================================================================================
                       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: SEPTEMBER 28, 1997
                         COMMISSION FILE NUMBER 0-15885

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

          DELAWARE                                        04-2942832
(State or other jurisdiction of                 (IRS Employer Identification #)
incorporation  or  organization)  

900 MIDDLESEX TURNPIKE, BLDG. 5
BILLERICA, MA.                                                   01821
(Address of principal executive offices)                       (Zip Code)

         Registrant's telephone number including area code (508)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 September 28, 1997.

COMMON STOCK, $0.08 PAR VALUE                                    1,417,289
   (Title of each class)                                     (number of shares)






                           NATIONAL DATACOMPUTER, INC.
                                      INDEX
                          PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>

                                                                                 Page No.
Item 1.  Financial Statements:

<S>                                                                               <C>
         Balance Sheet as of
          September 28, 1997 and December 29, 1996...................................3

         Statement of Operations
          Three and nine months ended
                  September 28, 1997 and September 30, 1996..........................4

         Statement of Changes in
           Stockholders' Equity for the nine
            months ended September 28, 1997..........................................5

         Statement of Cash Flows
          for the nine months ended
                   September 28, 1997 and September 30, 1996.........................6

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


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

               PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings..........................................................11

ITEM 2.  Changes in Securities......................................................11

ITEM 3.  Defaults upon Senior Securities............................................11

ITEM 4.  Submissions of Matters to a Vote of Security Holders.......................11

ITEM 5.  Other Information..........................................................11

ITEM 6.  Exhibits and Reports on Form 8-K...........................................11

SIGNATURES..........................................................................12

</TABLE>





NATIONAL DATACOMPUTER, INC.
BALANCE SHEET
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                          September 28,             December 29,
                                                                                              1997                      1996
                                                                                           (Unaudited)
<S>                                                                                   <C>                       <C>
Assets
Current Assets:
    Cash and cash equivalents                                                           $        89,623           $       722,285
    Accounts receivable, net of allowance for doubtful accounts                               1,448,318                   621,037
    Inventories                                                                               1,530,361                 1,479,153
    Other current assets                                                                         75,589                   153,741
                                                                                        ----------------          ----------------

       Total current assets                                                                   3,143,891                 2,976,216

Property and equipment, net                                                                     297,534                   234,530
                                                                                        ----------------          ----------------

                                                                                        $     3,441,425           $     3,210,746
                                                                                        ================          ================

Liabilities and stockholders' equity
Current Liabilities:
    Current obligations under capital lease                                             $        39,600           $        21,424
    Accounts payable                                                                            320,491                   125,454
    Accrued payroll and related taxes                                                           135,871                   171,104
    Accrued professional fees                                                                    32,525                    48,732
    Accrued rent and utilities                                                                   29,188                    54,429
    Accrued expenses - other                                                                    178,437                   274,423
    Accrued interest on preferred stock                                                         106,500                    84,000
    Deferred revenues, current portion                                                          430,295                   678,625
    Deferred compensation                                                                        45,742                    45,742
                                                                                        ----------------          ----------------

       Total current liabilities                                                              1,318,649                 1,503,933

Convertible debt                                                                                250,000                   -
Obligation under capital lease                                                                   81,269                   114,828
Deferred revenues                                                                                75,143                    75,143
                                                                                        ----------------          ----------------

                                                                                              1,725,061                 1,693,904
                                                                                        ----------------          ----------------

Stockholders' equity

    Preferred stock, Series B convertible $0.001 par value; 4,200 shares
       authorized; 4,200 shares issued and outstanding at September 28, 1997
       and December 29, 1996, respectively (liquidating preference of $4,200,000)             3,685,206                 3,685,206

    Preferred stock, Series C convertible $0.001 par value; 900 shares
       authorized; 900 and 0 shares issued and outstanding at September 28, 1997,
       and December 29, 1996, respectively (liquidating preference of $900,000)                 881,583                   -

    Preferred stock, Series D convertible $0.001 par value; 350 shares
       authorized; 350 and 0 shares issued and outstanding at September 28, 1997,
       and December 29, 1996, respectively (liquidating preference of $350,000)                 343,000                   -

    Common stock, $0.08 par value; 5,000,000 shares authorized; 1,417,289 and 1,251,925
       shares issued and outstanding at September 28, 1997 and December 29, 1996, respectively  113,382                   100,154

    Capital in excess of par value                                                           10,032,229                 9,755,957
    Accumulated deficit                                                                     (12,886,594)              (11,548,437)
    Unamortized stock compensation                                                             (101,173)                 (124,769)
    Notes receivable - employees                                                               (351,269)                 (351,269)
                                                                                        ----------------          ----------------

       Total stockholders' equity                                                             1,716,364                 1,516,842
                                                                                        ----------------          ----------------

                                                                                        $     3,441,425           $     3,210,746
                                                                                        ================          ================
</TABLE>

                   The accompanying notes are an integral part
                          of these financial statements

                                       3







NATIONAL DATACOMPUTER, INC.
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                         Third Fiscal Quarter                              Nine Months
                                                                 Ended                                        Ended
                                                 --------------------------------------        -------------------------------------
                                                    September 28,         September 30,          September 28,         September 30,
                                                       1997                  1996                   1997                  1996
                                                              (Unaudited)                                  (Unaudited)

<S>                                          <C>                   <C>                    <C>                  <C>
Revenues
     Net product revenue                       $       1,249,933     $         870,124      $       3,368,967     $       3,325,301
     Service and other revenue                           273,931               266,804                880,128               775,769
                                               ------------------    ------------------     ------------------    ------------------

                                                       1,523,864             1,136,928              4,249,095             4,101,070

Cost of sales and services                               885,708               733,582              2,427,500             2,517,434
                                               ------------------    ------------------     ------------------    ------------------

                                                         638,156               403,346              1,821,595             1,583,636
                                               ------------------    ------------------     ------------------    ------------------

Operating expenses:
     Research and development                            307,949               363,868              1,046,636               926,599
     Selling, general and administrative                 523,106               723,029              1,801,668             1,907,576
                                               ------------------    ------------------     ------------------       ---------------

                                                         831,055             1,086,897              2,848,304             2,834,175
                                               ------------------    ------------------     ------------------    ------------------

Loss from operations                                    (192,899)             (683,551)            (1,026,709)           (1,250,539)

Other income (expense):
     Interest income                                       6,619                17,009                 13,252                22,783
     Interest expense                                     (2,661)               (2,538)               (12,700)              (20,651)
                                               ------------------    ------------------     ------------------    ------------------

Net  loss                                      $        (188,941)    $        (669,080)     $      (1,026,157)    $      (1,248,407)
                                               ==================    ==================     ==================    ==================


Net loss per share                             $           (0.23)    $           (0.61)     $           (1.05)    $           (1.15)
                                               ==================    ==================     ==================    ==================

Weighted average shares and dilutive
     share equivalents outstanding                     1,309,246             1,230,153              1,277,926             1,196,650
                                               ==================    ==================     ==================    ==================
</TABLE>


                   The accompanying notes are an integral part
                          of these financial statements

                                        4





<TABLE>
<CAPTION>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)

                                 Preferred Stock          Preferred Stock      Preferred Stock             Common Stock
                                     Series B                Series C             Series D
                             ------------------------  -------------------- -------------------- -----------------------------------
                                                                                                                         Capital in 
                                        Net Issuance           Net Issuance         Net Issuance                Par        Excess   
                              Shares       Price       Shares     Price      Shares    Price       Shares      Value   of par value)

<S>                           <C>      <C>            <C>      <C>          <C>      <C>          <C>         <C>       <C>        
Balance at December 29, 1996   4,200    $ 3,685,206                                              1,251,925   $100,154    $9,755,957 

Net loss                                                                                                                            

Issuance of preferred stock                               900     881,583       350    343,000                                      

Interest on preferred stock                                                                                                         

Amortization of stock compensation                                                                                                  

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

Balance at March 30, 1997       4,200   $ 3,685,206       900   $ 881,583       350  $ 343,000   1,251,925   $100,154   $ 9,755,957 
                              ========  ============  ========  ========== ========= ========== =========== ========== =============

Net loss                                                                                                                            

Issuance of common stock
  in satisfaction of accrued interest                                                               26,886      2,150        81,850 

Interest on preferred stock                                                                                                         

Amortization of stock compensation                                                                                                  

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

Balance at June 29, 1997        4,200   $ 3,685,206       900   $ 881,583       350  $ 343,000   1,278,811   $102,304   $ 9,837,807 
                              ========  ============  ========  ========== ========= ========== =========== ========== =============

Net loss                                                                                                                            

Issuance of common stock
  in satisfaction of accrued interest                                                              138,286     11,063       194,437 

Interest on preferred stock                                                                                                         

Adj for fractional shares                                                                              192         15           (15)

Amortization of stock compensation                                                                                                  

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

Balance at September 28, 1997   4,200   $ 3,685,206       900   $ 881,583       350  $ 343,000   1,417,289   $113,382  $ 10,032,229 
                              ========  ============  ========  ========== ========= ========== =========== ========== =============
</TABLE>

<TABLE>
<CAPTION>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY 
--------------------------------------------------------------------------------------------
                              
                                            Notes     Unamortized                   Total
                                          receivable     Stock      Accumulated  stockholders'
                                          employees  Compensation     deficit       equity                        

<S>                                      <C>         <C>         <C>            <C>       
Balance at December 29, 1996              $ (351,269) $ (124,769) ($11,548,437)  $1,516,842

Net loss                                                              (298,328)   ($298,328)

Issuance of preferred stock                                                      $1,224,583

Interest on preferred stock                                            (99,000)    ($99,000)

Amortization of stock compensation                         7,799                     $7,799

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

Balance at March 30, 1997                 $ (351,269)  $ (116,970) $(11,945,765) $ 2,351,896
                                         =========== ============ ============= ============

Net loss                                                              (538,888)   ($538,888)

Issuance of common stock
  in satisfaction of accrued interest                                               $84,000

Interest on preferred stock                                           (106,500)   ($106,500)

Amortization of stock compensation                         7,797                     $7,797

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

Balance at June 29, 1997                 $ (351,269)  $ (109,173) $(12,591,153) $ 1,798,305
                                         =========== ============ ============= ============

Net loss                                                              (188,941)   ($188,941)

Issuance of common stock
  in satisfaction of accrued interest                                              $205,500

Interest on preferred stock                                           (106,500)   ($106,500)

Adj for fractional shares                                                                $0

Amortization of stock compensation                         8,000                     $8,000

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

Balance at September 28, 1997            $ (351,269)  $ (101,173) $(12,886,594) $ 1,716,364
                                         =========== ============ ============= ============
</TABLE>

                   The accompanying notes are an integral part
                          of these financial statements





<TABLE>
<CAPTION>

NATIONAL DATACOMPUTER, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
---------------------------------------------------------------------------------------------------------------------------

                                                                                             For the Nine Months Ended
                                                                                    September 28, 1997      September 30, 1996
                                                                                        (Unaudited)             (Unaudited)



<S>                                                                          <C>                      <C>
Cash flows from operating activities:
     Net loss                                                                 $         (1,026,157)    $        (1,248,407)
     Adjustments to reconcile net loss to net
        cash (used for) provided by operating activities:
        Depreciation and amortization                                                       90,540                  41,631
        Amortization of stock compensation                                                  23,596               -
        Gain on sale of property and equipment                                                                      (1,780)
        Changes in assets and liabilities:
           (Increase) decrease in accounts receivable                                     (827,281)                227,641
            Increase in inventories                                                        (51,208)                (97,533)
           (Increase) decrease in other current assets                                      78,152                 (25,104)
           (Decrease) increase in accounts payable                                         195,037                (124,088)
           (Decrease) increase in debt                                                                              (7,784)
            Decrease accrued expenses
               and deferred compensation                                                  (172,667)               (522,799)
            Decrease in deferred revenues                                                 (248,330)                (38,814)
                                                                                 ------------------       -----------------

     Net cash used for operating activities                                             (1,938,318)             (1,797,037)
                                                                                 ------------------       -----------------

Cash flows from investing activities:
     Purchases of property and equipment                                                  (139,359)                (17,741)
     Proceeds from sale of property and equipment                                        -                           5,650
                                                                                 ------------------       -----------------

     Net cash used for investing activities                                               (139,359)                (12,091)
                                                                                 ------------------       -----------------

Cash flows from financing activities:
     Proceeds from issuance of  preferred stock, net of issuance costs                   1,224,583               3,685,206
     Repayment of borrowings                                                             -                        (440,278)
     Proceeds from issuance of convertible note                                            250,000               -
     Collection of Receivable from stockholder                                           -                          50,268
     Payments of obligations under capital lease                                            (29,568)             -
     Proceeds from issuance of common stock,
        net of issuance costs                                                                                       43,617
                                                                                 ------------------       -----------------

     Net cash provided by financing activities                                           1,445,015               3,338,813
                                                                                 ------------------       -----------------

Net increase (decrease) in cash and cash equivalents                                      (632,662)              1,529,685
Cash and cash equivalents at beginning of period                                           722,285                     470
                                                                                 ------------------       -----------------

Cash and cash equivalents  at end of period                                   $             89,623     $         1,530,155
                                                                                 ==================       =================


Supplemental Cash Flow Information:
     Cash paid for interest                                                   $               12,700   $            28,350
     Non-cash investing and financing activities:
        Accrued Interest on preferred stock charged to
           Accumulated deficit                                                               312,000                84,000
        Purchase of property and equipment  under capital lease                               14,185             -
        Common stock issued in satisfaction of interest on  
           preferred stock                                                                   289,500             -
</TABLE>


                   The accompanying notes are an integral part
                          of these financial statements
                                        6








                           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
      29, 1996 of National Datacomputer, Inc. (the "Company"), 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  recurring
      nature) necessary for a fair presentation of the financial statements. The
      results of  operations  for the three and nine months ended  September 28,
      1997 are not necessarily  indicative of the results to be expected for the
      full year.

      REVENUE RECOGNITION
      The Company  recognizes  revenues for products  upon  shipment.  Estimated
      installation,  training  and  warranty  costs are  accrued  at the time of
      shipment.  Service  revenue is  recognized  ratably  over the  contractual
      periods.

      EARNINGS PER SHARE
      Per share data was  computed by dividing  net loss as adjusted by interest
      on the  preferred  stock by the weighted  average  number of common shares
      outstanding  during the period;  common equivalent shares are not included
      as the effect of such would be considered anti-dilutive.

      RESEARCH AND DEVELOPMENT AND COMPUTER SOFTWARE DEVELOPMENT COSTS
      Statement of Financial  Accounting  Standards 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  September 28, 1997 or December
      29, 1996.








      NEW ACCOUNTING PRONOUNCEMENT
      In  February  1997,  the  Financial   Accounting  Standards  Board  issued
      Statement  of  Financial  Accounting  Standards  No.  128,  ("SFAS  128"),
      "Earnings per Share", effective for fiscal years ending after December 15,
      1997,  with  retroactive  restatement  of  prior  periods  presented  upon
      adoption.  Management has  determined  that there will be no impact of the
      adoption of SFAS 128 on the Company's  reported  results of operations for
      the periods presented. The future adoption of SFAS 128 will have no effect
      on the Company's financial position or cash flows.

      In October 1997,  the  Accounting  Standards  Executive  Committee  issued
      Statement of Position 97-2,  "Software Revenue  Recognition" ("SOP 97-2").
      SOP  97-2  provides   guidance  on  the  timing  and  amounts  of  revenue
      recognition  for  licensing,  selling,  leasing,  or  otherwise  marketing
      computer software,  including  software  incorporated into other products.
      This  SOP   supersedes   SOP  91-1  (also   entitled   "Software   Revenue
      Recognition")  and is effective  for  transactions  entered into in fiscal
      years  beginning  after  December  15,  1997.  The  Company  is  currently
      reviewing SOP 97-2 to determine  the impact,  if any, of adopting SOP 97-2
      on the Company's financial position and results of operations.

      RECLASSIFICATIONS
      Certain  prior year  amounts  have been  reclassified  to conform with the
      current year presentation.

3.    INVENTORIES

<TABLE>
<CAPTION>
      Inventories consist of the following:                   SEPTEMBER 28,              DECEMBER 29,
                                                                   1997                      1996
                                                          -----------------------    ----------------------

     <S>                                                       <C>                         <C>      
      Raw Material                                              $  364,041                  $ 351,860
      Work-in-process                                              613,262                    592,741
      Finished goods                                               553,058                    534,552
                                                          -----------------------    ----------------------

                               Total                            $1,530,361                $ 1,479,153
                                                          =======================    ======================
</TABLE>


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

4.    CONVERTIBLE PREFERRED STOCK AND PROMISSORY NOTES

      In March  1997,  the  Company  designated  and sold 900 and 350  shares of
      Series C and Series D Convertible Preferred Stock,  respectively,  for net
      proceeds of $881,583 and $343,000, respectively. The Series C and Series D
      Convertible Preferred Stock have voting, dividend preference,  liquidating
      preference,  mandatory  conversion and Company redemption terms similar to
      those of the Company's existing Series B Convertible  Preferred Stock. The
      Series C and Series D Convertible  Preferred  Stock are  convertible  into
      shares  of  common  stock  at a  price  of  $3.20  and  $2.74  per  share,
      respectively.  Holders of the Series C and Series D Convertible  Preferred
      Stock are also  entitled to receive  interest at a rate of 6% per annum on
      the stated value of the preferred stock.

      At the  same  time,  the  Company  also  issued  $250,000  of  Convertible
      Promissory  Notes  to the same  investors  as the  Series  C and  Series D
      Convertible Preferred Stockholders.  These notes bear interest at the rate
      of 6% annum,  mature in March 1998 and are convertible  into shares of the
      Company's common stock at a price of $2.74 per share.

5.    SUBSEQUENT EVENT

      On November 7, 1997,  the Company  signed a Sales and Marketing  Agreement
      with Infos, a European  company.  The agreement  provides that the Company
      will sell Infos products in North America (Canada, Mexico and the USA) and
      Infos will sell the Company's products in Europe.








      This agreement will provide the Company the  availability of a broad range
      of hand-held  computer products and an outlet to expand into other markets
      and applications.


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


         THIRD  QUARTER  ENDED  SEPTEMBER  28, 1997  COMPARED WITH THIRD QUARTER
ENDED SEPTEMBER 30, 1996.

         Revenues  increased  34% to  $1,523,864  in the Third Quarter 1997 from
$1,136,928 in the Third Quarter 1996. The increase in revenues was mainly due to
a higher sales volume of the Company's  Datacomputers which experienced a growth
of approximately 44%, mainly attributable to two major contracts.

         Service  and other  revenues  for the  current  quarter  were  $273,931
compared to $266,804 for the previous comparable quarter, an increase of 3%. The
Company  expects that service and other  revenues  will  continue to rise as the
Company's installed base of hand-held computers continues to expand.

         Cost of sales and services, as a percentage of net revenues,  decreased
to 58% during the current quarter from 65% during the prior  comparable  period,
primarily  as a result of spreading  certain  fixed  manufacturing  costs over a
higher sales volume,  combined  with the decline of the Company's  field support
cost due to the Company's quality programs instituted in the last year.

         Research and  development  expenses  during the Third Quarter 1997 were
$307,949 a decrease of  approximately  15% compared to $363,868 during the prior
comparable quarter. The Company has made great stride in improving its products,
and therefore lowering the level of third-party development costs in many areas.

         Selling,  general and administrative  expenses during the Third Quarter
1997 were $523,106 a decrease of  approximately  28% compared to $723,029 during
the prior comparable  period.  The significantly  lower level of cost,  resulted
from the Company's  ongoing  evaluation  of its  operations  and  organizational
structure.

         As a result,  the Company  incurred a net loss of  $188,941  during the
Third  Quarter  1997,  compared  to a net  loss of  $669,080  during  the  prior
comparable quarter.








         NINE MONTHS ENDED  SEPTEMBER  28, 1997  COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1996.

         Revenues for the first nine months of 1997  increased 4% to  $4,249,095
from  $4,101,070  for the same period in 1996.  The  increase  in  revenues  was
primarily due to the growth in service revenues as the Company's  installed base
of hand-held computers continues to expand.

         Cost of sales and services, as a percentage of net revenues,  decreased
to 57%  during  the  first  nine  months  of 1997,  from 61%  during  the  prior
comparable  period.  The  decrease is  primarily  attributable  to lower cost of
materials,  and lower field support cost due to the Company's  quality  programs
instituted in the last year.

         Research and development  expenses increased to $1,046,636 in the first
nine months of 1997,  from  $926,599 for the same period in 1996, an increase of
approximately  13%. The  increase is due to the  Company's  continued  effort to
enhance its current products while developing future products.

         Selling, general and administrative expenses decreased to $1,801,668 in
the  first  nine  months  of  1997  from  $1,907,576  in  1996,  a  decrease  of
approximately  6%. The  decrease is  primarily  due to programs  implemented  to
streamline personnel costs.

         As a result,  the Company incurred a net loss of $1,026,157  during the
first nine months of 1997, compared to a net loss of $1,248,407 during the prior
comparable period.

LIQUIDITY AND CAPITAL RESOURCES

         Cash and cash equivalent totaled $89,623 at September 28, 1997 compared
to $722,285  at December  29,  1996.  During the first nine months of 1997,  the
Company  generated  net  proceeds  of  $1,474,583  (Note  4)  from  the  sale of
Convertible  Preferred Stock and the issuance of Convertible  Promissory  Notes.
The proceeds were used to fund the  operating  loss of $1,026,157 in addition to
an increase in accounts receivable.

         The  Company's  primary  requirements  for capital  will be the cost of
systems sold, strategic acquisitions,  marketing and sales costs associated with
the Company's  expansion into new target markets.






                           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)   Computation of per share earnings
                  (27)   Financial Data Schedule.

         (b)      There  were  no  Reports on  Form  8-K  filed during the three
                  months-ended September 28, 1997
                







                                   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.


November 12, 1997                  /s/ Malcolm M. Bibby
                                   --------------------------------
                                   Malcolm M. Bibby
                                   President


November 12, 1997                  /s/ Gerald S. Eilberg
                                   --------------------------------
                                   Gerald S. Eilberg
                                   Vice President, Finance and Administration
                                   Chief Financial Officer