UNITED STATES
                       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 September 30, 2008. 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, a non-accelerated  filer, or a smaller reporting company.
See the definitions of "large  accelerated  filer" and  "accelerated  filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange Act.

     (Check  one):   Large   Accelerated   Filer  [  ]  Accelerated   Filer  [X]
Non-Accelerated  Filer [ ]  Smaller  Reporting  Company  [ ](Do  not  check if a
smaller reporting company)

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

     Thenumber of shares outstanding of registrant's common stock, as of
October 31, 2008 - 14,533,963 shares.

<PAGE>

                           PAR TECHNOLOGY CORPORATION


                                TABLE OF CONTENTS
                                    FORM 10-Q


                                     PART I
                              FINANCIAL INFORMATION


Item Number
-----------

  Item 1.    Financial Statements (unaudited)
             -  Consolidated Statements of Operations for
                the three and nine months ended September 30, 2008 and 2007

             -  Consolidated Statements of Comprehensive Income (Loss)
                for the three and nine months ended September 30, 2008 and 2007

             -  Consolidated Balance Sheets at
                September 30, 2008 and December 31, 2007

             -  Consolidated Statements of Cash Flows
                for the nine months ended September 30, 2008 and 2007

             -  Notes to Unaudited Interim Consolidated Financial Statements

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

  Item 3.    Quantitative and Qualitative Disclosures About Market Risk

  Item 4.    Controls and Procedures

                                     PART II
                                OTHER INFORMATION



  Item 1A.   Risk Factors

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

  Item 5.    Other Information

  Item 6.    Exhibits

  Signatures

  Exhibit Index


<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

                                                       For the three months      For the nine months
                                                        ended September 30,       ended September 30,
                                                      ----------------------    ----------------------
                                                        2008          2007        2008          2007
                                                      ---------    ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>          <C>
Net revenues:
     Product ......................................   $  20,918    $  18,066    $  58,566    $  53,092
     Service ......................................      19,155       17,006       53,299       48,635
     Contract .....................................      17,894       16,505       55,443       47,558
                                                      ---------    ---------    ---------    ---------
                                                         57,967       51,577      167,308      149,285
                                                      ---------    ---------    ---------    ---------
Costs of sales:
     Product ......................................      12,016       10,681       34,053       31,688
     Service ......................................      14,466       13,238       39,826       37,290
     Contract .....................................      16,924       15,256       52,477       44,462
                                                      ---------    ---------    ---------    ---------
                                                         43,406       39,175      126,356      113,440
                                                      ---------    ---------    ---------    ---------

           Gross margin ...........................      14,561       12,402       40,952       35,845
                                                      ---------    ---------    ---------    ---------
Operating expenses:
     Selling, general and administrative ..........       9,121        8,581       26,924       26,476
     Research and development .....................       3,560        4,562       11,571       12,763
     Amortization of identifiable intangible assets         388          397        1,167        1,181
                                                      ---------    ---------    ---------    ---------
                                                         13,069       13,540       39,662       40,420
                                                      ---------    ---------    ---------    ---------

Operating income (loss) ...........................       1,492       (1,138)       1,290       (4,575)
Other income, net .................................         216          350          759          744
Interest expense ..................................        (275)        (310)        (745)        (769)
                                                      ---------    ---------    ---------    ---------
Income (loss) before provision for income taxes ...       1,433       (1,098)       1,304       (4,600)
(Provision) benefit for income taxes ..............        (605)         236         (547)       1,409
                                                      ---------    ---------    ---------    ---------
Net income (loss) .................................   $     828    $    (862)   $     757    $  (3,191)
                                                      =========    =========    =========    =========
Earnings (loss) per share
     Basic ........................................   $     .06    $    (.06)   $     .05    $    (.22)

     Diluted ......................................   $     .06    $    (.06)   $     .05    $    (.22)

Weighted average shares outstanding
     Basic ........................................      14,440       14,351       14,404       14,340
                                                      =========    =========    =========    =========
     Diluted ......................................      14,823       14,351       14,787       14,340
                                                      =========    =========    =========    =========

</TABLE>

See notes to unaudited interim consolidated financial statements


<PAGE>

<TABLE>
<CAPTION>

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

                                                       For the three months      For the nine months
                                                        ended September 30,       ended September 30,
                                                      ----------------------    ----------------------
                                                        2008          2007        2008          2007
                                                      ---------    ---------    ---------    ---------
<S>                                                   <C>          <C>         <C>           <C>
Net income (loss) ............................        $     828    $    (862)  $      757    $  (3,191)
Other comprehensive income (loss), net of tax:
     Foreign currency translation adjustments              (781)         505         (745)       1,034
                                                      ---------    ---------   ----------    ---------

Comprehensive income (loss) ..................        $      47    $    (357)  $       12    $  (2,157)
                                                      =========    =========   ==========    =========







See notes to unaudited interim consolidated financial statements
</TABLE>


<PAGE>


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

                                                     September 30,  December 31,
                                                          2008          2007
                                                     -------------  ------------
Assets
Current assets:
     Cash and cash equivalents ......................... $   2,892    $   4,431
     Accounts receivable-net ...........................    46,865       43,608
     Inventories-net ...................................    42,638       40,319
     Income tax refunds ................................     1,065          521
     Deferred income taxes .............................     5,298        5,630
     Other current assets ..............................     3,892        3,370
                                                         ---------    ---------
         Total current assets ..........................   102,650       97,879
Property, plant and equipment - net ....................     7,169        7,669
Deferred income taxes ..................................       746          503
Goodwill ...............................................    26,618       26,998
Intangible assets - net ................................     8,840        9,899
Other assets ...........................................     1,846        3,570
                                                         ---------    ---------
              Total Assets ............................. $ 147,869    $ 146,518
                                                         =========    =========
Liabilities and Shareholders' Equity
Current liabilities:
     Current portion of long-term debt ................. $   1,110    $     772
     Borrowings under lines of credit ..................     7,541        2,500
     Accounts payable ..................................    14,448       16,978
     Accrued salaries and benefits .....................     8,942        9,919
     Accrued expenses ..................................     4,073        3,860
     Customer deposits .................................     3,779        3,898
     Deferred service revenue ..........................    13,825       14,357
                                                         ---------    ---------
         Total current liabilities .....................    53,718       52,284
                                                         ---------    ---------
Long-term debt .........................................     6,179        6,932
                                                         ---------    ---------
Other long-term liabilities ............................     2,167        2,315
                                                         ---------    ---------
Shareholders' Equity:
     Preferred stock, $.02 par value,
       1,000,000 shares authorized .....................      --           --
     Common stock, $.02 par value,
       29,000,000 shares authorized;
       16,186,718 and 16,047,818 shares issued;
       14,533,963 and 14,395,063 outstanding ...........       324          321
     Capital in excess of par value ....................    40,055       39,252
     Retained earnings .................................    51,208       50,451
     Accumulated other comprehensive income (loss) .....      (273)         472
     Treasury stock, at cost, 1,652,755 shares .........    (5,509)      (5,509)
                                                         ---------    ---------
         Total shareholders' equity ....................    85,805       84,987
                                                         ---------    ---------
              Total Liabilities and Shareholders' Equity $ 147,869    $ 146,518
                                                         =========    =========



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 nine months
                                                                                  ended September 30,
                                                                                ----------------------
                                                                                   2008        2007
                                                                                ---------  -----------
<S>                                                                              <C>        <C>
Cash flows from operating activities:
    Net income (loss) ........................................................   $   757    $(3,191)
    Adjustments to reconcile net income (loss) to net cash
         provided by (used in) operating activities:
         Depreciation and amortization .......................................     3,064      2,915
         Provision for bad debts .............................................       374      1,395
         Provision for obsolete inventory ....................................     1,900      1,998
         Equity based compensation ...........................................       285        328
         Deferred income tax .................................................       608     (1,577)
         Changes in operating assets and liabilities:
             Accounts receivable .............................................    (3,630)     5,998
             Inventories .....................................................    (4,219)    (4,332)
             Income tax refunds ..............................................      (544)       120
             Other current assets ............................................      (523)      (591)
             Other assets ....................................................       153       (685)
             Accounts payable ................................................    (2,530)    (1,034)
             Accrued salaries and benefits ...................................      (977)      (459)
             Accrued expenses ................................................       369        930
             Customer deposits ...............................................      (119)       933
             Deferred service revenue ........................................      (532)       159
             Other long-term liabilities .....................................      (148)       999
                                                                                 -------    -------
               Net cash provided by (used in) operating activities ...........    (5,712)     3,906
                                                                                 -------    -------
Cash flows from investing activities:
    Capital expenditures .....................................................      (939)    (1,049)
    Capitalization of software costs .........................................      (641)      (788)
    Contingent purchase price paid on prior year acquisitions ................      (156)      --
    Cash received from voluntary conversion of long-lived other assets .......     1,571       --
                                                                                 -------    -------
               Net cash used in investing activities .........................      (165)    (1,837)
                                                                                 -------    -------
Cash flows from financing activities:
    Net borrowings (payments) under line-of-credit agreements ................     5,041     (2,292)
    Payments of long-term debt ...............................................      (415)       (72)
    Proceeds from the exercise of stock options ..............................       480        119
    Excess tax benefit of stock option exercises .............................        41       --
                                                                                 -------    -------
               Net cash provided by (used in) financing activities ...........     5,147     (2,245)
                                                                                 -------    -------
Effect of exchange rate changes on cash and cash equivalents .................      (809)       409
                                                                                 -------    -------
Net increase (decrease) in cash and cash equivalents .........................    (1,539)       233
Cash and cash equivalents at beginning of period .............................     4,431      4,273
                                                                                 -------    -------
Cash and cash equivalents at end of period ...................................   $ 2,892    $ 4,506
                                                                                 =======    =======

Supplemental  disclosures of cash flow information:  Cash paid during the period
for:

    Interest .................................................................   $   636    $   725
    Income taxes, net of refunds .............................................       437       (145)

See notes to unaudited interim consolidated financial statements

</TABLE>

<PAGE>


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


1.   The accompanying  unaudited interim consolidated  financial statements have
     been prepared by PAR  Technology  Corporation  (the  "Company" or "PAR") in
     accordance with U.S. generally accepted  accounting  principles for interim
     financial  statements and with the instructions to Form 10-Q and Regulation
     S-X pertaining to interim financial statements.  Accordingly, these interim
     financial  statements do not include all information and footnotes required
     by U.S.  generally  accepted  accounting  principles for complete financial
     statements.  In the  opinion  of the  Company,  such  unaudited  statements
     include all  adjustments  (which comprise only normal  recurring  accruals)
     necessary  for a fair  presentation  of the results for such  periods.  The
     results of  operations  for the three and nine months ended  September  30,
     2008 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,  2007
     included in the Company's December 31, 2007 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 amounts 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,  equity based compensation,  and valuation  allowances
     for  receivables,  inventories  and deferred  income taxes.  Actual results
     could differ from those estimates.

2.   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)
                                                September 30,  December 31,
                                                    2008          2007
                                                -----------    ----------

              Finished goods ...............       $10,646      $ 9,965
              Work in process ..............         2,192        1,722
              Component parts ..............        11,331       10,408
              Service parts ................        18,469       18,224
                                                   -------      -------
                                                   $42,638      $40,319
                                                   =======      =======

     At  September  30, 2008 and  December  31,  2007,  the Company had recorded
     reserves for  shrinkage,  excess and obsolete  inventory of $4,155,000  and
     $3,951,000, respectively.

3.   The Company adopted the fair value  recognition  provisions of Statement of
     Financial  Accounting  Standards (SFAS) 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.


<PAGE>

     Total compensation expense included in operating expenses for the three and
     nine  months  ended   September   30,  2008  was  $121,000  and   $285,000,
     respectively. Total compensation expense included in operating expenses for
     the  three  and nine  months  ended  September  30,  2007 was  $57,000  and
     $328,000,   respectively.   At  September   30,  2008,   the   unrecognized
     compensation  expense related to non-vested option awards was $743,000 (net
     of  estimated   forfeitures)   which  is  expected  to  be   recognized  as
     compensation expense in fiscal years 2008 through 2012.

4.   Earnings per share is 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.

     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 September 30,
                                                        --------------------
                                                           2008       2007
                                                        --------    --------
Net income (loss) ...................................   $    828    $   (862)
                                                        ========    ========
Basic:
     Shares outstanding at beginning of period ......     14,418      14,349
     Weighted average shares issued during the period         22           2
                                                        --------    --------
     Weighted average common shares, basic ..........     14,440      14,351
                                                        ========    ========
     Earnings (loss) per common share, basic ........   $    .06    $   (.06)
                                                        ========    ========

Diluted:
     Weighted average common shares, basic ..........     14,440      14,351
     Weighted average shares issued during the period         22        --
     Dilutive impact of restricted stock awards .....         17        --
     Unamortized compensation expense ...............        (16)       --
     Dilutive impact of stock options ...............        360        --
                                                        --------    --------
     Weighted average common shares, diluted ........     14,823      14,351
                                                        ========    ========
     Earnings (loss) per common share, diluted ......   $    .06    $   (.06)
                                                        ========    ========

                                                        For the nine months
                                                         ended September 30,
                                                        --------------------
                                                           2008       2007
                                                        --------    --------
Net income (loss) ...................................   $    757    $ (3,191)
                                                        ========    ========
Basic:
     Shares outstanding at beginning of period ......     14,372      14,310
     Weighted average shares issued during the period         32          30
                                                        --------    --------
     Weighted average common shares, basic ..........     14,404      14,340
                                                        ========    ========
     Earnings (loss) per common share, basic ........   $    .05    $   (.22)
                                                        ========    ========
Diluted:
     Weighted average common shares, basic ..........     14,404      14,340
     Weighted average shares issued during the period         32        --
     Dilutive impact of restricted stock awards .....          3        --
     Unamortized compensation expense ...............        (19)       --
     Dilutive impact of stock options ...............        367        --
                                                        --------    --------
     Weighted average common shares, diluted ........     14,787      14,340
                                                        ========    ========
     Earnings (loss) per common share, diluted ......   $    .05    $   (.22)
                                                        ========    ========
<PAGE>

5.   In September 2006, the Financial  Accounting  Standards Board (FASB) issued
     SFAS No. 157, "Fair Value Measurements," (SFAS 157), which is effective for
     fiscal years  beginning  after  November  15, 2007 and for interim  periods
     within those  years.  This  statement  defines  fair value,  establishes  a
     framework  for  measuring  fair value and expands  the  related  disclosure
     requirements.  This statement applies under other accounting pronouncements
     that require or permit fair value  measurements.  The statement  indicates,
     among  other  things,  that a  fair  value  measurement  assumes  that  the
     transaction  to sell  an  asset  or  transfer  a  liability  occurs  in the
     principal  market  for the  asset or  liability  or,  in the  absence  of a
     principal market, the most advantageous market for the asset or liability.

     Relative to SFAS 157, the FASB issued FASB Staff  Positions (FSP) 157-1 and
     157-2.  FSP 157-1 amends SFAS 157 to exclude SFAS No. 13,  "Accounting  for
     Leases," (SFAS 13) and its related interpretive  accounting  pronouncements
     that address  leasing  transactions,  while FSP 157-2 delays the  effective
     date of the  application  of  SFAS  157 to  fiscal  years  beginning  after
     November 15, 2008 for all nonfinancial assets and nonfinancial  liabilities
     that are recognized or disclosed at fair value in the financial statements.

     The Company  adopted SFAS 157 as of January 1, 2008,  with the exception of
     the  application of the statement to nonfinancial  assets and  nonfinancial
     liabilities.  Nonfinancial assets and nonfinancial liabilities for which we
     have not applied the  provisions of SFAS 157 include those measured at fair
     value in goodwill  impairment  testing,  indefinite lived intangible assets
     measured at fair value for impairment testing, asset retirement obligations
     initially  measured at fair  value,  and those  initially  measured at fair
     value in a business combination.

     SFAS 157 establishes a valuation  hierarchy for disclosure of the inputs to
     valuation used to measure fair value. This hierarchy prioritizes the inputs
     into three  broad  levels as  follows.  Level 1 inputs  are  quoted  prices
     (unadjusted) in active markets for identical assets or liabilities. Level 2
     inputs  are quoted  prices for  similar  assets and  liabilities  in active
     markets or inputs that are  observable  for the asset or liability,  either
     directly or indirectly through market corroboration,  for substantially the
     full term of the  financial  instrument.  Level 3 inputs  are  unobservable
     inputs based on our own assumptions  used to measure assets and liabilities
     at fair value. A financial asset or liability's  classification  within the
     hierarchy is determined based on the lowest level input that is significant
     to the fair value measurement.

     The  Company's  interest  rate swap  agreement  is valued at the amount the
     Company  would have expected to pay to terminate  the  agreement.  The fair
     value  determination  was based upon the present  value of expected  future
     cash flows using the LIBOR rate, plus an applicable interest rate spread, a
     technique  classified within Level 2 of the valuation  hierarchy  described
     above.  The fair value at September 30, 2008 was $170,000,  and is included
     as a component of accrued expenses within the  consolidated  balance sheet.
     The associated fair value  adjustments for the three months ended September
     30, 2008 and the nine months ended September 30, 2008,  respectively,  are:
     $1,000 included as a decrease to interest expense;  and $16,200 included as
     an increase to interest expense.


<PAGE>


6.   In June 2008,  the  Company  executed a new  credit  agreement  with a bank
     replacing its existing credit agreement.  Under this agreement, the Company
     has  borrowing  availability  up to  $20,000,000  in the  form of a line of
     credit.  This agreement 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 plus the  applicable  interest  rate spread  (5.25% at
     September 30, 2008).  This agreement expires in June 2011. At September 30,
     2008, there was $7,541,000  outstanding under this agreement.  The weighted
     average  interest  rate paid by the  Company  was 5.2%  during  2008.  This
     agreement  contains  certain loan  covenants  including  leverage and fixed
     charge coverage  ratios.  The Company is in compliance with these covenants
     at September 30, 2008. This credit facility is secured by certain assets of
     the Company.

     In 2006,  the Company  borrowed  $6,000,000  under an  unsecured  term loan
     agreement,  executed as an amendment to one of its then bank line of credit
     agreements,  in connection with the asset  acquisition of SIVA Corporation.
     The  loan  provides  for  interest  only  payments  in the  first  year and
     escalating  principal payments through 2012. The loan bears interest at the
     LIBOR rate plus the applicable  interest rate spread or at the bank's prime
     lending rate plus the applicable  interest rate spread (5.25 % at September
     30,  2008).  The  terms  and  conditions  of the line of  credit  agreement
     described above also apply to the term loan.

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

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


<PAGE>


     Information as to the Company's segments is set forth below:

                                                (in thousands)
                                 For the three months   For the nine months
                                  ended September 30,   ended September 30,
                                 --------------------  ---------------------
                                    2008       2007       2008         2007
                                 --------------------  ---------------------
Net revenues:
     Hospitality .............  $  40,073  $  35,072   $ 111,865    $ 101,727
     Government ..............     17,894     16,505      55,443       47,558
                                ---------  ---------   ---------    ---------
            Total ............  $  57,967  $  51,577   $ 167,308    $ 149,285
                                =========  =========   =========    =========

Operating income (loss):
     Hospitality ............. $      763  $  (2,213)  $  (1,218)   $  (7,108)
     Government ..............        920      1,132       2,793        2,861
     Other ...................       (191)       (57)       (285)        (328)
                               ----------  ---------   ---------    ---------
                                    1,492     (1,138)      1,290       (4,575)
Other income, net ............        216        350         759          744
Interest expense .............       (275)      (310)       (745)        (769)
                               ----------  ---------   ---------    ---------
Income (loss) before provision
  for income taxes ........... $    1,433  $  (1,098)  $   1,304    $  (4,600)
                               ==========  =========   =========    =========

Depreciation and amortization:
     Hospitality ............. $      908  $     829   $   2,715    $   2,580
     Government ..............         22         43          72           60
     Other ...................         89         88         277          275
                               ----------  ---------   ---------    ---------
           Total ............. $    1,019  $     960   $   3,064    $   2,915
                               ==========  =========   =========    =========

Capital expenditures:
     Hospitality ............. $      244  $     366   $     814    $     943
     Government ..............         --         26          35           58
     Other ...................         --          8          90           48
                               ----------  ---------   ---------    ---------
           Total ............. $      244  $     400   $     939    $   1,049
                               ==========  =========   =========    =========

Revenues by geographic area:
     United States ........... $   50,978  $  44,464   $ 147,067    $ 127,968
     Other Countries .........      6,989      7,113      20,241       21,317
                               ----------  ---------   ---------    ---------
           Total ............. $   57,967  $  51,577   $ 167,308    $ 149,285
                               ==========  =========   =========    =========


     The following table represents identifiable assets by business segment:

                                                   (in thousands)
                                           September 30,    December 31,
                                              2008             2007
                                           ----------     --------------
              Identifiable assets:
                  Hospitality ....          $127,606       $122,442
                  Government .....            11,854         14,429
                  Other ..........             8,409          9,647
                                            --------       --------
              Total ..............          $147,869       $146,518
                                            ========       ========
<PAGE>

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

                                             (in thousands)
                                      September 30,   December 31,
                                          2008           2007
                                      -----------     ----------

              United States ......     $135,547       $134,766
              Other Countries ....       12,322         11,752
                                       --------       --------
                     Total .......     $147,869       $146,518
                                       ========       ========


     The following table represents Goodwill by business segment:

                                           (in thousands)
                                     September 30,   December 31,
                                        2008            2007
                                      ---------      ---------

              Hospitality ........     $25,969        $26,349
              Government .........         649            649
                                       -------        -------
                     Total .......     $26,618        $26,998
                                       =======        =======


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

                                   For the three months  For the nine months
                                    ended September 30,   ended September 30,
                                   -------------------   --------------------
                                        2008     2007      2008       2007
                                       -----    -----     ------     -----

Restaurant Segment:
     McDonald's Corporation .......     25%       24%       22%       25%
     YUM! Brands, Inc. ............     16%       16%       15%       14%
Government Segment:
     Department of Defense ........     31%       32%       33%       32%
All Others ........................     28%       28%       30%       29%
                                       ---       ---       ---       ---
                                       100%      100%      100%      100%
                                       ===       ===       ===       ===
<PAGE>


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

Forward-Looking Statement

     This document contains  "forward-looking  statements" within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934.  Any  statements  in this document that do not
describe  historical  facts  are  forward-looking  statements.   Forward-looking
statements in this document (including  forward-looking statements regarding the
continued  health of the Hospitality  industry,  future  information  technology
outsourcing opportunities,  an expected increase in contract funding by the U.S.
Government, 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  expectations,
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  statements if we
obtain new information or upon the occurrence of future events or otherwise.

Overview

     PAR  continues  to be a leading  provider  of  hospitality  solutions  that
feature  software,  hardware  and  professional/lifecycle  support  services  to
several industries including: restaurants, hotels/resorts/spas, cruise lines and
specialty retailers.  The Company also provides the Federal Government,  and its
agencies,   applied   technology  and  technical  services  primarily  with  the
Department of Defense.

     The  Company's  hospitality  technology  products  are used in a variety of
applications by thousands of customers.  The Company faces competition in all of
its markets  (restaurants,  hotels, etc.) and competes primarily on the basis of
product design/features,  product quality/reliability,  price, customer service,
and delivery  capability.  Recently,  the trend in the hospitality  industry has
been to reduce the number of  approved  vendors to  companies  that have  global

<PAGE>

capabilities,  can achieve quality and delivery standards, have multiple product
offerings,  R&D  capability,  and can be  competitive  with their  pricing.  PAR
believes  that  its  global  reach  as a  technology  provider  is an  important
competitive  advantage as it allows the Company to provide innovative solutions,
with significant delivery capability,  globally, to its multinational  customers
like McDonald's, Yum! Brands and the Mandarin Oriental Hotel Group.

     PAR's strategy is to provide completely  integrated  technology systems and
services  with a high  level of  customer  service  in the  markets  in which it
competes.  The Company  conducts its research and development  efforts to create
innovative  technology  that meets and exceeds our customers'  requirements  and
also has high  probability  for broader  market appeal and success.  PAR focuses
upon operating  efficiencies  and controlling  costs.  This is achieved  through
investment  in  modern  production  technologies,  and  by  managing  purchasing
processes and functions.

     The Company has an internal  investment strategy in three distinct areas of
its hospitality segment.  First, the Company made significant investments in its
development of next generation software.  Additionally,  the Company invested in
building a more robust,  further reaching distribution  channel.  Lastly, as the
Company's  customers  expand  in  international  markets,  PAR has  invested  in
creating  an  international  infrastructure,   initially  concentrating  on  the
Asia/Pacific  rim due to the new restaurant  growth and  concentration  of PAR's
customers in that region.

     Approximately 33% of the Company's revenues are generated in our Government
Business segment. This segment is comprised of two subsidiaries:  PAR Government
Systems Corporation and Rome Research Corporation.  Through these two government
contractors,  the Company provides IT and communications support services to the
U.S.  Navy,  Air  Force  and Army.  PAR also  offers  its  services  to  several
non-military  U.S.  federal,  state and local  agencies.  The  Company  provides
applied  technology  services  including  radar,  image and  signal  processing,
logistics  management  systems,  and  geospatial  services  and  products.   The
Company's  Government  performance  ratings allow PAR to consistently win repeat
business and sustain long-term  client-vendor  relationships with their contract
customers. The Company can provide its clients the technical expertise necessary
to facilitate and operate complex systems utilized by government agencies.

     The Company will continue to leverage 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.
<PAGE>

Summary

     In regards to the current economic  landscape,  it is PAR's belief that the
quick  serve  restaurant  sector  will  remain  strong  during  this  period  of
uncertainty.  This is a direct impact of the value and  convenience  PAR's large
customers  offer through their  products and  services.  However,  the Company's
continued success will depend upon the availability of affordable financing,  as
its restaurant customers typically finance their purchase of PAR's products. The
Company will continue to monitor this closely.

     As for PAR's other  hospitality  markets,  early indications are that there
may be a market slowdown for the Company's table service technology  products in
the near term.  Table service  restaurants may be more severely  impacted by the
current  economic  cycle and may delay  capital  expenditure  decisions  in this
sector of hospitality.

     With  respect  to  PAR's  hotel,  resort  and  spa  customers,   management
anticipates  the  continued  economic  uncertainty  will have a modest impact on
their future operations.  PAR  Springer-Miller  markets to five star destination
resorts  globally  whose  customers  generally are not impacted  financially  by
normal economic cycles. However, as this current cycle seems anything but normal
the Company will  carefully  monitor for any signs which would  dictate the need
for immediate corrective actions.

     Historically the Company's Government I/T business has not been impacted by
business  cycle  fluctuations.   PAR's  I/T  outsourcing   business  focuses  on
cost-effective   operations  of  information  technology  and  telecommunication
facilities which must function independent of business cycles.

     PAR's main  concerns  relative to the health of our  markets are  primarily
related to three issues:

     o    The evident slowdown in our table service business;

     o    The potential slowdown of our high end hotel/resort/spa business; and

     o    The continuing availability of affordable financing for our restaurant
          customers.

     Currently, table service is a small part of the Company's overall business,
and for 2009, PAR is planning for modest growth of PAR Springer-Miller business.
The Company  will  continue  to monitor the credit  markets on a daily basis and
make the necessary adjustments to its business.

     PAR remains  committed to streamlining  operations and improving  return on
invested capital through a variety of initiatives.

<PAGE>
Results of Operations -- Three Months Ended September 30, 2008 Compared to Three
Months Ended September 30, 2007

     The  Company  reported  revenues  of $58  million  for  the  quarter  ended
September 30, 2008,  an increase of 12% from the $51.6 million  reported for the
quarter ended September 30, 2007. The Company's net income for the quarter ended
September 30, 2008 was $828,000, or $.06 diluted earnings per share, compared to
a net loss of $862,000 and a $.06 diluted net loss per share for the same period
in 2007.

     Product revenues from the Company's  Hospitality segment were $20.9 million
for the quarter  ended  September  30,  2008,  an increase of 16% from the $18.1
million recorded in 2007. This increase was due to a 23% improvement in domestic
product sales primarily due to sales to McDonald's, YUM! Brands, Burger King and
CKE restaurants.  This increase in domestic revenue was partially offset by a 2%
decrease in  international  product  sales,  due to a decline in sales to Resort
Hotels and Spas.  This decrease was partially  offset by an 8% increase in sales
to restaurant customers in several countries.

     Customer service  revenues are also generated by the Company's  Hospitality
segment.  The  Company's  service  offerings  include   installation,   software
maintenance,  training, twenty-four hour help desk support and various depot and
on-site service  options.  Customer  service revenues were $19.2 million for the
quarter ended  September 30, 2008, a 13% increase from $17 million  reported for
the same period in 2007. The growth is primarily related to increases in several
service  areas  including  installation,  and  professional  service  activities
related to McDonald's initiatives.

     Contract revenues from the Company's  Government segment were $17.9 million
for the quarter ended September 30, 2008, an increase of 8% when compared to the
$16.5 million  recorded in the same period in 2007.  This increase was primarily
due to the start of new  contracts  in the  information  technology  outsourcing
area,  including the timing of  subcontract  work and material buys on these new
contracts. 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  September 30, 2008 were 42.6 %, an
increase of 170 basis points from the 40.9% for the quarter ended  September 30,
2007.  This increase in margins was due to an increase in higher margin software
sales to various restaurant customers as compared to the same quarter last year.
This was  partially  offset by lower  margins  on  increased  hardware  sales to
McDonald's in the quarter ended September 30, 2008.
<PAGE>

     Customer  service  margins were 24.5% for the quarter  ended  September 30,
2008,  an increase of 230 basis points  compared to 22.2% for the same period in
2007.  Service  margins  increased  primarily  due to improved  margins in field
service and the call center as productivity increased in both of these areas.

     Contract  margins  were 5.4% for the quarter  ended  September  30, 2008, a
decrease of 220 basis points  compared to 7.6% for the same period in 2007. This
decline was due to lower margins on certain new fixed price contracts.  The most
significant  components of contract costs in 2008 and 2007 were labor and fringe
benefits.  For 2008,  labor and fringe  benefits  were  $12.9  million or 76% of
contract  costs in 2008 compared to $11.3  million or 74% of contract  costs for
the same period in 2007.

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the quarter ended  September  30, 2008 were $9.1 million,  an increase of 6%
from the $8.6 million for the same period in 2007.  This increase  resulted from
expenses  associated with the Company's  investment in software sales personnel,
channel and International expansion.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality segment. Research and development expenses were $3.6 million for the
quarter  ended  September  30,  2008,  a decrease  of 22% from the $4.6  million
recorded in 2007. The decrease was primarily attributable to the near completion
of certain software development projects.

     Amortization of identifiable intangible assets was $388,000 for the quarter
ended September 30, 2008, compared to $397,000 reported in 2007. Amortization is
on the identifiable assets acquired in the Company's  acquisitions over the last
several years.

     Other income,  net, was $216,000 for the quarter  ended  September 30, 2008
compared  to  $350,000  for the same  period  in 2007.  Other  income  primarily
includes  rental income and foreign  currency gains and losses.  The decrease is
primarily due to a decline in rental income.

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$275,000  for the quarter  ended  September  30, 2008 as compared to $310,000 in
2007.  The decline is primarily  due to a lower average  borrowing  rate in 2008
compared to 2007.  This was  partially  offset by an  increase in the  Company's
average borrowings outstanding in 2008 when compared to 2007.

     For the quarters ended September 30, 2008 and 2007, the Company's  expected
effective income tax rate based on projected pre-tax income was 42.2% and 21.5%,
respectively.  The increase in effective tax rate is primarily  attributable  to
the expiration of the Research and  Experimental  Tax Credit at the end of 2007.

<PAGE>

Also  contributing to the increase in effective tax rate was the taxable portion
of the proceeds from the voluntary  conversion of a Company-owned life insurance
policy in 2008.  Due to the pre-tax  loss for the quarter  ended  September  30,
2007, the Company  provided a tax benefit of 21.5% as its estimate of the annual
effective income tax rate based on projected pre-tax income as indicated above.

Results of Operations  -- Nine Months Ended  September 30, 2008 Compared to Nine
Months Ended September 30, 2007

     The Company  reported  revenues of $167.3 million for the nine months ended
September 30, 2008, an increase of 12% from the $149.3 million  reported for the
nine months ended  September  30, 2007.  The  Company's  net income for the nine
months ended  September  30, 2008 was  $757,000,  or $.05 diluted net income per
share,  compared  to a net loss of $3.2  million  and $.22  diluted net loss per
share for the same period in 2007.

     Product revenues from the Company's  Hospitality segment were $58.6 million
for the nine months ended  September 30, 2008, an increase of 10% from the $53.1
million  recorded in 2007.  This increase was due to an 18% increase in domestic
product sales,  primarily due to solution sales to new restaurant customers,  as
well as to YUM!  Brands and  McDonald's.  This increase in domestic  revenue was
partially offset by a 10% decrease in international product sales. This decrease
was the result of the timing of orders from the Company's  restaurant  customers
in Asia and Canada.

     Customer service  revenues are also generated by the Company's  Hospitality
segment.  The  Company's  service  offerings  include   installation,   software
maintenance,  training, twenty-four hour help desk support and various depot and
on-site service  options.  Customer  service revenues were $53.3 million for the
nine months ended September 30, 2008, a 10% increase from $48.6 million reported
for the same period in 2007.  The growth is  primarily  related to  increases in
field  service,  installation  and  professional  services  revenue with several
restaurant customers.

     Contract revenues from the Company's  Government segment were $55.4 million
for the nine months ended  September  30, 2008, an increase of 17% when compared
to the $47.6  million  recorded in the same  period in 2007.  The  increase  was
primarily due to new contracts in the  information  technology  outsourcing  and
imaging information areas.

     Product margins for the nine months ended September 30, 2008 were 41.9%, an
increase of 160 basis points from the 40.3% for the nine months ended  September
30, 2007. The improved  margins were the result of higher software sales in 2008
compared to 2007. This was partially  offset by an increase in hardware sales to
McDonald's.
<PAGE>

     Customer Service margins were 25.3% for the nine months ended September 30,
2008,  an increase of 200 basis points  compared to 23.3% for the same period in
2007.  This  increase  is due to an  increase  in margins in field  service  and
installation as revenue and productivity rose in both of these areas.

     Contract  margins were 5.3% for the nine months ended September 30, 2008, a
decline  of 120  basis  points  versus  6.5% for the same  period  in 2007.  The
decrease was due to a favorable cost share adjustment on the Company's Logistics
Management  program in 2007 and the lower margins  realized on certain new fixed
price  contracts in 2008. The most  significant  components of contract costs in
2008 and 2007 were  labor  and  fringe  benefits.  For  2008,  labor and  fringe
benefits were $39.3 million or 75% of contract  costs  compared to $35.4 million
or 79% of contract costs for the same period in 2007.

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the nine months ended September 30, 2008 were $26.9 million,  an increase of
2% from the  $26.5  million  for the same  period  in 2007.  This  increase  was
primarily due to the Company's investment in the expansion of its dealer channel
and domestic  sales force.  This was  partially  offset by a decline in bad debt
expense.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality  segment.  Research and development  expenses were $11.6 million for
the nine  months  ended  September  30,  2008,  a decrease  of 9% from the $12.8
million  recorded in 2007. The decrease was primarily  attributable  to the near
completion of certain software development projects.

         Amortization of identifiable intangible assets was $1.2 million for the
nine months ended September 30, 2008 virtually unchanged from 2007. This relates
to amortization of intangible assets acquired in the Company's acquisitions over
the last several years.

     Other  income,  net, was $759,000 for the nine months ended  September  30,
2008  compared to $744,000 for the same period in 2007.  Other income  primarily
includes rental income and foreign  currency gains and losses.  This increase is
primarily due to higher foreign  currency  gains in 2008 compared to 2007.  This
was partially offset by lower rental income in 2008 versus 2007.

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$745,000 for the nine months ended September 30, 2008 as compared to $769,000 in
2007.  This  decline  was due to a lower  average  borrowing  rate in 2008  when
compared to 2007.  This was partially  offset by a higher  average  borrowing in
2008 when compared to 2007 under its lines of credit with banks.
<PAGE>

     For the nine months ended  September  30,  2008,  the  Company's  effective
income tax rate was 41.9%,  compared to 30.6% in 2007. The increase in effective
tax  rate is  primarily  attributable  to the  expiration  of the  Research  and
Experimental Tax Credit at the end of 2007. Also contributing to the increase in
effective  tax rate was the taxable  portion of the proceeds  from the voluntary
conversion of a Company-owned  life insurance policy in 2008. Due to the pre-tax
loss for the nine months ended  September 30, 2007,  the Company  provided a tax
benefit of 30.6%, as its estimate of the annual  effective income tax rate based
on projected pre-tax income as indicated above.

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
$5.7  million  for the nine months  ended  September  30, 2008  compared to cash
provided by  operations  of $3.9 million for 2007.  In 2008,  cash was primarily
impacted by the growth in accounts  receivable and inventory.  In 2007, cash was
generated through collection of accounts  receivable.  This was partially offset
by a growth in inventory and the timing of payments to vendors.

     Cash used in  investing  activities  was $165,000 for the nine months ended
September 30, 2008 versus cash used of $1.8 million for the same period in 2007.
In 2008, capital expenditures were $939,000 and were primarily for manufacturing
and  computer  equipment.   Capitalized  software  costs  relating  to  software
development of Hospitality  segment products were $641,000 in 2008. In 2008, the
Company  received $1.6 million from the voluntary  conversion of a Company-owned
life insurance  policy. In 2007,  capital  expenditures were $1 million and were
principally  for   manufacturing   and  research  and   development   equipment.
Capitalized  software  costs  relating to software  development  of  Hospitality
segment products were $788,000 in 2007.

     Cash provided by financing  activities was $5.1 million for the nine months
ended  September 30, 2008 versus cash used of $2.2 million in 2007. In 2008, the
Company  increased  its  short-term  borrowings  by $5 million and decreased its
long-term  debt by  $415,000.  The  Company  also  benefited  $480,000  from the
exercise  of  employee  stock  options.  In  2007,  the  Company  decreased  its
short-term  bank  borrowings by $2.3 million and decreased its long-term debt by
$72,000. The Company also benefited $119,000 from the exercise of employee stock
options.

     In June 2008,  the  Company  executed a new  credit  agreement  with a bank
replacing  its  existing  agreement.  Under this  agreement,  the  Company has a
borrowing  availability up to $20,000,000 in the form of a line of credit.  This
agreement 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
plus the  applicable  interest rate spread  (5.25% at September 30, 2008).  This

<PAGE>

agreement  expires in June 2011.  At September  30, 2008,  there was  $7,541,000
outstanding under this agreement. The weighted average interest rate paid by the
Company was 5.2% during 2008.  This  agreement  contains  certain loan covenants
including  leverage  and  fixed  charge  coverage  ratios.  The  Company  is  in
compliance  with these  covenants at September 30, 2008. This credit facility is
secured by certain assets of the Company.

     In 2006,  the Company  borrowed  $6,000,000  under an  unsecured  term loan
agreement,  executed  as an  amendment  to one of its then  bank  line of credit
agreements,  in connection with the asset acquisition of SIVA  Corporation.  The
loan  provides  for  interest  only  payments  in the first year and  escalating
principal  payments through 2012. The loan bears interest at the LIBOR rate plus
the applicable interest rate spread or at the bank's prime lending rate plus the
applicable  interest rate spread  (5.25% at September  30, 2008).  The terms and
conditions  of the line of credit  agreement  described  above also apply to the
term loan.

     In September 2007, the Company entered into an interest rate swap agreement
associated  with a $6,000,000  variable  rate loan with  principal  and interest
payments due through August 2012. At September 30, 2007, the notional  principal
amount  totaled  $6,000,000.  This  instrument  was  utilized  by the Company to
minimize significant unplanned fluctuations in earnings and cash flows caused by
interest rate  volatility.  The Company did not adopt hedge accounting under the
provision of FASB Statement No 133,  Accounting for Derivative  Instruments  and
Hedging Activities, but rather records the fair market value adjustments through
the consolidated statements of operations each period. The associated fair value
adjustments  for the three months ended  September  30, 2008 and the nine months
ended  September 30, 2008,  respectively,  are: $1,000 included as a decrease to
interest expense; and $16,200 included as an increase to interest expense.

     The  Company  has a  $1,781,700  mortgage  collateralized  by certain  real
estate.  The annual mortgage payment  including  interest totals  $226,000.  The
mortgage bears interest at a fixed rate of 7% and matures in 2010.

     During  fiscal  year  2008,  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

<PAGE>

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.

Recent Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements"
("SFAS 157"), which provides guidance for measuring the fair value of assets and
liabilities,   as  well  as  requires  expanded  disclosures  about  fair  value
measurements.  SFAS 157 indicates that fair value should be determined  based on
the  assumptions  marketplace  participants  would use in  pricing  the asset or
liability,  and provides  additional  guidelines to consider in determining  the
market-based  measurement.  The Company  adopted SFAS 157 as of January 1, 2008,
with the exception of the  application of the statement to  nonfinancial  assets
and  nonfinancial  liabilities.  Refer  to  Note  5  to  the  Unaudited  Interim
Consolidated  Financial  Statements  for  additional  discussion  on fair  value
measurements.  This did not have a material impact on the consolidated financial
statements.

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial  Liabilities"  ("SFAS 159"). SFAS 159 permits all
entities to choose to measure eligible items at fair value at specified election
dates.  SFAS 159 is  effective as of the  beginning of an entity's  first fiscal
year that begins after  November 15,  2007.  The Company  adopted SFAS 159 as of
January  1,  2008  and has  elected  not to  measure  any  additional  financial
instruments  and other items at fair value.  This did not have a material impact
on the consolidated financial statements.

     In December  2007,  the FASB issued SFAS No.141  (revised  2007),  Business
Combinations  (SFAS  141(R)).  The objective of this Statement is to improve the
relevance,  representational  faithfulness, and comparability of the information
that a reporting  entity  provides  in its  financial  reports  about a business
combination.  Specifically,  it establishes principles and requirements over how
the acquirer (1) recognizes and measures the identifiable  assets acquired,  the
liabilities  assumed,  and any  noncontrolling  interest  in the  acquiree;  (2)

<PAGE>

recognizes and measures goodwill acquired in the business  combination or a gain
from a bargain  purchase,  and; (3) determines  what  information to disclose to
enable users of the  financial  statements  to evaluate the nature and financial
effects of the business  combination.  This  Statement  is effective  for fiscal
years  beginning  after  December 15, 2008  (fiscal  year 2009).  The Company is
currently  assessing  the  impact,  if  any,  of  adopting  SFAS  141(R)  on its
consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated  Financial  Statements  an amendment of ARB No. 51 (SFAS 160).  The
objective of this  Statement  is to improve the  relevance,  comparability,  and
transparency of the financial  information  that a reporting  entity provides in
its consolidated  financial statements by establishing  accounting and reporting
standards for the noncontrolling  interest in a subsidiary  (minority interests)
and for the  deconsolidation  of a subsidiary.  This  Statement is effective for
fiscal years,  and interim  periods within those fiscal years,  beginning  after
December  15, 2008 (fiscal year 2009).  The Company is currently  assessing  the
impact, if any, of adopting SFAS 160 on its consolidated financial statements.

     In March 2008, the FASB issued SFAS No. 161,  "Disclosures about Derivative
Instruments  and Hedging  Activities,  an amendment of FASB  Statement  No. 133"
(SFAS 161).  This  statement  is intended to improve  transparency  in financial
reporting  by  requiring   enhanced   disclosures  of  an  entity's   derivative
instruments and hedging  activities and their effects on the entity's  financial
position,  financial  performance,  and  cash  flows.  SFAS 161  applies  to all
derivative  instruments within the scope of SFAS 133, "Accounting for Derivative
Instruments and Hedging  Activities" (SFAS 133) as well as related hedged items,
bifurcated  derivatives,  and nonderivative  instruments that are designated and
qualify as hedging  instruments.  Entities with instruments  subject to SFAS 161
must  provide more robust  qualitative  disclosures  and  expanded  quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim  periods  beginning after November 15, 2008 (fiscal
year  2009),  with  early  application  permitted.   The  Company  is  currently
evaluating the disclosure implications of this statement.

Critical Accounting Policies

     In our Annual Report on Form 10-K for the year ended  December 31, 2007, we
disclose accounting policies,  referred to as critical accounting policies, that
require  management  to use  significant  judgment or that  require  significant
estimates.  Management  regularly  reviews the selection and  application of our
critical  accounting  policies.  There  have  been no  updates  to the  critical
accounting  policies  contained  in our Annual  Report on Form 10-K for the year
ended December 31, 2007.

<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

INFLATION

     Inflation had little effect on revenues and related costs during the
first nine months of 2008. Management anticipates that margins will be
maintained at acceptable levels to minimize the affects of inflation, if any.

INTEREST RATES

     As of  September  30,  2008,  the  Company  has $4.5  million  in  variable
long-term  debt and $8.4  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,  and results of operations or cash flows due to
the low volume of business affected by foreign currencies.

Item 4. Controls and Procedures

     (a) Evaluation of Disclosure Controls and Procedures.

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

     (b) Changes in Internal Control over Financial Reporting.

     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 September 30, 2008 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

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

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

     None.


Item 5.  Other Information

     On July 28, 2008, 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 June 30, 2008,
as presented  in a press  release of July 28, 2008 and  furnished  thereto as an
exhibit.

<PAGE>


Item 6. Exhibits


                                List of Exhibits


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

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

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

       32.1                Certification of Chairman of the Board
                           and Chief Executive Officer and
                           Vice President, Chief Financial Officer
                           and Treasurer Pursuant to 18 U.S.C.
                           Section 1350, as Adopted Pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>




                                   SIGNATURES




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








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






Date:  November 10, 2008



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



<PAGE>

                                  Exhibit Index




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


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

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

       32.1          Certification of Chairman of the Board            E-3
                     and Chief Executive Officer and
                     Vice President, Chief Financial Officer
                     and Treasurer Pursuant to 18 U.S.C.
                     Section 1350, as Adopted Pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>




                                  Exhibit 31.1

                           PAR TECHNOLOGY CORPORATION
                         STATEMENT OF EXECUTIVE OFFICER

I, John W. Sammon certify that:

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

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

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

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

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

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

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

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

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

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

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


Date: November 10, 2008
                                            John W. Sammon
                                            -----------------------------------
                                            John W. Sammon
                                            Chairman of the Board and
                                            Chief Executive Officer


                                       E-1
<PAGE>

                                  Exhibit 31.2

                           PAR TECHNOLOGY CORPORATION
                         STATEMENT OF EXECUTIVE OFFICER

I, Ronald J. Casciano, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 10, 2008
                                            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  September 30, 2008 as filed with
the Securities and Exchange  Commission on the date hereof (the  "Report"),  we,
John W. Sammon and Ronald J. Casciano,  Chairman of the Board & Chief  Executive
Officer and Vice President,  Chief Financial Officer & Treasurer of the Company,
certify  pursuant to 18 U.S.C.  ss. 1350, as adopted  pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that to the best of our knowledge:


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

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






John W. Sammon
------------------------------
John W. Sammon
Chairman of the Board & Chief Executive Officer
November 10, 2008

Ronald J. Casciano
------------------------------
Ronald J. Casciano
Vice President, Chief Financial Officer & Treasurer
November 10, 2008










                                       E-3