SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q

          [ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


       For the Quarter Ended June 30, 2007. Commission File Number 1-9720

                                       OR
               [ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


             For the Transition Period From __________ to __________
                        Commission File Number __________

                           PAR TECHNOLOGY CORPORATION
             (Exact name of registrant as specified in its charter)

             Delaware                                    16-1434688
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)


       PAR Technology Park
       8383 Seneca Turnpike
       New Hartford, NY                                  13413-4991
(Address of principal executive offices)                 (Zip Code)


       Registrant's telephone number, including area code: (315) 738-0600

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):Large Accelerated Filer [ ] Accelerated Filer [X] Non-Accelerated Filer [ ]

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

     The number of shares  outstanding of registrant's  common stock, as of July
31, 2007 - 14,364,680 shares.

<PAGE>



                           PAR TECHNOLOGY CORPORATION


                                TABLE OF CONTENTS
                                    FORM 10-Q


                                     PART I
                              FINANCIAL INFORMATION


   Item Number

      Item 1.   Financial Statements (unaudited)
                -  Consolidated Statements of Operations for
                   the three and six months ended June 30, 2007 and 2006

                -  Consolidated Statements of Comprehensive Income (Loss)
                   for the three and six months ended June 30, 2007 and 2006

                -  Consolidated Balance Sheets at
                   June 30, 2007 and December 31, 2006

                -  Consolidated Statements of Cash Flows
                   for the six months ended June 30, 2007 and 2006

                -  Notes to Unaudited Interim Consolidated Financial Statements

      Item 2.   Management's Discussion and Analysis of
                Financial Condition and Results of Operations

      Item 3.   Quantitative and Qualitative Disclosures About Market Risk

      Item 4.   Controls and Procedures

                                     PART II
                                OTHER INFORMATION



      Item 1A.  Risk Factors

      Item 4.   Submission of Matters to a Vote of Security Holders

      Item 5.   Other Information

      Item 6.   Exhibits

      Signatures

      Exhibit Index


<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>
                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                   (unaudited)

                                                       For the three months       For the six months
                                                           ended June 30,            ended June 30,
                                                      ----------------------    ----------------------
                                                         2007         2006        2007          2006
                                                      ---------    ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>          <C>
Net revenues:
     Product ......................................   $  18,320    $  22,710    $  35,026    $  45,730
     Service ......................................      16,100       14,886       31,629       28,631
     Contract .....................................      15,452       15,747       31,053       31,579
                                                      ---------    ---------    ---------    ---------
                                                         49,872       53,343       97,708      105,940
                                                      ---------    ---------    ---------    ---------
Costs of sales:
     Product ......................................      10,699       13,074       21,007       25,872
     Service ......................................      11,886       10,840       24,052       21,550
     Contract .....................................      14,652       14,518       29,206       29,244
                                                      ---------    ---------    ---------    ---------
                                                         37,237       38,432       74,265       76,666
                                                      ---------    ---------    ---------    ---------
           Gross margin ...........................      12,635       14,911       23,443       29,274
                                                      ---------    ---------    ---------    ---------
Operating expenses:
     Selling, general and administrative ..........       9,186        8,194       17,895       16,269
     Research and development .....................       4,387        2,836        8,201        5,735
     Amortization of identifiable intangible assets         394          308          784          615
                                                      ---------    ---------    ---------    ---------
                                                         13,967       11,338       26,880       22,619
                                                      ---------    ---------    ---------    ---------
Operating income (loss) ...........................      (1,332)       3,573       (3,437)       6,655
Other income, net .................................         154          218          394          375
Interest expense ..................................        (237)        (167)        (459)        (252)
                                                      ---------    ---------    ---------    ---------
Income (loss) before provision for income taxes ...      (1,415)       3,624       (3,502)       6,778
Benefit (provision) for income taxes ..............         394       (1,286)       1,173       (2,428)
                                                      ---------    ---------    ---------    ---------
Net income (loss) .................................   $  (1,021)   $   2,338    $  (2,329)   $   4,350
                                                      =========    =========    =========    =========
Earnings (loss) per share
     Basic ........................................   $    (.07)   $     .16    $    (.16)   $     .31
     Diluted ......................................   $    (.07)   $     .16    $    (.16)   $     .29
Weighted average shares outstanding
     Basic ........................................      14,348       14,173       14,334       14,162
                                                      =========    =========    =========    =========
     Diluted ......................................      14,348       14,776       14,334       14,802
                                                      =========    =========    =========    =========
</TABLE>


See notes to unaudited interim consolidated financial statements


<PAGE>


<TABLE>
<CAPTION>


                                              PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                                            (in thousands)
                                                              (unaudited)


                                                       For the three months       For the six months
                                                           ended June 30,            ended June 30,
                                                      ----------------------    ----------------------
                                                         2007         2006        2007          2006
                                                      ---------    ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>          <C>

Net income (loss)                                     $  (1,021)   $   2,338     $  (2,329)   $   4,350
Other comprehensive income, net of tax:
     Foreign currency translation adjustments               613           50           529          121
                                                      ---------    ---------     ---------    ---------
Comprehensive income (loss)                           $    (408)   $   2,388     $  (1,800)   $   4,471
                                                      =========    =========     =========    =========

</TABLE>







See notes to unaudited interim consolidated financial statements


<PAGE>


                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)
                                   (unaudited)

                                                      June 30,   December 31,
                                                        2007         2006
                                                     ---------   ------------
Assets
     Cash and cash equivalents ...................   $   3,320    $   4,273
     Accounts receivable-net .....................      39,567       46,791
     Inventories-net .............................      38,012       35,948
     Income tax refunds ..........................         357        1,103
     Deferred income taxes .......................       6,295        5,139
     Other current assets ........................       2,874        2,737
                                                     ---------    ---------
         Total current assets ....................      90,425       95,991
Property, plant and equipment - net ..............       7,277        7,535
Goodwill .........................................      26,339       25,734
Intangible assets - net ..........................      10,508       10,695
Other assets .....................................       3,370        2,841
                                                     ---------    ---------
                                                     $ 137,919    $ 142,796
                                                     =========    =========
Liabilities and Shareholders' Equity
Current liabilities:
     Current portion of long-term debt ...........   $     542    $     240
     Borrowings under lines of credit ............       6,043        7,713
     Accounts payable ............................       9,923       12,470
     Accrued salaries and benefits ...............       7,978        8,279
     Accrued expenses ............................       2,009        1,861
     Customer deposits ...........................       3,969        3,656
     Deferred service revenue ....................      12,342       12,254
                                                     ---------    ---------
         Total current liabilities ...............      42,806       46,473
                                                     ---------    ---------
Long-term debt ...................................       7,357        7,708
                                                     ---------    ---------
Deferred income taxes ............................         499          653
                                                     ---------    ---------
Other long-term liabilities ......................       2,594        1,879
                                                     ---------    ---------
Shareholders' Equity:
     Preferred stock, $.02 par value,
       1,000,000 shares authorized ...............        --           --
     Common stock, $.02 par value,
       29,000,000 shares authorized;
        16,017,285 and 15,980,486 shares issued;
         14,364,530 and 14,327,731outstanding ....         320          320
     Capital in excess of par value ..............      38,982       38,602
     Retained earnings ...........................      50,830       53,159
     Accumulated other comprehensive income (loss)          40         (489)
     Treasury stock, at cost, 1,652,755 shares ...      (5,509)      (5,509)
                                                     ---------    ---------
         Total shareholders' equity ..............      84,663       86,083
                                                     ---------    ---------
                                                     $ 137,919    $ 142,796
                                                     =========    =========

See notes to unaudited interim consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>

                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

                                                                     For the six months
                                                                        ended June 30,
                                                                     ------------------
                                                                       2007       2006
                                                                     --------   -------
<S>                                                                  <C>        <C>
Cash flows from operating activities:
    Net income (loss) ............................................   $(2,329)   $ 4,350
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
         Depreciation and amortization ...........................     1,955      1,914
         Provision for bad debts .................................     1,066        286
         Provision for obsolete inventory ........................       663        622
         Equity based compensation ...............................       271        138
         Deferred income tax .....................................    (1,620)     1,682
         Changes in operating assets and liabilities:
             Accounts receivable .................................     6,158     (9,748)
             Inventories .........................................    (2,727)    (3,259)
             Income tax refunds ..................................       746        (25)
             Other current assets ................................      (137)      (250)
             Other assets ........................................      (529)      (451)
             Accounts payable ....................................    (2,574)      (231)
             Accrued salaries and benefits .......................      (301)      (864)
             Accrued expenses ....................................       148       (147)
             Customer deposits ...................................       313       (738)
             Deferred service revenue ............................        88       (583)
             Other long-term liabilities .........................       715        582
                                                                     -------    -------
               Net cash provided by (used in) operating activities     1,906     (6,722)
                                                                     -------    -------
Cash flows from investing activities:
    Capital expenditures .........................................      (649)      (867)
    Capitalization of software costs .............................      (730)      (234)
                                                                     -------    -------
               Net cash used in investing activities .............    (1,379)    (1,101)
                                                                     -------    -------
Cash flows from financing activities:
    Net borrowings under line-of-credit agreements ...............    (1,670)     4,588
    Payments of long-term debt ...................................       (49)       (38)
    Proceeds from the exercise of stock options ..................       109        159
    Excess tax benefit of stock option exercises .................      --          169
    Cash dividend in lieu of fractional shares on stock split ....      --           (4)
                                                                     -------    -------
               Net cash provided by (used in) financing activities    (1,610)     4,874
                                                                     -------    -------
Effect of exchange rate changes on cash and cash equivalents .....       130         35
                                                                     -------    -------
Net decrease in cash and cash equivalents ........................      (953)    (2,914)
Cash and cash equivalents at beginning of period .................     4,273      4,982
                                                                     -------    -------
Cash and cash equivalents at end of period .......................   $ 3,320    $ 2,068
                                                                     =======    =======

Supplemental disclosures of cash flow information:
Cash paid during the period for:
    Interest .....................................................   $   474    $   230
    Income taxes, net of refunds .................................      (331)       548

See notes to unaudited interim consolidated financial statements

</TABLE>


<PAGE>


                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS


1.   The accompanying  unaudited interim consolidated  financial statements have
     been prepared by PAR  Technology  Corporation  (the  "Company" or "PAR") in
     accordance with U.S. generally accepted  accounting  principles for interim
     financial  statements and with the instructions to Form 10-Q and Regulation
     S-X pertaining to interim financial statements.  Accordingly, these interim
     financial  statements do not include all information and footnotes required
     by U.S.  generally  accepted  accounting  principles for complete financial
     statements.  In the  opinion  of the  Company,  such  unaudited  statements
     include all  adjustments  (which comprise only normal  recurring  accruals)
     necessary  for a fair  presentation  of the results for such  periods.  The
     results of operations  for the three and six months ended June 30, 2007 are
     not necessarily  indicative of the results of operations to be expected for
     any future period. The consolidated  financial statements and notes thereto
     should  be read in  conjunction  with the  audited  consolidated  financial
     statements  and notes for the year ended  December 31, 2006 included in the
     Company's  December 31, 2006 Annual Report to the  Securities  and Exchange
     Commission on Form 10-K.

     The preparation of consolidated financial statements requires management of
     the Company to make a number of estimates and  assumptions  relating to the
     reported  amount of assets and liabilities and the disclosure of contingent
     assets and liabilities at the date of the consolidated financial statements
     and the  reported  amounts of  revenues  and  expenses  during the  period.
     Significant  items subject to such estimates and assumptions  include:  the
     carrying amount of property,  plant and equipment,  identifiable intangible
     assets and goodwill,  valuation  allowances for  receivables,  inventories,
     deferred  income tax assets and equity based  compensation.  Actual results
     could differ from those estimates.

2.   On November 2, 2006, PAR  Technology  Corporation  (the  "Company") and its
     wholly owned  subsidiary,  Par-Siva  Corporation  (f/k/a PAR Vision Systems
     Corporation) (the  "Subsidiary")  acquired  substantially all of the assets
     and assumed certain liabilities of SIVA Corporation ("SIVA").  The purchase
     price of the assets was  approximately  $6.9  million  including  estimated
     acquisition costs of approximately  $177,000.  The purchase price consisted
     of $1.1  million  worth of PAR common stock  (125,549  shares of PAR common
     stock issued out of treasury)  and the  remainder  in cash.  The  agreement
     provides for additional contingent purchase price payments based on certain
     sales based milestones and other  conditions.  SIVA, based in Delray Beach,
     Florida,  is a developer of software  solutions for  multi-unit  restaurant
     operations.

     On an unaudited  proforma  basis,  assuming the completed  acquisition  had
     occurred as of the  beginning of the periods  presented,  the  consolidated
     results of the Company would have been as follows (in thousands, except per
     share amounts):

                                    For the three months    For the six months
                                    ended June 30, 2006     ended June 30, 2006
                                    --------------------    -------------------

Net revenues ................           $   53,935             $   106,992
Net income ..................           $    1,538             $     2,680

Earnings per share:
   Basic ....................           $      .11             $       .19
   Diluted ..................           $      .10             $       .18

<PAGE>


     The unaudited proforma financial  information  presented above gives effect
     to purchase  accounting  adjustments which have resulted or are expected to
     result from the acquisition.  This proforma  information is not necessarily
     indicative  of the results that would  actually  have been obtained had the
     companies been combined for the periods presented.

3.   Inventories   are  primarily  used  in  the   manufacture  and  service  of
     Hospitality products. The components of inventory, net of related reserves,
     consist of the following:

                                             (in thousands)
                                              ------------
                                       June 30,           December 31,
                                        2007                 2006
                                      ---------           ---------

Finished goods ...............         $ 8,680             $ 9,533
Work in process ..............           1,836               1,667
Component parts ..............           8,650               7,119
Service parts ................          18,846              17,629
                                       -------             -------
                                       $38,012             $35,948
                                       =======             =======

     At June 30, 2007 and December 31, 2006,  the Company had recorded  reserves
     for shrinkage,  excess and obsolete inventory of $3,724,000 and $3,658,000,
     respectively.

4.   Effective  January 1, 2006, the Company adopted the fair value  recognition
     provisions  of  Statement  of  Financial   Accounting  Standards  No.  123R
     Share-Based  Payment  (SFAS  123R) on a modified  prospective  basis.  This
     standard  requires  the Company to measure  the cost of  employee  services
     received in exchange  for equity  awards based on the grant date fair value
     of the awards.  The cost is  recognized  as  compensation  expense over the
     vesting  period of the  awards.  Total  compensation  expense  included  in
     operating  expenses  for the three and six months  ended June 30,  2007 was
     $134,000 and $271,000, respectively. Total compensation expense included in
     operating  expenses  for the three and six months  ended June 30,  2006 was
     $95,000 and  $138,000,  respectively.  At June 30, 2007,  the  unrecognized
     compensation  expense related to non-vested option awards was $798,000 (net
     of estimated forfeitures).

5.   Earnings per share are calculated in accordance with Statement of Financial
     Accounting  Standards  No. 128,  Earnings per Share,  which  specifies  the
     computation,  presentation  and  disclosure  requirements  for earnings per
     share (EPS).  It requires the  presentation of basic and diluted EPS. Basic
     EPS excludes all dilution and is based upon the weighted  average number of
     common  shares  outstanding  during the period.  Diluted EPS  reflects  the
     potential  dilution that would occur if  securities  or other  contracts to
     issue common stock were exercised or converted into common stock.
<PAGE>

         The following is a reconciliation of the weighted average shares
         outstanding for the basic and diluted EPS computations (in thousands,
         except per share data):

                                                        For the three months
                                                            ended June 30,
                                                        --------------------
                                                           2007        2006
                                                        --------    --------

Net income (loss) ...................................   $ (1,021)   $  2,338
                                                        ========    ========
Basic:
     Shares outstanding at beginning of period ......     14,343      14,158
     Weighted average shares issued during the period          5          15
                                                        --------    --------
     Weighted average common shares, basic ..........     14,348      14,173
                                                        ========    ========
     Earnings (loss) per common share, basic ........   $   (.07)   $    .16
                                                        ========    ========
Diluted:
     Weighted average common shares, basic ..........     14,348      14,173
     Dilutive impact of stock options ...............       --           603
                                                        --------    --------
     Weighted average common shares, diluted ........     14,348      14,776
                                                        ========    ========
     Earnings (loss) per common share, diluted ......   $   (.07)   $    .16
                                                        ========    ========


                                                         For the six months
                                                            ended June 30,
                                                        --------------------
                                                           2007        2006
                                                        --------    --------

Net income (loss) ...................................   $ (2,329)   $  4,350
                                                        ========    ========
Basic:
     Shares outstanding at beginning of period ......     14,310      14,137
     Weighted average shares issued during the period         24          25
                                                        --------    --------
     Weighted average common shares, basic ..........     14,334      14,162
                                                        ========    ========
     Earnings (loss) per common share, basic ........   $   (.16)   $    .31
                                                        ========    ========
Diluted:
     Weighted average common shares, basic ..........     14,334      14,162
     Dilutive impact of stock options ...............       --           640
                                                        --------    --------
     Weighted average common shares, diluted ........     14,334      14,802
                                                        ========    ========
     Earnings (loss) per common share, diluted ......   $   (.16)   $    .29
                                                        ========    ========

     For the three and six months  ended June 30,  2007,  449,361  and  454,626,
     respectively,  of  incremental  shares from the  assumed  exercise of stock
     options  and  18,300  restricted  stock  awards  are  not  included  in the
     computation  of diluted  earnings  per share  because of the  anti-dilution
     effect on earnings per share.

6.   The Company has adopted the  provisions of Financial  Accounting  Standards
     Board  Interpretation  No. 48,  Accounting for  Uncertainty in Income Taxes
     (FIN 48) effective  January 1, 2007.  The  Company's  adoption of FIN 48 on
     January  1,  2007,  did not  have a  material  impact  on the  consolidated
     financial position, results of operations or cash flows.

     As of June 30, 2007 and January 1, 2007,  the Company had an  insignificant
     amount of unrecognized  tax benefits.  The Company's policy is to recognize
     interest and penalties on  unrecognized  tax benefits in income tax expense
     in the  consolidated  statements of operations.  The amount of interest and
     penalties  for the six  months  ended  June 30,  2007 was  immaterial.  The

<PAGE>

     Company or one of its  subsidiaries  files  income tax  returns in the U.S.
     federal  jurisdiction  and  various  state and foreign  jurisdictions.  The
     Company  is  no  longer  subject  to  U.S.  Federal  or  state  income  tax
     examinations by tax authorities for tax years prior to 2003.

7.   The Company's  reportable  segments are strategic  business units that have
     separate management teams and infrastructures that offer different products
     and services.

     The Company has two reportable  segments,  Hospitality and Government.  The
     Hospitality   segment  offers  integrated   solutions  to  the  hospitality
     industry.  These offerings  include  industry leading hardware and software
     applications utilized in point-of-sale,  back of store and corporate office
     applications as well as in the hotel/resort/spa  marketplace.  This segment
     also  offers  customer  support  including  field  service,   installation,
     twenty-four hour telephone support and depot repair. The Government segment
     provides  technical  expertise in the  development  of advanced  technology
     prototype  systems  primarily  for the  Department  of  Defense  and  other
     Governmental  agencies.  It provides services for operating and maintaining
     certain  U.S.  Government-owned  communication  and  test  sites,  and  for
     planning,  executing and evaluating  experiments  involving new or advanced
     radar systems. It is also involved in developing technology to track mobile
     chassis. Intersegment sales and transfers are not significant.


<PAGE>


     Information as to the Company's segments is set forth below:
<TABLE>
<CAPTION>

                                                 (in thousands)
                                  For the three months       For the six months
                                      ended June 30,            ended June 30,
                                 ----------------------    ----------------------
                                    2007         2006         2007          2006
                                 ---------    ---------    ---------    ---------
<S>                              <C>          <C>          <C>          <C>
Revenues:
     Hospitality .............   $  34,420    $  37,596    $  66,655    $  74,361
     Government ..............      15,452       15,747       31,053       31,579
                                 ---------    ---------    ---------    ---------
           Total .............   $  49,872    $  53,343    $  97,708    $ 105,940
                                 =========    =========    =========    =========
Operating income(loss):
     Hospitality .............   $  (1,927)   $   2,513    $  (4,895)   $   4,572
     Government ..............         729        1,155        1,729        2,221
     Other ...................        (134)         (95)        (271)        (138)
                                 ---------    ---------    ---------    ---------
                                    (1,332)       3,573       (3,437)       6,655
Other income, net ............         154          218          394          375
Interest expense .............        (237)        (167)        (459)        (252)
                                 ---------    ---------    ---------    ---------
Income (loss) before provision
  for income taxes ...........   $  (1,415)   $   3,624    $  (3,502)   $   6,778
                                 =========    =========    =========    =========

Depreciation and amortization:
     Hospitality .............   $     891    $     797    $   1,751    $   1,696
     Government ..............           8           10           17           24
     Other ...................          91          122          187          194
                                 ---------    ---------    ---------    ---------
           Total .............   $     990    $     929    $   1,955    $   1,914
                                 =========    =========    =========    =========
Capital expenditures:
     Hospitality .............   $     286    $     300    $     577    $     688
     Government ..............        --           --             32         --
     Other ...................          31          119           40          179
                                 ---------    ---------    ---------    ---------
           Total .............   $     317    $     419    $     649    $     867
                                 =========    =========    =========    =========

Revenues by geographic area:
     United States ...........   $  41,817    $  45,881    $  83,503    $  93,171
     Other Countries .........       8,055        7,462       14,205       12,769
                                 ---------    ---------    ---------    ---------
           Total .............   $  49,872    $  53,343    $  97,708    $ 105,940
                                 =========    =========    =========    =========
</TABLE>


     The following table represents identifiable assets by business segment:

                                                   (in thousands)
                                              June 30,      December 31,
                                                2007           2006
                                             ---------       ---------
Identifiable assets:
    Hospitality .....................         $117,832        $123,958
    Government ......................           11,667          10,898
    Other ...........................            8,420           7,940
                                              --------        --------
Total ...............................         $137,919        $142,796
                                              ========        ========
<PAGE>


     The following table presents  identifiable  assets by geographic area based
on the location of the asset:

                                                    (in thousands)
                                               June 30,       December 31,
                                                 2007             2006
                                              ---------       ----------

United States .....................            $125,527        $135,337
Other Countries ...................              12,392           7,459
                                               --------        --------
       Total ......................            $137,919        $142,796
                                               ========        ========


     The following table represents Goodwill by business segment:

                                                    (in thousands)
                                                June 30,      December 31,
                                                 2007            2006
                                              ----------       ---------

    Hospitality ...................             $25,743         $25,138
    Government ....................                 596             596
                                                -------         -------
       Total ......................             $26,339         $25,734
                                                =======         =======


     Customers  comprising  10% or  more of the  Company's  total  revenues  are
summarized as follows:

                                        For the three months  For the six months
                                            ended June 30,       ended June 30,
                                         ------------------    -----------------
                                           2007       2006       2007      2006
                                         -------    -------     ------   -------

Restaurant Segment:
     McDonald's Corporation .....          27%         27%         26%      26%
     YUM! Brands, Inc. ..........          14%         12%         13%      11%
Government Segment:
     Department of Defense ......          31%         30%         32%      30%
All Others ......................          28%         31%         29%      33%
                                          ---          ---        ---      ---
                                          100%         100%       100%     100%
                                          ===          ===        ===      ===


<PAGE>


Item 2: Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Forward-Looking Statement

     This document contains  "forward-looking  statements" within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934.  Any  statements  in this document that do not
describe  historical  facts  are  forward-looking  statements.   Forward-looking
statements in this document (including  forward-looking statements regarding the
continued  health of the Hospitality  industry,  future  information  technology
outsourcing opportunities,  continued funding by the U.S. Government relating to
the Company's logistics management contracts, the impact of current world events
on our results of operations,  the effects of inflation on our margins,  and the
effects of interest  rate and foreign  currency  fluctuations  on our results of
operations)  are made  pursuant  to the safe  harbor  provisions  of the Private
Securities  Litigation  Reform Act of 1995.  When we use words such as "intend,"
"anticipate,"  "believe," "estimate," "plan," "will," or "expect", we are making
forward-looking  statements.  We believe that the assumptions  and  expectations
reflected  in  such   forward-looking   statements  are  reasonable,   based  on
information  available to us on the date hereof,  but we cannot  assure you that
these  assumptions and  expectations  will prove to have been correct or that we
will take any  action  that we  presently  may be  planning.  We have  disclosed
certain  important  factors that could cause our actual future results to differ
materially  from our current  expectation,  including a decline in the volume of
purchases  made by one or a group of our major  customers;  risks in  technology
development  and  commercialization;  risks of downturns in economic  conditions
generally,   and  in  the  quick-service   sector  of  the  hospitality   market
specifically;  risks associated with government contracts; risks associated with
competition  and  competitive  pricing  pressures;  and risks related to foreign
operations.  Forward-looking  statements made in connection with this report are
necessarily  qualified by these  factors.  We are not  undertaking  to update or
revise  publicly any  forward-looking  statement if we obtain new information or
upon the occurrence of future events or otherwise.

Overview

     PAR is a leading provider of hospitality  technology systems. PAR is also a
leader in supplying  engineering  services and applied technology to the Federal
Government,  and  several of its  agencies.  The  primary  end  markets  for our
products and services are:

     o    Restaurant, hotel/resort/spa, entertainment, and retail industries for
          the integrated  solution  technologies  of transaction  processing and
          data capture for many hospitality enterprises

     o    the U.S.  military  and a broad  range of  Federal,  State  and  Local
          government agencies
<PAGE>

The  Company's  hospitality  technology  products  are used in several  vertical
markets  in a  variety  of  applications  by  numerous  customers.  The  Company
encounters  competition in all of its markets  (restaurants,  hotels,  theaters,
specialty retail,  etc.) and competes  primarily on the basis of product design,
features/functions,  product  quality/reliability,  price,  customer service and
delivery  capability.  Recently  there  has  been a  trend  amongst  hospitality
technology end users to consolidate their lists of approved vendors to companies
that have a global capability,  can achieve high quality and delivery standards,
have multiple product offerings,  R&D capability,  and be competitive with their
pricing.  PAR  believes  that its global  presence as a  hospitality  technology
provider is a crucial  competitive  advantage as the Company provides innovative
products/solutions,  with a  significant  delivery  capability  globally  to its
multinational customers like McDonald's, Yum! Brands and Mandarin Oriental Hotel
Group.

     In the fourth quarter of 2006 PAR acquired the assets of SIVA  Corporation,
a privately  held  hospitality  technology  software  company and a cutting edge
provider of web-based  service  oriented  architected  software  applications to
large hospitality  organizations in table-service dining and theme park resorts.
Several  organizations  in  hospitality  technology  believe  that the  value in
restaurant  technology happens at the point-of-sale.  PAR fully understands that
to  successfully  run  an  enterprise  business,  a  wide  range  of  operations
information is needed--and that information has value to the individual  stores,
field,  and  corporate  employees  beyond  accounting.  Par-Siva's  applications
collect data at the site and then deliver it wherever it is required  throughout
the organization--not as an add-on module, but as an integral component of every
application's design. Today's hospitality organizations are connected like never
before.  Par-Siva's  offering  was  designed  from the ground up to utilize  the
operational  knowledge and experience PAR has in  hospitality  and  specifically
restaurants.  Par-Siva's applications automate core restaurant processes such as
order entry,  food preparation,  inventory  control,  and labor management.  The
applications  can  deliver  action  prompts  and  performance  scorecards.  From
tracking to monitoring  equipment  performance,  PAR- Siva's  offerings  support
operations.

     PAR's  business  strategy is to provide  completely  integrated  technology
systems,  professional  services  and a high level of  lifecycle  support in the
markets in which it  competes.  The Company  continues to focus its research and
development  efforts to develop  cutting-edge  products that meet and exceed our
customers'  needs and also have high  probability  for broader market appeal and
success.  PAR  concentrates  upon efficiency in their operations and controlling
costs.

     PAR operates  two  wholly-owned  subsidiaries  in the  Government  business
segment, PAR Government Systems Corporation (PGSC) and Rome Research Corporation
(RRC).  As  a  long-standing  Government  contractor,   PAR  provides  technical
<PAGE>


expertise  towards the development of advanced  technology  systems for the U.S.
Department of Defense and other U.S. Governmental  agencies.  Additionally,  PAR
provides information  technology and communications support services to the U.S.
Navy,  U.S.  Air Force and U.S.  Army.  The Company  focuses its  computer-based
system  design  services  on  providing  high  quality  technical  products  and
services,  ranging from experimental  studies to advanced  operational  systems,
within a  variety  of areas of  research,  including  radar,  image  and  signal
processing,  logistic management systems,  and geospatial services and products.
PAR's  Government   engineering   service  business   provides   management  and
engineering  services  that include  facilities  operation and  management.  The
Company will continue to execute its strategy of leveraging  its core  technical
capabilities  and  performance  into  related  technical  areas and an expanding
customer base. The Company will seek to accelerate this growth through strategic
acquisitions of businesses that broaden the Company's technology and/or business
base.

     PAR's future business plan is to continue to expand the Company's  customer
base and solidify their leading  position in the industries to which they market
by:

     o    Developing integrated solutions

     o    Continuing to grow our global presence in growth markets

     o    Focusing on customer  needs

     o    Encouraging entrepreneurial corporate attitude and spirit

     o    Fostering  a  mindset  of  controlling   cost

     o    Pursuing strategic acquisitions

Summary

     The Company  believes  they can continue to be successful in their two core
business segments -Hospitality and Government-their focus and industry expertise
will  allow  this to happen.  In  addition,  PAR will  continue  its  investment
initiatives for the remainder of 2007 in three  particular  areas: the continued
development of the newly  acquired SIVA software  platform for table service and
quick  serve  restaurant  chains;  increasing  their  distribution  channel  for
hospitality  markets;  and  investing in the  Company's  international  business
infrastructure,  in particular in the Asia-Pacific Rim region.  The Company will
benefit from our efficient  supply chain and economies of scale as they leverage
suppliers and  distribution  operations.  PAR remains  committed to streamlining
operations  and  improving  return on  invested  capital  through  a variety  of
initiatives.
<PAGE>


Results of  Operations  -- Three  Months  Ended June 30, 2007  Compared to Three
Months Ended June 30, 2006

     The Company reported  revenues of $ 49.9 million for the quarter ended June
30,  2007, a decrease of 6.5 % from the $53.3  million  reported for the quarter
ended June 30, 2006.  The Company's net loss for the quarter ended June 30, 2007
was $1 million,  or $.07  diluted net loss per share,  compared to net income of
$2.3 million and $.16 diluted net income per share for the same period in 2006.

     Product revenues from the Company's  Hospitality segment were $18.3 million
for the quarter  ended June 30, 2007, a decrease of 19 % from the $22.7  million
recorded in 2006.  This  decrease was due to a $4.9 million  decline in domestic
product sales due to a continued  delay in hardware orders from a major customer
pending the release of that customer's new third party software. The decline was
also due to the  Company's  delay in replacing  hardware  and software  business
associated with last year's orders from two new customers. This drop in domestic
revenue was partially  offset by a $504,000  increase in  international  product
sales.  This  increase  was the  result  of  growth  in sales  to the  Company's
restaurant customers in Asia and Canada.

     Customer service  revenues are also generated by the Company's  Hospitality
segment.  The  Company's  service  offerings  include   installation,   software
maintenance,  training, twenty-four hour help desk support and various depot and
on-site service  options.  Customer  service revenues were $16.1 million for the
quarter ended June 30, 2007, an 8 % increase from $14.9 million reported for the
same  period in 2006.  The  growth is  primarily  related  to the award of a new
service  contract with a major  customer in October of 2006.  This was partially
offset by a decline in installation revenue.

     Contract revenues from the Company's  Government segment were $15.5 million
for the quarter ended June 30, 2007, a decrease of 2% when compared to the $15.7
million  recorded in the same period in 2006.  This minor decline was due to the
delay  in  the  start  of  some  new  contracts  in the  information  technology
outsourcing area. These outsourcing  operations provided by the Company directly
support U.S. Navy,  Air Force and Army  operations as they seek to convert their
military information  technology  communications  facilities into contractor-run
operations and to meet new requirements with contractor support.

     Product margins for the quarter ended June 30, 2007 were 41.6 %, a decrease
of 80 basis  points from the 42.4% for the  quarter  ended June 30,  2006.  This
decrease in margins was primarily attributable to lower software revenue in 2007
when compared to 2006 and to unfavorable absorption of fixed manufacturing costs
as the result of a decline in production volume.

<PAGE>

     Customer  Service  margins were 26.2% for the quarter ended June 30, 2007 a
decrease of 100 basis points  compared to 27.2% for the same period in 2006. The
Company  experienced  a drop in  installation  margins due to lower than planned
installation  revenue as a result of the  decrease  in product  sales.  This was
partially offset by an increase in software maintenance margins due to increased
revenue in this area.

     Contract  margins were 5.2 % for the quarter ended June 30, 2007 a decrease
of 260 basis points  compared to 7.8% for the same period in 2006. This decrease
was due to the completion of various higher margin  fixed-price  contracts.  The
most  significant  components of contract  costs in 2007 and 2006 were labor and
fringe  benefits.  For 2007, labor and fringe benefits were $11.4 million or 78%
of contract  costs  compared to $11.2  million or 70% of contract  costs for the
same period in 2006.

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the quarter ended June 30, 2007 were $9.2  million,  an increase of 12% from
the $8.2 million for the same period in 2006. This increase was primarily due to
a rise in sales and marketing  expenses  associated with restaurant  products as
the  Company  is  investing  in  its  international  infrastructure  and  in the
expansion  of its dealer  channel.  The  increase is also due to higher bad debt
expense in 2007 versus 2006.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality segment. Research and development expenses were $4.4 million for the
quarter ended June 30, 2007,  an increase of 55% from the $2.8 million  recorded
in 2006.  The increase was primarily  attributable  to the  Company's  continued
research  and  development  in its next  generation  software  products  for its
restaurant  customers.  The  platform for this next  generation  of products was
acquired from SIVA Corporation in the fourth quarter of 2006.

     Amortization of identifiable intangible assets was $394,000 for the quarter
ended June 30, 2007 compared to $308,000 for 2006. The increase is primarily due
to the amortization of intangible  assets acquired as part of the acquisition of
SIVA Corporation on November 2, 2006.

     Other  income,  net,  was  $154,000  for the  quarter  ended June 30,  2007
compared  to  $218,000  for the same  period  in 2006.  Other  income  primarily
includes rental income and foreign  currency gains and losses.  This decrease is
primarily due to lower rental income in 2007 partially  offset by an increase in
foreign currency gains in 2007 versus 2006.

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$237,000  for the  quarter  ended June 30, 2007 as compared to $167,000 in 2006.
The Company entered into a $6 million term loan in the fourth quarter of 2006 to
finance  the  SIVA  acquisition.  This is  partially  offset  by  lower  average
borrowings  and a lower  borrowing  rate in 2007  under the  Company's  lines of
credit with banks when compared to 2006.
<PAGE>

     For the quarter  ended June 30, 2007,  the Company's  effective  income tax
rate was 27.8 %,  compared  to 35.5% in  2006.  The  variance  from the  federal
statutory  rate in 2007 was primarily due to state income taxes,  non-deductible
expenses,  and the relative  impact of these items in relation to the  Company's
expected pre-tax financial performance.  The variance from the federal statutory
rate in 2006 was primarily due to state income taxes, offset by benefits related
to  export  sales  as  well  as tax  benefits  related  to  domestic  production
activities.

Results of  Operations  -- Six Months Ended June 30, 2007 Compared to Six Months
Ended June 30, 2006

     The Company  reported  revenues of $97.7  million for the six months  ended
June 30,  2007,  a decrease of 8% from the $105.9  million  reported for the six
months ended June 30, 2006. The Company's net loss for the six months ended June
30, 2007 was $2.3 million,  or $.16 diluted net loss per share,  compared to net
income of $4.3 million and $.29 diluted net income per share for the same period
in 2006.

     Product  revenues from the Company's  Hospitality  segment were $35 million
for the six months ended June 30, 2007, a decrease of 23% from the $45.7 million
recorded in 2006.  This decrease was due to a $11.7 million  decline in domestic
product sales primarily due to a continued delay in hardware orders from a major
customer  pending the release of that customer's new third party  software.  The
decline was also due to the Company's  delay in replacing  hardware and software
business associated with last year's orders from two new customers. This drop in
domestic  revenue was partially offset by a $1 million increase in international
product sales.  This increase was the result of growth in sales to the Company's
restaurant customers in Asia and Canada.

     Customer service  revenues are also generated by the Company's  Hospitality
segment.  The  Company's  service  offerings  include   installation,   software
maintenance,  training, twenty-four hour help desk support and various depot and
on-site service  options.  Customer  service revenues were $31.6 million for the
six months ended June 30, 2007, a 10% increase from $28.6  million  reported for
the same period in 2006.  The growth is primarily  related to the award of a new
service contract with a major customer in October of 2006. Also  contributing to
the growth was an increase in software maintenance contracts.

     Contract  revenues from the Company's  Government  segment were $31 million
for the six months ended June 30,  2007, a decrease of 2 % when  compared to the
$31.6 million recorded in the same period in 2006. This minor decline was due to
the  completion of certain  fixed price  contracts and the delay in the start of
some new awards in the information technology outsourcing area.
<PAGE>

     Product margins for the six months ended June 30, 2007 were 40%, a decrease
of 340 basis points from the 43.4% for the six months ended June 30, 2006.  This
decrease in margins was primarily attributable to lower software revenue in 2007
when compared to 2006 and to unfavorable absorption of fixed manufacturing costs
as the result of a decline in production volume.

     Customer Service margins were 24% for the six months ended June 30, 2007, a
decrease of 70 basis points  compared to 24.7% for the same period in 2006. This
decline is due to lower  than  planned  installation  revenue as a result of the
decrease in product sales.  This was partially offset by an increase in software
maintenance.

     Contract  margins  were 5.9% for the six  months  ended  June 30,  2007,  a
decline  of 150  basis  points  versus  7.4% for the same  period  in 2006.  The
decrease was due to a favorable cost share adjustment on the Company's Logistics
management  program in 2006.  This  decrease was also due to the  completion  of
various higher margin fixed-price contacts.  The most significant  components of
contract costs in 2007 and 2006 were labor and fringe benefits.  For 2007, labor
and fringe  benefits  were $24.1  million or 82% of contract  costs  compared to
$22.9 million or 78% of contract costs for the same period in 2006.

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the six months ended June 30, 2007 were $17.9  million,  an increase of 10 %
from the $16.3  million for the same period in 2006.  This increase was due to a
rise in sales and marketing expenses  associated with restaurant products as the
Company is investing in its international infrastructure and in the expansion of
its dealer channel.  The increase was also due to a rise in bad debt expense and
stock based compensation expense.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality segment. Research and development expenses were $8.2 million for the
six  months  ended  June 30,  2007,  an  increase  of 43% from the $5.7  million
recorded in 2006.  The  increase was  primarily  attributable  to the  Company's
continued research and development in its next generation  software products for
its restaurant customers.  The platform for this next generation of products was
acquired from SIVA Corporation in the fourth quarter of 2006.

     Amortization  of  identifiable  intangible  assets was $784,000 for the six
months  ended June 30,  2007  compared  to $615,000  for 2006.  The  increase is
primarily due to the  amortization of intangible  assets acquired as part of the
acquisition of SIVA Corporation on November 2, 2006.
<PAGE>

     Other  income,  net,  was  $394,000  for the six months ended June 30, 2007
compared  to  $375,000  for the same  period  in 2006.  Other  income  primarily
includes rental income and foreign  currency gains and losses.  This increase is
primarily due to higher foreign  currency  gains in 2007 compared to 2006.  This
was  partially  offset by a decline in rental  income in 2007 when  compared  to
2006.

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$459,000 for the six months ended June 30, 2007 as compared to $252,000 in 2006.
The Company  experienced higher average borrowings in 2007 when compared to 2006
under its lines of credit with banks. In addition, the Company entered into a $6
million term loan in the fourth quarter of 2006 to finance the SIVA acquisition.
This is partially offset by a lower average borrowing rate in 2007 when compared
to 2006.

     For the six months ended June 30, 2007, the Company's  effective income tax
rate was 33.5 %,  compared  to 35.8% in  2006.  The  variance  from the  federal
statutory  rate in 2007 was primarily due to state income taxes,  non-deductible
expenses,  and the relative  impact of these items in relation to the  Company's
expected pre-tax financial performance.  The variance from the federal statutory
rate in 2006 was primarily due to state income taxes, offset by benefits related
to  export  sales  as  well  as tax  benefits  related  to  domestic  production
activities.

Liquidity and Capital Resources

     The  Company's  primary  sources  of  liquidity  have  been  cash flow from
operations and lines of credit with various  banks.  Cash provided by operations
was $1.9 million for the six months ended June 30, 2007 compared to cash used of
$6.7  million  for 2006.  In 2007,  cash was  generated  through  collection  of
accounts receivable.  This was partially offset by a growth in inventory and the
timing of payments to vendors. In 2006, cash flow was negatively impacted by the
timing of customer receipts and by inventory purchases in anticipation of future
demand.

     Cash used in  investing  activities  was $1.4 for the six months ended June
30,  2007 versus $1.1  million  for the same  period in 2006.  In 2007,  capital
expenditures were $649,000 and were primarily for manufacturing and research and
development   equipment.   Capitalized   software  costs  relating  to  software
development  of  Hospitality  segment  products  were $730,000 in 2007. In 2006,
capital  expenditures  were $867,000 and were principally for  manufacturing and
information  technology  equipment  and software for internal  use.  Capitalized
software costs relating to software  development of Hospitality segment products
were $234,000 in 2006.

     Cash used in financing activities was $1.6 million for the six months ended
June 30, 2007 versus cash provided of $4.9 million in 2006. In 2007, the Company
reduced its  short-term  borrowings  by $1.7 million and decreased its long-term
debt by $49,000.  The  Company  also  benefited  $109,000  from the  exercise of
employee stock  options.  In 2006,  the Company  increased its  short-term  bank
borrowings by $4.6 million and benefited  $159,000 from the exercise of employee
stock options.
<PAGE>

     The Company has an aggregate  availability of $20,000,000 in unsecured bank
lines of  credit.  One line  totaling  $12,500,000  bears  interest  at the bank
borrowing  rate (6.8 % at June 30, 2007).  The second line of $7,500,000  allows
the  Company,  at its  option,  to  borrow  funds  at the  LIBOR  rate  plus the
applicable  interest  rate spread or at the bank's prime  lending rate (6.5 % at
June 30, 2007). In June, 2007 these credit  agreements were amended to waive the
existing  leverage and fixed charge  coverage  ratios for the remainder of 2007.
Under the amendment,  the Company is required to meet an EBITDA covenant for the
balance of 2007. These lines expire in April 2009. The Company was in compliance
with all loan covenants on June 30, 2007. At June 30, 2007, there was $6,043,000
outstanding  under these lines.  The weighted  average interest rate paid by the
Company during 2007 was 6.4% and 6.9% during 2006.

     In 2006,  the Company  borrowed  $6,000,000  under an  unsecured  term loan
agreement with a bank in connection  with the  acquisition of SIVA  Corporation.
The loan provides for interest  only  payments in the first year and  escalating
principal  payments through 2012. The loan bears interest at the LIBOR rate plus
the applicable interest rate spread (6.6 % at June 30, 2007).

     The  Company  has a  $1,899,000  mortgage  collateralized  by certain  real
estate.  The annual mortgage payment  including  interest totals  $226,000.  The
mortgage bears interest at a fixed rate of 7% and matures in 2010.

     During  fiscal  year  2007,  the  Company   anticipates  that  its  capital
requirements  will be  approximately  $2 million.  The Company  does not usually
enter into long term contracts with its major Hospitality segment customers. The
Company  commits  to  purchasing   inventory  from  its  suppliers  based  on  a
combination  of internal  forecasts and the actual orders from  customers.  This
process, along with good relations with suppliers, minimizes the working capital
investment  required  by the  Company.  Although  the  Company  lists  two major
customers,  McDonald's  and Yum!  Brands,  it sells to  hundreds  of  individual
franchisees of these corporations, each of which is individually responsible for
its own debts. These broadly made sales  substantially  reduce the impact on the
Company's  liquidity  if one  individual  franchisee  reduces  the volume of its
purchases  from the  Company in a given  year.  The  Company,  based on internal
forecasts,  believes  its  existing  cash,  line of  credit  facilities  and its
anticipated operating cash flow will be sufficient to meet its cash requirements
through at least the next twelve months.  However,  the Company may be required,
or could elect,  to seek  additional  funding prior to that time.  The Company's
future capital  requirements  will depend on many factors  including its rate of
revenue growth, the timing and extent of spending to support product development
efforts,  expansion of sales and marketing,  the timing of  introductions of new
products and  enhancements to existing  products,  and market  acceptance of its
products.  The Company  cannot assure that  additional  equity or debt financing
<PAGE>


will be  available  on  acceptable  terms or at all.  The  Company's  sources of
liquidity  beyond  twelve  months,  in  management's  opinion,  will be its cash
balances on hand at that time,  funds  provided by operations,  funds  available
through  its lines of credit and the  long-term  credit  facilities  that it can
arrange.

Critical Accounting Policies

     The  Company's   consolidated   financial   statements  are  based  on  the
application  of U.S.  generally  accepted  accounting  principles  (GAAP).  GAAP
requires  the  use  of  estimates,   assumptions,   judgments   and   subjective
interpretations  of  accounting  principles  that have an impact on the  assets,
liabilities,  revenue and expense amounts reported. The Company believes its use
of  estimates  and  underlying  accounting  assumptions  adhere  to GAAP and are
consistently   applied.   Valuations   based  on  estimates   are  reviewed  for
reasonableness  and  adequacy on a  consistent  basis  throughout  the  Company.
Primary areas where  financial  information of the Company is subject to the use
of  estimates,  assumptions  and the  application  of judgment  include  revenue
recognition,  accounts  receivable,  inventories,  intangible assets,  taxes and
equity-based compensation.

Revenue Recognition Policy

     The Company recognizes  revenue generated by the Hospitality  segment using
the  guidance  from SEC  Staff  Accounting  Bulletin  (SAB)  No.  104,  "Revenue
Recognition" and the AICPA Statement of Position (SOP) 97-2,  "Software  Revenue
Recognition."  Product  revenues  consist  of  sales of the  Company's  standard
point-of-sale  and  property  management  systems  of the  Hospitality  segment.
Product  revenues  include both  hardware and software  sales.  The Company also
records service  revenues  relating to its standard  point-of-sale  and property
management systems of the Hospitality segment.

         Hardware

     Revenue  recognition on hardware sales occurs upon delivery to the customer
site (or when  shipped for systems  that are not  installed  by the  Company) as
under SAB 104,  persuasive  evidence  of an  arrangement  exists,  delivery  has
occurred,  the price is fixed or determinable,  and collectibility is reasonably
assured.

         Software

     Revenue recognition on software sales generally occurs upon delivery to the
customer  site (or when  shipped  for  systems  that  are not  installed  by the
Company)  as under SOP  97-2,  persuasive  evidence  of an  arrangement  exists,
delivery has occurred, the price is fixed or determinable, and collectibility is
reasonably assured.  For software sales where the Company is the sole party that
has the  proprietary  knowledge to install the  software,  revenue is recognized
upon installation and when the system is ready to go live.
<PAGE>

         Service

     Service revenue  consists of installation  and training  services,  support
maintenance,  and field and depot  repair.  Installation  and  training  service
revenue are based upon standard  hourly/daily rates and revenue is recognized as
the services are performed.  Support  maintenance and field and depot repair are
provided  to  customers  either  on a  time  and  materials  basis  or  under  a
maintenance  contract.  Services  provided  on a time and  materials  basis  are
recognized as the services are  performed.  Service  revenues  from  maintenance
contracts are recognized ratably over the underlying contract period.

     The  individual   product  and  service  offerings  that  are  included  in
arrangements  with our customers  are  identified  and priced  separately to the
customer based upon the stand alone price for each individual product or service
sold in the arrangement irrespective of the combination of products and services
which are included in a particular arrangement. As such, the units of accounting
are based on each individual  product and service sold, and revenue is allocated
to each  element  based on vendor  specific  objective  evidence  (VSOE) of fair
value.  VSOE of fair value for each  individual  product and service is based on
separate individual prices of these products and services.  The sales price used
to  establish  fair  value is the  sales  price of the  element  when it is sold
individually  in a  separate  arrangement  and not as a  separate  element  in a
multiple element arrangement.

         Contracts

     The Company recognizes revenue in its Government segment using the guidance
from SEC Staff Accounting Bulletin No. 104, Revenue  Recognition.  The Company's
contract  revenues  generated by the Government  segment  result  primarily from
contract services performed for the U.S. Government under a variety of cost-plus
fixed fee,  time-and-material  and fixed-price  contracts.  Revenue on cost-plus
fixed fee  contracts  is  recognized  based on  allowable  costs for labor hours
delivered,  as well as other allowable costs plus the applicable fee. Revenue on
time and material  contracts is recognized by  multiplying  the number of direct
labor hours delivered in the performance of the contract by the contract billing
rates and adding  other  direct  costs as  incurred.  Revenue  from  fixed-price
contracts is  recognized  as labor hours are delivered  which  approximates  the
straight-line basis of the life of the contract.  The Company's obligation under
these  contracts  is to  provide  labor  hours to conduct  research  or to staff
facilities with no other  deliverables or performance  obligations.  Anticipated
losses on all contracts are recorded in full when identified.  Unbilled accounts
receivable  are stated in the  Company's  consolidated  financial  statements at
their estimated realizable value.  Contract costs,  including indirect expenses,
are subject to audit and adjustment through negotiations between the Company and
U.S. Government representatives.


<PAGE>

Accounts Receivable-Allowance for Doubtful Accounts

     Allowances for doubtful  accounts are based on estimates of probable losses
related  to  accounts  receivable  balances.  The  establishment  of  allowances
requires  the use of  judgment  and  assumptions  regarding  probable  losses on
receivable  balances.  We continuously monitor collections and payments from our
customers  and maintain a provision  for  estimated  credit  losses based on our
historical  experience and any specific customer  collection issues that we have
identified.   While  such  credit  losses  have  historically  been  within  our
expectations and appropriate reserves have been established, we cannot guarantee
that we will  continue  to  experience  the same  credit loss rates that we have
experienced in the past. Thus, if the financial  condition of our customers were
to  deteriorate,  our actual  losses may exceed our  estimates,  and  additional
allowances would be required.

Inventories

     The Company's  inventories are valued at the lower of cost or market,  with
cost determined using the first-in,  first-out  (FIFO) method.  The Company uses
certain  estimates and judgments and considers several factors including product
demand and changes in technology to provide for excess and obsolescence reserves
to properly value inventory.

Capitalized Software Development Costs

     The  Company  capitalizes  certain  costs  related  to the  development  of
computer  software used in its  Hospitality  segment under the  requirements  of
Statement of Financial  Accounting Standards No. 86, Accounting for the Costs of
Computer  Software  to  be  Sold,  Leased,  or  Otherwise   Marketed.   Software
development costs incurred prior to establishing  technological  feasibility are
charged to operations and included in research and development  costs.  Software
development  costs incurred after  establishing  technological  feasibility  are
capitalized  and amortized over the estimated  economic life when the product is
available for general release to customers.

Goodwill

     Following  Financial  Accounting  Standards  Board issuance of Statement of
Financial  Accounting  Standards No. 142, Goodwill and Other Intangible  Assets,
(SFAS 142),  the Company  tests all goodwill for  impairment  annually,  or more
frequently  if  circumstances  indicate  potential  impairment.  The Company has
elected to  annually  test for  impairment  in the fourth  quarter of its fiscal
year.
<PAGE>

Taxes

     The  Company  has  significant  amounts of  deferred  tax  assets  that are
reviewed for recoverability and valued  accordingly.  These assets are evaluated
by using  estimates  of future  taxable  income and the  impact of tax  planning
strategies.  Valuations  related to tax  accruals  and assets can be impacted by
changes to tax codes, changes in statutory tax rates and the Company's estimates
of its future taxable income levels.

Equity-Based Compensation

     The Company accounts for equity based  compensation by recognizing  expense
over the vesting period for any non-vested  stock option awards  granted.  Stock
option  grants  are  valued by using a  Black-Scholes  method at the date of the
grant.  There are assumptions and estimates made by management which go into the
valuation  of the options  granted,  such as  volatility,  vesting  period,  and
forfeiture  rate.  The Company  recognizes  expense on options  granted  using a
ratable  method over the vesting  period.  Restricted  stock grants are expensed
over the vesting period, which is determined at the date of the grant.

Recent Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements"
("SFAS 157"), which provides guidance for measuring the fair value of assets and
liabilities,   as  well  as  requires  expanded  disclosures  about  fair  value
measurements.  SFAS 157 indicates that fair value should be determined  based on
the  assumptions  marketplace  participants  would use in  pricing  the asset or
liability,  and provides  additional  guidelines to consider in determining  the
market-based  measurement.  The  Company  will be  required to adopt SFAS 157 on
January 1, 2008. The Company is currently evaluating the impact of adopting SFAS
157 on its consolidated financial statements.

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial  Liabilities"  ("SFAS 159"). SFAS 159 permits all
entities to choose to measure eligible items at fair value at specified election
dates.  SFAS 159 is  effective as of the  beginning of an entity's  first fiscal
year that begins after November 15, 2007. The Company is currently assessing the
impact of adopting SFAS 159 on its consolidated financial statements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

INFLATION

     Inflation  had little effect on revenues and related costs during the first
three months of 2007. Management  anticipates that margins will be maintained at
acceptable levels to minimize the affects of inflation, if any.

INTEREST RATES

     As of June 30,  2007,  the Company has $5.6  million in variable  long-term
debt and $6.5 million in variable  short-term debt. The Company believes that an
adverse  change in interest  rates of 100 basis points would not have a material
impact on our  business,  financial  condition,  results of  operations  or cash
flows.
<PAGE>

FOREIGN CURRENCY

     The Company's  primary exposures relate to certain  non-dollar  denominated
sales and operating  expenses in Europe and Asia.  These primary  currencies are
the Euro, the Australian  dollar and the Singapore dollar.  Management  believes
that foreign currency  fluctuations  should not have a significant impact on our
business,  financial conditions,  results of operations or cash flows due to the
low volume of business affected by foreign currencies.

Item 4. Controls and Procedures

     (a) Evaluation of Disclosure Controls and Procedures.

     As of the  end of the  period  covered  by  this  report,  our  management,
including our Chief Executive Officer and Chief Financial  Officer,  carried out
an evaluation of the  effectiveness  of the Company's  "disclosure  controls and
procedures"  (as defined in the Securities  Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)) of the Company. These officers have concluded that our disclosure
controls and  procedures  are  effective.  As such, we believe that all material
information  relating  to us and our  consolidated  subsidiaries  required to be
disclosed in our periodic  filings with the Securities  and Exchange  Commission
(i) is recorded,  processed,  summarized  and reported  within the required time
period,  and (ii) is accumulated and  communicated to the Company's  management,
including  our  Chief  Executive  Officer  and  Chief  Financial   Officer,   as
appropriate,  to allow  timely  decisions  regarding  required  disclosure.

     (b)  Changes in Internal Controls.

     There was no change  in the  Company's  internal  controls  over  financial
reporting,  as defined in Rule  13a-15(f) of the Exchange Act during the quarter
ended June 30, 2007 that has  materially  affected,  or is reasonably  likely to
materially affect, such internal controls over financial reporting.

                           PART II - OTHER INFORMATION

Item 1A.  Risk Factors

     The Company is exposed to certain risk  factors that may effect  operations
and/or  financial  results.  The  significant  factors  known to the Company are
described in the Company's most recently filed Annual Report on Form 10-K. There
have been no material  changes from the risk factors as previously  disclosed in
the Company's Annual Report on Form 10-K.

Item 4.  Submission of Matters to a Vote of Security Holders

     None.
<PAGE>

Item 5.  Other Information

     On April 26, 2007,  PAR Technology  Corporation  furnished a report on Form
8-K pursuant to Item 2.02  (Results of Operations  and  Financial  Condition) of
that Form relating to its financial  information for the quarter ended March 31,
2007, as presented in a press release of April 26, 2007 and furnished thereto as
an exhibit.

Item 6.  Exhibits

                                List of Exhibits




         Exhibit No.                         Description of Instrument
         -----------                         -------------------------

            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 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
                                        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.


<PAGE>


                                   SIGNATURES




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.








                                        PAR TECHNOLOGY CORPORATION
                                        --------------------------
                                                (Registrant)









Date:  August 9, 2007



                                        RONALD J. CASCIANO
                                        --------------------------------
                                        Ronald J. Casciano
                                        Vice President, Chief Financial Officer
                                        and Treasurer




<PAGE>




                                  Exhibit Index




                                                                  Sequential
                                                                     Page
      Exhibit                                                       Number
      -------                                                       ------


       31.1          Certification of Chairman of the Board            E-1
                     and Chief Executive Officer Pursuant
                     to Section 302 of the Sarbanes-Oxley Act
                     of 2002.

       31.2          Certification of Vice President, Chief            E-2
                     Financial Officer and Treasurer Pursuant
                     to Section 302 of the Sarbanes-Oxley Act
                     of 2002.

       32.1          Certification of Chairman of the Board            E-3
                     and Chief Executive Officer and
                     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.


<PAGE>




                                  Exhibit 31.1

                           PAR TECHNOLOGY CORPORATION
                         STATEMENT OF EXECUTIVE OFFICER

I, John W. Sammon certify that:

1.   I have reviewed this report on Form 10-Q of PAR Technology Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)), for the registrant and have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; and

          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most recent fiscal  quarter and that has materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting.

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date: August 9, 2007
                                            John W. Sammon
                                            -----------------------------------
                                            John W. Sammon
                                            Chairman of the Board and
                                            Chief Executive Officer


                                       E-1
<PAGE>

                                  Exhibit 31.2

                           PAR TECHNOLOGY CORPORATION
                         STATEMENT OF EXECUTIVE OFFICER

I, Ronald J. Casciano, certify that:

1.   I have reviewed this report on Form 10-Q of PAR Technology Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)), for the registrant and have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; and

          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most recent fiscal  quarter and that has materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting.

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Date: August 9, 2007
                                            Ronald J. Casciano
                                            -----------------------------------
                                            Ronald J. Casciano
                                            Vice President,
                                            Chief Financial Officer & Treasurer



                                       E-2

<PAGE>

                                  Exhibit 32.1


                           PAR TECHNOLOGY CORPORATION
                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of PAR Technology  Corporation (the
"Company")  on Form 10-Q for the  quarter  ended June 30, 2007 as filed with the
Securities and Exchange  Commission on the date hereof (the "Report"),  we, John
W. Sammon,  Jr. and Ronald J. Casciano,  Chairman of the Board & Chief Executive
Officer and Vice President,  Chief Financial Officer & Treasurer of the Company,
certify  pursuant to 18 U.S.C.  ss. 1350, as adopted  pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that to the best of our knowledge:


     (1)  The Report fully  complies  with the  requirement  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934, as amended; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.






John W. Sammon
------------------------------
John W. Sammon
Chairman of the Board & Chief Executive Officer
August 9, 2007

Ronald J. Casciano
------------------------------
Ronald J. Casciano
Vice President, Chief Financial Officer & Treasurer
August 9, 2007










                                       E-3