<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   FORM 10-QSB
                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1998
                         COMMISSION FILE NUMBER 0-15885

                           NATIONAL DATACOMPUTER, INC.
                 (Name of Small Business Issuer in its Charter)

<TABLE>
<S>                                                              <C>       
                  DELAWARE                                                04-2942832
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification #)

900 Middlesex Turnpike, Bldg. 5
Billerica, Ma.                                                               01821
(Address of principal executive offices)                                   (Zip Code)
</TABLE>

         Registrant's telephone number including area code (978) 663-7677

                  ---------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Securities and Exchange Act of 1934 during the past 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.

                               Yes X     No_____

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of June 30, 1998.

COMMON STOCK, $0.08 PAR VALUE                                     1,896,994
    (Title of each class)                                     (number of shares)
<PAGE>   2
                           NATIONAL DATACOMPUTER, INC.
                                      INDEX
                          PART I. FINANCIAL INFORMATION

                                                                        Page No.
ITEM 1.  FINANCIAL STATEMENTS:

         Balance Sheet as of
          June 30, 1998 (unaudited) and December 31,1997...................3

         Statement of Operations
          Three and six months ended
           June 30, 1998 and June 29, 1997 (unaudited).....................4

         Statement of Changes in
          Stockholders' Equity for the six
           months ended June 30, 1998 (unaudited)..........................5

         Statement of Cash Flows
          for the six months ended
           June 30, 1998 and June 29, 1997 (unaudited).....................6

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


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
          AND RESULTS OF OPERATIONS........................................9

                           PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings.................................................12

ITEM 2.  Changes in Securities.............................................12

ITEM 3.  Defaults upon Senior Securities...................................12

ITEM 4.  Submissions of Matters to a Vote of Security Holders..............12

ITEM 5.  Other Information.................................................12

ITEM 6.  Exhibits and Reports on Form 8-K..................................12

SIGNATURES.................................................................13

<PAGE>   3
NATIONAL DATACOMPUTER, INC.
BALANCE SHEET
--------------------------------------------------------------------------------




<TABLE>
<CAPTION>
                                                                                                         June 30,      December 31,
                                                                                                           1998            1997
                                                                                                        (Unaudited)
<S>                                                                                                     <C>            <C>         
Assets
Current Assets:
     Cash and cash equivalents                                                                          $    603,451   $    208,731
     Accounts receivable, net of allowance for doubtful accounts                                             770,685      1,545,319
     Inventories                                                                                           1,593,762      1,298,979
     Other current assets                                                                                    143,490         59,800
                                                                                                        ------------   ------------
          Total current assets                                                                             3,111,388      3,112,829

Fixed assets, net                                                                                            207,484        259,512
                                                                                                        ------------   ------------
                                                                                                        $  3,318,872   $  3,372,341
                                                                                                        ============   ============
Liabilities and stockholders' equity
Current Liabilities:
     Convertible debt to related party                                                                  $    175,000   $     75,000
     Current obligations under capital lease                                                                  19,918         41,810
     Accounts payable                                                                                        190,198        349,807
     Accrued payroll and related taxes                                                                       165,783        127,675
     Accrued expenses - other                                                                                228,459        264,024
     Accrued interest on preferred stock                                                                       3,500        102,750
     Deferred revenues, current portion                                                                      602,932        470,125
     Deferred compensation                                                                                    27,620         45,214
                                                                                                        ------------   ------------
          Total current liabilities                                                                        1,413,410      1,476,405

Convertible debt to related party                                                                                 --        158,730
Obligations under capital lease                                                                               70,617         70,617
Deferred revenues                                                                                             38,143         38,143
                                                                                                        ------------   ------------
                                                                                                           1,522,710      1,743,895
                                                                                                        ------------   ------------
Stockholders' equity
     Preferred stock, Series A convertible, $0.001 par value; 20 shares
          authorized; 0 shares issued and outstanding at June 30, 1998 and December 31, 1997                      --             --

     Preferred stock, Series B convertible $0.001 par value; 4,200 shares
          authorized, issued and outstanding (liquidating preference of $4,200,000)                        3,685,206      3,685,206

     Preferred stock, Series C convertible $0.001 par value; 900 shares
          authorized, issued and outstanding (liquidating preference of $900,000)                            834,370        808,412

     Preferred stock, Series D convertible $0.001 par value; 350 shares
          authorized, issued and outstanding (liquidating preference $350,000)                               324,639        303,995

     Preferred stock, Series E convertible $0.001 par value; 500 shares
          authorized; 500 and 0 shares issued and outstanding at June 30, 1998 and December 31, 1997,
          respectively (liquidating preference of $500,000)                                                  273,880             --

     Common stock, $0.08 par value; 5,000,000 shares authorized; 1,896,994 and 1,628,332
          shares issued and outstanding at June 30, 1998 and December 31, 1997, respectively                 151,760        130,267

     Capital in excess of par value                                                                       10,764,916     10,310,761
     Accumulated deficit                                                                                 (13,809,627)   (13,165,753)
     Unamortized stock compensation                                                                          (77,173)       (93,173)
     Notes receivable - employees                                                                           (351,269)      (351,269)
                                                                                                        ------------   ------------
          Total stockholders' equity                                                                       1,796,702      1,628,446
                                                                                                        ------------   ------------
                                                                                                        $  3,318,872   $  3,372,341
                                                                                                        ============   ============
</TABLE>

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


                                        3
<PAGE>   4
NATIONAL DATACOMPUTER, INC.
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                             Second Fiscal Quarter              Six Months 
                                                                                     Ended                         Ended
                                                                           -----------    -----------    -----------    -----------
                                                                            June 30,        June 29,       June 30,       June 29,
                                                                              1998            1997           1998           1997
                                                                                   (Unaudited)                   (Unaudited)
<S>                                                                        <C>            <C>            <C>            <C>        
Revenues
       Net product revenue                                                 $   915,536    $   875,070    $ 1,386,677    $ 2,119,034
       Service and other revenue                                               417,966        314,723        848,578        606,197
                                                                           -----------    -----------    -----------    -----------
                                                                             1,333,502      1,189,793      2,235,255      2,725,231

Cost of sales and services                                                     682,928        720,167      1,257,190      1,541,792
                                                                           -----------    -----------    -----------    -----------
                                                                               650,574        469,626        978,065      1,183,439
                                                                           -----------    -----------    -----------    -----------
Operating expenses:
       Research and development                                                212,465        361,397        418,486        738,687
       Selling, general and administrative                                     489,716        647,457        967,338      1,278,562
                                                                           -----------    -----------    -----------    -----------
                                                                               702,181      1,008,854      1,385,824      2,017,249
                                                                           -----------    -----------    -----------    -----------
Loss from operations                                                           (51,607)      (539,228)      (407,759)      (833,810)

Other income (expense):
       Interest income                                                           1,056          4,897          1,056          6,633
       Interest expense                                                         (5,979)        (4,557)       (31,671)       (10,039)
                                                                           -----------    -----------    -----------    -----------
Net  loss                                                                  $   (56,530)   $  (538,888)   $  (438,374)   $  (837,216)
                                                                           ===========    ===========    ===========    ===========

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

       Net loss                                                            $   (56,530)   $  (538,888)   $  (438,374)   $  (837,216)
       Preferred stock preferences                                            (102,750)      (102,750)      (466,102)      (199,250)
                                                                           -----------    -----------    -----------    -----------
Net loss attributable to common shareholders                               $  (159,280)   $  (641,638)   $  (904,476)   $(1,036,466)
                                                                           ===========    ===========    ===========    ===========
Basic and diluted net loss per share                                       $     (0.10)   $     (0.50)   $     (0.51)   $     (0.82)
                                                                           ===========    ===========    ===========    ===========
Weighted average shares and dilutive
       share equivalents outstanding                                         1,666,740      1,272,607      1,771,383      1,262,266
                                                                           ===========    ===========    ===========    ===========
</TABLE>

                   The accompanying notes are an integral part
                          of these financial statements


                                        4
<PAGE>   5
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, 1997                   4,200   $  3,685,206            900   $    808,412            350   $    303,995   

Net loss                                                                                                                          

Issuance of preferred stock                                                                                                       

Interest on preferred stock (Note 7)                                                                                              

Amortization of stock compensation                                                                                                

Amortization of discounted
  conversion rate on Preferred
   Stock                                                                                   25,958                        20,644   

Adjustment for fractional shares                                                                                                  


                                        ------------   ------------   ------------   ------------   ------------   ------------   
Balance at March 31, 1998                      4,200   $  3,685,206            900   $    834,370            350   $    324,639   
                                        ============   ============   ============   ============   ============   ============   

Net loss                                                                                                                          

Issuance of preferred stock

Interest on preferred stock (Note 7)                                                                                              

Amortization of stock compensation                                                                                                

Issuance of common stock
   in satisfaction of accrued
   interest                                                                                                                       

Adjustment for fractional shares                                                                                                  
                                        ------------   ------------   ------------   ------------   ------------   ------------   
Balance at June 30, 1998                       4,200   $  3,685,206            900   $    834,370            350   $    324,639   
                                        ============   ============   ============   ============   ============   ============   


                                        
<CAPTION>
                                         PREFERRED STOCK SERIES E                   COMMON STOCK
                                        ---------------------------   ------------------------------------------
                                                                                                     CAPITAL IN       NOTES       
                                                       NET ISSUANCE                      PAR           EXCESS       RECEIVABLE    
                                           SHARES         PRICE         SHARES           VALUE      OF PAR VALUE    EMPLOYEES     
                                        ------------   ------------   ------------   ------------   ------------   ------------   
<S>                                     <C>            <C>            <C>            <C>            <C>            <C>
Balance at December 31, 1997                      --                     1,628,332   $    130,267   $ 10,310,761   $   (351,269)  
                                                                                                                                  
Net loss                                                                                                                          
                                                                                                                                  
Issuance of preferred stock                      500        273,880                                      214,000                  
                                                                                                                                  
Interest on preferred stock (Note 7)                                                                                              
                                                                                                                                  
Amortization of stock compensation                                                                                                
                                                                                                                                  
Amortization of discounted                                                                                                        
  conversion rate on Preferred                                                                                                    
   Stock                                                                                                 (46,602)                 
                                                                                                                                  
Adjustment for fractional shares                                                10              1             (1)                 
                                                                                                                                  
                                                                                                                                  
                                        ------------   ------------   ------------   ------------   ------------   ------------   
Balance at March 31, 1998                        500   $    273,880      1,628,342   $    130,268   $ 10,478,158   $   (351,269)  
                                        ============   ============   ============   ============   ============   ============   
                                                                                                                                  
Net loss                                                                                                                          
                                                                                                                                  
Issuance of preferred stock                                                                                                       
                                                                                                                                  
Interest on preferred stock (Note 7)                                                                                              
                                                                                                                                  
Amortization of stock compensation                                                                                                
                                                                                                                                  
Issuance of common stock                                                                                                          
   in satisfaction of accrued                                                                                                     
   interest                                                                268,649         21,492        286,758                  
                                                                                                                                  
Adjustment for fractional shares                                                 3                                                
                                        ------------   ------------   ------------   ------------   ------------   ------------   
Balance at June 30, 1998                         500   $    273,880      1,896,994   $    151,760   $ 10,764,916   $   (351,269)  
                                        ============   ============   ============   ============   ============   ============   


<CAPTION>
                                         UNAMORTIZED                     TOTAL          
                                           STOCK       ACCUMULATED    STOCKHOLDERS'     
                                        COMPENSATION      DEFICIT        EQUITY         
                                        ------------   ------------   ------------      
<S>                                     <C>            <C>            <C>
Balance at December 31, 1997            $    (93,173)  $(13,165,753)  $  1,628,446      
                                                                                        
Net loss                                                   (381,844)  $   (381,844)     
                                                                                        
Issuance of preferred stock                                           $    487,880      
                                                                                        
Interest on preferred stock (Note 7)                       (102,750)  $   (102,750)     
                                                                                        
Amortization of stock compensation             8,000                  $      8,000      
                                                                                        
Amortization of discounted                                                              
  conversion rate on Preferred                                                          
   Stock                                                                                
                                                                                        
Adjustment for fractional shares                                                        
                                                                                        
                                                                                        
                                        ------------   ------------   ------------      
Balance at March 31, 1998               $    (85,173)  $(13,650,347)  $  1,639,732      
                                        ============   ============   ============      
                                                                                        
Net loss                                                    (56,530)  $    (56,530)     
                                                                                        
Issuance of preferred stock                                                             
                                                                                        
Interest on preferred stock (Note 7)                       (102,750)  $   (102,750)     
                                                                                        
Amortization of stock compensation             8,000                  $      8,000      
                                                                                        
Issuance of common stock                                                                
   in satisfaction of accrued                                                           
   interest                                                           $    308,250      
                                                                                        
Adjustment for fractional shares                                                        
                                        ------------   ------------   ------------      
Balance at June 30, 1998                $    (77,173)  $(13,809,627)  $  1,796,702      
                                        ============   ============   ============      
</TABLE>

                   The accompanying notes are an integral part
                          of these financial statements


                                        5
<PAGE>   6
NATIONAL DATACOMPUTER, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                                    June 30, 1998   June 29, 1997
                                                                     (Unaudited)     (Unaudited)

<S>                                                                 <C>             <C>
Cash flows from operating activities:
     Net loss                                                        $  (438,374)    $  (837,216)
     Adjustments to reconcile net loss to net
          cash provided by (used for) operating activities:
          Depreciation and amortization                                   57,585          53,097
          Amortization of stock compensation                              16,000          15,596
          Amortization of deferred debt issuance costs
              and debt discount                                           18,789              --
          Changes in assets and liabilities:
              Decrease (increase) in accounts receivable                 774,634        (552,623)
              Increase in inventories                                   (294,783)       (245,552)
              (Increase) decrease in other current assets                (86,209)         33,326
              (Decrease) increase in accounts payable                   (159,609)        257,297
              Decrease in accrued expenses
                  and deferred compensation                              (11,550)       (125,231)
              Increase (decrease) in deferred revenues                   132,807        (145,347)
                                                                     -----------     -----------
     Net cash provided by (used for) operating activities                  9,290      (1,546,653)
                                                                     -----------     -----------
Cash flows from investing activities:
     Purchases of fixed assets                                            (5,557)       (117,949)
                                                                     -----------     -----------
     Net cash used for investing activities                               (5,557)       (117,949)
                                                                     -----------     -----------
Cash flows from financing activities:
     Proceeds from issuance of  preferred stock and warrants,
          net of issuance costs                                          487,880       1,224,583
     Proceeds from issuance of convertible note to related party              --         250,000
     Principal payment on convertible debt                               (75,000)             --
     Principal payments on obligations under capital lease               (21,893)        (21,166)
                                                                     -----------     -----------
     Net cash provided by financing activities                           390,987       1,453,417
                                                                     -----------     -----------
Net increase in cash and cash equivalents                                394,720        (211,185)
Cash and cash equivalents at beginning of year                           208,731         722,285
                                                                     -----------     -----------
Cash and cash equivalents  at end of period                          $   603,451     $   511,100
                                                                     ===========     ===========
Supplemental Cash Flow Information:
     Cash paid for interest                                          $    12,882     $     9,902
     Non-cash investing and financing activities:
          Accrued Interest on preferred stock charged to
              accumulated deficit                                        205,500         205,500
          Purchase of property and equipment  under capital lease             --          14,185
          Common stock issued in satisfaction of interest on
              preferred stock                                            308,250          84,000

</TABLE>

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


                                        6
<PAGE>   7
                           NATIONAL DATACOMPUTER, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.    ORGANIZATION

            National Datacomputer, Inc. (the "Company") designs, develops,
      manufactures, markets and services a line of hand-held battery powered
      microprocessor-based data collection products and computers and associated
      peripherals for use in mobile operations.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION

            The accompanying unaudited financial statements, which are for
      interim periods, 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 December
      31, 1997 of National Datacomputer, Inc., as filed with the Securities and
      Exchange Commission.

      INTERIM PERIODS

            In the opinion of the Company, the accompanying unaudited financial
      statements 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 six months ended June 30, 1998 are not
      necessarily indicative of the results to be expected for the full year.

      REVENUE RECOGNITION

            The Company recognizes revenues for products upon shipment. Revenue
      from installation and training is recognized upon completion of the
      project. Service revenue is recognized ratably over the contractual
      periods.

      LOSS PER SHARE

            Loss per share is determined by dividing net loss, after deducting
      certain amounts associated with the Company's preferred stock, by the
      weighted average number of common shares outstanding during the year.


                                        7
<PAGE>   8
            Interest payable to preferred stockholders, the fair value of
      inducements to convert preferred stock into common stock, and any discount
      implicit in the conversion terms upon issuance of preferred stock are
      added to the net loss to determine the amount of net loss attributable to
      common stockholders.

      RESEARCH AND DEVELOPMENT AND COMPUTER SOFTWARE DEVELOPMENT COSTS

            Research and development costs, other than software development
      costs, have been charged to operations as incurred. SFAS No. 86,
      "Accounting for the Costs of Computer Software to be Sold, Leased or
      Otherwise Marketed", requires the capitalization of certain computer
      software development costs incurred after technological feasibility is
      established. No software development costs have been capitalized at June
      30, 1998 or June 29, 1997.


3.    INVENTORIES

<TABLE>
<CAPTION>
      Inventories consist of the following:          JUNE 30,      DECEMBER 31,
                                                       1998            1997
                                                    ----------      ----------
<S>                                                 <C>             <C>       
      Raw Material                                  $  765,108      $  623,593
      Work-in-process                                  552,412         450,238
      Finished goods                                   276,242         225,148
                                                    ----------      ----------

            Total                                   $1,593,762      $1,298,979
                                                    ==========      ==========
</TABLE>

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

4.    CONVERTIBLE PREFERRED STOCK AND PROMISSORY NOTE

      In March 1998, the Company designated and sold 500 shares of Series E
Convertible Preferred Stock with a warrant to purchase up to 700,000 shares of
common stock at an exercise price of $.75 per share, for net proceeds of
$487,880. The warrant expires in March 2000. The Series E Convertible Preferred
Stock was sold to the same stockholder of the previously issued Series B, Series
C and Series D Convertible Preferred Stock. The proceeds of this financing were
allocated to the preferred shares and warrant based on an estimate of their fair
values. This resulted in $214,000 being ascribed to the warrant which was
recorded as additional paid-in-capital and $273,880 being recorded as preferred
stock. Series E Convertible Preferred Stock has voting rights, dividend
preference, liquidation preference, mandatory conversion and Company redemption
terms similar to the Company's existing Series B, Series C and Series D
Convertible Preferred Stock. The Subscription Agreement for Series E Convertible
Preferred Stock offers anti-dilution protection to its shareholders. Series E
Convertible Preferred Stock is convertible into shares of common stock at a
conversion price of $.75.


                                        8
<PAGE>   9
      The Company, in conjunction with the issuance of the Series E Convertible
Preferred Stock, canceled its previously issued warrants to purchase 700,000
shares of common stock for $4.00 per share. Additionally, the Company changed
the conversion price on the Series B and Series C Convertible Preferred Stock to
$2.74 and offered anti-dilution protection to these shareholders. In addition,
the shareholder of the Series E Convertible Preferred Stock agreed to place into
escrow 2,100 shares of the Series B Convertible Preferred Stock that is also
owned by this shareholder. The Company may at its option and at any time through
January 31, 2000 redeem the escrowed shares of Series B Convertible Preferred
Stock, which has a face value of $1,000 per share, at a price of $1,250 per
share.

      Also in March 1998, the Company refinanced the $250,000 convertible debt
by making a principal payment of $75,000 and issuing a convertible note payable
for $175,000. The note bears interest at a rate of 6% per annum, matures in
March 1999, and is convertible into shares of the Company's common stock at a
conversion price equal to the average closing bid price for the Company's common
stock for the five days ending March 6, 1998. The note can be converted at the
option of the holder after January 1, 1999.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

      The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere herein.



RESULTS OF OPERATIONS


      THREE MONTHS ENDED JUNE 30, 1998 COMPARED WITH THREE MONTHS ENDED JUNE 29,
1997.

      Total revenue during the three months ended June 30, 1998 was $1,333,502,
an increase of 12%, compared to total revenue of $1,189,793 during the prior
comparable quarter. Revenue from product sales increased by 5% to $915,536
during the three months ended June 30, 1998, compared to $875,070 during the
prior comparable quarter.

      Service and other revenue increased by 33% to $417,966 during the three
months ended June 30, 1998, compared to $314,723 during the prior comparable
quarter. The Company expects that service and other revenues will continue to
rise as a result of improved maintenance and pricing policies instituted.


                                        9
<PAGE>   10
      Cost of sales and services, as a percentage of net revenues, decreased to
51% during the three months ended June 30, 1998 from 61% during the prior
comparable period. This decrease is primarily attributable to the institution of
the Company's quality control programs, which improved the quality of the
Company's products and led to fewer field support demands and, thereby, lower
field support costs.

      Research and development expenses decreased to $212,465 in the second
quarter of 1998, from $361,397 for the same period in 1997, a decrease of
approximately 41%. The decrease resulted primarily from a reduction in the
Company's product development staff due in part to the completion of the new
Datacomputer model DC4 which was introduced in the later part of 1997.

      Selling, general and administrative expenses decreased to $489,715 in the
second quarter of 1998, from $647,457 for the same period in 1997, a decrease of
approximately 24%. The lower level of costs resulted primarily from the
Company's ongoing programs of streamlining its operations and organizational
structure, combined with, higher legal and professional fees in the second
quarter of 1997 associated with the Company's filing and listing on NASDAQ stock
market.

      As a result, the Company incurred a net loss of $56,529 during the three
months ended June 30, 1998, compared to a net loss of $538,888 during the three
months ended June 29, 1997.

      SIX MONTHS ENDED JUNE 30, 1998 COMPARED WITH SIX MONTHS ENDED JUNE 29,
1997.

      The Company's total revenue for the six months ended June 30, 1998 were
$2,235,255 which represents an 18% decrease from total revenue of $2,725,231 for
the same period of the prior fiscal year. The decrease in revenue was
attributable to a decrease in sales of units of the Company's Datacomputers
which decreased 35% to $1,386,677 during the six months ended June 30, 1998 from
$2,119,034 during the same period in the prior fiscal year.

      Service and other revenue for the six months ended June 30, 1998 were
$848,578 compared to $606,197 for the same period of the prior fiscal year, an
increase of 40%. The Company expects that service and other revenues will
continue to rise as a result of improved maintenance and pricing policies
instituted.

      Cost of sales and services as a percentage of revenues for the six months
ended June 30, 1998 was 56% as compared to 57% for the same period of the prior
fiscal year. The improved gross margin resulted from the institution of the
Company's quality control programs, which led to fewer field support demands
and, thereby, lower field support costs. This was offset by a higher percentage
of peripheral sales in the first three months of 1998 which carry a lower
margin.


                                       10
<PAGE>   11
      Research and development expenses for the six months ended June 30, 1998
decreased to $418,486 as compared to $738,687 for the same period in 1997, a
decrease of approximately 43%. The decrease resulted primarily from a reduction
in the Company's product development staff due to the completion of the new
Datacomputer model DC4 which was introduced in the later part of 1997.

      Selling, general and administrative expenses for the six months ended June
30, 1998 decreased to $967,337 as compared to $1,278,562 for the same period in
1997, a decrease of approximately 24%. The lower level of costs resulted
primarily from the Company's ongoing programs of streamlining its operations and
organizational structure, combined with, higher legal and professional fees in
the six months of 1997 associated with the Company's filing and listing on
NASDAQ stock market.

      As a result, the Company's operating loss for the six months ended June
30, 1998 was $407,759 as compared to an operating loss of $833,810 for the same
period of the prior fiscal year.

      Interest expenses was $31,671 in the first six months of 1998, compared to
$10,039 for the same period of the prior fiscal year. This increase resulted
primarily from the amortization of approximately $23,000 to interest expense
related to the discount on the convertible debt obtained in 1997.

LIQUIDITY AND CAPITAL RESOURCES

      The Company had a cash balance of $603,451 at June 30, 1998 compared to
$208,731 at December 31, 1997. The increase in cash was due primarily to cash
generated from the sale of 500 shares of Series E Convertible Preferred Stock
with a warrant to purchase up to 700,000 shares of common stock at an exercise
price of $.75 per share, for net proceeds of $487,880.

      The Company also refinanced the $250,000 convertible debt by making a
principal payment of $75,000 and issuing a convertible note payable for
$175,000.

      At June 30, 1998, the Company had cash of $603,451 and a current ratio of
2.1:1. The Company anticipates that available cash, together with cash flow from
anticipated operations, will be sufficient to meet its working capital needs for
the remainder of 1998. However, unanticipated adverse results of operations
could impact anticipated cash flows and, as a result, there can be no assurance
that the Company will not be required to raise additional capital or that the
Company will be able to raise additional capital on favorable terms, if at all.

      The Letter of Intent "LOI" to merge signed by Infos International and
National Datacomputer, Inc. on February 17, 1998 and announced on February 20,
1998 has expired.  Although there can be no guarantee, both companies intend to
resign an agreement and are currently in the process of negotiating the new LOI.

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<PAGE>   12
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      The Company is not presently involved in any material pending litigation.

ITEM 2. CHANGES IN 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 AND REPORTS ON FORM 8 - K

      (a)   Exhibits

            (11)   Statement Re: Computation of Per Share Earnings.
            (27)   Financial Data Schedule.

 

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<PAGE>   13
                                   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, 1998                       ________________________________
                                      Malcolm M. Bibby
                                      President


August 13, 1998                       ________________________________
                                      Gerald S. Eilberg
                                      Vice President, Finance and Administration
                                      Chief Financial Officer


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