|                                   
|-----------------------------------
|SECURITIES
 AND EXCHANGE COMMISSION
|Washington, D.C. 20549             
|                                   
|FORM 10-Q/A                        
|AMENDMENT
 NO.1                    

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

FOR THE QUARTERLY PERIOD ENDED April 30, 2010

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

For the transition period from ______________
to ____________________

Commission file number 0-8174

|                                                      
|------------------------------------------------------
|Conolog Corporation                                   
|(Exact name of registrant as specified in its charter)

|                                              |  |                                       
|--------------------------------------------- |  | --------------------------------------
|Delaware                                      |  | 22-1847286                            
|                                              |  |                                       
|(State or other jurisdiction of organization) |  | (I. R. S. Employer Identification No.)

5 Columbia Road
Somerville, NJ 08876(Address of principal executive offices and zip code)

Registrants telephone number, including area
code: (908) 722-8081

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 o

Indicate by
check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes x No o

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 o Accelerated filer o
Non-accelerated filer o
Smaller reporting company x

Indicate by
check mark whether the registrant is a shell company (as defined by Rule 12b-2
of the Exchange Act) Yes o No x

The number of shares of common stock
outstanding as of June 11, 2010 was 6,965,039.

---



| |                    
| | -------------------
| | Conolog Corporation
| | Form 10-Q          
| | April 30, 2010     
|
| | Explanatory Note   

The accompanying
unaudited interim financial statements and notes thereto as of July 31, 2009
and April 30, 2010 and for the three and nine month periods ended April 30,
2010 and 2009, have not been reviewed in accordance with Statement of Auditing
Standards No. 100 (SAS 100), as required by Rule 10-01(d) of Regulation S-X
promulgated under the Securities Act of 1934. The Company intends to file an
amendment to this Form 10-Q to file unaudited interim financial statements
reviewed in accordance with SAS 100 as required by Rule 10-01(d) as promptly as
practicable after it has resolved outstanding matters addressed in a comment
letter it has received from the Division of Corporation Finance of the
Securities and Exchange Commission (SEC).

Because the
financial statements contained in this Form 10-Q do not meet the requirements
of Rule 10-01 (d) of Regulation S-X, the Company may not be considered current
in our filings under the Securities Exchange Act of 1934. Filing an amendment
to this report, when the independent registered public accountants review is
complete, would eliminate certain consequences of a deficient filing, but the
Company may become ineligible to use Form S-3 to register securities until all
required reports under the Securities Exchange Act of 1934 have been timely
filed for the 12 months prior to the filing of the registration statement for
those securities. The Company is evaluating the impact of filing a deficient
Form 10-Q due to lack of a review by an independent registered public
accounting firm on its covenants under its contractual commitments, its
obligations under NASDAQ Stock Market listing standards, and the Securities
Exchange Act.

SIGNATURES


In
accordance with the requirements of the Exchange Act, the Registrants caused
this report to be signed on its behalf by the undersigned, thereunto and duly
authorized


|                     |                                         | 
|-------------------- | --------------------------------------- | 
|                     | CONOLOG
 CORPORATION                    | 
|                     |                                         | 
|Date: June
 30, 2010 | By /s/
 Robert S. Benou                 | 
|                     |                                         | 
|                     | Robert S.
 Benou                        | 
|                     | Chairman,
 Chief Executive Officer,     | 
|                     | (Principal
 Executive Officer)          | 
|                     | Chief
 Financial Officer and Treasurer, | 
|                     | (Chief
 Accounting Officer)             | 

2

---



INDEX

|                                                                                                                                                                                                                                                                                          |                                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------
|PART I                                                                                                                                                                                                                                                                                    | FINANCIAL INFORMATION                                                                                          
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 1.                                                                                                                                                                                                                                                                                   | CONDENSED CONSOLIDATED
 FINANCIAL STATEMENTS (Unaudited)                                                       
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Contrary to
 the rules of the Securities and Exchange Commission, the Companys condensed
 consolidated financial statements included in this filing have not been
 reviewed by our independent public accountant in accordance with professional
 standards for conducting such reviews.
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|                                                                                                                                                                                                                                                                                          | Condensed
 Consolidated Balance Sheets as of April 30, 2010 and July 31, 2009                                  
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|                                                                                                                                                                                                                                                                                          | Condensed
 Consolidated Statements of Operations for the six and nine months ended April
 30, 2010 and 2009    
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|                                                                                                                                                                                                                                                                                          | Condensed
 Consolidated Statements of Cash Flows for the nine months ended April 30,
 2010 and 2009            
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|                                                                                                                                                                                                                                                                                          | Notes to
 Condensed Consolidated Financial Statements                                                          
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 2.                                                                                                                                                                                                                                                                                   | MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND
 FINANCIAL CONDITION
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 3                                                                                                                                                                                                                                                                                    | QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                    
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 4T.                                                                                                                                                                                                                                                                                  | CONTROLS AND
 PROCEDURES                                                                                       
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|PART II                                                                                                                                                                                                                                                                                   | OTHER INFORMATION                                                                                              
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 1.                                                                                                                                                                                                                                                                                   | LEGAL
 PROCEEDINGS                                                                                             
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 2.                                                                                                                                                                                                                                                                                   | UNREGISTERED
 SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                                   
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 3.                                                                                                                                                                                                                                                                                   | DEFAULTS
 UPON SENIOR SECURITIES                                                                               
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 4.                                                                                                                                                                                                                                                                                   | SUBMISSION
 OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                           
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 5.                                                                                                                                                                                                                                                                                   | OTHER
 INFORMATION                                                                                             
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|Item 6.                                                                                                                                                                                                                                                                                   | EXHIBITS                                                                                                       
|                                                                                                                                                                                                                                                                                          |                                                                                                                
|                                                                                                                                                                                                                                                                                          | SIGNATURES
 AND CERTIFICATIONS                                                                                 

3

---



CONOLOG CORPORATION AND SUBSIDIARIES 
Condensed Consolidated Balance Sheets (Unaudited)

|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ----------- | ------------------------- | - | ----------- | -
|                                                                                                                                                                     |  | April
 30, 2010 |             | Restated
 
 July 31, 2009 |  
|                                                                                                                                                                     |  |                 |             |                           |  
|ASSETS                                                                                                                                                               |  |                 |             |                           |   |             |  
|Current Assets:                                                                                                                                                      |  |                 |             |                           |   |             |  
|Cash and cash equivalents                                                                                                                                            |  | $               | 1,097,410   |                           | $ | 27,358      |  
|Accounts receivable, net of allowance                                                                                                                                |  |                 | 396,118     |                           |   | 245,980     |  
|Prepaid expenses                                                                                                                                                     |  |                 | 15,896      |                           |   | 70,843      |  
|Prepaid service agreements                                                                                                                                           |  |                 | 435,651     |                           |   |            |  
|Current portion of note receivable                                                                                                                                   |  |                 |            |                           |   | 14,864      |  
|Inventory                                                                                                                                                            |  |                 | 700,000     |                           |   | 425,920     |  
|Other current assets                                                                                                                                                 |  |                 | 5,000       |                           |   | 5,000       |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Total
 Current Assets                                                                                                                                                |  |                 | 2,650,075   |                           |   | 789,965     |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Property and equipment:                                                                                                                                              |  |                 |             |                           |   |             |  
|Net
 Property and Equipment                                                                                                                                          |  |                 | 360,775     |                           |   | 396,704     |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Other Assets:                                                                                                                                                        |  |                 |             |                           |   |             |  
|Other non-current assets                                                                                                                                             |  |                 | 262,234     |                           |   |             |  
|Non-current inventory                                                                                                                                                |  |                 | 547,721     |                           |   | 425,000     |  
|Deferred financing fees, net of amortization                                                                                                                         |  |                 | 51,507      |                           |   | 8,445       |  
|Note receivable, net of current portion                                                                                                                              |  |                 | 83,103      |                           |   | 69,846      |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Total
 Other Assets                                                                                                                                                  |  |                 | 944,565     |                           |   | 503,291     |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|TOTAL
 ASSETS                                                                                                                                                        |  | $               | 3,955,415   |                           | $ | 1,689,960   |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|LIABILITIES
 AND STOCKHOLDERS EQUITY                                                                                                                                |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Current Liabilities:                                                                                                                                                 |  |                 |             |                           |   |             |  
|Accounts payable                                                                                                                                                     |  | $               | 181,682     |                           | $ | 217,456     |  
|Accrued expenses                                                                                                                                                     |  |                 | 47,334      |                           |   | 26,132      |  
|Derivative Liability                                                                                                                                                 |  |                 | 20,847,678  |                           |   |            |  
|Current Convertible debenture, net of discount                                                                                                                       |  |                 |            |                           |   | 34,318      |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Total Current Liabilities                                                                                                                                            |  |                 | 21,076,694  |                           |   | 277,906     |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Non-Current Liabilities:                                                                                                                                             |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Convertible debenture, net of discount                                                                                                                               |  | $               | 355,634     |                           |   |            |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Total Liabilities                                                                                                                                                    |  |                 | 21,432,328  |                           |   | 277,906     |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Stockholders Equity:                                                                                                                                                |  |                 |             |                           |   |             |  
|Preferred stock, par value $.50; Series A; 4% cumulative; 500,000 shares authorized; 155,000 shares issued and outstanding                                           |  |                 | 77,500      |                           |   | 77,500      |  
|Preferred stock, par value $.50; Series B; $.90 cumulative; 500,000
 shares authorized; 1,197 shares issued and outstanding                                          |  |                 | 597         |                           |   | 597         |  
|Common stock, par value $0.01; 30,000,000 shares authorized; 6,965,680
 and 1,842,485 shares issued and outstanding at April 30, 2010 and July 31, 2009 respectively |  |                 | 69,679      |                           |   | 18,425      |  
|Contributed capital                                                                                                                                                  |  |                 | 61,471,520  |                           |   | 52,385,432  |  
|Accumulated deficit                                                                                                                                                  |  |                 | (78,964,475 | )                         |   | (50,938,166 | )
|Treasury shares at cost - 2 shares                                                                                                                                   |  |                 | (131,734    | )                         |   | (131,734    | )
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|Total Stockholders Equity                                                                                                                                           |  |                 | (17,476,913 | )                         |   | 1,412,054   |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                           |  | $               | 3,955,415   |                           | $ | 1,689,960   |  
|                                                                                                                                                                     |  |                 |             |                           |   |             |  

The accompanying notes are an
integral part of the condensed consolidated financial statements

4

---



CONOLOG CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Operations (Unaudited)

|                                                               |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|-------------------------------------------------------------- |  | ------------------------------------ | ---------- | ----------------------------------- | - | ---------- | - | ---- | ----------- | - | - | ---------- | -
|                                                               |  | For the Three Months Ended April 30, |            | For the Nine Months Ended April 30, |  
|                                                               |  | 2010                                 |            | 2009                                |   | 2010       |   | 2009 |            
|                                                               |  |                                      |            |                                     |  
|                                                               |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|OPERATING REVENUES                                             |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|Product revenue                                                |  | $                                    | 515,897    |                                     | $ | 293,920    |   | $    | 1,095,913   |   |   | 1,239,560  |  
|                                                               |  |                                      |            |                                     |  
|                                                               |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|Cost of product revenue                                        |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|Cost of goods sold                                             |  |                                      | 220,403    |                                     |   | 78,159     |   |      | 514,394     |   |   | 312,522    |  
|                                                               |  |                                      |            |                                     |  
|Total Cost of product revenue                                  |  |                                      | 220,403    |                                     |   | 78,159     |   |      | 514,394     |   |   | 312,522    |  
|                                                               |  |                                      |            |                                     |  
|                                                               |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|Gross Profit (Loss) from Operations                            |  |                                      | 295,494    |                                     |   | 215,761    |   |      | 581,519     |   |   | 927,038    |  
|                                                               |  |                                      |            |                                     |  
|Selling, general and administrative expenses                   |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|General and administrative (includes non-cash stock grants)    |  |                                      | 849,894    |                                     |   | 1,152,063  |   |      | 3,434,412   |   |   | 2,285,610  |  
|                                                               |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|                                                               |  |                                      |            |                                     |  
|Total selling, general and administrative expenses             |  |                                      | 849,894    |                                     |   | 1,152,063  |   |      | 3,434,412   |   |   | 2,285,610  |  
|                                                               |  |                                      |            |                                     |  
|Loss Before Other Income (Expenses)                            |  |                                      | (554,400   | )                                   |   | (936,302   | ) |      | (2,852,893  | ) |   | (1,358,572 | )
|                                                               |  |                                      |            |                                     |  
|OTHER INCOME (EXPENSES)                                        |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|Interest expense                                               |  |                                      | (4,946,564 | )                                   |   | (6,289     | ) |      | (22,415,385 | ) |   | (75,563    | )
|Interest income                                                |  |                                      | 1,244      |                                     |   | 76         |   |      | 2,661       |   |   | 13,888     |  
|Other Income                                                   |  |                                      |           |                                     |   | (320       | ) |      | 284,703     |   |   | 354,947    |  
|Change in Fair Market value of
 derivatives                    |  |                                      | 13,965,643 |                                     |   |           |   |      | (2,102,682  | ) |   |            |  
|Induced conversion cost                                        |  |                                      |           |                                     |   | (142,071   | ) |      | (150,201    | ) |   | (347,982   | )
|Amortization                                                   |  |                                      | (438,666   | )                                   |   | (36,155    | ) |      | (1,263,444  | ) |   | (373,703   | )
|                                                               |  |                                      |            |                                     |  
|Total Other Income (Expense)                                   |  |                                      | 8,581,657  |                                     |   | (184,759   | ) |      | (25,644,348 | ) |   | (428,413   | )
|                                                               |  |                                      |            |                                     |  
|Income (Loss) before provision for income taxes                |  |                                      | 8,027,257  |                                     |   | (1,121,061 | ) |      | (28,497,241 | ) |   | (1,786,985 | )
|Provision for income taxes                                     |  |                                      |           |                                     |   |           |   |      |            |   |   |           |  
|                                                               |  |                                      |            |                                     |  
|NET INCOME (LOSS)                                              |  | $                                    | 8,027,257  |                                     | $ | (1,121,061 | ) | $    | (28,497,241 | ) | $ | (1,786,985 | )
|Preferred stock dividends                                      |  | $                                    | (1,045     | )                                   | $ |           |   | $    | (3,135      | ) | $ |           |  
|                                                               |  |                                      |            |                                     |  
|NET INCOME (LOSS) APPLICABLE TO COMMON SHARES                  |  | $                                    | 8,026,212  |                                     | $ | (1,121,061 | ) | $    | (28,500,376 | ) | $ | (1,786,985 | )
|NET INCOME
    (LOSS) PER COMMON SHARE                         |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|BASIC
           EARNINGS (LOSS)                               |  | $                                    | 1.22       |                                     | $ | (1.19      | ) | $    | (7.24       | ) | $ | (2.46      | )
|DILUTIVE EARNINGS (LOSS)                                       |  | $                                    | 0.47       |                                     | $ |           |   | $    |            |   | $ |           |  
|                                                               |  |                                      |            |                                     |   |            |   |      |             |   |   |            |  
|WEIGHTED AVERAGE COMMON SHARESOUTSTANDING - BASIC              |  |                                      | 6,596,113  |                                     |   | 939,688    |   |      | 3,938,957   |   |   | 727,420    |  
|                                                               |  |                                      |            |                                     |  
|WEIGHTED AVERAGE COMMON SHARESOUTSTANDING - ASSUMING
 DILUTIVE |  |                                      | 17,068,624 |                                     |   |           |   |      |            |   |   |           |  
|                                                               |  |                                      |            |                                     |  

The accompanying notes are
an integral part of the condensed consolidated financial statements

5

---



CONOLOG CORPORATION AND SUBSIDIARIESCondensed Consolidated Statement
of Cash Flows (Unaudited)For the Nine Months Ended April
30, 2010 and 2009

|                                                                    |  |      |             |      |   |            |  
|------------------------------------------------------------------- |  | ---- | ----------- | ---- | - | ---------- | -
|                                                                    |  | 2010 |             | 2009 |  
|                                                                    |  |      |             |      |  
|CASH FLOWS
 FROM OPERATING ACTIVITIES                               |  |      |             |      |   |            |  
|Net loss                                                            |  | $    | (28,497,241 | )    | $ | (1,786,985 | )
|Adjustments to reconcile net loss to net cash used in
 operations:  |  |      |             |      |   |            |  
|Amortization and Depreciation                                       |  |      | 69,150      |      |   | 8,000      |  
|Amortization of prepaid consulting expense                          |  |      | 35,763      |      |   | 11,921     |  
|Stock based compensation                                            |  |      | 1,381,800   |      |   | 378,876    |  
|Change in Fair Market value of derivatives                          |  |      | 2,102,682   |      |   |           |  
|Induced conversion cost                                             |  |      | 150,201     |      |   | 347,982    |  
|Amortization and interest discount on convertible debt and warrants |  |      | 24,013,198  |      |   | 112,399    |  
|Stock issued interest                                               |  |      | 39,545      |      |   |           |  
|Changes in assets and liabilities                                   |  |      |             |      |   |            |  
|(Increase) Decrease in accounts receivable                          |  |      | (150,176    | )    |   | 119,193    |  
|(Increase) decrease in accounts receivable - other                  |  |      |            |      |   | 16,592     |  
|Decrease (increase) in prepaid expenses                             |  |      | (380,703    | )    |   | (14,085    | )
|(Increase) in inventories                                           |  |      |            |      |   | (341,199   | )
|Decease in other assets                                             |  |      |            |      |   |           |  
|Deferred financing fees                                             |  |      | (43,062     | )    |   | 261,304    |  
|(Decrease) in accounts payable                                      |  |      | (35,774     | )    |   | (64,043    | )
|Increase in accrued expenses                                        |  |      | 21,202      |      |   | 5,676      |  
|                                                                    |  |      |             |      |   |            |  
|Net cash used in operations                                         |  |      | (1,293,415  | )    |   | (944,369   | )
|                                                                    |  |      |             |      |   |            |  
|CASH FLOWS
 FROM INVESTING ACTIVITIES                               |  |      |             |      |   |            |  
|Purchase of property and equipment                                  |  |      | (33,220     | )    |   |           |  
|Redemption of certificates of deposit                               |  |      |             |      |   | 600,182    |  
|                                                                    |  |      |             |      |   |            |  
|Net cash used in investing activities                               |  |      | (33,220     | )    |   | 600,182    |  
|                                                                    |  |      |             |      |   |            |  
|CASH FLOWS
 FROM FINANCING ACTIVITIES                               |  |      |             |      |   |            |  
|Proceeds from issuance of stock                                     |  |      | 1,000,000   |      |   |           |  
|Proceeds from issuance of convertible debentures                    |  |      | 1,000,000   |      |   |            |  
|Proceeds from exercise of warrants                                  |  |      | 635,070     |      |   |           |  
|Payments of financing fees related to convertible debentures        |  |      | (240,000    | )    |   |            |  
|Proceeds from note receivable                                       |  |      | 1,607       |      |   | 10,649     |  
|                                                                    |  |      |             |      |   |            |  
|Net cash provided by financing activities                           |  |      | 2,396,677   |      |   | 10,649     |  
|                                                                    |  |      |             |      |   |            |  
|NET
 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               |  |      | 1,070,042   |      |   | (333,538   | )
|CASH AND
 CASH EQUIVALENTS - BEGINNING OF YEAR                      |  |      | 27,358      |      |   | 680,647    |  
|                                                                    |  |      |             |      |   |            |  
|CASH AND
 CASH EQUIVALENTS - END OF YEAR                            |  |      | 1,097,400   |      |   | 347,109    |  
|                                                                    |  |      |             |      |   |            |  
|SUPPLEMENTAL
 DISCLOSURE OF CASH FLOW INFORMATION:                  |  |      |             |      |   |            |  
|CASH PAID
 DURING THE YEAR FOR:                                     |  |      |             |      |   |            |  
|Interest expense                                                    |  | $    |            |      | $ | 7,931      |  
|                                                                    |  |      |             |      |   |            |  
|Income Taxes                                                        |  |      |            |      |   |           |  
|                                                                    |  |      |             |      |   |            |  
|SUPPLEMENTAL
 DISCLOSURE OF NONCASH ACTIVITIES:                     |  |      |             |      |   |            |  
|Debt converted to equity                                            |  | $    | 748,550     |      | $ | 633,327    |  
|                                                                    |  |      |             |      |   |            |  
|Common stock issued for
 services to be provided                    |  | $    | 506,200     |      | $ |           |  
|                                                                    |  |      |             |      |   |            |  
|Common stock (cancelled)
 issued for services to be provided        |  | $    |            |      | $ | (19,890    | )
|                                                                    |  |      |             |      |   |            |  
|Common stock (cancelled)
 issued for deferred compensation          |  | $    |            |      | $ | (561,210   | )
|                                                                    |  |      |             |      |   |            |  
|Common stock issued for
 accrued interest                           |  | $    | 39,545      |      | $ | 67,631     |  
|                                                                    |  |      |             |      |   |            |  
|Common stock issued for
 deferred compensation                      |  |      | 1,381,800   |      | $ | 1,345,465  |  
|                                                                    |  |      |             |      |   |            |  

The accompanying notes are
an integral part of the condensed consolidated financial statements

6

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CONOLOG CORPORATION AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2010
(Unaudited)


Note 1  Unaudited Financial Statements

The condensed unaudited
interim consolidated financial statements included herein have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The condensed consolidated financial statements and notes
are presented as permitted on Form 10-Q and do not contain information included
in the Companys annual statements and notes. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed consolidated
financial statements be read in conjunction with the July 31, 2009 audited
consolidated financial statements and the accompanying notes thereto.

These condensed unaudited
consolidated financial statements reflect all adjustments, including normal
recurring adjustments, which, in the opinion of management, are necessary to
present fairly the operations and cash flows for the period presented.Results of
operations for the nine months ended April 30, 2010 should not necessarily be
taken as indicative of the results of operations that may be expected for the
fiscal year ending July 31, 2010.

The Company
has filed an 8-K, on March 22, 2010 regarding non-reliance for the 10-Q for the
period October 31, 2009.Adjustments to
the October 31, 2010 10-Q relate to the accounting for derivative liability on
convertible debt and warrants.All accounting
adjustments for these convertible debentures and warrants have been property
recorded for the nine month period ended April 30, 2010. .

Note 2  Conversion of Debt

On September 8, 2008, the
Company reduced the exercise price of the warrants issued in connection with
the Subscription Agreement, dated March 12, 2007 (the Subscription
Agreement), from $1.20 per share to $0.50 per share. As a result of the
reduction of the warrant exercise price, pursuant to Section 12 (b) of the
Subscription Agreement, the conversion price of the Convertible Notes issued in
connection with the Subscription Agreement is now $0.50 per share. Any shares
in excess of the shares that already have been registered for sale on conversion
of the Notes will not be registered under the Securities Act of 1933, as
amended, and, therefore, may not be offered for sale, pledged or hypothecated
in the absence of an effective registration statement or an opinion of counsel
reasonably satisfactory to the Company that such registration is not required.

On March 9, 2009 the
Maturity Date of the Convertible debt was extended from March 11, 2009 to
August 31,2009. In addition, from the date of March 9, 2009 until immediately
after the Maturity Date, the holders may convert at a conversion rate of 75% of
the average closing bid prices for the five trading days preceding the date of
the Conversion Notice.

As a result of the above
reductions in exercise and conversion prices, for the three months ended October
31, 2009 investors have converted $37,950 of debt for 46,592 common stock
shares. The Company has recognized an Induced Conversion cost related to these
conversions of $31,208 for the three months ended October 31, 2009.

The Company entered into a Subscription
Agreement (the Subscription Agreement), dated as of August 3, 2009 ( the
Closing Date), with three investors, pursuant to which it sold an aggregate
of One Million Dollars of its principal amount of secured promissory notes (the
Notes). On the Closing Date the Company received gross proceeds of $500,000
and $500,000 (the Escrowed Funds) was placed in escrow pursuant to an Escrow
Agreement between the Company, the Subscribers and the escrow agent. Pursuant
to the Subscription Agreement, the Company was required to file a preliminary
proxy statement with the Securities and Exchange Commission by September 2,
2009 seeking approval for the transactions contemplated by the Subscription
Agreement and the Company was obtained approval of its shareholders on
September 24, 2009.

At a special meeting of
      shareholders held on September 24, 2009, the shareholder approval was obtained.
      As a result, the escrow funds were released and after payment of fees in the
      amount of $50,000 to the placement agent for the transaction. (The company
      received net proceeds of $450,000 prior to the deduction of other fees and
  expenses related to the offering.)

7

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The amount of the note was
increased to $500,000. The initial interest rate of
the Notes is 4% per annum and upon the shareholder Approval the interest rate
became 8% per annum. Interest accrues from the date of the Closing Date and is
be payable quarterly, in arrears, commencing six months after the Closing Date
and on the maturity date of the Note. The Conversion Price of the Notes is $.78
(the Fixed Conversion Price) as may be adjusted (the Initial
Conversion Price). Commencing six months after the Closing Date, the Conversion
Price shall be the Fixed Conversion Price or 75% of the lowest three closing
bid prices for the Companys common stock for the ten days prior to when
the Note is converted.

The Company also issued the
  Subscribers Class A Warrants to purchase 1,282,051 shares of the Companys
  Common Stock at $1.12 per share. The Class A warrants are exercisable for a
  period beginning on August 3, 2009 and terminate on August 3, 2014. Pursuant
  to the Subscription Agreement, the Company also issued the Subscribers a total
  of 40,000 class B Warrants.

The Class B Warrants entitle
  the Subscribers after September 24, 2009 until July 3, 2012, to purchase up to
  $4,000,000 of principal amount of the Companys 8% notes on the same terms as
  the original Notes and 40,000 warrants (exercisable in 1,000 blocks) to
  purchase 128,205 shares of the Companys Common Stock, per 1,000 Warrants, at a
  per share purchase price equal to 105 % of the closing bid price of the
  Companys common stock or the exercise price of the Class A Warrants. For each
  $100,000 of principal of notes purchased pursuant to the Class B Warrants,the
  Subscribers will surrender 1,000 Class B Warrants.

The Notes cannot be
converted to the extent such conversion would cause the Subscriber, together
with such holders affiliates, to beneficially own in excess of 4.99% of the of
the Companys outstanding common stock immediately following such conversion.

The Company paid the selling
agent for this transaction, a cash fee of $100,000 (10% of the aggregate gross
proceeds received by the Company) and issued warrants to purchase 256,410
shares of the Companys common stock (20% of the shares issuable to the
subscribers upon conversion of the Notes). Fees paid to the selling agent will
be amortized over the term of the subscription agreement.

At the Special Meeting of
Shareholders held on September 24, 2009, Shareholder approval was obtained for
the Companys 2009 Restrictive Stock Incentive Plan.

On September 28, 2009, the
Company entered into an Advisory Service Agreement with Garden State Securities
Inc. (GSS) to perform certain Advisory and Business services. The Board of
Directors has approved the Company to issue 200,000 restricted common shares to
GSS.

On October 21, 2009, two
holders of the Companys outstanding Convertible Notes dated August 3, 2009
converted principal amounts of $221,256 and interest amounts of $3,855 and were
issued a total of 288,605 restricted common shares. On January 29, 2010, two
holders of the Companys Convertible Notes dated August 3, 2009 converted
additional principal amounts of $489,344 and interest amounts of $19,895.25 and
were issued a total of 652,872 restricted common shares. At January 31, 2010
the remaining balance on these debentures amounted to $289,400, net of
discount of $313,199.

On November 30, 2009, the
Company filed a Preliminary Prospectus, Form S-1, subject to completion. This
prospectus relates to the public offering of up to 635,070 shares of common
stock, par value $0.01 per share, of Conolog Corporation, by the selling
stockholder, which is issuable upon exercise of class A warrants with an
exercise price of $1.12. The number of shares being registered is 33% of the
shares held by non-affiliates of the company. The Form S-1 went effective as of
December 11, 2009.

On December 29, 2009 the
Board of Directors voted to reduce the class A warrant exercise price for the
635,070 warrants registered on Form S-1 to $1.00 per Class A Warrant. The
balance of the Class A Warrants was reduced to an exercise price of $0.01 per
warrant.

During January 2010, the
635,070 class A warrants which were registered and reduced to a $1.00 exercise
price were exercised for 635,070 shares of common stock.

8

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On February 25, 2010, three
investors converted 10,000 Class B Warrants for $1,000,000. Under the terms of
the Class B warrants, The Company issued new interest bearing convertible
debentures totaling $1,000,000 with interest at 8%. These new debentures can be
converted into restricted common shares at the rate of $0.78 per share, but in
no event greater than $1.00 per share. Class C Common Stock Purchase Warrants
(2,564,102 warrants) were issued with the new secured promissory notes. The
exercise price of the Class C Warrants is $1.12. These notes and Class C
Warrants contain a provisions where the conversion and exercise price may
reset. This provision creates a derivative and is separately accounted for as a
liability at fair value. Please see Note 5.

Note 3  Major Customers

The Companys
revenues from four customers accounted for $641,867 or 59% of total revenues in
the nine months ended April 30, 2010. Each of these four customers accounted
for 10% or more of total revenues, which is the definition of a major customer.
Accounts receivable from these same four customers at April 30, 2010 amounted
to $204,947 of 52% of total accounts receivable.

Note 4  2009 Stock Incentive Plan

In accordance with the
Companys 2009 Stock Incentive Plan, on November 20, 2009, 735,000 shares of
common stock were issued to officers, employees and directors of the Company at
an aggregate market value of $1,381,800 and recorded as stock compensation
expense at time of grant. This non-cash expense was recorded in General and
Administrative costs on the Condensed Consolidated Statements of Operations.

Note 5  Warrant and Conversion liabilities

Secured promissory notes in
the amount of $1,000,000 were issued on August 3, 2009 along with 2,564,102
Class A common stock purchase warrant. These notes and Class A Warrants contain
a provisions where the conversion and exercise price may reset. This provision
creates a derivative and is separately accounted for as a liability at fair
value. At March 6, 2010, $1,000,000 of secured promissory notes and the
2,564,102 Class A common stock purchase warrants have been converted and
exercised.

On November 30, 2009 the
Company filed a Registration Statement to register 635,070 common stock shares
underlying the Class A Warrants. On December 29, 2009 the Board of Directors
voted to adjust the exercise price of these 635,070 Class A Warrants from $1.12
to $1.00 and 1,929,032 Class A Warrants from $1.12 to $0.01. 635,070 These
Class A Warrants were subsequently exercised at $1.00 per warrant for a total
of $635,070. The remaining Class A Warrants ($0.01) were exercised on a
Cashless basis for 1,926,265 shares of common stock.

During the 3rd
quarter, three investors converted 10,000 Class B Warrants for $1,000,000.
Under the terms of the Class B warrants, The Company issued new interest
bearing convertible debentures totaling $1,000,000 with interest at 8%. These
new debentures can be converted into restricted common shares at the rate of
$0.78 per share, but in no event greater than $1.00 per share. Class C Common
Stock Purchase Warrants (2,564,102 warrants) were issued with the new secured
promissory notes.

The exercise
of the Class B Warrants resulted in the issuance of secured promissory notes
and the issuance of Class C common stock purchase warrants which are considered
derivative equities, The Company has determined these Class B Warrants should
also to be recognized as derivative liabilities and separately accounted for at
fair value. The Company determined the fair value of the embedded conversion
feature and the free-standing class B warrants utilizing a Black-Scholes
pricing model. The fair values were measured at the commitment date, at the
conversion or exercise date, as applicable, and at the end of the interim
period, based on the following range of assumptions: strike price - $0.78
(conversion feature) and $1.00 - $1.12 (warrants); expected life  18 months
from commitment date (conversion feature) and 5 years from commitment date
(warrants); risk-free rate  2.36% - 2.43%; dividend yield  none; volatility 
117.4% (conversion feature) and 108.0% (warrants). The total commitment date
value of the derivative liabilities of $16,139,959 was recorded with a charge
to interest expense of $14,665,698.

9

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The secured promissory notes
totaling $1,000,000 were issued on February 25, 2010 and March 3, 2010. The
notes and the 2,564,102 Class C common stock purchase warrants issued with
these notes contain a provision whereby if the Company were to issue common stock
prior to the complete conversion or payment of the notes or exercise of the
warrants, for a consideration less than the fixed conversion price of the note
or exercise price of the warrants, then the conversion price or exercise price
would be reduced to such other lower price. The Company has determined that
this provision precludes the conversion feature and underlying warrants from
being treated as indexed to the Companys own stock, requiring these conversion
features and warrants to be recognized as derivative liabilities and separately
accounted for at fair value. The Company determined the fair value of the
embedded conversion feature and the free-standing warrants utilizing a
Black-Scholes pricing model. The fair values were measured at the commitment
date, at the conversion or exercise date, as applicable, and at the end of the
interim period, based on the following range of assumptions: strike price -
$0.78 (conversion feature) and $1.00 - $1.12 (warrants); expected life  18
months from commitment date (conversion feature) and 5 years from commitment
date (warrants); risk-free rate  2.36% - 2.43%; dividend yield  none;
volatility  117.4% (conversion feature) and 108.0% (warrants). The total
commitment date value of the derivative liabilities of $5,689,078 was recorded
as a debt discount of $1,000,000 and a charge to interest expense of
$4,689,079. The debt discount is being amortized over the life of the notes,
with the amortizable base adjusted for conversions of debt on a pro rata basis.
A total of $355,634 in amortization expense was recognized during the three
months ended April 30, 2009 for amortization of the debt discount. Upon partial
conversion of debt ($289,400 in principal was converted during the three months
ended April 30, 2010), the fair value of the converted shares was determined
using the Black-Scholes model on the conversion date and this value ($488,625)
was removed from the carrying fair value of the derivative liability. The
change in fair value of the derivative liabilities for the three months ended
April 30, 2010 of $1,050,200 (income) was measured at April 30, 2010 based on
the net change in the commitment date value of the derivative liabilities plus
the value of derivative liabilities converted during the period upon conversions
of debt. At April 30, 2010, a total of 371,038 common shares were convertible
under these convertible notes.

Note 6 - Loss Per Share of Common Stock

Loss per share
of common stock is computed by dividing net loss (after dividends on preferred
shares) by the weighted average number of shares of Common Stock outstanding
during the year. The preferred dividends are not reflected in arriving at the
net loss as they are not material and would have no effect on earnings per
share available to common shareholders. The effect of assuming the exchange of
Series A Preferred Stock and Series B Preferred Stock in 2009 and 2008 would be
anti-dilutive.

Note 6  Restatement of Opening Balances
Sheets

The Company
has restated the Condensed Consolidated Balance Sheets at July 31, 2009 to
reflect adjustment made to the Companys financial information, as amended
on From 10-K for the fiscal year ended July 31, 2009. At that time the Company
did not properly account for the timely amortization of certain costs related
to its Stock Grant Plan and the Company has revised the amount of inventory to
be reserved in accordance with Generally Accepted Accounting Principles and,
as a result, cannot be relied upon.

Note 7  Subsequent Events

On February 25, 2010, the Company
received a comment letter from the Securities and Exchange Commission (SEC)
regarding the Companys 2009 Form 10-K and October 31, 2009 Form 10-Q. The
Company prepared and submitted to the SEC its responses to the comment letter
on April 8, 2010. The SEC reviewed the Companys responses and on May 6, 2010
the SEC responded with a follow up comment letter which requested additional
information or clarification regarding, among other matters, the level of
inventory in relation to sales,

10

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measurement and recognition
of share based compensation, accounting and measurement of derivative
liabilities, and the adequacy of certain disclosures. The Company responded to
the SEC in their letter dated June 1, 2010.

Because the financial
statements contained in this Form 10-Q do not meet the requirements of Rule
10-01 (d) of Regulation S-X, the Company may not be considered current in our
filings under the Securities Exchange Act of 1934. Filing an amendment to this
report, when the independent registered public accountants review is complete,
would eliminate certain consequences of a deficient filing, but the Company may
become ineligible to use Form S-3 to register securities until all required
reports under the Securities Exchange Act of 1934 have been timely filed for
the 12 months prior to the filing of the registration statement for those
securities. The Company is evaluating the impact of filing a deficient Form
10-Q due to lack of a review by an independent registered public accounting
firm on its covenants under its contractual commitments, its obligations under
NASDAQ Stock Market listing standards, and the Securities Exchange Act.

On June 10,
2010 the Board of Directors amended the provisions of the secured promissory
notes, Class B and C Common Stock Purchase Warrants (contained within the
August 3, 2009 Subscription Agreement) to (1) set a fixed conversion and
exercise price of these promissory notes and warrants at $0.60 and $0.50
respectively and (2) eliminate the reset provision therefore removing the
derivative nature of the instrument which would require accounting for a
liability at fair value.

On June 8,
2010, a Form 8-K, Item 4.02 Non-reliance on Previously Issued Financial
Statements or a Related Audit Report or Completed Interim Period. was filed by
the management of Conolog Corporation. Management concluded that its financial
statements for the year ended July 31 2009, which are included in its Form 10-K
for the year ended July 31, 2009 and the financial statements for three month
periods ended October 31, 2009 and January 31, 2010 which are included in its
10-Q for the three months ended October 31, 2009 and January 31, 2010 did not
properly account for the timely amortization of certain costs related to its
Stock Grant Plan and the Company has revised the amount of inventory to be
reserved in accordance with Generally Accepted Accounting Principles and, as a
result, cannot be relied upon. The Company has correctly accounted for these
costs in subsequent filings with the Securities and Exchange Commission.

On June 18,
2010 Thomas R. Fogg, the Companys Vice-President of Engineering, passed away.

ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Contrary to the rules of the
Securities and Exchange Commission, the Companys condensed consolidated
financial statements included in this filing have not been reviewed by our
independent public accountant in accordance with professional standards for
conducting such reviews.

Due to the complex development
of the derivative calculation required for the Class B Common Stock Purchase
Warrants a complete review of this Form 10-Q would not have be completed by the
required due date.

When the review is complete,
the Company will amend this Form 10-Q.

Results of Operations (three months ended
April 30, 2010 compared to the three months ended April 30, 2009.

For the three
months ended April 30, 2010 product revenues were $515,897 compared to $293,920
for the three months ended April 30, 2009. The Company attributes this increase
to additional customer purchase order releases.

Cost of goods
sold (Materials and Labor) increased to $220,403 for the quarter ended April
30, 2010 from $78,159 for the same quarter ended April 30, 2009. This increase
in cost can be attributed to the increase in products produced and shipped
within the quarter and by an increase in fixed labor costs.

Gross profit
for the three month periods ended April 30, 2010 and 2009, amounted to $295,494
or 57% of revenues and $215,761 or 73% of revenues respectively.

11

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Total Selling,
general and administrative expenses decreased to $849,894 for the three months
ended April 30, 2010 compared to $1,152,063 for the three months ended April
30, 2009. This decrease for the three month period was primarily due to a
non-cash expense of $1,381,800 for the annual stock incentive grant to
employees, officers and directors which was amortized in an earlier period.

Other non-cash
non-operating income (expenses) increased to $8,581,657 for the three months
ended April 30, 2010 compared to ($184,759) for the three months ended April
30, 2009. This increase consisted primarily of changes in fair market value of
derivatives of $13,965,643 offset by related interest expense ($4,946,564)
related to recording of equity derivatives on debt.

As a result of
the foregoing, the Company reported net income from operations for the three
months ended April 30, 2010 of $8,027,257, or $1.22 earnings per share- Basic
and $0.47 earnings per share- Diluted, compared to a net loss from operations
of ($1,121,061), or ($1.19) (loss) per share Basic and diluted, for the three
months ended April 30, 2009.

Basic earnings
per share is computed based on the weighted average number of common shares
outstanding, including potential common shares outstanding for conversion and
exercise of secured promissory notes and warrants to purchase common stock,
which are recognized as derivative liabilities and separately accounted for at
fair value for each reporting period.

The Company
determined the fair value of the embedded conversion feature and the
free-standing warrants utilizing a Black-Scholes pricing model. The fair values
were measured at the commitment date, at the conversion or exercise date, as
applicable, and at the end of the interim period, based on the following range
of assumptions: strike price - $0.78 (conversion feature) and $1.00 - $1.12
(warrants); expected life  18 months from commitment date (conversion feature)
and 5 years from commitment date (warrants); risk-free rate  2.36% - 2.43%;
dividend yield  none; volatility  117.4% (conversion feature) and 108.0%
(warrants).

Results of Operations (nine months ended
April 30, 2010 compared to the nine months ended April 30, 2009.

For the nine
months ended April 30, 2010 product revenues were $1,095,913 compared to
$1,239,560 for the nine months ended April 30, 2009. The Company attributes
this decrease to the scheduling in receiving customer purchase order releases.
The Company believes that this scheduling of releases will adjust in the
following quarter.

Cost of goods
sold (Materials and Labor) increased to $514,394 for the nine months ended
April 30, 2010 from $312,522 for the same nine months period ended April 30,
2009. The Company attributes this increase in cost of $201,872 to production of
more costly systems combined with an increase in fixed labor costs.

Gross profit
for the nine month periods ended April 30, 2010 and 2009, amounted to $581,519
or 53% of revenues and $927,038 or 75% of revenues respectively.

Total Selling,
general and administrative expenses increased to $3,434,412 for the nine months
ended April 30, 2010 compared to $2,285,610 for the nine months ended April 30,
2009.This increase of $1,148,802 was primarily due to the amortization of a
non-cash expense of $1,381,800 for the annual stock incentive grant to
employees, officers and directors in an earlier period.

Other non-cash
non-operating expenses increased to $25,644,348 for the nine months ended April
30, 2010 compared to $428,413 for the nine months ended April 30, 2009. This
increase in expenses consisted primarily of negative change in fair market
value of derivatives of ($2,102,682) and the increase in interest expense
($23,678,829) related to recording of equity derivatives on debt.

As a result of
the foregoing, the Company reported a net loss from operations for the nine
months ended April 30, 2010 of ($28,500,376), or ($7.24) (loss) per share
Basic and Diluted, compared to a net loss of ($1,786,985), or ($2.46) (loss)
per share for the nine months ended April 30, 2009.

Basic earnings
per share is computed based on the weighted average number of common shares
outstanding, including potential common shares outstanding for conversion and
exercise of secured promissory notes and warrants to purchase common stock,
which are recognized as derivative liabilities and separately accounted for at
fair value for each reporting period.

12

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The Company
determined the fair value of the embedded conversion feature and the
free-standing warrants utilizing a Black-Scholes pricing model. The fair values
were measured at the commitment date, at the conversion or exercise date, as
applicable, and at the end of the interim period, based on specific assumptions
for each reporting period including: strike price (conversion feature and
warrants); expected life  18 months from commitment date (conversion feature)
and 5 years from commitment date (warrants); risk-free rate; dividend yield 
none; and volatility.

LIQUIDITY AND FINANCIAL CONDITION

Inventories
from the Companys product segment increased from $850,920 at July 31, 2009 to
$1,247,721 for the nine months ended April 30, 2010, an increase of $188,455.
The Company classifies ( in accordance with GAAP) as current assets only that
amount of inventory it expects to realize in the next 1 year operating cycle,
the balance of the inventory is classified as non-currentAccounts
Receivable-trade increased to $396,118 for the nine months ended April 30, 2010
from $245,980 as of July 31, 2009.

Cash
expenditures have exceeded revenues for the prior year and Management expects
this consumption of cash to continue into next year. Our operations have been
and will continue to be funded from existing cash balances and private
placements of equity. The Company also anticipates additional financing during
the next12 months of up to $3,000,000 from current investors.

FORWARD LOOKING STATEMENTS

          This quarterly
report contains certain forward-looking statements within the meaning of
Section 27A of The Securities Act of 1933, as amended and section 21E of The
Securities Act of 1934, as amended. Such Statements are subject to certain
risks and uncertainties, including, among other things, significant variations
in recognizing revenue due to customer-caused delays, and intense competition
from more well known companies, that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed above, among other
factors, could affect the Companys financial performance and could cause the
Companys actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements. The Company does not undertake, and specifically declines any
obligations, to publicly release the results of any revisions, which may be
made to any forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of unanticipated
events.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.

N/A

ITEM 4T  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and
Procedures

It is
managements responsibility to establish and maintain adequate internal control
over all financial reporting pursuant to Rule 13a-15 under the Securities
Exchange Act of 1934 (the Exchange Act). Our management, including our
principal executive officer and our principal financial officer, have reviewed
and evaluated the effectiveness of our disclosure controls and procedures as of
the filing date of Form 10-Q Quarterly Report. Based upon their evaluation as
of April 31, 2010, the end of the period covered by this 10-Q report, the
Companys chief executive officer and chief financial officer concluded that,
the Companys disclosure controls and procedures are not effective to ensure
that information required to be included in the Companys periodic SEC filings
is recorded, processed, summarized, and reported within the time periods
specified in the SEC rules and forms.

The
significant deficiency consisted primarily of inadequate staffing and
supervision that could lead to the untimely identification and resolution of
accounting and disclosure matters and failure to perform timely effective
reviews.

13

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Additionally,
due to the Companys poor expertise in applying the FASB Codification guidance
in regard to interpreting the requirement for a derivative liability; the error
in the presentation of employee stock-based compensation and an error in
calculating earnings per share, it has engaged outside expects to advise
management on all required disclosures.

Changes in Internal Control over Financial
Reporting

There were no
changes in our internal control over financial reporting that occurred during
the period covered by this Quarterly Report on Form 10Q that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal
Proceedings A Promissory Note dated October 22, 2002 from Natony Corp. and
Independent Computer Maintenance, LLC to Conolog Corporation came into default
during November 2009. The Company has filed for a judgment seeking full payment
and penalty against the makers.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds: During the quarter
ended April 30, 2010, a Note Holders exercised conversion rights to convert
$289,400 principal and $13,217 of interest to 387,971 unregistered shares of
common stock. In connection with the foregoing, the Company relied upon the
exemption from securities registration afforded by Rule 506 of Regulation D as
promulgated by the SEC under the Securities Act of 1933, as amended (the
Securities Act) an/or Section 4(2) of the Securities Act. No advertising or
general solicitation was employed in offering the securities. The offerings and
sales were made to a limited number of persons, all of whom were accredited
investors, and transfer was restricted by the Company in accordance with the
requirements of the Securities Act of 1933.

Item 3.
Defaults upon Senior Securities  None

ITEM 4 
Removed and Reserved

ITEM 5. Other Information 
None

ITEM 6
..Exhibits

|                |  |                                                                                                                          
|--------------- |  | -------------------------------------------------------------------------------------------------------------------------
|Exhibit
 Number |  | Description                                                                                                              
|                |  |                                                                                                                          
|31.1            |  | Certification
 of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act                              
|31.2            |  | Certification
 of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act                              
|32              |  | Certification
 of Chief Executive Officer and Chief Financial Officer pursuant to Section
 906 of the Sarbanes Oxley Act.

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SIGNATURES


In
accordance with the requirements of the Exchange Act, the Registrants caused
this report to be signed on its behalf by the undersigned, thereunto and duly
authorized


|                    |                                        
|------------------- | ---------------------------------------
|                    | CONOLOG CORPORATION                    
|                    |                                        
|Date: June 21, 2010 | By /s/ Robert S. Benou                 
|                    |                                        
|                    | Robert S. Benou                        
|                    | Chairman, Chief Executive
 Officer,    
|                    | (Principal Executive
 Officer)         
|                    | Chief Financial Officer
 and Treasurer,
|                    | (Chief Accounting Officer)             

15

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