SecProbe.io

CORRESP
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Prepared and filed by St Ives Financial

June 30, 2005

Filed via EDGAR and

Delivered via Facsimile (202) 772-9210

Mr. Craig Wilson

Senior Assistant Chief Accountant

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Ms. Christine Davis

Staff Accountant

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

  Re:
  Authentidate Holding Corp.

  Form 10-K for fiscal year ended June 30, 2004

Form 10-Q for the period ended March 31, 2005

Form 8-K dated August 16, 2004

  Form 8-K dated February 8, 2005

  File No. 000-20190

Confidential Treatment of Certain Portions of this Letter is

Requested by Authentidate Holding Corp. pursuant to 17 C.F.R. 200.83

Dear Ms. Davis:

We
    are counsel to Authentidate Holding Corp. (“Authentidate” or
    the “Company”) and are in receipt of your letter dated May 18,
    2005 concerning comments to the above-referenced filings of Authentidate.
    This letter sets forth Authentidate’s responses to the Staff”s
    comments as set forth in your May 18, 2005 letter. In presenting this response,
    we have followed the enumerated comments and section headings as set forth
    in your letter. Please note that in the event you have any questions regarding
    the Company’s request for confidential treatment under Rule 83, please
    contact either the undersigned or the Company’s Chief Financial Officer,
    Mr. Dennis H. Bunt, Authentidate Holding Corp. 2165 Technology Drive, Schenectady,
    New York, 12308, telephone: (518) 346-7799.

The Company’s responses are as follows:

Securities & Exchange Commission

June 30, 2005

Page 2

Form 10-K for the Year Ended June 30, 2004

Revenue Recognition

Comment 1. Supplementally,
      clarify for us the extent to which you have historically recognized revenue
      in accordance with SOP 97-2. In this regard, we note that you only recently
      began to disclose your policies related to software revenue recognition
      in your most recent Form 10-Q. However, your disclosures appear to indicate
      that you have been selling material amounts of software and software-related
      services for several years through your Docstar and Authentidate divisions.
      Explain how the revenue recognition policies disclosed in your 2004 Form
      10-K applied to such software sales.

Response

According
    to AICPA Statement of Position No. 97-02, Software Revenue Recognition,
    revenue should be recognized when the contract for software does not involve
    major production, alteration or customization, provided all of the following
    conditions are satisfied: (1) receipt of payment is probable; (2) the selling
    price is fixed or determinable; (3) the software is delivered; and (4) there
    is persuasive evidence of an arrangement. The Company has followed SOP 97-02
    since 1997, when it began selling its DocStar products. The Company’s
    DocStar products consist of a personal computer and document imaging software.
    The Company assembles the DocStar products and loads the software prior to
    shipping the units to its dealers. Customers can optionally purchase separate
    support packages. Revenues derived from support and maintenance are deferred
    and amortized into revenue over the life of the contract. All four of these
    conditions were present in each sale. The Company conducts
    a credit analysis of each customer prior to shipment to ensure payment is
    probable. The selling price is fixed on the customer’s Purchase Order
    or by a Dealer Price List. No sale is recorded until the product has been
    shipped under terms of FOB Shipping Point and the purchase is enforceable
    under a legally binding Purchase Order.

More
    recently, the Company began to sell Authentidate services to the United States
    Post Office (USPS). Historically, all Authentidate sales were to the USPS,
    with the USPS serving as the vendor to customers. In the future Authentidate
    expects to have sales directly to corporate accounts as well and will evaluate
    revenue recognition under such contracts in accordance with SOP 97-02. Authentidate’s
    contract with the USPS is more fully described in Footnote 1 to the financial
    statements in its Annual Report on Form 10-K for the fiscal year ended June
    30, 2004 (the “Form 10-K”), as well as in Part 1 of the Form
    10-K, which states that Authentidate sells a software product allowing users
    to verify the authenticity of digital images by employing a secure clock
    that will date stamp the images when received, providing proof of time, date
    and also proof of content via the Internet. In July 2002, the Company entered
    into a strategic alliance with the USPS. Under that agreement, Authentidate
    provides the USPS with proprietary technology to operate the USPS Electronic
    Post Mark (EPM). The USPS offers and sells EPMs directly to third parties.
    Pursuant to the USPS agreement, Authentidate is responsible for the administration
    of the service offering, including billing. Accordingly, Authentidate invoices
    the customer on behalf of the USPS. The customer, however, remits payment
    directly to the USPS and Authentidate invoices the USPS for its portion of
    the sale. Accordingly, Authentidate
recognizes the sale on solely its portion of EPM sales at the time it invoices
    USPS as the EPMs are used. Authentidate believes that this procedure satisfies
    all of the conditions of SOP 97-02. As Authentidate begins to sell software
    licenses directly to corporate accounts, it will continue to apply the rules
    of SOP 97-02 to its revenue recognition policies.

Securities & Exchange Commission

June 30, 2005

Page 3

     The
    Company enhanced its critical accounting policies (including its revenue
    recognition policies in particular) in its Form 10-K and further enhanced
    them in its Form 10-Q for the fiscal quarter ended December 31, 2004. In
    reviewing its critical accounting policies for the Form 10-Q for the quarter
    ended March 31, 2005, the Company decided to clarify certain disclosures
    related to revenue recognition previously
      disclosed in its Form 10-K.

Comment  2. We note that
      you refer to several hosting facilities and describe services that appear
      to be hosting services. Supplementally describe these services and the
      material terms of the related arrangements including any set-up fees and
      provide reference to the accounting literature that supports your treatment.

Response

     The
    Company has only utilized two data centers, one in New York City and one
    in Raleigh, North Carolina. The Company does not offer traditional hosting
    services. The New York data center houses its USPS EPM service, which Authentidate
    provides to the USPS as described in its response discussed in Comment 1,
    above. When a customer purchases an EPM from the USPS the transaction occurs
    on
    the servers located in the New York data center. An EPM is issued to the
    customer who then typically uses it with a secure email transmission. Authentidate’s
    service typically ends when the EPM is used by the end user. Authentidate
    entered into an agreement with an independent third-party for the data center
    pursuant to its agreement with the USPS and expenses these costs as they
    are incurred. The Company owns all of the hardware and software and the independent
    third party (as stated in the previous sentence) simply provides a secure
    physical location for the hardware. The Company recognizes revenue for these
    transactions as per SOP 97-02, as was described above.

Rule 83 Confidential Treatment Request by Authentidate Holding Corp.  AHC – 0001

     The
    second data center, which was based in Raleigh and has recently been moved
    to New York, provides services for the Trac Medical Solutions business. The
    Company considered SOP 97-02 and SOP 98-9 (which modifies 97-02) and SAB
    101 for revenue recognition from its Trac Medical business. Revenue recognition
    for this business is described in Footnote 1 to the financial statements
    in the Form 10-K. The Trac Medical business enters into multiple-element
    arrangements including licensing, maintenance, set-up fees, support fees
    and transaction fees. In applying SOP 97-2 all revenue from the arrangement
    is deferred until all elements of the contract are delivered to the Customer,
    which happens as soon as the customer completes its setup of the software
    (this is further detailed in Comment 5). The Trac Medical data center is
    the location of the technology supporting the service purchased by the customer – electronic
    Certificates of Medical Necessity (CMN) and other medical forms (more fully
    described in Item 1 of our Form 10-K). Generally, Trac Medical’s customer
    contracts include up-front payments as well as progress payments. By applying
    SOP 97-2 the Company defers revenue from upfront payments and recognizes
    the revenue on these contracts over the life of the contract. For example,
    with a 12-month contract, the Company defers the prepaid maintenance, set-up,
    time-based license, support and transaction fees and recognizes the revenue
    ratably over a period of 12 months, as each item is delivered to the customer
    on an on-going/monthly basis. There are no undelivered items. At the end
    of the initial contract term, the customer can renew on similar terms or
    the
contract will expire.  [X X X].1

1
 The Company requests that the
      information contained in Confidential Treatment Request No. AHC – 0001
      be treated as confidential information and that the Commission promptly
      notify the Company’s designated contact person(s) before it permits any disclosure
      of such confidential information.

Securities & Exchange Commission

June 30, 2005

Page 4

Comment 3. You disclose
      on page 17 that many of your contracts exceed one year which results in
      revenue recognition over the life of the contract. Supplementally, describe
      the material terms of these arrangements, including the products and/or
      services provided. Indicate whether revenue is recognized ratably over
      the life of the contracts or on some other basis and refer to the specific
      accounting literature that supports your revenue recognition model.

Response

     With
    respect to the service provided by Trac Medical Solutions, two of the customer
    contracts extend beyond one year. In addition, Trac Medical has two additional
    long-term contracts with third parties in connection with its provision of
    its service. These contracts are with Homecare Association LLC and bConnected
    Software, Inc. and are not customer agreements. These contracts are also
    described in detail in the Form 10-K. The two Trac Medical customer agreements
    are software license agreements that include set-up, maintenance, support
    and transaction fees. The Company considered SOP 97-02 and SOP 98-09 to determine
    how to account for these contracts (the accounting is described in detail
    in Comment 5, paragraph 2 below). Generally the revenue is deferred and recognized
    ratably over the life of the contract. If a Trac Medical contract, however,
    includes a professional services component rather than multiple elements,
    the Company will recognize revenue when the item is delivered and accepted
    by the customer in accordance with SOP 97-02. In these situations, custom
    programming may be done for a customer pursuant to a Statement of Work. Once
    the deliverables are accepted by the customer, the Company invoices the customer
    and records the revenue. The software code will generally not be placed in
    escrow for the benefit of the customer.

Securities & Exchange Commission

June 30, 2005

Page 5

Comment  4. Supplementally,
      tell us more about your agreement with the United States Postal Service
      (USPS). Describe the material terms of this agreement and explain, in detail,
      the revenue generating transactions. Compare the revenue transactions under
      the USPS agreement to your typical arrangements and highlight material
      differences in terms and/or revenue recognition policies. Indicate the
      amount of revenue that you have recognized under this agreement and describe
      the impact to the company if this agreement is cancelled.

Response

Rule 83 Confidential Treatment Request by Authentidate Holding Corp.  AHC – 0002

     In August 2002, Authentidate announced that it entered into an agreement with the USPS to market and sell the USPS Electronic Post Mark (EPM).  Pursuant to this agreement, Authentidate provides the management, technology and support for the USPS.  The management functions provided by Authentidate include sales, marketing, customer billing as well as contract administration.  [X X X].2

     The percentage of revenue that Authentidate is entitled to on each sale will be adjusted over the life of the agreement, based on the amount of gross revenue derived from EPM sales.   As stated above, Authentidate is responsible for invoicing the customer on behalf of the Postal Service. The Company is also responsible for collection and credit activities in connection with its relationship with the Postal Service. The customer remits payment directly to the Postal Service and Authentidate invoices the Postal Service for its percentage share (generally on a monthly basis).  Authentidate recognizes the revenue when it invoices the Postal Service as EPMs are used.  Pursuant to the end user agreement between the Postal
Service and the customers, EPMs are purchased, typically in small blocks (similar to how a customer buys a book or roll of paper stamps).  The value of the blocks of EPMs are priced on a sliding scale as customers receive volume discounts.

2
 The Company requests that the information contained
    in Confidential Treatment Request No. AHC – 0002 be treated as confidential information and that the Commission promptly notify the Company’s designated contact person(s) before it permits any disclosure of such confidential information.

Securities & Exchange Commission

June 30, 2005

Page 6

     This differs substantially from contracts to corporate customer accounts which include software licenses granted directly by the Company and may include other elements such as support, set-up, transactions and maintenance.  In these contracts, Authentidate and Trac Medical sell software licenses and related support directly to such customers and the customer is solely procuring EPMs from the Postal Service.  This is in contrast to Authentidate’s relationship with the Postal Service, where it provides services and rights to its proprietary technology to the Postal Service in connection with the provision of the EPM offering. The revenue recognition accounting has been described in Comment 2 above.

Rule 83 Confidential Treatment Request by Authentidate Holding Corp.  AHC – 0003 and AHC – 0004

     [X
    X X].3  Authentidate believes that the impact of the cancellation
    of its contract with the Postal Service would be significant to it. While
    the revenue recognized to date has not been material to the Company’s
    Statements of Operations, the Company believes that the growth could be significant.
    In addition, from a marketing standpoint the name recognition of the USPS
    EPM being related to our company is very significant as is the investment
    Authentidate has made in this business over the last three years. For these
    reasons, Authentidate believes that the termination of the USPS contract
    would have a material adverse impact on its business. This belief is consistent
    with th