**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                 June              30, 2008                          |
|   |   |                                                                                                                   |
| **or** |
|   |   |                                                                                                                   |
| o      |   | **TRANSITION REPORT PURSUANT              TO SECTION              13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|   |   |                                                                                                                   |
|   |   | **For the transition period              from ____________ to              ____________**                         |
|   |   |                                                                                                                   |
|   |   | Commission File Number: 000-53234                                                                            |

**Interstate      Data USA, Inc.**

| **Delaware**                                                  | **61-1348524**                                      |
|---------------------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation) | (IRS                Employer Identification Number) |

**1900      West Loop South, # 1850**

**Houston,      Texas 77027**

**(606)      324-0048**

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

----

**TABLE      OF CONTENTS **

| PART                  I — FINANCIAL INFORMATION |                                                                                                                           |
|-------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| ITEM                  1.                              | Financial                  Statements.                                                                                         | 3 |
|                                                  | CONDENSED                  BALANCE SHEETS                                                                                      | 3 |
|                                                  | CONDENSED                  STATEMENTS OF OPERATIONS                                                                            | 4 |
|                                                  | CONDENSED                  STATEMENTS OF CASH FLOWS                                                                            | 5 |
|                                                  | NOTES                  TO CONDENSED INTERIM FINANCIAL STATEMENTS                                                               | 6 |
| ITEM                  2.                              | Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations. | 14 |
| ITEM                  3.                              | Quantitative                  and Qualitative Disclosures about Market Risk.                                                   | 19 |
| ITEM                  4T.                             | Controls                  and Procedures.                                                                                      | 19 |
| PART                  II — OTHER INFORMATION    |                                                                                                                           |
| ITEM                  1.                              | Legal                  Proceedings.                                                                                            | 21 |
| ITEM                  1A.                             | Risk Factors                                                                                                                   | 21 |
| ITEM                  2.                              | Unregistered                  Sales of Equity Securities and Use of Proceeds.                                                  | 21 |
| ITEM                  3.                              | Defaults                  upon Senior Securities.                                                                              | 21 |
| ITEM                  4.                              | Submission                  of Matters to a Vote of the Security Holders.                                                      | 21 |
| ITEM                  5.                              | Other                  Information.                                                                                            | 21 |
| ITEM                  6.                              | Exhibits.                                                                                                                      | 22 |
| SIGNATURES                                            | 24                                                                                                                             |
| EX-31.1                                               | Section                  302 Certification of Principal Executive Officer                                                      |   |
| EX-31.2                                               | Section                  302 Certification of Principal Financial Officer                                                      |   |
| EX-32.1                                               | Section                  906 Certification of Principal Executive Officer                                                      |   |
| EX-32.2                                               | Section                  906 Certification of Principal Financial Officer                                                      |   |

----

**PART      I -- FINANCIAL INFORMATION**

**ITEM      1. Financial Statements.**

| **Interstate                Data USA, Inc.** |
|----------------------------------------------|
| (A                Development Stage Company) |
| Condensed                Balance Sheets      |

|                                                                                                                                                                  |   | June                  30, |         | December                  31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------------|-------------------------------|--------|
|                                                                                                                                                                  |   | 2008                      |         | 2007                          |   |
|                                                                                                                                                                  |   | (Unaudited)               |         |                          |   |
| ASSETS                                                                                                                                                                |   |                      |         |                          |   |
| CURRENT                  ASSETS                                                                                                                                       |   |                      |         |                          |   |
| Cash                                                                                                                                                                  |   | $                         | 1,494        |                          | $      | 68,984 |   |
| Total                  Current Assets                                                                                                                                 |   |                      | 1,494        |                          |   | 68,984 |   |
| Fixed                  Assets                                                                                                                                         |   |                      |         |                          |   |   |   |
| Equipment                  net of Depreciation                                                                                                                        |   |                      | 32,640       |                          |   | 35,978 |   |
| Other                  Assets                                                                                                                                         |   |                      |         |                          |   |   |   |
| Website                  Development in Progress                                                                                                                      |   |                      | -            |                          |   | 274,500 |   |
| Leasehold                  Improvements net of Amortization                                                                                                           |   |                      | 29,850       |                          |   | 31,650 |   |
| Website                  Development net of accumulated                                                                                                               |   |                      |         |                          |   |   |   |
| Amortization                                                                                                                                                          |   |                      | 439,750      |                          |   | 273,333 |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| TOTAL                  ASSETS                                                                                                                                         |   | $                         | 503,734      |                          | $      | 684,445 |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                       |   |                      |         |                          |   |   |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| Accounts                  payable                                                                                                                                     |   | $                         | 415,758      |                          | $      | 1,811 |   |
| Notes                  payable - related party - Current                                                                                                              |   |                      | 712,400      |                          |   | 6,900 |   |
| Accrued                  liabilities                                                                                                                                  |   |                      | 540,470      |                          |   | 407,513 |   |
| Convertible                  Notes Payable Current                                                                                                                    |   |                      |         |                          |   | 100,000 |   |
| Discount                  on Convertible Note Payable                                                                                                                 |   |                      |    |                          |   | (38,024 | ) |
| Total                  Current Liabilities                                                                                                                            |   |                      | 1,668,628    |                          |   | 478,200 |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| Notes                  payable-related parties                                                                                                                        |   |                      | 239,850      |                          |   | 238,050 |   |
| Notes                  payable                                                                                                                                        |   |                      | 101,749      |                          |   | 101,749 |   |
| Total                  Liabilities                                                                                                                                    |   |                      | 2,010,227    |                          |   | 817,999 |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| STOCKHOLDERS'                  EQUITY (DEFICIT)                                                                                                                       |   |                      |         |                          |   |   |   |
| Preferred                  Stock: 20,000,000 shares authorized, at $0.001 par                  value, 281,833 shares issued and outstanding                      |   |                      | 282          |                          |   | 282 |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| Common                  stock; 80,000,000 shares authorized, at                  $0.001 par value, 6,366,231 shares issued                  and outstanding |   |                      | 6,366        |                          |   | 6,267 |   |
| Additional                  paid-in capital                                                                                                                           |   |                      | 4,670,484    |                          |   | 4,704,251 |   |
| Additional                  paid-in - capital share options                                                                                                           |   |                      | 2,023,377    |                          |   | 1,953,568 |   |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| Deficit                  accumulated during the development stage                                                                                                     |   |                      | (8,207,002   | )                             |   | (6,797,922 | ) |
|                                                                                                                                                                  |   |                      |         |                          |   |   |   |
| Total                  Stockholders' Equity (Deficit)                                                                                                                 |   |                      | (1,506,493   | )                             |   | (133,554 | ) |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                  (DEFICIT)                                                                           |   | $                         | 503,734      |                          | $      | 684,445 |   |

*See        accompanying notes to condensed interim financial statements.*

----

| **Interstate                Data USA, Inc.**                                 |
|------------------------------------------------------------------------------|
| (A                Development Stage Company)                                 |
| Condensed                Statements of Operations                (Unaudited) |

|                                                           |   | For                  the ThreeMonths                  EndedJune                  30, |      | For                  the SixMonths                  EndedJune                  30, |   | From                  InceptionMay                  19,1999                  ThroughJune                  30, |   |
|----------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|-----------|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|
|                                                           |   | 2008                                                                                 |      | 2007                                                                               |   | 2008                                                                                                          |   | 2007 |   | 2008 |   |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |
| REVENUES                                                       |   | $                                                                                    | -         |                                                                               | $      | 52                                                                                                            |   | $ | - |   | $ | 66 |   | $ | 35,421 |   |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                                       |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Stock                  Option Expense                          |   |                                                                                 | 69.908    |                                                                               |   |                                                                                                          |   |   | 69,908 |   |   | 0 |   |   | 2,043,204 |   |
| Amortization                  Expense                          |   |                                                                                 | 57,042    |                                                                               |   | 34,167                                                                                                        |   |   | 108,083 |   |   | 68,333 |   |   | 450,957 |   |
| Depreciation                  Expense                          |   |                                                                                 | 2,567     |                                                                               |   | 598                                                                                                           |   |   | 5,138 |   |   | 2,247 |   |   | 39,189 |   |
| General                  and                                   |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Administrative                  Expenses                       |   |                                                                                 | 482,948   |                                                                               |   | 83,930                                                                                                        |   |   | 1,225,951 |   |   | 206,584 |   |   | 5,709,073 |   |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| Total                  Expenses                                |   |                                                                                 | 612,465   |                                                                               |   | 118,695                                                                                                       |   |   | 1,409,080 |   |   | 277,164 |   |   | 8,242,423 |   |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| NET                  LOSS                                      |   | $                                                                                    | (612,465  | )                                                                                  | $      | (118,643                                                                                                      | )      | $ | (1,409,080 | ) | $ | (277,098 | ) | $ | (8,207,002 | ) |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| BASIC                  LOSS PER SHARE                          |   | $                                                                                    | (0.10     | )                                                                                  | $      | (0.02                                                                                                         | )      | $ | (0.22 | ) | $ | (0.04 | ) |   |   |   |
|                                                           |   |                                                                                 |      |                                                                               |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED                  AVERAGE NUMBER OF SHARES OUTSTANDING |   |                                                                                 | 6,318,978 |                                                                               |   | 6,261,853                                                                                                     |   |   | 6,292,750 |   |   | 6,261,853 |   |   |   |   |

*See          accompanying notes to condensed interim financial statements.*

----

| **Interstate                Data USA, Inc.**                                 |
|------------------------------------------------------------------------------|
| (A                Development Stage Company)                                 |
| Condensed                Statements of Cash Flows                (Unaudited) |

|                                                                                                          |   | For                  the SixMonths                  EndedJune                  30, |         | From                  InceptionMay                  11,1999                  ThroughJune                  30, |   |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                          |   | 2008                                                                               |         | 2007                                                                                                          |   | 2008 |   |
| OPERATING                  ACTIVITIES                                                                         |   |                                                                               |         |                                                                                                          |   |   |   |
| Net                  loss                                                                                     |   | $                                                                                  | (1,409,080   | )                                                                                                             | $      | (277,098 | ) | $ | (8,207,002 | ) |
| Adjustments                  to reconcile net loss to net cash used by operating                  activities: |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| Additional                  Paid in Capital Share Options                                                     |   |                                                                               | 69,809       |                                                                                                          |   |   |   |   | 2,023,377 |   |
| Depreciation                                                                                                  |   |                                                                               | 5,138        |                                                                                                          |   | 2,247 |   |   | 25,909 |   |
| Amortization                                                                                                  |   |                                                                               | 108,083      |                                                                                                          |   | 68,333 |   |   | 450,957 |   |
| Stock                  for Services                                                                           |   |                                                                               |         |                                                                                                          |   |   |   |   | 54,550 |   |
| Changes                  in operating assets and liabilities                                                  |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| Increase                  in accrued expenses                                                                 |   |                                                                               | 132,957      |                                                                                                          |   | (3,077 | ) |   | 540,470 |   |
| Increase                  in accounts payable - related                                                       |   |                                                                               | -            |                                                                                                          |   | (7,768 | ) |   | 0 |   |
| Increase                  in accounts payable                                                                 |   |                                                                               | 413,947      |                                                                                                          |   | 26,710 |   |   | 415,758 |   |
|                                                                                                          |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| Net                      Cash Used by Operating Activities                                                    |   |                                                                               | (679,146     | )                                                                                                             |   | (190,653 | ) |   | (4,695,981 | ) |
|                                                                                                          |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| INVESTING                  ACTIVITIES                                                                         |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| Leasehold                  Improvements Blg                                                                   |   |                                                                               |         |                                                                                                          |   |   |   |   | (36,000 | ) |
| Website                  Development                                                                          |   |                                                                               | (274,500     | )                                                                                                             |   | (410,000 | ) |   | (890,707 | ) |
| Equipment                                                                                                     |   |                                                                               | -            |                                                                                                          |   | (9,536 | ) |   | (52,400 | ) |
| Development                  Cost in Progress                                                                 |   |                                                                               | 274,500      |                                                                                                          |   | 255,000 |   |   | - |   |
| Net                  Cash provided from Investing                                                             |   |                                                                               | -            |                                                                                                          |   | (164,536 | ) |   | (979,107 | ) |
| CASH                  FLOWS FROM FINANCING ACTIVITIES                                                         |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| Additional                  Paid in Capital                                                                   |   |                                                                               |         |                                                                                                          |   |   |   |   | 41,193 |   |
| Dividends                  Paid                                                                               |   |                                                                               | (33,767      | )                                                                                                             |   |   |   |   | (50,677 | ) |
| Proceeds                  from notes payable                                                                  |   |                                                                               | 620,172      |                                                                                                          |   | 74,975 |   |   | 1,485,348 |   |
| Discounts                  on notes payable                                                                   |   |                                                                               | 38,024       |                                                                                                          |   |   |   |   |   |   |
| Payments                  of long term debt                                                                   |   |                                                                               | (12,873      | )                                                                                                             |   | (4,596 | ) |   | (431,349 | ) |
| Proceeds                  from sale of common stock                                                           |   |                                                                               | 99           |                                                                                                          |   | 91,500 |   |   | 3,760,965 |   |
| Proceeds                  from sale of preferred stock                                                        |   |                                                                               |    |                                                                                                          |   |    |   |   | 871,101 |   |
| Net                  Cash Provided by                                                                         |   |                                                                               | 611,655      |                                                                                                          |   | 161,879 |   |   | 5,676,581 |   |
| Financing                  Activities                                                                         |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
|                                                                                                          |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| NET                  DECREASE IN CASH                                                                         |   |                                                                               | (67,491      | )                                                                                                             |   | (193,310 | ) |   | 1,493 |   |
| CASH                  AT BEGINNING OF PERIOD                                                                  |   |                                                                               | 68,984       |                                                                                                          |   | 204,314 |   |   | - |   |
| CASH                  AT END OF PERIOD                                                                        |   | $                                                                                  | 1,493        |                                                                                                          | $      | 11,004 |   | $ | 1,493 |   |
|                                                                                                          |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURES OF                                                                  |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| CASH                  FLOW INFORMATION                                                                        |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| CASH                  PAID FOR:                                                                               |   |                                                                               |         |                                                                                                          |   |   |   |   |   |   |
| Interest                                                                                                      |   | $                                                                                  | 58,892       |                                                                                                          | $      | 4,501 |   | $ | 100,575 |   |
| Income                  Taxes                                                                                 |   | $                                                                                  | -            |                                                                                                          | $      | - |   | $ | - |   |

*See          accompanying notes to condensed interim financial statements.*

----

**Interstate      Data USA, Inc.**

**(A      Development Stage Company)**

**Notes      to Unaudited Financial Statements**

**(June      30, 2008)**

**Note      1. General Organization and Business**

**Note      2. Summary of Significant Accounting Practices**

***Recently      issued accounting pronouncements:***

*Business      Combinations*

----

*Noncontrolling      Interests in Consolidated Financial Statements - An Amendment of ARB      No. 51*

*“Share-Based      Payment”*

*“Disclosures      about Derivative Instruments and Hedging Activities - An Amendment to FASB      Statement No. 133*

*,      “The Hierarchy of Generally Accepted Accounting Principles” *
*“The      Meaning of Present Fairly in Conformity With Generally Accepted Accounting      Principles”*

*,      “Accounting for Financial Guarantee Insurance Contracts - An interpretation      of      FASB Statement No. 60”*
*.*

----

***Recently      adopted accounting standards:***

*Fair      Value Measurements*
*Effective      Date of FASB Statement No. 157*

*The      Fair Value Option for Financial Assets and Financial Liabilities- Including      an      amendment of FASB Statement No. 155*

| **For                  the Three Months Ended June 30, 2008** |   |
|---------------------------------------------------------------|--------|
|                                                          |   |   |   |   |   |
| **Loss****Numerator**                                         |   | **Shares****Denominator** |   | **Per****Share                      Amount** |   |
| (                  612,465)                                   |   |   | 6,318,978 |   |   | (.10 | ) |
|                                                          |   |   |   |   |   |   |   |
| **For                  the Three Months Ended June 30, 2007** |
|                                                          |   |   |   |   |   |   |   |
| **Loss****Numerator**                                         |   |   | **Shares****Denominator** |   |   | **Per****Share                      Amount** |   |
| (118,643)                                                     |   |   | 6,261,853 |   |   | (.02 | ) |

----

| Basic                and Diluted                            |   |                                                         |       |   |   |
|-------------------------------------------------------------|--------|--------------------------------------------------------------|------------|--------|--------|
|                                                        |   |                                                         |       |   |   |
|                                                        |   | Six                Months Ended June                30, 2008 |       |
|                                                        |   | 2008                                                         |       | 2007   |   |
| Basic                earnings per share:                    |   |                                                         |       |   |   |
|                                                        |   |                                                         |       |   |   |
| Net                Income ( loss)                           |   | $                                                            | (1,409,080 | )      | $      | (277,098 | ) |
|                                                        |   |                                                         |       |   |   |   |   |
| Weighted                average shares outstanding, basic   |   |                                                         | 6,292,750  |   |   | 6,261,853 |   |
| Weighted                average shares outstanding, diluted |   |                                                         | 8,972,563  |   |   | 8,046,010 |   |
| Basic                earnings per share                     |   | $                                                            | (0.22      | )      | $      | (0.04 | ) |
| Diluted                earnings per share                   |   | $                                                            | (0.22      | )      | $      | (0.04 | ) |

----

|   | a.) | On                March 31, 2008, the Company issued a promissory note in the principal                amount of $296,000 to Vincent O. Ebuh, a stockholder and director                of the                Company. The note accrues interest at a rate of 12% per annum and                both the                principal and interest are due and payable on March, 31, 2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b.) | On                December 13, 2007, the Company issued a convertible promissory note                in the                principal amount of $100,000 to Apollos Ikpobe, a stockholder of                the                Company. The note accrues interest at a rate of 12% per annum, payable                monthly, and matures on June 30, 2008. Due to the convertible nature                of                this note an adjustment was made in the amount of $41,193 as a discount                to                notes payable. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c.) | On                April 30, 2008, the Company issued a promissory note in the principal                amount of $80,000 to Vincent O. Ebuh, a stockholder and director                of the                Company. The note accrues interest at a rate of 12% per annum and                both                principal and interest are due and payable on April 30,                2009. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d.) | On                May 19, 2008, the Company issued a promissory note in the principal                amount                of $17,500 to Randall R. Carpenter, a stockholder and director                of the Company. The note accrues interest at a rate of 12% per annum                and                both the principal and interest are due and payable on May 19,                2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | e.) | On                May 29, 2008, the Company issued a promissory note in the principal                amount                of $66,000 to Vincent O. Ebuh, a stockholder and director of the                Company.                The note accrues interest at a rate of 12% per annum and both principal                and interest are due and payable on May 29,                2009. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f.) | On                June 19, 2008, the Company issued a promissory note in the principal                amount of $146,000 to Vincent O. Ebuh, a stockholder and director                of the                Company. The note accrues interest at a rate of 12% per annum and                both the                principal and interest are due and payable on June 19,                2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | g.) | On                July 16, 2008, the Company issued a promissory note in the principal                amount of $1,209.52 to Randall R. Carpenter, a stockholder and director                of                the Company. The note accrues interest at a rate of 12% per annum                and both                the principal and interest are due and payable on July 16,                2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | h.) | The                Company has obtained a line of credit with Town Square Bank of Ashland,                KY. This line of credit is for a total of $100,000. This note was                guaranteed by David Carter, Bob Lowe, and Randall R. Carpenter, all                of                whom are officers and directors of the Company. On June 28, 2006,                the                Company repaid loans to Town Square Bank of $100,000 in principal                together                with $1,749 in accrued interest and obtained a new loan from Palmetto                Heritage Bank and Trust in the principal amount of $101,749. Under                the                terms of this loan the Company is required to make twenty-three (23)                monthly interest payments beginning June 1, 2006 through June 1,                2008 and                one (1) final payment of the principal amount of $101,749 plus the                last                month’s interest. Interest accrues on the loan at a variable rate of 8.5%                per annum. During the three months ended March 31, 2008, the Company                extended the maturity of the loan from Palmetto Heritage Bank for                (1) one                additional year until June 28, 2009. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | i.) | The                Company has issued non-interest bearing promissory notes to David                Carter,                its Chief Executive Officer and a corporation owned by David Carter.                Notes                due to Mr. Carter and his affiliate include: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | June,                  30, 2008 |    | June                  30, 2007 |   |
|----------------------------------|--------|---------------------------------|---------|--------------------------------|--------|
|                             |   |                            |    |                           |   |
| David                  E. Carter |   | $                               | 15,000  |                           | $      | 15,000 |   |
| DEC,                  Inc        |   | $                               | 103,747 |                           | $      | 103,747 |   |
| Total                            |   | $                               | 118,747 |                           | $      | 118,747 |   |

|   | j.) | The                Company has issued promissory notes to Randall R. Carpenter, its                President                in the amounts set forth below. The Company is currently making monthly                payments to Mr. Carpenter in the amount of $575. The current portion                of                each notes is $24,400 and 6,900 for the three months ended June 30,                2008                and 2007, respectively. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |   | June                  30, 2008 |   | June                  30, 2007 |   |
|---------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|
|                                  |   |                           |   |                           |   |
| Randall                  R. Carpenter |   | $                              | 61,859 |                           | $      | 75,433 |   |

|   | k.) | The                Company has issued promissory notes to Vincent O. Ebuh and Robert                Lowe in                the amounts set forth below, which includes non-interest bearing                loans in                the amounts of $48,507 and $35,138, respectively. Mr. Ebuh and Mr.                Lowe                own shares representing a 31.65% and 14.05%, respectively, of the                Company’s shares outstanding as of June 30,                2008. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | June                  30, 2008 |    | June                  30, 2007 |   |
|----------------------------------|--------|--------------------------------|---------|--------------------------------|--------|
|                             |   |                           |    |                           |   |
| Vincent                  O. Ebuh |   | $                              | 636,506 |                           | $      | 130,688 |   |
| Robert                  Lowe     |   | $                              | 35,138  |                           | $      | 25,138 |   |
| Total                            |   | $                              | 671,644 |                           | $      | 155,826 |   |

----

**Note      3. Stockholders Equity**

|                                                |   | Three                Months Ended |      |
|-----------------------------------------------------|--------|-----------------------------------|-----------|
|                                                |   | June                30, 2008      |      |
|                                                |   | Shares                            |      |
|                                                |   |                              |      |
| Outstanding                at beginning of year     |   |                              | 1,784,157 |   |
| Granted                                             |   |                              | 187,500   |   |
| Exercised                                           |   |                              | -         |   |
| Forfeited                or expired                 |   |                              | -         |   |
|                                                |   |                              |      |   |
| Outstanding                at end of period         |   |                              | 1,971,657 |   |
| Options                exercisable at end of period |   |                              | 1,784,157 |   |

----

**Note      4. **
**Related      Party Transactions **

**Note      5. Going Concern**

----

**ITEM      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations.**

|   | · | industry                competition, conditions, performance and consolidation;  |
|--------|--------|---------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | product                demand and market acceptance risks; |
|--------|--------|------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | legislative                and/or regulatory developments;  |
|--------|--------|------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | the                presence of competitors with greater financial resources than us; |
|--------|--------|--------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | exposure                to obsolescence due to the rapid technological changes occurring                in                Internet industries; and  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | effects                of adverse general economic conditions within the United States;                or                financial performance. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

**Overview**

|   | · | be                customized for a user’s travel                preferences; |
|--------|--------|------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | display                all interstate highway exits along a particular route to a destination                provided by the user; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

|   | · | identify                the names and locations of travel related businesses, on each exit                of the                interstate route. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Satisfaction      of our cash obligations for the next 12 months**

|   | · | our                operating expenses; |
|--------|--------|----------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | our                continued Web site improvement; |
|--------|--------|----------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | payment                of professional fees, including independent certified public auditing                services and legal fees; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | our                marketing and advertising campaign; and |
|--------|--------|------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | our                dividend payments to our Series A preferred stockholders. |
|--------|--------|------------------------------------------------------------------------------|

**Financial      Condition and Changes**

*Accrued      Expenses and Other Liabilities*

|                                        |   | Six                Months endedJune                30, |    |
|---------------------------------------------|--------|-------------------------------------------------------------|---------|
|                                        |   | 2007                                                        |    | 2008 |   |
|                                        |   |                                                        |    |   |   |
| Accrued                Interest             |   | $                                                           | -0-     |   | $ | 17,977 |   |
| Accrued                Payroll              |   |                                                        | 266,667 |   |   | 375,000 |   |
| DEC                Management Payable       |   |                                                        | 33,000  |   |   | 33,000 |   |
| DEC                Health Insurance Payable |   |                                                        | 82,484  |   |   | 114,687 |   |
| Payroll                Taxes Payable        |   |                                                        | 973     |   |   | -0- |   |
| Local                Taxes Payable          |   |                                                        | 56      |   |   | (194 | ) |
|                                        |   |                                                        |         |   |   |  |   |
| Total                                       |   | $                                                           | 383,180 |   |   | 540,470 |   |

----

|   | a.) | On                March 31, 2008, the Company issued a promissory note in the principal                amount of $296,000 to Vincent Ebuh, a stockholder and director of                the                Company. The note accrues interest at a rate of 12% per annum and                both the                principal and interest are due and payable on March, 31, 2009. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b.) | On                December 13, 2007, the Company issued a convertible promissory note                in the                principal amount of $100,000 to Apollos Ikpobe, a stockholder of                the                Company. The note accrues interest at a rate of 12% per annum, payable                monthly, and matures on June 30, 2008. Due to the convertible nature                of                this note an adjustment was made in the amount of $41,193 as a discount                to                notes payable. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c.) | On                April 30, 2008, the Company issued a promissory note in the principal                amount of $80,000 to Vincent O. Ebuh, a stockholder and director                of the                Company. The note accrues interest at a rate of 12% per annum and                both                principal and interest are due and payable on April 30,                2009. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d.) | On                May 19, 2008, the Company issued a promissory note in the principal                amount                of $17,500 to Randall R. Carpenter, a stockholder and director of                the                Company. The note accrues interest at a rate of 12% per annum and                both the                principal and interest are due and payable on May 19,                2009. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e.) | On                May 29, 2008, the Company issued a promissory note in the principal                amount                of $66,000 to Vincent O. Ebuh, a stockholder and director of the                Company.                The note accrues interest at a rate of 12% per annum and both principal                and interest are due and payable on May 29,                2009. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f.) | On                June 19, 2008, the Company issued a promissory note in the principal                amount of $146,000 to Vincent O. Ebuh, a stockholder and director                of the                Company. The note accrues interest at a rate of 12% per annum and                both the                principal and interest are due and payable on June 19,                2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | g.) | On                July 16, 2008, the Company issued a promissory note in the principal                amount of $1,209.52 to Vincent O. Ebuh, a stockholder and director                of the                Company. The note accrues interest at a rate of 12% per annum and                both the                principal and interest are due and payable on July 16,                2009. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | h.) | The                Company obtained a line of credit with Town Square Bank of Ashland,                KY.                This line of credit is for a total of $100,000. This note was guaranteed                by David Carter, Robert Lowe, and Randall R. Carpenter, all of whom                are                officers and directors of the Company. On June 28, 2006, the Company                repaid loans to Town Square Bank of $100,000 in principal together                with                $1,749 in accrued interest and obtained a new loan from Palmetto                Heritage                Bank and Trust in the principal amount of $101,749. Under the terms                of                this loan the Company is required to make 23 monthly interest payments                beginning June 1, 2006 through June 1, 2008 and one (1) final payment                of                the principal amount of $101,749 plus the last month’s interest. Interest                accrues on the loan at a variable rate of 8.5% per annum. During                the three                months ended March 31, 2008, the Company extended the maturity of                the loan                from Palmetto Heritage Bank and Trust for one additional year until                June 28, 2009. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | i.) | The                Company has issued non-interest bearing promissory notes to Mr. Carter                and                a corporation owned by Mr. Carter, DEC, Inc. Notes due to Mr. Carter                and                his affiliate include: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | June 30, 2008 |    | June                  30, 2007 |   |
|--------------------------------|--------|-------------------------|---------|-------------------------------------|--------|
| David                E. Carter |   | $                       | 15,000  |                                | $      | 15,000 |   |
| DEC,                Inc.       |   | $                       | 103,747 |                                | $      | 103,747 |   |
| Total                          |   | $                       | 118,747 |                                | $      | 118,747 |   |

|   | j.) | The                Company has issued the following promissory notes to Mr. Carpenter,                pursuant to which the Company is currently making monthly payments                to Mr.                Carpenter in the amount of $575. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | June                  30, 2008 |   | June                  30, 2007 |   |
|-------------------------------------|--------|-------------------------------------|--------|-------------------------------------|--------|
| Randall                R. Carpenter |   | $                                   | 61,859 |                                | $      | 75,433 |   |

|   | k.) | The                Company has issued promissory notes to Vincent Ebuh and Robert Lowe                in the                amounts set forth below, which includes non-interest bearing loans                in the                amounts of $48,507 and $35,138, respectively. Mr. Ebuh and Mr. Lowe                own shares representing a 31.65% and 14.05%, respectively, of the                Company’s shares outstanding as of June 30,                2008. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | June                30, 2008 |    | June                30, 2007 |   |
|--------------------------------|--------|-----------------------------------|---------|-----------------------------------|--------|
| Vincent                O. Ebuh |   | $                                 | 636,506 |                              | $      | 130,688 |   |
| Robert                Lowe     |   | $                                 | 35,138  |                              | $      | 25,138 |   |
|                           |   |                              |    |                              |   |   |   |
| Total                          |   | $                                 | 671,644 |                              | $      | 155,826 |   |

**Affiliated      Party Debt and Loans**

**Contractual      Obligations**

**Results      of Operations**

*Three      Months Ended June 30, 2008 Compared to the Three Months Ended June 30, 2007      *

----

*Six Months      Ended June 30, 2008 Compared to the Six Months Ended June 30,      2007*

**Liquidity      and Capital Resources**

----

*Off-Balance      Sheet Arrangements*

**ITEM      3. Quantitative and Qualitative Disclosure About Market      Risk. **

**ITEM      4T. Controls and Procedures.**

----

----

**PART      II -- OTHER INFORMATION**

**ITEM      1. Legal Proceedings.**

**ITEM      1A. Risk Factors**

***We      are in arrears with respect to the payment of our quarterly dividend on our      Series A Convertible Preferred Stock***

**ITEM      2. Unregistered Sales of Equity Securities and Use of      Proceeds.**

**ITEM      3. Defaults upon Senior Securities.**

**ITEM      4. Submission of Matters to a Vote of the Security      Holders.**

**ITEM      5. Other Information.**

----

**ITEM      6. Exhibits.**

| **Exhibit****Number** |   | **Description**                                                                                                                                                                                                                           |
|-----------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.1**               |   | Plan                and Agreement of Merger and Reorganization of Interstate Data, Inc.                into                and with Interstate Data USA, Inc. (1)                                                                         |
| **3.1**               |   | Amended                and Restated Certificate of Incorporation filed with the Secretary                of                State of the State of Delaware on October 24, 2006 (1)                                                         |
| **3.2**               |   | Certificate                of Amendment to Amended and Restated Certificate of Incorporation                filed                with the Secretary of State of the State of Delaware on March 21,                2007 (1)           |
| **3.3**               |   | Certificate                of Designation of 8% Series A Convertible Preferred Stock filed with                the                Secretary of State of the State of Delaware on July 24, 2007                (1)                         |
| **3.4**               |   | Certificate                of Amendment to Amended and Restated Certificate of Incorporation                filed                with the Secretary of State of the State of Delaware on April 24,                2008                (1) |
| **3.5**               |   | Amended                and Restated By-Laws (1)                                                                                                                                                                                           |
| **3.6**               |   | First                Amendment to Amended and Restated By-Laws (2)                                                                                                                                                                        |
| **4.1**               |   | Unit Purchase                Warrant issued to Newbridge Securities Corporation (1)                                                                                                                                                  |
| **4.2**               |   | Form                of Common Stock Purchase Warrant issued to Series A Convertible Preferred                Stock investors (1)                                                                                                          |
| **10.2**              |   | Placement                Agency Agreement, between Interstate Data USA, Inc. and Newbridge                Securities Corporation (1)                                                                                                      |
| **10.2**              |   | Amendment                No. 1 to Placement Agency Agreement, between Interstate Data USA,                Inc. and                Newbridge Securities Corporation (1)                                                                    |
| **10.3**              |   | Amendment                No. 2 to Placement Agency Agreement, between Interstate Data USA,                Inc. and                Newbridge Securities Corporation (1)                                                                    |
| **10.4**              |   | Form                of Subscription Agreement for Series A Convertible Preferred Stock                Offering (1)                                                                                                                        |
| **10.5**              |   | Form                of Registration Rights Agreement for Series A Convertible Preferred                Stock                Offering (1)                                                                                                  |
| **10.6**              |   | Form                of Promissory Note executed by Interstate Data USA, Inc. in favor                of                officers and directors (1)                                                                                         |
| **10.7**              |   | Convertible                Promissory Note executed by Interstate Data USA, Inc. in favor of                Mr.                Apollos Ikpobe (1)                                                                                         |
| **10.8**              |   | Employment                Agreement between Interstate Data USA, Inc. and Mr. Randall R. Carpenter                (1)                                                                                                                     |
| **10.9**              |   | Form                of Stock Option Agreement (1)                                                                                                                                                                                         |
| **10.10**             |   | 2008                Stock Incentive Plan (1)                                                                                                                                                                                              |
| **10.11**             |   | Lease                Agreement, dated August 16, 2007, by and between Interstate Data                USA, Inc.                and Community Trust Bank Inc. for Ashland, Kentucky office space                (1)                         |
| **10.12**             |   | Lease                Agreement, dated February 1, 2008, by and between Interstate Data                USA,                Inc. and Community Trust Bank Inc. for Ashland, Kentucky office space                (1)                        |
| **10.13**             |   | Loan                Agreement, dated June 28, 2006, by and between Interstate Data USA,                Inc.                and Palmetto Heritage Bank and Trust (2)                                                                       |
| **10.14**             |   | Amendment                to Convertible Note between Interstate Data USA, Inc. and Vincent                O. Ebuh                (2)                                                                                                      |

----

| **Exhibit****Number** |   | **Description** |
|-----------------------|--------|-----------------|

| **31.1*** |   | Chief                Executive Officer Certification Pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **31.2*** |   | Chief                Financial Officer Certification Pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                |
| **32.1*** |   | Chief                Executive Officer Certification Pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                2002 |
| **32.2*** |   | Chief                Financial Officer Certification Pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                2002 |

----

| (1) | Incorporated                by reference to the corresponding exhibit filed with the Registration                Statement on Form 10 (File No. 000-1143705) with the SEC on May 13,                2008. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|

| (2) | Incorporated                by reference to the corresponding exhibit filed with Amendment No.                1 to                the Registration Statement on Form 10 (File No. 000-1143705) filed                with                the SEC on July 3, 2008. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                               |                                                                                                    |                                        |
|------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------|
| August              14, 2008  | **INTERSTATE              DATA USA, INC.**                                                              |
|                          |                                                                                               |                                   |
|                                    | By:                                                                                           | /S/              RANDALL R. CARPENTER  |
|                               | Randall              R. Carpenter                                                                       |
|                               | Title:               President                                                                     |
|                               |                         (Principal Executive Officer) |

|   |                                                                                                                                                                                                                                                                                       |                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|
|   |                                                                                                                                                                                                                                                                                       |                               |
|        | By:                                                                                                                                                                                                                                                                              | /S/              DUANE JAMES  |
|   | Duane              James                                                                                                                                                                                                                                                                   |
|   | Title:                 Vice                President - Finance                           (Principal Financial Officer and                           Principal Accounting Officer) |

----