================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB
(MARK ONE)

                 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended: June 30, 2005

                                       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 SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                       04-2942832
(STATE OR OTHER JURISDICTION OF                 (IRS EMPLOYER IDENTIFICATION #)
 INCORPORATION OR ORGANIZATION)

                   900 MIDDLESEX TURNPIKE, BILLERICA, MA 01821
               (Address of principal executive offices) (Zip Code)

        REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: (978) 663-7677

                  _____________________________________________

Check whether the registrant (1) filed all reports required to be filed by
section 13 or 15 (d) of the Securities and Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such report(s), and (2) has been subject to such filing requirements for
the past ninety (90) days. [X] Yes [_] No

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

The number of shares of the Registrant's common stock, par value $0.08,
outstanding as of August 15, 2005 was 22,134,181.

================================================================================
<PAGE>

                           NATIONAL DATACOMPUTER, INC.
                                      INDEX
                          PART I. FINANCIAL INFORMATION

                                                                        Page No.
                                                                        --------
ITEM 1. UNAUDITED FINANCIAL STATEMENTS:

        Unaudited Balance Sheets as of June 30, 2005
         and December 31, 2004.................................................3

        Unaudited Statements of Operations for the three and
         six months ended June 30, 2005 and 2004...............................4

        Unaudited Statement of Stockholders' Equity for the
           three and six months ended June 30, 2005............................5

        Unaudited Statements of Cash Flows for the six months
           ended June 30, 2005 and  2004.......................................6

        Notes to Unaudited Financial Statements................................7


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............12

ITEM 3. CONTROLS AND PROCEDURES...............................................16

                           PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.....................................................17

ITEM 2. Changes in Securities and Small Business Issuer Purchases of
        Securities............................................................17

ITEM 3. Defaults upon Senior Securities.......................................17

ITEM 4. Submissions of Matters to a Vote of Security Holders..................17

ITEM 5. Other Information.....................................................17

ITEM 6. Exhibits..............................................................17

SIGNATURES....................................................................18

EXHIBIT INDEX.................................................................19

                                       2
<PAGE>

                           NATIONAL DATACOMPUTER, INC.
                                 BALANCE SHEETS
                                   (Unaudited)
--------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                                                   June 30,      December 31,
                                                                                     2005            2004
                                                                                 ------------    ------------
<S>                                                                             <C>             <C>
Assets
Current Assets:
     Cash                                                                        $     88,099    $    266,463
     Accounts receivable, net of allowance for doubtful accounts of
       $1,296 in 2005 and 2004                                                        250,587         280,707
     Inventories                                                                      200,787         194,397
     Other current assets                                                              29,461          11,820
                                                                                 ------------    ------------
       Total current assets                                                           568,934         753,387
Fixed assets, net                                                                      91,089         116,481
Capitalized software development costs, net                                            54,382          86,920
                                                                                 ------------    ------------
       Total Assets                                                              $    714,405    $    956,788
                                                                                 ============    ============

Liabilities and stockholders' equity
Current Liabilities:
     Current obligations under capital lease                                     $      3,074    $      6,604
     Note payable, current portion                                                     54,000          54,000
     Accounts payable                                                                 335,094         223,367
     Accrued payroll and related taxes                                                143,705          95,300
     Other accrued expenses                                                            85,204          92,478
     Deferred revenues                                                                361,830         373,866
                                                                                 ------------    ------------
       Total current liabilities                                                      982,907         845,615
Obligations under capital lease, net of current portion                                10,688          16,964
                                                                                 ------------    ------------
       Total Liabilities                                                              993,595         862,579
                                                                                 ------------    ------------

Commitments

Stockholders' Equity (Deficit):
     Preferred stock, Series A convertible, $0.001 par value; 20 shares
       authorized; no shares issued or outstanding                                       --              --

     Preferred stock, Series B convertible $0.001 par value; 4,200 shares
       authorized; 2,400 shares issued and outstanding
       (liquidating preference of $2,400,000 )                                      2,105,832       2,105,832

     Preferred stock, Series C convertible $0.001 par value; 900 shares
       authorized, issued and outstanding (liquidating preference of $900,000)        834,370         834,370

     Preferred stock, Series D convertible $0.001 par value; 350 shares
       authorized, issued and outstanding (liquidating preference of $350,000)        324,639         324,639

     Preferred stock, Series E convertible $0.001 par value; 500 shares
       authorized, issued and outstanding (liquidating preference of $500,000)        273,880         273,880

     Preferred stock, Series F convertible $0.001 par value; 175 shares
       authorized; no shares issued or outstanding                                       --              --

     Common stock, $0.08 par value; 30,000,000 shares authorized; 22,134,181
       shares issued and outstanding at June 30, 2005 and December 31, 2004         1,770,733       1,770,733

     Capital in excess of par value                                                13,066,822      12,933,322
     Accumulated deficit                                                          (18,655,466)    (18,148,567)
     Stock subscriptions receivab(net of allowance for doubtful accounts
       of $351,269)                                                                      --              --
                                                                                 ------------    ------------
       Total Stockholders' Equity (Deficit)                                          (279,190)         94,209
                                                                                 ------------    ------------
       Total Liabilities and Stockholders' Equity                                $    714,405    $    956,788
                                                                                 ============    ============
</TABLE>

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

                                        3
<PAGE>

NATIONAL DATACOMPUTER, INC.
STATEMENTS OF OPERATIONS (Unaudited)
--------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                  Three Months                     Six Months
                                                     Ended                           Ended
                                          ----------------------------    ----------------------------
                                             June 30,       June 30,        June 30,        June 30,
                                               2005           2004            2005            2004
<S>                                      <C>             <C>             <C>             <C>
Revenues:
    Product revenue                       $    260,230    $    284,061    $    767,818    $    946,076
    Service and other revenue                  271,283         327,922         566,572         682,185
                                          ------------    ------------    ------------    ------------

                                               531,513         611,983       1,334,390       1,628,261

Cost of sales and services                     329,649         421,034         731,315         938,432
                                          ------------    ------------    ------------    ------------

                                               201,864         190,949         603,075         689,829
                                          ------------    ------------    ------------    ------------

Operating expenses:
    Research and development                    90,070          86,677         184,531         177,601
    Selling and marketing                      131,870         116,128         271,212         206,302
    General and administrative                 244,779         242,613         520,576         523,703
                                          ------------    ------------    ------------    ------------

                                               466,719         445,418         976,319         907,606
                                          ------------    ------------    ------------    ------------

Loss from operations                          (264,855)       (254,469)       (373,244)       (217,777)

Other income (expense):
    Interest income                                664           2,155           1,668           2,155
    Other income                                  --              --                60            --
    Interest expense                              (830)           (995)         (1,883)         (2,190)
                                          ------------    ------------    ------------    ------------

Net loss                                  $   (265,021)   $   (253,309)   $   (373,399)   $   (217,812)
                                          ============    ============    ============    ============


Calculation of net loss per common share and dilutive share equivalents:


Net loss                                  $   (265,021)   $   (253,309)   $   (373,399)   $   (217,812)
Interest on preferred stock                    (66,750)        (66,750)       (133,500)       (133,500)
                                          ------------    ------------    ------------    ------------

Net loss attributable to
    common shareholders                   $   (331,771)   $   (320,059)   $   (506,899)   $   (351,312)
                                          ============    ============    ============    ============

Basic and diluted net loss per share      $      (0.01)   $      (0.01)   $      (0.02)   $      (0.02)
                                          ============    ============    ============    ============

Weighted average shares                     22,134,181      21,742,594      22,134,181      21,831,546
                                          ============    ============    ============    ============
</TABLE>


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

                                        4
<PAGE>

NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
--------------------------------------------------------------------------------
<TABLE><CAPTION>
                               PREFERRED STOCK SERIES B      PREFERRED STOCK SERIES C     PREFERRED STOCK SERIES D
                             ---------------------------   ---------------------------   ---------------------------

                                            NET ISSUANCE                  NET ISSUANCE                  NET ISSUANCE
                                SHARES          PRICE         SHARES          PRICE         SHARES          PRICE
                             ------------   ------------   ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>            <C>            <C>            <C>
Balance at December 31, 2004        2,400   $  2,105,832            900   $    834,370            350       $324,639

Net loss                              --             --             --             --             --             --

Interest on preferred stock           --             --             --             --             --             --
                             ------------   ------------   ------------   ------------   ------------   ------------

Balance at June 30, 2005            2,400   $  2,105,832            900   $    834,370            350   $    324,639
                             ------------   ------------   ------------   ------------   ------------   ------------



                              PREFERRED STOCK SERIES E                   COMMON STOCK
                             ---------------------------   ------------------------------------------
                                                                                          CAPITAL IN                       TOTAL
                                            NET ISSUANCE                      PAR          EXCESS OF    ACCUMULATED    STOCKHOLDERS'
                                SHARES          PRICE         SHARES          VALUE        PAR VALUE      DEFICIT         EQUITY
                             ------------   ------------   ------------   ------------   ------------   ------------   ------------

Balance at December 31, 2004          500   $    273,880     22,134,181   $  1,770,733   $ 12,933,322   ($18,148,567)  $     94,209

Net loss                              --             --             --             --             --        (373,399)     ($373,399)

Interest on preferred stock           --             --             --             --         133,500       (133,500)           --


Balance at June 30, 2005              500   $    273,880     22,134,181   $  1,770,733   $ 13,066,822   ($18,655,466)     ($279,190)

</TABLE>

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

                                        5
<PAGE>

                          NATIONAL DATACOMPUTER, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
--------------------------------------------------------------------------------
<TABLE><CAPTION>
                                                              Six Months Ended
                                                          ------------------------
                                                           June 30,      June 30,
                                                             2005          2004
                                                          ----------    ----------
<S>                                                      <C>           <C>
Cash flows from operating activities:
     Net loss                                             $ (373,399)   $ (217,812)
     Adjustments to reconcile net loss to net
         cash used for operating activities:
         Depreciation and amortization                        65,083       101,322
         Changes in assets and liabilities:
            Decrease (increase) in accounts receivable        30,120      (140,040)
            (Increase) decrease in inventories                (6,390)       48,519
            Increase in other current assets                 (17,641)      (17,071)
            Increase (decrease) in accounts payable          111,731       (26,659)
            Increase (decrease) in accrued expenses           41,127       (29,068)
            Decrease in deferred revenues                    (12,036)      (25,779)
                                                          ----------    ----------
     Net cash used for operating activities                 (161,405)     (306,588)
                                                          ----------    ----------

Cash flows from investing activities:
     Purchases of fixed assets                                (7,153)      (49,345)

                                                          ----------    ----------
     Net cash used for investing activities                   (7,153)      (49,345)
                                                          ----------    ----------

Cash flows from financing activities:
     Principal payment on obligations
         under capital lease                                  (9,806)       (9,957)
                                                          ----------    ----------
     Net cash used for financing activities                   (9,806)       (9,957)
                                                          ----------    ----------

Net decrease in cash                                        (178,364)     (365,890)
Cash, beginning of period                                    266,463       690,826
                                                          ----------    ----------

Cash, end of period                                       $   88,099    $  324,936
                                                          ==========    ==========

Supplemental Disclosure of Cash Flow Information:

     Cash paid for interest                               $      830    $    2,190
     Income taxes paid                                    $     --      $   15,050
Non-cash investing and financing activities:
         Decrease in cost of capitalized software
            due to decrease in accounts payable           $     --      $    4,650
         Accrued interest on preferred stock charged to
            accumulated deficit                           $  133,500    $  133,500
</TABLE>


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

                                        6
<PAGE>

                           NATIONAL DATACOMPUTER, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    ORGANIZATION

         National Datacomputer, Inc. (the "Company") designs, develops,
      manufactures, sells and services computerized systems used to automate the
      collection, processing and communication of information related to product
      sales, distribution and inventory control. The Company's products and
      services include data communications networks, application-specific
      software, hand-held computers and related peripherals, as well as
      associated training and support services.

      LIQUIDITY AND CAPITAL RESOURCES

         The Company has incurred an accumulated deficit of approximately $18.7
      million through June 30, 2005. As a result of this accumulated deficit,
      the report of its independent registered public accounting firm relating
      to the financials for 2004 contains an explanatory paragraph regarding
      substantial doubt about the Company's ability to continue as a going
      concern. The Company's plans to address the situation are presented below.
      However, there are no assurances that these plans will be successful or
      sufficient.

         As of June 30, 2005, the Company had approximately $0.1 million in
      cash. In the event the Company's operations are not profitable or do not
      generate sufficient cash to fund the business, or if the Company fails to
      obtain additional financing, management will have to substantially reduce
      its level of operations. These circumstances raise substantial doubt about
      the Company's ability to continue as a going concern. These interim
      financial statements do not include any adjustments that might result from
      the outcome of this uncertainty.

         In order to improve its cash position, the Company has taken a number
      of steps to reduce operating expenses, while simultaneously pursuing sales
      opportunities. There is a possibility that the latter might not result in
      adequate revenues in the near future to meet cash flow requirements and
      therefore might require the Company to implement further cost saving
      action or attempt to obtain additional financing.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION
      ---------------------

         The accompanying unaudited interim financial statements do not include
      all disclosures provided in the annual financial statements. These
      unaudited financial statements should be read in conjunction with the
      financial statements and the footnotes thereto contained in the Annual
      Report on Form 10-KSB for the year ended

                                       7
<PAGE>

      December 31, 2004 of National Datacomputer, Inc., as filed with the
      Securities and Exchange Commission.

         The balance sheet as of December 31, 2004 is derived from the audited
      financial statements presented in the Company's Annual Report on Form
      10-KSB for the year then ended.

      INTERIM PERIODS
      ---------------

         In the opinion of management, the accompanying unaudited interim
      financial statements have been prepared in accordance with accounting
      principles generally accepted in the United States of America for interim
      financial information, with instructions to Form 10-QSB, and Regulation
      S-B, and contain all adjustments (which are of a normal and recurring
      nature) necessary for a fair presentation of the financial statements. The
      results of operations for the three and six month periods ended June 30,
      2005 are not necessarily indicative of the results to be expected for any
      other period or for the full year.

      REVENUE RECOGNITION
      -------------------

         The Company recognizes revenue upon shipment, provided persuasive
      evidence of an arrangement exists, there are no uncertainties regarding
      customer acceptance, the sales price is fixed or determinable and
      collection of the related receivable is probable.

         Service revenue is recognized ratably over the contractual period.

      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 been historically insignificant.

      FINANCIAL INSTRUMENTS
      ---------------------

         Fair values for cash, accounts receivable, and accounts and notes
      payable approximate their carrying values at June 30, 2005 and December
      31, 2004 due to their short maturities.

         Based on borrowing rates currently available to the Company for loans
      with similar terms, the carrying value of capital lease obligations
      approximates fair value.

                                       8
<PAGE>

      ACCOUNTS RECEIVABLE
      -------------------

         The Company records trade receivables at their principal amount,
      adjusted for write-offs and allowances for uncollectable 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 uncollectable amounts against the allowance provided for such
      accounts.

         Accounts receivable from four customers accounted for approximately 90%
      of total accounts receivable at June 30, 2005.

      INVENTORIES
      -----------

         Inventories are stated at the lower of cost or market. Cost is
      determined using the first-in, first-out (FIFO) method.

      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.

      FIXED ASSETS
      ------------

         Fixed assets are recorded at cost and depreciated over the estimated
      useful lives of the assets, which range from 3 to 5 years, 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.

      LONG-LIVED ASSETS
      -----------------

         In accordance with Statement of Financial Accounting Standards ("SFAS")
      No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets,"
      the Company reviews the carrying values of its long-lived assets for
      possible impairment whenever events or changes in circumstances indicate
      that the carrying amounts of the assets may not be recoverable. Any
      long-lived assets held for disposal are reported at the lower of their
      carrying amounts or fair values less costs to sell.

      CAPITALIZED SOFTWARE DEVELOPMENT COSTS
      --------------------------------------

         Costs associated with the development of computer software are charged
      to operations prior to establishment of technological feasibility, as
      defined by SFAS No. 86, "Accounting for the Costs of Computer Software to
      be Sold, Leased, or Otherwise

                                       9
<PAGE>

      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.

      NET (LOSS) INCOME PER SHARE
      ---------------------------

         Basic net (loss) income per share is computed by dividing net (loss)
      income, after deducting certain amounts associated with the Company's
      preferred stock, by the weighted average number of common shares
      outstanding for the period. Diluted earnings per share is computed using
      the weighted average number of common shares outstanding and gives effect
      to all dilutive common share equivalents outstanding during the period.

         Interest payable to preferred stockholders, the fair value of
      inducements to convert preferred stock into common stock, and any
      discounts implicit in the conversion terms upon issuance of preferred
      stock are subtracted from the net (loss) income to determine the amount of
      net (loss) income attributable to common stockholders.

      STOCK-BASED COMPENSATION
      ------------------------

         The Company's employee stock option plans are accounted for in
      accordance with Accounting Principles Board Opinion No. 25, "Accounting
      for Stock Issued to Employees," ("APB 25") and related interpretations.
      The Company adopted SFAS No. 123, "Accounting for Stock Based
      Compensation," for disclosure only.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
      Stock-Based Compensation - Transition and Disclosure", which (i) amends
      SFAS Statement No. 123, "Accounting for Stock-Based Compensation," to
      provide alternative methods of transition for an entity that voluntarily
      changes to the fair value based method of accounting for stock-based
      employee compensation (ii) amends the disclosure provisions of SFAS 123 to
      require prominent disclosure about the effects on reported net income of
      an entity's accounting policy decisions with respect to stock-based
      employee compensation and (iii) amends APB opinion No. 28, "Interim
      Financial Reporting" to require disclosure about those effects in interim
      financial information. Items (ii) and (iii) of the new requirements in
      SFAS 148 are effective for financial statements for years ending after
      December 15, 2002. The Company adopted the disclosure requirements of SFAS
      148 for the year ended December 31, 2002 and continues to account for
      stock-based compensation utilizing the intrinsic value method. The
      additional disclosures required by SFAS 148 are as follows:

                                       10
<PAGE>

<TABLE><CAPTION>
                                                     THREE MONTHS ENDED               SIX MONTHS ENDED
                                                ----------------------------    ----------------------------
                                                  June 30,        June 30,        June 30,        June 30,
                                                    2005            2004            2005            2004
                                                ------------    ------------    ------------    ------------
<S>                                             <C>             <C>             <C>             <C>
Net (loss) income:
     As reported                                $   (265,021)   $   (253,309)   $   (373,399)   $   (217,812)
     Pro forma                                  $   (265,021)   $   (253,716)   $   (373,399)   $   (218,626)

Basic and diluted net (loss) income per share
attributable to common stockholders:
     As reported                                $      (0.01)   $      (0.01)   $      (0.02)   $      (0.02)
     Pro forma                                  $      (0.01)   $      (0.01)   $      (0.02)   $      (0.02)
</TABLE>

      NEW ACCOUNTING PRONOUNCEMENST
      -----------------------------

         In December 2004, the Financial Accounting Standards Board issued SFAS
      No. 123R, "Share-Based Payment". This Statement is a revision of SFAS
      No.123, "Accounting for Stock-Based Compensation," and supersedes
      Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
      to Employees," and its related implementation guidance. SFAS No. 123R
      focuses primarily on accounting for transactions in which a company
      obtains employee services in share-based payment transactions.

         SFAS No. 123R is effective for the Company on January 1, 2006. The
      Company is evaluating the methods of adoption allowed by SFAS No. 123R and
      does not yet have an estimate of the effect on its statements of
      operations of adopting SFAS No. 123R


3.    INVENTORIES

      Inventories consist of the following:
                                                     JUNE 30,     DECEMBER 31,
                                                       2005           2004
                                                   ------------   ------------
      Raw material                                 $     80,699   $    148,793
      Work-in-process                                   102,503         12,438
      Finished goods                                     33,166
                                                                        17,585
                                                   ------------   ------------

                       Total                       $    200,787   $    194,397
                                                   ============   ============


         Inventories are stated at the lower of cost (first-in, first-out) or
      market.

                                       11
<PAGE>

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

OVERVIEW

    Our mission is to provide solutions through the use of mobile information
systems in the distribution and inventory control areas of the product supply
chain. We design, manufacture, 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 data
communication, application-specific software, hand-held computers, related
peripherals, and accessories. We were organized as a Delaware corporation in
1986 and began active operations in 1987 following our merger with an
established computer systems engineering business. Since that time we have
delivered hardware and software solutions to the distribution and inventory
audit markets we have targeted.

     Our hand-held Datacomputer computers include a microprocessor, keyboard,
LCD displays, and full alphabetic and numeric character sets. Our Datacomputers
are designed to be highly reliable, tolerant to human error, and easy to use.
They are shock resistant, and operate over a wide temperature range. Our current
generation Datacomputer, the DC5, was launched in the beginning of 2001 into the
Inventory Audit Specialist marketplace. The DC5 is designed as a rugged,
Microsoft Windows CE based mobile Datacomputer with optional radio frequency
(RF) connectivity to provide fast, real-time, wireless transmission of collected
data to a host computer, a process that can greatly reduce the cost of inventory
data collection and management.

    Our Datacomputer model DC4 can be equipped with our RouteRIDER(R) software,
which is designed to be a powerful but easy-to-use route accounting system that
can be customized based on the way our customers run their businesses.
RouteRIDER(R) equipped Datacomputers allow sales people to communicate orders
electronically as often as they want throughout the day, by modem. On June 1,
2004, we announced the signing of a distribution agreement with Micronet LTD,
giving us exclusive rights to market, sell and support a new mobile accounting
software product throughout the United States, Canada and Mexico, subject to our
meeting annual sales quotas as defined. The agreement enables us to target major
food and beverage distributors, as well as distributors in other markets, by
providing them with an efficient solution which reduces costs, increases sales,
tracks operations more accurately, and enhances customer service. The new
software, named RouteRider(R) LE, enables seamless integration of any host
environment to mobile computers running on any wireless hand-held device that
supports Microsoft's Pocket PC or Windows CE, while incorporating cell phone and
Internet communications.

                                       12
<PAGE>

RESULTS OF OPERATIONS

    THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THREE MONTHS ENDED JUNE 30,
    2004.

    For the three months ended June 30, 2005 (the "2005 Period"), we reported a
net loss of $265,021 compared to a net loss of $253,309 for the three months
ended June 30, 2004 (the "2004 Period").

    Total revenues for the 2005 Period decreased 13% to $531,513 from $611,983
for the 2004 Period.

    Net product revenues for the 2005 Period were $260,230, a decrease of 8%
from $284,061 for the 2004 Period. The decrease in net product revenues of
$23,831 is primarily due to decreased shipments of our inventory service
products, mainly the DC5. Net service revenues for the 2005 Period were
$271,283, a 17% decrease as compared to $327,922 for the 2004 Period. The
decrease is a result of fewer maintenance contracts for our route service
products due to unfavorable economic conditions, along with customer constraints
on spending.

    Gross profit for the 2005 Period was $201,864 or 38% of revenues as compared
to $190,949 or 31% of revenues for the 2004 Period. The improvement in gross
profit, despite the overall decrease in sales, is due to a decrease in
manufacturing payroll costs of approximately $22,500 and a decrease in
manufacturing occupancy cost of approximately $12,400.

    Research and development expenses for the 2005 Period increased 4% to
$90,070 from $86,677 for the 2004 Period.

    Selling and marketing expenses for the 2005 Period increased 14% to $131,870
from $116,128 for the 2004 Period. The increase is primarily due to increased
marketing expenses related to the launching of RouteRider LE, our new mobile
route accounting solution.

    General and administrative expenses for the 2005 Period increased 1% to
$244,779 from $242,613 for the 2004 Period. The increase is the result of higher
occupancy cost offset by lower costs for legal and professional services.

    SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO SIX MONTHS ENDED JUNE 30, 2004

    For the six months ended June 30, 2005 (the "2005 Period"), we reported a
net loss of $373,399 compared to a net loss of $217,812 for the six months ended
June 30, 2004 (the "2004 Period").

    Total revenues for the 2005 Period decreased 18% to $1,334,390 from
$1,628,261 for the 2004 Period.

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<PAGE>

    Net product revenues for the 2005 Period were $767,818 a decrease of 19%
from $946,076 for the 2004 Period. The decrease in net product revenues of
$178,258 is primarily due to decreased shipments of our inventory service
products, mainly the DC5, which experienced reduced demands form one of our
major customers. Net service revenues for the 2005 Period were $566,572, a 17%
decrease as compared to $682,185 for the 2004 Period. The decrease is a result
of fewer maintenance contracts for our route service products due to unfavorable
economic conditions, along with customer constraints on spending.

    Gross Profit for the 2005 Period was $603,075 or 45% of revenues as compared
to $689,829 or 42% of revenues for the 2004 Period. The improvement in gross
profit, despite the overall decrease in sales, is due to a decrease in
manufacturing payroll costs of approximately $64,000 and a decrease in
manufacturing occupancy cost of approximately $22,700.

    Research and development expenses for the 2005 Period increased 4% to
$184,531 from $177,601 for the 2004 Period.

    Selling and marketing expenses for the 2005 Period increased 31% to $271,212
from $206,302 for the 2004 Period. The increase is primarily due to increased
marketing expenses along with increased sales personnel related to the launching
of RouteRider LE, our new mobile route accounting solution.

    General and administrative expenses for the 2005 Period decreased 1% to
$520,576 from $523,703 for the 2004 Period.

    LIQUIDITY AND CAPITAL RESOURCES

    We used cash of $161,405 and $306,588 from operations for the six months
ended June 30, 2005 and 2004, respectively. For the six months ended June 30,
2005, our principal operating cash requirements were to fund our loss from
operations, along with an increase in other current assets and inventories,
partially offset by increases in accounts payable, accrued expenses and a
decrease in trade receivables. For the six months ended June 30, 2004, our
principal operating cash requirements were to fund our loss from operations,
along with an increase in trade receivables and other current assets, a decrease
in accounts payable, accrued expenses and deferred revenues, offset by a
decrease in inventories, along with non-cash charges for depreciation and
amortization.

    We used cash of $7,153 and $49,345 for investing activities for the six
months ended June 30, 2005 and 2004, respectively. In each six-month period, the
cash was used for the purchase of capital equipment. As of June 30, 2005, we had
no material commitments for capital expenditures.

                                       14
<PAGE>

    We used cash of $9,806 and $9,957 for financing activities for the six
months ended June 30, 2005 and 2004, respectively. In each six-month period, the
cash was used to make payments on obligations under capital leases.

    We incurred an accumulated deficit of approximately $18.7 million through
June 30, 2005. As a result of this accumulated deficit, the report of our
independent registered public accounting firm relating to the financials for
2003 and 2004 contains an explanatory paragraph regarding substantial doubt
about our ability to continue as a going concern. Our plans to address the
situation are presented below. However, there are no assurances that these plans
will be successful or sufficient.

    In the event our operations are not profitable or do not generate sufficient
cash to fund the business, or if we fail to obtain additional financing,
management will have to substantially reduce our level of operations. These
circumstances raise substantial doubt about our ability to continue as a going
concern. These interim financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

    In order to improve our cash position, we have taken a number of steps to
control our operating expenses, while simultaneously pursuing sales
opportunities. There is a possibility that the latter might not result in
adequate revenues in the near future to meet cash flow requirements, and
therefore might require us to implement further cost saving action or attempt to
obtain additional financing.

    We maintain adequate levels of inventory and have not experienced any
interruption of supplies or services from vendors.

SECURITIES LITIGATION REFORM ACT

    The foregoing discussion and analysis 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, 2004.

    This report 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 above and elsewhere in this report.

    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

                                       15
<PAGE>

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

ITEM 3.

CONTROLS AND PROCEDURES

         (a) Evaluation of Disclosure Controls and Procedures.

         Our principal executive officer and principal financial officer, after
      evaluating the effectiveness of our disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of
      the period covered by this Quarterly Report on Form 10-QSB, have concluded
      that, based on such evaluation, our disclosure controls and procedures
      were adequate and effective to ensure that material information relating
      to us, was made known to them by others within the Company, particularly
      during the period in which this Quarterly Report on Form 10-QSB was being
      prepared. In designing and evaluating our disclosure controls and
      procedures, our management recognizes that any controls and procedures, no
      matter how well designed and operated, can provide only reasonable
      assurance of achieving the desired control objectives, and our management
      necessarily is required to apply its judgment in evaluating the
      cost-benefit relationship of possible controls and procedures.

         (b) Changes in Internal Controls.

         There were no changes in our internal control over financial reporting,
      identified in connection with the evaluation of such internal control that
      occurred during our last fiscal quarter, that have materially affected, or
      are reasonably likely to materially affect, our internal control over
      financial reporting.




                                       16
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        We are not a party to any legal proceedings.

ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
        SECURITIES

        Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not Applicable.

ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

        Not Applicable.

ITEM 5. OTHER INFORMATION

        Not Applicable

ITEM 6. EXHIBITS

(a)     Exhibits

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


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<PAGE>

                                   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 22, 2005                        /s/ John P. Ward
                                       ----------------------------------------
                                       John P. Ward
                                       Chairman of the Board, President and
                                       Chief Executive Officer (principal
                                       executive officer)

August 22, 2005                        /s/ Gerald S. Eilberg
                                       ----------------------------------------
                                       Gerald S. Eilberg
                                       Chief Financial Officer (principal
                                       financial and accounting officer)
























                                       18
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT NO.                         TITLE


31.1              Certification of the Chief Executive Officer.

31.2              Certification of the Chief Financial Officer.

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



























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