**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-Q**


**(Mark
      One)**


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





For
      the
      quarterly period ended April
      30, 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  1-11601




**iDNA,
      INC.**





(Exact
      name of registrant as specified in its charter)




Delaware
              34-1816760(State
                  or other jurisdiction
                  of
                incorporation
                  or organization)
              (I.R.S. Employer
                Identification
                  No.)
  415
                  Madison Avenue, 7thFloor, New York, New York
              10017(Address
                  of principal executive
                  offices)
              (Zip
                  Code)
  (212)
                  644-1400(Registrant’s
                  telephone number, including
                  area code)




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
      definition 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 ( ) 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
      )





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date:




Class
              Outstanding
                  at June 12, 2008Common
                  Stock, $0.05 par
                  value
              10,585,864









**iDNA,
      Inc. and Subsidiaries**





**TABLE
      OF CONTENTS**





PAGEPART
                I.
            FINANCIAL
                INFORMATIONItem
                1.
            Financial
                StatementsCondensed
                Consolidated Balance Sheets as of
                April
                  30, 2008 and January 31, 2008
            3Condensed
                Consolidated Statements of Operations for the
                Three
                  Months Ended April 30, 2008 and 2007
            4Condensed
                Consolidated Statement of Stockholders’ Equity and
                Comprehensive
                  Loss for the Three Months Ended
                April
                  30, 2008
            5Condensed
                Consolidated Statements of Cash Flows for the
                Three
                  Months Ended April 30, 2008 and 2007
            6Notes
                to Condensed Consolidated Financial Statements
            7Item
                2.
            Management’s
                Discussion and Analysis of
                Financial
                  Condition and Results of Operations
            21Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            35Item
                4.
            Controls
                and Procedures
            35PART
                II.
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            36Item 1A.
            Risk
              Factors
            37Item 2.
            Unregistered
              Sales of Equity Securities and Use of
              Proceeds
            37Item 3.
            Defaults
              Upon Senior Securities
            37Item 4.
            Submission
              of Matters to a Vote of Security Holders
            37Item
                5.
            Other
                Information
            37Item
                6.
            Exhibits
            38Signatures
            
            39Certifications
            
            40






2




**PART
      I. FINANCIAL INFORMATION**


**Item
      1.**  **Financial Statements.**


**iDNA,
      Inc. and Subsidiaries**


**Condensed
      Consolidated Balance Sheets**


**(in
      thousands, except share data)**




April
                  30,
                2008
              
              
              January
                  31,
                2008(unaudited)**ASSETS**Cash
                  and cash equivalents
              
              $
              110
              
              $
              169Restricted
                  cash (Note 1)
              
              
              147
              
              
              147Investment
                  in trading securities (Note 1)
              
              
              524
              
              
              1,421Accounts
                  receivable, net of allowanceof
                  $90 and $75, respectively (Note 1)
              
              
              1,815
              
              
              1,453Income
                  taxes refundable
              
              
              19
              
              
              19Inventory
                  (Note 1)
              
              
              155
              
              
              165Prepaid
                  expenses
              
              
              454
              
              
              444Other
                  current assets
              
              
              55
              
              
              90Total
                  current assets
              
              
              3,279
              
              
              3,908Property
                  and equipment, net of accumulateddepreciation
                  of $3,531 and $3,325, respectively (Note 1)
              
              
              1,981
              
              
              2,102Investment
                  in AFC (Note 2)
              
              
              6,765
              
              
              7,129Other
                  assets
              
              
              374
              
              
              414$
              12,399
              
              $
              13,553**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)**LIABILITIESCurrent
                  maturities of long term obligations (Note 3)
              
              $
              1,003
              
              $
              1,123Accounts
                  payable
              
              
              1,449
              
              
              1,220Deferred
                  revenue (Note 1)
              
              
              1,481
              
              
              1,552Self-insurance
                  claims (Note 4)
              
              
              157
              
              
              172Other
                  liabilities
              
              
              1,169
              
              
              1,324Total
                  current liabilities
              
              
              5,259
              
              
              5,391Long
                  term obligations (Note 3)
              
              
              13,127
              
              
              13,373Convertible
                  promissory note (Note 3)
              
              
              2,825
              
              
              2,825Accrued
                  income taxes, long term
              
              
              616
              
              
              61021,827
              
              
              22,199COMMITMENTS
                  AND CONTINGENCIES (Note 4)
              
              
              -
              
              
              -STOCKHOLDERS'
                  EQUITY (DEFICIT)Preferred
                  stock
              
              
              -
              
              
              -Common
                  stock - $.05 par value,authorized
                  50,000,000 shares, issued39,949,589
                  and 39,949,589 shares, respectively
              
              
              1,997
              
              
              1,997Additional
                  paid-in capital
              
              
              175,579
              
              
              175,537Retained
                  deficit
              
              
              (165,330
              )
              
              (164,076
              )Deferred
                  compensation
              
              
              (12
              )
              
              (18
              )Treasury
                  stock, at cost, 29,363,725 and 29,938,725shares,
                  respectively
              
              
              (21,662
              )
              
              (22,086
              )Total
                  stockholders' equity
              
              
              (9,428
              )
              
              (8,646
              )$
              12,399
              
              $
              13,553




See
      accompanying notes to condensed consolidated financial statements.




3




**iDNA,
      Inc. and Subsidiaries**


**Condensed
      Consolidated Statements of Operations**


**(in
      thousands, except per share data)**


**(unaudited)**




Three
                  Months Ended
                April
                  30,2008
              
              
              2007Revenues
                  (Note 1)
              $
              3,503
              
              $
              3,600Cost
                  of revenues (Note 1)
              
              2,334
              
              
              2,521Gross
                  profit
              
              1,169
              
              
              1,079Selling,
                  general and administrative
              
              2,077
              
              
              2,334Loss
                  from operations
              
              (908
              )
              
              (1,255
              )Other
                  income (expense):Income
                  from AFC investment (Note 2)
              
              236
              
              
              271Interest
                  income
              
              1
              
              
              2Interest
                  expense (Note 3)
              
              (234
              )
              
              (55
              )Loss
                  from continuing operationsbefore
                  income taxes
              
              (905
              )
              
              (1,037
              )Provision
                  for income taxes
              
              (6
              )
              
              (6
              )Loss
                  from continuing operations
              
              (911
              )
              
              (1,043
              )Income
                  from discontinuedoperations,
                  net of tax
              
              1
              
              
              5Net
                  loss
              $
              (910
              )
              $
              (1,038
              )Basic
                  and diluted loss per shareContinuing
                  operations
              $
              (.09
              )
              $
              (.11
              )Discontinued
                  operations
              
              -
              
              
              -Net
                  loss per share
              $
              (.09
              )
              $
              (.11
              )Weighted
                  average numberof
                  shares outstandingBasic
                  and diluted
              
              10,049
              
              
              9,861






See
      accompanying notes to condensed consolidated financial statements.




4




**iDNA,
        Inc. and Subsidiaries**
 **Condensed
        Consolidated Statement of Stockholders’ Equity**
 **and
        Comprehensive Loss**
 **Three
        Months Ended April 30, 2008**
 **(in
        thousands, except share data)**
 **(unaudited)**
  Preferred
                    Stock
                
                Common
                    StockShares
                
                
                Par
                  Value
                
                
                Shares
                
                
                Par
                  Value
                
                
                Additional
                  Paid-In
                  Capital
                
                
                Retained
                  Deficit
                
                
                Treasury
                  Stock
                
                
                Deferred
                  Compensation
                  Expense
                
                
                Total
                
                
                Comprehensive
                  (Loss)
                      IncomeBalance
                    atJanuary
                    31, 2008
                
                -
                
                $
                -
                
                
                39,949,589
                
                $
                1,997
                
                $
                175,537
                
                $
                (164,076
                )
                $
                (22,086
                )
                $
                (18
                )
                $
                (8,646
                )Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (910
                )
                
                
                
                
                
                
                
                (910
                )
                $
                (910
                )Share-based
                    compensation expense
                
                
                
                
                
                
                
                
                
                
                
                
                
                42
                
                
                
                
                
                
                
                
                
                
                
                42Treasury
                    stock issued
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (344
                )
                
                424
                
                
                
                
                
                80Deferred
                      compensationexpense
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                6
                
                
                6Comprehensive
                    income (loss)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                $
                (910
                )Balance
                    atApril
                    30, 2008
                
                -
                
                $
                -
                
                
                39,949,589
                
                $
                1,997
                
                $
                175,579
                
                $
                (165,330
                )
                $
                (21,662
                )
                $
                (12
                )
                $
                (9,428
                )


See
      accompanying notes to condensed consolidated financial statements.




5




**iDNA,
      Inc. and Subsidiaries**


**Condensed
      Consolidated Statements of Cash Flows**


**(in
      thousands)**


**(unaudited)**




Three
                  Months Ended April 30,2008
              
              
              2007Cash
                  flows from operating activitiesNet
                  loss
              
              $
              (910
              )
              $
              (1,038
              )Adjustments
                  to reconcile net loss to net cash provided by(used
                  in) operating activities:Depreciation
                  and amortization
              
              
              206
              
              
              419Non-cash
                  interest
              
              
              72
              
              
              -Income
                  from AFC investment
              
              
              (236
              )
              
              (271
              )Share-based
                  compensation expense
              
              
              122
              
              
              77Stock
                  issued as compensation for services rendered
              
              
              -
              
              
              33Amortization
                  of deferred compensation expense
              
              
              6
              
              
              5Changes
                  in operating assets and liabilities, net of acquisition:Accounts
                  receivable
              
              
              (362
              )
              
              (352
              )Accrued
                  income tax/refundable
              
              
              6
              
              
              -Accounts
                  payable
              
              
              229
              
              
              (95
              )Deferred
                  revenue
              
              
              (71
              )
              
              346Self
                  insurance claims
              
              
              (15
              )Other
                  operating assets and liabilities, net
              
              
              (80
              )
              
              369Net
                  cash used in operating activities
              
              
              (1,033
              )
              
              (507
              )Cash
                  flows from investing activities:Proceeds
                  from AFC distributions
              
              
              600
              
              
              750Proceeds
                  from sale of marketable securities
              
              
              897
              
              
              -Purchase
                  of other property and equipment
              
              
              (85
              )
              
              (15
              )Net
                  cash provided by investing activities
              
              
              1,412
              
              
              735Cash
                  flows from financing activities:Proceeds
                  from exercise of stock options
              
              
              -
              
              
              14Payments
                  of loan origination fees
              
              
              (43
              )
              
              -Payments
                  on debt, notes payable and capital lease
              
              
              (395
              )
              
              (16
              )Net
                  cash provided by (used in) financing activities
              
              
              (438
              )
              
              (2
              )Increase
                  (decrease) in cash and cash equivalents
              
              
              (59
              )
              
              226Cash
                  and cash equivalents at beginning of period
              
              
              169
              
              
              548Cash
                  and cash equivalents at end of period
              
              $
              110
              
              $
              774Supplemental
                  disclosures of cash flow information:Interest
                  paid
              
              $
              169
              
              $
              41Income
                  taxes paid
              
              $
              -
              
              $
              -






See
      accompanying notes to condensed consolidated financial statements




6




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**




**Note
      1 - Basis of Presentation and Significant Accounting
      Policies**





*General*


The
      accompanying unaudited condensed consolidated financial statements include
      the accounts
      of iDNA, Inc. and its subsidiaries (“iDNA”). iDNA’s operations are comprised of
      three principal reportable segments: (i) strategic communications services,
      (ii)
      information services and (iii) entertainment. iDNA manages each segment
      separately as a consequence of different marketing, service requirements and
      technology strategies (see Note 5).





The
      strategic communications services segment provides content development via
      the
      design, development and production of media, collateral material, logistics,
      support and/or broadcast services for presentations at corporate and
      institutional events, meetings, training seminars and symposiums. The
      presentations may be live at single or multi-site venues and can include video
      conferencing, satellite broadcasting and webcasting or the presentations may
      be
      provided via on-demand access via internet websites, DVD or video
      tape.





The
      information services segment utilizes custom wireless communication technology
      and proprietary software to facilitate client audience interaction,
      participation and polling to collect, exchange and/or analyze data and
      information in real-time during a meeting or event. The wireless communication
      services are available as a turn-key service provided by iDNA during a scheduled
      meeting or event or alternatively, a client can purchase from iDNA the required
      electronic components and related proprietary software to administer its needs
      independently.





As
      a
      consequence of iDNA’s investment in the Angelika Film Centers, LLC (“AFC”), iDNA
      operates in the movie exhibition and entertainment industry (see Note
      2).





The
      financial statements are unaudited but in the opinion of management, reflect
      all
      adjustments (consisting only of normal recurring accruals) necessary for a
      fair
      presentation of iDNA’s consolidated financial position, results of operations,
      stockholders’ equity and comprehensive loss, and cash flows for the periods
      presented.





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles for interim
      financial statements and with the rules of the Securities and Exchange
      Commission applicable to interim financial statements and therefore do not
      include all disclosures that might normally be required for financial statements
      prepared in accordance with generally accepted accounting principles. The
      accompanying unaudited condensed consolidated financial statements should be
      read in conjunction with iDNA’s consolidated financial statements, including the
      notes thereto, appearing in iDNA’s Annual Report on Form 10-K for the year ended
      January 31, 2008. The results of operations for the three months ended April
      30,
      2008 are not necessarily indicative of operating results that may be achieved
      over the course of the full year.




7




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited**


**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





The
      preparation of financial statements and the accompanying notes thereto, in
      conformity with generally accepted accounting principles, requires management
      to
      make estimates and assumptions that affect reported amounts of assets and
      liabilities and disclosure of contingent assets and
      liabilities at the
      date of the financial statements and reported amounts of revenues and expenses
      during the respective reporting periods. Examples include the provision for
      bad
      debt, useful lives of property and equipment and intangible assets, impairment
      of property and equipment and intangible assets, deferred income taxes, self
      insurance claims and assumptions related to equity-based compensation. Actual
      results could differ from those estimates.





iDNA
      uses
      a January 31 year-end for financial reporting purposes. References herein to
      the
      term “Fiscal 2009” shall mean iDNA’s fiscal year ending January 31, 2009 and
      references to other “Fiscal” years shall mean the year that ended (or ends, as
      the case may be) on January 31 of the year indicated. The term the “Company” or
“iDNA” as used herein refers to iDNA, Inc. together with its consolidated
      subsidiaries unless the context otherwise requires.





*Investments
      in Trading Securities*


iDNA’s
      investment in trading securities is comprised of an investment in a mutual
      fund
      which invests in highly liquid, AAA fixed income securities. iDNA’s investment
      in trading securities is carried at fair market value at April 30, 2008.
      Unrealized gains or losses on trading securities are credited or charged to
      operations. Interest and dividends earned on the investment are recorded as
      interest income.





*Revenues*


iDNA’s
      revenues are earned within short time periods, generally less than one week.
      iDNA recognizes revenue from its strategic communications segment, including
      the
      video production, video editing, meeting services and broadcast satellite or
      webcast services, and its information services segment when the services are
      complete and delivered or all technical services have been rendered. Deposits
      and other prepayments are recorded as deferred revenue until revenue is
      recognized. iDNA does not have licensing or other arrangements that result
      in
      additional revenues following the delivery of the video or a broadcast. Costs
      accumulated in the production of the video, meeting services or broadcasts
      are
      deferred until the sale and delivery are complete. Deferred production costs
      of
      $55,000 and $90,000, respectively, are reported as other current assets at
      April
      30, 2008 and January 31, 2008.





iDNA
      recognizes revenue from the sale of electronic equipment, proprietary software
      and related components at the time of shipment. Deposits and other prepayments
      received prior to shipment are recorded as deferred revenue until the electronic
      equipment and related software are shipped. iDNA has licensing and technical
      support arrangements for future software enhancements and upgrades for technical
      support for previously delivered electronic equipment. Revenues derived from
      licensing and technical support are recognized over the term of the licensing
      and technical support period, which generally are sold in increments of one
      year
      of coverage. For the three months ended April 30, 2008 and 2007, electronic
      equipment sales were $476,000 and $576,000, respectively.




8


**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





*Cost
      of Revenues*


Cost
      of
      revenues consists of direct expenses specifically associated with client service
      revenues. The cost of revenues includes direct salaries and benefits, purchased
      products or services for clients, web hosting, support services, shipping and
      delivery costs.





*Research
      and Development Costs*


Research
      and development costs are comprised principally of personnel costs incurred
      for
      enhancements, modifications, updates, service and support expenditures for
      iDNA’s proprietary software. Research and development costs are charged to
      operations as incurred and are included as a component of costs of revenues.
      iDNA charged $102,000 and $97,000, respectively, to research and development
      expense for the three months ended April 30, 2008 and 2007.




*Restricted
      Cash*


In
      June
      2006, iDNA obtained a letter of credit in an amount of $147,000 that was issued
      in favor of the landlord of iDNA’s new New York headquarters. The letter of
      credit is collateralized by an interest bearing money market account in the
      same
      amount. Therefore, $147,000 is classified as restricted cash as of April 30,
      2008
      and January 31, 2008.





*Accounts
      Receivable*


Accounts
      receivable are recorded at the invoiced amount and do not bear interest. The
      allowance for doubtful accounts is iDNA’s best estimate of the amount of
      probable credit losses in iDNA's existing accounts receivable. iDNA determines
      the allowance based on analysis of historical bad debts, client concentrations,
      client credit-worthiness and current economic trends. iDNA reviews its allowance
      for doubtful accounts quarterly. Past-due balances over 90 days and specified
      other balances are reviewed individually for collectibility. All other balances
      are reviewed on an aggregate basis. Account balances are written off against
      the
      allowance after all means of collection have been exhausted and the potential
      for recovery is considered remote. iDNA does not have any off-balance sheet
      credit exposure related to its clients.





*Inventory*


Inventory
      is comprised principally of electronic equipment and related components held
      for
      sale to clients. Inventory is valued at the lower of cost or market using the
      first-in - first-out inventory cost method.





*Property
      and Equipment*


Property
      and equipment are stated at cost. Depreciation is computed using the
      straight-line method over the estimated useful lives of the assets, which range
      from eighteen months to ten years. Leasehold improvements are amortized over
      the
      shorter of the lease term or the estimated useful lives of the related
      improvements.




9




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**






**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





*Goodwill
      and Other Intangible Assets*


Intangible
      assets with indefinite lives, including goodwill through January 31, 2008,
      are
      not subject to amortization but are subject to testing for impairment at least
      annually or whenever there is an impairment indicator (see below).





*Valuation
      of Long-Lived Assets*


iDNA reviews
      the carrying value of its long-lived assets (other than goodwill) whenever
      events or changes in circumstances indicate that its carrying amount may not
      be
      recoverable. When indicators of impairment exist, iDNA determines whether the
      estimated undiscounted sum of the future cash flows of such assets is less
      than
      their carrying amounts. If less, an impairment loss is recognized in the amount,
      if any, by which the carrying amount of such assets exceeds their respective
      fair values. The determination of fair value is based on quoted market prices
      in
      active markets, if available, or independent appraisals; sales price
      negotiations; or projected future cash flows discounted at a rate determined
      by
      management to be commensurate with iDNA’s business risk. The estimation of fair
      value utilizing discounted forecasted cash flows includes significant judgments
      regarding assumptions of revenue, operating and marketing costs; selling and
      administrative expenses; interest rates; property and equipment additions and
      retirements; industry competition; and general economic and business conditions,
      among other factors.





At
      January 31, 2008, the goodwill for each of iDNA’s business segments (information
      services and strategic communications services) was tested for impairment.
      As a
      consequence of the testing, iDNA determined that the carrying value of both
      its
      information services and its strategic communications services business segments
      exceeded their fair value, which was estimated based upon the present value
      of
      each reporting units expected future cash flows. As a consequence, iDNA charged
      to operations an aggregate of $8.0 million for the estimated impairment of
      goodwill and other intangible assets relating to (i) its information services
      segment in the amount of $5.9 million, and (ii) strategic communication services
      segment in the amount of $2.1 million, respectively ,
      resulting in the reduction of the carrying value of all goodwill and other
      intangible assets to zero. Prior to the impairment charge during the fourth
      quarter of Fiscal 2008, iDNA charged to operations $203,000 for the amortization
      of these intangibles for the three months ended April 30, 2007.




10




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**




**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





*Income
      Taxes*


Deferred
      income taxes are provided for all temporary differences between the book and
      tax
      basis of assets and liabilities. Deferred income taxes are adjusted to reflect
      new tax rates when they are enacted into law. The effect on deferred tax assets
      and liabilities of a change in tax rates is recognized in income in the period
      that includes the enactment date. A valuation allowance is recognized if it
      is
      anticipated that some or all of a net deferred tax asset may not be
      realized.





In
      February 2007, iDNA adopted the provisions of the Financial Accounting Standards
      Board (“FASB”) Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes* (“FIN
      48”), an interpretation of FASB Statement No. 109, *Accounting
      for Income Taxes* .
      FIN 48
      prescribes a recognition threshold and measurement attribute for the financial
      recognition and measurement of a tax position taken or expected to be taken
      on a
      tax return. The interpretation requires that iDNA recognize the impact of a
      tax
      position in the financial statements if that position is more likely than not
      of
      being sustained on audit, based on the technical merits of the position. FIN
      48
      also provides guidance on derecognition classification, interest and penalties,
      accounting in interim periods and disclosure.





In
      accordance with the provisions of FIN 48, upon its adoption as of February
      1,
      2007, iDNA recorded an adjustment to retained deficit of $329,000, inclusive
      of
      interest, to reflect potential liabilities for iDNA’s uncertain tax positions,
      inclusive of interest. iDNA recognizes interest and penalties associated with
      uncertain tax positions as a component of tax expense (benefit). For the three
      months ended April 30, 2008, iDNA charged to operations $6,000 for income
      taxes.





As
      of
      January 31, 2008 iDNA has federal net operating loss carryforwards of $91.5
      million of which approximately $24.5 million is estimated to expire due to
      the
      limitations described below. As a consequence, iDNA’s remaining federal net
      operating loss carryforwards of $67.0 million may be used to reduce future
      taxable income. Largely
      as a consequence of these operating loss carryforwards, iDNA reported a net
      deferred tax asset of $29.0 million and an offsetting valuation allowance of
      $29.0 million since iDNA is unable to determine, at this time, that it more
      likely than not will generate future taxable income against which the net
      operating loss could be applied.





Effective
      November 3, 2000, iDNA repurchased shares of its common stock, $0.05 par value,
      (“Common Stock”) and underwent a “change in ownership” as defined for the
      purposes of Sections 382 and 383 of the Internal Revenue Code. As a consequence
      of this “change in ownership”, the use of net operating loss carryforwards
      totaling $61.0 million incurred prior to November 3, 2000 (“pre-change losses”)
      will be subject to significant annual limitation. Based upon an evaluation
      of
      the tax position regarding the Section 382 limitation on the pre-change losses,
      iDNA has determined that $24.5 million of these pre-change losses may expire
      unused.




11




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**




**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





*Stock-Based
      Compensation*


Effective
      February 1, 2006, iDNA adopted the provisions of Statement of Financial
      Accounting Standards (“SFAS”) No. 123R (revised 2004), *Share-Based
      Payment* (“SFAS
      No. 123(R)”), which replaced SFAS No. 123, *Accounting
      for Stock-Based Compensation* (“SFAS
      No. 123”), and superseded APB Opinion No. 25, *Accounting
      for Stock Issued to Employees* .
      SFAS
      No. 123(R) requires all share-based payments to employees, including grants
      of
      employee stock options, to be recognized in the financial statements based
      on
      their fair values beginning with the first interim or annual period after
      December 15, 2005. iDNA elected the prospective method of adopting SFAS No.
      123(R) which requires that compensation expense be recorded over the remaining
      periods for what would have been the remaining fair value under SFAS No. 123
      of
      all unvested stock options and restricted stock at the beginning of the first
      quarter of adoption. The compensation costs for that portion of awards is based
      on the grant-date fair value of the awards as calculated for pro forma
      disclosures under SFAS No. 123. iDNA charged to operations $122,000 and $77,000,
      respectively, for share-based compensation for the three months ended April
      30,
      2008 and 2007





*Earnings
      Per Share*


Basic
      earnings (loss) per share is computed by dividing net income (loss) by the
      weighted-average number of shares of iDNA’s Common Stock outstanding for the
      period. Dilutive earnings per share for all periods presented is the same as
      basic earnings per share because the inclusion of common stock ,
      in the
      form of stock options and warrants, would have an anti-dilutive effect on income
      (loss) per share for the three months ended April 30, 2008 and 2007. For the
      three months ended April 30, 2008 and 2007, there were 0 and 264,245 common
      stock equivalents, respectively, excluded from the earnings per share
      computation due to their dilutive effect.




12


**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**






**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





*New
      Accounting Pronouncements*


In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 157, *Fair
      Value Measurement* (“SFAS
      No. 157”). SFAS No. 157 defines fair value, establishes a framework for
      measuring fair value in accordance with Generally Accepted Accounting Principles
      (“GAAP”), and expands disclosures about fair value measurements. The provisions
      of SFAS No. 157 are effective for fiscal years beginning after November 15,
      2007. The FASB agreed to a one-year deferral of the effective date for
      non-financial assets and liabilities that are recognized or disclosed at fair
      value on a non-recurring basis. The application of this pronouncement did not
      have a material impact on iDNA’s reported consolidated financial position or
      results of operations.





In
      February 2007, the FASB issued Statement No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      No. 159”). SFAS No. 159 allows entities the option to measure eligible financial
      instruments at fair value as of specified dates. Such election, which may be
      applied on an instrument by instrument basis, is typically irrevocable once
      elected. SFAS No. 159 is effective for fiscal years beginning after November
      15,
      2007. The adoption of this pronouncement did not have a material impact on
      iDNA’s reported consolidated financial position or results of
      operations.





In
      December 2007, the FASB issued SFAS No. 141-R, *Business
      Combinations* .
      SFAS
      No. 141-R applies prospectively to business combinations for which the
      acquisition date is on or after the beginning of the first annual reporting
      period beginning on or after December 15, 2008. The objective of SFAS No. 141-R
      is to improve the relevance, representational faithfulness and comparability
      of
      the information that a reporting entity provides in its financial reports about
      a business combination. SFAS No, 141-R changes the requirements for an
      acquirer’s recognition and measurement of the assets acquired and the
      liabilities assumed in a business combination. iDNA does not anticipate the
      application of this pronouncement will have a material impact on iDNA’s reported
      consolidated financial position or results of operations.




In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interest in Consolidated Financial Statements - an amendment to ARB
      No.51* .
      SFAS
      No. 160 requires that (i) noncontrolling (minority) interests be reported as
      a
      component of shareholders’ equity, (ii) net income attributable to the parent
      and to the noncontrolling interest be separately identified in the consolidated
      statement of operations, (iii) changes in a parent’s ownership interest while
      the parent retains its controlling interest be accounted for as equity
      transactions, (iv) any retained noncontrolling equity investment upon the
      deconsolidation of a subsidiary be initially measured at fair value, and (v)
      sufficient disclosures are provided that clearly identify and distinguish
      between the interests of the parent and the interests of the noncontrolling
      owners. SFAS No.160 is effective for annual periods beginning after December
      15,
      2008. iDNA does not anticipate the application of this pronouncement will have
      a
      material impact on iDNA’s reported consolidated financial position or results of
      operations.




13






**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      1 - Basis of Presentation and Significant Accounting Policies** **-
      continued**





In
      March
      2008, the FASB issued SFAS No. 161, *“Disclosures
      about Derivative Instruments and Hedging Activities”* (“SFAS
      161”). SFAS 161 enhances disclosure requirements for derivative instruments in
      order to provide users of financial statements with an enhanced understanding
      of
      (i) how and why an entity uses derivative instruments, (ii) how derivative
      instruments and related hedged items are accounted for under SFAS No. 133, *“Accounting
      for Derivative Instruments and Hedging Activities”* and its
      related interpretations, and (iii) how derivative instruments and related hedged
      items affect an entity’s financial position, financial performance and cash
      flows. SFAS 161 is to be applied prospectively for the first annual reporting
      period beginning on or after November 15, 2008. iDNA does not anticipate the
      application of this pronouncement will have a material impact on iDNA’s reported
      consolidated financial position or results of operations.





*Reclassifications*


Certain
      Fiscal 2008 amounts have been reclassified to conform with Fiscal 2009
      presentations.




**Note
      2 - Investment in AFC**





On
      April
      5, 2000, iDNA, through its wholly owned subsidiary National Cinemas, Inc.,
      acquired a 50% membership interest in AFC. AFC is the owner and operator of
      the
      Angelika Film Center s,
      which
      is a multiplex cinema and café complex in the Soho District of Manhattan in New
      York City.





AFC
      is
      currently owned 50% by iDNA and 50% by Reading International, Inc. (“Reading”).
      The articles and bylaws of AFC provide that for all matters subject to a vote
      of
      the members, a majority is required, except that in the event of a tie vote,
      the
      Chairman of Reading shall cast the deciding vote.





iDNA
      uses
      the equity method to account for its investment in AFC. AFC uses a December
      31
      year-end for financial reporting purposes. iDNA reports on a January 31
      year-end, and for its fiscal quarters ending April 30, July 31, October 31
      and
      January 31 records its pro-rata share of AFC’s earnings on the basis of AFC’s
      fiscal quarters ending March 31, June 30, September 30 and December 31,
      respectively. For the three months ended April 30, 2008 and 2007, iDNA recorded
      income of $236,000 and $271,000, respectively, representing its share of AFC’s
      net income.




14




**iDNA,
          Inc. and Subsidiaries**
 **Notes
          to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      2 - Investment in AFC - continued**





Summarized
      income statement data for AFC for the three months ended March 31, 2008 and
      2007, respectively, is as follows (in thousands):




Three
                  Months Ended
                March
                  31,2008
              
              
              2007Revenues
              
              $
              1,847
              
              $
              2,000Film
                  rental
              
              
              480
              
              
              562Operating
                  costs
              
              
              675
              
              
              654Depreciation
                  and amortization
              
              
              197
              
              
              195General
                  and administrative expenses
              
              
              22
              
              
              471,374
              
              
              1,458Net
                  income
              
              $
              473
              
              $
              542iDNA's
                  proportionate share of net income
              
              $
              236
              
              $
              271




**Note
      3 - Current and Long Term Obligations**





On
      November 21, 2007, iDNA, via its wholly owned subsidiary, iDNA Cinema Holdings,
      Inc. (“Holdings”), consummated a Master Loan and Security Agreement (the “Loan
      Agreement”) with Silar Advisors, L.P. (“Silar”), as Lender and Administrative,
      Payment and Collateral Agent, pursuant to which Silar provided a term loan
      in an
      aggregate principal amount of $4.25 million (the “Term Loan”) to Holdings (the
“Term Loan Financing”). Interest accrues on the Term Loan at a per annum rate
      equal to the variable annual rate of interest designated from time to time
      by
      Citibank N.A. as its “prime rate,” plus 4%, or, if greater, 12.25%, and is
      payable by Holdings on a quarterly basis. At April 30, 2008, the “prime rate”
was 5.0%. The Term Loan matures on November 20, 2009 unless extended for one
      year at the option of Holdings, upon written notice provided to Silar between
      fifteen (15) and forty-five (45) days prior to the Maturity Date, provided
      that
      no default is then ongoing and that Holdings is then in compliance with its
      financial covenants under the Loan Agreement. At April 30, 2008, Holdings and
      iDNA were in compliance with the financial covenants under the Loan Agreement.
      At April 30, 2008, the principal balance of the Term Loan was $3.9 million.





Holdings’
      obligations under the Term Loan are secured by a pledge of all of Holdings’
assets, including all of the outstanding shares of National Cinemas, Inc.
      (“NCI”), which owns a 50% membership interest in AFC .
      The
      Term Loan is also guaranteed by (i) iDNA (with such guaranty being secured
      by a
      pledge of substantially all of iDNA’s assets, other than the shares of its
      operating subsidiaries) and (ii) NCI (with such guaranty being secured by a
      pledge of substantially all of NCI’s assets, other than its 50% membership
      interest in AFC).




15




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**




**Note
      3 - Current and Long Term Obligations - continued**





In
      connection with the consummation of the Term Loan, as required by the Loan
      Agreement, iDNA issued warrants to Silar and a consultant (the “Warrants”) to
      purchase 1.5 million and 60,000 shares, respectively, of iDNA’s Common Stock at
      an exercise price of $0.27 per share. The number of shares issuable upon
      exercise of the Warrants is subject to customary adjustment in the event of
      a
      stock dividend, stock split, reverse stock split or similar event and is
      furthermore subject to a weighted-average antidilution protection in the event
      that iDNA issues additional shares of Common Stock for consideration less than
      the existing exercise price under the Warrants. Additionally, pursuant to the
      Warrants, the holder thereof has been granted (subject to certain conditions,
      including the reimbursement of iDNA’s costs) three demand registration rights
      for the underlying shares of Common Stock, as well as unlimited piggyback
      registration rights for such shares of Common Stock. The fair value of the
      Warrants at the date of grant was $339,000. At April 30, 2008, the unamortized
      fair value of the Warrants issued in the amount of $277,000 was recorded as
      a
      reduction of the principal on the Term Loan. iDNA charges to interest expense
      the fair value of the Warrants over the expected three year term of the Term
      Loan. For the three months ended April 30, 2008, iDNA charged to interest
      expense $29,000 for the fair value of the Warrants.




On
      January 31, 2008, ARS consummated an auto loan with a financing institution
      for
      the purchase of a delivery van in the principal amount of $24,000. The auto
      loan
      is repayable in monthly installments of $755 with the last payment due February
      2011. The auto loan bears interest at the rate of 9.0% and is collateralized
      by
      the van purchased with the proceeds from the loan. At April 30, 2008, the
      principal balance of the auto loan was $23,000.





As
      a
      consequence of iDNA’s acquisition of OTI effective November 18, 2005, iDNA
      issued to Flexner Wheatley & Associates (“FWA”) and MeetingNet Interactive,
      Inc. (“MeetingNet”) promissory notes in an aggregate principal amount of $1.5
      million (the “OTI Promissory Notes”). The OTI Promissory Notes bear interest at
      5% per annum and are repayable in quarterly installments according to a formula
      based upon the future cash flows realized from OTI’s operations. iDNA’s
      obligations under the OTI Promissory Notes are secured by the membership
      interests of OTI. At April 30, 2008, iDNA had outstanding principal obligations
      under the terms of the OTI Promissory Notes of $855,000 and accrued interest
      obligations of $12,000.





As
      of
      January 31, 2008, OTI did not meet certain minimum financial performance
      criterion and, as a consequence, (i) iDNA retained an option to reduce the
      purchase price in an amount estimated between $206,000 and $412,000 and (ii)
      for
      the three months ended April 30, 2008 no interest was incurred under the OTI
      Promissory Notes. iDNA has not exercised its option to reduce the purchase
      price
      for its acquisition of OTI as of June 12, 2008 and no adjustment to the OTI
      Promissory Notes was recorded at April 30, 2008. Prospectively, interest may
      accrue pursuant to the terms of the OTI Promissory Notes once the minimum
      operating cash flow thresholds are achieved.




16




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      3 - Current and Long Term Obligations - continued**





As
      a
      consequence of iDNA’s acquisition of Audience Response Systems, Inc. and the
      Campus Group Companies, Inc. (collectively, the “Campus Group”) effective July
      31, 2003, iDNA issued to Mr. Steve Campus and certain family trusts
      (collectively, the former shareholders of the Campus Group) promissory notes
      in
      an aggregate principal amount of $9.9 million and a convertible promissory
      note
      in the principal amount of $2.8 million (collectively, the “Campus Notes”). Of
      the $9.9 million in promissory notes issued by iDNA, $6.6 million of the
      promissory notes (“Base Notes”) bear interest at 5% per annum and are repayable
      in quarterly installments according to a formula based upon the future cash
      flows realized from the Campus Group over a period not to exceed seven years.
      The remaining $3.3 million in promissory notes (“Trailing Notes”) issued by iDNA
      bear interest at 5% per annum and are repayable in quarterly installments,
      commencing upon the retirement of the Base Notes, according to a formula based
      upon the future cash flows realized from the Campus Group over a period not
      to
      exceed three years subsequent to the retirement of the Base Notes. The $2.8
      million convertible promissory note (“Convertible Note”) (i) bears interest at
      5% per annum, payable quarterly in cash or accumulating as principal at the
      election of iDNA, (ii) requires principal payments to commence upon the
      retirement of the Base Notes and Trailing Notes and is then repayable in
      quarterly installments according to a formula based upon the future cash flows
      realized from the Campus Group over a period not to exceed three years and
      (iii)
      is convertible at the option of the holder into shares of iDNA’s Common Stock at
      a base conversion price of $1.50 per share. The holder may not convert the
      Convertible Note into shares of iDNA’s Common Stock prior to repayment of the
      Base Notes and Trailing Notes. iDNA’s obligations under the Campus Notes are
      secured by the capital stock of the companies comprising the Campus Group.
      At
      April 30, 2008, iDNA had outstanding principal obligations under the terms
      of
      the Base Notes, Trailing Notes and the Convertible Note of $6.0 million, $3.3
      million and $2.8 million, respectively, and accrued interest obligations of
      $156,000.





For
      the
      trailing twelve month period ended April 30, 2008 and April 30, 2007, the Campus
      Group’s financial performance was below certain minimum operating cash flow
      thresholds established pursuant to the terms of the Campus Notes. As a
      consequence no interest was incurred on the Campus Notes during the three months
      ended April 30, 2008 or 2007. Prospectively, interest may accrue pursuant to
      the
      terms of the Campus Notes.




As
      a
      consequence of iDNA’s acquisition of OMI Business Communications, Inc. (“OMI”)
      effective April 1, 2003, iDNA assumed a $402,000 loan guaranteed by the U.S.
      Small Business Administration (the “SBA Loan”). At April 30, 2008, the remaining
      balance of the SBA Loan of $291,000 is repayable in monthly installments of
      $3,309 with the last payment due in April 2017. The SBA Loan bears interest
      at
      the rate of 4% per annum. OMI’s obligations under the SBA Loan are
      collateralized by substantially all of OMI’s assets and the personal guarantee
      of Mr. Dean Thompson, President of OMI.


17




**iDNA,
        Inc. and Subsidiaries**
 **Notes
        to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      3 - Current and Long Term Obligations - continued**





In
      September 2006, OMI consummated equipment financing in the form of a capital
      lease with a financing institution to acquire $102,000 in various digital media
      production and editing equipment. The capital lease bears an implied interest
      rate of 10% and is payable in monthly installments with the last payment due
      in
      July 2009. At April 30, 2008, the remaining balance due under the capital lease
      was $44,000. The accumulated depreciation for the underlying equipment pursuant
      to the capital lease was $57,000 and $48,000, respectively, at April 30, 2008
      and January 31, 2008.





The
      components of long term obligations at April 30, 2008 are as follows (in
      thousands):




AmountsAuto
                  loan
              
              $
              23Capital
                  leases
              
              
              44SBA
                  loan
              
              
              291Term
                  Loan
              
              
              3,596OTI
                  promissory notes
              
              
              855Base
                  promissory notes
              
              
              6,046Trailing
                  promissory notes
              
              
              3,275Convertible
                  debt
              
              
              2,82516,955Less
                  current maturities
              
              
              (1,003
              )Long-term
                  obligations andconvertible
                  debt
              
              $
              15,952




iDNA’s
      current maturities and long term obligations at April 30, 2008 are as follows
      (in thousands):




Amounts2009
              
              $
              1,0062010
              
              
              1,6782011
              
              
              8,2492012
              
              
              5772013
              
              
              1,124Thereafter
              
              
              4,60117,235Less
                  - unamortized debt discount
              
              
              (277
              )Less
                  - capital lease interest
              
              
              (3
              )$
              16,955


18




**iDNA,
          Inc. and Subsidiaries**
 **Notes
          to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      4 - Commitments and Contingencies**





*Self-Insurance
      Reserves for Property Damage and Personal Injury Claims*


iDNA,
      under the names Agency Rent-A-Car, Inc. (“ARAC”), Altra Auto Rental and Automate
      Auto Rental, previously engaged in the rental of automobiles on a short-term
      basis, principally to the insurance replacement market. In Fiscal 1996, iDNA
      disposed of its rental fleet business through the sale of certain assets and
      through certain leases to a national car rental company. All liabilities related
      to the discontinued rental business, principally self-insurance claims, were
      retained by ARAC.





iDNA
      is
      subject to certain self-insurance claims and litigation expenses relating to
      its
      discontinued automobile rental operations. iDNA’s management estimates the
      required self-insurance liability based upon specific identification of the
      known matters subject to future claims, the nature of the claim and the
      estimated costs to be incurred. These estimates include, but are not limited
      to,
      ARAC’s historical loss experience and projected loss factors. The required
      self-insurance liability is subject to adjustment in the future based upon
      changes in the nature of the remaining claims or the ultimate cost. As a
      consequence of iDNA’s sale of its automobile rental operations in 1995, iDNA
      believes that all incurred claims have been reported to ARAC and that there
      are
      no longer any incurred but not yet reported claims to be received by ARAC.
      iDNA’s self-insurance liability at April 30, 2008 and January 31, 2008 was
      $157,000 and $172,000, respectively.





*Other
      Litigation*


In
      the
      normal course of its business, iDNA is periodically named as defendant in legal
      proceedings. It is the policy of iDNA to vigorously defend litigation and/or
      enter into settlements of claims where management deems appropriate. In the
      opinion of management, the amount of ultimate liability with respect to any
      current actions, if any, is unlikely to materially affect iDNA’s financial
      position, results of operations or liquidity.




19




**iDNA,
          Inc. and Subsidiaries**
 **Notes
          to Condensed Consolidated Financial Statements**
 **(unaudited)**


**Note
      5 - Segment Information**





iDNA’s
      operations are comprised of three principal reportable segments: (i) strategic
      communications services, (ii) information services and (iii) entertainment.
      iDNA
      manages each segment separately as a consequence of different marketing, service
      requirements and technology strategies for the respective segments.





iDNA
      evaluates the performance of its segments and allocates resources based on
      revenues and operating income. The table below presents the information about
      reportable segments for continuing operations used by iDNA’s chief operating
      decision-makers for the three months ended April 30, 2008 and 2007. Prior
      financial periods have been conformed to the current presentation (in
      thousands):




Information
                Services
              
              
              Strategic
                  Communications
                    Services
              
              
              Entertainment
              
              
              Undistributed
                Corporate
                Expenses
              
              
              Intersegment
                Elimination
              
              
              Total**Three
                  Months Ended****April
                  30, 2008**Revenues
              
              $
              2,097
              
              $
              1,441
              
              $
              -
              
              $
              -
              
              $
              (35
              )
              $
              3,503Operating
                  income (loss)
              
              
              (489
              )
              
              (238
              )
              
              236
              
              
              (414
              )
              
              -
              
              
              (905
              )Depreciation
                  andamortization
                  expense
              
              
              133
              
              
              62
              
              
              -
              
              
              11
              
              
              -
              
              
              206Capital
                  expenditures
              
              
              68
              
              
              4
              
              
              -
              
              
              13
              
              
              -
              
              
              85**Three
                  Months Ended****April
                  30, 2007**Revenues
              
              $
              2,305
              
              $
              1,326
              
              $
              -
              
              $
              -
              
              $
              (31
              )
              $
              3,600Operating
                  income (loss)
              
              
              (226
              )
              
              (811
              )
              
              271
              
              
              (271
              )
              
              -
              
              
              (1,037
              )Depreciation
                  andamortization
                  expense
              
              
              220
              
              
              185
              
              
              -
              
              
              14
              
              
              -
              
              
              419Capital
                  expenditures
              
              
              3
              
              
              -
              
              
              -
              
              
              12
              
              
              -
              
              
              15




20




**Item
      2.**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations**





**General**





iDNA,
      Inc. (the “Company” or “iDNA”), began operations in 1969 and was incorporated in
      Delaware in 1971. iDNA’s operations are comprised of three principal reportable
      segments: (i) strategic communications services, (ii) information services
      and
      (iii) entertainment. iDNA manages each segment separately as a consequence
      of
      different marketing, service requirements and technology strategies for the
      respective segments.





The
      strategic communications services segment provides content development via
      the
      design, development and production of media, collateral material, logistics,
      support and/or broadcast services for presentations at corporate and
      institutional events, meetings, training seminars and symposiums. The
      presentations may be live at single or multi-site venues and can include video
      conferencing, satellite broadcasting and webcasting, or the presentations may
      be
      provided via on-demand access via internet websites, DVD or video
      tape.





The
      information services segment utilizes custom wireless communication technology
      and proprietary software to facilitate client audience interaction,
      participation and polling to collect, exchange and/or analyze data and
      information in real-time during a meeting or event. The wireless communication
      services are available as a turn-key service provided by iDNA during a scheduled
      meeting or event or alternatively, a client can purchase from iDNA the required
      electronic components and related proprietary software to administer its needs
      independently.





As
      of
      consequence of iDNA’s investment in the Angelika Film Centers, LLC (“AFC”), iDNA
      operates in the movie exhibition and entertainment industry.





**Critical
      Accounting Policies**





iDNA’s
      consolidated financial statements are prepared in accordance with generally
      accepted accounting principles, which require iDNA to make estimates and
      assumptions. Those estimates and assumptions affect the reported amounts of
      assets and liabilities, the disclosure of contingent assets and liabilities,
      and
      the reported revenues and expenses of iDNA. iDNA’s significant accounting
      policies are described in Note 1 of Notes to Condensed Consolidated Financial
      Statements included under Item 1 of this Part I (hereinafter, the “Notes”).
      However, certain accounting policies are deemed “critical”, as they require
      management’s highest degree of judgment, estimates and assumptions. These
      accounting estimates and disclosures have been discussed with the Audit
      Committee of iDNA’s Board of Directors. A discussion of iDNA’s critical
      accounting policies, the judgments and uncertainties affecting their application
      and the likelihood that materially different amounts would be reported under
      different conditions or using different assumptions are as follows:




21




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





Revenues :
      iDNA’s
      revenues are earned within short time periods, generally less than one week.
      iDNA recognizes revenue from its strategic communications segment, including
      the
      video production, video editing, meeting services and broadcast satellite or
      webcast services, and its information services segment when the services are
      complete and delivered or all technical services have been rendered. Deposits
      and other prepayments are recorded as deferred revenue until revenue is
      recognized. iDNA does not have licensing or other arrangements that result
      in
      additional revenues following the delivery of the video or a broadcast. Costs
      accumulated in the production of the video, meeting services or broadcasts
      are
      deferred until the sale and delivery are complete. Deferred production costs
      of
      $55,000 and $90,000, respectively, are reported as other current assets at
      April
      30, 2008 and January 31, 2008.





iDNA
      recognizes revenue from the sale of electronic equipment, proprietary software
      and related components at the time of shipment. Deposits and other prepayments
      received prior to shipment are recorded as deferred revenue until the electronic
      equipment and related software are shipped. iDNA has licensing and technical
      support arrangements for future software enhancements and upgrades for technical
      support for previously delivered electronic equipment. Revenues derived from
      licensing and technical support are recognized over the term of the licensing
      and technical support period, which generally are sold in increments of one
      year
      of coverage. For the three months ended April 30, 2008 and 2007, electronic
      equipment sales were $476,000 and $576,000, respectively.





Cost
      of Revenues :
      Cost of
      revenues consists of direct expenses specifically associated with client service
      revenues. The cost of revenues includes direct salaries and benefits, purchased
      products or services for clients, web hosting, support services, shipping and
      delivery costs.





Accounts
      Receivable :
      iDNA
      extends credit to clients in the normal course of business. iDNA continuously
      monitors collections and payments from clients and maintains an allowance for
      doubtful accounts based upon historical experience and any specific client
      collection issues that have been identified. Since accounts receivable are
      concentrated in a relatively few number of clients, a significant change in
      the
      liquidity or financial position of any of these clients could have a material
      adverse impact on the collectibility of the accounts receivable and future
      operating results. i DNA
      does
      not have any off-balance sheet credit exposure related to its
      customers.




22




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





Valuation
      of Long-lived Assets and Goodwill :
      iDNA
      reviews the carrying value of its long-lived assets (other than goodwill)
      whenever events or changes in circumstances indicate that its carrying amount
      may not be recoverable. When indicators of impairment exist, iDNA determines
      whether the estimated undiscounted sum of the future cash flows of such assets
      is less than their carrying amounts. If less, an impairment loss is recognized
      in the amount, if any, by which the carrying amount of such assets exceeds
      their
      respective fair values. The determination of fair value is based on quoted
      market prices in active markets, if available, or independent appraisals; sales
      price negotiations; or projected future cash flows discounted at a rate
      determined by management to be commensurate with iDNA’s business risk. The
      estimation of fair value utilizing discounted forecasted cash flows includes
      significant judgments regarding assumptions of revenue, operating and marketing
      costs; selling and administrative expenses; interest rates; property and
      equipment additions and retirements; industry competition; and general economic
      and business conditions, among other factors.





At
      January 31, 2008, the goodwill for each of iDNA’s business segments (information
      services and strategic communications services) was tested for impairment.
      As a
      consequence of the testing, iDNA determined that the carrying value of both
      its
      information services and its strategic communications services business segments
      exceeded their fair value, which was estimated based upon the present value
      of
      each reporting units expected future cash flows. As a consequence, iDNA charged
      to operations an aggregate of $8.0 million for the estimated impairment of
      goodwill and other intangible assets relating to (i) its information services
      segment in the amount of $5.9 million, and (ii) strategic communication services
      segment in the amount of $2.1 million, respectively, resulting in the carrying
      value of all goodwill and other intangible assets being reduced to zero. Prior
      to the impairment charge during the fourth quarter of Fiscal 2008, iDNA charged
      to operations $203,000 for the amortization of these intangibles for the three
      months ended April 30, 2007.




Self-Insurance
      Claims :
      iDNA’s
      wholly-owned subsidiary ARAC, Inc. (“ARAC”) maintained and continues to maintain
      self-insurance for claims and associated litigation expenses relating to bodily
      injury or property damage from accidents involving the vehicles rented to
      customers by its discontinued automobile rental operations occurring in Fiscal
      1996 and prior. ARAC was, when required by either governing state law or the
      terms of its rental agreement, self-insured for the first $1.0 million per
      occurrence, and for losses in excess of $5.0 million per occurrence, for bodily
      injury and property damage resulting from accidents involving its rental
      vehicles. ARAC was also self-insured, up to certain retained limits, for bodily
      injury and property damage resulting from accidents involving ARAC vehicles
      operated by employees within the scope of their employment.




23




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





ARAC
      is
      the subject to certain self-insurance claims and associated litigation expenses
      relating to its discontinued automobile rental operations. iDNA’s management
      estimates the required self-insurance liability based upon specific
      identification of the known matters subject to future claims, the nature of
      the
      claim and the estimated costs to be incurred. These estimates include, but
      are
      not limited to, ARAC’s historical loss experience and projected loss factors.
      The required self-insurance liability is subject to adjustment in the future
      based upon changes in the nature of the remaining claims or the ultimate cost.
      As a consequence of iDNA’s sale of its automobile rental operations in 1995,
      iDNA believes that all incurred claims have been reported to ARAC and that
      there
      are no longer any incurred but not yet reported claims to be received by ARAC.
      iDNA’s self-insurance liability at April 30, 2008 and January 31, 2008 was
      $157,000 and $172,000, respectively.





Because
      of the uncertainties related to several residual small claims and legal
      proceedings involving iDNA’s former rental operations and self-insurance claims,
      it is difficult to project with precision the ultimate effect that the
      adjudication or settlement of these matters will have on iDNA. As additional
      information regarding iDNA’s potential liabilities becomes available, iDNA will
      revise its estimates as appropriate.




Stock-Based
      Compensation :
      Effective February 1, 2006, iDNA adopted the provisions of Statement of
      Financial Accounting Standards (“SFAS”) No. 123R (revised 2004), *Share-Based
      Payment* (“SFAS
      No. 123(R)”), which replaced SFAS No. 123, *Accounting
      for Stock-Based Compensation* (“SFAS
      No. 123”), and superseded APB Opinion No. 25, *Accounting
      for Stock Issued to Employees* .
      SFAS
      No. 123(R) requires all share-based payments to employees, including grants
      of
      employee stock options, to be recognized in the financial statements based
      on
      their fair values beginning with the first interim or annual period after
      December 15, 2005. iDNA elected the prospective method of adopting SFAS No.
      123(R) which requires that compensation expense be recorded over the remaining
      periods for what would have been the remaining fair value under SFAS No. 123
      of
      all unvested stock options and restricted stock at the beginning of the first
      quarter of adoption. The compensation costs for that portion of awards is based
      on the grant-date fair value of the awards as calculated for pro forma
      disclosures under SFAS No. 123. iDNA charged to operations $122,000 and $77,000,
      respectively, for share-based compensation for the three months ended April
      30,
      2008 and 2007.





Income
      Taxes :
      iDNA
      recognizes deferred tax assets and liabilities based on differences between
      the
      financial statement carrying amounts and the tax basis of assets and
      liabilities. Loss carrybacks, reversal of deferred tax liabilities, tax planning
      and estimates of future taxable income are considered in assessing the need
      for
      a valuation allowance. At the time it is determined that iDNA will more likely
      than not be able to realize deferred tax assets in excess of the recorded
      amount, net of its valuation allowance, an adjustment to reduce the valuation
      allowance would be recorded that would increase income in the period such
      determination was made. Likewise, should management determine that iDNA would
      not be able to realize all or part of net deferred tax assets generated in
      the
      future, an increase to the valuation allowance would be charged to and reduce
      income in the period such determination was made.




24




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





**Financial
      Condition and Results of Operations**


**Results
      from Operations for the Three Months Ended April 30, 2008**


**as
      Compared to the Three Months Ended April 30, 2007**





The
      following table sets forth for the three months ended April 30, 2008 and 2007
      certain statements of operations data by segment obtained from iDNA’s
      consolidated statement of operations (in thousands). All figures described
      in
      the ensuing discussion (as derived from the table) are stated in approximate
      amounts, based upon rounding of figures presented in the table.




Information
                    Services
                  Three
                    Months Ended
                  April
                    30,
              
              
              Strategic
                  Communications
                    Services
                  Three
                    Months Ended
                  April
                    30,
              
              
              Intersegment
                    Elimination
                  Three
                    Months Ended
                  April
                    30,2008
              
              
              2007
              
              
              2008
              
              
              2007
              
              
              2008
              
              
              2007Revenues
              
              $
              2,097
              
              $
              2,305
              
              $
              1,441
              
              $
              1,326
              
              $
              (35
              )
              $
              (31
              )Cost
                  of revenues
              
              
              1,424
              
              
              1,346
              
              
              945
              
              
              1,206
              
              
              (35
              )
              
              (31
              )Selling,
                  general andadministrative
                  expenses
              
              
              1,162
              
              
              1,186
              
              
              735
              
              
              931
              
              
              -
              
              
              -Operating
                  income (loss)
              
              
              (489
              )
              
              (226
              )
              
              (238
              )
              
              (811
              )
              
              -
              
              
              -Depreciation
                  andamortization
                  expense
              
              
              133
              
              
              220
              
              
              62
              
              
              185
              
              
              -
              
              
              -
  Entertainment
                Three
                  Months Ended
                April
                  30,
              
              
              Undistributed
                Corporate
                  Expenses
                Three
                  Months Ended
                April
                  30,
              
              
              Consolidated
                Three
                  Months Ended
                April
                  30,2008
              
              
              2007
              
              
              2008
              
              
              2007
              
              
              2008
              
              
              2007Revenues
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              3,503
              
              $
              3,600Cost
                  of revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,334
              
              
              2,521Selling,
                  general andadministrative
                  expenses
              
              
              -
              
              
              -
              
              
              180
              
              
              217
              
              
              2,077
              
              
              2,334Operating
                  income (loss)
              
              
              236
              
              
              271
              
              
              (414
              )
              
              (271
              )
              
              (905
              )
              
              (1,037
              )Depreciation
                  andamortization
                  expense
              
              
              -
              
              
              -
              
              
              11
              
              
              14
              
              
              206
              
              
              419




Revenues: Revenues
      decreased $97,000 to $3.5 million for the three months ended April 30, 2008
      as
      compared to $3.6 million for the three months ended April 30, 2007.





Revenues
      attributed to the information services segment decreased $208,000 to $2.1
      million for the three months ended April 30, 2008 as compared to $2.3 million
      for the three months ended April 30, 2007. The decrease in revenues was
      principally due to (i) a decline in electronic equipment sales of $99,000 and
      (ii) a decrease of $109,000 as a consequence of changes in the timing and/or
      scope of the projects completed during the three months ended April 30, 2008
      as
      compared to the three months ended April 30, 2007.




25




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





Revenues
      attributed to the strategic communications services segment increased $115,000
      to $1.4 million for the three months ended April 30, 2008 as compared to $1.3
      million for the three months ended April 30, 2007. The increase in revenues
      was
      principally due to an increase in the scope and size of projects completed
      during the three months ended April 30, 2008 as compared to the three months
      ended April 30,, 2007.





The
      nature of iDNA’s business is such that the nature and timing of assignments
      completed for clients, and the resulting revenue, will vary from period to
      period in terms of scope, size of projects and the ultimate revenues derived.
      The timing and fluctuations between periods for assignments is particularly
      apparent for our strategic communications segment where assignments tend to
      be
      fewer in number but larger in scope than the information services segment.
      As a
      consequence, revenues tend to fluctuate from quarter-to-quarter based upon
      the
      client determined timing for completion of an assignment.





Cost
      of Service Revenues :
      Cost of
      revenues for the three months ended April 30,, 2008 and 2007 was $2.3 million
      and $2.5 million, respectively.





Cost
      of
      revenues attributed to the information services segment was $1.4 million for
      the
      three months ended April 30, 2008 as compared to $1.3 million for the three
      months ended April 30,, 2007.





The
      gross
      profit realized by the information services segment for the three months ended
      April 30, 2008 and 2007 was $673,000 and $959,000, respectively. The gross
      profit decrease of $286,000 for the three months ended April 30, 2008 as
      compared to the three months ended April 30, 2007 is due principally to the
      net
      effect of (i) a decrease in revenues, (ii) a decrease in project margins for
      the
      period offset by (iii) a decrease of $13,000 in project overhead costs. The
      gross margin for the three months ended April 30, 2008 decreased 9.5% to 32.1%
      as compared to 41.6% for the three months ended April 30, 2007, principally
      due
      to (i) a decrease of 9.2% associated with equipment sales, (ii) an increase
      in
      direct project costs of 9.3% that resulted in lower project margins and (iii)
      an
      increase of 1.2% in indirect production overhead expenses as a percentage of
      revenues.




26




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





Cost
      of
      revenues attributable to the strategic communications segment decreased $261,000
      to $945,000 for the three months ended April 30, 2008 as compared to $1.2
      million for the three months ended April 30, 2007. The decrease in the costs
      of
      revenues was principally due to a decrease in direct project costs of $273,000
      as a consequence of the net effect of (i) an increased utilization of internal
      production staff and resources offset by (ii) a reduction in outside production
      costs for the three months ended April 30, 2008 as compared to the three months
      ended April 30, 2007. The gross profit realized by the strategic communications
      segment for the three months ended April 30, 2008 and 2007 was $496,000 and
      $120,000, respectively. The gross profit increase of $376,000 for the three
      months ended April 30, 2008 as compared the three months ended April 30, 2007
      was principally due to a favorable mix of production projects utilizing internal
      production staff and resources. The nature of the strategic communications
      segment’s cost of revenues includes various fixed production, operating and
      personnel costs as well as variable direct project costs. As a consequence,
      the
      absorption of the fixed production operating and personnel costs can cause
      quarter-to-quarter fluctuations in gross profit realized as iDNA experiences
      quarter-to-quarter fluctuations in revenues.





Selling,
      General and Administrative (“SG&A”) :
      SG&A for the three months ended April 30, 2008 and the three months ended
      April 30, 2007 was $2.1 million and $2.3 million, respectively.





SG&A
      attributed to the information services segment was $1.2 million and $1.2 million
      respectively, for three months ended April 30, 2008 and the three months ended
      April 30, 2007. The decrease in SG&A of $24,000 was principally due to the
      net effect of (i) a decrease of $92,000 for depreciation and amortization
      expense as a consequence of the elimination of the amortization of certain
      intangible assets written off in Fiscal 2008 offset by (ii) an increase in
      personnel and related cost of $59,000.





SG&A
      attributable to the strategic communications services segment decreased $196,000
      to $735,000 for the three months ended April 30, 2008 as compared to $931,000
      for the three months ended April 30, 2007. The decrease in SG&A was due to
      (i) a decrease of $111,000 for depreciation and amortization expense as a
      consequence of the elimination of the amortization of certain intangible assets
      written off in Fiscal 2008 and (ii) a decrease in facility expenses as a
      consequence of the consolidation of certain facilities implemented in Fiscal
      2008.




27




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





SG&A
      for undistributed corporate expenses for the three months ended April 30, 2008
      and April 30, 2007 was $180,000 and $217,000, respectively. The corporate
      expenses incurred by iDNA relate principally to expenses incurred at its
      executive offices for executive and corporate finance personnel, certain
      employee benefits, professional services such as consulting, legal and
      accounting fees, corporate insurance, corporate marketing initiatives and the
      costs associated with maintaining its New York facility. iDNA allocates to
      its
      various business segments or units the proportionate share of corporate expenses
      that directly relate to and/or benefit such business segment or unit. The
      undistributed corporate expenses reflect the remaining expenses incurred but
      not
      directly attributable to a business segment or unit. The decrease in corporate
      SG&A of $37,000 for the three months ended April 30, 2008 as compared to the
      three months ended April 30, 2007 was due principally to the net effect of
      (i)
      lower professional fees from company advisors, (ii) the reduction in facility
      rent and related occupancy costs as iDNA consolidated its New York City-based
      strategic communications operations into one facility, offset by (iii) a net
      increase in personnel and related benefit expenses.





Income
      from AFC Investment :
      iDNA
      accounts for its investment in AFC using the equity method. For the three months
      ended April 30, 2008 and April 30, 2007, iDNA recorded income of $236,000 and
      $271,000, respectively, representing iDNA’s share of AFC’s net income.





Summarized
      income statement data for AFC for the three months ended March 31, 2008 and
      2007, respectively, is as follows (in thousands):




Three
                  Months Ended
                March
                  31,2008
              
              
              2007Revenues
              
              $
              1,847
              
              $
              2,000Film
                  rental
              
              
              480
              
              
              562Operating
                  costs
              
              
              675
              
              
              654Depreciation
                  and amortization
              
              
              197
              
              
              195General
                  and administrative expenses
              
              
              22
              
              
              471,374
              
              
              1,458Net
                  income
              
              $
              473
              
              $
              542iDNA's
                  proportionate share of net income
              
              $
              236
              
              $
              271




28




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





AFC’s
      revenues decreased $153,000 for the three months ended March 31, 2008 as
      compared to the three months ended March 31, 2007, principally as a result
      of
      the net effects of (i) a decrease of 13.4% in attendance period-to-period,
      (ii)
      a decrease of $20,000 in other, concession and café revenues, offset by, (iii) a
      6.0% increase in average ticket prices. The attendance, and at times the ticket
      prices, at AFC will vary depending on audience interest in, and the popularity
      of the films it exhibits and other factors. Film rental expense, as a percentage
      of revenue, decreased 2.1% to 26.0% from 28.1% for the three months ended March
      31, 2008 and 2007, respectively. Film rental expense generally is a factor
      of a
      fixed percentage rental rate per film multiplied by the number of tickets sold.
      AFC experiences fluctuations in film rental expense, as a percentage of revenue,
      depending upon the rental rate per film and the popularity of the film.
      Operating costs, as a percentage of revenue, increased 3.8% to 36.5% for the
      three months ended March 31, 2008, as compared to 32.7% for the three months
      ended March 31, 2007 due principally to decreased revenues for the three months
      ended March 31, 2008 as compared to the three months ended March 31, 2007.
      The
      nature of AFC’s operating costs tend generally to be more fixed overhead-related
      costs and advertising expenses.





Interest
      Expense :
      For the
      three months ended April 30, 2008 and 2007, iDNA incurred interest expense
      of
      $234,000 and $55,000, respectively. The increase of $179,000 in interest expense
      for the three month period ended April 30, 2008 as compared to the three month
      period ended April 30, 2007 is due principally to an increase in interest costs
      attributable to the Term Loan (defined below) consummated in November
      2007.





Income
      Taxes :
      Due to
      net operating losses and the availability of net operating loss carryforwards,
      iDNA’s effective federal income tax rate was zero for the three month periods
      ended April 30, 2008 and April 30, 2007. iDNA has provided a full valuation
      allowance against its net operating loss carryforward and other net deferred
      tax
      asset items due to the uncertainty of their future realization. For the three
      months ended April 30, 2008, iDNA has charged to income tax expense $6,000
      relating to estimated state and local income taxes.




29




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





**Liquidity
      and Capital Resources**





As
      a
      consequence of periodic fluctuations in iDNA’s working capital needs based upon
      the timing of collections, distributions from AFC, and periods of increased
      production activity, on November 21, 2007, iDNA, via its wholly owned
      subsidiary, iDNA Cinema Holdings, Inc. (“Holdings”), consummated a Master Loan
      and Security Agreement (the “Loan Agreement”) with Silar Advisors, L.P.
      (“Silar”), as Lender and Administrative, Payment and Collateral Agent, pursuant
      to which Silar provided a term loan in an aggregate principal amount of $4.25
      million (the “Term Loan”) to Holdings (the “Term Loan Financing”). Interest
      accrues on the Term Loan at a per annum rate equal to the variable annual rate
      of interest designated from time to time by Citibank N.A. as its “prime rate,”
plus 4%, or, if greater, 12.25%, and is payable by Holdings on a quarterly
      basis. At April 30, 2008, the “prime rate” was 5.0%. The Term Loan matures on
      November 20, 2009 unless extended for one year at the option of Holdings, upon
      written notice provided to Silar between fifteen (15) and forty-five (45) days
      prior to the Maturity Date, provided that no default is then ongoing and that
      Holdings is then in compliance with its financial covenants under the Loan
      Agreement. At April 30, 2008, Holdings and iDNA were in compliance with the
      financial covenants under the Loan Agreement. At April 30, 2008, the principal
      balance of the Term Loan was $3.9 million. The Term Loan is also guaranteed
      by
      (i) iDNA (with such guaranty being secured by a pledge of substantially all
      of
      iDNA’s assets, other than the shares of its operating subsidiaries) and (ii)
      National Cinemas, Inc. (“NCI”), which owns a 50% membership interest in AFC
      (with such guaranty being secured by a pledge of substantially all of NCI’s
      assets, other than its 50% membership interest in AFC).





As
      a
      consequence of iDNA’s acquisition of OTI effective November 18, 2005, iDNA
      issued to Flexner Wheatley & Associates (“FWA”) and MeetingNet Interactive,
      Inc. (“MeetingNet”) promissory notes in an aggregate principal amount of $1.5
      million (the “OTI Promissory Notes”). The OTI Promissory Notes bear interest at
      5% per annum and are repayable in quarterly installments according to a formula
      based upon the future cash flows realized from OTI’s operations. iDNA’s
      obligations under the OTI Promissory Notes are secured by the membership
      interests of OTI. At April 30, 2008, iDNA had outstanding principal obligations
      under the terms of the OTI Promissory Notes of $855,000 and accrued interest
      obligations of $12,000.





As
      of
      January 31, 2008, OTI did not meet certain minimum financial performance
      criterion and, as a consequence, (i) iDNA retained an option to reduce the
      purchase price in an amount estimated between $206,000 and $412,000 and (ii)
      for
      the three months ended April 30, 2008 no interest was incurred under the OTI
      Promissory Notes. iDNA has not exercised its option to reduce the purchase
      price
      for its acquisition of OTI as of June 12, 2008 and no adjustment to the OTI
      Promissory Notes was recorded at April 30, 2008. Prospectively, interest may
      accrue pursuant to the terms of the OTI Promissory Notes once the minimum
      operating cash flow thresholds are achieved.




30




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





As
      a
      consequence of iDNA’s acquisition of Audience Response Systems, Inc. and the
      Campus Group Companies, Inc. (collectively, the “Campus Group”) effective July
      31, 2003, iDNA issued to Mr. Steve Campus and certain family trusts promissory
      notes (the former shareholders of the Campus Group) in an aggregate principal
      amount of $9.9 million and a convertible promissory note in the principal amount
      of $2.8 million (collectively, the “Campus Notes”). Of the $9.9 million in
      promissory notes issued by iDNA, $6.6 million of the promissory notes (“Base
      Notes”) bear interest at 5% per annum and are repayable in quarterly
      installments according to a formula based upon the future cash flows realized
      from the Campus Group over a period not to exceed seven years. The remaining
      $3.3 million in promissory notes (“Trailing Notes”) issued by iDNA bear interest
      at 5% per annum and are repayable in quarterly installments, commencing upon
      the
      retirement of the Base Notes, according to a formula based upon the future
      cash
      flows realized from the Campus Group over a period not to exceed three years
      subsequent to the retirement of the Base Notes. The $2.8 million convertible
      promissory note (“Convertible Note”) (i) bears interest at 5% per annum, payable
      quarterly in cash or accumulating as principal at the election of iDNA, (ii)
      requires principal payments to commence upon the retirement of the Base Notes
      and Trailing Notes and is then repayable in quarterly installments according
      to
      a formula based upon the future cash flows realized from the Campus Group over
      a
      period not to exceed three years and (iii) is convertible at the option of
      the
      holder into shares of iDNA’s Common Stock at a base conversion price of $1.50
      per share. The holder may not convert the Convertible Note into iDNA’s Common
      Stock prior to repayment of the Base Notes and Trailing Notes. iDNA’s
      obligations under the Campus Notes are secured by the capital stock of the
      companies comprising the Campus Group. At April 30, 2008, iDNA had outstanding
      principal obligations under the terms of the Base Notes, Trailing Notes and
      the
      Convertible Note of $6.0 million, $3.3 million and $2.8 million, respectively,
      and accrued interest obligations of $156,000.





For
      the
      trailing twelve month periods ended April 30, 2008 and April 30, 2007, the
      Campus Group’s financial performance was below certain minimum operating cash
      flow thresholds established pursuant to the terms of the Campus Notes. As a
      consequence, no interest was incurred on the Campus Notes during the three
      months ended April 30, 2008 or 2007. Prospectively, interest may accrue pursuant
      to the terms of the Campus Notes.





As
      a
      consequence of iDNA’s acquisition of OMI Business Communications, Inc. (“OMI”)
      effective April 1, 2003, iDNA assumed a $402,000 loan guaranteed by the U.S.
      Small Business Administration (the “SBA Loan”). At April 30, 2008, the remaining
      balance of the SBA Loan of $291,000 is repayable in monthly installments of
      $3,309 with the last payment due in April 2017. The SBA Loan bears interest
      at
      the rate of 4% per annum. OMI’s obligations under the SBA Loan are
      collateralized by substantially all of OMI’s assets and payment thereunder is
      subject to the personal guarantee of Mr. Dean Thompson, President of OMI.




31




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





In
      September 2006, OMI consummated equipment financing in the form of a capital
      lease with a financing institution to acquire $102,000 in various digital media
      production and editing equipment. The capital lease bears an implied interest
      rate of 10% and is payable in monthly installments with the last payment due
      in
      July 2009. At April 30, 2008, the remaining balance due under the capital lease
      was $44,000.





On
      January 31, 2008, ARS consummated an auto loan with a financing institution
      for
      the purchase of a delivery van in the principal amount of $24,000. The auto
      loan
      is repayable in monthly installments of $755 with the last payment due February
      2011. The auto loan bears interest at the rate of 9.0% and is collateralized
      by
      the van purchased with the proceeds from the loan. At April 30, 2008, the
      principal balance of the auto loan was $23,000.





For
      the
      three months ended April 30, 2008, iDNA’s cash and cash equivalents decreased
      $59,000 due principally to the net effects of (i) proceeds from the sale of
      marketable securities of $897,000, (ii) AFC distributions of $600,000 offset
      by
      (iii) cash flows used in operations of $1.0 million, (iv) capital expenditures
      of $85,000, and (v) the repayment of debt and fees of $438,000.





Prior
      to
      the Term Loan, iDNA had limited external sources of financing and has operated
      on its existing cash balances, cash flows from operations and distributions
      from
      its investment in AFC. iDNA will continue to pursue reductions in its operating
      expenses, invest in marketing initiatives and seek new debt or equity financing
      (though there can be no assurance iDNA will obtain such financing) as means
      of
      supplementing iDNA’s resources available to pursue new acquisitions, joint
      ventures or other business development opportunities. At April 30, 2008, iDNA
      had unrestricted cash of $110,000 and investments in trading securities of
      $524,000 which together with any cash flow derived from its investment in AFC
      and the operations of iDNA’s corporate communications business will be used to
      pursue such opportunities and reduce debt.





In
      addition, iDNA has initiated preliminary discussions with the former
      shareholders of the Campus Group to restructure the Campus Notes in the
      aggregate amount of $12.1 million and/or reduce the original purchase
      consideration of the Campus Group acquisition. Currently, iDNA’s payment
      obligations are deferred until certain performance criteria are met. Although
      iDNA is seeking to restructure its obligations under the Campus Notes and/or
      reduce the original purchase consideration, there can be no assurance that
      such
      negotiations will result in a restructuring and/or a reduction in the original
      purchase consideration. iDNA believes that its available cash and cash
      equivalents and investments in trading securities totaling $634,000 at April
      30,
      2008 and any cash distributions from its investment in AFC and cash flow from
      operations will be sufficient to pay operating expenses, existing liabilities,
      fund existing debt repayments and fund its activities through the next twelve
      months as iDNA explores new strategic business alternatives. However, as
      previously discussed, iDNA’s lack of external financing sources may limit its
      ability to pursue strategic business alternatives being considered by iDNA’s
      Board of Directors. Such limitations may have an adverse impact on iDNA’s
      financial position, results of operations and liquidity.




32




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





**Other**





*New
      Accounting Pronouncements*


In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 157, *Fair
      Value Measurement* (“SFAS
      No. 157”). SFAS No. 157 defines fair value, establishes a framework for
      measuring fair value in accordance with Generally Accepted Accounting Principles
      (“GAAP”), and expands disclosures about fair value measurements. The provisions
      of SFAS No. 157 are effective for fiscal years beginning after November 15,
      2007. The FASB agreed to a one-year deferral of the effective date for
      non-financial assets and liabilities that are recognized or disclosed at fair
      value on a non-recurring basis. The application of this pronouncement did not
      have a material impact on iDNA’s reported consolidated financial position or
      results of operations.





In
      February 2007, the FASB issued Statement No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      No. 159”). SFAS No. 159 allows entities the option to measure eligible financial
      instruments at fair value as of specified dates. Such election, which may be
      applied on an instrument by instrument basis, is typically irrevocable once
      elected. SFAS No. 159 is effective for fiscal years beginning after November 15,
      2007. The adoption of this pronouncement did not have a material impact on
      iDNA’s reported consolidated financial position or results of
      operations.





In
      December 2007, the FASB issued SFAS No. 141-R, *Business
      Combinations* .
      SFAS
      No. 141-R applies prospectively to business combinations for which the
      acquisition date is on or after the beginning of the first annual reporting
      period beginning on or after December 15, 2008. The objective of SFAS No. 141-R
      is to improve the relevance, representational faithfulness and comparability
      of
      the information that a reporting entity provides in its financial reports about
      a business combination. SFAS No, 141-R changes the requirements for an
      acquirer’s recognition and measurement of the assets acquired and the
      liabilities assumed in a business combination. iDNA does not anticipate the
      application of this pronouncement will have a material impact on iDNA’s reported
      consolidated financial position or results of operations.





In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interest in Consolidated Financial Statements - an amendment to ARB
      No.51* .
      SFAS
      No. 160 requires that (i) noncontrolling (minority) interests be reported as
      a
      component of shareholders’ equity, (ii) net income attributable to the parent
      and to the noncontrolling interest be separately identified in the consolidated
      statement of operations, (iii) changes in a parent’s ownership interest while
      the parent retains its controlling interest be accounted for as equity
      transactions, (iv) any retained noncontrolling equity investment upon the
      deconsolidation of a subsidiary be initially measured at fair value, and (v)
      sufficient disclosures are provided that clearly identify and distinguish
      between the interests of the parent and the interests of the noncontrolling
      owners. SFAS No.160 is effective for annual periods beginning after December
      15,
      2008. iDNA does not anticipate the application of this pronouncement will have
      a
      material impact on iDNA’s reported consolidated financial position or results of
      operations.




33




**iDNA,
      Inc. and Subsidiaries**


**Management’s
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations - continued**





In
      March
      2008, the FASB issued SFAS No. 161, *“Disclosures
      about Derivative Instruments and Hedging Activities”* (“SFAS
      161”). SFAS 161 enhances disclosure requirements for derivative instruments in
      order to provide users of financial statements with an enhanced understanding
      of
      (i) how and why an entity uses derivative instruments, (ii) how derivative
      instruments and related hedged items are accounted for under SFAS No. 133, *“Accounting
      for Derivative Instruments and Hedging Activities”* and its
      related interpretations, and (iii) how derivative instruments and related hedged
      items affect an entity’s financial position, financial performance and cash
      flows. SFAS 161 is to be applied prospectively for the first annual reporting
      period beginning on or after November 15, 2008. iDNA does not anticipate the
      application of this pronouncement will have a material impact on iDNA’s reported
      consolidated financial position or results of operations.





*Inflation*


Inflation
      has not had a material adverse impact on iDNA.





*Off-Balance
      Sheet Arrangements*


iDNA
      does
      not have in place any off-balance sheet arrangements (as defined in Item
      303(a)(4) of Regulation S-K).




**Forward
      Looking Statements**





Some
      of
      the information in this Quarterly Report on Form 10-Q (including the section
      titled Management’s Discussion and Analysis of Financial Condition and Results
      of Operations) contains forward looking statements within the meaning of the
      federal securities laws that relate to future events or our future financial
      performance and involve known and unknown risks, uncertainties and other factors
      that may cause iDNA or iDNA’s industry’s actual results, levels of activity,
      performance or achievements to be materially different from any future results,
      levels of activity, performance or achievements expressed or implied by the
      forward-looking statements. You should not rely on forward-looking statements
      in
      this report. Forward-looking statements typically are identified by use of
      terms
      such as “anticipate”, “believe”, “plan”, “expect”, “intend”, “may”, “will”,
“should”, “estimate”, “predict”, “potential”, “continue” and similar words,
      although some forward-looking statements are expressed differently. This report
      may contain forward-looking statements attributed to third parties relating
      to
      their estimates regarding the growth of iDNA’s markets or other factors. All
      forward-looking statements address matters that involve risk and uncertainties,
      and there are many important risks, uncertainties and other factors that could
      cause iDNA’s actual results as well as those of the markets it serves, levels of
      activity, performance, achievements and prospects to differ materially from
      the
      forward-looking statements contained in this report. You should also consider
      carefully the statements under other sections of this report that address
      additional factors that could cause our actual results to differ from those
      set
      forth in any forward-looking statements. iDNA undertakes no obligation to
      publicly update or review any forward-looking statements, whether as a result
      of
      new information, future developments or otherwise.




34




**Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk.**





Like
      virtually all commercial enterprises, iDNA can be exposed to the risk (“market
      risk”) that the cash flows to be received or paid relating to certain financial
      instruments could change as a result of changes in interest rate, exchange
      rates, commodity prices, equity prices and other market changes.





iDNA
      does
      not engage in trading activities, does not utilize interest rate swaps or other
      derivative financial instruments and does not buy or sell foreign currency,
      commodity or stock indexed futures or options. Accordingly, iDNA is not exposed
      to market risk from these sources.





As
      of
      April 30, 2008, the interest rates under iDNA’s long term and convertible debt,
      exclusive of the Term Loan, are fixed. As a result iDNA has limited market
      risk
      associated with market interest rates. The interest rate attributable to the
      Term Loan is a variable annual rate based upon the prime rate, as published
      by
      Citibank N.A. (“Prime Rate”) plus 4%, or, if greater, 12.25%. As a consequence,
      iDNA’s interest charges under the Term Loan are subject to fluctuations based
      upon changes in the credit markets and the corresponding Prime Rate. For each
      1%
      increase in the Prime Rate above 8.25%, iDNA’s interest costs under the Term
      Loan would increase approximately $42,000 per annum. At April 30, 2008, the
      Prime Rate was 5.0%.





**Item
      4. Controls and Procedures.**




As
      of the
      end of the period covered by this Quarterly Report on Form 10-Q, the Chief
      Executive Officer and the Chief Financial Officer of iDNA (the “Certifying
      Officers”) have conducted evaluations of iDNA’s disclosure controls and
      procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure
      controls and procedures” means controls and other procedures of an issuer that
      are designed to ensure that information required to be disclosed by the issuer
      in the reports that it files or submits under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in the
      Securities and Exchange Commission’s rules and forms. Disclosure controls and
      procedures include, without limitation, controls and procedures designed to
      ensure that information required to be disclosed by an issuer in the reports
      that it files or submits under the Exchange Act is accumulated and communicated
      to the issuer’s management, including its principal executive and principal
      financial officers, or persons performing similar functions, as appropriate
      to
      allow timely decisions regarding required disclosure.  The Certifying
      Officers have reviewed iDNA’s disclosure controls and procedures and have
      concluded that those disclosure controls and procedures were effective as of
      the
      end of iDNA’s most recent fiscal quarter. In compliance with Rules 13a-14(a) and
      15d-14(a) under the Exchange Act and Section 302 of the Sarbanes-Oxley Act
      of
      2002, (18 U.S.C. 1350), each of the Certifying Officers has executed the
      requisite Officer’s Certification included as Exhibit 31 to this Quarterly
      Report on Form 10-Q.




In
      accordance with Rules 13a-15(d) and 15d-15(d) of the Exchange Act, the
      Certifying Officers have also conducted an evaluation of iDNA’s internal control
      over financial reporting and have concluded that there has been no change in
      iDNA’s internal control over financial reporting during its most recent fiscal
      quarter covered by this Quarterly Report on Form 10-Q that has materially
      affected, or is reasonably likely to materially affect, iDNA’s internal control
      over financial reporting.




35




**PART
      II. -**  **OTHER
      INFORMATION**





**Item
      1.**   **Legal
      Proceedings**





*Self-Insurance
      Reserves for Property Damage and Personal Injury Claims*


iDNA,
      under the names Agency Rent-A-Car, Inc. (“ARAC”), Altra Auto Rental and Automate
      Auto Rental, previously engaged in the rental of automobiles on a short-term
      basis, principally to the insurance replacement market. In Fiscal 1996, iDNA
      discontinued its automobile rental fleet business through the sale of certain
      assets and through certain leases to a national car rental company. All
      liabilities related to the discontinued rental business, principally
      self-insurance claims, were retained by ARAC.





iDNA’s
      wholly-owned subsidiary ARAC maintained and continues to maintain self-insurance
      for claims relating to bodily injury or property damage from accidents involving
      the vehicles rented to customers by its discontinued automobile rental
      operations occurring in Fiscal 1996 and prior. ARAC was, when required by either
      governing state law or the terms of its rental agreement, self-insured for
      the
      first $1.0 million per occurrence, and for losses in excess of $5.0 million
      per
      occurrence, for bodily injury and property damage resulting from accidents
      involving its rental vehicles. ARAC was also self-insured, up to certain
      retained limits, for bodily injury and property damage resulting from accidents
      involving ARAC vehicles operated by employees within the scope of their
      employment.





ARAC
      is
      subject to certain self-insurance claims and litigation expenses relating to
      its
      discontinued automobile rental operations. iDNA’s management estimates the
      required self-insurance liability based upon specific identification of the
      known matters subject to future claims, the nature of the claim and the
      estimated costs to be incurred. These estimates include, but are not limited
      to,
      ARAC’s historical loss experience and projected loss factors. The required
      self-insurance liability is subject to adjustment in the future based upon
      changes in the nature of the remaining claims or the ultimate cost. As a
      consequence of iDNA’s sale of its automobile rental operations in 1995, iDNA
      believes that all incurred claims have been reported to ARAC and that there
      are
      no longer any incurred but not yet reported claims to be received by ARAC.
      iDNA’s self-insurance liability at April 30, 2008 and January 31, 2008 was
      $157,000 and $172,000, respectively.





Because
      of the uncertainties related to several residual small claims and legal
      proceedings involving iDNA’s former rental operations and self-insurance claims,
      it is difficult to project with precision the ultimate effect the adjudication
      or settlement of these matters will have on iDNA. As additional information
      regarding iDNA’s potential liabilities becomes available, iDNA will revise the
      estimates as appropriate.




36




*Other
      Litigation*


In
      the
      normal course of its business, iDNA is periodically named as defendant in legal
      proceedings. It is the policy of iDNA to vigorously defend litigation and/or
      enter into settlements of claims where management deems appropriate. In the
      opinion of management, the amount of ultimate liability with respect to any
      current actions, if any, is unlikely to materially affect our financial
      position, results of operations or liquidity.




**Item
              1A.**
            **Risk
              Factors.**


Not
      applicable




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


Not
      applicable




**Item 3.**
            **Defaults
              Upon Senior Securities.**


Not
      applicable




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


Not
      applicable




**Item 5.**
              **Other
                Information.**


Not
      applicable




37




**Item 6.**
                **Exhibits.**


**Exhibit Number**
              
              **Title
                of
                Exhibit**
              **Page**
                **Number**3.1
              Second
                    Amended and Restated Certificate of Incorporation of the Company
                    (incorporated by reference to Exhibit 99.1 to the Company’s Current Report
                    on Form 8-K filed with the SEC on November 4, 2005, SEC File
                    No.
                    1-11601).
              N/A3.2
              Second
                  Amended and Restated By-Laws of the Company dated as of November
                  4, 2005
                  (incorporated by reference to Exhibit 99.2 to the Company’s Current Report
                  on Form 8-K filed with the SEC on November 4, 2005, SEC File No.
                  1-11601).
              N/A4.1
              Certificate
                of Designation Preferences and Rights of Series D Junior Participating
                Preferred Stock of the Company (incorporated by reference to Exhibit
                4.1
                to the Company’s Current Report on Form 8-K filed with the SEC on October
                9, 2001, SEC File No. 1-11601).
              N/A4.2
              Specimen
                  Stock Certificate - of the Company’s Common Stock(incorporated
                  by reference to Exhibit 4(c) to the Company’sAnnual
                  Report on Form 10-K for the fiscal year endedJanuary
                  31, 1996, filed with the SEC on April 25, 1996,SEC
                  File No. 1-11601).
              N/A4.3
              Rights
                  Agreement, dated as of September 26, 2001,
                  by and between the
                  Company and American Stock Transfer & Trust Company,including
                  the form of Certificate of Designation, Preferencesand
                  Rights for the Series D Junior Participating Preferred Stockattached
                  as Exhibit “A”, the form of Rights Certificate attached asExhibit
                  “B” and the Summary of Rights to Purchase PreferredStock
                  attached as Exhibit “C” (incorporated by reference toExhibit
                  4.1 to the Company’s Current Report on Form 8-K,filed
                  with the SEC on October 9, 2001, SEC File No. 1-11601).
              N/A31.1
              Certification
                of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
                of the
                Securities Exchange Act of 1934, As adopted pursuant to Section 302
                of the Sarbanes-Oxley Act
              4031.2
              Certification
                of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
                of the
                Securities Exchange Act of 1934,As adopted pursuant to Section 302
                of the
                Sarbanes-Oxley Act
              4132.1
              Certification
                of Principal Executive Officer Pursuant to Rule 13a-14(b) of the
                Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
              4232.2
              Certification
                of Principal Financial Officer Pursuant toRule
                13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.Section
                1350, as adopted pursuant to Section 906 of theSarbanes-Oxley
                Act of 2002
              43





38




SIGNATURES








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




iDNA,
                INC.Date:
June
                16,
                2008
              By:
              /s/James
                J.
                McNamaraJames J. McNamara
                Chairman
                  of the Board and Chief Executive Officer
                (principal
                  executive officer)


Date:
June
                  16,
                  2008
                By:
                Robert
                  V. Cuddihy,
                  Jr.Robert V. Cuddihy, Jr.
                    Chief
                      Financial Officer, Secretary and Treasurer
                    (principal
                      accounting and financial officer)
  39