014, `798 and `336 patents and that all three of these
patents are invalid and unenforceable. Subsequent to October 26, 2007 and
through the date hereof, we and Juniper have filed further replies and responses
addressing the issues raised in our original complaint and Juniper's Answer and
Counterclaims. On May 30, 2008 the court issued a Docket Control Order setting
the dates of April 7, 2010 for the Markman Hearing and July 6, 2010 for jury
selection. Also on May 30, 2008, we served our Asserted Claims and Infringement
Contentions. On July 25, 2008, we filed an amended complaint removing the `336
patent from our infringement claim. Juniper responded with its answer and
counterclaim to the amended complaint on August 11, 2008. Separately, Juniper
has petitioned the United States Patent and Trademark Office (the "PTO") to
reexamine the `014 and `798 patents. On April 17, 2008, the PTO ordered the
reexamination of the `798 patent but has not yet responded regarding
reexamination of the `014 patent.

On March 10, 2008, we initiated a proceeding against Classified Ventures, LLC;
IAC/InterActiveCorp; Match.com (an operating business of IAC/InterActiveCorp);
Yahoo! Inc.; eHarmony.com; and CareerBuilder, LLC in the United States District
Court in the Eastern District of Texas alleging infringement of four of our
patents, namely; U.S. Patent Nos. 6,324,538, 6,850,940, 7,028,034 and 7,269,591,
which protect our unique method of maintaining an automated and
network-accessible database. The suit alleges that the named companies infringe
our patents on each of their Web sites. The suit seeks permanent injunctive
relief along with unspecified damages. During late April and early May 2008, the
opposing parties in the proceeding filed their Answers and Counterclaims seeking
a declaratory judgment that they do not infringe the patents in the suit and
that each of the patents in the suit are invalid and unenforceable. On June 5,
2008, we filed our answers to each of the opposing parties' counterclaims.

ITEM 1A. Risk Factors

Not Applicable

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three-month period ended June 30, 2008, we granted stock options to
purchase an aggregate 15,000 shares of common stock, at an exercise price of
$0.32, to a non-executive employee. The grant of such stock options was not
registered under the Securities Act of 1933, because the stock options either
did not involve an offer or sale for purposes of Section 2(a)(3) of the
Securities Act, in reliance on the fact that the stock options were granted for
no consideration, or were offered and sold in transactions not involving a
public offering, exempt from registration under the Securities Act pursuant to
Section 4(2).

ITEM 3. Defaults Upon Senior Securities

Not Applicable

ITEM 4. Submission of Matters to a Vote of Security Holders

Not Applicable

ITEM 5. Other Information

Not Applicable

ITEM 6. Exhibits

Exhibit 10.1 - Director Severance Plan

Exhibit 10.2 - Key Employee Severance Plan


                                       23
<PAGE>

Exhibit 31 - Rule 13a-14(a)/15d-14(a) Certifications

Exhibit 32 - Section 1350 Certifications


SIGNATURES

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


                                             GraphOn Corporation
                                                (Registrant)

                                           Date: August 14, 2008
                                           By: /s/ Robert Dilworth
                                               -------------------
                                                 Robert Dilworth
                                         Chief Executive Officer and
                                            Chairman of the Board
                                        (Principal Executive Officer)

                                            Date: August 14, 2008
                                            By: /s/ William Swain
                                                -----------------
                                                  William Swain
                                             Chief Financial Officer
                                        (Principal Financial Officer and
                                          Principal Accounting Officer)




                                       24
<PAGE>