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

|   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

|   | Delaware                        |   | 94-2790442          |   |
|--------|---------------------------------|--------|---------------------|--------|
|   | (State or other jurisdiction of |   | (I.R.S. Employer    |   |
|   | incorporation or organization)  |   | Identification No.) |   |

|   | Yes | X |   | No |   |   |
|--------|-----|---|--------|----|--------|--------|

|   | Yes |   |   | No |   |   |
|--------|-----|--------|--------|----|--------|--------|

|   | large accelerated filer |   | accelerated filer |   | non-accelerated filer |  X | Smaller reporting Company |
|--------|-------------------------|--------|-------------------|--------|-----------------------|---------|---------------------------|

|   | Yes |   |   | No | X |   |
|--------|-----|--------|--------|----|---|--------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Page No.       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
| PART I.  FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |           |
| Item 1.  Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |           |
| Condensed Consolidated Balance Sheets at September 30, 2010 (unaudited) andDecember 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   3  |
| Condensed Consolidated Statements of Operations for the Three-MonthAnd Nine-Month Periods Ended September 30, 2010 and 2009 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   4  |
| Condensed Consolidated Statements of Changes in Stockholders’ Equity for theNine-Month Period Ended September 30, 2010 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   5  |
| Condensed Consolidated Statements of Cash Flows for the Nine-Month PeriodsEnded September 30, 2010 and 2009 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   6  |
| Notes to Unaudited Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  8        |
| Item 2.  Management's Discussion and Analysis of Financial Condition andResults of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   18 |
| Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                                                                                                             |  23       |
| Item 4.  Controls and Procedures                                                                                                                                                                     |  24       |
|  PART II.  OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |           |
| Item 1.    Legal Proceedings                                                                                                                                                          |  24       |
| Item 1A. Risk Factors                                                                                                                                                                                     |  24       |
| Item 2.    Unregistered Sale of Securities and Use of Proceeds                                                                                                                        |  24       |
| Item 3.    Defaults Upon Senior Securities                                                                                                                                            |  24       |
| Item 4.    (Removed andReserved)                                                                                                                                                      |  24       |
| Item 5.    Other Information                                                                                                                                                          |  24       |
| Item 6.    Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |           |
| (a) Exhibits                                                                                                                                                                                                                  |  24       |
| Signatures                                                                                                                                                                                                |  27       |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | September 30, |           |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|----------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2010          |           |   | 2009         |   |
| Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Unaudited     |           |   |         |   |
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          |           |   |         |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $             | 792            |   |         | $      | 1,021 |   |
| Accounts receivable, net of allowance of $116 and $117 at September 30, 2010 and December 31, 2009, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          | 42             |   |         |   | 227 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 85             |   |         |   | 66 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Total current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          | 919            |   |         |   | 1,314 |   |
| Property and equipment, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          | 27             |   |         |   | 31 |   |
| Patents, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          | 2,487          |   |         |   | 2,771 |   |
| Capitalized software development costs, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          | 1,477          |   |         |   | 1,515 |   |
| Deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |          | –        |   |         |   | 218 |   |
| Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          | 29             |   |         |   | 29 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Total assets                                                                                        |   | $             | 4,939          |   |         | $      | 5,878 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Liabilities and Stockholders' Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Current portion of long-term debt –net of discount of $2,222, at  December 31, 2009, including related party debt $4,918, net of discount $2,138 at December 31, 2009 (Note 4)                                                                                                                                                                                                                                                                                                                                                         |   |          |   − |   |         |   |   2,869 |   |
| Accounts payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          | 245            |   |         |   | 118 |   |
| Accrued compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          | 287            |   |         |   | 327 |   |
| Other accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 240            |   |         |   | 169 |   |
| Deferred revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          | 497            |   |         |   | 458 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Total current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 1,269          |   |         |   | 3,941 |   |
| Deferred revenue long-term                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |          | 711            |   |         |   | 867 |   |
| Derivative liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          | 2,683          |   |         |   | 422 |   |
| Total liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |          | 4,663          |   |         |   | 5,230 |   |
| Commitments and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |           |   |         |   |   |   |
| Stockholders' equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          |           |   |         |   |   |   |
| Series A-1 Preferred stock, $.01 par value; 2,000 shares authorized; 797 and 751 shares outstanding at September 30, 2010 and December 31, 2009, respectively ($797 liquidation preference at September 30, 2010)                                                                                                                                                                                                                                                                                                                                      |   |          |   797     |   |         |   |   751 |   |
| Series B Preferred stock, $.01 par value; 14,000 shares authorized; 8,174 shares outstanding at September 30, 2010 ($8,174 liquidation preference at September 30, 2010)                                                                                                                                                                                                                                                                                                                                                                               |   |          |   6,147   |   |         |   |   − |   |
| Common stock, $.01 par value; 519,000 shares authorized; 192,418 and 190,026 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively                                                                                                                                                                                                                                                                                                                                                                                   |   |          |   1,924   |   |         |   |   1,900 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |          | 99,001         |   |         |   | 101,221 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          | (107,555       | )      |         |   | (103,178 | ) |
| Accumulated other comprehensive loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          | (38            | )      |         |   | (46 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Total stockholders' equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |          | 276            |   |         |   | 648 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |           |   |         |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $             | 4,939          |   |         | $      | 5,878 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                    |   | Three Months Ended |    |   | Nine Months Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                    |   | September 30,      |    |   | September 30,     |   |
|                                                                                                                                                                                                                                                                                                                                                                    |   | 2010               |    |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                    |   |               |    |   |              |   |   |   |   |   |   |   |
| Revenue:                                                                                                                                                                                                                                                                                                                                                                |   |               |    |   |              |   |   |   |   |   |   |   |
| Product                                                                                                                 |   | $                  | 13      |   |              | $      | 688 |   |   | $ | 104 |   |   | $ | 968 |   |
| Maintenance                                                                                                             |   |               | 151     |   |              |   | 189 |   |   |   | 479 |   |   |   | 559 |   |
| Total Revenue                                                                                                                                                                                                                                                                                                                                                           |   |               | 164     |   |              |   | 877 |   |   |   | 583 |   |   |   | 1,527 |   |
|                                                                                                                                                                                                                                                                                                                                                                    |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Operating costs and expenses:                                                                                                                                                                                                                                                                                                                                           |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                    |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales:                                                                                                                                                                                                                                                                                                                                                          |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Product                                                                                                                                          |   |               | 153     |   |              |   | 186 |   |   |   | 497 |   |   |   | 539 |   |
| Maintenance                                                                                                                                      |   |               | 53      |   |              |   | 44 |   |   |   | 130 |   |   |   | 141 |   |
| Research and development                                                                                                |   |               | 31      |   |              |   | 60 |   |   |   | 337 |   |   |   | 186 |   |
| Sales and marketing                                                                                                     |   |               | 388     |   |              |   | 407 |   |   |   | 1,136 |   |   |   | 1,104 |   |
| General and administrative                                                                                              |   |               | 585     |   |              |   | 545 |   |   |   | 1,581 |   |   |   | 1,504 |   |
| Total operating costs and expenses                                                                                                                                                                                                                                                                                                                                      |   |               | 1,210   |   |              |   | 1,242 |   |   |   | 3,681 |   |   |   | 3,474 |   |
|                                                                                                                                                                                                                                                                                                                                                                    |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                                                                      |   |               | (1,046  | )      |              |   | (365 | ) |   |   | (3,098 | ) |   |   | (1,947 | ) |
|                                                                                                                                                                                                                                                                                                                                                                    |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest and other (expense) income, net                                                                                                                                                                                                                                                                                                                                |   |               | (1      | )      |              |   | 1 |   |   |   | (1 | ) |   |   | 2 |   |
| Interest expense:                                                                                                                                                                                                                                                                                                                                                       |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Related party                                                                                                           |   |               | (48     | )      |              |   | (96 | ) |   |   | (255 | ) |   |   | (243 | ) |
| Other                                                                                                                                                                                                                                                                                                                                                                   |   |               | (1      | )      |              |   | (4 | ) |   |   | (8 | ) |   |   | (12 | ) |
| Amortization of loan discount and deferred financing:                                                                                                                                                                                                                                                                                                                   |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Related party                                                                                                           |   |               | (445    | )      |              |   | (549 | ) |   |   | (1,719 | ) |   |   | (1,062 | ) |
| Other                                                                                                                                                                                                                                                                                                                                                                   |   |               | (19     | )      |              |   | (19 | ) |   |   | (57 | ) |   |   | (36 | ) |
| Loss on extinguishment of long term debt                                                                                                                                                                                                                                                                                                                                |   |               | − |   |              |   | − |   |   |   | − |   |   |   | (829 | ) |
| Gain (loss) on derivative liability                                                       |   |               | 465     |   |              |   | (1,529 | ) |   |   | 761 |   |   |   | (2,505 | ) |
| Net loss                                                                                                                |   |               | (1,095  | )      |              |   | (2,561 | ) |   |   | (4,377 | ) |   |   | (6,632 | ) |
| Preferred stock dividends:                                                                                                                                                                                                                                                                                                                                              |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Related party                                                                                                           |   |               | (105    | )      |              |   | (10 | ) |   |   | (127 | ) |   |   | (34 | ) |
| Other                                                                                                                                                                                                                                                                                                                                                                   |   |               | (37     | )      |              |   | (4 | ) |   |   | (45 | ) |   |   | (12 | ) |
| Net loss attributable to common stockholders                                                                                                                                                                                                                                                                                                                       |   | $                  | (1,237  | )      |              | $      | (2,575 | ) |   | $ | (4,549 | ) |   | $ | (6,678 | ) |
| Basic and diluted loss per common share                                                                                                                                                                                                                                                                                                                                 |   | $                  | (0.01   | )      |              | $      | (0.02 | ) |   | $ | (0.02 | ) |   | $ | (0.05 | ) |
| Weighted average common shares outstanding, basic and diluted                                                                                                                                                                                                                                                                                                           |   |               | 190,776 |   |              |   | 131,379 |   |   |   | 190,702 |   |   |   | 131,134 |   |

----

|                                                                                                |  Series A-1PreferredSharesOutstanding |   |   |  Series A-1PreferredSharesAmount |   |  Series BPreferredSharesOutstanding |   |   |  Series BPreferredSharesAmount |   |   |   CommonSharesOutstanding |         |   |   CommonStock Amount |    |    |   AdditionalPaid-InCapital |   |   |    AccumulatedDeficit |   |   |  AccumulatedOtherComprehensiveLoss |   |   |     Total |     |
|-----------------------------------------------------------------------------------------------------|--------------------------------------------|--------|--------|---------------------------------------|--------|------------------------------------------|--------|--------|-------------------------------------|--------|--------|-------------------------------------|--------------|--------|--------------------------------|---------|---------|--------------------------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------|--------|--------|-------------------------------|----------|
|                                                                                                |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |
| Balances as of December 31, 2009                                                                    |                                       | 751    |   |                                  | $      | 751                                      |   |   |                                |   | $      | −                             |         |   |                           | 190,026 |    |                                 | $      | 1,900  |                                 |   | $      | 101,221                                 |   |   | $                             | (103,178 | ) |   | $ | (46 | ) |   | $ | 648 |   |
| Conversion of long-term notes into Series B Preferred Shares, net of unamortized discount of $1,509 |                                       |   |   |                                  |   |                                     |   |   |   6,608                        |   |   |                                |   6,608 |   |                           |    |    |                                 |   |   |                                 |   |   |                                    | (1,509 | )      |                          |     |   |   |   |   |   |   |   |   |   5,099 |   |
| Issuance of Series B Preferred Shares                                                               |                                       |   |   |                                  |   |                                     |   |   | 1,440                               |   |   |                                | 1,440        |   |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |   |   |   |   |   |   |   |   | 1,440 |   |
| Financing cost on conversion of long-term notes and issuance of Series B Preferred Shares           |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    | (535   | )      |                          |     |   |   |   |   |   |   |   |   | (535 | ) |
| Conversion feature associated with the Preferred Shares                                             |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                | (2,000       | )      |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |   |   |   |   |   |   |   |   | (2,000 | ) |
| Warrants issued for services                                                                        |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    | (143   | )      |                          |     |   |   |   |   |   |   |   |   | (143 | ) |
| Stock based employee compensation                                                                   |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    | 73     |   |                          |     |   |   |   |   |   |   |   |   | 73 |   |
| Common stock issued for services                                                                    |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    | 750     |                                 |   |   | 8                                    |   |   |                                    | 58     |   |                          |     |   |   |   |   |   |   |   |   | 66 |   |
| Restricted common stock issued in lieu of salaries                                                  |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    | 1,642   |                                 |   |   | 16                                   |   |   |                                    | (16    | )      |                          |     |   |   |   |   |   |   |   |   | − |   |
| Restricted stock expense                                                                            |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    | 24     |   |                          |     |   |   |   |   |   |   |   |   | 24 |   |
| Comprehensive loss:                                                                                 |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |   |   |   |   |   |   |   |   |   |   |
|  Net loss                                                                                      |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     | (4,377 | ) |   |   |   |   |   |   | (4,377 | ) |
|  Foreign currency translation adjustment                                                       |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |   |   |   |   |   8 |   |   |   |   8 |   |
| Total comprehensive loss                                                                            |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                |         |   |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |   |   |   |   |   |   |   |   | (4,369 | ) |
| Preferred share dividends                                                                           |                                       | 46     |   |                                  |   | 46                                       |   |   | 126                                 |   |   |                                | 126          |   |                           |    |    |                                 |   |   |                                 |   |   |                                    | (172   | )      |                          |     |   |   |   |   |   |   |   |   | − |   |
| Conversion feature associated with the Series B Preferred Shares dividends                          |                                       |   |   |                                  |   |                                     |   |   |                                |   |   |                                | (27          | )      |                           |    |    |                                 |   |   |                                 |   |   |                                    |   |   |                          |     |   |   |   |   |   |   |   |   | (27 | ) |
|  Balances as of September 30, 2010                                                             |                                       | 797    |   |                                  | $      | 797                                      |   |   | 8,174                               |   |   | $                                   | 6,147        |   |                           |    | 192,418 |                                 |   | $      | 1,924                                |   |   | $                                       | 99,001 |   |                          | $        | (107,555 | ) |   | $ | (38 | ) |   | $ | 276 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Nine Months EndedSeptember 30, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2010                           |    |   | 2009 |   |
| Cash flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |    |   |   |   |
| Net loss                                                                                                                                               |   | $                              | (4,377  | ) |   | $ | (6,678 | ) |
| Adjustments to reconcile net loss to net cashused for operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           |    |   |   |   |   |   |
| Depreciation and amortization                                                                                                                                                   |   |                           | 876     |   |   |   | 822 |   |
| Amortization of debt discount and deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | 1,776   |   |   |   | 1,098 |   |
| Loss on extinguishment of long-term debt                                                                                                                                        |   |                           | − |   |   |   | 829 |   |
| Stock-based employee compensation                                                                                                                                               |   |                           | 73      |   |   |   | 211 |   |
| Restricted stock expense                                                                                                                                                        |   |                           | 24      |   |   |   | − |   |
| Stock issued for services                                                                                                                                                       |   |                           | 66      |   |   |   | − |   |
| (Gain) loss on derivative liability                                                                                                                                             |   |                           | (761    | ) |   |   | 2,505 |   |
| Non cash financing expense                                                                                                                                                      |   |                           | 273     |   |   |   | − |   |
| Changes in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |    |   |   |   |   |   |
|    Accounts receivable, net                                                                                                                                      |   |                           | 185     |   |   |   | 46 |   |
|    Prepaid expenses and other assets                                                                                                                             |   |                           | (19     | ) |   |   | (2 | ) |
|    Accounts payable                                                                                                                                              |   |                           | 127     |   |   |   | 110 |   |
|    Accrued compensation                                                                                                                                          |   |                           | (40     | ) |   |   | (8 | ) |
|    Other accrued liabilities                                                                                                                                     |   |                           | 71      |   |   |   | 150 |   |
|    Deferred revenue                                                                                                                                              |   |                           | (117    | ) |   |   | 363 |   |
| Net cash used for operating  activities                                                                                                                               |   |                           | (1,843  | ) |   |   | (554 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |    |   |   |   |   |   |
| Cash flows from investing activities:Acquisition of property and equipment                                                                             |   |                           | (12     | ) |   |   | (3 | ) |
| Capitalized software development costs                                                                                                                 |   |                           | (539    | ) |   |   | (654 | ) |
| Net cash used for investing activities                                                                                                                                          |   |                           | (551    | ) |   |   | (657 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |    |   |   |   |   |   |
| Cash flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |    |   |   |   |   |   |
| Net proceeds from issuance of short-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           | 1,240   |   |   |   | − |   |
| Net proceeds from issuance of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | − |   |   |   | 926 |   |
| Proceeds from issuance of Series B preferred shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           | 925     |   |   |   | − |   |
| Principal payments on short term debt                                                                                                                  |   |                           | − |   |   |   | (45 | ) |
| Net cash provided by financing activities                                                                                                                                       |   |                           | 2,165   |   |   |   | 881 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |    |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | − |   |   |   | 32 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           |    |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                                                                |   |                           | (229    | ) |   |   | (298 | ) |
| Cash and cash equivalents at beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                           | 1,021   |   |   |   | 929 |   |
| Cash and cash equivalents at end of period                                                                               |   | $                              | 792     |   |   | $ | 631 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Nine Months EndedSeptember 30, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2010                           |    |   | 2009 |   |
| Supplementary disclosure of cash flow information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           |    |   |   |   |
| Interest paid                                                                                                                                               |   | $                              | − |   |   | $ | − |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                           |    |   |   |   |   |   |
| Non-cash financing and investing transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                           |    |   |   |   |   |   |
| Long-term notes and accrued interest exchanged for Series B convertible preferred stock                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                              | 6,608   |   |   | $ | − |   |
| Conversion feature of Series B preferred shares classified as a derivative liability                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                              | 2,000   |   |   |   | − |   |
| Dividends on preferred shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                              | 172     |   |   | $ | 46 |   |
| Conversion feature of Series B preferred shares dividends issued as payment in-kind classified as a derivative liability                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                              | 27      |   |   |   | − |   |
| Conversion of preferred stock to common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                              | − |   |   | $ | 146 |   |
| Issuance of long-term debt for payment of interest in kind                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                              | − |   |   | $ | 254 |   |
| Reclassification of equity linked instrument to derivative liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                              | − |   |   | $ | 1,353 |   |
| Debt discount and related liability recorded in connection with long-term debt                                                                         |   | $                              | − |   |   | $ | 3,347 |   |
| Warrants issued as payment of financing services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                              | 143     |   |   | $ | − |   |
| Warrants issued in connection with bridge loans recorded as derivative liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                              | 682     |   |   | $ | − |   |
| Warrants issued for interest recorded as derivative liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                              | 170     |   |   | $ | 205 |   |

----

| 1.   | Nature of business |
|----------------|--------------------|

----

| 1.   | Nature of business |
|----------------|--------------------|

----

| 3.   | Patents |
|----------------|---------|

| 4. | Debt |
|----|------|

----

| 4. | Debt (continued) |
|----|------------------|

|                    | September 30, 2010 | December 31, 2009 |
|-------------------------|--------------------|-------------------|
| Expected term           | .01 to 4.0 years   | 0.5 to 3.00 years |
| Volatility              | 139.0% - 222.3%    | 139.0% - 156.0%   |
| Risk-free interest rate | 0.14% - 0.64%      | 1.70%             |
| Dividend yield          | 0%                 | 0%                |

----

|                 | Value atSeptember 30, 2010           |   | Quoted prices in active markets                                            |   | Significant other observable inputs                      |   | Significant unobservable inputs                        |
|----------------------|--------------------------------------|--------|----------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------------------------------------------------------|
|                 |                                 |   | (Level 1)                                                                  |   | (Level 2)                                                |   | (Level 3)                                              |
| Derivative liability | $     2,683 |   | $           − |   | $        − |   | $        2,683 |

|   | Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                      |   | Derivative Liability |         |
|---------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------------|
| Balance at December 31, 2009                                                                                              |   | $                    | 422          |   |
| Additional liabilities recorded related to warrants issued for services                                                   |   |                 | 143          |   |
| Additional liabilities recorded related to warrants issued for interest paid in kind and bridge financing                 |   |                 |   852   |   |
| Additional liabilities recorded related to the conversion feature on Series B preferred shares and dividends paid in kind |   |                 |   2,027 |   |
| Gain on derivative liability                                                                                              |   |                 | (761         | ) |
|                                                                                                                      |   |                 |         |   |
| Balance at September 30, 2010                                                                                             |   | $                    | 2,683        |   |

| 6. | Net (loss) per share |
|----|----------------------|

----

| 6. | Net (loss) per share (continued) |
|----|----------------------------------|

| 7. | Equity |
|----|--------|

|                    |   | Nine Months EndedSeptember 30, 2010 | Nine Months EndedSeptember 30, 2009 |
|-------------------------|--------|-------------------------------------|-------------------------------------|
| Risk free interest rate |   | 1.12% – 5.11%                 | 1.45% – 5.11%                 |
| Expected life (years)   |   | 2.82 – 7.00                   | 3.21 – 6.88                   |
| Expected volatility     |   | 91.99% – 148.80%              | 80.96% – 131.35%              |
| Expected dividends      |   | None                                | None                                |

----

| 7. | Equity (continued) |
|----|--------------------|

|                             |   | Three Months Ended September 30, |    |   | Nine months Ended September 30, |   |
|----------------------------------|--------|----------------------------------|---------|--------|---------------------------------|--------|
|                             |   | 2010                             |    |   | 2009                            |   |   | 2010 |   |   | 2009 |   |
|  Research and development   |   | $                                | 6       |   |                            | $      | 28 |   |   | $ | 10 |   |   | $ | 43 |   |
| Sales and marketing              |   |                             | 7       |   |                            |   | 44 |   |   |   | 46 |   |   |   | 57 |   |
| General and administrative       |   |                             | 4       |   |                            |   | 65 |   |   |   | 17 |   |   |   | 91 |   |
| Director options                 |   |                             | − |   |                            |   | 20 |   |   |   | − |   |   |   | 20 |   |
| Stock-based compensation expense |   | $                                | 17      |   |                            | $      | 157 |   |   | $ | 73 |   |   | $ | 211 |   |

|                                              |   | As of September 30,     |    |
|---------------------------------------------------|--------|-------------------------|---------|
|                                              |   | 2010                    |    |   | 2009 |   |
|     Options                   |   |   Shares(000) |    |   | Weighted Average Exercise Price |   |   | Weighted average Remaining Contractual Term |   |   |  Aggregate Intrinsic Value |   |   |   Shares(000) |   |   | Weighted Average Exercise Price |   |   | Weighted average Remaining Contractual Term |   |   |  Aggregate Intrinsic Value |   |
| Outstanding at January 1,                         |   |                    | 10,231  |   |   | $ | 0.34 |   |   |   |   |   |   |   |   |   | 7,608 |   |   | $ | 0.48 |   |   |   |   |   |   |   |
| Granted                                           |   |                    | 2,550   |   |   | $ | 0.08 |   |   |   |   |   | $ | − |   |   |   | 3,098 |   |   | $ | 0.09 |   |   |   |   |   | $ | 127 |   |
| Exercised                                         |   |                    | − |   |   |   |   |   |   |   |   |   |   |   |   |   |   | − |   |   |   |   |   |   |   |   |   |   |   |   |
| Forfeited or expired                              |   |                    | (2,640  | ) |   | $ | 0.14 |   |   |   |   |   |   |   |   |   |   | (1,012 | ) |   | $ | 0.43 |   |   |   |   |   |   |   |   |
| Outstanding at September 30                       |   |                    | 10,141  |   |   | $ | 0.33 |   |   |   | 3.43 |   |   | $ | − |   |   |   | 9,694 |   |   | $ | 0.36 |   |   |   | 4.06 |   |   | $ | − |   |
|  Vested and expected to vest at September 30 |   |                    | 10,141  |   |   | $ |   0.33 |   |   |   | 3.43 |   |   | $ | − |   |   |   | 9,694 |   |   | $ |   0.36 |   |   |   | 4.06 |   |   | $ | − |   |
| Exercisable at September 30                       |   |                    | 8,149   |   |   | $ | 0.39 |   |   |   | 2.70 |   |   | $ | − |   |   |   | 7,745 |   |   | $ | 0.42 |   |   |   | 3.50 |   |   | $ | − |   |

----

| 7. | Equity (continued) |
|----|--------------------|

|                                       |                   |   | As of September 30, 2010       |   |
|--------------------------------------------|------------------------|--------|--------------------------------|--------|
|                                       |                   |   | Options Outstanding            |   |   | Options Exercisable |   |
|    Range of Exercise Prices |                   |   |   Number Outstanding |   |   | Weighted Average Remaining Contractual Life (in years) |   |   | Weighted Average Exercise Price |   |   |   Number Outstanding |   |   | Weighted Average Exercise Price |   |
| $                                          | 0.07 – $0.50     |   |                           |   | 7,160 |   |   |   | 4.03 |   |   | $ | 0.15 |   |   |   | 5,168 |   |   | $ | 0.18 |   |
|                                       | 0.51 – 1.00 |   |                           |   | 2,908 |   |   |   | 2.02 |   |   | $ | 0.72 |   |   |   | 2,908 |   |   | $ | 0.72 |   |
|                                       | 1.01 – 2.00 |   |                           |   | 73 |   |   |   | 1.47 |   |   | $ | 1.66 |   |   |   | 73 |   |   | $ | 1.66 |   |
|                                       |                   |   |                           |   | 10,141 |   |   |   | 3.43 |   |   | $ | 0.33 |   |   |   | 8,149 |   |   | $ | 0.39 |   |

|                                       |                   |   | As of September 30, 2009       |   |
|--------------------------------------------|------------------------|--------|--------------------------------|--------|
|                                       |                   |   | Options Outstanding            |   |   | Options Exercisable |   |
|    Range of Exercise Prices |                   |   |   Number Outstanding |   |   | Weighted Average Remaining Contractual Life (in years) |   |   | Weighted Average Exercise Price |   |   |   Number Outstanding |   |   | Weighted Average Exercise Price |   |
| $                                          | 0.07 – $0.50     |   |                           |   | 6,665 |   |   |   | 4.6 |   |   | $ | 0.17 |   |   |   | 4,717 |   |   | $ | 0.19 |   |
|                                       | 0.51 – 1.00 |   |                           |   | 2,941 |   |   |   | 3.0 |   |   | $ | 0.72 |   |   |   | 2,940 |   |   | $ | 0.72 |   |
|                                       | 1.01 – 2.00 |   |                           |   | 73 |   |   |   | 2.5 |   |   | $ | 1.66 |   |   |   | 73 |   |   | $ | 1.66 |   |
|                                       | 2.01 – 3.00 |   |                           |   | − |   |   |   | − |   |   | $ | − |   |   |   | − |   |   | $ | − |   |
|                                       | 3.01 – 7.50 |   |                           |   | 15 |   |   |   | 0.7 |   |   | $ | 3.56 |   |   |   | 15 |   |   | $ | 3.56 |   |
|                                       |                   |   |                           |   | 9,694 |   |   |   | 4.1 |   |   | $ | 0.42 |   |   |   | 7,745 |   |   | $ | 0.42 |   |

|   Nonvested Shares       |   |  Shares |   |   | Weighted AverageGrant-DateFair Value |   |
|------------------------------------|--------|--------------|--------|--------|--------------------------------------|--------|
|  Nonvested at January 1, 2010 |   |         | 1,982  |   |                                 | $      | 0.16 |   |
| Granted                            |   |         | 2,550  |   |                                 | $      | 0.07 |   |
| Forfeited                          |   |         | (1,991 | )      |                                 | $      | 0.09 |   |
| Vested                             |   |         | (549   | )      |                                 | $      | 0.08 |   |
| Nonvested at September 30, 2010    |   |         | 1,992  |   |                                 | $      | 0.22 |   |

----

| 7.   | Equity (continued) |
|----------------|--------------------|

----

| 7.   | Equity (continued) |
|----------------|--------------------|

----

| ·   | Technological, engineering, manufacturing, quality control or other circumstances that could delay the sale or shipment of products; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Economic, business, market and competitive conditions in the software industry and technological innovations that could affect the Company’s business; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Company’s inability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the Company; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General economic and business conditions and the availability of sufficient financing. |
|--------------------|----------------------------------------------------------------------------------------|

----

----

----

----

----

|                               |   | Payments due by period |   |
|------------------------------------|--------|------------------------|--------|
| Contractual obligations            |   | Total                  |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | Thereafter |   |
| Operating lease commitments (1)    |   | $                      | 1,643  |   |   | $ | − |   |   | $ | 277 |   |   | $ | 267 |   |   | $ | 275 |   |   | $ | 283 |   |   | $ | 541 |   |
| Total contractual cash obligations |   | $                      | 1,643  |   |   | $ | − |   |   | $ | 277 |   |   | $ | 267 |   |   | $ | 275 |   |   | $ | 283 |   |   | $ | 541 |   |

| 1.   | The Company renegotiated the office lease in May 2010 which provides for rent abatement until January 1, 2011. The base rent will increase approximately 3% per annum over the term of the lease, which expires on October 31, 2016. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  Exhibit Number |  Document                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  3.1            |  Certificate of Incorporation of the Company, as amended, incorporated herein by reference to Exhibits 3.1, 3.2, 3.3 and 3.4 to the Company's Registration Statement on Form 10 (File No. 0-19301).                                                                                                                                                                                                                |
| 3.2                  | Certificate of Amendment to the Company's Certificate of Incorporation (authorizing the reclassification of the Class A Common Stock and Class B Common Stock into one class of Common Stock) as filed with the Delaware Secretary of State's office on November 1, 1991, incorporated herein by reference to Exhibit 3 to Amendment 1 on Form 8 to the Company's Form 8-A (File No. 0-19301). |
| 3.3                  | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State June 12, 1998, incorporated herein by reference to Exhibit 10.24 to the Company’s 1998 Form 10-K filed on April 6, 1999.                                                                                                                                                            |
| 3.4                  | By-laws of the Company adopted on October 6, 1986, incorporated herein by reference to Exhibit 3.5 to the Company's Registration Statement on Form 10 (File No. 0-19301).                                                                                                                                                                                                                                          |

----

|  Exhibit Number |  Document                                                                                                                                                                                                                                                                                                   |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  3.5            | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation dated January 24, 2001, incorporated herein by reference to Exhibit 3.5 to the Company’s Registration Statement on Form S/1, filed December 28, 2007.                                                    |
| 3.6                  | Certificate of Elimination of the Company’s Certificate of Designation of the Series A Preferred Stock dated August 17, 2001, incorporated herein by reference to Exhibit 3.6 to the Company’s Registration Statement on Form S/1, filed December 28, 2007.                                          |
| 3.7                  | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State August 17, 2007, incorporated herein by reference to Exhibit 3.7 to the Company’s Registration Statement on Form S/1 filed on December 28, 2007.              |
| 3.8                  | Amended and Restated Certificate of Incorporation of the Company filed with the Delaware Secretary of State on May 18, 1995, incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.                                                      |
| 3.9                  | Certificate of Designations, Powers, Preferences and Rights of the Series A Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on June 4, 2008, incorporated herein by reference to Exhibit 4.23 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.   |
| 3.10                 | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on June 30, 2008, incorporated herein by reference to Exhibit 3.7 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2008.                    |
| 3.11                 | Certificate of Designations, Powers, Preferences and Rights of the Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on October 30, 2008, incorporated herein by reference to Exhibit 3.11 to the Company’s Annual Report on Form 10-K filed on March 12, 2009. |
| 3.12                 | Certificate of Elimination of the Company’s Series A Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on December 30, 2008, incorporated herein by reference to Exhibit 3.12 to the Company’s Annual Report on Form 10-K filed on March 12, 2009.                   |
| 3.13                 | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on June 30, 2009, incorporated herein by reference to Exhibit 3.13 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2009.                   |
| 3.14                 | Amendment No. 1 to By-laws dated June 17, 2010, incorporated herein by reference to Exhibit 3.14 to the Company’s Quarterly Report on Form 10-Q filed on August 16, 2010.                                                                                                                                  |
| *3.15                | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on August 4, 2010.                                                                                                                                                  |
| *3.16                | Amended and Restated Certificate of Designation of Series A-1 Cumulative Convertible Preferred Stock filed with the Delaware Secretary of State on August 4, 2010                                                                                                                                                |
| *3.17                | Certificate of Designation of Series B Participating Convertible Preferred Stock filed with the Delaware Secretary of State on August 4, 2010                                                                                                                                                                    |
| *10.53               | Amendment No. 3 to Credit Agreement dated July 22, 2010, by and among the Company, the Lenders and Additional Lenders Parties Hereto and SG Phoenix as Collateral Agent                                                                                                                                          |
| *10.54               | Amendment No. 3 to Registration Rights Agreement dated July 22, 2010, by and among the Company and the parties identified therein                                                                                                                                                                                |
| *10.55               | Registration Rights Agreement dated August 5, 2010, by and among the Company and the Persons Executing the Agreement as Investors                                                                                                                                                                                |
| *10.56               | Investor Rights Agreement dated August 5, 2010, by and among the Company and Phoenix Venture Fund LLC, SG Phoenix LLC, Michael Engmann, Ronald Goodman, Kendu Partners Company and MDNH Partners L.P.                                                                                                            |
| *31.1                | Certification of Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                               |
| *31.2                | Certificate of Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                 |
|                 |                                                                                                                                                                                                                                                                                                             |

----

|  Exhibit Number |  Document                                                                                                                                 |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
| *32.1                | Certification of Chief Executive Officer pursuant to 18 USC Section 1750, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| *32.2                | Certification of Chief Financial Officer pursuant to 18 USC Section 1750, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

| * | Filed herewith. |
|---|-----------------|

----

|   |   | COMMUNICATION INTELLIGENCE CORPORATION |
|--------|--------|----------------------------------------|
|   |   | Registrant                             |
|   |   |                                   |

| November 12, 2010 |   | /s/ Francis V. Dane                                                                           |
|-------------------|--------|-----------------------------------------------------------------------------------------------|
| Date              |   | Francis V. Dane                                                                               |
|              |   | (Principal Financial Officer and Officer Duly Authorized to Sign on Behalf of the Registrant) |