UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549







FORM
10-Q











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





For
the quarterly period ended June 30, 2008





OR




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





For
the transition period from __________ to __________




Commission
File Number 0-15885







NATIONAL
DATACOMPUTER, INC.





(Exact
name of registrant as specified in its charter)




Delaware
            
            04-2942832(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)




900
      Middlesex Turnpike, Billerica, MA
            
            01821(Address
      of principal executive offices)
            
            (Zip
      Code)





(978)
663-7677





(Registrant’s
telephone number, including area code)









(Former
name, former address and former fiscal year, if changed since last
report.)







Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  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(Do not check
      if a smaller reporting company)


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





The
number of shares of Common Stock outstanding at August 12, 2008 was
2,449,496.





NATIONAL
DATACOMPUTER, INC.


INDEX












Page
      No.PART
      I.    FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements:Balance
      Sheets as of June 30, 2008 and December 31, 2007
              
              3Statements
      of Operations for the three and six months ended June 30, 2008 and
      2007
              
              4Statement
      of Stockholders’ Deficit for the six months ended June 30,
      2008
              
              5Statements
      of Cash Flows for the six months ended June 30, 2008 and
    2007
              
              6Notes
      to Financial Statements
              
              7Item
      2.
              Management’s
      Discussion and Analysis or Plan of Operation
              
              11Item
      3.
              Quantitative
      and Qualitative Disclosures about Market Risk
              
              18Item
      4.
              Controls
      and Procedures
              
              18PART
      II.   OTHER INFORMATIONItem
      1.
              Legal
      Proceedings
              
              20Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              
              20Item
      3.
              Defaults
      upon Senior Securities
              
              20Item
      4.
              Submissions
      of Matters to a Vote of Security Holders
              
              20Item
      5.
              Other
      Information
              
              20Item
      6.
              Exhibits
              
              21Signatures
              
              
              22Exhibit
      Index
              
              
              23












2
 
 NATIONAL
DATACOMPUTER, INC.
 BALANCE
SHEETS


June
      30,
              
              
              December
      31,2008
              
              
              2007(Unaudited)
              
              
              (Audited)AssetsCurrent
      Assets:Cash
              
              $
              56,923
              
              
              $
              257,019Accounts
      receivable, net of allowance for doubtful accounts of
    $3,000
              
              
              255,552
              
              
              
              76,158Inventories,
      net
              
              
              302
              
              
              
              2,401Deferred
      hardware and software costs
              
              
              665,901
              
              
              
              799,623Prepaid
      expenses
              
              
              270,103
              
              
              
              52,317Total
      current assets
              
              
              1,248,781
              
              
              
              1,187,518Prepaid
      expenses
              
              
              
              
              
              
              19,811Property
      and equipment, net
              
              
              54,290
              
              
              
              56,826Capitalized
      software development costs, net
              
              
              5,196
              
              
              
              9,289Total
      Assets
              
              $
              1,308,267
              
              
              $
              1,273,444Liabilities
      and Stockholders’ Deficit:Current
      Liabilities:Current
      obligations under capital lease
              
              $
              21,945
              
              
              $
              19,093Note
      payable
              
              
              6,223
              
              
              
              18,125Accounts
      payable
              
              
              812,201
              
              
              
              1,422,629Customer
      deposits
              
              
              8,017
              
              
              
              9,964Accrued
      payroll and related taxes
              
              
              64,422
              
              
              
              52,535Other
      accrued expenses
              
              
              47,867
              
              
              
              98,210Deferred
      revenues
              
              
              1,268,503
              
              
              
              508,058Total
      current liabilities
              
              
              2,229,178
              
              
              
              2,128,614Obligations
      under capital lease, net of current portion
              
              
              15,464
              
              
              
              27,680Total
      Liabilities
              
              
              2,244,642
              
              
              
              2,156,294Commitments
      and contingenciesStockholders’
      Deficit:Preferred
      stock, $0.001 par value; 3,333 shares authorized;

                  no
      shares issued or outstanding
              
              
              —
              
              
              
              —Common
      stock, $0.001 par value; 6,000,000 shares authorized; 2,382,829 shares
                issued
      and outstanding at June 30, 2008 and December 31,
    2007
              
              
              2,383
              
              
              
              2,383Capital
      in excess of par value
              
              
              15,555,288
              
              
              
              15,551,667Accumulated
      deficit
              
              
              (16,494,046
              )
              
              
              (16,436,900
              )Total
      Stockholders’ Deficit
              
              
              (936,375
              )
              
              
              (882,850
              )Total
      Liabilities and Stockholders’ Deficit
              
              $
              1,308,267
              
              
              $
              1,273,444
     The
accompanying notes are an integral part of these
financial statements.


3


NATIONAL
DATACOMPUTER, INC.
 STATEMENTS
OF OPERATIONS
 (Unaudited)


Three
      Months Ended
              
              
              Six
      Months EndedJune
      30,
              
              
              June
      30,
              
              
              June
      30,
              
              
              June
      30,2008
              
              
              2007
              
              
              2008
              
              
              2007Revenues:Product
              
              $
              847,631
              
              
              $
              286,325
              
              
              $
              986,902
              
              
              $
              353,053Services
              
              
              217,344
              
              
              
              229,332
              
              
              
              495,265
              
              
              
              460,297Total
      Revenues
              
              
              1,064,975
              
              
              
              515,657
              
              
              
              1,482,167
              
              
              
              813,350Cost
      of revenues
              
              
              773,840
              
              
              
              309,893
              
              
              
              1,012,949
              
              
              
              517,257Gross
      Profit
              
              
              291,135
              
              
              
              205,764
              
              
              
              469,218
              
              
              
              296,093Operating
      expenses:Selling
      and marketing
              
              
              97,761
              
              
              
              82,072
              
              
              
              156,831
              
              
              
              166,620General
      and administrative
              
              
              180,718
              
              
              
              194,479
              
              
              
              369,052
              
              
              
              450,459278,479
              
              
              
              276,551
              
              
              
              525,883
              
              
              
              617,079Income
      (loss) from operations
              
              
              12,656
              
              
              
              (70,787
              )
              
              
              (56,665
              )
              
              
              (320,986
              )Other
      income (expense):Interest
      income
              
              
              94
              
              
              
              1,859
              
              
              
              2,518
              
              
              
              4,495Gain
      (loss) on currency exchange
              
              
              293
              
              
              
              6,887
              
              
              
              1,984
              
              
              
              8,018Interest
      expense
              
              
              (2,636
              )
              
              
              (2,872
              )
              
              
              (4,983
              )
              
              
              (4,650
              )Net
      income (loss)
              
              
              10,407
              
              
              
              (64,913
              )
              
              
              (57,146
              )
              
              
              (313,123
              )Calculation
      of net income (loss) per common share:Basic
      and diluted net loss per share attributable tocommon
      stockholders:
              
              
              0.00
              
              
              
              (0.03
              )
              
              
              (0.02
              )
              
              
              (0.15
              )Net
      loss attributable to common stockholders
              
              $
              0.00
              
              
              $
              (0.03
              )
              
              $
              (0.02
              )
              
              $
              (0.15
              )Weighted
      average shares
              
              
              2,382,829
              
              
              
              2,365,613
              
              
              
              2,382,829
              
              
              
              2,075,632
       The
accompanying notes are an integral part of these
financial statements.


4
 
 NATIONAL
DATACOMPUTER, INC.
 STATEMENT
OF STOCKHOLDERS’ DEFICIT


Common
      Stock
              
              
              Capital
      in
              
              
              
              
              
              TotalPar
              
              
              excess
              
              
              Accumulated
              
              
              stockholders’Shares
              
              
              value
              
              
              of par value
              
              
              deficit
              
              
              deficitBalance
      at December 31, 2007 (Audited)
              
              
              2,382,829
              
              
              $
              2,383
              
              
              $
              15,551,667
              
              
              $
              (16,436,900
              )
              
              $
              (882,850
              )Net
      loss
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (57,146
              )
              
              
              (57,146
              )Stock
      based compensation related to options
      granted
              
              
              —
              
              
              
              —
              
              
              
              3,621
              
              
              
              —
              
              
              
              3,621Balance
      at June 30, 2008 (Unaudited)
              
              
              2,382,829
              
              
              $
              2,383
              
              
              $
              15,555,288
              
              
              $
              (16,494,046
              )
              
              $
              (936,375
              )








































The
accompanying notes are an integral part of these
financial statements.


5


NATIONAL
DATACOMPUTER, INC.


STATEMENTS
OF CASH FLOWS


(Unaudited)


Six
      Months EndedJune
      30,
              
              
              June
      30,2008
              
              
              2007OPERATING
      ACTIVITIES:Net
      loss
              
              $
              (57,146
              )
              
              $
              (313,123
              )Adjustments
      to reconcile net loss to netcash
      used for operating activities:Depreciation
      and amortization
              
              
              20,543
              
              
              
              14,747Stock
      based compensation related to options granted
              
              
              3,621
              
              
              
              904Changes
      in assets and liabilities:Increase
      in accounts receivable
              
              
              (179,394
              )
              
              
              (184,324
              )Decrease
      in inventories
              
              
              2,099
              
              
              
              2,472Decrease
      (increase) in deferred hardware and software costs
              
              
              133,722
              
              
              
              (314,410
              )Increase
      in other prepaid expenses
              
              
              (197,975
              )
              
              
              (83,766
              )(Decrease)
      increase in accounts payable
              
              
              (610,428
              )
              
              
              192,952(Decrease)
      increase in customer deposits
              
              
              (1,947
              )
              
              
              17,551Decrease
      in accrued expenses
              
              
              (38,456
              )
              
              
              (36,716
              )Increase
      in deferred revenues
              
              
              760,445
              
              
              
              553,220Net
      cash used for operating activities
              
              
              (164,916
              )
              
              
              (150,493
              )Cash
      flows from investing activities:Purchases
      of property and equipment
              
              
              (13,914
              )
              
              
              (17,124
              )Additions
      to capitalized software development costs
              
              
              —
              
              
              
              (1,674
              )Net
      cash used for investing activities
              
              
              (13,914
              )
              
              
              (18,798
              )Cash
      flows from financing activities:Net
      proceeds from additional capital raised
              
              
              —
              
              
              
              262,165Principal
      payments on note payable
              
              
              (11,902
              )
              
              
              (16,563
              )Principal
      payments on obligationsunder capital lease
              
              
              (9,364
              )
              
              
              (5,138
              )Net
      cash (used for) provided by financing activities
              
              
              (21,266
              )
              
              
              240,464Net
      (decrease) increase in cash
              
              
              (200,096
              )
              
              
              71,173Cash,
      beginning of period
              
              
              257,019
              
              
              
              162,783Cash,
      end of period
              
              $
              56,923
              
              
              $
              233,956Supplemental
      Disclosure of Cash Flow Information:Cash
      paid for interest
              
              $
              4,523
              
              
              $
              4,650Non-cash
      investing and financing activities:Accrued
      compensation paid with stock
              
              $
              —
              
              
              
              21,250Deferred
      compensation paid with stock
              
              $
              —
              
              
              
              15,000Acquisition
      of property and equipment under capital lease
              
              $
              —
              
              
              
              48,539










The
accompanying notes are an integral part of these
financial statements.


6


NATIONAL
DATACOMPUTER, INC.


NOTES
TO UNAUDITED FINANCIAL STATEMENTS





1.   
Basis of presentation:





Company





National
Datacomputer is engaged exclusively in providing solutions through the use of
mobile information systems in the distribution market segment within the product
supply chain. We design, market, sell and service computerized systems used to
automate the collection, processing, and communication of information related to
product sales and inventory control. Our products and services include
application-specific software, data communication, handheld computers, related
peripherals and accessories, as well as associated education and
support.





General





The
unaudited financial statements included herein have been presented pursuant to
the rules of the Securities and Exchange Commission (the “SEC”) for quarterly
reports on Form 10-Q and do not include all of the information and note
disclosure required by accounting principles generally accepted in the United
States of America. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. In the opinion of management, these
statements include all adjustments, consisting only of normal, recurring
adjustments necessary for a fair presentation of the financial position of
National Datacomputer, Inc. (the “Company”) as of June 30, 2008, and the results
of their operations and cash flows for the three and six months ended June 30,
2008 and 2007. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company’s annual report
for the year ended December 31, 2007, which are included in the Company’s Form
10-KSB. The year-end condensed balance sheet data was derived from audited
financial statements.





2.    Recent
accounting pronouncements:





In
September 2006, the FASB issued SFAS No. 157,“Fair Value Measurements”.
SFAS 157 prescribes a single definition of fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The adoption of
SFAS No. 157 with respect to financial assets and liabilities in the first
quarter of 2008 had no effect on the Company’s results of operations or
financial position. In addition, the Company is evaluating the impact of SFAS
No. 157 for measuring nonfinancial assets and liabilities on future results of
operations and financial position.




In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities.”   This statement
permits entities to choose to measure many financial instruments and certain
other items at fair value.  The objective 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.  The
adoption of SFAS No. 159 in the first quarter of 2008 did not have an impact on
the Company’s results of operations or financial position.




In
December 2007, the FASB issued SFAS No. 141R, “Business Combinations,”
which changes how business acquisitions are accounted.  SFAS No. 141R
requires the acquiring entity in a business combination to
recognize






7


all (and
only) the assets acquired and liabilities assumed in the transaction and
establishes the acquisition-date fair value as the measurement objective for all
assets acquired and liabilities assumed in a business combination.  Certain
provisions of this standard will, among other things, impact the determination
of acquisition-date fair value of consideration paid in a business combination
(including contingent consideration); exclude transaction costs from acquisition
accounting; and change accounting practices for acquired contingencies,
acquisition-related restructuring costs, in-process research and development,
indemnification assets and tax benefits.  SFAS No. 141R is effective
for the Company for business combinations and adjustments to an acquired
entity’s deferred tax asset and liability balances occurring after
December 31, 2008.  The Company is currently evaluating the future
impacts and disclosures of this standard.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51.” This
statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. SFAS No. 160 requires
the recognition of a noncontrolling interest (minority interest) as equity in
the consolidated financial statements and separate from the parent’s equity. The
amount of net income attributable to the noncontrolling interest will be
included in consolidated net income on the face of the income statement. SFAS
No. 160 amends certain of ARB No. 51’s consolidation procedures for
consistency with the requirements of SFAS No. 141(R). This statement
requires changes in the parent’s ownership interest of consolidated subsidiaries
to be accounted for as equity transactions. This statement also includes
expanded disclosure requirements regarding the interests of the parent and its
noncontrolling interest. The Company is currently evaluating the future impacts
and disclosures of this standard.





In
December 2007, the SEC issued SAB No. 110.  SAB 110 allows for the
continued use of a “simplified” method, as discussed in SAB No. 107, in
developing an estimate of expected term of “plain vanilla” share options in
accordance with SFAS 123 (revised 2004).  Originally the SEC staff stated
in SAB 107 that it would not expect a company to use the simplified method for
share option grants after December 31, 2007.  Accordingly, the SEC staff
will continue to accept, under certain circumstances, the use of the simplified
method beyond December 31, 2007.  The Company will continue to use of the
simplified method for determining the value of options granted as allowed by SAB
110.





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities,” which changes the disclosure requirements
for derivative instruments and hedging activities. SFAS No. 161 requires
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS No. 133, “Accounting for Derivative Instruments
and Hedging Activities” and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. This statement’s
disclosure requirements are effective for fiscal years and interim periods
beginning after November 15, 2008. The Company is currently evaluating the
future impacts and disclosures of this standard.





3.   
Share-based payments:





The
Company accounts for share-based compensation according to the provisions of
SFAS No. 123(R), “Share−based Payment”, which establishes accounting for equity
instruments exchanged for employee services. Under SFAS 123(R), share-based
compensation cost is measured at the grant date, based on the fair value of the
award, and is recognized as an expense over the employee’s requisite service
period (generally the vesting period of the equity grant).





8


During
the six months ended June 30, 2008 and 2007, share-based compensation expense
amounted to $3,621 and $0.





The
Company estimates the fair value of stock options using the Black-Scholes
valuation model.  Key input assumptions used to estimate the fair
value of stock options include the exercise price of the award, the expected
option term, the expected volatility of the Company’s stock over the option’s
expected term, the risk-free interest rate over the option’s expected term, and
the Company’s expected annual dividend rate.  The Company believes
that the valuation technique and the approach utilized to develop the underlying
assumptions are appropriate in calculating the fair values of the Company’s
stock options granted in the six months ended June 30,
2008.    Estimates of fair values are not intended to
predict actual future events or the value ultimately realized by persons who
receive equity awards.





The
weighted average grant date fair value of options granted was $0.15 and $0.45
during the six months ended June 30, 2008 and 2007, respectively. The fair value
of options at date of grant was estimated using the Black-Scholes option-pricing
model with the following assumptions:





Six
      Months ended
            
            Six
      Months endedJune 30, 2008
            
            June 30, 2007Expected
      option term (1)
            
            
            6.25
      years
            
            
            6.25
      yearsExpected
      volatility factor (2)
            
            
            103.8%
            
            
            99.6%Risk-free
      interest rate (3)
            
            
            2.62%
            
            
            4.57%Expected
      annual dividend rate
            
            
            0%
            
            
            0%








(1)  The
option life was determined using the simplified method for estimating expected
option life, which qualifies as “plain-vanilla” options.


(2)  The
stock volatility for each grant is determined based on the review of the
experience of the weighted average of historical monthly price changes of the
Company’s common stock over the most recent six years, which approximates the
expected option life of the grant of 6.25 years.


(3)  The
risk-free interest rate for periods equal to the expected term of the share
option is based on the U.S. Treasury yield curve in effect at the time of
grant.





Stock
Option Plans





On August
19, 1997, the Board of Directors adopted the 1997 Stock Option Plan (“1997
Plan”) which provided for issuance of both incentive stock options and
non-qualified options to employees. As of June 30, 2008, there were options to
purchase 13,333 shares of common stock outstanding and no shares available for
grant under the 1997 Plan.





On
January 1, 1998, the Board of Directors adopted the 1998 Stock Option Plan
(“1998 Plan”) which provides for issuance of non-qualified options to employees.
As of June 30, 2008, there were options to purchase 1,333 shares of common stock
outstanding and no shares available for grant under the 1998 Plan.





On March
30, 2007, the Board of Directors adopted the 2007 Employee, Director and
Consultant Stock Option Plan (“2007 Plan”) which provides for the issuance of
both incentive and non-qualified stock options to




9


employees,
consultants and directors. A maximum of 133,333 shares of common stock of the
Company was reserved for issuance in accordance with the terms of the 2007 Plan.
On June 24, 2008, upon stockholders approval the maximum number of shares
reserved for issuance under the 2007 Plan was increased to 200,000.





Upon the
approval of the 2007 Plan, our 1997 Plan and our 1998 Plan terminated. All
outstanding options under our 1997 and 1998 Stock Option Plans will remain in
effect, but no additional option grants may be made. As of June 30, 2008, there
were 91,667 options outstanding under the 2007 Plan and 108,333 shares available
for grant under the 2007 Plan.




The
following table summarizes information about stock options outstanding at June
30, 2008:





Number
      of shares
            
            
            Weighted
      average
              exercise
      price
            
            
            Remaining
              contractual
              life
      in years
            
            
            Aggregate
              intrinsic
      valueOutstanding
      at December 31, 2007
            
            
            89,667
            
            
            $
            2.25
            
            
            
            8.53
            
            
            $
            —Granted
            
            
            16,667
            
            
            
            0.23Exercised
            
            
            —Cancelled/forfeited
            
            
            —Outstanding
      at June 30, 2008
            
            
            106,334
            
            
            
            1.95
            
            
            
            7.82
            
            
            $
            —Options
      vested or expected to vest at June 30, 2008 (1)
            
            
            96,250
            
            
            
            2.10
            
            
            
            7.45
            
            
            $
            —Options
      exercisable at June 30, 2008
            
            
            33,417
            
            
            $
            11.25
            
            
            
            .43
            
            
            $
            —





(1)  In
addition to the vested options, the Company expects a portion of the unvested
options to vest at some point in the future.  Options expected to vest
are calculated by applying an estimated forfeiture rate to the unvested
options.





4.    Income
Taxes:




The
Company adopted the provisions of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes – an interpretation of FASB Statement No. 9” (“FIN
48”), on January 1, 2007. FIN 48 requires that the impact of tax positions be
recognized in the financial statements if they are more likely than not to be
sustained upon examination, based on the technical merits of the
position.  As discussed in the financial statements in the
2007 Form 10-KSB, the Company has a valuation allowance against
the full amount of its net deferred tax assets. The Company
currently provides a valuation allowance against deferred tax
assets when it is more likely than not that some portion, or all of its deferred
tax assets, will not be realized.  The implementation of FIN 48 had no
effect on the Company’s financial position or results of operations and there is
no interest or penalties as management believes the Company has no uncertain tax
position at June 30, 2008.




The
Company is subject to U.S. federal income tax as well as well as income tax of
certain state jurisdictions. The Company has not been audited by the I.R.S. or
any states in connection with income taxes. The period from 2004-2007 remains
open to examination by the I.R.S. and state authorities.




10


ITEM
2.   Management’s Discussion and Analysis or Plan of
Operation.







The
following discussion provides an analysis of the financial condition and results
of operations of the Company and should be read in conjunction with the
Unaudited Financial Statements and Notes thereto appearing elsewhere herein and
our Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission for the year ended December 31, 2007.




The
discussion below contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
that involve risks and uncertainties. We generally use words such as “believe,”
“may,” “could,” “will,” “intend,” “expect,” “anticipate,” “plan,” and similar
expressions to identify forward-looking statements. You should not place undue
reliance on these forward-looking statements. Our actual results could differ
materially from those anticipated in the forward-looking statements for many
reasons, including the risks described in the Company’s filings with the
Security and Exchange Commission, including its Annual Report on Form 10-KSB for
the year ended December 31, 2007, filed on March 28, 2008.




Although
we believe the expectations reflected in the forward-looking statements are
reasonable, they relate only to events as of the date on which the statements
are made, and we cannot assure you that our future results, levels of activity,
performance or achievements will meet these expectations. Moreover, neither we
nor any other person assumes responsibility for the accuracy and completeness of
the forward-looking statements. We do not intend to update any of the
forward-looking statements after the date of this report to conform these
statements to actual results or to changes in our expectations, except as
required by law.





Summary





Our
mission is to provide solutions through the use of mobile information systems in
the distribution market segment within the product supply chain. We design,
market, sell, and service computerized systems used to automate the collection,
processing, and communication of information related to product sales and
inventory control. Our products and services include application-specific
software, data communication, handheld computers, related peripherals, and
accessories, as well as associated education and support.





From the
very beginning we designed our software solution based on the customer’s unique
specifications. Our first entry into the market was a DOS-based Route Accounting
software solution named RouteRider® which we developed in 1988. The RouteRider
software, running on our first generation of rugged handheld Datacomputer®
(“Datacomputer”) the DC3.0, was originally designed and built for an office
coffee service company. Since that time multiple generations of Datacomputers
(DC3X, DC4 and DC4CE) were designed and brought to market and our software
application was improved customer by customer and market by market. To date we
have provided dependable solutions for distribution markets such as baking,
dairy, beer, soda, water, wine and spirits.




Although
our Datacomputers running our original RouteRider software are still available
for purchase, we have now channeled all of our experience into new portable and
highly parameterized Route Accounting solution software named RouteRider LE®,
(“RRLE”). RRLE is a mobile sales force automation application designed to
increase efficiency, improve productivity and make companies more profitable and
competitive by allowing sales and distribution personnel to gather, enter and
share data at the point of work. It has been designed to run on the very latest
industry standard MicrosoftTMoperating systems and architectures which increases our market potential
by running on industry preferred operating systems and handheld
devices.




11


During
2006 we divested ourselves from our audit business to better concentrate our
efforts on our new Route Accounting solution. The hand-held route solution,
interfacing with the J.D. Edwards system, we delivered in 2006 to an
internationally recognized company in the food services industry has been
successful and the company has continued to deploy additional routes in Europe.
During the last quarter of 2007, we contracted to deliver a comprehensive RRLE
Direct Store Delivery solution to a major national bakery, and also to a major
bottling company. The combined orders have a value of approximately $2,000,000
with delivery scheduled in 2008.





Results
of Operations





Three
months ended June 30, 2008 compared to three months ended June 30,
2007.





For the
three months ended June 30, 2008, we reported a net income of $10,407 compared
to a net loss of $64,913 for the three months ended June 30, 2007. The improved
results were a direct result of higher revenues.





Revenue and Gross
Profit





Total
revenues increased 107% to $1,064,975 for the three months ended June 30, 2008
from $515,657 for the three months ended June 30, 2007. Total product revenues
increased 196% to $847,631 for the three months ended June 30, 2008 from
$286,325 for the comparable prior period. The increase was due to higher sales
of our new route software product, RRLE, offset by decreased sales of our
Datacomputers. Total service revenues decreased 5% to $217,344 for the three
months ended June 30, 2008 from $229,332 for the comparable prior period. The
decrease is a direct result of lower maintenance and repair contracts for our
Datacomputers.





Gross
profit was $291,135 or 27% of revenues for the three months ended June 30, 2008,
compared to $205,764 or 40% of revenues for the prior comparable
period.  The improved gross profit in absolute dollars was due to our
increased sales and our continued effort towards reducing our expenses. The
decreased profit as a percentage of revenues was due to sales during the three
months ended June 30, 2007 which carried a higher profit.





Operating
Expenses





Selling
and marketing expenses for the three months ended June 30, 2008 were $97,761
compared to $82,072 for the prior comparable period, an increase of $15,689 or
19%.  The increase is due primarily to higher commission expenses
offset by lower payroll cost resulting from reduced manpower.





General
and administrative expenses for the three months ended June 30, 2008 were
$180,718 compared to $194,479 for the prior comparable period, a decrease of
$13,761 or 7%. The decrease is a result of reduced legal and directors’ fees
combined with lower payroll costs resulting from reduced manpower.








Six
months ended June 30, 2008 compared to six months ended June 30,
2007.





For the
six months ended June 30, 2008, we reported a net loss of $57,146 compared to a
net loss of $313,123 for the six months ended June 30, 2007. The improved
results were a direct result of higher revenues combined with lower payroll
costs, resulting from reduced manpower, along with reduced legal and directors’
fees.




12


Revenue and Gross
Profit





Total
revenues increased 82% to $1,482,167 for the six months ended June 30, 2008 from
$813,350 for the six months ended June 30, 2007. Total product revenues
increased 180% to $986,902 for the six months ended June 30, 2008 from $353,053
for the comparable prior period. The increase was due to higher sales of our new
route software product, RRLE, offset by decreased sales of our Datacomputers.
Total service revenues increased 8% to $495,265 for the six months ended June
30, 2008 from $460,297 for the comparable prior period. The increase is a direct
result of higher billings of our professional services for RRLE implementation
projects, offset by lower maintenance and repair contracts for our
Datacomputers.





Gross
profit was $469,218 or 32% of revenues for the six months ended June 30, 2008,
compared to $296,093 or 36% of revenues for the prior comparable
period.  The improved gross profit in absolute dollars was due to our
increased sales and our continued effort towards reducing our expenses. The
decreased profit as a percentage of revenues was due to sales during the six
months ended June 30, 2007 which carried a higher profit.





Operating
Expenses





Total
operating expenses decreased 15% to $525,883 for the six months ended June 30,
2008 from $617,079 for the comparable prior period.





Selling
and marketing expenses for the six months ended June 30, 2008 were $156,831
compared to $166,620 for the prior comparable period, a decrease of $9,789 or
6%.  The decrease is due primarily to lower payroll cost resulting
from reduced manpower, offset by higher commission expenses resulting from
higher revenues.





General
and administrative expenses for the six months ended June 30, 2008 were $369,052
compared to $450,459 for the prior comparable period, a decrease of $81,407 or
18%. The decrease is a result of reduced legal and directors’ fees combined with
lower payroll costs resulting from reduced manpower.







Liquidity
and Capital Resources





We used
cash of $164,916 and $150,493 for operating activities for the six months ended
June 30, 2008 and 2007, respectively. For the six months ended June 30, 2008,
our principal operating cash was used to fund our loss from operations combined
with a decrease in accounts payable, along with an increase in accounts
receivable and prepaid expenses, offset by a decrease in deferred hardware and
software cost and an increase in deferred revenues related to new orders for
RRLE scheduled for completion in the later part of 2008. For the six months
ended June 30, 2007, our principal operating cash was used to fund our loss from
operations combined with an increase in deferred hardware and software cost,
accounts receivable and prepaid expenses, offset by an increase in accounts
payable and deferred revenues.





We used
cash of $13,914 and $18,798 for investing activities from operations for the six
months ended June 30, 2008 and 2007, respectively. The cash was used for the
purchase of capital equipment. As of June 30, 2008, we had no material
commitments for capital expenditures.





13


We used
cash of $21,266 and generated cash of $240,464 for financing activities for the
six months ended June 30, 2008 and 2007, respectively. During the six months
ended June 30, 2008, cash was used to make payments on obligations under our
notes payable and capital leases. During the six months ended June 30, 2007, we
raised capital, net of expenses, in the amount of $262,165 and made payments on
obligations under our notes payable and capital leases.





We have
an accumulated deficit of approximately $16,494,000 through June 30, 2008. As a
result of our deficit and our cash position, the report of our independent
registered public accounting firm relating to the financial statements as of and
for  the year ended December 31, 2007 contains an explanatory
paragraph regarding substantial doubt about our ability to continue as a going
concern. We have taken numerous steps to address this situation. In prior
periods, we divested ourselves of our audit business line in connection with a
transaction relating to shares of our preferred and common stock held by a
majority holder of our capital stock.  We also entered into an
arrangement with A.S.T., Inc. (“AST”) and Phyle Industries, Inc. (“Phyle”)
pursuant to which we sold our audit business line to AST in exchange for 4,150
shares of our preferred stock (representing all of our issued and outstanding
preferred stock).





During
January 2007 acting as agent for certain new investors interested in purchasing
shares of our common stock, we caused the transfer of 30,339,236 shares of our
common stock, together with accrued but unpaid stock dividends (representing
approximately 90% of our common stock in the aggregate) that Phyle had
previously purchased from Capital Bank Grawe Gruppe AG (“CapitalBank”). These
investors paid Phyle $250,000 for the purchase of our common stock and agreed to
also provide us $350,000 to be used as working capital.





We
continue exploring all opportunities to improve our financial condition by
pursuing potential revenues sources through increased marketing efforts. There
is a possibility that we may not realize adequate revenues in the near future to
meet cash flow requirements, and therefore might require us to implement further
cost saving actions or attempt to obtain additional financing. We believe that
based on our current revenue expectations, the expected timing of such revenues,
and our current level of expenses we have sufficient cash to fund our operations
through the end of 2008. There can be no assurance that such financing, if
required, will be available on reasonable terms, if at all.




Commitments,
Contractual Obligations and Off-Balance Sheet Arrangements





Our only
off-balance sheet arrangements are non-cancelable operating leases entered into
in the ordinary course of business, as discussed in our Annual Report on Form
10-KSB for the year ended December 31, 2007.





As of
June 30, 2008, there are no material changes in our contractual obligations as
disclosed in our Annual Report on Form 10-KSB for the year ended December 31,
2007.





Concentration
of Credit Risk





The
Company sells its products to customers principally in the United States of
America. During the first 6 months of 2008, two customers accounted for
approximately 82% of our total revenues.





14


Critical
Accounting Policies and Estimates





Use of
Estimates





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




Revenue
Recognition




We
recognize the majority of our revenue in accordance with SEC Staff Accounting
Bulletin No. 104, “Revenue
Recognition in Financial Statements”. Revenue related to product sales is
recognized upon shipment provided that title and risk of loss have passed to the
customer, there is persuasive evidence of an arrangement, the sales price is
fixed or determinable, collection of the related receivable is reasonably
assured and customer acceptance criteria, if any, have been successfully
demonstrated. Where the criteria cannot be demonstrated prior to shipment, or in
the case of new products, revenue is deferred until acceptance has been
received. Our sales contracts provide for the customer to accept title and risk
of loss at the time of delivery of the product to a common carrier.





Our
transactions sometimes involve multiple elements (i.e. systems and services).
Revenue under multiple arrangements is recognized in accordance with Emerging
Issues Task Force (“EITF”) Issue No. 00-21, “Accounting for Revenue Arrangements
with Multiple Deliverables”. Under this method, if an element is
determined to be a separate unit of accounting, the revenue for the element is
based on fair value and determined by verifiable objective evidence, and
recognized at time of delivery. If the arrangement has an undeliverable element,
we ensure that we have objective and reliable evidence of the fair value of the
undeliverable element. Fair value is determined based upon the price charged
when the element is sold separately.





We
recognize revenue for software licenses in accordance with the American
Institute of Certified Public Accountants (“AICPA”)’s Statement of Position
97-2, “Software Revenue
Recognition”(“SOP 97-2”). The application of SOP 97-2 requires judgment,
including whether a software arrangement includes multiple elements. License
revenue is recognized upon customer acceptance, provided that persuasive
evidence of an arrangement exists, no significant obligations with regards to
installation or implementation remain, fees are fixed or determinable, and
collectibility is probable.





Hardware
and software maintenance is marketed under annual and multi-year arrangements
and revenue is recognized ratably over the contract maintenance
term.





Accounts
Receivable





The
Company records trade receivables at their principal amount, adjusted for
write-offs and allowances for uncollectible amounts.  The Company
reviews its trade receivables monthly, and determines, based on management’s
knowledge and the customer’s payment history, any write-off or allowance that
may be necessary.  The Company follows the practice of writing off
uncollectible amounts against the allowance provided for such
accounts.





15


Inventories





Inventories
are stated at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method. The Company evaluates its inventories to
determine excess or slow moving products based on quantities on hand, current
orders and expected future demand. For those items in which the Company believes
it has an excess supply or for those items that are obsolete, the Company
estimates the net amount that the Company expects to realize from the sale of
such products and records an allowance.





Property and
Equipment





Property
and equipment are recorded at cost and depreciated over the estimated useful
lives of the assets using the straight-line method. Leasehold improvements are
amortized over the shorter of the useful lives or the remaining terms of the
related leases. Maintenance and repair costs are charged to operations as
incurred.





Capitalized
Software Research and Development Costs.





Costs
associated with the development of computer software are charged to operations
prior to the establishment of technological feasibility, as defined by Statement
of Financial Accounting Standards (SFAS) No. 86, “Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise Marketed”. Costs incurred
subsequent to the establishment of technological feasibility and prior to the
general release of the products are capitalized.





Capitalized
software costs are amortized on a product-by-product basis. The annual
amortization is the greater of the amount computed using (a) the ratio that
current gross revenue for a product bears to the total of current and
anticipated future gross revenues for that product or (b) the straight-line
method over the remaining estimated economic life of the product. Amortization
begins when the product is available for general release to the
customer.





Stock-Based
Compensation





The
Company accounts for share-based compensation according to the provisions of
SFAS No. 123(R), “Share-based Payment”, which establishes accounting for equity
instruments exchanged for employee services. Under SFAS 123(R), share-based
compensation cost is measured at the grant date, based on the fair value of the
award, and is recognized as an expense over the employee’s requisite service
period (generally the vesting period of the equity grant).




Net Loss Per
Share





Basic and
diluted loss per share is calculated by dividing net loss attributable to common
stockholders by the weighted-average number of common shares
outstanding.





16


Warranty and Return
Policy





The
Company’s warranty policy provides 90-day coverage on all parts and labor on all
products.  The policy with respect to sales returns provides that a
customer may not return inventory except at the Company’s option. The Company’s
warranty costs have historically been insignificant.





Shipping and Handling
Costs





Shipping
and handling costs are classified as a component of cost of goods sold. The
Company accounts for shipping and handling costs passed on to customers as
revenues.





Recent
accounting pronouncements





In
September 2006, the FASB issued SFAS No. 157,“Fair Value Measurements”.
SFAS 157 prescribes a single definition of fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The adoption of
SFAS No. 157 with respect to financial assets and liabilities in the first
quarter of 2008 had no effect on the Company’s results of operations or
financial position. In addition, the Company is evaluating the impact of SFAS
No. 157 for measuring nonfinancial assets and liabilities on future results of
operations and financial position.




In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities.”   This statement
permits entities to choose to measure many financial instruments and certain
other items at fair value.  The objective 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.  The
adoption of SFAS No. 159 in the first quarter of 2008 did not have an impact on
the Company’s results of operations or financial position.




In
December 2007, the FASB issued SFAS No. 141R, “Business Combinations,”
which changes how business acquisitions are accounted.  SFAS No. 141R
requires the acquiring entity in a business combination to recognize all (and
only) the assets acquired and liabilities assumed in the transaction and
establishes the acquisition-date fair value as the measurement objective for all
assets acquired and liabilities assumed in a business combination.  Certain
provisions of this standard will, among other things, impact the determination
of acquisition-date fair value of consideration paid in a business combination
(including contingent consideration); exclude transaction costs from acquisition
accounting; and change accounting practices for acquired contingencies,
acquisition-related restructuring costs, in-process research and development,
indemnification assets and tax benefits.  SFAS No. 141R is effective
for the Company for business combinations and adjustments to an acquired
entity’s deferred tax asset and liability balances occurring after
December 31, 2008.  The Company is currently evaluating the future
impacts and disclosures of this standard.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51.” This
statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. SFAS No. 160 requires
the recognition of a noncontrolling interest (minority interest) as equity in
the consolidated financial statements and separate from the parent’s equity. The
amount of net income attributable to the noncontrolling interest will be
included in consolidated net income on the face of the income statement. SFAS
No. 160 amends certain of ARB No. 51’s




17


consolidation
procedures for consistency with the requirements of SFAS No. 141(R). This
statement requires changes in the parent’s ownership interest of consolidated
subsidiaries to be accounted for as equity transactions. This statement also
includes expanded disclosure requirements regarding the interests of the parent
and its noncontrolling interest. The Company is currently evaluating the future
impacts and disclosures of this standard.





In
December 2007, the SEC issued SAB No. 110.  SAB 110 allows for the
continued use of a “simplified” method, as discussed in SAB No. 107, in
developing an estimate of expected term of “plain vanilla” share options in
accordance with SFAS 123 (revised 2004).  Originally the SEC staff stated
in SAB 107 that it would not expect a company to use the simplified method for
share option grants after December 31, 2007.  Accordingly, the SEC staff
will continue to accept, under certain circumstances, the use of the simplified
method beyond December 31, 2007.  The Company will continue to use of the
simplified method for determining the value of options granted as allowed by SAB
110.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities,” which changes the disclosure requirements
for derivative instruments and hedging activities. SFAS No. 161 requires
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS No. 133, “Accounting for Derivative Instruments
and Hedging Activities” and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. This statement’s
disclosure requirements are effective for fiscal years and interim periods
beginning after November 15, 2008. The Company is currently evaluating the
future impacts and disclosures of this standard.






ITEM
3.     Quantitative and Qualitative Disclosures about
Market Risk





No
discussion is required pursuant to Form 10-Q Instruction to paragraph
305(c).







ITEM
4.     Controls and Procedures




a) Evaluation of Disclosure Controls
and Procedures. We have conducted an evaluation under the supervision of
the Chief Executive Officer and the Chief Accounting Officer (its principal
executive officer and principal financial officers, respectively), regarding the
effectiveness of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act of 1934) as of June 30,
2008. Based on the aforementioned evaluation, management has concluded that our
disclosure control and procedures were not effective as of June 30, 2008 because
of the existence of two material weaknesses in our internal control over
financial reporting related to (i) our finance group’s inability to perform the
testing of internal controls on financial reporting due to our limited number of
personnel engaged in accounting and finance functions and a resulting lack in
the segregation of duties, and (ii) the potential inability of our accounting
staff to handle certain complex accounting issues. Notwithstanding the existence
of the material weaknesses described below, management has concluded that the
consolidated financial statements in this Form 10-Q fairly represents, in all
material respects, the Company’s financial position, results of operations and
cash flow for the periods and dates presented.




(b)           Management’s Annual Report on
Internal Control over Financial Reporting




(i)    Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Our internal control system is designed to
provide reasonable assurance to our management and board




18


of
directors regarding the reliability of financial reporting and the preparation
of published financial statements. All internal control systems, no matter how
well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial reporting and financial statement preparation and
presentation.




(ii)    We
have assessed the effectiveness of our internal control over financial reporting
as of June 30, 2008. In making this assessment, we used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission, or
COSO, in Internal
Control—Integrated Framework.




(iii)   Two
material weaknesses were identified in our internal control over financial
reporting relative to accounting for the quarter ended June 30, 2008. The first
material weakness was comprised of inadequate segregation of duties to ensure a
sufficient review of the work performed by our Chief Accounting Officer (due to
the limited number of personnel we retain as employees).  The second
material weakness was the potential inability of our accounting staff to handle
certain complex accounting issues.   We believe a mitigating
factor for this material weakness is the active participation of our Audit
Committee.   These material weaknesses did not  result
in the restatement of any previously reported financial statements or any other
related financial disclosure nor did they disclose any errors or
misstatements.




Because
of the material weaknesses described above, management has concluded that the
Company’s internal control over financial reporting was not effective as of June
30, 2008. No other material weaknesses in our internal control over financial
reporting were identified.




A
material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the Company’s annual or interim financial
statements will not be prevented or detected on a timely basis.




(c)           Changes in Internal Control over
Financial Reporting




No
changes in our internal control over financial reporting occurred during the
quarter ended June 30, 2008 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.




(d)           Remediation Plan for Material
Weakness




In
response to the identified material weaknesses described above, our management,
with oversight from our Audit Committee, intends to continue to enhance our
internal control over financial reporting relative to accounting during this
fiscal year as follows:




·
            
            Interview
      and potentially retain third party consultants which may assist the
      Company’s accounting staff  in providing review and analysis of
      complex accounting issues, and




·
            
            Engage
      additional expert resources to review material transactions so as to
      provide a review of what are otherwise unsegregated duties of finance and
      accounting staff.










19


PART
II - OTHER INFORMATION







Item
1.   Legal Proceedings




We are
not a party to any legal proceedings.





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





On July
28, 2008, Anthony Stafford purchased 66,667 shares of our common stock at a
price of $0.75 per share for a total cash consideration of $50,000.





Item
3.   Defaults upon Senior Securities





Not
Applicable.





Item
4.   Submissions of Matters to a Vote of Security Holders





As
described in our Form 8-K filing on August 5, 2008, on June 24, 2008, we
submitted the following matters to a vote of our stockholders:




1.
            To
      elect the Company’s director nominees to the Board of
      Directors.




2.
            To
      approve an amendment to the Company’s Certificate of Incorporation, as
      amended (the “Certificate of Incorporation”) that Article Fourth of the
      Company’s Certificate of Incorporation be amended to effect a 1-for-15
      reverse stock split of the issued and outstanding shares of the Company’s
      common stock;




3.
            To
      approve an amendment to the Restated Company’s Certificate of
      Incorporation to reduce  the number of authorized shares of
      common stock;




4.
            To
      amend the 2007 Employee, Director and Consultant Stock Plan by increasing
      the shares of the Company’s common stock for grant under that plan from
      2,000,000 to 3,000,000 shares (which shares available for grant shall be
      reduced to 200,000 shares following the reverse stock
    split;




5.
            To
      ratify the appointment of Carlin, Charron & Rosen, LLP as the
      independent registered public accounting firm of the
    Company;




The votes
for each of the proposals were as follows:




FOR:
              
              AGAINST
              
              ABSTAINProposal
      1.
              
              29,975,674
              
              0
              
              343Proposal
      2.
              
              29,925,670
              
              50,923
              
              83Proposal
      3.
              
              29,925,793
              
              50,775
              
              108Proposal
      4.
              
              29,872,903
              
              51,028
              
              52,745Proposal
      5.
              
              29,975,750
              
              661
              
              265















Item
5.   Other Information





Not
Applicable.




20


Item
6.   Exhibits





(a)
            Exhibits





31.1
            Certification
      of the Chief Executive Officer




31.2
            Certification
      of the Chief Accounting Officer




32.1
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.


















































21





SIGNATURES





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








NATIONAL DATACOMPUTER,
      INC.August
      13, 2008
              By:
              /s/ William
      B. BerensWilliam
      B. BerensPresident
      and Chief Executive Officer (principal executive officer)






August
      13, 2008
              By:
              /s/ Bruna
      BucacciBruna
      BucacciChief
      Accounting Officer (principal financial and accounting officer)




















22





EXHIBIT
INDEX













Exhibit
No.                                                      Title





31.1
              Certification
      of the Chief Executive Officer.
  31.2
              Certification
      of the Chief Accounting Officer.
  32.1
              Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.























































23