| Delaware                                                       |   | 16-1434688                              |
|----------------------------------------------------------------|--------|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification Number) |
| PAR Technology Park                                            |   |                                    |
| 8383 Seneca Turnpike                                           |   |                                    |
| New Hartford, New York                                         |   | 13413-4991                              |
| (Address of principal executive offices)                       |   | (Zip Code)                              |
| Large Accelerated Filer o | Accelerated Filer o | Non Accelerated Filer o | Smaller Reporting Company x |
|---------------------------|---------------------|-------------------------|-----------------------------|

----

| Item Number   |   |                                                                                  | Page   |
|---------------|--------|---------------------------------------------------------------------------------------|--------|
|          |   |                                                                                  |   |
| Item 1.       |   | Financial Statements (unaudited)                                                      |   |
|          |   |                                                                                  |   |
|          |   | Consolidated Statements of Operations for the three and six months                    | 1      |
|          |   | ended June 30, 2012 and 2011                                                          |   |
|          |   |                                                                                  |   |
|          |   | Consolidated Statements of Comprehensive Income (Loss)                                | 2      |
|          |   | for the three and six months ended June 30, 2012 and 2011                             |   |
|          |   |                                                                                  |   |
|          |   | Consolidated Balance Sheets at June 30, 2012 and                                      | 3      |
|          |   | December 31, 2011                                                                     |   |
|          |   |                                                                                  |   |
|          |   | Consolidated Statements of Cash Flows for the six months ended                        | 4      |
|          |   | June 30, 2012 and 2011                                                                |   |
|          |   |                                                                                  |   |
|          |   | Notes to Unaudited Interim Consolidated Financial Statements                          | 5      |
|          |   |                                                                                  |   |
| Item 2.       |   | Management's Discussion and Analysis of Financial Condition and Results of Operations | 16     |
|          |   |                                                                                  |   |
| Item 3.       |   | Quantitative and Qualitative Disclosures About Market Risk                            | 26     |
|          |   |                                                                                  |   |
| Item 4.       |   | Controls and Procedures                                                               | 26     |
|          |   |                                                                                  |   |
|          |   | PART II                                                                               |   |
|          |   | OTHER INFORMATION                                                                     |   |
|          |   |                                                                                  |   |
|          |   |                                                                                  |   |
|          |   |                                                                                  |   |
| Item 1A.      |   | Risk Factors                                                                          | 27     |
|          |   |                                                                                  |   |
| Item 4.       |   | Mine Safety Disclosures                                                               | 27     |
|          |   |                                                                                  |   |
| Item 5.       |   | Other Information                                                                     | 27     |
|          |   |                                                                                  |   |
| Item 6.       |   | Exhibits                                                                              | 28     |
|          |   |                                                                                  |   |
| Signatures    |   |                                                                                  | 29     |
|          |   |                                                                                  |   |
| Exhibit Index |   |                                                                                  | 30     |

----

|                                                                       |   | For the three months |   |   | For the six months |   |
|----------------------------------------------------------------------------|--------|----------------------|--------|--------|--------------------|--------|
|                                                                  |   | Ended June 30,       |   |   | Ended June 30,     |   |
|                                                                       |   | 2012                 |   |   | 2011               |   |   | 2012 |   |   | 2011 |   |
| Net revenues:                                                              |   |                      |   |   |                    |   |   |  |   |   |  |   |
| Product                                                                    |   | $                    | 20,142 |   |               | $      | 22,743 |   |   | $ | 40,312 |   |   | $ | 44,453 |   |
| Service                                                                    |   |                 | 16,014 |   |               |   | 17,440 |   |   |   | 31,393 |   |   |   | 33,084 |   |
| Contract                                                                   |   |                 | 25,929 |   |               |   | 16,258 |   |   |   | 45,973 |   |   |   | 33,080 |   |
|                                                                       |   |                 | 62,085 |   |               |   | 56,441 |   |   |   | 117,678 |   |   |   | 110,617 |   |
| Costs of sales:                                                            |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Product                                                                    |   |                 | 14,041 |   |               |   | 13,963 |   |   |   | 25,018 |   |   |   | 27,134 |   |
| Service                                                                    |   |                 | 11,473 |   |               |   | 20,285 |   |   |   | 22,038 |   |   |   | 30,992 |   |
| Contract                                                                   |   |                 | 24,584 |   |               |   | 15,336 |   |   |   | 43,567 |   |   |   | 31,145 |   |
|                                                                       |   |                 | 50,098 |   |               |   | 49,584 |   |   |   | 90,623 |   |   |   | 89,271 |   |
| Gross margin                                                               |   |                 | 11,987 |   |               |   | 6,857 |   |   |   | 27,055 |   |   |   | 21,346 |   |
| Operating expenses:                                                        |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative                                        |   |                 | 9,291  |   |               |   | 9,647 |   |   |   | 19,434 |   |   |   | 18,985 |   |
| Research and development                                                   |   |                 | 3,089  |   |               |   | 3,322 |   |   |   | 6,638 |   |   |   | 7,065 |   |
| Impairment of goodwill and intangible assets                               |   |                 | -      |   |               |   | 20,843 |   |   |   | - |   |   |   | 20,843 |   |
| Amortization of identifiable intangible assets                             |   |                 | 150    |   |               |   | 205 |   |   |   | 303 |   |   |   | 410 |   |
|                                                                       |   |                 | 12,530 |   |               |   | 34,017 |   |   |   | 26,375 |   |   |   | 47,303 |   |
| Operating income (loss) from continuing operations                         |   |                 | (543   | )      |               |   | (27,160 | ) |   |   | 680 |   |   |   | (25,957 | ) |
| Other income (expense), net                                                |   |                 | (366   | )      |               |   | (157 | ) |   |   | 207 |   |   |   | (129 | ) |
| Interest expense                                                           |   |                 | (21    | )      |               |   | (67 | ) |   |   | (42 | ) |   |   | (115 | ) |
| Income (loss) from continuing operations before provision for income taxes |   |                 | (930   | )      |               |   | (27,384 | ) |   |   | 845 |   |   |   | (26,201 | ) |
| (Provision) benefit for income taxes                                       |   |                 | 419    |   |               |   | 9,858 |   |   |   | (321 | ) |   |   | 9,416 |   |
| Income (loss) from continuing operations                                   |   |                 | (511   | )      |               |   | (17,526 | ) |   |   | 524 |   |   |   | (16,785 | ) |
| Discontinued operations                                                    |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) on discontinued operations (net of tax)                      |   |                 | (10    | )      |               |   | (322 | ) |   |   | 1,420 |   |   |   | (659 | ) |
| Net income (loss)                                                          |   | $                    | (521   | )      |               | $      | (17,848 | ) |   | $ | 1,944 |   |   | $ | (17,444 | ) |
| Basic Earnings per Share:                                                  |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                                   |   |                 | (.03   | )      |               |   | (1.17 | ) |   |   | .03 |   |   |   | (1.12 | ) |
| Income (loss) from discontinued operations                                 |   |                 | (.00   | )      |               |   | (.02 | ) |   |   | .09 |   |   |   | (.04 | ) |
| Net income (loss)                                                          |   | $                    | (.03   | )      |               | $      | (1.19 | ) |   | $ | .13 |   |   | $ | (1.17 | ) |
| Diluted Earnings per Share:                                                |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                                   |   |                 | (.03   | )      |               |   | (1.17 | ) |   |   | .03 |   |   |   | (1.12 | ) |
| Income (loss) from discontinued operations                                 |   |                 | (.00   | )      |               |   | (.02 | ) |   |   | .09 |   |   |   | (.04 | ) |
| Net income (loss)                                                          |   | $                    | (.03   | )      |               | $      | (1.19 | ) |   | $ | .13 |   |   | $ | (1.17 | ) |
| Weighted average shares outstanding                                        |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                      |   |                 | 15,098 |   |               |   | 14,996 |   |   |   | 15,091 |   |   |   | 14,960 |   |
| Diluted                                                                    |   |                 | 15,098 |   |               |   | 14,996 |   |   |   | 15,163 |   |   |   | 14,960 |   |

----

|                                          |   | For the three months |   |   | For the six months |   |
|-----------------------------------------------|--------|----------------------|--------|--------|--------------------|--------|
|                                     |   | Ended June 30,       |   |   | Ended June 30,     |   |
|                                          |   | 2012                 |   |   | 2011               |   |   | 2012 |   |   | 2011 |   |
| Net income (loss)                             |   | $                    | (521   | )      |               | $      | (17,848 | ) |   | $ | 1,944 |   |   | $ | (17,444 | ) |
| Other comprehensive income (loss) net of tax: |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustments      |   |                 | (181   | )      |               |   | 295 |   |   |   | (31 | ) |   |   | 937 |   |
| Comprehensive income (loss)                   |   | $                    | (702   | )      |               | $      | (17,553 | ) |   | $ | 1,913 |   |   | $ | (16,507 | ) |
|                                          |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                     |   |                    |      |   |             |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|-----------|--------|------------------|--------|
|                                                                                                                                     |   | June 30,2012(Unaudited) |      |   | December 31,2011 |   |
| Assets                                                                                                                                   |   |                         |      |   |                  |   |
| Current assets:                                                                                                                          |
| Cash and cash equivalents                                                                                                                |   | $                       | 16,895    |   |             | $      | 7,742 |   |
| Investments                                                                                                                              |   |                    | 250       |   |             |   | - |   |
| Accounts receivable-net                                                                                                                  |   |                    | 31,336    |   |             |   | 30,680 |   |
| Inventories-net                                                                                                                          |   |                    | 23,469    |   |             |   | 25,260 |   |
| Deferred income taxes                                                                                                                    |   |                    | 9,907     |   |             |   | 10,240 |   |
| Other current assets                                                                                                                     |   |                    | 3,138     |   |             |   | 3,088 |   |
| Escrow receivable                                                                                                                        |   |                    | 1,147     |   |             |   | - |   |
| Total current assets                                                                                                                     |   |                    | 86,142    |   |             |   | 77,010 |   |
| Property, plant and equipment - net                                                                                                      |   |                    | 6,119     |   |             |   | 5,259 |   |
| Deferred income taxes                                                                                                                    |   |                    | 5,116     |   |             |   | 5,605 |   |
| Goodwill                                                                                                                                 |   |                    | 6,852     |   |             |   | 6,852 |   |
| Intangible assets - net                                                                                                                  |   |                    | 16,444    |   |             |   | 15,888 |   |
| Other assets                                                                                                                             |   |                    | 2,330     |   |             |   | 2,147 |   |
| Assets of discontinued operations                                                                                                        |   |                    | -         |   |             |   | 3,182 |   |
| Total Assets                                                                                                                             |   | $                       | 123,003   |   |             | $      | 115,943 |   |
| Liabilities and Shareholders' Equity                                                                                                     |   |                    |      |   |             |   |   |   |
| Current liabilities:                                                                                                                     |   |                    |      |   |             |   |   |   |
| Current portion of long-term debt                                                                                                        |   | $                       | 599       |   |             | $      | 1,494 |   |
| Accounts payable                                                                                                                         |   |                    | 19,000    |   |             |   | 15,773 |   |
| Accrued salaries and benefits                                                                                                            |   |                    | 6,392     |   |             |   | 7,002 |   |
| Accrued expenses                                                                                                                         |   |                    | 2,211     |   |             |   | 2,609 |   |
| Customer deposits                                                                                                                        |   |                    | 714       |   |             |   | 1,137 |   |
| Deferred service revenue                                                                                                                 |   |                    | 14,912    |   |             |   | 10,412 |   |
| Income taxes payable                                                                                                                     |   |                    | 93        |   |             |   | 138 |   |
| Total current liabilities                                                                                                                |   |                    | 43,921    |   |             |   | 38,565 |   |
|  Long-term debt                                                                                                                     |   |                    | 1,173     |   |             |   | 1,249 |   |
| Other long-term liabilities                                                                                                              |   |                    | 3,101     |   |             |   | 2,837 |   |
| Liabilities of discontinued operations                                                                                                   |   |                    | 101       |   |             |   | 925 |   |
| Shareholders' Equity:                                                                                                                    |   |                    |      |   |             |   |   |   |
| Preferred stock, $.02 par value, 1,000,000 shares authorized                                                                             |   |                    | -         |   |             |   | - |   |
| Common stock, $.02 par value, 29,000,000 shares authorized;17,050,102 and 16,863,868 shares issued;15,342,818 and 15,156,584 outstanding |   |                    |  341 |   |             |   | 337 |   |
| Capital in excess of par value                                                                                                           |   |                    | 43,413    |   |             |   | 42,990 |   |
| Retained earnings                                                                                                                        |   |                    | 37,017    |   |             |   | 35,073 |   |
| Accumulated other comprehensive loss                                                                                                     |   |                    | (232      | )      |             |   | (201 | ) |
| Treasury stock, at cost, 1,707,284 and 1,707,284 shares                                                                                  |   |                    | (5,832    | )      |             |   | (5,832 | ) |
| Total shareholders' equity                                                                                                               |   |                    | 74,707    |   |             |   | 72,367 |   |
| Total Liabilities and Shareholders' Equity                                                                                               |   | $                       | 123,003   |   |             | $      | 115,943 |   |

----

|                                                                         |   | For the six months ended June 30, |   |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                        |   | 2012                              |   |   | 2011 |   |
| Cash flows from operating activities:                                                       |   |                                   |   |   |  |   |
| Net income (loss)                                                                           |   | $                                 | 1,944  |   |   | $ | (17,444 | ) |
| (Income) loss from discontinued operations                                                  |   |                              | (1,420 | ) |   |   | 659 |   |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |   |                              |   |   |   |   |   |   |
| Impairment of goodwill and intangible assets                                                |   |                              | -      |   |   |   | 20,843 |   |
| Depreciation and amortization                                                               |   |                              | 1,744  |   |   |   | 1,388 |   |
| Provision for bad debts                                                                     |   |                              | 140    |   |   |   | 308 |   |
| Provision for obsolete inventory                                                            |   |                              | 1,361  |   |   |   | 8,629 |   |
| Equity based compensation                                                                   |   |                              | 400    |   |   |   | 231 |   |
| Deferred income tax                                                                         |   |                              | 1,052  |   |   |   | (9,826 | ) |
| Changes in operating assets and liabilities:                                                |   |                              |   |   |   |   |   |   |
| Accounts receivable                                                                         |   |                              | (796   | ) |   |   | 3,986 |   |
| Inventories                                                                                 |   |                              | 431    |   |   |   | (5,481 | ) |
| Income tax refunds/payable                                                                  |   |                              | (45    | ) |   |   | (227 | ) |
| Other current assets                                                                        |   |                              | (50    | ) |   |   | (680 | ) |
| Other assets                                                                                |   |                              | (183   | ) |   |   | (86 | ) |
| Accounts payable                                                                            |   |                              | 3,232  |   |   |   | (1,631 | ) |
| Accrued salaries and benefits                                                               |   |                              | (610   | ) |   |   | (778 | ) |
| Accrued expenses                                                                            |   |                              | (398   | ) |   |   | (70 | ) |
| Customer deposits                                                                           |   |                              | (423   | ) |   |   | (1,330 | ) |
| Deferred service revenue                                                                    |   |                              | 4,501  |   |   |   | 2,046 |   |
| Other long-term liabilities                                                                 |   |                              | 262    |   |   |   | 145 |   |
| Net cash provided by (used in) operating activities-continuing operations                   |   |                              | 11,142 |   |   |   | 682 |   |
| Net cash used in operating activities-discontinued operations                               |   |                              | (2,368 | ) |   |   | (614 | ) |
| Net cash provided by (used in) operating activities                                         |   |                              | 8,774  |   |   |   | 68 |   |
| Cash flows from investing activities:                                                       |   |                              |   |   |   |   |   |   |
| Capital expenditures                                                                        |   |                              | (1,539 | ) |   |   | (534 | ) |
| Capitalization of software costs                                                            |   |                              | (1,622 | ) |   |   | (5,096 | ) |
| Purchase of investments                                                                     |   |                              | (250   | ) |   |   | - |   |
| Maturity of investments                                                                     |   |                              | 1,912  |   |   |   | - |   |
| Escrow                                                                                      |   |                              | (1,147 | ) |   |   | - |   |
| Proceeds from sale of business                                                              |   |                              | 4,000  |   |   |   | - |   |
| Net cash provided by (used in) investing activities-continuing operations                   |   |                              | 1,354  |   |   |   | (5,630 | ) |
| Net cash (used in) investing activities-discontinued operations                             |   |                              | -      |   |   |   | (26 | ) |
| Net cash provided by (used in) investing activities                                         |   |                              | 1,354  |   |   |   | (5,656 | ) |
| Cash flows from financing activities:                                                       |   |                              |   |   |   |   |   |   |
| Net borrowings (payments) under line-of-credit agreements                                   |   |                              | -      |   |   |   | 3,000 |   |
| Payments of long-term debt                                                                  |   |                              | (971   | ) |   |   | (818 | ) |
| Proceeds from the exercise of stock options                                                 |   |                              | 27     |   |   |   | 132 |   |
| Net cash provided by (used in) financing activities-continuing operations                   |   |                              | (944   | ) |   |   | 2,314 |   |
| Net cash used in financing activities-discontinued operations                               |   |                              | -      |   |   |   | - |   |
| Net cash provided by (used in) financing activities                                         |   |                              | (944   | ) |   |   | 2,314 |   |
| Effect of exchange rate changes on cash and cash equivalents                                |   |                              | (31    | ) |   |   | 181 |   |
| Net increase (decrease) in cash and cash equivalents                                        |   |                              | 9,153  |   |   |   | (3,093 | ) |
| Cash and cash equivalents at beginning of period                                            |   |                              | 7,742  |   |   |   | 6,781 |   |
| Cash and cash equivalents at end of period                                                  |   |                              | 16,895 |   |   |   | 3,688 |  |
| Less cash and equivalents of discontinued operations at end of period                       |   |                              | -      |   |   |   | (5 | ) |
| Cash and equivalents of continuing operations at end of period                              |   | $                                 | 16,895 |   |   | $ | 3,683 |   |
| Supplemental disclosures of cash flow information:                                          |   |                              |   |   |   |   |   |   |
| Cash paid during the period for:                                                            |   |                              |   |   |   |   |   |   |
| Interest                                                                                    |   |                              | 42     |   |   |   | 115 |   |
| Income taxes, net of (refunds)                                                              |   |                              | 45     |   |   |   | 153 |   |

----

----

|                                         |   | June 30, |   |   | December 31, |   |
|----------------------------------------------|--------|----------|--------|--------|--------------|--------|
|                                         |   | 2012     |   |   | 2011         |   |
| Assets                                       |   |          |   |   |              |   |
| Cash                                         |   | $        | -      |   |         | $      | 5 |   |
| Accounts receivable - net                    |   |     | -      |   |         |   | 1,398 |   |
| Inventories                                  |   |     | -      |   |         |   | 1,355 |   |
| Other assets                                 |   |     | -      |   |         |   | 424 |   |
| Total assets of discontinued operations      |   | $        | -      |   |         | $      | 3,182 |   |
|                                         |   |     |   |   |         |   |   |   |
| Liabilities                                  |   |     |   |   |         |   |   |   |
| Accounts payable and accrued expenses        |   | $        | 101    |   |         |   | 674 |   |
| Accrued salaries and benefits                |   |     | -      |   |         |   | 236 |   |
| Other liabilities                            |   |     | -      |   |         |   | 15 |   |
| Total liabilities of discontinued operations |   | $        | 101    |   |         | $      | 925 |   |
|                                         |   |     |   |   |         |   |   |   |
|                                         |   |     |   |   |         |   |   |   |

----

| Operations                                            |   | For the three months ended June 30, 2012 |   |   | For the three months ended June 30, 2011 |   |
|-------------------------------------------------------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|
| Total revenues                                        |   | $                                        | -      |   |                                     | $      | 1,843 |   |
|                                                  |   |                                     |   |   |                                     |   |   |   |
| Loss from discontinued operations before income taxes |   | $                                        | (13    | )      |                                     | $      | (529 | ) |
| Gain on disposition                                   |   |                                     | -      |   |                                     |   | - |   |
| (Provision) benefit for income taxes                  |   |                                     | 3      |   |                                     |   | 207 |   |
| Income (loss) from discontinued operations            |   | $                                        | (10    | )      |                                     | $      | (322 | ) |
| Operations                                            |   | For the six months ended June 30, 2012 |   |   | For the six months ended June 30, 2011 |    |
|-------------------------------------------------------|--------|----------------------------------------|--------|--------|----------------------------------------|---------|
| Total revenues                                        |   | $                                      | 136    |   |                                   | $       | 3,515 |   |
|                                                  |   |                                   |   |   |                                   |    |   |   |
| Loss from discontinued operations before income taxes |   | $                                 | (261   | )      |                                   | $  | (1,068 | ) |
| Gain on disposition                                   |   |                                   | 2,588  |   |                                   |    | - |   |
| (Provision) benefit for income taxes                  |   |                                   | (907   | )      |                                   |    | 409 |   |
| Income (loss) from discontinued operations            |   | $                                      | 1,420  |   |                                   | $       | (659 | ) |
|                           |   | (in thousands) |   |
|---------------------------|--------|----------------|--------|
|                           |   | June 30,       |   |   | December 31, |   |
|                      |   |           | 2012   |   |   |   | 2011 |   |
| Government segment:       |   |           |   |   |   |   |   |   |
| Billed                    |   | $              | 13,854 |   |   | $ | 12,903 |   |
| Advanced billings         |   |           | (2,109 | ) |   |   | (1,552 | ) |
|                      |   |           | 11,745 |   |   |   | 11,351 |   |
| Hospitality segment:      |   |           |   |   |   |   |   |   |
| Accounts receivable - net |   |           | 19,591 |   |   |   | 19,329 |   |
|                 |   | $              | 31,336 |   |   | $ | 30,680 |   |

----

|                 | (in thousands) |   |
|-----------------|----------------|--------|
|                 | June 30,       |   | December 31, |   |
|            | 2012           |   | 2011 |   |
| Finished Goods  |           | $      | 9,061 |   |   | $ | 9,325 |   |
| Work in process |           |   | 958 |   |   |   | 1,007 |   |
| Component parts |           |   | 5,345 |   |   |   | 6,138 |   |
| Service parts   |           |   | 8,105 |   |   |   | 8,790 |   |
|            |           | $      | 23,469 |   |   | $ | 25,260 |   |

----

|                                             |   | (in thousands) |    |
|--------------------------------------------------|--------|----------------|---------|
|                                             |   | June 30,       |    |   | December 31, |   |
|                                             |   | 2012           |    |   | 2011 |   |
| Acquired and internally developed software costs |   | $              | 19,522  |   |   | $ | 17,902 |   |
| Customer relationships                           |   |           | 4,519   |   |   |   | 4,519 |   |
| Trademarks (non-amortizable)                     |   |           | 2,100   |   |   |   | 2,100 |   |
| Other                                            |   |           | 690     |   |   |   | 690 |   |
|                                             |   |           | 26,831  |   |   |   | 25,211 |   |
| Less accumulated amortization                    |   |           | (10,387 | ) |   |   | (9,323 | ) |
|                                             |   | $              | 16,444  |   |   | $ | 15,888 |   |

| 2012       |   | $      | 1,176  |   |
|------------|--------|--------|--------|--------|
| 2013       |   |   | 2,483  |   |
| 2014       |   |   | 2,459  |   |
| 2015       |   |   | 2,167  |   |
| 2016       |   |   | 2,165  |   |
| Thereafter |   |   | 3,894  |   |
| Total      |   | $      | 14,344 |   |

----

|                                                                 |   | For the three months |   |
|----------------------------------------------------------------------|--------|----------------------|--------|
|                                                            |   | ended June 30,       |   |
|                                                                 |   |                 | 2012   |   |   |   | 2011 |   |
| Loss from continuing operations                                      |   | $                    | (511   | ) |   | $ | (17,526 | ) |
|                                                                 |   |                 |   |   |   |   |   |   |
| Basic:                                                               |   |                 |   |   |   |   |   |   |
| Shares outstanding at beginning of period                            |   |                 | 15,088 |   |   |   | 14,934 |   |
| Weighted average shares issued during the period, net                |   |                 | 10     |   |   |   | 62 |   |
| Weighted average common shares, basic                                |   |                 | 15,098 |   |   |   | 14,996 |   |
| Earnings/(loss) from continuing operations per common share, basic   |   | $                    | (0.03  | ) |   | $ | (1.17 | ) |
| Diluted:                                                             |   |                 |   |   |   |   |   |   |
| Weighted average common shares, basic                                |   |                 | 15,098 |   |   |   | 14,996 |   |
| Dilutive impact of stock options and restricted stock awards         |   |                 | -      |   |   |   | - |   |
| Weighted average common shares, diluted                              |   |                 | 15,098 |   |   |   | 14,996 |   |
| Earnings/(loss) from continuing operations per common share, diluted |   | $                    | (0.03  | ) |   | $ | (1.17 | ) |

----

|                                                                 |   | For the six months |   |
|----------------------------------------------------------------------|--------|--------------------|--------|
|                                                            |   | ended June 30,     |   |
|                                                                 |   |               | 2012   |   |   |   | 2011 |   |
| Income (loss) from continuing operations                             |   | $                  | 524    |   |   | $ | (16,785 | ) |
|                                                                 |   |               |   |   |   |   |   |   |
| Basic:                                                               |   |               |   |   |   |   |   |   |
| Shares outstanding at beginning of period                            |   |               | 15,051 |   |   |   | 14,909 |   |
| Weighted average shares issued during the period, net                |   |               | 40     |   |   |   | 51 |   |
| Weighted average common shares, basic                                |   |               | 15,091 |   |   |   | 14,960 |   |
| Earnings/(loss) from continuing operations per common share, basic   |   | $                  | 0.03   |   |   | $ | (1.12 | ) |
| Diluted:                                                             |   |               |   |   |   |   |   |   |
| Weighted average common shares, basic                                |   |               | 15,091 |   |   |   | 14,960 |   |
| Dilutive impact of stock options and restricted stock awards         |   |               | 72     |   |   |   | - |   |
| Weighted average common shares, diluted                              |   |               | 15,163 |   |   |   | 14,960 |   |
| Earnings/(loss) from continuing operations per common share, diluted |   | $                  | 0.03   |   |   | $ | (1.12 | ) |

|                        |   | June 30, 2012  |   |
|-----------------------------|--------|----------------|--------|
|                        |   | Amortized Cost |   |   | Gross unrealized gains |   |   | Gross unrealized losses |   |   | Fair Value |   |
| (amounts in thousands)      |   |                |   |   |  |   |   |  |   |   |  |   |
|                        |   |                |   |   |  |   |   |  |   |   |  |   |
| Securities held to maturity |   |                |   |   |  |   |   |  |   |   |  |   |
| Certificates of deposit     |   | $              | 250    |   |   | $ | - |   |   | $ | - |   |   | $ | 250 |   |
|                        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investments           |   | $              | 250    |   |   | $ | - |   |   | $ | - |   |   | $ | 250 |   |

----

----

|                                                                     |   | (in thousands)       |   |   | (in thousands)     |   |
|---------------------------------------------------------------------|--------|----------------------|--------|--------|--------------------|--------|
|                                                                     |   | For the three months |   |   | For the six months |   |
|                                                                |   | ended June 30,       |   |   | ended June 30,     |   |
|                                                                |   |                 | 2012   |   |               |   | 2011 |   |   |   | 2012 |   |   |   | 2011 |   |
| Revenues:                                                           |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Hospitality                                                         |   | $                    | 36,156 |   |               | $      | 40,183 |   |   | $ | 71,705 |   |   | $ | 77,537 |   |
| Government                                                          |   |                 | 25,929 |   |               |   | 16,258 |   |   |   | 45,973 |   |   |   | 33,080 |   |
| Total                                                               |   | $                    | 62,085 |   |               | $      | 56,441 |   |   | $ | 117,678 |   |   | $ | 110,617 |   |
|                                                                |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss) from continuing operations:                 |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Hospitality                                                         |   | $                    | (1,558 | )      |               | $      | (27,786 | ) |   | $ | (1,192 | ) |   | $ | (27,503 | ) |
| Government                                                          |   |                 | 1,251  |   |               |   | 865 |   |   |   | 2,272 |   |   |   | 1,823 |   |
| Other                                                               |   |                 | (236   | )      |               |   | (239 | ) |   |   | (400 | ) |   |   | (277 | ) |
|                                                                |   |                 | (543   | )      |               |   | (27,160 | ) |   |   | 680 |   |   |   | (25,957 | ) |
| Other income, net                                                   |   |                 | (366   | )      |               |   | (157 | ) |   |   | 207 |   |   |   | (129 | ) |
| Interest expense                                                    |   |                 | (21    | )      |               |   | (67 | ) |   |   | (42 | ) |   |   | (115 | ) |
| Income from continuing operations before provision for income taxes |   | $                    | (930   | )      |               | $      | (27,384 | ) |   | $ | 845 |   |   | $ | (26,201 | ) |
|                                                                |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization:                                      |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Hospitality                                                         |   | $                    | 782    |   |               | $      | 568 |   |   | $ | 1,525 |   |   | $ | 1,157 |   |
| Government                                                          |   |                 | 19     |   |               |   | 21 |   |   |   | 38 |   |   |   | 40 |   |
| Other                                                               |   |                 | 118    |   |               |   | 95 |   |   |   | 181 |   |   |   | 191 |   |
| Total                                                               |   | $                    | 919    |   |               | $      | 684 |   |   | $ | 1,744 |   |   | $ | 1,388 |   |
|                                                                |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures:                                               |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Hospitality                                                         |   | $                    | 1,885  |   |               | $      | 2,564 |   |   | $ | 3,016 |   |   | $ | 5,547 |   |
| Government                                                          |   |                 | -      |   |               |   | 20 |   |   |   | - |   |   |   | 20 |   |
| Other                                                               |   |                 | 103    |   |               |   | 8 |   |   |   | 145 |   |   |   | 63 |   |
| Total                                                               |   | $                    | 1,988  |   |               | $      | 2,592 |   |   | $ | 3,161 |   |   | $ | 5,630 |   |
|                                                                |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Revenues by geographic area:                                        |   |                 |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| United States                                                       |   | $                    | 54,205 |   |               | $      | 49,075 |   |   | $ | 102,570 |   |   | $ | 97,025 |   |
| Other Countries                                                     |   |                 | 7,880  |   |               |   | 7,366 |   |   |   | 15,108 |   |   |   | 13,592 |   |
| Total                                                               |   | $                    | 62,085 |   |               | $      | 56,441 |   |   | $ | 117,678 |   |   | $ | 110,617 |   |

----

|                 | (in thousands) |   |
|----------------------|----------------|---|
|                 | June 30,       |   | December 31, |  |
|                 | 2012           |   | 2011 |  |
| Identifiable assets: |                |   |  |  |  |  |
| Hospitality          |                | $ | 92,524 |  |  | $ | 89,135 |  |
| Government           |                |   | 12,955 |  |  |  | 12,617 |  |
| Other                |                |   | 17,524 |  |  |  | 11,009 |  |
| Total                |                | $ | 123,003 |  |  | $ | 112,761 |  |

|            | (in thousands) |   |
|-----------------|----------------|--------|
|            | June 30,       |   | December 31, |   |
|            | 2012           |   | 2011 |   |
| United States   |           | $      | 108,711 |   |   | $ | 100,310 |   |
| Other Countries |           |   | 14,292 |   |   |   | 12,451 |   |
| Total           |           | $      | 123,003 |   |   | $ | 112,761 |   |

|        | (in thousands) |   |
|-------------|----------------|--------|
|        | June 30,       |   | December 31, |   |
|        | 2012           |   | 2011 |   |
| Hospitality |           | $      | 6,116 |   |   | $ | 6,116 |   |
| Government  |           |   | 736 |   |   |   | 736 |   |
| Total       |           | $      | 6,852 |   |   | $ | 6,852 |   |

----

|                       | For the Three Months Ended June 30, |   | For the Six Months Ended June 30, |
|----------------------------|-------------------------------------|--------|-----------------------------------|
|                       | 2012                                |   | 2011                              |   | 2012 |   | 2011 |
| Hospitality segment:       |                                |   |                              |   |   |   |   |
| McDonald's Corporation     | 19%                                 |   | 28%                               |   | 18% |   | 30% |
| Yum! Brands, Inc.          | 14%                                 |   | 13%                               |   | 14% |   | 12% |
| Government segment:        |                                |   |                              |   |   |   |   |
| U.S. Department of Defense | 42%                                 |   | 29%                               |   | 39% |   | 30% |
| All Others                 | 25%                                 |   | 30%                               |   | 29% |   | 28% |
|                       | 100%                                |   | 100%                              |   | 100% |   | 100% |

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| (a) | Evaluation of Disclosure Controls and Procedures. |
|-----|---------------------------------------------------|

----

| (b) | Changes in Internal Control over Financial Reporting. |
|-----|-------------------------------------------------------|

----

| Exhibit No. | Description of Instrument                                                                                                                                                                                                                              |  |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
|  10.1  |  Notice of Stock Option Award                                                                                                                                                                                                                     |
|  10.2  |  International Notice of Stock Option Award with Performance Based Vesting                                                                                                                                                                        |
|  10.3  |  Long-Term Performance-Based Restricted Stock Agreement                                                                                                                                                                                           |
| 31.1        |  Certification of Chairman of the Board and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                    |  |
| 31.2        |  Certification of Sr. Vice President, Chief Financial Officer and Treasurer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                            |  |
| 32.1        |  Certification of Chairman of the Board and Chief Executive Officer and Sr. Vice President, Chief Financial Officer and Treasurer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  |  |

----

|                        |   | PAR TECHNOLOGY CORPORATION                               |
|-----------------------------|--------|----------------------------------------------------------|
|                        |   | (Registrant)                                             |
|                        |   |                                                     |
|                        |   |                                                     |
| Date:  August 14, 2012 |   |                                                     |
|                        |   |                                                     |
|                        |   |                                                     |
|                        |   |                                                     |
|                        |   | /s/STEVEN M. MALONE                                      |
|                        |   | Steven M. Malone                                         |
|                        |   | Vice President, Controller, and Chief Accounting Officer |

----

|  Exhibit No. |  Description of Instrument                                                                                                                                                                                                                  | Sequential Page Number |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
|  10.1        |  Notice of Stock Option Award                                                                                                                                                                                                               |  E-1              |
|              |                                                                                                                                                                                                                                             |                   |
|  10.2        |  International Notice of Stock Option Award with Performance Based Vesting                                                                                                                                                                  |  E-2              |
|              |                                                                                                                                                                                                                                             |                   |
|  10.3        |  Long-Term Performance-Based Restricted Stock Agreement                                                                                                                                                                                     |  E-3              |
| 31.1              |  Certification of Chairman of the Board and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              |  E-4              |
| 31.2              |  Certification of Sr. Vice President, Chief Financial Officer and Treasurer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                      |  E-5              |
| 32.1              |  Certification of Chairman of the Board and Chief Executive Officer and Sr. Vice President, Chief Financial Officer and Treasurer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  E-6              |

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