U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  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

[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF  1934
              For the transition period from _________ to ________

                         Commission File Number: 0-30786

                             NIGHTHAWK SYSTEMS, INC
                             ----------------------
        (Exact name of small business issuer as specified in its charter)

           Nevada                                       87-0627349
           ------                                       ----------
 (State or other jurisdiction                          (I.R.S Employer
 of incorporation or organization)                   Identification No.)

                            10715 Gulfdale, Suite 200
                             San Antonio, TX  78216
                             ----------------------
                    (Address of principal executive offices)

                                  210 341-4811
                                  ------------
                           (Issuer's telephone number)

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

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEEDING FIVE YEARS

Check  whether  the  registrant  filed  all documents and reports required to be
filed  by  Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities  under  a  plan  confirmed  by  a  court.  Yes  [  ]  No  [  ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

As  of  August  12, 2005 there were 40,521,194 shares of common stock, par value
$.001  per  share,  of  the  registrant  issued  and  outstanding.

Transitional  Small  Business  Disclosure  Format  (Check one):  Yes [ ]  No [X]

                                        INDEX

Part  I     FINANCIAL  INFORMATION

Item  1     Financial  Statements  (unaudited)
            Report of Independent Registered Public Accounting Firm            2
            Condensed consolidated balance sheet as of June 30, 2005           3
            Condensed consolidated statements of operations for the
            three and six month periods ended June 30, 2005 and 2004           4
            Condensed  consolidated  statement  of  stockholders'
            deficit  for the six  months ended June 30, 2005                   5
            Condensed  consolidated  statements  of cash flows for
            the six months ended June 30, 2005 and 2004                        6
            Notes to condensed consolidated financial statements               8

Item 2     Management's Discussion and Analysis or Plan of Operation          17
Item 3     Controls and Procedures                                            24

Part  II     OTHER  INFORMATION

Item 1     Legal Proceedings                                                  25
Item 2     Unregistered Sales of Equity Securities and Use of Proceeds        25
Item 3     Defaults Upon Senior Securities                                    25
Item 4     Submissions of Matters to a Vote of Security Holders               25
Item 5     Other Information                                                  25
Item 6     Exhibits and Reports on Form 8-K                                   26
           Signatures and Certifications                                      27

                         PART I - FINANCIAL INFORMATION

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board  of  Directors
Nighthawk  Systems,  Inc.

We  have  reviewed  the  accompanying  condensed  consolidated  balance sheet of
Nighthawk  Systems,  Inc.  and  subsidiary  as  of  June  30,  2005, the related
condensed  consolidated  statements  of  operations  for  the  three-month  and
six-month  periods  ended  June  30,  2005  and 2004, the condensed consolidated
statement of stockholders' deficit for the six-month period ended June 30, 2005,
and  the  condensed  consolidated  statements  of  cash  flows for the six-month
periods  ended  June  30,  2005  and  2004. These interim condensed consolidated
financial  statements  are  the  responsibility  of  the  Company's  management.

We  conducted  our  reviews  in  accordance with standards of the Public Company
Accounting  Oversight  Board  (United  States).  A  review  of interim financial
information  consists  principally  of applying analytical procedures and making
inquiries  of  persons  responsible  for financial and accounting matters. It is
substantially  less  in  scope  than  an  audit conducted in accordance with the
standards  of the Public Company Accounting Oversight Board (United States), the
objective  of  which  is  the  expression  of an opinion regarding the financial
statements  taken  as  a  whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to  above  for  them  to  be  in conformity with accounting principles generally
accepted  in  the  United  States  of  America.

GHP  HORWATH,  P.C.

Denver,  Colorado
August  17,  2005

<TABLE>
<CAPTION>

                            NIGHTHAWK SYSTEMS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2005
<S>                                                                                  <C>
        ASSETS

Current assets:
     Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    19,927
     Accounts receivable, net of allowance for doubtful accounts of $750. . . . . .       26,920
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       88,908
     Prepaids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      143,920
                                                                                     ------------
               Total current assets . . . . . . . . . . . . . . . . . . . . . . . .      279,675
                                                                                     ------------

Furniture, fixtures and equipment, net. . . . . . . . . . . . . . . . . . . . . . .       11,877
Intangible and other assets. . . . . .. . . . . . . . . . . . . . . . . . . . . . .       14,762
                                                                                     ------------
                                                                                     $   306,314
                                                                                     ============

      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   339,701
    Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      331,658
    Line of credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       19,792
    Notes payable:
        Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       14,736
        Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,347,582
                                                                                     ------------
               Total current liabilities. . . . . . . . . . . . . . . . . . . . . .    2,053,469
                                                                                     ------------

Long-term liabilities:
   Convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       72,014
                                                                                     ------------
Commitments and contingencies

Stockholders' deficit:
    Preferred stock, $0.001 par value; 5,000,000 shares authorized; 5,000 issued
    and outstanding; liquidation preference. . . . . . . . . . . . . . . . . . . .       $12,500
    Common stock; $0.001 par value; 200,000,000 shares authorized;
    39,021,194 issued and outstanding . . . . . . . . . . . . . . . . . . . . . . .       39,022
    Additional paid- in capital . . . . . . . . . . . . . . . . . . . . . . . . . .    5,046,227
    Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (6,916,918)
                                                                                     ------------
               Total stockholders' deficit. . . . . . . . . . . . . . . . . . . . .   (1,819,169)
                                                                                     ------------
                                                                                     $   306,314
                                                                                     ============

<FN>
The accompanying notes are an integral part of these financial statements
</TABLE>

<TABLE>
<CAPTION>

                            Nighthawk Systems, Inc.
                Condensed Consolidated Statements of Operations
<S>                                                                 <C>          <C>               <C>           <C>
                                                                    Three months ended June 30,    Six months ended June 30,
                                                                         2005       2004                2005          2004
                                                                    -----------------------------  ---------------------------
Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   98,372   $ 161,387         $   269,594   $   264,225
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . .      85,099     108,057             189,623       180,623
                                                                    -----------------------------  ---------------------------
     Gross profit. . . . . . . . . . . . . . . . . . . . . . . . .      13,273      53,330              79,971        83,602


Selling, general and administrative expenses . . . . . . . . . . .     588,040     264,865           1,149,700       540,945
                                                                    -----------------------------  ---------------------------
     Loss from operations. . . . . . . . . . . . . . . . . . . . .    (574,767)   (211,535)         (1,069,729)     (457,343)

 Interest expense:
     Related parties . . . . . . . . . . . . . . . . . . . . . . .         148       2,227                 839         5,600
     Other . . . . . . . . . . . . . . . . . . . . . . . . . . . .     358,381      38,571             489,008        56,589
                                                                    -----------------------------  ---------------------------
         Total interest expense. . . . . . . . . . . . . . . . . .     358,529      40,798             489,847        62,189
                                                                    -----------------------------  ---------------------------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (933,296)   (252,333)         (1,559,576)     (519,532)
Less: preferred stock dividends. . . . . . . . . . . . . . . . . .        (221)       (197)               (440)         (197)
                                                                    -----------------------------  ---------------------------
Net loss to common stockholders. . . . . . . . . . . . . . . . . .  $ (933,517)  $(252,530)        $(1,560,016)  $  (519,729)
                                                                    =============================  ===========================
Net loss per basic and diluted common share. . . . . . . . . . . .  $    (0.03)  $   (0.01)        $     (0.04)  $     (0.02)
                                                                    =============================  ===========================
Net loss to common stockholders per basic and diluted common share  $    (0.03)  $   (0.01)        $     (0.04)  $     (0.02)
                                                                    =============================  ===========================
Weighted average common shares outstanding - basic and diluted . .  37,249,225  25,911,034          35,501,257    25,434,668

<FN>

The accompanying notes are an integral part of these financial statements.
</TABLE>

<TABLE>
<CAPTION>

Nighthawk Systems, Inc.
Condensed Consolidated Statements of Stockholders' Deficit
Six months ended June 30, 2005
<S>                                    <C>       <C>        <C>          <C>    <C>              <C>        <C>          <C>
                                        Preferred Stock         Common stock
                                        --------------         --------------     Additional paid  Special   Accumulated
                                       Shares     Amount    Shares         Amount   in capital     Warrants    deficit    Total
                                    -----------------------------------------------------------------------------------------------
Balances, December 31, 2004. . . . .   5,000   $   12,500   31,959,247    $ 31,960 $3,884,516  $ 188,775 $(5,357,342)  $(1,239,591)
   Common stock issued, and puts
   and warrants exercised for cash                           2,276,610       2,277    359,526                              361,803
   Common stock issued as incentive
   on notes payable                                            900,000         900    167,600                              168,500
   Common stock and options issued
   for consulting and other services                         1,200,000       1,200    229,325                              230,525
   Conversion of accrued liabilities
   to common stock                                             313,100         313     56,307                               56,620
   Conversion of notes payable and
   accrued interest to common stock.                         1,400,000       1,400    161,150                              162,550
   Series A preferred dividend . . .                             2,487           2         (2)                                   -
   Exercise of Special Warrants. . .                           969,750         970    187,805   (188,775)                        -
   Net loss. . . . . . . . . . . .                                                                         (1,559,576)  (1,559,576)
                                    -----------------------------------------------------------------------------------------------
Balances, June 30, 2005. . . . . . .   5,000    $  12,500   39,021,194    $ 39,022 $5,046,227    $    -  $ (6,916,918) $(1,819,169)
                                    ===============================================================================================

<FN>

The accompanying notes are an integral part of these financial statements

</TABLE>

<TABLE>
<CAPTION>

                            Nighthawk Systems, Inc.
                Condensed Consolidated Statements of Cash Flows
                            Six months ended June 30,
<S>                                                                                   <C>           <C>
                                                                                             2005        2004
                                                                                      -----------   ----------
Cash flows from operating activities:
      Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(1,559,576)  $(519,532)
                                                                                      -----------   ----------
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . .        3,163       3,854
   Bad debt expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,648
   Amortization of loan discounts and warrants . . . . . . . . . . . . . . . . . . .      198,013           -
   Common stock and options issued for consulting and other services . . . . . . . .       23,025      73,660
   Common stock and warrants issued for interest . . . . . . . . . . . . . . . . . .            -      34,500
   Amortization of shares issued as incentives on notes payable. . . . . . . . . . .      133,908           -
   Amortization of shares issued for prepaid consulting. . . . . . . . . . . . . . .      212,124           -
Changes in assets and liabilities, net of business acquisition:
   Decrease (increase) in accounts receivable. . . . . . . . . . . . . . . . . . . .       17,186     (11,357)
   (Increase) in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (62,199)    (39,189)
   Decrease in prepaids. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       26,810           -
   Decrease in other assets and liabilities. . . . . . . . . . . . . . . . . . . . .       (1,020)     (2,198)
   (Increase) decrease in accounts payable . . . . . . . . . . . . . . . . . . . . .      (82,553)     11,801
   Increase in accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .      149,434      35,313
                                                                                      ------------  ----------
Total adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      619,539     106,384
                                                                                      ------------  ----------
Net cash used in operating activities of continuing operations . . . . . . . . . . .     (940,037)   (413,148)
                                                                                      ------------  ----------

Cash flows from investing activities:
   Purchases of furniture, fixtures and equipment. . . . . . . . . . . . . . . . . .       (1,973)          -
                                                                                      ------------  ----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . .       (1,973)          -
                                                                                      ------------  ----------

Cash flows from financing activities:
   Cash overdraft. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -      (3,902)
   Proceeds from the sale of preferred stock . . . . . . . . . . . . . . . . . . . .            -      12,500
   Proceeds from notes payable, related parties. . . . . . . . . . . . . . . . . . .          567      25,516
   Payments on notes payable, related parties. . . . . . . . . . . . . . . . . . . .       (1,233)    (34,655)
   Proceeds from notes payable, other. . . . . . . . . . . . . . . . . . . . . . . .    1,113,500      25,000
   Payments on notes payable, other. . . . . . . . . . . . . . . . . . . . . . . . .     (573,818)    (10,404)
   Payments on other related party payable . . . . . . . . . . . . . . . . . . . . .            -     (25,000)
   Proceeds from the issuance of special warrants. . . . . . . . . . . . . . . . . .            -     188,775
   Net proceeds from the sale of common stock, and the exercise of puts and warrants      361,803     237,350
                                                                                      ------------  ----------
Net cash provided by financing activities. . . . . . . . . . . . . . . . . . . . . .      900,819     415,180
                                                                                      ------------  ----------
Net (decrease) increase in cash. . . . . . . . . . . . . . . . . . . . . . . . . . .      (41,191)      2,032
Cash, beginning balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       61,118           -
                                                                                      ------------  ----------
Cash, ending balance                                                                     $ 19,927       2,032
                                                                                      ============  ==========
</TABLE>

<TABLE>
<CAPTION>

Condensed Consolidated Statements of Cash Flows
(continued)
<S>                                                                       <C>       <C>
Supplemental disclosures of cash flow information:
                                                                              2005     2004
                                                                          --------  -------
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . .  $ 49,722  $17,222
                                                                          ========  =======
Supplemental disclosure of non-cash investing and financing activities:

Common shares issued as incentives for notes payable . . . . . . . . . . $168,500
                                                                         ========
Common shares issued for prepaid consulting agreements . . . . . . . . . $207,500
                                                                         ========
Conversion of accrued expenses to common stock . . . . . . . . . . . . . $ 56,620
                                                                         ========
Conversion of notes payable and accrued interest to common stock
   Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $155,590  $71,640
   Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . .     6,960    8,876
                                                                          --------  -------
Total amount converted . . . . . . . . . . . . . . . . . . . . . . . . .  $162,550  $80,516
                                                                          ========  =======
Preferred stock dividends issued in common stock . . . . . . . . . . . .  $    440  $   197
                                                                          ========  =======

</TABLE>

                             NIGHTHAWK SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
            THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2005 AND 2004
                                   (unaudited)

1.  Organization,  going  concern,  results of operations and management's plans

Organization

Nighthawk  Systems,  Inc.  ("the  Company") designs and manufactures intelligent
remote power control products that are easy to use, inexpensive and can remotely
control  virtually  any  device  from  any location.  The Company's proprietary,
wireless  products  are ready to use upon purchase, so they are easily installed
by  anyone, regardless of technical ability, and are also easily integrated into
third-party products, systems and processes.  They allow for intelligent control
by  interpreting instructions sent via paging and satellite media, and executing
the  instructions  by 'switching' the electrical current that powers the device,
system  or  process.  Nighthawk's  intelligent  products  can  be  activated
individually, in pre-defined groups, or en masse, and for specified time periods
with  a  simple  click  of  a  mouse  or  by  dialing  a  telephone  number.

GOING  CONCERN,  RESULTS  OF  OPERATIONS  AND  MANAGEMENT'S  PLANS

The  Company  incurred a net loss of approximately $1.38 million during the year
ended December 31, 2004 and a net loss of approximately $1.56 million during the
six  months  ended  June  30, 2005.  The Company had a stockholders' deficit and
working  capital  deficiency  of  approximately $1.24 million and $1.04 million,
respectively,  as  of  December  31,  2004  and  $1.82 million and $1.77 million
respectively,  as  of  June  30,  2005. These conditions raise substantial doubt
about  the  Company's  ability  to  continue  as  a  going concern.  Although no
assurance  can  be  given  that  such  plans  will  be successfully implemented,
management's  plans  to  address  these  concerns  include:

1.     Raising  working  capital  through  additional  borrowings.
2.     Raising  equity  funding  through  sales  of  the Company's common stock.
3.     Implementation  of  a  sales  and  marketing  plan.

ADDITIONAL  BORROWINGS  AND  EQUITY  FUNDRAISING:

In August 2004, the Company signed a financing arrangement with Dutchess Private
Equities,  II,  L.P.  ("Dutchess")  under which the Company received $250,000 in
exchange  for  a  convertible  debenture  during the third quarter of 2004.  The
Company  also  signed  an  investment  agreement  under which Dutchess agreed to
purchase  up to $10.0 million in common stock from the Company, at the Company's
discretion,  over the next three years, subject to certain limitations including
the  Company's  then  current trading volume.  Although the amount and timing of
specific  cash infusions available under the entire financing arrangement cannot
be predicted with certainty, the arrangement represents a contractual commitment
by  Dutchess  to  provide  funds  to  the  Company.

During  the  six months ended June 30, 2005, Dutchess loaned the company a total
of  $1,113,500  in the form of notes payable.  The notes have no stated interest
rate  but have a face amount greater than the funded amount.  This difference is
recognized  as  interest  expense over the life of the loan.  Under the terms of
the  notes,  Dutchess  is  also  issued  incentive shares, which are recorded as
prepaid  interest  and  expensed  over  the  life  of  the  loan.

During the six months ended June 30, 2005, the Company exercised six (6) puts to
Dutchess  totaling  1,276,610 shares for net proceeds of $222,726.  Of the total
proceeds,  $125,633  was  used  to  repay portions of previously issued notes to
Dutchess  and  $67,838  went  to  the  Company.

On  March 9, 2005, Dutchess exercised 250,000 warrants at $0.125 each, for total
proceeds  of  $31,250,  $15,000  of  which  was applied to outstanding notes and
accrued  interest.

The  Company  used  the  proceeds  from the notes, puts and warrants to fund its
operating cash flow deficits and to repay outstanding notes and accrued interest
and  penalties  to  Dutchess.

For more information on the transactions with Dutchess, please see Note 5, Notes
payable.

Although  no  assurance  may be given that it will be able to do so, the Company
expects to be able to continue to access funds under this arrangement to help it
fund near-term and long-term sales and marketing efforts, and to cover cash flow
deficiencies.

THE  SALES  AND  MARKETING  PLAN  FOR  2005  INCLUDES  THE  FOLLOWING:

-     Hiring  sales  and  marketing  personnel.  The Company increased its sales
force in the first quarter of 2005 with experienced salespeople with the goal of
effectively  targeting  existing  and  new  markets.

-     Product  marketing  including  print  media and attendance at trade shows.
This  method has proved the most effective for the Company to date, and it plans
to  increase  its  presence  in  these  areas  to  attract  new  customers.

-     An  improved Internet presence.  The Company launched a new website in May
2005  to  improve  content and to make the site more friendly to search engines.
The  Company  has  plans  to  add  e-commerce  functionality  at  a future date.

-     Leveraging  existing  customer relationships by up-selling new products or
fully  integrating  systems  with  the  Company's  products.

-     The  establishment  of  distribution  and  dealer  networks.  Through  an
effective dealer network, the Company can increase awareness in its products and
utilize  a  dealer's  sales  force  to  actively  promote  its  products.

-     New  applications  in  irrigation  control,  civil  defense  and emergency
management.   The  current product design can be altered with little cost to the
Company  to be effectively implemented into a wide array of fields.  Through the
commitment  of  funding,  the Company can now research all possible applications
and  begin  to  market  directly  to  new  customers.

-     The  development  and launch of a product designed to be used for multiple
purposes  by  consumers.

In  addition  to  the marketing and sales objectives, the Company has identified
the  following  strategic  goals  for  2005:

-     Joint  ventures  with  wireless  service  providers  and  equipment
manufacturers.

-     The  identification  of complementary products and companies for potential
acquisition.

The accompanying financial statements do not include any adjustments relating to
the  recoverability  and  classification of assets or the amounts of liabilities
that might be necessary should the Company be unsuccessful in implementing these
plans,  or  otherwise  be  unable  to  continue  as  a  going  concern.

2.  BASIS  OF  PRESENTATION

The  accompanying  unaudited  condensed consolidated financial statements, which
include  the  accounts  of  Nighthawk  Systems,  Inc.  and  its  subsidiary  PCT
(collectively  referred  to  herein  as  "the  Company"),  have been prepared in
accordance with accounting principles generally accepted in the U.S. for interim
financial information. In the opinion of management, all adjustments (consisting
of  only  normal  recurring  items), which are necessary for a fair presentation
have  been  included.  The  results  for  interim  periods  are  not necessarily
indicative  of  results that may be expected for any other interim period or for
the  full year. These condensed consolidated financial statements should be read
in  conjunction  with the financial statements and notes thereto included in the
Company's  Annual  Report  on Form 10-KSB for 2004 filed with the Securities and
Exchange  Commission  (the  "SEC").

3.  SIGNIFICANT  ACCOUNTING  POLICIES

REVENUE  RECOGNITION

Revenue from product sales is recognized when all significant obligations of the
Company  have  been  satisfied.  Revenues  from  equipment  sales are recognized
either  on  the completion of the manufacturing process, or upon shipment of the
equipment  to  the customer, depending on the Company's contractual obligations.
The  Company  occasionally  contracts to manufacture items, bill for those items
and  then  hold  them  for  later shipment to customer-specified locations.  The
Company  had  no  bill  and  hold  sales  at December 31, 2004 or June 30, 2005.
Revenue  related to airtime billing is recognized when the service is performed.
Some  customers  pre-pay airtime on a quarterly or annual basis and the pre-paid
portion  is recorded as deferred revenue.  Deferred revenue, included in accrued
expenses  on  the  balance  sheet  at  June  30,  2005, is approximately $6,300.

PROVISION  FOR  DOUBTFUL  ACCOUNTS

The  Company  reviews  accounts  receivable  periodically for collectibility and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed  necessary.

CONCENTRATIONS

Financial  instruments that potentially subject the Company to concentrations of
credit risk consist primarily of trade accounts receivable.  Receivables arising
from  sales  to  customers  are  not collateralized and, as a result, management
continually monitors the financial condition of its customers to reduce the risk
of  loss.  At  June  30, 2005, the Company had approximately $26,900 in accounts
receivable,  net  of the allowance for doubtful accounts.  Approximately $17,300
of  this  balance,  or 64%, was from four customers.  Each balance was collected
subsequent  to  June  30,  2005.

During  the  three month period ended June 30, 2005, two customers accounted for
approximately  45% of total revenue.  During the six month period ended June 30,
2005,  two  customers  accounted  for  approximately  44%  of  total  revenue.

During  the  three  and  six  month  periods  ended June 30, 2005, the Company's
largest  supplier  accounted for approximately 55% and 49%, respectively, of the
Company's  purchases  of  pre-manufactured  component  materials.

INVENTORIES

Inventories  consist  of  parts  and  pre-manufactured  component  materials and
finished goods.  Inventories are valued at the lower of cost or market using the
first-in,  first-out  (FIFO)  method.

INCOME  TAXES

Deferred  tax  assets  and liabilities are recorded for the estimated future tax
effects of temporary differences between the tax basis of assets and liabilities
and  amounts reported in the accompanying balance sheets, and for operating loss
and tax credit carry forwards. The change in deferred tax assets and liabilities
for  the  period  measures the deferred tax provision or benefit for the period.
Effects  of  changes  in enacted tax laws on deferred tax assets and liabilities
are  reflected  as  adjustments to the tax provision or benefit in the period of
enactment.  The  Company's deferred tax assets have been completely reduced by a
valuation  allowance  because  management  does  not  believe realization of the
deferred  tax  assets  is  sufficiently  assured  at  the  balance  sheet  date.

NET  LOSS  PER  SHARE

Basic  net  loss  per  share  is computed by dividing the net loss applicable to
common  stockholders  by  the  weighted-average number of shares of common stock
outstanding  for  the  year.  Diluted  net loss per share reflects the potential
dilution  that  could  occur  if dilutive securities were exercised or converted
into  common  stock or resulted in the issuance of common stock that then shared
in the earnings of the Company, unless the effect of such inclusion would reduce
a  loss  or  increase  earnings  per share.  For the three and six month periods
ended  June  30,  2005  and  the year ended December 31, 2004, the effect of the
inclusion  of  dilutive  shares  would  have  resulted in a decrease in loss per
share.  Accordingly,  the  weighted  average  shares  outstanding  have not been
adjusted  for  dilutive  shares.

USE  OF  ESTIMATES

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

RECLASSIFICATIONS

Certain  amounts reported in the consolidated financial statements for the three
and six months ended June 30, 2004 have been reclassified to conform to the June
30,  2005  presentation.

STOCK-BASED  COMPENSATION

The  Company  has  adopted  Statement of Financial Accounting Standards No. 123,
"Accounting  for  Stock-Based Compensation" ("SFAS 123"). The provisions of SFAS
123  allow companies to either expense the estimated fair value of stock options
or  to  continue  to  follow  the intrinsic value method set forth in Accounting
Principles  Bulletin  Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB  25") but disclose the pro forma effects on net income (loss) had the fair
value of the options been expensed. The Company has elected to continue to apply
APB  25  in  accounting  for  its  employee  stock  option  incentive  plans.

Under  APB  25, where the exercise price of the Company's employee stock options
equals  the  market  price  of  the  underlying  stock  on the date of grant, no
compensation  is  recognized.  As  all  employee options were issued at or above
market during 2004 and the first six months of 2005, no compensation expense was
recognized  in either of the periods.  If compensation expense for the Company's
stock-based compensation plans had been determined consistent with SFAS 123, the
Company's net loss and net loss per share including pro forma results would have
been  the  amounts  indicated  below:

<TABLE>
<CAPTION>

<S>                                         <C>                 <C>              <C>           <C>
                                                  Three months ended June 30,    Six months ended June 30,
                                                 ---------------------------------------------------------
                                                     2005           2004              2005        2004
                                                 -----------------------------  ---------------------------
Net loss applicable to common stockholders:
As reported . . . . . . . . . . . . . . . . .   $ (933,517)     $ (252,530)      $(1,560,016)  $(519,729)
Total stock-based employee compensation expense
determined under fair value based method for
all employee awards, net                            (6,148)         (3,341)          (12,296)     (6,795)
                                             -------------      -----------      -----------   ----------
Pro forma net loss. . . . . . . . . . . . . .   $ (939,665)     $ (255,871)      $(1,572,312)  $(526,524)
                                             =============      ===========      ============  ==========

Net loss per share:
As reported:
Basic and diluted . . . . . . . . . . . . . . . $    (0.03)     $    (0.01)      $     (0.04)  $   (0.02)
Pro forma:
Basic and diluted                               $    (0.03)     $    (0.01)      $     (0.04)  $   (0.02)

</TABLE>

The  pro  forma  effect  on  net loss may not be representative of the pro forma
effect on net income or loss of future years due to, among other things: (i) the
vesting  period of the stock options and the (ii) fair value of additional stock
options  in  future  years.

For  the  purpose  of  the  above  table, the fair value of each option grant is
estimated  as  of the date of grant using the Black-Scholes option-pricing model
with  the  following  assumptions:

<TABLE>
<CAPTION>

<S>                        <C>           <C>                <C>            <C>
Black-Scholes Assumptions  Three months ended June 30,   Six months ended June 30,
                               2005        2004                2005         2004
                           ----------------------------  --------------------------
Dividend yield. . . . . .      0.00%       0.00%               0.00%        0.00%
Expected volatility . . .      1.31        1.122               1.31         1.122
Risk-free interest rate .      4.50%       4.50%               4.50%        4.50%
Expected life in years        2 years     3 years            2 years       3 years

</TABLE>

The  weighted average fair value at date of grant for options granted during the
first  quarter  of 2005 was $0.132 per share using the above assumptions.  There
were  no  options  granted  to employees during the first and second quarters of
2004  or  the  second  quarter  of  2005.

RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS

In  December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  123R  "Share-Based Payment", which addresses the accounting for share-based
payment  transactions.  SFAS  123R  eliminates  the  ability  to  account  for
share-based  compensation  transactions  using  APB  25,  and instead, generally
requires  that such transactions be accounted and recognized in the statement of
operations based on their fair value.  SFAS No. 123R will be effective for small
business  issuers  as  of the beginning of the first interim or annual reporting
period  that  begins  after December 15, 2005.  SFAS No. 123R offers the Company
alternative  methods  of  adopting  this  standard.  The  Company  has  not  yet
determined  which alternative method it will use.  Depending upon the number and
terms  of  options  that may be granted in future periods, the implementation of
this  standard  could have a material impact on the Company's financial position
and  results  of  operations.

4.  RELATED  PARTY  TRANSACTIONS

During  the  year  ended  December 31, 2004, a business partner of the Company's
Chairman  billed the Company $20,000 for consulting services.  The liability was
settled for 175,000 shares of the Company's common stock in the first quarter of
2005.  During  the  second  quarter  of 2005, the Company sold 100,000 shares of
common stock to this same individual for $20,000.  We did not publicly offer the
securities  and  this  person  is  an accredited investor.  No underwriters were
involved  in  the  sale.

5.  NOTES  PAYABLE

<TABLE>
<CAPTION>



<S>                                                                          <C>
At June 30, 2005, notes payable consist of the following:

Related parties:
Note payable, officer; unsecured; interest at prime  . . . . . . . . . . .   $    9,824
rate plus 5.5% (10.75% at June 30, 2005); due on demand
Note payable, officer; unsecured; interest at 23.99%, revolving . . . . . .       4,912
                                                                             ----------
                                                                             $   14,736
                                                                             ==========
Other:
Convertible note payable to stockholder, 8% interest  . . . . . . . . . . .  $  160,000
rate, in default as of the date of this report (1)
Notes payable to stockholder, 8% interest rate, in . . . . . . . . . . . .      165,000
default as of the date of this report (1)
Unsecured note with a financial institution, 15.99% . . . . . . . . . . . .      21,694
interest rate, revolving
Note payable, $586,200 face amount,  no stated interest                         586,200
rate but with an implied annual rate of 387.95%, due June 7, 2005 (2)
Note payable, $120,000 face amount,  no stated interest
rate but with an implied annual rate of 73.70%, due December 12, 2005 (2)       104,571
Note payable, $240,000 face amount,  no stated interest
rate but with an implied annual rate of 71.55%, due December 19, 2005 (2)       207,926
Note payable, $120,000 face amount,  no stated interest
rate but with an implied annual rate of 65.16%, due January 8, 2006 (2)         102,191
                                                                              ---------
                                                                            $ 1,347,582
                                                                              =========
Long Term:

Convertible  debenture,  8%  interest  rate,  due  August  10,  2007  (2)     $  72,014
                                                                              =========

</TABLE>

1)     The  Company  is  currently in discussions with Mr. Revesz, the holder of
the  notes that are in default as of the date of this report. In April 2004, the
Company  reached  an  agreement  with Tomas Revesz, a former board member, under
which,  in  return  for an additional $25,000 in borrowings and the extension of
the  maturity  dates  of  three  notes to July 31, 2004, the Company granted the
creditor  a  secured  position  in  the  assets  of  the  Company.

2)     On  April 7, 2005, Dutchess loaned the Company $488,500.  The note had no
stated  interest  rate  but had a face amount of $586,200 and matured on June 7,
2005.  A  portion  of the proceeds of this loan was used to repay the note dated
December 3, 2004 with a face amount of $300,000, which matured on April 3, 2005.
Under  the  terms  of  the note, Dutchess was issued 250,000 incentive shares of
common  stock.  The Company recorded the fair value of these incentive shares as
prepaid  interest,  and  will  expense  their  value  over the term of the note.
Dutchess  also  required  the  Company  to hire Edgarization, LLC for consulting
services  and  Nighthawk  issued the consulting company 300,000 shares of common
stock.  The  Company  recorded  the  fair  value  of  these  shares  as  prepaid
consulting  and  will  expense  their value over the term of the agreement.  The
implied annual rate of interest is 387.95%.  The note was repaid on July 8, 2005
with  a  partial  use  of  the  proceeds  of  a  new  note.

On  May  12, 2005, Dutchess loaned the Company $100,000.  The note had no stated
interest  rate  but  had  a  face amount of $120,000 and matures on December 12,
2005.  Under the terms of the note, Dutchess was issued 100,000 incentive shares
of  common stock.  The Company recorded the fair value of these incentive shares
as  prepaid  interest,  and  will expense their value over the term of the note.
The  implied  annual  rate  of  interest  is  73.70%.

On  May  19, 2005, Dutchess loaned the Company $200,000.  The note had no stated
interest  rate  but  had  a  face amount of $240,000 and matures on December 19,
2005.  A  portion  of the proceeds of this loan was used to repay the note dated
January  18, 2005 with a face amount of $270,000, which matured on May 18, 2005.
Under  the  terms  of  the note, Dutchess was issued 200,000 incentive shares of
common  stock.  The Company recorded the fair value of these incentive shares as
prepaid  interest,  and will expense their value over the term of the note.  The
implied  annual  rate  of  interest  is  71.55%.

On  June  8, 2005, Dutchess loaned the Company $100,000.  The note had no stated
interest  rate but had a face amount of $120,000 and matures on January 8, 2006.
Under  the  terms  of  the note, Dutchess was issued 100,000 incentive shares of
common  stock.  The Company recorded the fair value of these incentive shares as
prepaid  interest,  and will expense their value over the term of the note.  The
implied  annual  rate  of  interest  is  65.16%.

On  July  8, 2005, Dutchess loaned the Company $795,154.  The note had no stated
interest rate but had a face amount of $820,154 and matures on February 8, 2006.
A portion of the proceeds of this loan was used to repay the note dated April 7,
2005  with  a face amount of $586,200, which matured on June 7, 2005.  Under the
terms of the note, Dutchess was issued 285,000 incentive shares of common stock.
The  Company  recorded  the  fair  value  of  these  incentive shares as prepaid
interest,  and  will  expense  their  value  over  the  term  of  the  note.

On August 3, 2005, Dutchess loaned the Company $130,000.  The note had no stated
interest  rate  but had a face amount of $156,000 and matures on August 3, 2006.
Under  the  terms  of  the note, Dutchess was issued 285,000 incentive shares of
common  stock.  The Company recorded the fair value of these incentive shares as
prepaid  interest,  and  will  expense  their  value  over the term of the note.

During  the  period  from  January  1,  2005  through June 30, 2005, the Company
exercised  six  (6)  puts  to Dutchess totaling 1,276,610 shares for proceeds of
$222,726  less  commissions of $9,673.  Of the total proceeds, $125,633 was used
to repay portions of previously issued notes to Dutchess and $67,838 went to the
Company.

On  March 9, 2005, Dutchess exercised 250,000 warrants at $0.125 each, for total
proceeds  of  $31,250,  $15,000  of  which  was applied to outstanding notes and
accrued  interest.

Also  during  the  period  from  January 1, 2005 through June 30, 2005, Dutchess
elected  to  convert  a  total  of $162,550 of the 36-month convertible note for
1,400,000  shares  of  the  Company's  common  stock.

During  the period from July 1, 2005 through August 1, 2005, Dutchess elected to
convert  a  total of $51,767 of the 36-month convertible note for 680,000 shares
of  the  Company's  common  stock.


6.  STOCKHOLDERS'  DEFICIT

PREFERRED  STOCK

Preferred  stock  dividends of $440 were accrued in the form of a stock dividend
equal to 2,487 shares of common stock of the Company during the six months ended
June  30,  2005.

COMMON  STOCK

The  Company  held  a  special shareholders' meeting on January 6, 2005 where an
amendment  to  the  Amended  and Restated Articles of Incorporation of Nighthawk
Systems,  Inc.  was  approved to increase the number of authorized shares of our
common  stock  from  50,000,000  to  200,000,000.

During  the  first  quarter  of  2005,  the  Company  issued  463,100 shares for
consulting and other services, of which 175,000 shares were issued to a business
partner  of  the Company's Chairman to settle a $20,000 liability for consulting
services  performed  and  expensed  in  2004.

During  the  first  quarter  of  2005, the Company sold 650,000 shares of common
stock  to  an  investor  for  cash at a price of $0.15 per share for proceeds of
$97,500.  Warrants  to  purchase  650,000  shares of common stock at an exercise
price  of  $0.25  per share were also included in the sale.  We did not publicly
offer  the  securities  and  the  investor  is  an  accredited  investor.  No
underwriters  were  involved  in  the  sale.

During  the  second  quarter  of 2005, the Company sold 100,000 shares of common
stock  to  a business partner of the Company's Chairman for $20,000.  We did not
publicly  offer  the  securities  and this person is an accredited investor.  No
underwriters  were  involved  in  the  sale.

During  the  second quarter of 2005, the Company issued 250,000 shares of common
stock  to  Prospect Hunter, Inc. for marketing services for a period of one year
beginning  in  April  2005.

Also  during  the  second quarter of 2005, the Special Warrant holders exercised
their  right  to  969,750  shares  of  the  Company's common stock.  The Special
Warrants  were  sold  in  2004 for net proceeds of $188,775 and consisted of the
right  to  one share of the Company's common stock and one warrant to purchase a
share  of the Company's common stock for $0.30.  The warrants remain unexercised
as  of  the  date  of  this  report.

7.  SUBSEQUENT  EVENTS

In  April  2004,  the  Company,  along with current officers, board members, and
several  of  the  Company's former directors, were sued in the Colorado District
Court  by  a former director (Larry Brady) and former member of management (Mark
Brady,  Larry's  son)  for,  among other things, breach of contract for unlawful
termination and failure to provide stock allegedly promised during their service
as  Company director and chief financial officer, respectively, for part of 2001
and  part  of  2002.  The  Company  denied the allegations. Further, the Company
counter-sued  the  Bradys  for  non-performance  and breach of fiduciary duties.
Pursuant to a court order, dated June 23, 2005, the judge terminated the Bradys'
lawsuit,  dismissing  it,  outright.  In  July  of 2005, in an effort to bar the
Bradys  from raising these issues in the future, the Company engaged in a mutual
release  of  all  claims  and  issued  a total of 250,000 shares of unregistered
common  stock  and $10,000 to Lawrence Brady, Mark Brady, and their counsel. The
Company  recognized  $32,500  in expenses for the quarter ended June 30, 2005 in
relation  to  this  settlement.

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

FORWARD-LOOKING  STATEMENTS

Discussions  and  information  in this document, which are not historical facts,
should  be considered forward-looking statements. With regard to forward-looking
statements,  including  those  regarding  the  potential revenues from increased
sales,  and  the  business  prospects  or any other aspect of Nighthawk Systems,
Inc.'s  business,  actual results and business performance may differ materially
from  that  projected or estimated in such forward-looking statements. Nighthawk
Systems, Inc. ("the Company") has attempted to identify in this document certain
of the factors that it currently believes may cause actual future experience and
results  to differ from its current expectations. Differences may be caused by a
variety  of  factors, including but not limited to, adverse economic conditions,
entry  of  new and stronger competitors, inadequate capital and the inability to
obtain  funding  from  third  parties.

The  following  information  should  be  read  in conjunction with the unaudited
condensed  consolidated  financial statements included herein which are prepared
in accordance with accounting principles generally accepted in the United States
of  America  for  interim  financial  information.

GENERAL

The  Company  designs  and  manufactures intelligent remote monitoring and power
control  products  that  are  easy  to use, inexpensive and can remotely control
virtually  any device from any location.  Our proprietary, wireless products are
ready  to  use upon purchase, so they are easily installed by anyone, regardless
of  technical ability, and are also easily integrated into third-party products,
systems  and  processes.  They  allow  for  intelligent  control by interpreting
instructions sent via paging and satellite media, and executing the instructions
by 'switching' the electrical current that powers the device, system or process.
Our  intelligent  products can be activated individually, in pre-defined groups,
or en masse, and for specified time periods with a simple click of a mouse or by
dialing  a  telephone  number.

Our  products  have been uniquely designed and programmed to be simple and ready
to use upon purchase by anyone, almost anywhere, at affordable prices.  As such,
it  is  the Company's goal to have its products become commonplace, accepted and
used  by  businesses  and  consumers  alike  in  their  daily  routines.

We  save  consumers  and  businesses time, effort and expense by eliminating the
need  for a person to be present when and where an action needs to be taken.  By
utilizing  existing  wireless  technology,  we give our users the flexibility to
move  their  application  from  place  to  place,  without  re-engineering their
network.  Currently,  most  commercial  control  applications  utilize telephone
lines,  which  tether  the  system  to  a  single  location  and have associated
installation  and  monthly charges.  Our products make companies more profitable
by  eliminating  installation costs and monthly charges for telephone lines, and
allow  for  remote  control  of unmanned or remote locations that may operate on
traditional  electrical  power,  or  solar  or  battery  generated  power.

Applications  for  our  intelligent  products  include,  but are not limited to:

-     Rebooting  remotely  located  computer  equipment
-     Remote  switching  of  residential  power
-     Managing  power  on  an  electrical  grid
-     Activation/deactivation  of  alarm  and  warning  devices
-     Displaying  or  changing  a  digital  or  printed  message or warning sign
-     Turning  pumps  on  or  off
-     Turning  heating  or  cooling  equipment  on  or  off

Companies both large and small are seeking ways to save money and lower the risk
of  liability  by  replacing  processes  that  require  human  intervention with
processes  that  can  be controlled remotely without on-site human intervention.
Today,  the  remote  control of industrial or commercial assets and processes is
performed mainly through the use of telephone-line based systems.  Opportunities
exist  for  companies  that provide intelligent wireless solutions, as telephone
lines  are  expensive  and  limited  in  availability  and function. Nighthawk's
products  are  wireless,  and can be designed to work with a variety of wireless
media.  The  number  of  applications  for  wireless remote control is virtually
limitless.  The  Company  has  identified  primary  markets  (Utility,  IT
Professional,  Traffic  Control),  as  well  as  secondary  markets (Irrigation,
Outdoor  Advertising,  Oil/Gas,  Security)  for  its  products.


The  Company  has  historically had minimum funds available to it to support its
operations  and  has  been  largely  dependent on private equity placements with
accredited  investors  to  fund its negative cash flows.  As such, the Company's
ability  to  fund  and  sustain sales and marketing efforts was very limited. In
August  2004,  the  Company signed a financing arrangement with Dutchess Private
Equities,  II,  L.P.  Under  the  terms  of the amended arrangement, the Company
received  a  total  of  $250,000 under a debenture during the three-month period
ended September 30, 2004.  The Company also signed an investment agreement under
which,  subsequent  to the December 2004 effectiveness of its  SB-2 registration
statement  filed with the Securities  and  Exchange Commission ("SEC"), Dutchess
agreed  to  purchase  up  to  $10.0  million  in  common  stock  from  the
Company,  at  the  Company's  discretion,  over the next three years, subject to
certain  limitations  including  the  Company's  then  current  trading  volume.
As is more fully explained in Liquidity and Capital Resources below, the Company
began  utilizing  this  investment  agreement  in December 2004 and continued to
utilize  this  agreement in the first half of 2005 in order to implement a sales
and  marketing  effort  designed  to  stimulate revenue growth.   This sales and
marketing  plan  for  2005  includes  the  following:

-     Hiring  sales  and  marketing  personnel.  The Company increased its sales
force in the first quarter of 2005 with experienced salespeople with the goal of
effectively  targeting  existing  and  new  markets.

-     Product  marketing  including  print  media and attendance at trade shows.
This  method has proved the most effective for the Company to date, and it plans
to  increase  its  presence  in  these  areas  to  attract  new  customers.

-     An  improved Internet presence.  The Company launched a new website in May
2005  to  improve  content and to make the site more friendly to search engines.
The  Company  has  plans  to  add  e-commerce  functionality  at  a future date.

-     Leveraging  existing  customer relationships by up-selling new products or
fully  integrating  systems  with  the  Company's  products.

-     The  establishment  of  distribution  and  dealer  networks.  Through  an
effective dealer network, the Company can increase awareness in its products and
utilize  a  dealer's  sales  force  to  actively  promote  its  products.

-     New  applications  in  irrigation  control,  civil  defense  and emergency
management.   The  current product design can be altered with little cost to the
Company  to be effectively implemented into a wide array of fields.  Through the
commitment  of  funding,  the Company can now research all possible applications
and  begin  to  market  directly  to  new  customers.

-     The  development  and launch of a product designed to be used for multiple
purposes  by  consumers.

In  addition  to  the marketing and sales objectives, the Company has identified
the  following  strategic  goals  for  2005:

-     Joint  ventures  with  wireless  service  providers  and  equipment
manufacturers.

-     The  identification  of complementary products and companies for potential
acquisition.

CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES

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

REVENUE  RECOGNITION

Revenue from product sales is recognized when all significant obligations of the
Company  have  been  satisfied.  Revenues  from  equipment  sales are recognized
either  on  the completion of the manufacturing process, or upon shipment of the
equipment  to  the customer, depending on the Company's contractual obligations.
The  Company  occasionally  contracts to manufacture items, bill for those items
and  then  hold  them  for  later shipment to customer-specified locations.  The
Company  had  no  bill  and  hold  sales  at December 31, 2004 or June 30, 2005.
Revenue  related to airtime billing is recognized when the service is performed.
Some  customers  pre-pay airtime on a quarterly or annual basis and the pre-paid
portion  is recorded as deferred revenue.  Deferred revenue, included in accrued
expenses  on  the  balance  sheet  at  June  30,  2005, is approximately $6,300.

STOCK-BASED  COMPENSATION

We  believe  that  stock-based compensation is a critical accounting policy that
affects  our  financial  condition  and  results  of  operations.  Statement  of
Financial  Accounting  Standards  ("SFAS")  No.  123, Accounting for Stock-Based
Compensation  defines  a  fair-value  based method of accounting for stock-based
employee  compensation  plans  and  transactions  in  which an entity issues its
equity  instruments  to  acquire  goods  or  services  from  non-employees,  and
encourages  but  does  not  require  companies  to  record compensation cost for
stock-based employee compensation plans at fair value. The Company has chosen to
continue  to  account  for employee stock-based compensation using the intrinsic
value  method  prescribed  in  Accounting  Principles  Board  Opinion  No.  25,
Accounting  for  Stock  Issued  to  Employees  ("APB  No.  25")  and  related
interpretations.

In  December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  123R  "Share-Based Payment", which addresses the accounting for share-based
payment  transactions.  SFAS  123R  eliminates  the  ability  to  account  for
share-based  compensation  transactions  using  APB  25,  and instead, generally
requires  that such transactions be accounted and recognized in the statement of
operations based on their fair value.  SFAS No. 123R will be effective for small
business  issuers  as  of the beginning of the first interim or annual reporting
period  that  begins  after December 15, 2005.  SFAS No. 123R offers the Company
alternative  methods  of  adopting  this  standard.  The  Company  has  not  yet
determined  which alternative method it will use.  Depending upon the number and
terms  of  options  that may be granted in future periods, the implementation of
this  standard  could have a material impact on the Company's financial position
and  results  of  operations.

COMPARISON  OF  THE  THREE  MONTHS  ENDED  JUNE  30,  2005  AND  JUNE  30,  2004

Revenue

The  components  of  revenue and their associated percentages of total revenues,
for  the  three  months  ended  June  30,  2005  and  2004  are  as  follows:

                             THREE MONTHS ENDED JUNE 30,
                             ---------------------------
                                 2005         2004     CHANGE  %     CHANGE  $
                             -------------------------------------------------
Revenues:
Rebooting Products:
NH100,NH1, NH2 & NH8    $ 21,002   21%    $62,388  39%   -66%      $ (41,386)
Logic Boards: PT 1000,
PT1 LC & PT Boards        14,144   15%     47,618  30%   -70%        (33,474)
Utility Products: CEO 700 47,590   48%     41,174  25%    16%          6,416
Airtime sales             13,556   14%     10,207   6%    33%          3,349
Other products             1,282    1%          -   0%    n/a          1,282
Freight                      798    1%          -   0%    n/a            798
                        -----------------------------------------------------
Total revenues          $ 98,372  100%  $ 161,387 100%   -39%      $ (63,015)

Revenues for the three-month period ended June 30, 2005 were $98,372 as compared
to  $161,387  for  the corresponding period of the prior year, a decrease of 39%
between  periods.  During the three months ended June 30, 2004, the Company sold
approximately  $50,000  of  its  NH2  rebooting  device  to a single customer in
support  of that customer's primary contract with AT&T Wireless.  As a result of
the  AT&T  Wireless/Cingular  merger,  that  customers'  primary  contract  was
suspended  subsequent  to  June  30,  2004.  Because  the  Company  did not have
customers  to  replace the lost demand, sales of the Company's rebooting devices
declined  in  the  current  quarter  when compared to the quarter ended June 30,
2004.  In  an effort to improve the functionality of the NH2 and reduce its cost
of  production,  the  Company  replaced  the  NH2  with the NH100 in March 2005.
Although  revenues from rebooting products shipped during the quarter ended June
30,  2005  were  only  approximately  $21,000,  the  Company received additional
purchase  orders  during  the  quarter  for  approximately  $60,000 of rebooting
devices.  As  of  June  30,  2005,  the  Company  was  waiting  on customer site
information  before  those  units  could  be  produced  and  shipped.

The  Company  hired  two  salesmen in February 2005.  The initial focus of these
salesmen  has  been  on  selling  the  Company's  'plug  and  play' products for
rebooting  and  electric  utility  use.  During  the three months ended June 30,
2005,  the  Company  shipped three orders for its CEO 700 utility product to one
customer.  Revenues from these three orders represented approximately 32% of the
Company's total product revenues for the period.  Overall sales of the Company's
utility  products  increased  16%  between  the  periods  presented.

Sales  of  the Company's logic boards, which must be engineered into systems and
are  not  considered  'plug  and  play'  products, declined 70% between periods.
Airtime  sales,  which  consist  of  recurring  charges for access to customers'
units, increased 33% between periods due to the additional units sold during the
2005  period.  As  mentioned earlier, one of the Company's primary customers had
its  account  suspended  by  AT&T  Wireless/Cingular.  As  a result, should AT&T
Wireless/Cingular  choose  not  to  continue  its  program  with  the  Company's
customer,  airtime  revenues  could  decrease  going  forward.

Cost  of  goods  sold  includes  parts  and  pre-manufactured components used to
assemble our products as well as allocated overhead for production personnel and
facilities  costs. Cost of goods sold decreased by $22,958 or 21% to $85,099 for
the  three months ended June 30, 2005 from $108,057 for the corresponding period
of  the prior year and increased as a percentage of revenues between the periods
from 67% in the second quarter of 2004 to 87% in the second quarter of 2005. The
decrease in gross profit was due to lower sales volume and the decrease in gross
margin  was  due  to  poorer  utilization of our productive capacity. During the
quarter  ended  June  30, 2005, allocated overhead for production and facilities
cost  amounted  to  approximately  $19,000.

Selling, general and administrative expenses for the three months ended June 30,
2005 increased by $323,175 or 122% to $588,040 from $264,865 for the three-month
period ended June 30, 2004.  The Company spent approximately $138,000 in cash on
public  relations and promotional activity to increase its exposure to potential
investors  during  the  quarter  ended June 30, 2005 as opposed to $0 during the
previous year's quarter.  The Company incurred approximately $98,500 in non-cash
expenses  in  the second quarter of 2005 for consulting and other services. This
represents  an  increase  of  approximately  $58,000  in  non-cash expenses when
compared  to  the  quarter  ended  June  30,  2004.  During the 2005 period, the
Company  incurred  approximately  $64,000  in  cash expenses directly related to
sales  and marketing efforts, including compensation for the two salesmen hired,
trade  shows  and travel costs.  The Company also recognized $32,500 in expenses
during  the  quarter ended June 30, 2005 related to the settlement of a lawsuit.



Interest  expense  increased  $319,810  or  829% between the three-month periods
presented.  The  increase  was  due primarily to interest expense related to the
Dutchess  notes, some of which have no stated interest rate but have a repayment
amount  greater  than  the funded amount.  The Company recognizes the difference
between  the  face amount of the notes and the amounts actually received in cash
as  interest  expense  over the life of the loans. In addition, the value of the
incentive  shares issued in conjunction with the notes is recognized as interest
expense  over the life of the loans.  Penalties on late payment of notes and any
interest  incurred during these periods are also recognized as interest expense.
In  total,  the  Company  recognized approximately $132,000 in non-cash expenses
related  to  the  amortization of these loan discounts, approximately $84,000 in
non-cash  expenses  related  to  incentive  shares  and approximately $86,000 in
penalties  on  late  payments  of  notes.

The  net  loss  for  the  three-month  period  ended  June 30, 2005 was $933,296
compared  to  $252,333  for  the  three-month  period  ended  June 30, 2004. The
increase  in  net loss from continuing operations was due primarily to increased
non-cash  expenses  for  consulting  and  other  services,  expenses  related to
fundraising  efforts,  and  increased  non-cash  interest expense from incentive
shares  and  the  amortization  of  discounts  on  notes  payable.

COMPARISON  OF  THE  SIX  MONTHS  ENDED  JUNE  30,  2005  AND  JUNE  30,  2004

Revenue

The  components  of  revenue and their associated percentages of total revenues,
for  the  six  months  ended  June  30,  2005  and  2004  are  as  follows:

                              SIX MONTHS ENDED JUNE 30,
                              -------------------------
                              2005         2004        CHANGE  %     CHANGE  $
                            --------------------------------------------------
Revenues:
Rebooting Products: NH100,
NH1, NH2 & NH8             $ 42,606  16%  $119,246  45%  -64%       $ (76,640)
Logic Boards: PT 1000,
PT1 LC & PT Boards           39,997  15%    62,449  23%  -36%         (22,452)
Utility Products: CEO 700    78,815  29%    51,109  19%   54%          27,706
Hydro 1                      76,750  28%         -   0%   n/a          76,750
Airtime sales                27,789  10%    20,373   8%   36%           7,416
Other product                 1,637   1%     9,464   4%  -83%          (7,827)
Freight                       2,000   1%     1,584   1%   26%             416
                           ---------------------------------------------------
Total revenues           $  269,594 100% $ 264,225 100%    2%      $    5,369

Revenues  for the six-month period ended June 30, 2005 were $269,594 as compared
to  $264,255  for  the corresponding period of the prior year, an increase of 2%
between  periods.  During  the six months ended June 30, 2005, one customer, who
purchased  the  Company's  Hydro I product, represented approximately 28% of the
Company's  total  revenue.

Cost  of  goods  sold  includes  parts  and  pre-manufactured components used to
assemble our products as well as allocated overhead for production personnel and
facilities  costs.  Cost of goods sold increased by $9,000 or 5% to $189,623 for
the six months ended June 30, 2005 from $180,623 for the corresponding period of
the  prior  year  and  increased as a percentage of revenues between the periods
from  68%  to  70%.

Selling,  general  and administrative expenses for the six months ended June 30,
2005 increased by $608,755 or 113% to $1,149,700 from $540,945 for the six-month
period  ended  June  30,  2004.  The  Company incurred approximately $235,000 in
non-cash expenses in the six-month period ended June 30, 2005 for consulting and
other  services.  This  represents  an  increase  of  approximately  $161,000 in
non-cash  expenses  when compared to the same period ended June 30, 2004.  Other
SG&A  expense  increases  from  the six-month period ended June 30, 2004 to 2005
include:  non-manufacturing  related  employee  costs  increased  approximately
$57,000,  the  Company  spent approximately $49,000 more on sales, marketing and
travel,  incurred  approximately  $33,000  in  settling  a  lawsuit,  spent
approximately  $51,000 more on legal fees and incurred approximately $263,000 in
expenses  related  to  fundraising  activity.

Interest  expense  increased  $432,319  or  764%  between  the six-month periods
presented.  The  increase  was  due primarily to interest expense related to the
Dutchess  notes, some of which have no stated interest rate but have a repayment
amount  greater  than  the funded amount.  The Company recognizes the difference
between  the  face amount of the notes and the amounts actually received in cash
as  interest  expense  over the life of the loans. In addition, the value of the
incentive  shares issued in conjunction with the notes is recognized as interest
expense  over the life of the loans.  Penalties on late payment of notes and any
interest  incurred during these periods are also recognized as interest expense.
In  total,  the  Company  recognized approximately $198,000 in non-cash expenses
related  to  the amortization of these loan discounts, approximately $134,000 in
non-cash  expenses  related  to  incentive  shares  and approximately $86,000 in
penalties  on  late  payments  of  notes.

The  net  loss  for  the  six-month  period  ended  June 30, 2005 was $1,559,576
compared  to $519,532 for the six-month period ended June 30, 2004. The increase
in  net  loss from continuing operations was due primarily to increased non-cash
expenses  for consulting and other services, increased fundraising expenditures,
and  increased  non-cash  interest  expense.

LIQUIDITY  AND  CAPITAL  RESOURCES

The  Company's  financial statements for the six months ended June 30, 2005 have
been  prepared  on  a going concern basis, which contemplates the realization of
assets and the settlement of liabilities and commitments in the normal course of
business.  The Company incurred a net loss of approximately $1.38 million during
the  year  ended December 31, 2004 and a net loss of approximately $1.56 million
during  the  six  months  ended  June 30, 2005.  The Company had a stockholders'
deficit  and working capital deficiency of approximately $1.24 million and $1.04
million,  respectively,  as  of  December  31,  2004 and $1.82 million and $1.77
million  respectively,  as  of  June  30,  2005.

The  Report  of  Independent  Registered Public Accounting Firm on the Company's
financial  statements  as of and for the year ended December 31, 2004 includes a
"going  concern"  explanatory  paragraph which means that the auditors expressed
substantial  doubt  about  the Company's ability to continue as a going concern.

During the six months ended June 30, 2005, cash used in operating activities was
approximately  $940,000.  The  net  loss  of approximately $1.56 million for the
six-month  period  was  partially  offset  by approximately $572,000 in non-cash
expenses  and  decreases  in accounts receivable and prepaids and an increase in
accrued  expenses.  Uses  of  cash  were  increases  in inventories as well as a
decline in accounts payable.  Cash used in operating activities in the six-month
period  ended  June  30,  2004 was approximately $413,000.  The net loss for the
period  of approximately $520,000 was partially offset by approximately $112,000
in  non-cash  expenses  and  increase  in accounts payable and accrued expenses.
Other  uses  of cash during the period were increases in accounts receivable and
inventories.

The  Company  purchased  approximately  $2,000  in  computer  equipment  in  the
six-month  period  ended June 30, 2005.  There were no cash flows from investing
activity  for  the  six-month  period  ended  June  30,  2004.

Net  cash  provided  by financing activities for the six-month period ended June
30,  2005 was approximately $901,000 and resulted primarily from the issuance of
notes  payable  to  Dutchess,  the  sale  of  common  stock and warrants and the
exercise  of  puts with Dutchess.  The Company issued 2,276,610 shares of common
stock  in  return  for  approximately  $362,000  in net cash proceeds during the
period.  The Company also received $1,113,500 from Dutchess during the six-month
period  in exchange for notes.  These cash inflows were offset to some degree by
payments on notes payable of approximately $575,000 during the period.  Net cash
provided  by financing activity for the six-month period ended June 30, 2004 was
approximately  $415,000  and  resulted  primarily from the sale of common stock,
preferred  stock,  special  warrants  and  notes  from related and other parties
offset  by  payments  on  notes  payable  and  other  related  party  payables.

Until  the Company is able to generate positive cash flows from operations in an
amount  sufficient to cover its current liabilities and debt obligations as they
become  due, it will remain reliant on borrowing funds or selling equity to meet
those  obligations.  The  Company  had  historically  sold its equity securities
through  private  placements  with  various  individuals.  Raising funds in this
manner typically requires much time and effort to find new accredited investors,
and the terms of such an investment must be negotiated for each investment made.
Cash  from these types of investments has historically been generated in amounts
of  $50,000 or less, in an unpredictable manner, making it difficult to fund and
implement  a  broad-based  sales  and  marketing  program.

In August 2004, the Company signed a financing arrangement with Dutchess Private
Equities,  II,  L.P.  ("Dutchess")  under which the Company received $250,000 in
exchange  for  a  convertible  debenture  during the third quarter of 2004.  The
Company  also  signed  an  investment  agreement  under which Dutchess agreed to
purchase  up to $10.0 million in common stock from the Company, at the Company's
discretion,  over the next three years, subject to certain limitations including
the  Company's  then  current trading volume.  Although the amount and timing of
specific  cash infusions available under the entire financing arrangement cannot
be predicted with certainty, the arrangement represents a contractual commitment
by  Dutchess  to  provide  funds  to  the  Company.

During  the  six months ended June 30, 2005, Dutchess loaned the company a total
of  $1,113,500  in the form of notes payable.  The notes have no stated interest
rate  but have a face amount greater than the funded amount.  This difference is
recognized  as  interest  expense over the life of the loan.  Under the terms of
the  notes,  Dutchess  is  also  issued  incentive shares, which are recorded as
prepaid  interest  and  expensed  over  the  life  of  the  loan.

During the six months ended June 30, 2005, the Company exercised six (6) puts to
Dutchess  totaling  1,276,610 shares for net proceeds of $222,726.  Of the total
proceeds,  $125,633  was  used  to  repay portions of previously issued notes to
Dutchess  and  $67,838  went  to  the  Company.

On  March 9, 2005, Dutchess exercised 250,000 warrants at $0.125 each, for total
proceeds  of  $31,250,  $15,000  of  which  was applied to outstanding notes and
accrued  interest.

The  Company  used  the  proceeds  from the notes, puts and warrants to fund its
operating cash flow deficits and to repay outstanding notes and accrued interest
and  penalties  to  Dutchess.

For more information on the transactions with Dutchess, please see Note 5, Notes
payable.

Although  no  assurance  may be given that it will be able to do so, the Company
expects to be able to continue to access funds under this arrangement to help it
fund near-term and long-term sales and marketing efforts, and to cover cash flow
deficiencies.

In  the  first  six  months  of 2005, the Company identified sales and marketing
objectives  and  implemented  a  sales and marketing plan utilizing the Dutchess
financing  agreement  designed  to  stimulate  revenue  growth.  This effort has
continued  throughout  2005,  and  as  of  August  18,  2005,  the  Company  has
established  relationships  and  business  opportunities  that  it believes will
result  in increased sales and revenues in the future.  While our customers have
identified needs that are substantial, our efforts have indicated that customers
are  more  likely to order our products in stages so that their installation and
utilization can be managed efficiently.  Historical results have shown that once
customers  have adopted the use of our products, they often order multiple times
thereafter in order to meet their overall needs.  As such, and in order to avoid
the concentration of risk among only a few customers, the Company's approach for
the  foreseeable  future  will  be  to  obtain  customers through test and trial
programs  if  necessary, in order to grow its overall customer base and increase
the  likelihood  of  future  sales  to  those  same customers.  Initial customer
contact is typically made through the use of lead generation programs offered by
third  parties, attendance at trade shows, mailers to targeted lists, and direct
customer  inquiries  through  our  website.






ITEM  3.  CONTROLS  AND  PROCEDURES

(a)  Evaluation  of  Disclosure  Controls  and  Procedures:

The  Company's  management,  including the Company's principal executive officer
and  principal accounting and financial officer, has evaluated the effectiveness
of  the  Company's  disclosure  controls  and  procedures  (as  defined in Rules
13a-15(e)  and  15d-15(e)  under  the Securities Exchange Act of 1934) as of the
six-month period ended June 30, 2005, the period covered by the Quarterly Report
on  Form  10-QSB.  Based upon that evaluation, the Company's principal executive
officer  and  principal financial and accounting officer have concluded that the
disclosure controls and procedures were effective as of June 30, 2005 to provide
reasonable  assurance  that material information relating to the Company is made
known  to  management  including  the  CEO.

There were no changes in the Company's internal control over financial reporting
that  occurred  during  the  Company's  last fiscal quarter that have materially
affected,  or are reasonably likely to materially affect, the Company's internal
control  over  financial  reporting.  However,  as  noted  in  previous filings,
throughout  2002  and until March 26, 2003, the Company's former Chief Executive
Officer  was  responsible  for,  among  other  duties,  opening the mail, making
accounting  entries,  writing  checks  and  producing  financial  reports.
Disbursements of cash and stock issuances were made during this time period that
were  not  substantiated as relating to Company business, or were made in error.
At  the  meeting  of  the  Board of Directors held on March 26, 2003, the former
Chief  Executive  Officer  resigned, and the Chief Financial Officer, H. Douglas
Saathoff,  was  appointed  as  his  replacement  by  the  board  of  directors.
Consequently, Mr. Saathoff held both the position of Chief Executive Officer and
Chief Financial Officer, but procedures were implemented subsequent to March 26,
2003  to  segregate  responsibilities in order to reduce the opportunities for a
single  person  to  be  in  a  position to both perpetrate and conceal errors or
irregularities  in  the  normal  course of business.  In addition, the new Chief
Executive  Officer  and  the board of directors initiated a process to establish
and implement a written policy on disclosure controls and procedures and hired a
corporate  controller  on  January  1,  2005  to add additional oversight to the
accounting  function.  On April 12, 2005, the Board of Directors agreed that Mr.
Saathoff  should  no  longer  act  as  both  Chief  Executive  Officer and Chief
Financial  Officer.  Mr.  Saathoff  relinquished  his  duties as Chief Financial
Officer  as  of  April 12, 2005 and Daniel P. McRedmond, the Company's Corporate
Controller  assumed the role of the Company's Principal Accounting and Financial
Officer.

<PAGE>

                           PART II - OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

In  April  2004,  the  Company,  along with current officers, board members, and
several  of  the  Company's former directors, were sued in the Colorado District
Court  by  a former director (Larry Brady) and former member of management (Mark
Brady,  Larry's  son)  for,  among other things, breach of contract for unlawful
termination and failure to provide stock allegedly promised during their service
as  Company director and chief financial officer, respectively, for part of 2001
and  part  of  2002.  The  Company  denied the allegations. Further, the Company
counter-sued  the  Bradys  for  non-performance  and breach of fiduciary duties.
Pursuant to a court order, dated June 23, 2005, the judge terminated the Bradys'
lawsuit,  dismissing  it,  outright.  In  July  of 2005, in an effort to bar the
Bradys  from raising these issues in the future, the Company engaged in a mutual
release  of  all  claims  and  issued  a total of 250,000 shares of unregistered
common  stock  and $10,000 to Lawrence Brady, Mark Brady, and their counsel. The
Company  recognized  $32,500  in expenses for the quarter ended June 30, 2005 in
relation  to  this  settlement.

ITEM  2.  UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF  PROCEEDS

During  the  first  quarter  of  2005, the Company sold 650,000 shares of common
stock  to  an  investor  for  cash  at  a price of $0.15 per share.  Warrants to
purchase  650,000 shares of common stock at an exercise price of $0.25 per share
were  also  included  in the sale.  We did not publicly offer the securities and
the  investor  is  an accredited investor.  No underwriters were involved in the
sale.

During  the  second  quarter  of 2005, the Company sold 100,000 shares of common
stock  to  a business partner of the Company's Chairman for $20,000.  We did not
publicly  offer  the  securities  and this person is an accredited investor.  No
underwriters  were  involved  in  the  sale.

These  securities were issued to the investor in reliance upon an exemption from
the  registration  requirements  of  the Securities Act of 1933, as set forth in
Section  4(2)  under  the  Securities  Act  of 1933 and Rule 506 of Regulation D
promulgated  thereunder  relative to sales by an issuer not involving any public
offering,  to  the extent an exemption from such registration was required.  The
purchaser  represented  to  us  in  connection  with the purchase that; he is an
accredited  investor  and  was acquiring the shares for investment purposes only
and  not  for  distribution,  that he could bear the risks of the investment and
could  hold  the  securities  for  an  indefinite period of time.  The purchaser
received  written  disclosures that the securities had not been registered under
the  Securities  Act  of  1933  and  that  any resale must be made pursuant to a
registration  statement  or  an available exemption from such registration.  The
participant  in  the  offering  described  above  was  given  access to full and
complete  information  regarding  us, together with the opportunity to meet with
our  officers  and  directors  for  purposes  of  asking questions and receiving
answers  in order to facilitate such participant's independent evaluation of the
risks  associated  with  the  purchase  of  our  securities.

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

The  Company  is in default on two loans from Mr. Revesz, a former board member,
as  of the date of this report.  In April 2004, the Company reached an agreement
with Tomas Revesz under which, in return for an additional $25,000 in borrowings
and  the  extension  of  the maturity dates of three notes to July 31, 2004, the
Company  granted  the  creditor a secured position in the assets of the Company.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITIES  HOLDERS

None.

ITEM  5.  OTHER  INFORMATION

None.



ITEM  6.  EXHIBITS  AND  REPORTS

(a)  Exhibits

31.1  Certification of H. Douglas Saathoff, Chief Executive Officer, pursuant to
Rule  13A-14  or  15D-14  of  the  Securities  Exchange  Act of 1934, as adopted
pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act  of  2002.

31.2  Certification  of  Daniel P. McRedmond, Principal Financial and Accounting
Officer,  pursuant  to  Rule  13A-14 or 15D-14 of the Securities Exchange Act of
1934,  as  adopted  pursuant  to  Section 302 of the Sarbanes-Oxley Act of 2002.

32  Certification pursuant to the 18 U.S.C. Section 1350, as adopted pursuant to
Section  906  of  the  Sarbanes-Oxley  Act  of  2002.

(b)  Reports  on  Form  8-K.

None.

                                   SIGNATURES

In  accordance  with the requirements of the Exchange Act, the registrant caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.

                             NIGHTHAWK SYSTEMS, INC.
                                  (Registrant)


Date:  August  22,  2005        By:  /s/  H.  Douglas  Saathoff
        H.  Douglas  Saathoff,
     -------------------------
        Chief  Executive  Officer

Date:  August  22,  2005        By:  /s/  Daniel  P.  McRedmond
        Daniel  P.  McRedmond
     ------------------------
        Principal  Accounting  and  Financial  Officer