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 quarterly period ended September 30, 2008
  o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the transition period from
______to______.
  BEDMINSTER
NATIONAL CORP.
 (Exact
name of registrant as specified in Charter
  NEVADA
              
              000-52191
              
              20-2779605(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (Commission
      File No.)
              
              (IRS
      Employee Identification No.)
 
 90
Washington Valley Road, Bedminster, New Jersey 07921
 (Address
of Principal Executive Offices)
 _______________
  (908)
719-8940
 (Issuer
Telephone number)
 _______________
 
 
 (Former
Name or Former Address if Changed Since Last Report)
  Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days. Yes x Noo
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company 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 in Rule 12b-2
of the Exchange Act.
 Yes o  No x
 
 State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of as of November 12, 2008: class A 13,316,983
and class B 2,154,000.
 
   
 
  Bedminster
National Corp
 
 FORM
10-Q
  September
30, 2008
  INDEX
    PART
I-- FINANCIAL INFORMATION
  Item
      1.
              Financial
      Statements (for the periods ending September 30, 2008 and 2007 are
      unaudited)Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      OperationsItem
      4T.
              Controls
      and Procedures
  PART
II-- OTHER INFORMATION
  Item
      1
              Legal
      ProceedingsItem
      2.
              Unregistered
      Sales of Equity Securities and Use of ProceedsItem
      3.
              Defaults
      Upon Senior SecuritiesItem
      4.
              Submission
      of Matters to a Vote of Security HoldersItem
      5.
              Other
      InformationItem
      6.
              Exhibits
  SIGNATURE
   
 
  Item
1. Financial Information






BEDMINSTER
      NATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSSeptember
      30,
              
              
              December
      31,2008
              
              
              2007(unaudited)
              
              
              (audited)ASSETSCURRENT
      ASSETSCash
              
              $
              14,427
              
              
              $
              33,062Accounts
      receivable
              
              
              90,135
              
              
              
              128,847Inventory,
      net
              
              
              136,199
              
              
              
              136,619Other
      current assets
              
              
              54,876
              
              
              
              56,876Total
      Current Assets
              
              
              295,637
              
              
              
              355,404Property
      and equipment, net
              
              
              69,055
              
              
              
              46,383OTHER
      ASSETSDeposits
              
              
              400
              
              
              
              400Customer
      list, net
              
              
              304,617
              
              
              
              346,729Technology
      rights, net
              
              
              227,998
              
              
              
              255,357Total
      other assets
              
              
              533,015
              
              
              
              602,486TOTAL
      ASSETS
              
              $
              897,707
              
              
              $
              1,004,273LIABILITIES
      AND STOCKHOLDERS’ DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              590,303
              
              
              $
              405,795Accrued
      interest
              
              
              113,381
              
              
              
              28,014Lines
      of credit
              
              
              363,113
              
              
              
              207,553Notes
      payable - current portion, net of debt discount of $346,885 and $2,197,
      respectively
              
              
              1,269,971
              
              
              
              154,192Convertible
      notes payable - stockholders net of debt discount of $2,292 and $64,112,
      respectively
              
              
              372,708
              
              
              
              335,888Total
      Current Liabilities
              
              
              2,709,476
              
              
              
              1,131,442OTHER
      LIABILITIESNotes
      payable - net of current portion and  net of debt discount of
      $-0- and $426,783, respectively
              
              
              -
              
              
              
              1,002,399Convertible
      notes payable - stockholders net of debt discount of $15,000 and $64,112,
      respectively
              
              
              485,000
              
              
              
              -TOTAL
      LIABILITIES
              
              
              3,194,476
              
              
              
              2,133,841Minority
      Interest
              
              
              221
              
              
              
              58,705STOCKHOLDERS’
      DEFICITPreferred
      stock, $0.0001 par value, 100,000,000 shares authorized, none issued
      and outstanding, respectively
              
              
              -
              
              
              
              -Common
      stock – Class A, $0.0001 par value, 200,000,000 shares authorized, 13,280,983and 9,523,400 shares issued and outstanding,
      respectively
              
              
              1,341
              
              
              
              953Common
      stock – Class B, $0.0001 par value, 3,000,000 shares authorized, 2,154,000
      shares issued and outstanding
              
              
              215
              
              
              
              215Additional
      paid in capital
              
              
              1,001,250
              
              
              
              820,437Accumulated
      deficit
              
              
              (3,299,796
              )
              
              
              (2,009,878
              )Total
      Stockholders’ Deficit
              
              
              (2,296,990
              )
              
              
              (1,188,273
              )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
              
              $
              897,707
              
              
              $
              1,004,273




Notes to the Financial
Statement are an integral part of these statements.




-1-




BEDMINSTER
      NATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS (UNAUDITED)NINE
      MONTHS ENED
              
              
              THREE
      MONTHS ENEDSEPTMEBER
      30,
              
              
              SEPTEMBER
      30,2008
              
              
              2007
              
              
              2008
              
              
              2007REVENUES
              
              $
              990,783
              
              
              $
              331,544
              
              
              $
              194,340
              
              
              $
              330,044Cost
      of Goods Sold
              
              
              570,013
              
              
              
              564,794
              
              
              
              125,297
              
              
              
              564,794Gross
      Profit (Loss)
              
              
              420,770
              
              
              
              (233,250
              )
              
              
              69,043
              
              
              
              (234,750
              )OPERATING
      EXPENSESProfessional
      fees
              
              
              356,565
              
              
              
              202,406
              
              
              
              82,779
              
              
              
              117,501Officer
      Compensation
              
              
              363,585
              
              
              
              263,101
              
              
              
              119,804
              
              
              
              132,259Selling
      Expenses
              
              
              57,764
              
              
              
              24,713
              
              
              
              17,307
              
              
              
              24,713General
      and administrative
              
              
              556,505
              
              
              
              118,445
              
              
              
              184,667
              
              
              
              70,050Total
      Operating Expenses
              
              
              1,334,419
              
              
              
              608,665
              
              
              
              404,557
              
              
              
              344,523LOSS
      FROM OPERATIONS
              
              
              (913,649
              )
              
              
              (841,915
              )
              
              
              (335,514
              )
              
              
              (579,273
              )OTHER
      INCOME (EXPENSE)Interest
      Expense
              
              
              (439,379
              )
              
              
              (237,393
              )
              
              
              (209,036
              )
              
              
              (185,328
              )Interest
      Income
              
              
              5,144
              
              
              
              573
              
              
              
              5,121
              
              
              
              573Total
      Other Income (Expense), net
              
              
              (434,235
              )
              
              
              (236,820
              )
              
              
              (203,915
              )
              
              
              (184,755
              )LOSS
      BEFORE INCOME TAXES
              
              
              (1,347,884
              )
              
              
              (1,078,735
              )
              
              
              (539,429
              )
              
              
              (764,028
              )Provision
      for Income Taxes
              
              
              520
              
              
              
              3,444
              
              
              
              -
              
              
              
              2,924LOSS
      FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
              
              
              (1,348,404
              )
              
              
              (1,082,179
              )
              
              
              (539,429
              )
              
              
              (766,952
              )Minority
      Interest Share of Loss
              
              
              58,484
              
              
              
              83,518
              
              
              
              32,078
              
              
              
              83,518LOSS
      FROM CONTINUING OPERATIONS
              
              
              (1,289,920
              )
              
              
              (998,661
              )
              
              
              (507,351
              )
              
              
              (683,434
              )DISCONTINUED
      OPERATIONSBedminster
      Capital Corp
              
              
              -
              
              
              
              (126,456
              )
              
              
              -
              
              
              
              (27,632
              )Bedminster
      Financial Corp
              
              
              -
              
              
              
              (132,363
              )
              
              
              -
              
              
              
              (26,284
              )-
              
              
              
              (258,819
              )
              
              
              -
              
              
              
              (53,916
              )NET
      LOSS
              
              
              (1,289,920
              )
              
              
              (1,257,480
              )
              
              
              (507,351
              )
              
              
              (737,350
              )Net
      loss per share - basic and dilutedContinuing
      operations
              
              $
              (0.10
              )
              
              $
              (0.11
              )
              
              $
              (0.04
              )
              
              $
              (0.12
              )Discontinued
      operations
              
              
              -
              
              
              
              (0.03
              )
              
              
              -
              
              
              
              (0.01
              )Net
      Loss per share - basic and diluted
              
              $
              (0.10
              )
              
              $
              (0.14
              )
              
              $
              (0.04
              )
              
              $
              (0.13
              )Weighted
      average number of shares outstanding during the period - basic and
      diluted
              
              
              12,539,367
              
              
              
              9,083,091
              
              
              
              14,003,150
              
              
              
              5,615,765




Notes to the Financial
Statement are an integral part of these statements.




-2-






BEDMINSTER
      NATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWS (UNAUDITED)NINE
      MONTHS ENEDSEPTMEBER
      30,2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss from continuing operations
              
              $
              (1,289,920
              )
              
              $
              (998,661
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
              
              
              78,637
              
              
              
              11,199Amortization
      of note payable discount
              
              
              196,915
              
              
              
              224,511Stock
      issued for services
              
              
              19,000
              
              
              
              19,000Stock
      issued for interest expense
              
              
              13,474
              
              
              
              -Minority
      interest
              
              
              (58,484
              )
              
              
              (83,518
              )Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
              
              
              38,712
              
              
              
              (109,984
              )(Increase)
      decrease in prepaid
              
              
              -
              
              
              
              (58,469
              )(Increase)
      decrease in inventory
              
              
              420
              
              
              
              24,621(Increase)
      decrease in other current assets
              
              
              2,000
              
              
              
              -Increase
      (decrease) in accounts payable and accrued expenses
              
              
              184,508
              
              
              
              281,177Increase
      (decrease) in accrued interest
              
              
              154,772
              
              
              
              11,949Net
      Cash Used In Operating Activities in continuing operations
              
              
              (659,966
              )
              
              
              (678,175
              )Net
      Cash Used In Operating Activities in discontinuing
    operations
              
              
              -
              
              
              
              (183,323
              )Net
      Cash Used in Operating Activities
              
              
              (659,966
              )
              
              
              (861,498
              )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of fixed assets
              
              
              (31,838
              )
              
              
              -Cash
      paid for acquisition, net of cash received
              
              
              -
              
              
              
              (255,709
              )Net
      Cash Used In Investing Activities
              
              
              (31,838
              )
              
              
              (255,709
              )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of common stock
              
              
              -
              
              
              
              31,784Proceeds
      from issuance of notes payable
              
              
              -
              
              
              
              1,000,000Repayment
      of notes payable
              
              
              (32,391
              )
              
              
              (81,524
              )Repayment
      of Capital Lease
              
              
              -
              
              
              
              (6,010
              )Proceeds
      from convertible notes payable - stockholders
              
              
              550,000
              
              
              
              37,500Proceeds
      from lines of credit, net
              
              
              155,560
              
              
              
              192,479Net
      Cash Provided By Financing Activities
              
              
              673,169
              
              
              
              1,174,229NET
      INCREASE (DECREASE) IN CASH
              
              
              (18,636
              )
              
              
              57,022CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
              
              
              33,062
              
              
              
              110,852CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
              
              $
              14,427
              
              
              $
              167,874






-3-






Bedminster
National Corp and Subsidiaries


Notes
to Condensed Consolidated Financial Statements


As
of September 30, 2008






NOTE
1    SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND ORGANIZATION





(A) Basis of
Presentation





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the requirements of Form 10-Q and Rule 8-03 of
Regulation S-X of the Securities and Exchange Commission (the “Commission”) and
include the results of Bedminster National Corp (the
“Company”).  Accordingly, certain information and footnote disclosures
required in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted.  Statements are subject to possible adjustments
in connection with the annual audit of the Company’s accounts for the year ended
December 31, 2008.  In the opinion of the Company’s management, the
accompanying unaudited condensed consolidated financial statements contain all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for the fair presentation of the Company’s consolidated
financial position as of September 30, 2008 and the results of its operations
and cash flows for the three and nine month period ended September 30,
2008.  Results for the nine months ended September 30, 2008 are not
necessarily indicative of results that may be expected for the entire
year.  The unaudited condensed consolidated financial statements
should be read in conjunction with the audited financial statements of the
Company and the notes thereto as of and for the year ended December 31, 2007
included in the Company’s Form 10-KSB filed with the Commission on April 15,
2008.





The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. As reflected in the accompanying
financial statements, the Company has an accumulated deficit of $3,299,796,
negative working capital of $2,413,839, and has a negative cash flow from
operations of $659,967for the nine months ended September 30, 2008 and is in
default on several notes payable at September 30, 2008. See Notes 4 and 5. These
conditions raise substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going concern is dependent
on the Company’s ability to renegotiate debt that is currently in default, to
raise additional capital and to implement its business plan. Management believes
that actions presently being taken to obtain additional funding and implement
its strategic plans may provide an opportunity for the Company to continue as a
going concern. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.


(B)
Organization





Bedminster
National Corp. was incorporated under the laws of the State of Delaware on April
22, 2005 and reincorporated in the State of Nevada on October 20,
2006.  On January 18, 2007, Bedminster National Corp. established two
wholly owned subsidiaries (Bedminster Capital Corp, (“BCC’) a real estate
management company and Bedminster Financial Corp, (“BFC”) an investment
management company) in the State of Nevada.  On August 31, 2007, both
entities were spun-off from Bedminster National Corp. as a dividend to
shareholders. Bedminster National Corp was organized to provide management
consulting services and intends to acquire profitable and near term profitable
small and medium sized businesses. On July 3, 2007, Bedminster National Corp
entered into a Stock Purchase Agreement (“Agreement”) with Metropolitan
Computing Corporation, a New Jersey Corporation (“MCC”) and its principal
shareholder (“Seller”) in which Bedminster National acquired eighty (80%)
percent of the issued and outstanding shares of MCC.  MCC established
in 1985, is active in the design, development, and marketing of instrumentation
equipment for the pharmaceutical industry.  Bedminster National Corp
and its 80% owned subsidiary are here after referred to as the
“Company.”





As of
July 3, 2007, the Company has begun its principal operations and is no longer
considered a Development Stage Company.






-4-








Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






(C) Principles of
Consolidation





The 2007
consolidated financial statements include the accounts of Bedminster National
Corp. and its two wholly owned subsidiaries Bedminster Financial Corp.,
Bedminster Capital Corp., both from January 18, 2007 through the date of the
spin-off.  The operations of BFC and BCC have been reclassified to
Discontinued Operations, as the entities were spun-off in August
2007.  The 2008 and 2007 consolidated financial statements include its
80% owned subsidiary Metropolitan Computing Corporation from January 1, 2008 to
September 30, 2008 and from July 3, 2007 to September 30, 2007,
respectively.  All significant inter-company accounts and transactions
have been eliminated in consolidation.





(D) Use of
Estimates





In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period.  Significant estimates included
in these financial statements include the valuation of equity
transactions.  Actual results could differ from those
estimates.





(E) Financial
Instruments





The
Company’s financial instruments consist of cash, accounts receivable, accounts
payable, notes payable, and lines of credit.  It is management’s
opinion that the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments.  The fair value
of these financial instruments approximates their carrying value.





(F) Cash
Equivalents





For the
purpose of the cash flow statement, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents. There were no such equivalents at September 30,
2008 or December 31, 2007.




(G) Concentration of Credit
Risk





A
significant portion of the Company’s total revenues for the nine months ended
September 30, 2008 have been derived from two customers. Combined sales for
these customers accounted for approximately 30 percent of sales for the nine
months ended September 30, 2008. In addition, as of September 30, 2008 three
customers accounted for approximately 75% of accounts receivable.





(H) Accounts
Receivable





Accounts
receivable are non-interest bearing uncollateralized customer obligations.
Accounts receivable are stated at the amounts billed to the customer. Customer
account balances with invoices over 90 days old are considered delinquent.
Payments of accounts receivable are allocated to the specific invoices as
received. The carrying amount of accounts receivable is reduced by a valuation
allowance that reflects management’s estimate of the amounts that will not be
collected. No allowances for doubtful accounts exist as of September 30, 2008
and December 31, 2007.








-5-








Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






(I)
Inventory





Inventory
consists primarily of parts and work in process products held for sale.
 Inventory is stated at the lower of cost or market, with cost being
determined on a first in/first out basis.




(J) Property and
Equipment





Property
and equipment are stated at cost, less accumulated
depreciation.  Expenditures for maintenance and repairs are charged to
expense as incurred.  Gains and losses on depreciable assets retried
or sold are recognized in the statement of operations in the year of
disposal.  Depreciation is provided using the straight-line method
over the estimated useful life of five years.





(K) Impairment of Long-Lived
Assets





The
Company accounts for long-lived assets under the Statements of Financial
Accounting Standards Nos. 142 and 144 “Accounting for Goodwill and Other
Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived
Assets” (“SFAS No. 142 and 144”).  In accordance with SFAS No. 142 and
144, long-lived assets, goodwill and certain identifiable intangible assets held
and used by the Company are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable.  For purposes of evaluating the recoverability of
long-lived assets, goodwill and intangible assets, the recoverability test is
performed using undiscounted net cash flows related to the long-lived
assets.





In
accordance with SFAS No.142, the Company reviews the carrying value of goodwill
and intangible assets with indefinite lives annually or earlier in certain
circumstances as required. The Company measures impairment losses by comparing
carrying value to fair value. Fair value is determined using a price to sales
multiple of comparable companies.




In
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets,” long-lived assets used in operations are reviewed for
impairment whenever events or change circumstances indicate that carrying
amounts may not be recoverable. For such long-1ived assets, the Company
recognizes an impairment loss only if its carrying amount is not recoverable
through its undiscounted cash flows and measures the impairment loss based on
the difference between carrying amount and fair value.




(L) Goodwill and Intangible
Assets





Goodwill
and intangible assets result primarily from acquisitions accounted for under the
purchase method. In accordance with Statement of Financial Accounting Standards
(“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”)
goodwill and intangible assets with indefinite lives are not amortized but are
subject to impairment by applying a fair value based test. Intangible assets
with finite useful lives related to technology rights and customer lists are
being amortized on a straight-line basis over the estimated useful life of the
related asset of seven years.








-6-











Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






(M) Revenue
Recognition





Revenues
include fees billed for consulting services on a month to month
contract.  These revenues are recognized as the services are
performed.  Revenues also include sales for pharmaceutical machines
sold.  These revenues are recognized when the machine is delivered to
the customer.





(N) Income
Taxes





The
Company accounts for income taxes under the Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” (“Statement
109”).  Under Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled.  Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.  At September 30, 2008, deferred tax
assets amounted to approximately $418,867 which related to net operating loss
carry forwards.  The Company recorded a full valuation allowance to
reflect the estimated amount of deferred tax assets which are currently not
realizable.





The
Company maintains a valuation allowance with respect to deferred tax assets. The
Company establishes a valuation allowance based upon the potential likelihood of
realizing the deferred tax asset and taking into consideration the Company’s
consolidated financial position and results of operations for the current
period. Future realization of the deferred tax benefit depends on the existence
of sufficient taxable income within the carry forward period under the Federal
tax laws.





Changes
in circumstances, such as the Company generating taxable income, could cause a
change in judgment about the reliability of the related deferred tax asset. Any
change in the valuation allowance will be included in income in the year of the
change in estimate.




(O) Employee Benefit
Plan





The
Company maintains a qualified deferred compensation plan under section 401k of
the Internal Revenue Code.  Under the plan, employees may elect to
defer a portion of their salary, subject to limits set by the Internal Revenue
Service.  In addition, the plan allows for the Company to make
discretionary contributions based on the participants’ salaries.  The
Company made contributions to the plan for the nine months ended September 30,
2008 and 2007 of $3,476 and $-0- , respectively.





(P) Loss Per
Share





Basic and
diluted net loss per common share is computed based upon the weighted average
common shares (classes A and B) outstanding as defined by Financial Accounting
Standards No. 128, “Earnings Per Share.”  As of September 30, 2008 and
2007, there were 2,500,000 and -0- shares, respectively that are issuable upon
conversion of the convertible notes payable and 8,548,000 and -0- warrants
outstanding to purchase common stock, respectively, that were not included in
dilutive net loss per share as the effect was anti-dilutive.





(Q) Stock-Based
Compensation





Effective
January 1, 2006, the Company adopted the provisions of SFAS No. 123R and related
interpretations as provided by SAB 107.  As such, compensation cost is
measured on the date of grant at their fair value.  Such compensation
amounts, if any, are amortized over the respective vesting periods of the option
grant.








-7-









Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






Common
stock, stock options and common stock warrants issued to other than employees or
directors are recorded on the basis of their fair value, as required by SFAS
No. 123(R), which is measured as of the date required by EITF
Issue 96-18,“Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services.” In accordance with
EITF 96-18, the stock options or common stock warrants are valued using the
Black-Scholes option pricing model on the basis of the market price of the
underlying common stock on the “valuation date,” which for options and warrants
related to contracts that have substantial disincentives to non-performance is
the date of the contract, and for all other contracts is the vesting date.
Expense related to the options and warrants is recognized on a straight-line
basis over the shorter of the period over which services are to be received or
the vesting period. Where expense must be recognized prior to a valuation date,
the expense is computed under the Black-Scholes option pricing model on the
basis of the market price of the underlying common stock at the end of the
period, and any subsequent changes in the market price of the underlying common
stock up through the valuation date is reflected in the expense recorded in the
subsequent period in which that change occurs.





The
Company has not issued any stock options at September 30, 2008.





(R) Recent Accounting
Pronouncements





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
objective of SFAS 157 is to increase consistency and comparability in fair value
measurements and to expand disclosures about fair value
measurements.  SFAS 157 defines fair value, establishes a framework
for measuring fair value in generally accepted accounting principles, and
expands disclosures about fair value measurements. SFAS 157 applies under other
accounting pronouncements that require or permit fair value measurements and
does not require any new fair value measurements. The provisions of SFAS No. 157
are effective for fair value measurements made in fiscal years beginning after
November 15, 2007. The adoption of this statement did not have a material effect
on the Company's future reported financial position or results of
operations.





In
February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
159, “The Fair Value Option
for Financial Assets and Financial Liabilities – Including an Amendment of FASB
Statement No. 115”.  This statement permits entities to choose
to measure many financial instruments and certain other items at fair value.
Most of the provisions of SFAS No. 159 apply only to entities that elect the
fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments
in Debt and Equity Securities” applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity’s first fiscal year that begins after November 15, 2007.
The Company has elected not to adopt the statement.




In
December 2007, the FASB issued SFAS No. 160, “ Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of ARB No. 51” (“ SFAS 160” ). SFAS 160 amends
ARB 51 to establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. An
ownership interest in subsidiaries held by parties other than the parent should
be presented in the consolidated statement of financial position within equity,
but separate from the parent’s equity. SFAS 160 requires that changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary should be accounted for similarly as equity
transactions. When a subsidiary is deconsolidated, any retained noncontrolling
equity investment in the former subsidiary should be initially measured at fair
value, with any gain or loss recognized in earnings. SFAS 160 requires
consolidated net income to be reported at amounts that include the amounts
attributable to both the parent and the noncontrolling interest. It also
requires disclosure, on the face of the consolidated income statement, of the
amounts of consolidated net income attributable to the parent and to the
noncontrolling interests. SFAS 160 is effective for fiscal years (including
interim periods within those fiscal years) beginning on or after December 15,
2008 (October 1, 2009 for the Company). Earlier adoption is prohibited. The
statement shall be applied prospectively as of the beginning of the fiscal year
in which it is initially applied, except for the presentation and disclosure
requirement which shall be applied retrospectively for all periods presented.
The Company is currently evaluating the impact SFAS 160 will have on its
consolidated financial statements.








-8-







Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008









NOTE
2    INTANGIBLE
ASSETS





Intangible
assets consisted of the following at September 30, 2008 and December 31,
2007:








2008
            
            
            
            2007Customer
      list
            
            $
            373,400
            
            
            $
            373,400Technology
      rights
            
            
            275,000
            
            
            
            275,000648,400
            
            
            
            648,400Less:  Accumulated
      amortization
            
            
            115,785
            
            
            
            46,314$
            532,615
            
            
            $
            602,086





Amortization
expense amounted to $69,471 and $8,057 for the nine months ended September 30,
2008 and 2007, respectively. The Company anticipates amortization expense to
amount to approximately $93,000 per year for the next five years.





NOTE
3    LINES OF
CREDIT





During
2008 and 2007, respectively the Company had lines of credit available of
$435,000 and $235,000, respectively with various financial
institutions.  The lines bear interest between 5.0% and 9.5% as of
September 30, 2008 and December 31, 2007, on all outstanding principal
amounts.  There was $363,113 and $207,553 outstanding as of September
30, 2008 and December 31, 2007, respectively.  The sole officer of the
Company has personally guaranteed $150,000 of the available
credit.  The remaining lines are unsecured.





NOTE
4    NOTES
PAYABLE





Notes
payable consisted of the following at September 30, 2008 and December 31,
2007:




2008
            
            
            
            2007Note
      payable (a)
            
            $
            37,461
            
            
            $
            41,773Promissory
      note shareholder, bearing interest at 8% (b)
            
            
            262,471
            
            
            
            272,572Promissory
      note, bearing interest at 12% (c)
            
            
            1,316,924
            
            
            
            1,271,2261,616,856
            
            
            
            1,585,571Less:  debt
      discount
            
            
            (346,885
            )
            
            
            (428,980
            )1,269,971
            
            
            
            1,156,591Less:
      current portion
            
            
            1,269,971
            
            
            
            154,192Notes
      payable, net of current portion
            
            $
            -0-
            
            
            $
            1,002,399





(a)
            The
      note payable bear interest variable between 8.5% and 9.5%, per annum with
      monthly principal and interest payments of $ 795 monthly, secured by
      assets of the Company, final payments due June 2013.  The note
      is currently in default due to payments not being made in accordance with
      agreement. Consequently, the outstanding principal balance has been
      classified as short term in the financial
  statements.





(b)
            On
      July 3, 2007, the Company issued a promissory note to the principal
      shareholder of MCC in the amount of $300,000 payable monthly over 36
      months with an 8% interest rate. The note is currently in default due to
      payments not being made in accordance with
      agreement.  Consequently, the outstanding principal balance has
      been classified as short term in the financial
      statements.











-9-







Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008









(c)
            On
      July 3, 2007, the Company issued a promissory note to Dutchess Private
      Equities Fund, Ltd. (the “Investor” or “Dutchess”) for $1,375,000 (“Face
      Amount”) which has a two-year term and bears annual interest at
      12%.  The note included a discount of $275,000 whereby the
      Company was to receive proceeds from the note of $1,100,000.  In
      January 2008, the loan was amended. Pursuant to this amendment, the
      Company is required to make mandatory payments to the Investor in the
      amount of $5,000 per month for January 15, 2008 through April 1, 2008,
      $13,438 per month for May 1, 2008 through June 1, 2008, $25,000 each month
      from July 1, 2008 through December 2008, $40,000 for January 1, 2009
      through March 1, 2009, $50,000 a month for April 1, 2009 through June 1,
      2009 and $70,000 per month until the face amount of the loan is paid in
      full.  In addition, pursuant to the amendment the Company shall
      provide a warrant to Dutchess to purchase up to 8,484,000 shares of common
      stock with an exercise price of par.  In the event of default of
      this Note, the Investor may declare the entire unpaid principal
      balance of this Note, together with interest accrued, immediately due and
      payable at the place of payment, without presentment, protest, notice or
      demand, all of which are expressly waived.  The note payable is
      secured by the assets of the Company and its subsidiary
      (MCC).  The note is currently in default due to payments not
      being made in accordance with agreement. Consequently, the outstanding
      principal balance has been classified as short term in the financial
      statements.




NOTE
5    CONVERTIBLE NOTES PAYABLE -
STOCKHOLDERS





Convertible
notes payable – stockholders consisted of the following at September 30, 2008
and December 31, 2007:





2008
            
            
            
            2007Convertible
      notes issued August 2006 (a)
            
            $
            200,000
            
            
            $
            275,000Convertible
      notes issued during 2007 (b)
            
            
            125,000
            
            
            
            125,000Convertible
      notes issued during 2008 (c)
            
            
            550,000
            
            
            
            -0-875,000
            
            
            
            400,000Less:  debt
      discount
            
            
            17,292
            
            
            
            64,112857,708
            
            
            
            335,888Less:
      current portion
            
            
            372,708
            
            
            
            335,888Convertible
      notes payable, net of current portion
            
            $
            485,000
            
            
            $
            -0-





(a)
            During
      2006, several private placements to investors were completed in amounts
      ranging from $25,000 to $100,000 with interest payable (monthly in cash)
      at 10% percent per annum.  The investors received a one year
      Convertible Promissory Note in amounts ranging from $25,000 to
      $100,000.  The Company also issued 550,000 shares of the
      Company’s common stock in accordance with the private placement
      memorandum.  The proceeds of the offering were allocated to the
      shares of common stock based on a recent cash offering
      price.  The Company recorded a discount on the note payable of
      $55,000.  The discount was amortized over the life of the
      note.  The Company has agreed to register the common stock with
      the Securities and Exchange Commission within 180 days from
      closing.  In September of 2007, the Company issued an additional
      275,000 class A shares of stock in exchange for a one year extension on
      the notes payable to August 2008.  Accordingly, the Company has
      recorded an additional discount on the note payable of $68,749, which will
      be amortized over the life of the notes.  The notes matured as
      of August 2008, In September 2008 one note was extended until August
      2010.  During 2008, an investor converted their debt in the
      amount of 80,083 including accrued interest to 1,639,583shares of Class A
      at $.05 per share.  The note was originally convertible at $.50
      per share.  The Company induced conversion by amending the terms
      to $.05 per share plus 25,000 shares and recorded a conversion expense of
      $8,896.










-10-







Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008









(b)
            During
      2007, several private placements to investors were completed in the
      amounts ranging from $25,000 to $50,000 with interest payable (monthly in
      cash) at 10% percent per annum, with final payments due during
      2008.  These investors received a one year Convertible
      Promissory Note in the total amounts of in amounts ranging from $25,000 to
      $50,000.  The Company also issued 205,000 shares of the
      Company’s common stock in accordance with the private placement
      memorandum.  The proceeds of the offering were allocated to the
      shares of common stock based on a recent cash offering
      price.  The Company recorded a discount on the note payable of
      $43,000.  The discount will be amortized over the life of the
      note.





(c)
            During
      2008, a private placements to investors were completed in the amounts
      ranging of $25,000 to $500,000 with interest payable (monthly in cash)
      between 10% and 11% percent per annum, with final payments due during 2009
      and 2010.  The investors received a one year Convertible
      Promissory Note in amounts ranging from $25,000 to
      $500,000.  The Company also issued 1,055,000 shares of the
      Company’s common stock in accordance with the private placement
      memorandum.  The proceeds of the offering were allocated to the
      shares of common stock based on a recent cash offering
      price.  The Company recorded a discount on the notes payable of
      $25,500.  The discount will be amortized over the life of the
      notes.




NOTE
6    STOCKHOLDERS’
DEFICIT





(A) Common Stock
Issued for debt




During
2008, the Company issued 288,000 shares in connection with payment of the
Dutchess note with a fair value of $4,577 which was applied to interest
expense.





In
addition, the Company issued 1,000,000 shares of Class A common stock for a
subscription agreement, consisting of 24 month notes which are convertible into
shares of Class A common stock, and recorded a discount of
$20,000.  See Note 5.




( B) Common Stock
Issued for convertible notes payable





During
2008, the Company issued 55,000 shares of Class A stock with a fair value of
$5,500 in connection with a one year notes payable. This was recorded as debt
discount.  See Note 5.





( C) Issuance of
Warrant





During
2008, in connection with the refinance of the Dutchess note payable (see note
4), the Company issued 8,584,000 warrants to purchase class A shares of common
stock for $.0001 per share.  The warrants have a five year
life.  In connection with the transaction, the Company recorded a debt
discount in the amount of $42,500.





( D) Common Stock
issued for services





During
May, June, and September 2008, the Company issued 400,000 shares of Class A
stock to Carmac Associates, Inc for services rendered valued at
$14,000.





During
August 2008, the Company issued 500,000 shares of Class A stock
to consultant for services rendered valued at $5,000.





( E) Common Stock
issued for conversion of debt





During
2008, an investor converted their debt in the amount of  $89,624
including accrued interest to 1,639,583 shares of Class A at $.05 per
share.




NOTE
7    RELATED PARTY
TRANSACTIONS





The
Company has entered into an employment agreement with the sole officer of the
Company that became effective May 1, 2006.  See Note 8
(A).





During
2008 and 2007, the Company entered into convertible notes payable transactions
with stockholders for $550,000 and $125,000, respectively (See Note
5).





In
October 2006, the Board of Directors agreed to pay Apogee Partners Ltd. a fee of
$200,000 in cash for arranging the Dutchess Equity Line (see note
8(B)).




At times,
a related party loans to Company’s subsidiary money to pay for operating
expenses.  At September 30, 2008 and December 31, 2007, $32,389 and
$6,720, respectively, was due to the related party and included in accounts
payable and accrued expenses.








-11-







Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






NOTE
8    COMMITMENTS AND
CONTINGENCIES





(A) Employment
Agreement





The
Company has entered into an employment agreement with the sole officer of the
Company that became effective May 1, 2006.  The employment agreement
ends December 31, 2015 and calls for an annual salary of $250,000 (which amount
shall be increased by $35,000 when and if the Company’s revenues, based on the
trailing twelve months over per forma basis, exceed $10,000,000 and there after
increase by an additional $25,000 for each proforma revenue increase of
$10,000,000), which salary shall increase by no less then 5%
annually.  In the event of termination of employment without cause,
the agreement provides that the Company shall pay severance equaling the greater
of the balance of the term of the agreement or one year’s salary. In addition
the CEO will receive a $600 per month automobile allowance, $100 cellular
telephone allowance, a $200 home office allowance and a professional fee
allowance of $100 per month.  The CEO will also earn an annual bonus
of 10% of the annual adjusted EBITDA earnings.  The Bonus will be paid
65% in cash and 35% in Common Shares – A class at the annual average stock
price.  The CEO is also entitled to all employee benefits and life
insurance in the amount of $3,000,000.  The agreement also calls for
the CEO to receive a lump sum payment of 300% of his annual salary upon death or
termination during the term of the agreement.





The
Company has entered into an employment agreement with Seller of MCC whereby an
aggregate $200,000 and 1,000,000 shares of Class A Common Stock of BNC can be
earned by the Seller if certain income is earned over the next two
years.





(B) Consulting
Fee





In
October 2006, the Board of Directors agreed to pay Apogee Partners Ltd. a fee of
$200,000 in cash for arranging the Dutchess Equity Line.  A portion of
such fee shall be paid from time to time only when the Board of Directors
determines the Company has sufficient operating funds and only when there is an
amount of operating funds remaining after such payment equal to any such
payment.  Apogee is affiliated with our CEO Mr.
Patrizio.  For the nine months ended September 30, 2008 and 2007,
the Company paid $97,500 and $2,000, respectively and is included in
professional fee expense.  As of September 30, 2008, $102,500 is due
to Apogee Partners under the agreement.




(C)
Leases





The
Company leases offices under a lease agreement expiring in December 31, 2008,
requiring rental payments of approximately $65,000 per annum.  Rent
expense during the nine months ended September 30, 2008 was approximately
$50,000.





NOTE
9    EQUITY INVESTMENT
AGREEMENT





On June
29, 2006, the Company entered into an Investment Agreement (the “Agreement”)
with Dutchess Private Equities Fund II, LLP (“Dutchess”) to provide the Company
with an equity line of credit. Pursuant to this Agreement, upon effectiveness of
the registration statement, Dutchess is contractually obligated to
purchase up to $10,000,000 of the Company’s Stock over the course of 36
months (“Line Period”), after a  registration statement has been declared
effective (“Effective Date”). The amount that the Company shall be entitled to
request from each of the purchase “Puts”, shall be equal to either 1) $100,000
or 2) 200% of the average daily volume (U.S market only) (“ADV”), multiplied by
the average of the three (3) daily closing prices immediately preceding the Put
Date. The ADV shall be computed using the ten (10) trading days prior to the Put
Date. The Purchase Price for the common stock identified in the Put Notice shall
be set at ninety-five percent (95%) of the lowest closing bid price of the
common stock during the Pricing Period. The Pricing Period is equal to the
period beginning on the Put Notice Date and ending on and including the date
that is five (5) trading days after such Put Notice Date.








-12-







Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






There are
put restrictions applied on days between the Put Date and the Closing Date with
respect to that Put. During this time, the Company shall not be entitled to
deliver another Put Notice.  The Company shall automatically withdraw
that portion of the put notice amount, if the Market Price with respect to that
Put does not meet the Minimum Acceptable Price.  The Minimum
Acceptable Price is defined as seventy-five (75%) of the lowest closing bid
price of the common stock for the three (3) trading days prior to the
Put Date.  During the nine months ending September 30, 2008, the
Company has issued 288,000 shares and value at $4,577 and recorded it as
interest expense.





NOTE
10  BUSINESS
AQUISITION





On July
3, 2007, Bedminster National Corp entered into a Stock Purchase Agreement
(“Agreement”) with Metropolitan Computing Corporation, a  New Jersey
Corporation (“MCC”) and Seller in which the Company acquired eighty (80%)
percent of the issued and outstanding shares of MCC.  In consideration
for the purchase of the shares of MCC, the Company agreed to pay up to a total
of Eight Hundred Thousand Dollars ($800,000) plus 1,000,000 shares of our Class
A Common Stock; provided, however, that such Purchase Price will be adjusted in
accordance with terms of the Agreement.  The Company paid the Purchase
Price in the following manner: (i) Three Hundred Thousand and 00/100 Dollars
($300,000) at Closing, and (ii) Three Hundred Thousand and 00/100 Dollars
($300,000) paid by a Buyer Promissory Note delivered at the Closing, and
(iii) an aggregate of Two Hundred Thousand and 00/100 Dollars and 1,000,000
shares of our Class A Common Stock to be earned by Seller and paid by Buyer
in accordance with the Agreement.  At September 30, 2008, the Company
does not anticipate the seller earning these additional amounts due under
contract and has accordingly not recorded the contingent purchase
price.  The Company used the proceeds from the July 3,
2007 Promissory Note with Dutchess Private Equities Fund, Ltd. for the
initial payment to Seller.





Bedminster
National Corp also provided a revolving credit line (“Line”) to MCC at closing
of four hundred thousand dollars ($400,000).  The Line provides for an
interest rate of eight (8%) percent, and interest and principal will be repaid
to us annually.    The loan is eliminated in
consolidation.  At any time after the third anniversary of the Closing
provided that the Line has been repaid, Seller may put his remaining shares of
MCC (“Sellers’ Shares”) to BNC and the Company must purchase Seller’s Shares at
the Put Price. The Put Price is the per share amount based upon the average of
two most recent years of MCC’s audited annual EBITDA multiplied by six (6) and
divided by five (5) or $200,000, whichever is greater (the “Put
Amount”).  The Put Amount will be paid to Seller in cash in three (3)
equal annual payments.   Also, the Company entered into an
employment agreement with Seller which provides for a five (5) year term
and  have  mutually agreed to salary, benefits and other
standard provisions including a non-compete clause.





The
preliminary allocation of the total purchase price of MCC’s net tangible and
identifiable assets was based on their estimated fair value as of July 3, 2007.
The total purchase price of $ 603,840 has been allocated as
follows:




CASH
              
              $
              44,291ACCOUNTS
      RECEIVABLE
              
              
              85,006INVENTORY
              
              
              110,518EMPLOYEE
      LOAN RECEIVABLE
              
              
              16,167NET
      PROP AND EQUIP
              
              
              52,838CUSTOMER
      LIST
              
              
              373,400TECHNOLOGY
      RIGHTS
              
              
              275,000TOTAL ASSETS
              
              $
              957,220ACCOUNTS
      PAYABLE
              
              $
              91,054LINES
      OF CREDIT
              
              
              112,326MINORITY
      INTEREST
              
              
              150,000TOTAL
      LIABILITIES
              
              $
              353,380PURCHASE
      PRICE
              
              
              603,840$
              957,220






-13-







Bedminster
National Corp and Subsidiaries


Notes
to Consolidated Financial Statements


As
of September 30, 2008






The
following un-audited pro-forma summary presents the results of operations as if
the MCC, Inc acquisition described above had occurred as of the beginning of
each of the periods presented below and is not necessarily indicative of the
results that would have occurred had the transactions been completed as of that
date or results that may occur in the future.





Pro-forma
results for the nine months ended September 30, 2007 are as
follow:




Gross
      revenues
            
            $
            1,093,362Cost
      of goods sold
            
            $
            1,067,720Total
      expenses
            
            $
            1,092,946Net
      loss from continuing operations before minority interest
            
            
            (1,067,304
            )Minority
      interest share of loss
            
            
            83,518Net
      loss from continuing operations
            
            
            (983,786
            )Discontinued
      operations
            
            
            (258,819
            )Net
      loss
            
            $
            (1,242,605
            )Earnings
      per share
            
            $
            (0.14
            )Weighted
      average shares outstanding
            
            
            9,083,091





NOTE
11  SUPPLEMENTAL CASH FLOW
INFORMATION





(a)
            Supplemental
      Cash Flow Information




2008
            
            
            2007Cash
      paid for income taxes
            
            $
            520
            
            
            $
            -0-Cash
      paid for interest
            
            $
            32,516
            
            
            $
            13,025




(b)
            Supplemental
      disclosure of non cash investing and financing
  activities




2008
              
              
              2007Stock
      issued for debt discount
              
              $
              25,500
              
              
              $
              -0-Warrant
      issued for debt discount
              
              $
              42,500
              
              
              $
              -0-Accrued
      interest converted toadditional
      notes payable
              
              $
              63,676
              
              
              $
              -0-Stock
      issued for conversion of notes payable
              
              $
              80,083
              
              
              $
              -0-




NOTE 12  SUBSEQUENT EVENT




The
Company issued 36,000 Class A Common Shares under the consulting agreement for
services rendered in the fourth quarter of 2008.







-14-




ITEM
2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
 The
information contained in Item 2 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, as amended. Actual results may
materially differ from those projected in the forward-looking statements as a
result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual results
will not be different from expectations expressed in this report.
 
 Acquisition of Metropolitan
Computing Corporation
 
 On July
3, 2007, we entered into a Stock Purchase Agreement (the “Agreement”) with
Metropolitan Computing Corporation, a New Jersey Corporation (“MCC”) from its
owner (the “Seller”) in which we acquired eighty (80%) percent of the issued and
outstanding shares of MCC.  Pursuant to the Agreement, MCC became our
subsidiary.  The closing of the transactions contemplated by the
Agreement was subject to customary closing conditions, including the delivery of
financial statements by MCC.  In consideration for the purchase of the
shares of MCC, we paid a total of Eight Hundred Thousand Dollars
($800,000.00) plus 1,000,000 shares of our Class A Common Stock; provided,
however, that such Purchase Price will be adjusted in accordance with terms of
the Agreement.  We paid the Purchase Price in the following manner:
(i) Three Hundred Thousand and 00/100 dollars ($300,000.00) at Closing; and (ii)
Three Hundred Thousand and 00/100 dollars ($300,000.00) by a Buyer Promissory
Note delivered at the Closing; and (iii) an aggregate of Two Hundred Thousand
and 00/100 dollars and 1,000,000 shares of the Class A Common Stock to be earned
by Seller and paid by Buyer in accordance with the Agreement.  The
Company used the proceeds from the July 3, 2007 Promissory Note with Dutchess
Private Equities Fund, Ltd. for the initial payment to Seller.
 
 Results of
Operations
  For
the three and nine months ended September 30, 2008 and 2007
 
 Revenues
 For the
nine months ended September 30, 2008 our revenue increased by $ 659,239 to
$ 990,783 as compared to $331,544 for the nine months ended September
30, 2007.  For the three months ended September 30, 2008 our revenue
increased by $135,704 to $330,044 as compared to $194,340 for the
three months ended September 30, 2007. These increases were primarily
attributable to the July 3, 2007 acquisition of MCC.
  Operating
Expenses
 
 Total
Operating Expenses for the nine months and the quarter ended September 30, 2008
were $1,334,419 and $404,557, respectively, an increase of $725,754 and $60,034
respectively, as compared to $608,665 and $344,523, respectively, for the nine
and three month periods ended September 30, 2007.  These
changes were primarily attributable to the July 3, 2007 acquisition of
MCC.
  Net
Loss
 
 Our net
loss from operations for the nine month period and the quarter ending
September 30, 2007 was $998,661 and $683,434, respectively, as compared to net
loss from operations for the nine month period and the quarter ending September
30, 2008 of $1,289,920 and $507,351,
respectively.
   -15-
  Liquidity and Capital
Resources
  The
Company is currently financing its operations primarily through cash generated
by financing activities in the form of convertible notes and equity
investments.  At September 30, 2008, the Company had cash and cash
equivalents of $14,427.
  In
January 2006, Signature Bank approved a $50,000 line of credit for the
Company.  The line provides an interest rate of 1% above the prime
rate (9.25% as of September 30, 2008) on all outstanding amounts and requires
monthly payments of 1/36 of all principal amounts outstanding under the line
plus interest.  The CEO has personally guaranteed the line and there
is $49,442 outstanding under the line as of the date hereof.
  In March
2008, Team Capital Bank approved a $50,000 line of credit. The line provides an
interest rate of 1.0% over prime (6% at September 30, 2008) on all outstanding
amounts.  $50,000 was outstanding under the line on September 30,
2008.  The CEO has personally guaranteed the line.
 
 PNC Bank
has approved a $50,000 line of credit for the Company’s subsidiary
(MCC).  The line provides an interest rate of .75% over Prime (6%
at September 30, 2008) on all outstanding amounts.  $50,476 was
outstanding under the line as of the date hereof.  Such line of credit
is unsecured.
 
 Sovereign
Bank has approved a $200,000 line of credit for the Company’s subsidiary
(MCC).  The line provides an interest rate of 1.49% over Prime (7.49%
at September 30, 2008) on all outstanding amounts.  $99,945 was
outstanding under the line as of the date hereof.  Such line of credit
is unsecured.
  Wachovia
Bank has approved a $35,000 line of credit for the Company’s subsidiary
(MCC).  The line provides an interest rate that fluctuates with the
prime rate (6.75% at September 30, 2008) on all outstanding
amounts.  $34,480was
outstanding under the line as of the date hereof.  Such line of credit
is unsecured.
  In
August, 2006 the Company filed a registration statement with the SEC which was
declared effective in September 2006 registering a $10 million Investment
Agreement with Dutchess Private Equities Fund, Ltd. of Boston along with the
shares of Class A Common Stock issued to investors in connection with the
private placement in August 2006. Under the terms of the Investment Agreement,
the Company may elect to receive as much as $10 million from Dutchess through
common stock purchases by Dutchess over the next three years.
  On July
3, 2007, the Company issued to promissory note to Dutchess Private Equities
Fund, Ltd. (the “Investor”) for $1,375,000 (“Face Amount”) which has a two-year
term and bears annual interest at 12%.  The closing of and release of
proceeds of the Promissory Note were subject to our completion of the
acquisition of MCC and the transaction closed simultaneously. Pursuant to this
Note, we are required to make mandatory payments to the Investor in the amount
of $20,000 upon closing of the funding and then $30,000 on August 1, 2007,
$40,000 on September 1, 2007, $50,000 per month for October 1, 2007 through June
1, 2008 and then $70,000 each month from July 1, 2007 until the face amount of
the loan is paid in full.  In the event of default of this
Note, the Investor may declare the entire unpaid principal balance of this
Note, together with interest accrued, immediately due and payable at the place
of payment, without presentment, protest, notice or demand, all of which are
expressly waived.  In addition, pursuant to the Note with the
Investor, we issued 1,875,000 shares of Class A Common Stock with a fair value
of $337,500 and paid fees of $100,000 which were deducted from the proceeds
of the Note.  The note payable is secured by the assets of the Company
and its subsidiary (MCC).
 
 On
January 14, 2008, the Company entered into an amendment to its (i) Promissory
Note between Dutchess Private Equities Fund, Ltd. (“Dutchess”), on the one hand
(“Promissory Note”); and (ii) the Security Agreement dated June 26, 2007 between
Dutchess and the Company Metropolitan Computing Corp. (“MCC”) (collectively, the
“Agreements”).  Pursuant to the amendment the parties agreed to the
following:
  1.
              The
      Agreements remain in full force and effect, except as set forth below, and
      any other financing agreements between Dutchess and Bedminster remain in
      full force and effect and are not effected in any way by this
      Amendment.
   -16-
 
 2.
              Bedminster
      shall provide a warrant to Dutchess to purchase up to 8,584,000 shares of
      common stock with an exercise price of
par.
 
 3.
              Paul
      Patrizio, and those entities under the control of Mr. Patrizio pledged all
      Bedminster shares held by them, (the “Shares”), to
    Dutchess.
 
 4.
              Bedminster
      acknowledges that it has failed to make at least three required payments
      under the Promissory Note, totaling approximately $147,005, and that its
      current indebtedness to Dutchess is approximately $1,327,611.92 as of
      January 10, 2008.
 
 5.
              Bedminster
      shall timely make the payments set forth below to Dutchess with monthly
      payments due on or before the first day of each
  month:
  January
      15, 2008
              Five
      thousand dollars ($5,000)/monthFebruary
      1, 2008 – April 1, 2008
              Five
      thousand dollars ($5,000)/monthMay
      1, 2008 – June 1, 2008
              Interest
      only payments based upon outstanding principal on the Promissory
      Note/monthJuly
      1, 2008 – December 1, 2008
              Twenty-five
      thousand dollars ($25,000)/monthJanuary
      1, 2009 – March 1, 2009
              Forty
      thousand dollars ($40,000)/monthApril
      1, 2009 – June 1, 2009
              Fifty
      thousand dollars ($50,000)/monthJuly
      1, 2009 and each month
              Seventy
      thousand dollars ($70,000)/monththereafter
      until the Face Amount is paid in full
  6.
              If,
      at any time after Closing, the Company receives financing from a third
      party (excluding Dutchess), the Company is required to pay to Dutchess
      twenty percent (20%) of the proceeds raised from the third party up to an
      aggregate amount of $3,000,000 (the “Threshold Amount”), and 100% of the
      proceeds raised from the third party in excess of the Threshold
      Amount.  The Company agrees to pay twenty percent (20%) of any
      proceeds raised by the Company up to the Threshold Amount and one hundred
      percent (100%) of any proceeds raised by the Company in excess of the
      Threshold Amount toward the Accelerated Repayment of the Promissory Note
      with Interest until such time as the Face Amount of the Promissory Note,
      including accrued interest and penalties, has been paid in
      full.
 
 7.
              The
      Company and Patrizio acknowledge that the failure to meet any of the
      obligations as described herein constitutes an Event of Default under the
      Agreements, and that in the Event of Default, the Escrow Agent shall be
      obligated to deliver the Shares to
Dutchess.
 
 The
Company is currently in default on this Promissory Note as of October 1, 2008;
however; management is in discussion with Dutchess to renegotiate the terms of
this Note.
 
 On July
3, 2007, the Company issued a promissory note to the principal shareholder of
MCC in the amount of $300,000 payable monthly over 36 months with an 8% interest
rate. The Company has an outstanding balance as of September 30, 2008 of
$262,471 and accrued interest of $15,434.   The note is currently
in default.
 During
the third quarter of 2008, we sold 55,000 registered shares of Class A Common
Stock to Dutchess Private Equities Fund, Ltd. under the Investment Agreement for
$679.
   -17-
  We
believe we can not currently satisfy our cash requirements for the next twelve
months with our current cash and expected revenues from our current contract to
provide consulting services and our bank lines and funds from our private
financing. However, management plans to increase revenue and obtain additional
financing in order to sustain operations for at least the next twelve months. We
have already obtained some financing and sold shares to support our continued
operations. However, completion of our plan of operation is subject to attaining
adequate revenue. We cannot assure investors that adequate revenues will be
generated. In the absence of our projected revenues, we may be unable to proceed
with our plan of operations. Even without significant revenues within the next
twelve months, we still anticipate being able to continue with our present
activities, but we may require financing to potentially achieve our goal of
profit, revenue and growth.
 
 We plan
to establish a source of revenues sufficient to cover our operating costs by
acquiring additional companies that are generating positive cash flows from
operating activities either at acquisition or projected to do so in the future,
thereby furthering the objective of becoming profitable and generating positive
cash flow from operating activities on a consolidated basis.  The
funds needed to continue operations over the next twelve months will be raised
from accredited investors and/or institutional investors as in the previous
financings.  During this period, the Company will attempt to reduce or
defer expenses until such time as the capital is available.
 
 Our need
for capital may change dramatically as a result of any additional business
acquisition or combination transaction.  There can be no assurance
that we will identify any additional suitable business, product, technology or
opportunity in the future.  Further, even if we locate a suitable
target, there can be no assurance that we would be successful in consuming any
acquisition or business consolidation on favorable terms or that we will be able
to profitably manage the business, product, or technology, if acquired or
otherwise engaged.  The Company intends to acquire cash flow positive
companies of such size or number that will allow it to continue as a going
concern.  If we are unable to obtain debt and/or equity financing on
reasonable terms, we could be forced to delay or scale back our plans for
expansion.  Consequently, there is substantial doubt about our ability
to continue as a going concern.
 
 Management
intends to ask pertinent questions of the proposed candidates or opportunities
in the course of its diligence phase. Management will rely heavily on a business
plan, financial statements and projections, and management’s views of the
future. Unless something comes to management’s attention, as a result of its
review of the proposed candidate’s audited financial statements, which causes us
to have serious concerns on the viability or integrity of the financial records
and business projections, which would result in a disqualification of such
candidate, a transaction would be approved by the Board of Directors. When a
transaction requires shareholder approval, a shareholder meeting must be held
and a shareholder vote taken. A proxy statement would be mailed to each
shareholder informing them of the meeting and requesting their vote. However, in
lieu of holding a meeting, a majority of shareholders may sign a Shareholder’s
Resolution approving such transaction. If a meeting is not held, an information
statement must be mailed to all of its shareholders informing them of the action
taken by the majority shareholders.
  As
reflected in the accompanying financial statements, we have an accumulated
deficit from inception of $2,296,990 and has a negative cash flow from
operations of $659,966 for the nine months ended September 30, 2008. This raises
substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company's
ability to raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.  Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans may provide the opportunity for the Company to
continue as a going concern
 
 Discontinued
Operations
 
 On
January 18, 2007, Bedminster National Corp. established two wholly owned
subsidiaries (Bedminster Capital Corp, (“BCC’) a real estate management company
and Bedminster Financial Corp, (“BFC”) an investment management company) in the
State of Nevada.  On August 31, 2007, both entities were spun-off from
Bedminster National Corp. as a spin-off to shareholders.  At the time
of distribution BCC and BFC had net capital deficiencies of
$258,819.  The elimination of these net capital deficiencies was
recorded as an increase to contributed capital.
   -18-
  Transaction with Dutchess
Private Equities Fund Ltd.
  On June
29, 2006, we entered into an Investment Agreement (the “Agreement”) with
Dutchess Private Equities Fund Ltd. (“Dutchess”) to provide us with an equity
line of credit. Pursuant to this Agreement, upon effectiveness of this
registration statement, Dutchess is contractually obligated to
purchase up to $10,000,000 of the Company’s Stock over the course of 36
months (“Line Period”), after a  registration statement has been declared
effective (“Effective Date”). The amount that the Company shall be entitled to
request from each of the purchase “Puts”, shall be equal to either 1) $100,000
or 2) 200% of the average daily volume (U.S market only) (“ADV”), multiplied by
the average of the three (3) daily closing prices immediately preceding the Put
Date. The ADV shall be computed using the ten (10) trading days prior to the Put
Date. The Purchase Price for the common stock identified in the Put Notice shall
be set at ninety-five percent (95%) of the lowest closing bid price of the
common stock during the Pricing Period. The Pricing Period is equal to the
period beginning on the Put Notice Date and ending on and including the date
that is five (5) trading days after such Put Notice Date. There are put
restrictions applied on days between the Put Date and the Closing Date with
respect to that Put. During this time, the Company shall not be entitled to
deliver another Put Notice.
  The
Company shall automatically withdraw that portion of the put notice amount, if
the Market Price with respect to that Put does not meet the Minimum Acceptable
Price. The Minimum Acceptable Price is defined as seventy-five (75%) of the
lowest closing bid price of the common stock for the three (3) trading days
prior to the Put Date.
  In
connection with the Agreement, we entered into a Registration Rights Agreement
with Dutchess (“Registration Agreement”). Pursuant to the Registration
Agreement, we were obligated to file a registration statement with the
Securities and Exchange Commission covering the shares of common stock
underlying the Investment Agreement within forty-five (45) days after the
closing date. In addition, we were obligated to use all commercially reasonable
efforts to have the registration statement declared effective by the SEC within
ninety (90) days after the closing date. Such registration statement was filed
and declared effective by the SEC within the time periods set forth
above.
 
 On July
3, 2007, we entered into a Stock Purchase Agreement (“Agreement”) with
Metropolitan Computing Corporation, a New Jersey Corporation (“MCC”) and Michael
Levin (“Seller”) in which we acquired eighty (80%) percent of the issued and
outstanding shares of MCC.  Pursuant to the Agreement, MCC became our
subsidiary.  The closing of the transactions contemplated by the
Agreement was subject to customary closing conditions, including the delivery of
financial statements by MCC.  In consideration for the the purchase of
the shares of MCC, we paid a total of Eight Hundred Thousand  Dollars
($800,000.00) plus 1,000,000 shares of our Class A Common Stock; provided,
however, that such Purchase Price will be adjusted in accordance with terms of
the Agreement.  We  paid the Purchase Price in the following
manner: (i) Three Hundred Thousand and 00/100 Dollars ($300,000.00) at Closing,
and (ii) Three Hundred Thousand and 00/100 Dollars ($300,000.00)  by a
Buyer Promissory Note delivered at the Closing, and (iii) an aggregate of Two
Hundred Thousand and 00/100 Dollars and 1,000,000 shares of the Class A Common
Stock  to be earned by Seller and paid by Buyer in accordance with the
Agreement.  The Company used the proceeds from the July 3,
2007 Promissory Note with Dutchess Private Equities Fund, Ltd. for the
initial payment to Seller.
  On July
3, 2007, we issued a promissory note to Dutchess Private Equities Fund, Ltd.
(the “Investor”) for $1,375,000 (“Face Amount”) which has a two-year term and
bears annual interest at 12%.  The closing of and release of proceeds
of the Promissory Note were subject to our completion of the acquisition of MCC
and the transaction closed simultaneously. Pursuant to this Note, we are
required to make mandatory payments to the Investor in the amount of $20,000
upon closing of the funding and then $30,000 on August 1, 2007, $40,000 on
September 1, 2007, $50,000 per month for October 1, 2007 through June 1, 2008
and then $70,000 each month from July 1, 2008 until the face amount of the loan
is paid in full.  In the event of default of this Note, the
Investor may declare the entire unpaid principal balance of this Note, together
with interest accrued, immediately due and payable at the place of payment,
without presentment, protest, notice or demand, all of which are expressly
waived.  In addition, pursuant to the Note with the Investor, we
issued 1,875,000 shares of Class A Common Stock and we paid fees of
$100,000 which was deducted from the proceeds of the Note.  During the
nine months ended September 30, 2008, we amortized $124,595 of the discount on
the Promissory Note.
 -19-
 
 On
January 14, 2008, we entered into an amendment to its (i) Promissory Note dated
June 26, 2007 between Dutchess Private Equities Fund, Ltd. (“Dutchess”), on the
one hand (“Promissory Note”); and (ii) the Security Agreement dated June 26,
2007 between Dutchess and Metropolitan Computing Corp. (“MCC”) (collectively,
the “Agreements”).  Pursuant to the amendment the parties agreed to
the following:
 
 1.
              The
      Agreements remain in full force and effect, except as set forth below, and
      any other financing agreements between Dutchess and Bedminster remain in
      full force and effect and are not effected in any way by this
      Amendment.
 
 2.
              Bedminster
      shall provide a warrant to Dutchess to purchase up to 8,584,000 shares of
      common stock with an exercise price of
par.
 
 3.
              Paul
      Patrizio, and those entities under the control of Mr. Patrizio, pledged
      all Bedminster shares held by him, (the “Shares”), to
      Dutchess.
  4.
              Bedminster
      acknowledges that it has failed to make at least three required payments
      under the Promissory Note, totaling approximately $147,005, and that its
      current indebtedness to Dutchess is approximately $1,327,611.92 as of
      January 10, 2008.
 
 5.
              Bedminster
      shall timely make the payments set forth below to Dutchess with monthly
      payments due on or before the first day of each
  month:
  January
      15, 2008
              Five
      thousand dollars ($5,000)/monthFebruary
      1, 2008 – April 1, 2008
              Five
      thousand dollars ($5,000)/monthMay
      1, 2008 – June 1, 2008
              Interest
      only payments based upon outstanding principal on the Promissory
      Note/monthJuly
      1, 2008 – December 1, 2008
              Twenty-five
      thousand dollars ($25,000)/monthJanuary
      1, 2009 – March 1, 2009
              Forty
      thousand dollars ($40,000)/monthApril
      1, 2009 – June 1, 2009
              Fifty
      thousand dollars ($50,000)/monthJuly
      1, 2009 and each month
              Seventy
      thousand dollars ($70,000)/monththereafter
      until the Face Amount is paid in full
  6.
              If,
      at any time after Closing, we receive financing from a third party
      (excluding Dutchess), we are required to pay to Dutchess twenty percent
      (20%) of the proceeds raised from the third party up to an aggregate
      amount of $3,000,000 (the “Threshold Amount”), and 100% of the proceeds
      raised from the third party in excess of the Threshold
      Amount.  We agree to pay twenty percent (20%) of any proceeds
      raised by us up to the Threshold Amount and one hundred percent (100%) of
      any proceeds raised by us in excess of the Threshold Amount toward the
      Accelerated Repayment of the Promissory Note with Interest until such time
      as the Face Amount of the Promissory Note, including accrued interest and
      penalties, has been paid in full.
 
 7.
              We
      acknowledge that the failure to meet any of the obligations as described
      herein constitutes an Event of Default under the Agreements, and that in
      the Event of Default, the Escrow Agent shall be obligated to deliver the
      Shares to Dutchess.
  The
Company is currently in default on this Promissory Note as of October 1, 2008;
however; management is in discussion with Dutchess to renegotiate the terms of
this Note.
   -20-
  Critical Accounting
Policies
  Our
significant accounting policies are summarized in Note 1 of our financial
statements.
 
 We have
adopted the following accounting standards. While all of these significant
accounting policies impact our financial condition, our views of these policies
are critical. Policies determined to be critical are those policies that have
the most significant impact on our financial statements and require management
to use a greater degree of judgment and estimates. Actual results may differ
from those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our consolidated results of
operations, financial position or liquidity for the periods presented in this
report:
  Revenues
include fees billed for consulting services on a month to month contract. These
revenues are recognized as the services are performed. Revenues include fees
billed for consulting services on a month to month contract. These revenues are
recognized as the services are performed.  Revenues include fees
billed for consulting services on a month to month contract.  These
revenues are recognized as the services are performed.  Revenues also
include sales for pharmaceutical machines sold.  These revenues are
recognized when the machine is delivered to the customer.
  Inventory
consists primarily of parts and work in process products held for sale.
 Inventory, at year end, is stated at the lower of cost or market, with
cost being determined on a first in/first out basis.  In accordance with
APB 28 14(a), the Company uses estimated gross profit rates to determine costs
of goods sold during interim periods. This is different than the method used at
annual inventory dates. The Company performs physical inventory counts when
calculating year end inventory values. Historically, this has not resulted in
any material adjustment to the cost of goods sold.
  In
December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment," which
replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R),
companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees are
required to provide services. Share-based compensation arrangements include
stock options, restricted share plans, performance-based awards, share
appreciation rights and employee share purchase plans. In March 2005 the SEC
issued Staff Accounting Bulletin No. 107, or "SAB 107". SAB 107 expresses views
of the staff regarding the interaction between SFAS No. 123(R) and certain SEC
rules and regulations and provides the staff's views regarding the valuation of
share-based payment arrangements for public companies. SFAS No. 123(R) permits
public companies to adopt its requirements using one of two methods. On April
14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS
123R. Companies may elect to apply this statement either prospectively, or on a
modified version of retrospective application under which financial statements
for prior periods are adjusted on a basis consistent with the pro forma
disclosures required for those periods under SFAS 123. Effective January 1,
2006, the Company has fully adopted the provisions of SFAS No. 123R and related
interpretations as provided by SAB 107. As such, compensation cost is measured
on the date of grant at their fair value. Such compensation amounts, if any, are
amortized over the respective vesting periods of the option grant. The Company
applies this statement prospectively.
 
 Recent Accounting
Pronouncements
  In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
objective of SFAS 157 is to increase consistency and comparability in fair value
measurements and to expand disclosures about fair value measurements. SFAS 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 applies under other accounting pronouncements that
require or permit fair value measurements and does not require any new fair
value measurements. The provisions of SFAS No. 157 are effective for fair value
measurements made in fiscal years beginning after November 15, 2007. The
adoption of this statement did  not have a material effect on the Company's
future reported financial position or results of operations.
   -21-
 
 In
February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
159, “The Fair Value Option
for Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115”. This statement permits entities to choose to measure
many financial instruments and certain other items at fair value. Most of the
provisions of SFAS No. 159 apply only to entities that elect the fair value
option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments
in Debt and Equity Securities” applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity’s first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, “Fair Value Measurements”. The
Company as not elected to adopt the statement.
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of ARB No. 51”
(“ SFAS 160” ).
SFAS 160 amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. An ownership interest in subsidiaries held by parties other than the
parent should be presented in the consolidated statement of financial position
within equity, but separate from the parent’s equity. SFAS 160 requires that
changes in a parent’s ownership interest while the parent retains its
controlling financial interest in its subsidiary should be accounted for
similarly as equity transactions. When a subsidiary is deconsolidated, any
retained noncontrolling equity investment in the former subsidiary should be
initially measured at fair value, with any gain or loss recognized in earnings.
SFAS 160 requires consolidated net income to be reported at amounts that include
the amounts attributable to both the parent and the noncontrolling interest. It
also requires disclosure, on the face of the consolidated income statement, of
the amounts of consolidated net income attributable to the parent and to the
noncontrolling interests. SFAS 160 is effective for fiscal years (including
interim periods within those fiscal years) beginning on or after December 15,
2008 (October 1, 2009 for the Company). The Company is currently evaluating the
impact SFAS 160 will have on its consolidated financial statements.
 
 Off-Balance Sheet
Arrangements
 
 We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
  Item
4T.  Controls and Procedures
 
 The
Company's management evaluated, with the participation of its President, the
effectiveness of the design/operation of its disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the SEC Act of 1934) as of
September 30, 2008.  Based on such evaluation, the President of the Company
concluded that its disclosure controls and procedures are designed to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
rules and regulations of the Securities and Exchange Commission and is not
operating in an effective manner.
 
 Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of our financial statements for external reporting purposes in
accordance with U.S. generally accepted accounting principles. Under the
supervision and with the participation of management, including our President,
we conducted a review, evaluation, and assessment of the effectiveness of our
internal control over financial reporting as of December 31, 2007 based upon the
criteria set forth in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
  During
management’s evaluation of internal controls over financial reporting, the
following material weaknesses in the internal control over financial reporting
procedures were found:
  -
              There
      is no Audit Committee in place as required by the Sarbanes-Oxley Act of
      2002.-
              There
      is no Whistleblower Policy adopted and communicated to all staff and
      management.
   -22-
   -
              There
      are no controls in place to ensure complete and accurate recording of all
      trade payables, accrued liabilities and accrued
  purchases.-
              There
      are no controls in place to ensure complete and accurate preparation of
      the Statement of Cash Flows as they are currently not reviewed and
      re-calculated by a person other than the
  preparer.
 -
              There
      is no independent review of expenditures that are approved by the CEO by
      the Audit Committee to ensure validity of expenditures.-
              There
      is no independent review of expenditure classifications to ensure they are
      complete and accurate.-
              All
      spreadsheets that are used in connection with preparation of the financial
      statements are not independently re-calculated, reviewed and approved by
      management.-
              There
      is no independent review and re-calculation of stockholders’ equity
      section of the financial statement.
 -
              There
      is no independent review and re-calculation of investments in subsidiaries
      and other equity investment values represented in the financial
      statements.-
              There
      is no independent review by company management that financial statements
      are prepared in conformity with GAAP and SEC reporting requirements as
      well as related footnote disclosures based on current GAAP and SEC
      standards.
 
 Based on
the material weaknesses noted above, management concludes that the internal
controls over financial reporting are not effective. Management will be
undertaking remediation efforts on a cost-effective basis to remediate material
weaknesses during the next fiscal year. Based on cost constraints not all
material weaknesses are expected to be remediated. As a result, internal
controls over financial reporting are expected to remain not effective until
revenues from operations are sufficient to support additional internal controls
and the formation of an audit committee.
 
 There
were no changes in internal control over financial reporting (as defined in
Rules 13a-15(f) and 15(d)-15(f) under the SEC Act of 1934) identified in
connection with the evaluation as of September 30, 2008 by the President, which
occurred during the most recent fiscal quarter, which have materially affected,
or are reasonably likely to materially affect, internal control over financial
reporting
   -23-
 
  
 
 PART
II - OTHER INFORMATION
  Item
1.   Legal Proceedings.
  Currently
we are not aware of any litigation pending or threatened by or against the
Company.
  Item
2.   Unregistered Sales of Equity Securities and Use of
Proceeds
  The
Company issued 500,000 Class A Shares during the third quarter for services
rendered.  Such Shares were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933.
  Item
3.   Defaults Upon Senior Securities.
  See Note
4 to the financial statements in connection with the acquisition debt for
MCC.
  Item
4.   Submission of Matters to a Vote of Security Holders.
  None.
  Item
5.   Other Information.
  None
  Item
6.   Exhibits
  (a)           Exhibits
  31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of
2002
  32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of
2002
   -24-
 
  
 SIGNATURE
   Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
   Bedminster
      National CorpDate:
      November 19, 2008
              By:
              /s/
      Paul PatrizioPaul
      PatrizioPresident,
      Chief Executive Officer,
                Chief
      Financial Officer
 
     -25-