UNITED STATES
 SECURITIES AND EXCHANGE
COMMISSION
 Washington, D.C.
20549
 
 FORM 10-Q
 
 (Mark
One)
 
 xQUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
quarterly period ended March 31,
2008
 
 or
 
  ̈TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
transition period from 
to
 
 Commission
File Number: 0-19824
 
 Nutrition Management
      Services Company(Exact
      name of registrant as specified in its
charter)
 
 Pennsylvania
              23-2095332(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)
 
 Box
      725, Kimberton Road, Kimberton, PA
              19442(Address
      of principal executive offices)
              (Zip
      Code)
 
 (610)
      935-2050(Registrant’s
      telephone number, including area code)N/A(Former
      name, former address and former fiscal year, if changed since last
      report)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.     Yes x     No
 ̈
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 
(Check one):
  Large
      accelerated filer  ̈
                Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do
      not check if a smaller reporting company)
                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  ̈     No
x
 
 2,747,000
Shares of Registrant's Class A Common Stock, with no par value, and 100,000
shares of Registrant's Class B Common Stock, with no par value, are outstanding
as of May 8, 2008.
  Table Of Contents
  TABLEOF CONTENTS
  Part
      I.
                  Financial
      Information
                  Page No.Item
      1. – Financial Information
                  2Consolidated Balance Sheets as of March 31, 2008
      (unaudited) and June 30, 2007
                  2Consolidated Statements of Operations for the Three and
      Nine Months Ended March 31, 2008 (unaudited) and 2007
      (unaudited)
                  3Consolidated Statements of Cash Flows for the Nine
      Months Ended March 31, 2008 (unaudited) and 2007
      (unaudited)
                  4Notes to Consolidated Financial
    Statements
                  5 -
      9Item 2. – Management's Discussion and Analysis of Financial
      Condition and Results of Operations
                  10
      - 16Item 3. – Quantitative and Qualitative Disclosure about
      Market Risk
                  16Item 4T – Controls and Procedures
                  16
      - 17Part
      II.
                  Other Information
                  18Item 4 – Submission of Matters to a Vote of Security
      Holders
                  18Signatures
                  19
  Table Of Contents
 
 
 NUTRITIONMANAGEMENT SERVICES COMPANY
 CONSOLIDATED
BALANCE SHEETS
 
 March
      31, 2008
                
                
                June
      30, 2007Current
      assets:
                
                (unaudited)Cash
      and cash equivalents
                
                $
                50,281
                
                
                $
                701,858Accounts
      receivable, net of allowance for doubtful accounts of $793,922 and
      $755,778, respectively
                
                
                2,749,330
                
                
                
                2,774,016Inventory
                
                
                144,651
                
                
                
                142,921Prepaid
      and other
                
                
                581,873
                
                
                
                277,343Assets
      held for sale
                
                
                6,125,439
                
                
                
                0Total
      current assets
                
                
                9,651,574
                
                
                
                3,896,138Property
      and equipment, net
                
                
                99,886
                
                
                
                115,126Assets
      held for sale
                
                
                0
                
                
                
                6,295,450Other
      assets:Note
      receivable
                
                
                85,246
                
                
                
                86,746Advances
      to employees
                
                
                243,249
                
                
                
                427,510Deferred
      income taxes, net
                
                
                2,265,908
                
                
                
                2,265,908Bond
      issue costs, net of accumulated amortization of $165,084 and $154,158
      respectively
                
                
                127,433
                
                
                
                138,359Other
      assets
                
                
                49,614
                
                
                
                49,614Total
      other assets
                
                
                2,771,450
                
                
                
                2,968,137Total
      assets
                
                $
                12,522,910
                
                
                $
                13,274,851Current
      liabilities:Current
      portion of long-term debt
                
                $
                170,000
                
                
                $
                170,000Current
      portion of line of credit
                
                
                3,499,114
                
                
                
                3,499,114Current
      portion of note payable
                
                
                29,421
                
                
                
                0Accounts
      payable
                
                
                3,016,993
                
                
                
                3,001,543Accrued
      payroll and related expenses
                
                
                210,159
                
                
                
                260,185Accrued
      expenses
                
                
                342,668
                
                
                
                282,703Other
                
                
                141,358
                
                
                
                202,555Total
      current liabilities
                
                
                7,409,713
                
                
                
                7,416,100Long-Term
      liabilities:Long-term
      debt, net of current portion
                
                
                1,875,000
                
                
                
                2,045,000Total
      Liabilities
                
                
                9,284,713
                
                
                
                9,461,100Commitments
      and contingencies
                
                
                0
                
                
                
                0Stockholders'
      equity:Undesignated
      preferred stock - no par, 2,000,000 shares authorized, none issued or
      outstandingCommon
      stock:Class
      A - no par, 10,000,000 shares authorized; 3,000,000 issued, 2,747,000
      outstanding
                
                
                3,801,926
                
                
                
                3,801,926Class
      B - no par, 100,000 shares authorized, issued and
    outstanding
                
                
                48
                
                
                
                48Retained
      earnings
                
                
                (64,214
                )
                
                
                511,340Less:
      treasury stock (Class A common: 253,000 and 253,000shares,
      respectively) - at cost
                
                
                (499,563
                )
                
                
                (499,563
                )Total
      stockholders' equity
                
                
                3,238,197
                
                
                
                3,813,751Total
      liabilities and stockholders’ equity
                
                $
                12,522,910
                
                
                $
                13,274,851
 
 
 2
 Table Of Contents
  NUTRITIONMANAGEMENT SERVICES COMPANY
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (Unaudited)
 Three
      months ended
                  
                  
                  Nine
      months endedMarch
      31,
                  
                  
                  March
      312008
                  
                  
                  2007
                  
                  
                  2008
                  
                  
                  2007Food
      Service Revenue
                  
                  $
                  5,118,571
                  
                  
                  $
                  4,953,280
                  
                  
                  $
                  15,442,438
                  
                  
                  $
                  15,438,157Cost
      of OperationsPayroll
      and related expenses
                  
                  
                  2,490,231
                  
                  
                  
                  2,212,564
                  
                  
                  
                  7,372,148
                  
                  
                  
                  6,504,534Other
      costs of operations
                  
                  
                  1,695,368
                  
                  
                  
                  1,844,824
                  
                  
                  
                  5,149,650
                  
                  
                  
                  6,061,520Total
      cost of operations
                  
                  
                  4,185,599
                  
                  
                  
                  4,057,388
                  
                  
                  
                  12,521,798
                  
                  
                  
                  12,566,054Gross
      Profit
                  
                  
                  932,972
                  
                  
                  
                  895,892
                  
                  
                  
                  2,920,640
                  
                  
                  
                  2,872,103ExpensesGeneral
      and administrative expenses
                  
                  
                  959,916
                  
                  
                  
                  1,078,212
                  
                  
                  
                  2,986,864
                  
                  
                  
                  3,203,277Depreciation
      and amortization
                  
                  
                  64,584
                  
                  
                  
                  67,497
                  
                  
                  
                  195,939
                  
                  
                  
                  208,788Provision
      for doubtful accounts
                  
                  
                  12,773
                  
                  
                  
                  (15,000
                  )
                  
                  
                  38,108
                  
                  
                  
                  15,000Total
      expenses
                  
                  
                  1,037,273
                  
                  
                  
                  1,130,709
                  
                  
                  
                  3,220,911
                  
                  
                  
                  3,427,065Income/(loss)
      from operations
                  
                  
                  (104,301
                  )
                  
                  
                  (234,817
                  )
                  
                  
                  (300,271
                  )
                  
                  
                  (554,962
                  )Other
      income/(expense)Other
                  
                  
                  (4,510
                  )
                  
                  
                  (4,510
                  )
                  
                  
                  (13,521
                  )
                  
                  
                  612Interest
      income
                  
                  
                  1,767
                  
                  
                  
                  8,338
                  
                  
                  
                  12,196
                  
                  
                  
                  37,171Interest
      expense
                  
                  
                  (74,254
                  )
                  
                  
                  (115,772
                  )
                  
                  
                  (273,958
                  )
                  
                  
                  (345,887
                  )Total
      other income/(expense)
                  
                  
                  (76,997
                  )
                  
                  
                  (111,944
                  )
                  
                  
                  (275,283
                  )
                  
                  
                  (308,104
                  )Loss
      before income taxes
                  
                  
                  (181,298
                  )
                  
                  
                  (346,761
                  )
                  
                  
                  (575,554
                  )
                  
                  
                  (863,066
                  )Provision
      for income taxes
                  
                  
                  0
                  
                  
                  
                  (104,272
                  )
                  
                  
                  0
                  
                  
                  
                  (261,575
                  )Net
      loss
                  
                  $
                  (181,298
                  )
                  
                  $
                  (242,489
                  )
                  
                  $
                  (575,554
                  )
                  
                  $
                  (601,491
                  )Net
      loss per share - basic and diluted
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.09
                  )
                  
                  $
                  (0.20
                  )
                  
                  $
                  (0.21
                  )Weighted
      average number of shares
                  
                  
                  2,847,000
                  
                  
                  
                  2,847,000
                  
                  
                  
                  2,847,000
                  
                  
                  
                  2,847,000
 
 See
Notes to Unaudited Consolidated Financial Statements
 
 3
 Table Of Contents
 
 NUTRITIONMANAGEMENT  SERVICES COMPANY
 CONSOLIDATED
STATEMENT OF CASH FLOWS
 (Unaudited)
  Nine
      Months Ended March 31,2008
                  
                  
                  2007Operating
      activities:Net
      loss
                  
                  $
                  (575,554
                  )
                  
                  $
                  (601,491
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
                  
                  
                  195,939
                  
                  
                  
                  208,788Provision
      for bad debts
                  
                  
                  38,108
                  
                  
                  
                  15,000Amortization
      of bond costs
                  
                  
                  10,923
                  
                  
                  
                  10,923(Benefit)/provision
      for deferred taxes
                  
                  
                  0
                  
                  
                  
                  (261,575
                  )Changes
      in assets and liabilities:Accounts
      receivable
                  
                  
                  (11,923
                  )
                  
                  
                  (119,060
                  )Inventory
                  
                  
                  (1,730
                  )
                  
                  
                  (12,490
                  )Prepaid
      and other current assets
                  
                  
                  (304,537
                  )
                  
                  
                  (39,074
                  )Accounts
      payable
                  
                  
                  15,450
                  
                  
                  
                  (350,908
                  )Accrued
      payroll and related expenses
                  
                  
                  (50,025
                  )
                  
                  
                  72,517Accrued
      expenses and other
                  
                  
                  (1,224
                  )
                  
                  
                  (45,340
                  )Net
      cash used in operating activities
                  
                  
                  (684,573
                  )
                  
                  
                  (1,122,710
                  )Investing
      activities:Purchase
      of property and equipment
                  
                  
                  (10,687
                  )
                  
                  
                  (42,374
                  )Advance
      to employees
                  
                  
                  184,261
                  
                  
                  
                  13,104Net
      cash used in investing activities
                  
                  
                  173,574
                  
                  
                  
                  (29,270
                  )Financing
      activities:Proceeds
      from note payable
                  
                  
                  327,413
                  
                  
                  
                  297,659Repayment
      of note payable
                  
                  
                  (297,991
                  )
                  
                  
                  (272,213
                  )Repayments
      of long-term borrowing
                  
                  
                  (170,000
                  )
                  
                  
                  (165,000
                  )Net
      cash provided by financing activities
                  
                  
                  (140,578
                  )
                  
                  
                  (139,554
                  )Net
      decrease in cash
                  
                  
                  (651,577
                  )
                  
                  
                  (1,291,534
                  )Cash
      and cash equivalents - beginning of period
                  
                  
                  701,858
                  
                  
                  
                  1,613,567Cash
      and cash equivalents - end of period
                  
                  $
                  50,281
                  
                  
                  $
                  322,033Supplemental
      disclosure of cash flow information:Cash
      paid during the period for:Interest
      Paid
                  
                  $
                  285,370
                  
                  
                  $
                  321,682Taxes
      Paid
                  
                  
                  19,432
                  
                  
                  
                  30,913
  4
 Table Of Contents
 NUTRITIONMANAGEMENT SERVICES COMPANY
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March
31, 2008
 
 1.           
Basis of Presentation
 
 The
accompanying unaudited consolidated financial statements were prepared in
accordance with generally accepted accounting principles for interim financial
information for quarterly reports on Form 10-Q and, therefore, do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.  However, all
adjustments that, in the opinion of management, are necessary for fair
presentation of the financial statements have been included and such adjustments
are of a normal recurring nature.  The results of operations for the
interim period presented is not necessarily indicative of the results that may
be expected for the entire fiscal year ending June 30, 2008.  The
financial information presented should be read in conjunction with the Company's
2007 financial statements that were filed under Form
10-K.
 2.           
New Accounting Pronouncements
 
 In
July 2006, the FASB issued SFAS Interpretation No. 48, ‘‘Accounting for Uncertainty in
Income Taxes – An Interpretation of SFAS No. 109’’ (‘‘FIN 48’’). FIN 48
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. The evaluation of a tax position in accordance with FIN
48 is a two-step process. We first will be required to determine whether it is
more likely than not that a tax position, if any, will be sustained upon
examination, including resolution of any related appeals or litigation
processes, based on the technical merits of the position. A tax position that
meets the ‘‘more likely than not’’ recognition threshold will then be measured
to determine the amount of benefit to recognize in the financial statements
based upon the largest amount of benefit that is greater than 50 percent likely
of being realized upon ultimate settlement. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The Company is currently evaluating
the effect that FIN 48 may have on its financial
statements.
 In
September 2006, the FASB issued SFAS No. 157, “FairValue Measurements”. This
Statement defines fair value as ‘exit prices’ not ‘entry prices’ in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements for the purpose of promoting consistency and
simplification of the existing codification of accounting principles. To
eliminate differences in practice and reduce complexity in the application of
GAAP, the Statement emphasizes that fair value is a market-based measurement,
not an entity specific measurement and should be determined based on the
assumptions that market participants would use in pricing the asset or
liability. This statement establishes a fair value hierarchy that distinguishes
between observable and unobservable inputs and clarifies the need for
adjustments to fair value based on nonperformance, other market risk assessment
criteria, certain asset or event restrictions, and trading blockage. The
adoption of this Statement was effective for financial statements beginning with
fiscal years on or after November 15, 2007, including interim financial
statements within that fiscal year.  The adoption of SFAS No. 157 did
not have a material impact on our fair value measurements.
   5
 Table Of Contents
 
 In
September 2006, the Securities and Exchange Commission released Staff Accounting
Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB
108 provides guidance regarding the methodology for quantifying and evaluating
the materiality of financial statement misstatements.  SAB 108 is
effective for fiscal years ending after November 15,
2006.  Application of the guidance in SAB 108 is not expected to have
a material effect on the Company’s financial position, cash flows, or results of
operations.
 
 In
October, 2006, the FASB issued SFAS No.158, “Employers’ Accounting for Defined
BenefitPension and other
Postretirement Plans- An amendment of FASB Statements No. 87, 88, 106
and132( R
)”. This statement requires an employer to recognize the overfunded or
underfunded  status of a defined benefit postretirement plan, other
than a multi-employer plan, as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through the comprehensive income of a business entity.
This statement requires the measurement and recognition of the difference
between plan assets at fair value and the benefit obligation, as of the date of
the employer’s fiscal year-end statement of financial position. This statement
also requires additional disclosure in the footnotes to the financial statements
about certain effects on net periodic benefit cost for the next fiscal year that
arise from delayed recognition of the gains or losses, prior service costs or
credits, and transition assets or obligations. Employers who have issued
outstanding publicly traded equity securities are required to adopt this
Statement by initially recognizing the funded status of a defined benefit
postretirement plan including the required footnote disclosures as of the end of
the fiscal year ending after December 15, 2006.
 
 3.            Earnings
Per Common Share
 
 Earnings
per common share amounts are based on the weighted-average number of shares of
common stock outstanding during the three-month and six-month period ended March
31, 2008 and 2007.  The Company did not have any stock options and
warrants that impacted earnings per share in each period.
 
 4.           
Litigation
 
 On
February 7, 2001, the Company filed a suit against a major client in the Court
of Common Pleas of Chester County, Pennsylvania, which was subsequently
removed to the United States District Court for the Eastern District
of Pennsylvania.  On February 25, 2005, judgment was entered
on a jury verdict in favor of the Company, in the amount of $2,500,000 for
damages related to its claims, including breach of contract and contractual
interference. The client’s counterclaim was dismissed by the judge. The Company
filed a post-trial motion to amend the judgment to add prejudgment
interest.  On June 1, 2006 this motion was denied.  The
Company has engaged independent legal counsel to pursue alternative recourse in
regards to the denial of prejudgment interest.
 
 The
Company is involved in litigation with a construction contractor related to the
renovations of Collegeville Inn Conference and Training Center.  The
Company denies its liability for the contractor’s claims and has asserted
offsets against the amounts claimed.  The case is currently in
discovery.
 
 Although
it is not possible to predict with certainty the outcome of the unresolved legal
action, or the range of possible loss or recovery, the Company believes these
unresolved legal actions will not have a material effect on its financial
position or results of operations.
 
 6
 Table Of Contents
  In
addition to the litigation described above, the Company is exposed to asserted
and unasserted claims in the normal course of business.  In the
opinion of management, the resolution of these matters will not have a material
adverse effect on the Company’s financial position, results of operations or
cash flows.
 
 5.           
Business Segments
 
 The
Company follows the disclosure provisions of SFAS No. 131, “Disclosures
about Segments of an Enterprise and Related Information.”This
management approach focuses on internal financial information that is used by
management to assess performance and to make operating
decisions.  SFAS No. 131 also requires disclosuresabout
products, services, geographic areas, and major customers.
 
 The
Company’s reportable segments are (1) food service management and (2) training
and conference center.  The Company reports segment performance on an
after-tax basis.  Deferred taxes are not allocated to
segments.  The management accounting policies and processes utilized
in compiling segment financial information are highly subjective and, unlike
financial accounting, are not based on authoritative guidance similar to
accounting principles generally accepted in the United States of
America.  As a result, reported segment results are not necessarily
comparable with similar information reported by other similar
companies.
 
 For the
quarter ended March 31, 2008:
  Food
      Service Management
                  
                  
                  Training
      and
                    Conference
      Center
                  
                  
                  TotalFood
      service revenue
                  
                  $
                  5,026,124
                  
                  
                  $
                  92,447
                  
                  
                  $
                  5,118,571Depreciation
      and amortization
                  
                  
                  6,735
                  
                  
                  
                  57,849
                  
                  
                  
                  64,584Income
      (loss) from operations
                  
                  
                  76,796
                  
                  
                  
                  (181,097
                  )
                  
                  
                  (104,301
                  )Interest
      income
                  
                  
                  1,767
                  
                  
                  
                  0
                  
                  
                  
                  1,767Interest
      expense
                  
                  
                  (58,075
                  )
                  
                  
                  (16,179
                  )
                  
                  
                  (74,254
                  )Income
      (loss) before taxes (benefit)
                  
                  
                  20,488
                  
                  
                  
                  (201,786
                  )
                  
                  
                  (181,298
                  )Net
      income (loss)
                  
                  
                  20,488
                  
                  
                  
                  (201,786
                  )
                  
                  
                  (181,298
                  )Total
      assets
                  
                  $
                  5,912,120
                  
                  
                  $
                  6,610,790
                  
                  
                  $
                  12,522,910
  For the
quarter ended March 31, 2007:
  Food
      Service Management
                  
                  
                  Training
      and Conference Center
                  
                  
                  TotalFood
      service revenue
                  
                  $
                  4,814,173
                  
                  
                  $
                  139,107
                  
                  
                  
                  4,953,280Depreciation
      and amortization
                  
                  
                  9,179
                  
                  
                  
                  58,318
                  
                  
                  
                  67,497Income
      (loss) from operations
                  
                  
                  1,369
                  
                  
                  
                  (236,186
                  )
                  
                  
                  (234,817
                  )Interest
      income
                  
                  
                  8,338
                  
                  
                  
                  0
                  
                  
                  
                  8,338Interest
      expense
                  
                  
                  (79,624
                  )
                  
                  
                  (36,148
                  )
                  
                  
                  (115,772
                  )Income
      (loss) before taxes (benefit)
                  
                  
                  (69,917
                  )
                  
                  
                  (276,844
                  )
                  
                  
                  (346,761
                  )Net
      income (loss)
                  
                  
                  34,355
                  
                  
                  
                  (276,844
                  )
                  
                  
                  (242,489
                  )Total
      assets
                  
                  $
                  5,686,447
                  
                  
                  $
                  7,306,214
                  
                  
                  $
                  12,992,661
   7
 Table Of Contents
  For
the nine months ended March 31, 2008:
  Food
      Service Management
                  
                  
                  Training
      and Conference Center
                  
                  
                  TotalFood
      service revenue
                  
                  $
                  15,159,300
                  
                  
                  $
                  283,138
                  
                  
                  $
                  15,442,438Depreciation
      and amortization
                  
                  
                  22,381
                  
                  
                  
                  173,558
                  
                  
                  
                  195,939Income
      (loss) from operations
                  
                  
                  203,371
                  
                  
                  
                  (503,641
                  )
                  
                  
                  (300,271
                  )Interest
      income
                  
                  
                  12,196
                  
                  
                  
                  0
                  
                  
                  
                  12,196Interest
      expense
                  
                  
                  (203,833
                  )
                  
                  
                  (70,125
                  )
                  
                  
                  (273,958
                  )Income
      (loss) before taxes
                  
                  
                  11,740
                  
                  
                  
                  (587,294
                  )
                  
                  
                  (575,554
                  )Net
      income (loss)
                  
                  
                  11,740
                  
                  
                  
                  (587,294
                  )
                  
                  
                  (575,554
                  )Total
      assets
                  
                  $
                  5,912,120
                  
                  
                  $
                  6,610,790
                  
                  
                  $
                  12,522,910
  For
the nine months ended March 31, 2007:
  Food
      Service Management
                  
                  
                  Training
      and Conference Center
                  
                  
                  TotalFood
      service revenue
                  
                  $
                  14,917,899
                  
                  
                  $
                  520,258
                  
                  
                  $
                  15,438,157Depreciation
      and amortization
                  
                  
                  28,253
                  
                  
                  
                  180,535
                  
                  
                  
                  208,788Income
      (loss) from operations
                  
                  
                  (26,099
                  )
                  
                  
                  (528,863
                  )
                  
                  
                  (554,962
                  )Interest
      income
                  
                  
                  37,171
                  
                  
                  
                  0
                  
                  
                  
                  37,171Interest
      expense
                  
                  
                  (235,192
                  )
                  
                  
                  (110,695
                  )
                  
                  
                  (345,887
                  )Income
      (loss) before taxes
                  
                  
                  (209,980
                  )
                  
                  
                  (653,086
                  )
                  
                  
                  (863,066
                  )Net
      income (loss)
                  
                  
                  51,595
                  
                  
                  
                  (653,086
                  )
                  
                  
                  (601,491
                  )Total
      assets
                  
                  $
                  5,686,447
                  
                  
                  $
                  7,306,214
                  
                  
                  $
                  12,992,661
  6.           
Revolving Credit Facility
 
 In
February 2001, the Company executed a loan agreement with a bank for a revolving
credit facility and two irrevocable letters of credit issued in conjunction with
the issuance of the Industrial Revenue Bonds, totaling $4,000,000 and
$3,065,000, respectively.  In October 2003, the Company entered into
an amended credit agreement whereby the $4,000,000 Revolving Credit Loan
Facility was reduced to $3,500,000 and $500,000 was placed in a cash collateral
account and pledged as additional collateral against the revolving credit
line.  The cash collateral account has been released and as of March
31, 2008 and June 30, 2007, the Company had no restricted cash
balances.   In April, 2008, the Company entered into an agreement
whereby the credit loan facility was extended to June 30,
2008.
 
 At March
31, 2008 and June 30, 2007, the Company had approximately $3,500,000 outstanding
under the revolving credit.  Advances under the revolving credit are
used for working capital purposes.
 
 7.
                Collegeville
      Inn Conference & Training
Center
 
 Effective
June 27, 2005, the Company closed the buffet restaurant at the Collegeville Inn
Conference & Training Center to make the facility available for catered
events.  The Company is exploring all reasonable alternatives to
improve its operating results, including but not limited to, increasing food
service revenues with targeted marketing efforts, increasing revenues from the
sale of the Company’s Cook Chill products, the sale or lease of all or part of
the Collegeville Inn Conference and Training Center, sale of excess land at the
Collegeville Inn Conference and Training Center and reduction of operating
expenses. There can be no assurance as to the success of any or all of these
alternatives.
   8
 Table Of Contents
 
 The
Company is currently involved in discussions with several interested parties
regarding the sale/lease of the Collegeville Inn.  Management expects
to resolve and complete a transaction for the sale/lease within the next twelve
months.  However, the Company currently has no agreements, commitments
or understandings with respect to the sale/lease of the Collegeville Inn and
accordingly, there can be no assurances that the Company will successfully
conclude these discussions, or that it will be able to lease or sell all or part
of the facilities and land on acceptable terms, if at all.
 
 8.
                Business
      Conditions
 
 The
Company's primary sources of revenues are the management fees it receives from
contracts to provide food and housekeeping services to continuing care
facilities, hospitals, retirement communities and schools, as well as the
Collegeville Inn, which includes the Conference and Training Center, Catering
facilities and the Cook Chill operations. The Company has a business plan in
place to improve the operating results from the Collegeville Inn while it
continues its sale/lease efforts.  Effective June 27, 2005, the
Company closed the buffet restaurant at the Collegeville Inn to make the
facility available for catered events.
 
 The
Company is exploring all reasonable alternatives to improve its operating
results, including but not limited to, increasing food service revenues with
targeted marketing efforts, increasing revenues from the sale of the Company's
Cook Chill products, the sale or lease of all or part of the Collegeville Inn,
sale of excess land at the Collegeville Inn and reduction of operating
expenses.  The Company has entered into agreements with industry
experts to assess and examine these alternatives.  However, there can
be no assurance as to the success of any of these efforts.
 
 The
Company's financial statements as of March 31, 2008 have been presented on the
basis that it is a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business.
 
 Although
the Company had positive working capital at March 31, 2008 of approximately $2.2
million, the Company did have negative working capital of approximately $3.5
million as of June 30, 2007, which raised some doubt as to its ability to
satisfy its obligations during that next fiscal year as they become
due.  Such doubt was alleviated after careful review of Management's
plans for the future relating to the Collegeville Inn Assets and operations, and
the protections relating to the management fees from its contracts and future
contracts.
 
 Management
believes that operating cash flow, the possible proceeds from the sale or lease
of certain assets, available cash and available credit resources will be
adequate to make repayments of indebtedness, meet the working capital needs,
satisfy the needs of its operations, and to meet anticipated capital
expenditures during the next twelve months ending March 31,
2009.
 
 In view
of the matters described above, recoverability of a major portion of the
recorded asset amounts shown in the Company's accompanying balance sheet is
dependent upon continued operations of a continuing basis, to maintain present
financing, and to succeed in its future operations. The Company's financial
statements do not include any adjustment relating to the recoverability and
classification of recorded asset amounts or amounts and classification of
liabilities that might be necessary should the Company be unable to continue in
existence.
 
 
 9
 Table Of Contents
  Item2.
 
 Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
 
 The
following discussion and analysis should be read in conjunction with the
financial statements and notes thereto.
 
 Forward
Looking Statements
 
 This Form
10-Q 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, that are intended to be covered by the safe
harbors created thereby.  Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, the adequacy of the Company's cash from operations, existing
balances and available credit line.  Although the Company believes
that the assumptions underlying the forward-looking statements contained herein
are reasonable, any of the assumptions could be inaccurate, and therefore, there
can be no assurance that the forward-looking statements included in this Form
10-Q will prove to be accurate.  Factors that could cause actual
results to differ from the results discussed in the forward-looking statements
include, but are not limited to, results of operations and the outcome of the
Company’s litigation discussed in Note 4 - Litigation.  In light of
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
 
 Results
of Operations – Quarter Ended March 31, 2008
 
 Revenues
for the quarter ended March 31, 2008 were $5,118,571, an increase of $165,291 or
3.3% compared to revenues of $4,953,280 in the corresponding quarter last
year.  This increase is due to the net impact of revenue from new
contracts offsetting revenues from lost contracts as well as revenues from
ongoing contracts exceeding the prior year.  Revenues from
Collegeville Inn operations decreased over the same period last year, primarily
due to a decrease in catering events and a decrease in cook chill
operations.
 
 Cost of
operations for the current quarter was $4,185,599, compared to $4,057,388 for
similar expenses in the same period last year, an increase of $128,211or
3.2%.  The increase is primarily due to the costs associated with the
increase in revenues mentioned above.
 
 Gross
profit for the current quarter was $932,972, or 18.2% of gross revenue,
compared to$895,892, or 18.1% of
gross revenue, for the same period last year, an increase of $37,080 or
4.1%.  The increase in gross profit is due to improved operating
processes as well as the net impact of new contracts and lost contracts,
partially offset by the renegotiation of contract rates in the normal course of
business.
 
 General
and administrative expenses for the quarter were $959,916 or 18.8% of revenue,
compared to $1,078,212 or 21.8% of revenue for the same quarter last year, a
decrease of $118,296 or 11.0%.  This decrease is due to lower payroll
and related expenses in the period as well as a reduction in travel and related
costs.
   10
 Table Of Contents
 
 Provision
for doubtful accounts for the quarter was $12,773 compared to negative $15,000
for the corresponding quarter last year.
 
 Interest
expense for the three-month period totaled $74,254 compared to $115,772 for the
same period last year, a decrease of $41,518 or 35.9%.  The decrease
in interest expense is the result of a reduction in long term debt and a
decrease in interest rates.
 
 For the
reasons stated above, net loss after taxes for the quarter ended March 31, 2008
was $181,298 compared to $242,489 for the corresponding quarter last year, an
improvement of $61,191.
 
 Net loss
per share for the current quarter was $0.06 compared to net loss per
share of $0.09 for the same quarter last year.
 
 Results
of Operations – Nine Months Ended March 31, 2008
 
 Revenues
for the nine month period ended March 31, 2008 were $15,442,438, compared to
$15,438,157 for the nine month period ended March 31, 2007, an increase of
$4,281.  Revenue from new accounts during the current year have been
sufficient to offset any contracts terminating in the current
year.  Revenues at ongoing facilities increased slightly year over
year.
 
 Cost of
operations for the nine month period ended March 31, 2008 were $12,521,798,
compared to $12,566,054 for the nine month period ended March 31, 2007, a
decrease of $44,256 or .4%.  The decreases are associated with better
operating performance at ongoing accounts.
 
 Gross
profit for the nine month period ended March 31, 2008 was $ 2,920,640, compared
to $2,872,103 for the nine month period ended March 31, 2007, an increase of
$48,537 or 1.7 %.  The gross profit margin percentage on sales
increased to 18.9% from 18.6% due to improved operating performance at fixed
rate accounts and cost reductions in the cost of operations areas.
 
 General
and administrative expenses for the nine month period ended March 31, 2008 were
$2,986,864 compared to $3,203,277 for the nine month period ended March 31,
2007, a decrease of $216,413 or 6.8%.  This decrease is due to lower
staffing related expenses in the period as well as a reduction in travel and
related costs.
 
 Provision
for doubtful accounts for the nine month period ended March 31, 2008 was $38,108
compared to $15,000 for the nine month period ended March 31, 2007, an increase
of $23,108.
 
 Interest
expense for the nine-month period ended March 31, 2008 was $273,958 compared to
$345,887 for the nine month period ended March 31, 2007, a decrease of $71,929
or 20.8%. The decrease in interest expense is the result of a reduction in long
term debt and a decrease in interest rates.
 
 For the
reasons stated above, net loss after taxes for the nine month period ended March
31, 2008 was $575,554 compared to $601,491 for the nine month period ended March
31, 2007, an improvement of $25,937 or 4.3%.
 
 Net loss
per share for the nine month period ended March 31, 2008 was $0.20 per share
compared to $0.21 for the nine month period ended March 31, 2007, and
improvement of $0.01 per share reflecting improved net income and no change in
the number of issued and outstanding shares.
   11
 Table Of Contents
 
 Liquidity
and Capital Resources
 
 At March
31, 2008 the Company had working capital of $2,241,861 compared to negative
working capital of $3,623,399 for the same quarter last year.  This
increase in working capital is primarily attributable to the Company’s
reclassification of the asset held for sale to a current asset as management
expects to resolve and complete a transaction for the sale of the asset within
the next twelve months.  However, the Company currently has no
agreements, commitments or understandings with respect to the sale of
Collegeville Inn and accordingly, there can be no assurances that the Company
will successfully conclude these discussions, or that it will be able to lease
or sell all or part of the facilities and land on acceptable terms, if at
all.
 
 Operating
Activities.  Cash used in operations for the nine months ended
March 31, 2008 was $684,573 compared to $1,122,711 used by operations for the
nine months ended March 31, 2007.  The current period’s activity is
primarily attributable to operating losses sustained in the current period as
well as an increase in prepaid expenses.  The prior year’s activity is
primarily due to the operating losses sustained in that period as well as an
increase in accounts receivable and decreases in accounts payable.
 
 Investing Activities. Investing activities
provided $173,574 in cash in the current nine month period compared to $29,270
in cash used in the same period last year.   Investing activities
include capital expenditures in the amount of $10,687 in the current period as
well as the repayment of advances to employees of $184,261.  Investing
activities include capital expenditures of $42,374 in the period March 31,
2007.
 
 Financing
Activities.  Current year to date financing activities used
$140,578 in cash compared to $139,554 used in the same period last
year.  The current period activity includes proceeds from a note
payable as well as payments of long term debt.
 
 Capital
Resources.  The Company has certain credit facilities with its
bank including a revolving credit facility of $3,500,000.  At March
31, 2008 and June 30, 2007, the Company had approximately $3,500,000 outstanding
under its revolving credit.  The Company had previously pledged a
$250,000 Certificate of Deposit as additional collateral against the revolving
line of credit.  This restricted cash has been
released.  The Company issued two series of Industrial Bonds totaling
$3,560,548 in December 1996.  The outstanding balance on the bonds was
$2,045,000 and $2,215,000 as of March 31, 2008 and June 30, 2007,
respectively.  The Company and the bank reached an agreement in April,
2008 which maintains the revolving credit line in place to June 30,
2008.
  As
mentioned in previous filings, the Company has assets including its Collegeville
facility which are not considered essential to its core business. The Company
has plans to sell or lease a part of all of these assets in a fashion that will
increase the liquidity of the Company and is in negotiation with several
parties. To date, the Company has no agreements, commitments or understandings
with respect to the sale of all or any part of these assets and there can be no
assurance that any such sale will occur.
 12
 Table Of Contents
  Payment
      Due By PeriodContractual
      Obligations
                
                Total
                
                
                Less
      than 1 year
                
                
                1
      – 3 years
                
                
                4
      – 5 years
                
                
                After
      5 yearsTotal
      Debt  *
                
                $
                5,573,535
                
                
                $
                3,698,535
                
                
                $
                350,000
                
                
                $
                390,000
                
                
                $
                1,135,000Operating
      Leases
                
                
                14,731
                
                
                
                9,143
                
                
                
                5,588
                
                
                
                --
                
                
                
                -Total
      Contractual Cash Obligations
                
                $
                5,588,266
                
                
                $
                3,707,678
                
                
                $
                355,588
                
                
                $
                390,000
                
                
                $
                1,135,000
 
 ·
                Total
      Debt includes the $3,499,114 outstanding balance on the revolving credit
      facility.
 
 Amount
      of Commitment Expiration
                  Per
      PeriodOther
      Commercial Commitments
                
                Total
      Amounts Committed
                
                
                Less
      than 1 year
                
                
                1
      – 3 years
                
                
                4
      – 5 years
                
                
                Over
      5 yearsLines
      of Credit
                
                $
                3,500,000
                
                
                $
                3,500,000
                
                
                $
                --
                
                
                $
                --
                
                
                $
                --Standby
      Letter of Credit
                
                
                3,065,000
                
                
                
                --
                
                
                
                3,065,000
                
                
                
                --
                
                
                
                --Total
      Commercial Commitments
                
                $
                6,565,000
                
                
                $
                3,500,000
                
                
                $
                3,065,000
                
                
                $
                --
                
                
                $
                --
 
 The
Company's primary sources of revenues are the management fees it receives from
contracts to provide food and housekeeping services to continuing care
facilities, hospitals, retirement communities and schools, as well as the
Collegeville Inn, which includes the Conference and Training Center, Catering
facilities and the Cook Chill operations. In the event that the Company is
unable to consummate a transaction involving its Collegeville Inn facilities,
the Company has a business plan in place to improve the operating results from
the Collegeville Inn.
 
 The
Company is exploring all reasonable alternatives to improve its operating
results, including but not limited to, increasing food service revenues with
targeted marketing efforts, increasing revenues from the sale of the Company's
Cook Chill products, the sale or lease of all or part of the Collegeville Inn,
sale of excess land at the Collegeville Inn and reduction of operating
expenses.  The Company has entered into agreements with industry
experts to assess and examine these alternatives.  However, there can
be no assurances as to the success of any of these efforts.
 
 The
Company's financial statements as of March 31, 2008 have been presented on the
basis that it is a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business.
 
 Although
the Company had positive working capital at March 31, 2008 of approximately $2.2
million, the Company did have negative working capital of approximately $3.5
million as of June 30, 2007, which raised some doubt as to its ability to
satisfy its obligations during that next fiscal year as they become
due.  Such doubt was alleviated after careful review of Management's
plans for the future relating to the Collegeville Inn Assets and operations, and
the protections relating to the management fees from its contracts and future
contracts.
   13
 Table Of Contents
 
 Management
believes that operating cash flow, the possible proceeds from the sale or lease
of certain assets, available cash and available credit resources will be
adequate to make repayments of indebtedness, meet the working capital needs,
satisfy the needs of its operations, and to meet anticipated capital
expenditures during the next twelve months ending March 31,
2009.
 
 In view
of the matters described above, recoverability of a major portion of the
recorded asset amounts shown in the Company's accompanying balance sheet is
dependent upon continued operations of a continuing basis, to maintain present
financing, and to succeed in its future operations. The Company's financial
statements do not include any adjustment relating to the recoverability and
classification of recorded asset amounts or amounts and classification of
liabilities that might be necessary should the Company be unable to continue in
existence.
 
 The
Company may seek to access the public equity market whenever conditions are
favorable. Any additional public funding may result in significant dilution for
existing shareholders and could involve the issuance of securities with rights,
which are senior to those of existing stockholders.  The Company may
also need additional funding earlier than anticipated, and its cash
requirements, in general, may vary materially from those now planned, for
reasons including, but not limited to, competitive advances and higher than
anticipated revenues from operations.
 
 Critical
Accounting Policies
 
 The
discussion and analysis of our financial condition and results of operations are
based upon the Company's consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
the Company to make estimates and judgments that affect the reported amount of
assets and liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities at the date of the Company's financial
statements. Actual results may differ from these estimates under different
assumptions or conditions.
 
 Critical
accounting policies are defined as those that are reflective of significant
judgments and uncertainties, and potentially result in materially different
results under different assumptions and conditions. The Company believes that
its critical accounting policies include those described below.
 
 Revenue
Recognition
 
 Revenue
is generated primarily from fees for food service management and facilities
management at continuing care and health care facilities, schools and the
Collegeville Inn Conference and Training Center.
  The
Company provides its services under several different financial arrangements
including a fee basis and guaranteed rate basis.For Fee Contracts, certain
expenses are paid directly by the Customer and certain expenses are paid by the
Company and billed to the Customer.  The Company recognizes Revenue in
the amount of the expenses billed and the fees for providing
services.
  For
Guaranteed Rate Contracts, the Company charges Customers an established amount
for services provided (for example, per patient day) and is responsible for all
the expenses related to the delivery of those services.  The amount of
the billing is recorded as Revenue and the delivery costs are recorded as cost
of sales.
  
 14
 Table Of Contents
  Regardless
of the different financial arrangements, the Company recognizes revenue when
services have been rendered and the contract price is determinable, and
collectibility is reasonably assured.  Ongoing assessments of the
credit worthiness of customers provide the Company reasonable assurance of
collectibility upon performance of services.  The Company has no other
obligation with respect to its services once services are
performed.
 
 Accounts
Receivable
 
 The
Company performs ongoing credit evaluations of its customers and adjusts credit
limits based on payment history and the customer's current creditworthiness, as
determined by a review of their current credit information. The Company
continuously monitors collections and payments from its customers and maintains
a provision for estimated credit losses based on historical experience and any
specific customer collection issues that have been identified. While such credit
losses have historically been within the Company's expectations and the
provisions established, the Company cannot guarantee that it will continue to
experience the same credit loss rates that it has in the past.
 
 Impairment
or Disposal of Long Lived Assets
 
 The
carrying value of property, plant, and equipment is evaluated based upon current
and anticipated undiscounted operating cash flows before debt service
charges.  An impairment is recognized when it is probable that such
estimated future cash flows will be less than the carrying value of the
assets.  Measurement of the amount of impairment, if any, is based
upon the difference between the net carrying value and the fair value, which is
estimated based upon anticipated undiscounted operating cash flows before debt
service charges.  Based upon a review of its long-lived assets, the
Company did not recognize an impairment loss for the quarters ended March 31,
2008, December 31, 2007 or September 30, 2007; however, there can be no
assurance that the Company will not recognize an impairment loss on its
long-lived assets in future periods.
 
 Income
Tax Accounting
 
 The
Company determines its provision for income taxes using the asset and liability
method.  Under this method, deferred tax assets and liabilities are
recognized for the future tax effects of temporary differences of existing
assets and liabilities and their respective tax bases.  Future tax
benefits of tax loss and credit carry forwards are also recognized as deferred
tax assets.  When necessary, deferred tax assets are reduced by a
valuation allowance to the extent the Company concludes there is uncertainty as
to their ultimate realization.  Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.  The
effect on deferred taxes of a change in tax rates is recognized as income in the
period that the change is enacted.
 
 As of
March 31, 2008 and June 30, 2007, the Company maintained a deferred tax asset of
$2,265,908 and $2,265,908, respectively.  The Company has provided a
valuation allowance of $204,905 against its deferred tax assets after
consideration of a future gain on the disposal of certain land adjacent to its
Collegeville facility and anticipated future profitable operating
results.  However, the amount realizable may be reduced if future
taxable income is reduced or is insufficient to utilize the entire deferred tax
asset.
   15
 Table Of Contents
  Capital
Expenditures
 
 The
Company has no other material commitments for capital expenditures and believes
that its existing cash and cash equivalents, cash from operations and available
revolving credit will be sufficient to satisfy the needs of its operations and
its capital commitments for the next twelve months.  However, if the
need arose, the Company would seek to obtain capital from such sources as
continuing debt financing or equity financing.
 
 Effects
of Inflation
 
 Substantially
all of the Company's agreements with its customers allow the Company to pass
through to its customers its increases in the cost of labor, food and
supplies.  The Company believes that it will be able to recover
increased costs attributable to inflation by continuing to pass through cost
increases to its customers.
 
 Medicare
and Medicaid Reimbursements
 
 A
substantial portion of the Company's revenue is dependent upon the payment of
its fees by customer health care facilities, which, in turn, are dependent upon
third-party payers such as state governments, Medicare and
Medicaid.  Delays in payment by third party payers, particularly state
and local governments, may lead to delays in collection of accounts
receivable.
 
 ITEM3.
 
 Quantitative
and Qualitative Disclosure about Market Risk
 
 Not
applicable.
 
 ITEM4T.
 
 Controls
and Procedures
 
 As of the
end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of the Company’s management,
including the Company’s Chief Executive Officer and Principal Financial Manager,
of the effectiveness of the design and operation of the Company’s disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15(e) and
15d-15(e).  Based upon that evaluation, the Chief Executive Officer
and Principal Financial Manager concluded that the Company’s disclosure controls
and procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company’s periodic reports.
 
 16
 Table Of Contents
  The
Company’s internal control over financial reporting is a process designed by, or
under the supervision of, the Chief Executive Officer and Principal Financial
Manager and effected by the Company’s Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with generally accepted
accounting principles (United States).  Internal control over
financialreporting includes policies and procedures that pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the Company’s assets, provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
the Company’s financial statements in accordance with generally accepted
accounting principles (United States), and that the Company’s receipts and
expenditures are being made only in accordance with the authorization of the
Company’s Board of Directors and management, and provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the
Company’s financial statements.
 
 There
have been no significant changes in the Company’s internal controls over
financial reporting or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.
 
 
 17
 Table Of Contents
  PARTII - OTHER INFORMATION
 
 Item
      1.
                  Legal
      Proceedings
                  NoneItem
      1A.
                  There
      are no material changes to the risk factors disclosed in the Company’s
      Annual Report on Form 10-K for the Fiscal Year ended June 30, 2007 (The
      “Form 10-K”) as described in Note C to the financial statements of the
      Form 10-K, as well as in this Form 10-Q,  the Company's
      financial statements have been presented on the basis that it is a going
      concern, which contemplates the realization of assets and the satisfaction
      of liabilities in the normal course of business.Item
      2.
                  Changes
      in Securities
                  NoneItem
      3.
                  Defaults
      Upon Senior Securities
                  NoneItem4.
                  Submission
      of Matters to a Vote of Security Holders
                  NoneItem
      5.
                  Other
      Information
                  NoneItem
      6.
                  Exhibits
      and Reports on Form 8-K
  (a)
      Exhibits31.1
                  Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities
      and Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
                  Certification
      of Principal Financial Officer pursuant to Rule 13a-14(a) under the
      Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.32.1
                  Certification
      of Chief Executive Officer pursuant to 18 U.S. C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.32.2
                  Certification
      of Principal Financial Officer pursuant to 18 U.S. C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.
 
 18
 Table Of Contents
  SIGNATURES
  Pursuant to the requirements of the
Securities Exchange Act of 1934, the Company has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
 
 
 Nutrition
      Management Services Company/s/Joseph V.
      RobertsJoseph
      V. RobertsChairman
      and Chief Executive Officer/s/
      Linda J. HainesLinda
      J. HainesPrincipal
      Financial Manager
 
  Date:  May
20, 2008
 
 19