----

| Delaware                                                       | 11-2895590          |
|----------------------------------------------------------------|---------------------|
| (State or other jurisdiction of                                | (I.R.S. Employer    |
| incorporation or organization)                                 | Identification No.) |
|                                                           |                |
| 13450 West Sunrise Boulevard, Suite 510, Sunrise, FL           | 33323               |
|  (Address of principal executive offices)                 | (Zip Code)          |
|                                                           |                |
| Registrant’s telephone number, including area code  | (631) 873-2900      |

----

| PART I – FINANCIAL INFORMATION | Page                                                                                                         |
|--------------------------------------|--------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                         |   |
|                                 | Item 1. Financial Statements.                                                                                |   |
|                                 |                                                                                                         |   |
|                                 |   Condensed Consolidated Balance Sheets as of September 30, 2011 (Unaudited) and December 31, 2010 | 3 |
|                                 |                                                                                                         |   |
|                                 |   Condensed Consolidated Statements of Operations                                                       |   |
|                                 |   For the Three and Nine Months Ended September 30, 2011 and 2010 (Unaudited)                           | 4 |
|                                 |                                                                                                         |   |
|                                 |   Condensed Consolidated Statements of Cash Flows                                                       |   |
|                                 |   For the Nine Months Ended September 30, 2011 and 2010 (Unaudited)                                | 5 |
|                                 |                                                                                                         |   |
|                                 |   Notes to Condensed Consolidated Financial Statements (Unaudited)                                 | 6 |
|                                 |                                                                                                         |   |
|                                 | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations          | 12 |
|                                 |                                                                                                         |   |
|                                 | Item 3. Quantitative and Qualitative Disclosure About Market Risk                                            | 16 |
|                                 |                                                                                                         |   |
|                                 | Item 4. Controls and Procedures                                                                              | 17 |
|                                 |                                                                                                         |   |
| PART II – OTHER INFORMATION    |                                                                                                         |
|                                 |                                                                                                         |   |
|                                 | Item 6. Exhibits                                                                                             | 18 |
|                                 |                                                                                                         |   |
|                                 | Signatures                                                                                                   | 19 |
|                                 |                                                                                                         |   |
| CERTIFICATIONS                       | Exhibits                                                                                                     |

----

|                                                                                                                                                                                                                                           | September 30, 2011 |   | December 31, 2010 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|--------|-------------------|
|                                                                                                                                                                                                                                           | (Unaudited)             |   |              |
| ASSETS                                                                                                                                                                                                                                         |                    |   |              |
| Current assets                                                                                                                                                                                                                                 |                    |   |              |
|   Cash and cash equivalents                                                                                                                                                                                                          |                    | $      | 1,616             |   |   | $ | 1,707 |   |
|   Accounts receivable, net of allowance for doubtful accounts of    $0 in 2011 and 2010                                                                                                                          |                    |   | 1,552             |   |   |   | 1,325 |   |
|   Deferred tax asset – current                                                                                                                                                                                                 |                    |   | 750               |   |   |   | 750 |   |
|   Prepaid expenses and other current assets                                                                                                                                                                                          |                    |   | 247               |   |   |   | 159 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Total current assets                                                                                                                                                                                                                           |                    |   | 4,165             |   |   |   | 3,941 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Property and equipment, net                                                                                                                                                                                                                    |                    |   | 427               |   |   |   | 421 |   |
| Deferred tax asset                                                                                                                                                                                                                             |                    |   | 2,117             |   |   |   | 2,117 |   |
| Other assets                                                                                                                                                                                                                                   |                    |   | 242               |   |   |   | 226 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
|          TOTAL ASSETS                                                                                                                                                                             |                    | $      | 6,951             |   |   | $ | 6,705 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                                     |                    |   |              |   |   |   |   |   |
| Current liabilities                                                                                                                                                                                                                            |                    |   |              |   |   |   |   |   |
| Accounts payable and accrued expenses                                                                                                                                                                                                          |                    | $      | 1,623             |   |   | $ | 1,425 |   |
| Accrued severance pay                                                                                                                                                                                                                          |                    |   | 620               |   |   |   | -- |   |
| Current portion of capital lease obligations                                                                                                                                                                                                   |                    |   | 14                |   |   |   | -- |   |
| Current portion of notes payable                                                                                                                                                                                                               |                    |   | 71                |   |   |   | 157 |   |
| Deferred rent expense                                                                                                                                                                                                                          |                    |   | 18                |   |   |   | -- |   |
| Deferred revenue                                                                                                                                                                                                                               |                    |   | --                |   |   |   | 69 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Total current liabilities                                                                                                                                                                                                                      |                    |   | 2,346             |   |   |   | 1,651 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Leases payable, net of current portion                                                                                                                                                                                                         |                    |   | 20                |   |   |   | -- |   |
| Notes payable, net of current portion                                                                                                                                                                                                          |                    |   | 46                |   |   |   | 104 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Total liabilities                                                                                                                                                                                                                              |                    |   | 2,412             |   |   |   | 1,755 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Commitments and contingencies                                                                                                                                                                                                                  |                    |   |              |   |   |   |   |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
| Shareholders’ equity                                                                                                                                                                                                                     |                    |   |              |   |   |   |   |   |
|   Preferred stock, $0.0001 par value; 2,000,000 shares authorized;    0 shares issued and outstanding in 2011 and in 2010                                                                                        |                    |   |              |   |   |   |   |   |
| Common stock, $0.0001 par value; 50,000,000 shares authorized; 12,133,661,  and 11,717,310,  shares issued in 2011 and 2010, respectively; and 12,093,734 and 11,677,383 shares outstanding in 2011 and 2010, respectively |                    |   |   1          |   |   |   |    1 |   |
|   Additional paid-in capital                                                                                                                                                                                                         |                    |   | 115,302           |   |   |   | 114,990 |   |
|   Accumulated deficit                                                                                                                                                                                                                |                    |   | (110,436          | ) |   |   | (109,713 |   |
|                                                                                                                                                                                                                                           |                    |   | 4,867             |   |   |   | 5,278 |   |
|   Common stock in treasury, at cost- 24,371 shares                                                                                                                                                                                   |                    |   | (328              | ) |   |   | (328 |   |
| Total shareholders’ equity                                                                                                                                                                                                               |                    |   | 4,539             |   |   |   | 4,950 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
|           TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                              |                    | $      | 6,951             |   |   | $ | 6,705 |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |
|                                                                                                                                                                                                                                           |                    |   |              |   |   |   |   |   |

----

|                                                                     |   | Three Months Ended |         |   | Nine Months Ended |   |
|--------------------------------------------------------------------------|--------|--------------------|--------------|--------|-------------------|--------|
|                                                                     |   | September 30,      |         |   | September 30,     |   |
|                                                                     |   | 2011               |         |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |
| Revenue                                                                  |   | $                  | 2,263        |   |              | $      | 2,316 |   |   | $ | 6,416 |   |   | $ | 7,210 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses                                                       |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Operations, research and development                         |   |               | 945          |   |              |   | 818 |   |   |   | 2,708 |   |   |   | 2,620 |   |
|   Sales and marketing                                          |   |               | 586          |   |              |   | 422 |   |   |   | 1,558 |   |   |   | 1,296 |   |
|   General and administrative                                   |   |               | 454          |   |              |   | 717 |   |   |   | 1,837 |   |   |   | 2,189 |   |
|   Severance pay to former CEO                                  |   |               | --           |   |              |   | -- |   |   |   | 620 |   |   |   | -- |   |
|   Depreciation and amortization                                |   |               | 74           |   |              |   | 64 |   |   |   | 224 |   |   |   | 201 |   |
|                                                                     |   |               | 2,059        |   |              |   | 2,021 |   |   |   | 6,947 |   |   |   | 6,306 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)                                                  |   |               | 204          |   |              |   | 295 |   |   |   | (531 | ) |   |   | 904 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                                   |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Change in fair value of warrant liability                    |   |               | --           |   |              |   | -- |   |   |   | -- |   |   |   | 221 |   |
|   Reimbursed proxy costs                                       |   |               | 14           |   |              |   | -- |   |   |   | (181 | ) |   |   | -- |   |
|   Loss on disposal of fixed assets                             |   |               | (1           | )      |              |   | -- |   |   |   | (2 | ) |   |   | -- |   |
|   Other income, net                                            |   |               | --           |   |              |   | 1 |   |   |   | -- |   |   |   | 27 |   |
|   Interest expense, net                                        |   |               | (1           | )      |              |   | (3 | ) |   |   | (9 | ) |   |   | (16 | ) |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) before provision for income tax                            |   |               | 216          |   |              |   | 293 |   |   |   | (723 | ) |   |   | 1,136 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                               |   | --                 |         |   | --                |   |   | -- |   |   |   | 20 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                        |   |               | 216          |   |              |   | 293 |   |   |   | (723 | ) |   |   | 1,116 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends                                                |   |               | ---          |   |              |   | --- |   |   |   | --- |   |   |   | (42 | ) |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to common shareholders                    |   | $                  | 216          |   |              | $      | 293 |   |   | $ | (723 | ) |   | $ | 1,074 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic income (loss) per share attributable to common shareholders   |   | $                  | 0.02         |   |              | $      | 0.03 |   |   | $ | ( 0.06 | ) |   | $ | 0.09 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Diluted income (loss) per share attributable to common shareholders |   | $                  | 0.02         |   |              | $      | 0.03 |   |   | $ | ( 0.06 | ) |   | $ | 0.09 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Basic weighted average common shares outstanding                   |   |               |  11,914 |   |              |   |  11,563 |   |   |   |  11,776 |   |   |   |  11,426 |   |
|                                                                     |   |               |         |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Diluted weighted average common shares outstanding                       |   |               |  11,993 |   |              |   |  11,695 |   |   |   |  11,776 |   |   |   |  11,628 |   |

----

|                                                                                            |   | For the Nine Months Ended |   |   |
|-------------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|
|                                                                                            |   | September 30,             |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |
|                                                                                            |   |                      | 2011   |   |   |   | 2010 |   |
| Cash flows from operating activities:                                                           |   |                      |   |   |   |   |   |   |
|  Net (loss) income                                                                         |   | $                         | (723   | )      |   | $ | 1,116 |   |
|  Adjustments to reconcile net (loss) income to net cash  provided by operations: |   |                      |   |   |   |   |   |   |   |
|     Amortization and depreciation                                           |   |                      | 224    |   |   |   | 201 |   |
|     Stock based compensation expense                                        |   |                      | 95     |   |   |   | 404 |   |
|     Change in fair value of warrant liability                               |   |                      | --     |   |   |   | (221 | ) |
|     Deferred rent expense                                                   |   |                      | 18     |   |   |   | -- |   |
|    Changes in operating assets and liabilities:                                  |   |                      |   |   |   |   |   |   |   |
|     Accounts receivable                                                     |   |                      | (227   | )      |   |   | (413 | ) |
|     Prepaid expenses and other assets                                       |   |                      | (106   | )      |   |   | (1 | ) |
|     Accounts payable and accrued expenses                                   |   |                      | 818    |   |   |   | 170 |   |
|     Deferred revenue                                                        |   |                      | (69    | )      |   |   | (5 | ) |
| Net cash provided by operations                                                                 |   |                      | 30     |   |   |   | 1,251 |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
| Cash flows used in investing activities:                                                        |   |                      |   |   |   |   |   |   |   |
|     Expenditures for property and equipment                                 |   |                      | (186   | )      |   |   | (60 | ) |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                           |   |                      |   |   |   |   |   |   |   |
|     Redemption of preferred stock                                           |   |                      | --     |   |   |   | (1,100 | ) |   |
|     Stock options exercised                                                 |   |                      | 217    |   |   |   | -- |   |   |
|     Stock repurchase                                                        |   |                      | --     |   |   |   | (8 | ) |   |
|     Payment of dividends on preferred stock                                 |   |                      | --     |   |   |   | (68 | ) |   |
|     Principal payments on capital lease obligations                         |   |                      | (8     | )      |   |   | (5 | ) |   |
|     Repayments of long-term debt                                            |   |                      | (144   | )      |   |   | (139 | ) |   |
| Net cash provided by (used in) financing activities                                             |   |                      | 65     |   |   |   | (1,320 | ) |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                                       |   |                      | (91    | )      |   |   | (129 | ) |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
| Cash and cash equivalents – beginning of period                                           |   |                      | 1,707  |   |   |   | 1,758 |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
| Cash and cash equivalents – end of period                                                 |   | $                         | 1,616  |   |   | $ | 1,629 |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
|   Supplemental Disclosures:                                                                |   |                      |   |   |   |   |   |   |   |
|   Cash paid for interest                                                              |   | $                         | 11     |   |   | $ | 20 |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
|   Cash paid for income taxes                                                               |   | $                         | --     |   |   | $ | 26 |   |   |
|   Non-cash investing and financing activities:                                             |   |                      |   |   |   |   |   |   |   |
|    Acquisition of equipment through issuance of debt                                  |   | $                         | 42     |   |   | $ | 151 |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |
|                                                                                            |   |                      |   |   |   |   |   |   |   |

----

| 1.   | Interim Financial Information |
|----------------|-------------------------------|

| 2.   | The Company |
|----------------|-------------|

----

| 3.   | Stock Based Compensation |
|----------------|--------------------------|

|                                       |   |   Shares(in thousands) |            |   |   Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Term (in years) |   |  Aggregate Intrinsic Value(in thousands) |
|--------------------------------------------|--------|----------------------------------|-----------------|--------|---------------------------------------------|--------|--------|--------------------------------------------------------|--------|----------------------------------------------------|
| Balance, January 1, 2011                   |   |                             | 425             |   |                                        | $      | 0.78   |                                                   |   |                                               |   |   |   |
|     Granted            |   |                             | 78              |   |                                        | $      | 1.19   |                                                   |   |                                               |   |   |   |
|     Exercised          |   |                             | (350            | )      |                                        | $      | 0.62   |                                                   |   |                                               |   |   |   |
|     Canceled           |   |                             | --              |   |                                        |   | --     |                                                   |   |                                               |   |   |   |
|     Forfeited          |   |                             |  ( 25 | )      |                                        | $      | 1.50   |                                                   |   |                                               |   |   |   |
| Balance, September  30, 2011     |   |                             |  128       |   |                                        | $      | 1.31   |                                                   |   |                                               | 3.5 |   | -- |   |
| Exercisable, September  30, 2011 |   |                             | 113             |   |                                        | $      | 1.33   |                                                   |   |                                               | 3.3 |   | -- |   |

----

| 3.   | Stock Based Compensation (continued) |
|----------------|--------------------------------------|

|  Non-Vested Shares          |   | Shares (in thousands) |   | Weighted-AverageGrant Date Fair Value |   |
|----------------------------------|--------|-----------------------|--------|---------------------------------------|--------|
| Non-vested at January 1, 2011    |   |                  | 26     |                                  |   | $0.95 |   |
| Granted                          |   |                  | 111    |                                  |   | $0.78 |   |
| Vested                           |   |                  | (61    | )                                     |   | $0.81 |   |
| Forfeited                        |   |                  | (29    | )                                     |   | $0.62 |   |
| Non-vested at September 30, 2011 |   |                  | 47     |                                  |   | $0.94 |   |

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

----

| 5.   | Shareholders' Equity |
|----------------|----------------------|

|                                       |   | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |   |
|--------------------------------------------|--------|---------------------------------|--------------|--------|------------------------------------------|--------|
|                                       |   | 2011                            |         |   | 2010                                     |   |   | 2011 |   |   | 2010 |   |
| Weighted Average Common shares outstanding |   |                            |  11,914 |   |                                     |   |  11,563 |   |   |   |  11,776 |   |   |   |  11,426 |   |
| Options to purchase common stock           |   |                            | 71           |   |                                     |   | 131 |   |   |   | -- |   |   |   | 198 |   |
| Restricted stock grants                    |   |                            | 8            |   |                                     |   | 1 |   |   |   | -- |   |   |   | 4 |   |
| Total diluted shares                       |   |                            | 11,993       |   |                                     |   | 11,695 |   |   |   | 11,776 |   |   |   | 11,628 |   |

|                             |   | Three Months EndedSeptember 30, |   |   | Nine Months Ended September 30, |   |
|----------------------------------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|
|                             |   | 2011                                 |   |   | 2010                                 |   |   | 2011 |   |   | 2010 |   |
| Options to purchase common stock |   |                                 | 153    |   |                                 |   | 75 |   |   |   | 153 |   |   |   | 75 |   |
| Restricted stock grants          |   |                                 | 24     |   |                                 |   | 99 |   |   |   | 47 |   |   |   | 99 |   |
| Total potential common shares    |   |                                 | 177    |   |                                 |   | 174 |   |   |   | 200 |   |   |   | 174 |   |

----

| 6.   | Products and Services |
|----------------|-----------------------|

|                    |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-------------------------|--------|---------------------------------|--------|--------|------------------------------------------|--------|
|                    |   | 2011                            |   |   | 2010                                     |   |   | 2011 |   |   | 2011 |   |
| SaaS fees               |   | $                               | 1,924  |   |                                     | $      | 2,106 |   |   | $ | 5,740 |   |   | $ | 6,482 |   |
| Custom engineering fees |   |                            | 339    |   |                                     |   | 210 |   |   |   | 676 |   |   |   | 728 |   |
|                    |   |                            |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total Revenue           |   | $                               | 2,263  |   |                                     | $      | 2,316 |   |   | $ | 6,416 |   |   | $ | 7,210 |   |

| 7.   | Income Taxes |
|----------------|--------------|

----

| 7.   | Income Taxes (continued) |
|----------------|--------------------------|

| 8.   | New Accounting Pronouncements |
|----------------|-------------------------------|

| 9.   | Related Party Transactions |
|----------------|----------------------------|

| 10.   | Subsequent Events |
|-----------------|-------------------|

----

----

| ·   | It requires assumptions to be made that were uncertain at the time the estimate was made; and |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | Changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on the Company's condensed consolidated results of operations or financial condition. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Delivered item has standalone value to the customer; |
|--------------------|------------------------------------------------------|

| ·   | Where the arrangement includes a general right of return with respect to the delivered item, delivery of undelivered items is probable and substantially controlled by the Company; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenue recognition criteria is applied and determined separately for each separate deliverable. |
|--------------------|--------------------------------------------------------------------------------------------------|

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