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 March 31, 2006. 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 April
30, 2006 - 14,162,282 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 Income for
                         the three months ended March 31, 2006 and 2005

                      -  Consolidated Statements of Comprehensive Income for
                         the three months ended March 31, 2006 and 2005

                      -  Consolidated Balance Sheets at
                         March 31, 2006 and December 31, 2005

                      -  Consolidated Statements of Cash Flows
                         for the three months ended March 31, 2006 and 2005

                      -  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 6.         Exhibits and Reports on Form 8-K

      Signatures

      Exhibit Index


<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>


                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (in thousands except per share amounts)
                                   (unaudited)

                                                      For the three months
                                                         ended March 31,
                                                      ---------------------
                                                         2006        2005
                                                      ---------   ---------
<S>                                                   <C>         <C>
Net revenues:
     Product ......................................   $ 23,020    $ 21,001
     Service ......................................     13,745      13,402
     Contract .....................................     15,832      14,354
                                                      --------    --------
                                                        52,597      48,757
                                                      --------    --------
Costs of sales:
     Product ......................................     12,798      12,876
     Service ......................................     10,710      10,447
     Contract .....................................     14,726      13,565
                                                      --------    --------
                                                        38,234      36,888
                                                      --------    --------

           Gross margin ...........................     14,363      11,869
                                                      --------    --------
Operating expenses:
     Selling, general and administrative ..........      8,075       7,393
     Research and development .....................      2,899       2,278
     Amortization of identifiable intangible assets        307         246
                                                      --------    --------
                                                        11,281       9,917
                                                      --------    --------
Operating income ..................................      3,082       1,952
Other income, net .................................        157         233
Interest expense ..................................        (85)        (78)
                                                      --------    --------

Income before provision for income taxes ..........      3,154       2,107
Provision for income taxes ........................     (1,142)       (801)
                                                      --------    --------
Net income ........................................   $  2,012    $  1,306
                                                      ========    ========
Earnings per share
     Basic ........................................   $    .14    $    .10
     Diluted ......................................   $    .14    $    .09

Weighted average shares outstanding
     Basic ........................................     14,151      13,431
                                                      ========    ========
     Diluted ......................................     14,806      14,312
                                                      ========    ========


See notes to unaudited interim consolidated financial statements

</TABLE>

<PAGE>



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

<TABLE>
<CAPTION>


                                                      For the three months
                                                         ended March 31,
                                                      ---------------------
                                                         2006        2005
                                                      ---------   ---------
<S>                                                   <C>         <C>

Net income                                            $  2,012    $  1,306
Other comprehensive income (loss), net of tax:
     Foreign currency translation adjustments               71        (137)
                                                      --------    --------

Comprehensive income                                  $  2,083    $  1,169
                                                      ========    ========


</TABLE>










See notes to unaudited interim consolidated financial statements


<PAGE>


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

<TABLE>
<CAPTION>

                                                                March 31,    December 31,
                                                                  2006          2005
                                                                -------      -----------
<S>                                                            <C>          <C>
Assets
Current assets:
       Cash and cash equivalents ...........................   $   2,322    $   4,982
       Accounts receivable-net .............................      46,495       40,781
       Inventories-net .....................................      29,922       29,562
       Income tax refunds ..................................       1,528          879
       Deferred income taxes ...............................       4,235        5,690
       Other current assets ................................       2,878        2,598
                                                               ---------    ---------
              Total current assets .........................      87,380       84,492
Property, plant and equipment - net ........................       8,009        8,044
Goodwill ...................................................      20,620       20,622
Intangible assets - net ....................................       9,462        9,904
Other assets ...............................................       2,438        2,087
                                                               ---------    ---------
                                                               $ 127,909    $ 125,149
                                                               =========    =========

Liabilities and Shareholders' Equity
Current liabilities:
       Current portion of long-term debt ...................   $      79    $      76
       Borrowings under lines of credit ....................       7,123        3,500
       Accounts payable ....................................      11,384       12,703
       Accrued salaries and benefits .......................       7,626        9,725
       Accrued expenses ....................................       2,471        2,352
       Customer deposits ...................................       3,367        3,973
       Deferred service revenue ............................      11,495       11,332
                                                               ---------    ---------
              Total current liabilities ....................      43,545       43,661
                                                               ---------    ---------
Long-term debt .............................................       1,926        1,948
                                                               ---------    ---------
Deferred income taxes ......................................         441          201
                                                               ---------    ---------
Other long-term liabilities ................................       1,238          847
                                                               ---------    ---------
Commitments and contingent liabilities Shareholders' Equity:
       Preferred stock, $.02 par value,
           1,000,000 shares authorized .....................        --           --
       Common stock, $.02 par value,
           19,000,000 shares authorized;
           15,935,924 and 15,914,958 shares issued;
           14,157,620 and 14,136,654 outstanding ...........         319          318
       Capital in excess of par value ......................      37,458       37,271
       Retained earnings ...................................      49,450       47,442
       Accumulated other comprehensive loss ................        (540)        (611)
       Treasury stock, at cost, 1,778,304 shares ...........      (5,928)      (5,928)
                                                               ---------    ---------
              Total shareholders' equity ...................      80,759       78,492
                                                               ---------    ---------
                                                               $ 127,909    $ 125,149
                                                               =========    =========
</TABLE>

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 three months ended March 31,
                                                                        ------------------------------------
                                                                                  2006        2005
                                                                                  ----        ----
<S>                                                                              <C>        <C>
Cash flows from operating activities:
    Net income ...............................................................   $ 2,012    $ 1,306
    Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
         Depreciation and amortization .......................................       985        920
         Provision for bad debts .............................................       354        250
         Provision for obsolete inventory ....................................       540        955
         Equity based compensation ...........................................        43        --
         Tax benefit of stock option exercises ...............................       --         127
         Deferred income tax .................................................     1,638        538
         Changes in operating assets and liabilities:
             Accounts receivable .............................................    (6,068)      (840)
             Inventories .....................................................      (900)    (1,358)
             Income tax refunds ..............................................      (649)       --
             Other current assets ............................................      (280)      (168)
             Other assets ....................................................      (351)      (353)
             Accounts payable ................................................    (1,319)     1,383
             Accrued salaries and benefits ...................................    (2,099)      (325)
             Accrued expenses ................................................       119       (337)
             Customer deposits ...............................................      (606)      (393)
             Deferred service revenue ........................................       163        954
             Other long-term liabilities .....................................       391        370
                                                                                 -------    -------
               Net cash (used in) provided by operating activities ...........    (6,027)     3,029
                                                                                 -------    -------
Cash flows from investing activities:
    Capital expenditures .....................................................      (448)      (312)
    Capitalization of software costs .........................................       (60)      (223)
                                                                                 -------    -------
               Net cash used in investing activities .........................      (508)      (535)
                                                                                 -------    -------
Cash flows from financing activities:
    Net borrowings (payments) under line-of-credit agreements ................     3,623     (7,691)
    Payments of long-term debt ...............................................       (19)       (19)
    Proceeds from the exercise of stock options ..............................        96        214
    Tax benefit of stock option exercises ....................................        49        --
    Cash dividend in lieu of fractional shares on stock split ................        (4)       --
                                                                                 -------    -------
               Net cash provided by (used in) financing activities ...........     3,745     (7,496)
                                                                                 -------    -------
Effect of exchange rate changes on cash and cash equivalents .................       130       (332)
                                                                                 -------    -------
Net decrease in cash and cash equivalents ....................................    (2,660)    (5,334)
Cash and cash equivalents at beginning of period .............................     4,982      8,696
                                                                                 -------    -------
Cash and cash equivalents at end of period ...................................   $ 2,322    $ 3,362
                                                                                 =======    =======
Supplemental disclosures of cash flow information: Cash paid during the period
for:
    Interest .................................................................   $    68    $    98
    Income taxes, net of refunds .............................................       132        121

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 months  ended March 31, 2006 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,  2005  included  in the  Company's
     December 31, 2005 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,   warranty   reserve,   valuation   allowances   for
     receivables,  inventories  and deferred  income tax assets.  Actual results
     could differ from those estimates.

2.   On October 4, 2005, the Company and its wholly-owned  Canadian  subsidiary,
     PixelPoint, ULC (the "Canadian Subsidiary"), completed their acquisition of
     PixelPoint Technologies, Inc. ("PixelPoint") pursuant to which the Canadian
     Subsidiary acquired all of the stock of PixelPoint.  The purchase price was
     $7.5 million and consisted of $542,000 in Company  stock (27,210  shares of
     PAR  Technology   Corporation  common  stock  issued  out  of  treasury)  a
     promissory  note for $671,000 and the  remainder in cash.  The Company also
     incurred  $344,000 in direct  acquisition  costs relating to this purchase.
     The purchase price is also subject to price contingencies based upon future
     revenue performance against certain established targets.  Based in suburban
     Toronto,  Ontario,  PixelPoint Technologies,  Inc. is a premier supplier to
     the  hospitality  industry with over 5,000  installations  in  full-service
     restaurants around the globe.

     On December 6, 2005, the Company also acquired C(3)I Associates  (C(3)I), a
     Government technology services business.  The Company paid $589,000 in cash
     and assumed certain liabilities.

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

                                       For the three months ended
                                            March 31, 2005
                                       --------------------------

            Net revenues                      $   50,320
                                              ==========
            Net income                        $    1,393
                                              ==========

            Earnings per share:
                 Basic                        $      .10
                                              ==========
                 Diluted                      $      .10
                                              ==========

     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 period 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)
                                                   --------------
                                            March 31,          December 31,
                                              2006                2005
                                           ---------           ----------

                Finished goods             $   7,469          $   7,217
                Work in process                1,679              1,874
                Component parts                4,287              4,693
                Service parts                 16,487             15,778
                                           ---------          ---------
                                           $  29,922          $  29,562
                                           =========          =========

     At March 31, 2006 and December 31, 2005, the Company had recorded  reserves
     for shrinkage,  excess and obsolete inventory of $4,100,000 and $4,189,000,
     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 months ended March 31, 2006 is $43,000.

     As of March 31, 2006,  there were 1,015,893 stock options  outstanding.  At
     March 31, 2006, the unrecognized compensation expense related to non vested
     options awards was $412,000 (net of estimated  forfeitures).  There were no
     options granted or forfeited during the first three months of 2006.  Option
     grants   issued  prior  to  January  1,  2006  have  been  valued  using  a
     Black-Scholes option valuation model.
<PAGE>

     Prior to adopting SFAS 123R on January 1, 2006, the Company's  equity based
     employee  compensation  awards were accounted for under the recognition and
     measurement  principles of APB Opinion No. 25,  Accounting for Stock Issued
     to Employees, and related interpretations. For the three months ended March
     31, 2005, no equity option based employee compensation cost is reflected in
     net income,  as all options  granted under the Company's stock option plans
     had an exercise  price equal to the  underlying  common  stock price on the
     date of grant. The following table illustrates the effect on net income and
     earnings  per share if the Company  had applied the fair value  recognition
     provisions  of  SFAS  123R  to  equity  based  employee   compensation  (in
     thousands, except per share data):

                                                For the three months ended
                                                     March 31, 2005
                                                --------------------------

            Net income                                 $   1,306
            Compensation expense, net of tax                 (75)
                                                       ---------
            Proforma net income                        $   1,231
                                                       =========

            Earnings per share:
                As reported - Basic                    $     .10
                            - Diluted                  $     .09

                Proforma    - Basic                    $     .09
                            - Diluted                  $     .09


     The Company's 1995 Stock Option Plan expired in 2005. In 2005, the Board of
     the  Directors  of the Company  approved  the 2005 Equity  Incentive  Plan,
     subject to  shareholder  approval  at the 2006 Annual  Meeting.  Under this
     Plan,  the Company has reserved  200,000  shares.  Stock options under this
     Plan may be incentive stock options or nonqualified stock options. The Plan
     also  provides for  restricted  stock grants.  To date,  there have been no
     grants under this Plan. Stock options are  nontransferable  other than upon
     death.  Option grants generally vest over a three to five year period after
     the grant and typically expire ten years after the date of the grant.
<PAGE>
                                                                    Aggregate
                                  No. of Shares Weighted Average Intrinsic Value
                                 (in thousands)  Exercise Price   (in thousands)
                                 --------------  --------------  ---------------

Outstanding at December 31, 2004 ..    1,684       $    3.13
    Granted .......................       70           11.40
    Exercised .....................     (706)           2.59
    Forfeited .....................      (11)           5.75
                                       -----       ---------

Outstanding at December 31, 2005 ..    1,037            4.03         $15,019
                                                                     =======
    Granted .......................       --              --
    Exercised .....................      (21)           4.56
    Forfeited .....................       --              --
                                       -----       ---------

Outstanding at March 31, 2006 .....    1,016       $    4.01         $13,944
                                       =====       =========         =======
Shares remaining
       available for grant ........      200
                                       =====
Total shares vested and exercisable
as of March 31, 2006 ..............      667       $    2.80         $ 9,955
                                       =====       =========         =======


     Stock options outstanding at March 31, 2006 are summarized as follows:

                            Number
   Range of              Outstanding       Weighted Average    Weighted Average
Exercise Prices         (in thousands)      Remaining Life      Exercise Price
---------------         -------------       --------------      --------------

$1.25  -   $4.00              648             4.7   Years         $    2.31
$4.01  -   $7.25              298             8.3   Years         $    5.94
          $11.40               70             9.3   Years         $   11.40
----------------            -----             -----------         ---------
$1.25  -  $11.40            1,016             6.1   Years         $    4.01
================            =====             ===========         =========


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 March 31,
                                                         -------------------
                                                           2006      2005
                                                           ----      ----

Net income ...........................................   $ 2,012   $ 1,306
                                                         =======   =======
Basic:
      Shares outstanding at beginning of period ......    14,137    13,402
      Weighted average shares issued during the period        14        29
                                                         -------   -------
      Weighted average common shares, basic ..........    14,151    13,431
                                                         =======   =======
      Earnings per common share, basic ...............   $   .14   $   .10
                                                         =======   =======
Diluted:
      Weighted average common shares, basic ..........    14,151    13,431
      Dilutive impact of stock options ...............       655       881
                                                         -------   -------
      Weighted average common shares, diluted ........    14,806    14,312
                                                         =======   =======
      Earnings per common share, diluted .............   $   .14   $   .09
                                                         =======   =======


6.   On November 14, 2005, the Company's  Board of Directors  declared a 3 for 2
     stock split in the form of a stock dividend that was distributed on January
     6, 2006 to  shareholders  of record on December 12, 2005. All share and per
     share data in these consolidated interim unaudited financial statements and
     footnotes  have  been  retroactively  restated  as if the  stock  split had
     occurred as of the earliest period presented.

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
     develops 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:


                                  For the three months
                                     ended March 31,
                                     (in thousands)
                                  -------------------
                                    2006        2005
                                    ----        ----
Revenues:
    Hospitality ..............   $ 36,765    $ 34,403
    Government ...............     15,832      14,354
                                 --------    --------
         Total ...............   $ 52,597    $ 48,757
                                 ========    ========
Operating income:
    Hospitality ..............   $  2,016    $  1,186
    Government ...............      1,066         766
                                 --------    --------
                                    3,082       1,952
Other income, net ............        157         233
Interest expense .............        (85)        (78)
                                 --------    --------
Income before provision
  for income taxes ...........   $  3,154    $  2,107
                                 ========    ========

Revenues by geographic area:
    United States ............   $ 47,290    $ 44,105
    Other Countries ..........      5,307       4,652
                                 --------    --------
         Total ...............   $ 52,597    $ 48,757
                                 ========    ========
Depreciation and amortization:
    Hospitality ..............   $    900    $    805
    Government ...............         15          20
    Other ....................         70          95
                                 --------    --------
         Total ...............   $    985    $    920
                                 ========    ========
Capital expenditures:
    Hospitality ..............   $    388    $    236
    Government ...............         --          --
    Other ....................         60          76
                                 --------    --------
         Total ...............   $    448    $    312
                                 ========    ========
<PAGE>


     The following table represents identifiable assets by business segment:

                                       March 31,    December 31,
                                            (in thousands)
                                      --------------------------
                                        2006             2005
                                        ----             ----
          Identifiable assets:
              Hospitality ....        $108,298        $106,529
              Government .....          12,691           9,015
              Other ..........           6,920           9,605
                                      --------        --------
          Total ..............        $127,909        $125,149
                                      ========        ========


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

                                       March 31,     December 31,
                                            (in thousands)
                                      --------------------------
                                        2006             2005
                                        ----             ----

           United States .....        $120,739        $119,627
           Other Countries ...           7,170           5,522
                                      --------        --------
                  Total ......        $127,909        $125,149
                                      ========        ========


     The following table represents Goodwill by business segment:

                                       March 31,     December 31,
                                            (in thousands)
                                      --------------------------
                                        2006             2005
                                        ----             ----

           Hospitality ....           $ 20,084        $ 20,086
           Government .....                536             536
                                      --------        --------
                  Total               $ 20,620        $ 20,622
                                      ========        ========


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

                                                  For the three months
                                                     ended March 31,
                                                 ---------------------
                                                 2006             2005
                                                 ----             ----
    Hospitality Segment:
        McDonald's Corporation .....              25%              29%
        YUM! Brands, Inc............              10%              11%
    Government Segment:
        Department of Defense ......              30%              29%
    All Others .....................              35%              31%
                                                 ---              ---
                                                 100%             100%
                                                 ===              ===
<PAGE>

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

"Safe Harbor"  Statement under the Private  Securities  Litigation Reform Act of
1995

     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,   an  expected  increase  in  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  global  designer,  manufacturer  and  marketer  of  hospitality
technology systems.  We also are a provider to the Federal  Government,  and its
agencies,  of  engineering  services  and  applied  technology.  The primary end
markets for our products and services are:

     o    restaurant, hotel/resort, entertainment, and retail industries for the
          integrated technologies of transaction processing and data capture for
          certain enterprises

     o    the U.S. military and a broad range of government agencies

     The  Company's  hospitality  technology  products  are used in a variety of
applications by numerous customers. The Company encounters competition in all of
its markets (restaurants,  hotels, theaters, etc.) and competes primarily on the
basis of product design/features, product quality/reliability, price, customer
<PAGE>

service and delivery capability.  There has been a trend amongst our hospitality
customers to consolidate  their lists of approved vendors to companies that have
a global  reach,  can achieve  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 an
important  competitive  advantage as it allows the Company to provide innovative
products, with a significant delivery capability,  globally to its multinational
customers like McDonald's, Yum! Brands and Mandarin Oriental Hotel Group. During
2005 the Company acquired PixelPoint Technologies of Toronto,  Ontario,  Canada.
PixelPoint  designs  software  specifically for the table service segment of the
restaurant industry and the Company views this business as a natural progression
of the Company to be the  dominant  supplier of  hospitality  technology  across
several vertical  industries.  During the first quarter of 2006, the Company was
awarded the Corner Bakery Cafe account by CBC  Restaurant  Corp.  CBC Restaurant
selected the Company's integrated hospitality management technology solution for
its restaurant  operations  specifying the PixelPoint software application suite
operating on the Company's new VIGO POS(TM) hardware  terminals for their cafes.
The  Company  also  announced  a contract  with the  Hamilton  Island  resort in
Australia for its resort software.  Additionally, the Company became an approved
supplier  of  integrated  restaurant  technology  solutions  to more than 11,000
Burger King restaurants around the world.

     PAR's strategy is to provide  complete  integrated  technology  systems and
services  and a high  level  of  customer  service  in the  markets  in which it
competes.  The Company focuses 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 also focuses upon
efficiency in our operations and controlling costs. This is achieved through the
investment in modern production technologies,  managing purchasing processes and
functions.

     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  develops  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.
PAR 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.  In December  2005,  PAR  acquired  C(3)I  Associates,  a government

<PAGE>

technology services business and PAR will continue to seek out similar companies
for  partnership or acquisition as we expand our depth in this segment.  In 2005
PAR was awarded several new contracts with the U.S. Navy,  including one for the
operation  of a Navy I/T  facility  in Italy,  several  awards  with the General
Services  Administration  and the  International  Broadcast Bureau. In the first
quarter of 2006,  the  Company  was  awarded a $3.8  million  contract  with the
Government's  Defense  Finance  and  Accounting  Service to provide  Information
Technology  instruction  and helpdesk  services.  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.

     The  Company's  intention  is to continue to expand our  customer  base and
solidify our leading position in the industries to which we 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

     We  believe  we can  continue  to be  successful  in our two core  business
segments  -Hospitality  Technology  and Government  Contracting-  because of our
focus and industry expertise.  In addition, our operations will benefit from our
efficient  supply chain and  economies of scale as we leverage our suppliers and
distribution operations.  We remain committed to streamlining our operations and
improving our return on invested capital through a variety of initiatives.

     The  following  table sets forth the  Company's  net revenues by reportable
segment for the quarter ended March 31 (in thousands):

                                           2006              2005
                                           ----              ----
Net revenues:
   Hospitality                        $   36,765        $   34,403
   Government                             15,832            14,354
                                      ----------        ----------
Total consolidated net revenues       $   52,597        $   48,757
                                      ==========        ==========

     The following discussion and analysis highlights items having a significant
effect on  operations  during the three month period ended March 31, 2006.  This
discussion may not be indicative of future operations or earnings.  It should be
read in conjunction with the audited annual  consolidated  financial  statements
and notes thereto and other  financial and statistical  information  included in
this report.
<PAGE>

Results of Operations --
Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

     The Company reported  revenues of $52.6 million for the quarter ended March
31,  2006,  an increase of 8% from the $48.8  million  reported  for the quarter
ended March 31, 2005.  The  Company's net income for the quarter ended March 31,
2006 was $2  million,  or $.14  diluted  net income per share,  compared  to net
income of $1.3 million and $.09 per diluted share for the same period in 2005.

     Product  revenues from the Company's  Hospitality  segment were $23 million
for the quarter  ended March 31,  2006,  an increase of 10% from the $21 million
recorded in 2005. This increase of $2 million is due to a $1.6 million  increase
in sales to domestic customers.  Key restaurant  customers  contributing to this
increase were Corner Bakery and Papa  Murphy's.  The balance of the increase was
due to international  customers,  primarily  McDonald's.  Sales to the Company's
resort and spa customers also contributed to the international growth.

     Customer service  revenues are also generated by the Company's  Hospitality
segment.   The  Company's   service   offerings   include  system   integration,
installation, training, twenty-four hour help desk support and various depot and
on-site service  options.  Customer  service revenues were $13.7 million for the
quarter  ended March 31, 2006,  an increase of 3% from the $13.4 million for the
same period in 2005.  The  increase  was due to a 17% or $900,000  growth in the
Company's field service and support center revenue for its restaurant  customers
due  to  expansion  of  the  Company's  customer  base.  Additionally,   systems
integration and software  maintenance revenues from the Company's resort and spa
customers  contributed  to its revenue  growth.  This was partially  offset by a
decline in installation revenue due to the timing of customer installations.

     Contract revenues from the Company's  Government segment were $15.8 million
for the quarter  ended March 31, 2006,  an increase of 10% when  compared to the
$14.4 million recorded in the same period in 2005. This growth was primarily due
to a $700,000 increase in applied technology contracts including those involving
the  development of software to assist Air Force command level  personnel in air
battle  planning.  Also  contributing to this growth was a $400,000  increase in
information   technology   outsourcing   revenue  from  contracts  for  facility
operations at critical U.S. Department of Defense telecommunication sites across
the globe. 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  March 31,  2006 were  44.4%,  an
increase  of 570 basis  points  from the 38.7% for the  quarter  ended March 31,
2005.  This increase in margins was primarily  attributable  to higher  software

<PAGE>

revenue.  This software revenue was generated from the Company's resort, spa and
restaurant  customers  including  license sales of the Company's  newly acquired
PixelPoint software.

     Customer  Service  margins were 22.1% for the quarter  ended March 31, 2006
compared to 22% for the same period in 2005. While margins  increased in several
service  areas,  they were  offset  by a decline  in  installation  margins  for
restaurant customers due to the drop in installation revenue for the period.

     Contract  margins were 7% for the quarter  ended March 31, 2006 versus 5.5%
for the same period in 2005. The margin increase  resulted from a favorable cost
share  adjustment  on our  Logistics  Management  program and higher  margins on
certain fixed price contracts. The most significant components of contract costs
in 2006 and 2005 were labor and fringe benefits. For the quarter ended March 31,
2006,  labor and fringe  benefits  were $11.7  million or 80% of contract  costs
compared to $9.8 million or 72% of contract costs for the same period in 2005.

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the quarter ended March 31, 2006 were $8.1  million,  an increase of 9% from
the $7.4 million expense for the same period in 2005. The increase was primarily
attributable to a rise in selling and marketing expenses related to sales of the
Company's  traditional hardware and software products.  Also contributing to the
increase was an investment in the Company's  restaurant sales force, the cost of
compliance  with  the  Sarbanes-Oxley   regulations,   and  the  Company's  2005
acquisition of PixelPoint Technologies, Inc.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality segment. Research and development expenses were $2.9 million for the
quarter ended March 31, 2006, an increase of 27% from the $2.3 million  recorded
in 2005. The increase was primarily  attributable to the Company's  research and
development in its recently  acquired  PixelPoint  subsidiary.  The Company also
continues  to conduct  research  and  development  related to its  hardware  and
software products for its restaurant, resort and spa customers.

     Amortization of identifiable  intangible  assets was $307,000 for the first
quarter of 2006 compared to $246,000 for 2005.  The increase is primarily due to
amortization  relating to the  acquisition of PixelPoint  Technologies,  Inc. on
October 4, 2005.

     Other  income,  net,  was  $157,000  for the  quarter  ended March 31, 2006
compared  to  $233,000  for the same  period  in 2005.  Other  income  primarily
includes  rental income and foreign  currency gains and losses.  The decrease in
2006 resulted  primarily from a decline in foreign  currency gains when compared
to 2005.
<PAGE>

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$85,000 for the quarter ended March 31, 2006 as compared to $78,000 in 2005. The
Company experienced a higher borrowing interest rate in 2006 which was offset by
a lower average borrowings outstanding in 2006 when compared to 2005.

     For the quarter ended March 31, 2006,  the Company's  effective  income tax
rate was 36.2%, compared to 38% in 2005. The variance from the federal statutory
rate in 2006 and 2005 was primarily due to state income taxes.


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 used in operations was
$6 million for the quarter  ended  March 31, 2006  compared to cash  provided by
operations of $3 million for 2005. In 2006, cash was negatively  impacted by the
timing of customer receipts and the payment of employee  bonuses.  In 2005, cash
flow was generated  primarily from operating profits,  the tax benefit generated
from the  exercise  of stock  options  and the  timing  of vendor  payments  for
material purchases.

     Cash used in investing  activities was $508,000 for the quarter ended March
31,  2006  versus  $535,000  for the  same  period  in 2005.  In  2006,  capital
expenditures were $448,000 and were principally for manufacturing  equipment and
information  technology  equipment  and software for internal  use.  Capitalized
software costs relating to software  development of Hospitality segment products
were  $60,000 in 2006.  In 2005,  capital  expenditures  were  $312,000 and were
primarily for manufacturing and research and development equipment.  Capitalized
software costs relating to software  development of Hospitality segment products
were $223,000 in 2005.

     Cash  provided by  financing  activities  was $3.7  million for the quarter
ended March 31, 2006 versus cash used by financing activities of $7.5 million in
2005.  During 2006, the Company increased its short-term bank borrowings by $3.6
million and received  $96,000 from the exercise of employee  stock  options.  In
2005,  the Company  reduced its short-term  bank  borrowings by $7.7 million and
received $214,000 from the exercise of employee stock options.

     The Company has an aggregate  availability  of $20,000,000 in bank lines of
credit  secured  by  eligible  receivables  and  inventory.  One  line  totaling
$12,500,000  bears interest at the bank borrowing rate (6.9% at March 31, 2006).
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 (7.1% at March 31, 2006).
<PAGE>

At March 31,  2006,  there was  $7,123,000  outstanding  under  these  lines and
$12,877,000 available under these lines. In April 2006, these lines were renewed
for three  years and now expire in April  2009.  Under the new  agreements,  the
Company can borrow  funds at the LIBOR rate plus the  applicable  interest  rate
spread. The new facilities  contain certain loan covenants  including a leverage
ratio of greater  than 5 to 1 and a fixed charge  coverage  ratio of not greater
than 4 to 1. These new lines are unsecured.

     During  fiscal  year  2006,  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
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 and taxes.
<PAGE>

Revenue Recognition Policy

     The Company recognizes  revenue generated by the Hospitality  segment using
the guidance from SEC Staff Accounting  Bulletin No. 104,  Revenue  Recognition,
and the AICPA Statement of Position (SOP) 97-2,  Software  Revenue  Recognition,
and other applicable revenue recognition guidance and  interpretations.  Product
revenue consists of sales of the Company's  standard  point-of-sale and property
management  systems of the Hospitality  segment.  The Company recognizes revenue
from the sale of complete  restaurant systems (which primarily includes hardware
or  hardware  and  software)  upon  delivery  to  the  customer  site,  or  upon
installation  for certain  software  products.  For restaurant  systems that are
self-installed  by the  customer or an unrelated  third party and for  component
sales or supplies,  the Company recognizes  revenue at the time of shipment.  In
addition to product  sales,  the Company may provide  installation  and training
services,  and also offers maintenance contracts to its customers.  Installation
and training service revenues are recognized as the services are performed.  The
Company's other service revenues, consisting of support, field and depot repair,
are  provided to  customers  either on a time and  materials  basis or under its
maintenance  contracts.  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 related contract period.

     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  primarily on a straight-line basis over the life of the
fixed-price  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.

Accounts Receivable

     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

<PAGE>

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  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.

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.

<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Inflation

     Inflation  had little effect on revenues and related costs during the first
quarter of 2006.  Management  anticipates  that  margins will be  maintained  at
acceptable levels to minimize the affects of inflation, if any.

Interest rates

     As of March 31, 2006, the Company has $2 million in variable long-term debt
and $7.1  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.

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, the Company,  under the
supervision and with the  participation of the Company's  management,  including
the Company's President and Chief Executive Officer and Chief Financial Officer,
carried out an evaluation of the  effectiveness of the "disclosure  controls and
procedures"  (as defined in the Securities  Exchange Act of 1934 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)) of the Company.  These officers have
concluded  that our disclosure  controls and procedures are effective.  As such,
the Company believes that all material  information  relating to the Company and
its consolidated  subsidiaries required to be disclosed in 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 the 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 March 31, 2006 that has materially  affected,  or is reasonably  likely to
materially affect, such internal controls over financial reporting.
<PAGE>

                           PART II - OTHER INFORMATION

Item 1A.  Risk Factors

     We operate in a dynamic  and rapidly  changing  environment  that  involves
numerous risks and uncertainties.  The following section describes some, but not
all, of the risks and uncertainties that could have a material adverse effect on
our business, financial condition, results of operations and the market price of
our common stock,  and could cause our actual results to differ  materially from
those expressed or implied in our forward-looking statements.

A decline  in the volume of  purchases  made by any one of the  company's  major
customers would materially adversely affect our business.

     A small  number of related  customers  have  historically  accounted  for a
majority of the  Company's  net  revenues in any given  fiscal  period.  For the
fiscal years ended December 31, 2005, 2004 and 2003,  aggregate sales to our top
two Hospitality segment customers,  McDonald's and Yum! Brands, amounted to 41%,
51% and 50%,  respectively,  of total revenues. For the three months ended March
31, 2006 and 2005,  sales to those  customers were 35% and 40%,  respectively of
total revenues.  Most of the Company's customers are not obligated to provide us
with any minimum level of future purchases or with binding  forecasts of product
purchases for any future period. In addition, major customers may elect to delay
or otherwise change the timing of orders in a manner that could adversely affect
the  Company's  quarterly  and  annual  results of  operations.  There can be no
assurance  that our current  customers will continue to place orders with us, or
that we will be able to obtain orders from new customers.

An  inability  to  produce  new  products  that  keep  pace  with  technological
developments  and changing  market  conditions  could result in a loss of market
share.

     The  products  we sell  are  subject  to rapid  and  continual  changes  in
technology. Our competitors offer products that have an increasingly wider range
of features and capabilities. We believe that in order to compete effectively we
must provide systems incorporating new technologies at competitive prices. There
can be no  assurance  that we will be able  to  continue  funding  research  and
development at levels  sufficient to enhance our current product  offerings,  or
that the Company  will be able to develop and  introduce  on a timely  basis new
products that keep pace with  technological  developments and emerging  industry
standards  and address the  evolving  needs of  customers.  There also can be no
assurance that we will not experience  difficulties that will result in delaying
or preventing  the  successful  development,  introduction  and marketing of new
products  in our  existing  markets,  or  that  our  new  products  and  product
enhancements will adequately meet the requirements of the marketplace or achieve
any significant degree of market acceptance. Likewise, there can be no assurance
as to the  acceptance  of our  products  in new  markets,  nor can  there be any
assurance  as to the success of our  penetration  of these  markets,  nor to the
revenue or profit margins realized by the Company with respect to these
<PAGE>

products. If any of our competitors were to introduce superior software products
at competitive  prices,  or if our software  products no longer met the needs of
the  marketplace  due  to  technological   developments  and  emerging  industry
standards,  our software  products may no longer retain any  significant  market
share.  If this were to occur,  we could be required to record a charge  against
capitalized software costs, which amount to $3.4 million as of March 31, 2006.

We generate much of our revenue from the hospitality  industry and therefore are
subject to decreased revenues in the event of a downturn either in that industry
or in the economy as a whole.

     For the fiscal years ended  December 31,  2005,  2004 and 2003,  we derived
73%,  71% and 70%,  respectively,  of our total  revenues  from the  Hospitality
industry,  primarily the quick  service  restaurant  marketplace.  For the three
months ended March 31, 2006 and 2005,  revenues  from the  Hospitality  industry
were 70% and 71%, respectively, of total revenues. Consequently, our Hospitality
technology  product  sales  are  dependent  in large  part on the  health of the
Hospitality   industry,   which  in  turn  is  dependent  on  the  domestic  and
international  economy,  as well as factors such as consumer buying  preferences
and weather  conditions.  Instabilities  or downturns in the Hospitality  market
could  disproportionately  impact our  revenues,  as clients may either exit the
industry  or delay,  cancel or reduce  planned  expenditures  for our  products.
Although  we believe we can assist the quick  service  restaurant  sector of the
Hospitality industry in a competitive environment,  given the cyclical nature of
that industry,  there can be no assurance that our profitability and growth will
continue.

We derive a portion of our revenue  from  government  contracts,  which  contain
provisions unique to public sector customers,  including the government's  right
to modify or terminate these contracts at any time.

     For the fiscal years ended  December 31,  2005,  2004 and 2003,  we derived
27%, 29% and 30%, respectively,  of our total revenues from contracts to provide
technical services to U.S. Government agencies and defense contractors.  For the
three months ended March 31, 2006 and 2005,  revenues from such  contracts  were
30% and 29%,  respectively,  of total revenues.  Contracts with U.S.  Government
agencies typically provide that such contracts are terminable at the convenience
of the U.S.  Government.  If the U.S.  Government  terminated a contract on this
basis,  we would be entitled to receive  payment for our allowable costs and, in
general, a proportionate share of our fee or profit for work actually performed.
Most U.S.  Government  contracts are also subject to modification or termination
in the event of changes in funding. As such, we may perform work prior to formal
authorization,  or the  contract  prices may be adjusted for changes in scope of
work. Termination or modification of a substantial number of our U.S. Government
contracts  could  have a  material  adverse  effect on our  business,  financial
condition and results of operations.
<PAGE>

     We perform  work for  various  U.S.  Government  agencies  and  departments
pursuant  to  fixed-price,  cost-plus  fixed  fee and  time-and-material,  prime
contracts  and  subcontracts.  Approximately  64% of the revenue that we derived
from  Government  contracts  for the year  ended  December  31,  2005  came from
fixed-price or time-and-material  contracts.  The balance of the revenue that we
derived from  Government  contracts in 2005 primarily came from cost-plus  fixed
fee contracts. Most of our contracts are for one-year to five-year terms.

     While  fixed-price  contracts  allow us to benefit from cost savings,  they
also expose us to the risk of cost overruns. If the initial estimates we use for
calculating  the  contract  price are  incorrect,  we can incur  losses on those
contracts.  In addition,  some of our  governmental  contracts  have  provisions
relating  to cost  controls  and audit  rights and, if we fail to meet the terms
specified in those contracts, then we may not realize their full benefits. Lower
earnings  caused by cost overruns  would have an adverse effect on our financial
results.

     Under  time-and-materials  contracts,  we are paid for labor at  negotiated
hourly  billing  rates  and for  certain  expenses.  Under  cost-plus  fixed fee
contracts,  we are reimbursed for allowable costs and paid a fixed fee. However,
if our costs under either of these types of contract exceed the contract ceiling
or are  not  allowable  under  the  provisions  of the  contract  or  applicable
regulations, we may not be able to obtain reimbursement for all of our costs.

     If we are unable to control costs incurred in performing under each type of
contract,  such inability to control costs could have a material  adverse effect
on our financial  condition  and  operating  results.  Cost  over-runs  also may
adversely  affect our ability to sustain  existing  programs  and obtain  future
contract awards.

We face  extensive  competition  in the  markets  in which we  operate,  and our
failure to compete effectively could result in price reductions and/or decreased
demand for our products and services.

     There are  several  suppliers  who  offer  Hospitality  management  systems
similar to ours.  Some of these  competitors are larger than PAR and have access
to substantially greater financial and other resources and, consequently, may be
able to obtain more favorable terms than we can for components and subassemblies
incorporated  into  these  Hospitality  technology  products.  The rapid rate of
technological  change in the  Hospitality  industry makes it likely that we will
face competition from new products designed by companies not currently competing
with us.  These new products may have  features not  currently  available on our
Hospitality  products.  We believe that our  competitive  ability depends on our
total  solution  offering,  our  product  development  and  systems  integration
capability, our direct sales force and our customer service organization.  There
is no assurance,  however,  that we will be able to compete  effectively  in the
hospitality technology market in the future.
<PAGE>


     Our Government  contracting  business has been focused on niche  offerings,
primarily signal and image processing,  information  technology  outsourcing and
engineering  services.  Many of our  competitors  are, or are  subsidiaries  of,
companies such as Lockheed-Martin,  Raytheon, Northrop-Grumman,  BAE, Harris and
SAIC.  These  companies  are larger  and have  substantially  greater  financial
resources  than we do.  We also  compete  with  smaller  companies  that  target
particular  segments of the  Government  market.  These  companies may be better
positioned to obtain  contracts  through  competitive  proposals.  Consequently,
there are no assurances  that we will continue to win Government  contracts as a
prime contractor or subcontractor.

We may  not be  able  to  meet  the  unique  operational,  legal  and  financial
challenges  that  relate to our  international  operations,  which may limit the
growth of our business.

     For the fiscal  years  ended  December  31,  2005,  2004 and 2003,  our net
revenues   from  sales   outside  the  United  States  were  11%,  9%  and  11%,
respectively,  of the Company's total revenues. For the three months ended March
31,  2006  and  2005,   sales  outside  the  United  States  were  10%  and  9%,
respectively, of the total revenues. We anticipate that international sales will
continue to account for a significant portion of sales. We intend to continue to
expand  our  operations  outside  the  United  States  and to  enter  additional
international  markets,  which will require significant management attention and
financial resources.  Our operating results are subject to the risks inherent in
international  sales,  including,  but not limited to, regulatory  requirements,
political and economic changes and disruptions,  geopolitical  disputes and war,
transportation  delays,  difficulties  in staffing  and managing  foreign  sales
operations, and potentially adverse tax consequences. In addition,  fluctuations
in exchange  rates may render our products  less  competitive  relative to local
product  offerings,  or could result in foreign exchange losses,  depending upon
the currency in which we sell our products. There can be no assurance that these
factors  will not have a material  adverse  affect on our  future  international
sales and, consequently, on our operating results.

Our  business  depends  on a  large  number  of  highly  qualified  professional
employees  and, if we are not able to recruit and retain a sufficient  number of
these  employees,  we would not be able to provide high quality  services to our
current and future customers, which would have an adverse effect on our revenues
and operating results.

     We actively compete for qualified  professional  staff. The availability or
lack thereof of qualified  professional  staff may affect our ability to develop
new products and to provide  services and meet the needs of our customers in the
future. An inability to fulfill customer requirements due to a lack of available
qualified  staff at agreed upon salary rates may adversely  impact our operating
results in the future.
<PAGE>

a significant  portion of our total assets consists of goodwill and identifiable
intangible  assets,  which are subject to a periodic  impairment  analysis and a
significant impairment  determination in any future period could have an adverse
effect on our results of operations  even without a significant  loss of revenue
or increase in cash expenses attributable to such period.

     We have goodwill and identifiable  intangible assets totaling approximately
$20.6  million  and $9.5  million  at March 31,  2006,  respectively,  resulting
primarily from several  business  acquisitions.  At least annually,  we evaluate
goodwill and  identifiable  intangible  assets for impairment  based on the fair
value  of the  operating  business  unit to  which  these  assets  relate.  This
estimated fair value could change if we are unable to achieve  operating results
at the levels that have been forecasted,  the market valuation of such companies
decreases  based on  transactions  involving  similar  companies,  or there is a
permanent,  negative change in the market demand for the services offered by the
business  unit.  These  changes  could result in an  impairment  of the existing
goodwill  and  identifiable  intangible  asset  balances  that  could  require a
material non-cash charge to our results of operations.



<PAGE>


Item 6.  Exhibits and Reports on Form 8-K




                                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.


Reports on Form 8-K

     On February 6, 2006, PAR Technology  Corporation furnished a report on Form
8-K  pursuant to Item 8.01 (Other  Events) of that Form  relating to the name of
the director chosen to preside at the regularly  scheduled executive sessions of
the non-management  directors of PAR Technology  Corporation is Director Sangwoo
Ahn.

     On February 14, 2006, 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 December
31, 2005,  as presented  in a press  release of February 14, 2006 and  furnished
thereto as an exhibit.

     On March 28, 2006,  PAR Technology  Corporation  furnished a report on Form
8-K  pursuant  to Item 5.02  (Departure  of  Directors  or  Principal  Officers;
Election of Directors;  Appointment of Principal Officers) of that Form relating
to the received  notice from Mr. J.  Whitney  Haney of his decision not to stand
for re-election to the Company's Board of Directors.
<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:  May 10, 2006



                                       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, Jr., 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: May 10, 2006
                            John W. Sammon, Jr.
                            -------------------------------------------------
                            John W. Sammon, Jr.
                            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: May 10, 2006
                            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 March 31, 2006 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, Jr.
-----------------------------------------------
John W. Sammon, Jr.
Chairman of the Board & Chief Executive Officer
May 10, 2006

Ronald J. Casciano
-----------------------------------------------
Ronald J. Casciano
Vice President, Chief Financial Officer & Treasurer
May 10, 2006










                                       E-3