UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 (Mark
One)
 
 x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
quarterly period ended: September 30, 2008
 
 Or
 
  ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from ____________ to _____________
 
 Commission
File Number: 0-27012
 
 Insignia
      Solutions plc(Exact
      name of small business issuer as specified in its
  charter)England
      and Wales
                                    Not
      applicable(State
      or other jurisdiction of incorporation
                                      or
      organization)
                                    (I.R.S.
      Employer Identification No.)7575 E.
      Redfield Road
                                      Suite
      201
                                      Scottsdale,
      AZ
                                    85260(Address
      of principal executive offices)
                                    (Zip
      Code)(480)
      922-8155(Issuer's
      telephone number)(Former
      name, former address and former fiscal year, if changed since last
      report)
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 Yes x No  ̈


Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.)  Yes  ̈ No x





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:  101,227,045 as of March 17,
2009.


ii





INSIGNIA
SOLUTIONS PLC




Table
of Contents





PagePART
      I – FINANCIAL INFORMATION
                      1Item
      1. Financial Statements:.
                      2Consolidated
      Balance Sheets (unaudited)
                      2Consolidated
      Statements of Operations (unaudited)
                      3Consolidated
      Statements of Shareholders’ Equity (Deficit) (unaudited)
                      4Consolidated
      Statements of Cash Flows (unaudited)
                      5Notes
      to Consolidated Financial Statements (unaudited)
                      6Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
                      11Item
      4T. Controls and Procedures
                      15PART
      II – OTHER INFORMATION
                      16Item
      1. Legal Proceedings.
                      16Item
      1A. Risk Factors
                      16Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                      16Item
      3. Defaults Upon Senior Securities
                      16Item
      4. Submission of Matters to a Vote of Security Holders
                      16Item
      5. Other Information.
                      16Item
      6. Exhibits
                      17SIGNATURES
                      18





iii


PART
I – FINANCIAL INFORMATION





Forward-Looking
Information




Unless
otherwise indicated, the terms “Insignia,” the “Company,” “we,” “us,” and “our”
refer to Insignia Solutions plc and its subsidiaries. In this Quarterly Report
on Form 10-Q, we may make certain forward-looking statements, including
statements regarding our plans, strategies, objectives, expectations, intentions
and resources that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. We do not undertake to update,
revise or correct any of the forward-looking information. The following
discussion should also be read in conjunction with the audited consolidated
financial statements and the notes thereto.





The
statements contained in this Quarterly Report on Form 10-Q that are not
historical fact are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995), within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The forward-looking statements contained
herein are based on current expectations that involve a number of risks and
uncertainties. These statements can be identified by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “should,” “intend,”
“plan,” “could,” “is likely,” or “anticipates,” or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. The Company wishes to caution the reader that
these forward-looking statements that are not historical facts are only
predictions. No assurances can be given that the future results indicated,
whether expressed or implied, will be achieved. While sometimes presented with
numerical specificity, these projections and other forward-looking statements
are based upon a variety of assumptions relating to the business of the Company,
which, although considered reasonable by the Company, may not be realized.
Because of the number and range of assumptions underlying the Company’s
projections and forward-looking statements, many of which are subject to
significant uncertainties and contingencies that are beyond the reasonable
control of the Company, some of the assumptions inevitably will not materialize,
and unanticipated events and circumstances may occur subsequent to the date of
this report. These forward-looking statements are based on current expectations
and the Company assumes no obligation to update this information. Therefore, the
actual experience of the Company and the results achieved during the period
covered by any particular projections or forward-looking statements may differ
substantially from those projected. Consequently, the inclusion of projections
and other forward-looking statements should not be regarded as a representation
by the Company or any other person that these estimates and projections will be
realized, and actual results may vary materially. There can be no assurance that
any of these expectations will be realized or that any of the forward-looking
statements contained herein will prove to be accurate.


1


Item
      1.
            Financial
      Statements.




Insignia
Solutions plc


Consolidated
Balance Sheets


(unaudited)





September 30,
                        
                        
                        December 31,2008
                        
                        
                        2007AssetsCash
      and cash equivalents
                        
                        $
                        2,394,524
                        
                        
                        $
                        18,265Accounts
      receivable, net
                        
                        
                        62,270
                        
                        
                        
                        50,227Prepaid
      expenses and other current assets
                        
                        
                        115,005
                        
                        
                        
                        22,475Total
      current assets
                        
                        
                        2,571,799
                        
                        
                        
                        90,967Property
      and equipment, net
                        
                        
                        173,102
                        
                        
                        
                        127,287Deposits
      and other assets
                        
                        
                        42,352
                        
                        
                        
                        45,199Total
      assets
                        
                        $
                        2,787,253
                        
                        
                        $
                        263,453Liabilities
      and Shareholders' Equity (Deficit)Accounts
      payable
                        
                        $
                        1,131,019
                        
                        
                        $
                        1,230,674Accrued
      expenses
                        
                        
                        438,779
                        
                        
                        
                        96,432Accrued
      interest
                        
                        
                        -
                        
                        
                        
                        732,926Deferred
      revenue
                        
                        
                        44,126
                        
                        
                        
                        33,259Convertible
      debt and other notes payable (including $0 and $5,569,525 due to related
      parties), net of discount
                        
                        
                        -
                        
                        
                        
                        6,263,972Liability
      for unauthorized, unissued shares
                        
                        
                        521,485
                        
                        
                        
                        -Other
      liabilities
                        
                        
                        3,838
                        
                        
                        
                        698Total
      current liabilities
                        
                        
                        2,139,247
                        
                        
                        
                        8,357,961Shareholders'
      equity (deficit):Ordinary
      shares, 1 pence par value, 110,000,000 shares authorized, 126,682,430
      shares to be issued and outstanding at September 30 and 16,209,663 issued
      and outstanding at December 31 (see Note 1)
                        
                        
                        2,503,878
                        
                        
                        
                        320,384Additional
      paid in capital
                        
                        
                        4,232,272
                        
                        
                        
                        (2,211,698
                        )Accumulated
      deficit
                        
                        
                        (6,088,144
                        )
                        
                        
                        (6,203,194
                        )Total
      shareholders' equity (deficit)
                        
                        
                        648,006
                        
                        
                        
                        (8,094,508
                        )Total
      liabilities and shareholders' equity (deficit)
                        
                        $
                        2,787,253
                        
                        
                        $
                        263,453





See
accompanying notes to unaudited consolidated financial statements.




2





Insignia Solutions plc


Consolidated
Statements of Operations


(unaudited)





Three Months Ended September 30,
                                                                
                                                                
                                                                Nine Months Ended September 30,2008
                                                                
                                                                
                                                                2007
                                                                
                                                                
                                                                2008
                                                                
                                                                
                                                                2007Net
      revenues
                                                                
                                                                $
                                                                3,623,771
                                                                
                                                                
                                                                $
                                                                2,789,314
                                                                
                                                                
                                                                $
                                                                8,858,418
                                                                
                                                                
                                                                $
                                                                7,927,923Cost
      of goods sold
                                                                
                                                                
                                                                2,513,754
                                                                
                                                                
                                                                
                                                                1,999,457
                                                                
                                                                
                                                                
                                                                6,222,344
                                                                
                                                                
                                                                
                                                                5,600,730Gross
      profit
                                                                
                                                                
                                                                1,110,017
                                                                
                                                                
                                                                
                                                                789,857
                                                                
                                                                
                                                                
                                                                2,636,074
                                                                
                                                                
                                                                
                                                                2,327,193Operating
      expenses:Sales
      and marketing
                                                                
                                                                
                                                                713,281
                                                                
                                                                
                                                                
                                                                447,674
                                                                
                                                                
                                                                
                                                                1,755,182
                                                                
                                                                
                                                                
                                                                1,364,890General
      and administrative
                                                                
                                                                
                                                                733,842
                                                                
                                                                
                                                                
                                                                465,884
                                                                
                                                                
                                                                
                                                                1,705,395
                                                                
                                                                
                                                                
                                                                1,658,290Total
      operating expenses
                                                                
                                                                
                                                                1,447,123
                                                                
                                                                
                                                                
                                                                913,558
                                                                
                                                                
                                                                
                                                                3,460,577
                                                                
                                                                
                                                                
                                                                3,023,180Operating
      loss
                                                                
                                                                
                                                                (337,106
                                                                )
                                                                
                                                                
                                                                (123,701
                                                                )
                                                                
                                                                
                                                                (824,503
                                                                )
                                                                
                                                                
                                                                (695,987
                                                                )Other
      income (expense):Interest
      expense
                                                                
                                                                
                                                                (2,641
                                                                )
                                                                
                                                                
                                                                (302,917
                                                                )
                                                                
                                                                
                                                                (176,874
                                                                )
                                                                
                                                                
                                                                (737,453
                                                                )Gain
      on debt conversion
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                1,113,849
                                                                
                                                                
                                                                
                                                                -Mark
      to market gains (losses)on liability for unauthorized
      shares
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                (179,896
                                                                )Advertising
      revenue and other
                                                                
                                                                
                                                                85,941
                                                                
                                                                
                                                                
                                                                30,657
                                                                
                                                                
                                                                
                                                                182,474
                                                                
                                                                
                                                                
                                                                69,557Total
      other income (expense)
                                                                
                                                                
                                                                83,299
                                                                
                                                                
                                                                
                                                                (272,260
                                                                )
                                                                
                                                                
                                                                939,553
                                                                
                                                                
                                                                
                                                                (667,896
                                                                )Net
      income (loss)
                                                                
                                                                $
                                                                (253,807
                                                                )
                                                                
                                                                $
                                                                (395,961
                                                                )
                                                                
                                                                $
                                                                115,050
                                                                
                                                                
                                                                $
                                                                (1,363,883
                                                                )Net
      income (loss) per share:Basic
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                (0.02
                                                                )
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                (0.08
                                                                )Diluted
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                (0.02
                                                                )
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                (0.08
                                                                )Weighted
      average common shares outstandingBasic
                                                                
                                                                
                                                                126,682,430
                                                                
                                                                
                                                                
                                                                16,209,663
                                                                
                                                                
                                                                
                                                                56,125,006
                                                                
                                                                
                                                                
                                                                16,209,663Diluted
                                                                
                                                                
                                                                132,383,397
                                                                
                                                                
                                                                
                                                                16,209,663
                                                                
                                                                
                                                                
                                                                58,442,324
                                                                
                                                                
                                                                
                                                                16,209,663





See
accompanying notes to unaudited consolidated financial
statements.


3





Insignia
Solutions plc


Consolidated
Statement of Shareholders’ Equity (Deficit)


(unaudited)





AdditionalOrdinary Shares
                              
                              
                              Paid in
                              
                              
                              AccumulatedShares
                              
                              
                              Amount
                              
                              
                              Capital
                              
                              
                              Deficit
                              
                              
                              TotalBalance
      at December 31, 2007
                              
                              
                              16,209,663
                              
                              
                              $
                              320,384
                              
                              
                              $
                              (2,211,698
                              )
                              
                              $
                              (6,203,194
                              )
                              
                              $
                              (8,094,508
                              )Net
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              115,050
                              
                              
                              
                              115,050Shares
      issued in connection with debt conversion
                              
                              
                              51,855,761
                              
                              
                              
                              1,024,929
                              
                              
                              
                              4,117,268
                              
                              
                              
                              -
                              
                              
                              
                              5,142,197Recapitalization
      from reverse merger - shares retained by Insignia’s
      shareholders
                              
                              
                              50,934,080
                              
                              
                              
                              1,006,712
                              
                              
                              
                              1,763,078
                              
                              
                              
                              -
                              
                              
                              
                              2,769,790Shares
      issued for cash, net of offering costs of $80,000
                              
                              
                              6,146,341
                              
                              
                              
                              121,482
                              
                              
                              
                              348,518
                              
                              
                              
                              -
                              
                              
                              
                              470,000Shares
      issued as satisfaction of shareholder advance
                              
                              
                              1,536,585
                              
                              
                              
                              30,371
                              
                              
                              
                              419,629
                              
                              
                              
                              -
                              
                              
                              
                              450,000Amortization
      of stock based compensation awards
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              137,066
                              
                              
                              
                              -
                              
                              
                              
                              137,066Reclassification
      for liability associated with unauthorized, unissued
shares
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (341,589
                              )
                              
                              
                              -
                              
                              
                              
                              (341,589
                              )Balance
      at September 30, 2008
                              
                              
                              126,682,430
                              
                              
                              $
                              2,503,878
                              
                              
                              $
                              4,232,272
                              
                              
                              $
                              (6,088,144
                              )
                              
                              $
                              648,006





See
accompanying notes to unaudited consolidated financial
statements.


4





Insignia
Solutions plc


Consolidated
Statements of Cash Flows


(unaudited)





Nine
      Months Ended September 30,2008
                          
                          
                          2007Cash
      flows from operating activities:Net
      income (loss)
                          
                          $
                          115,050
                          
                          
                          $
                          (1,363,883
                          )Adjustments
      to reconcile net income (loss )to net cash used in operating
      activities:Interest
      paid-in-kind
                          
                          
                          -
                          
                          
                          
                          140,973Gain
      on debt conversion
                          
                          
                          (1,113,849
                          )
                          
                          
                          -Mark
      to market gains /losses on liability for unauthorized
    shares
                          
                          
                          179,896
                          
                          
                          
                          -Depreciation
      and amortization
                          
                          
                          30,859
                          
                          
                          
                          39,269Amortization
      of debt discount
                          
                          
                          12,480
                          
                          
                          
                          19,132Bad
      debt expense
                          
                          
                          5,578
                          
                          
                          
                          42,901Stock-based
      compensation
                          
                          
                          137,066
                          
                          
                          
                          45,576Stock
      options issued for interest expense
                          
                          
                          -
                          
                          
                          
                          102,694Changes
      in assets and liabilities:Accounts
      receivable
                          
                          
                          (17,621
                          )
                          
                          
                          (58,812
                          )Inventory
                          
                          
                          -
                          
                          
                          
                          124,630Prepaid
      and other current assets
                          
                          
                          (47,125
                          )
                          
                          
                          7,830Deposits
      and other assets
                          
                          
                          19,496
                          
                          
                          
                          7,250Accounts
      payable
                          
                          
                          (173,695
                          )
                          
                          
                          (399,921
                          )Accrued
      expenses
                          
                          
                          (9,569
                          )
                          
                          
                          (83,804
                          )Accrued
      interest
                          
                          
                          44,168
                          
                          
                          
                          348,987Deferred
      revenue
                          
                          
                          10,867
                          
                          
                          
                          43,276Other
      liabilities
                          
                          
                          3,140
                          
                          
                          
                          9,895Net
      cash used in operating activities
                          
                          
                          (803,259
                          )
                          
                          
                          (974,007
                          )Cash
      flows from investing activities:Cash
      acquired in connection with reverse merger, net of acquisition
      costs
                          
                          
                          3,133,692
                          
                          
                          
                          -Purchases
      of equipment
                          
                          
                          (76,674
                          )
                          
                          
                          (20,545
                          )Net
      cash provided by investing activities
                          
                          
                          3,057,018
                          
                          
                          
                          (20,545
                          )Cash
      flows from financing activities:Proceeds
      from equity issuance, net of offering costs
                          
                          
                          470,000
                          
                          
                          
                          -Advances
      on line of credit
                          
                          
                          -
                          
                          
                          
                          56,580Proceeds
      from issuance of debt
                          
                          
                          517,500
                          
                          
                          
                          997,528Repayments
      of long-term debt
                          
                          
                          (865,000
                          )
                          
                          
                          (250,000
                          )Net
      cash provided by financing activities
                          
                          
                          122,500
                          
                          
                          
                          804,108Change
      in cash and cash equivalents
                          
                          
                          2,376,259
                          
                          
                          
                          (190,444
                          )Cash
      and cash equivalents, beginning of period
                          
                          
                          18,265
                          
                          
                          
                          202,668Cash
      and cash equivalents, end of period
                          
                          $
                          2,394,524
                          
                          
                          $
                          12,224Supplemental
      cash flow disclosures:Noncash
      financing and investing activities -conversion
      of convertible debt and othernotes payable to
      equity
                          
                          $
                          6,256,046
                          
                          
                          $
                          -Conversion
      of advance to equity
                          
                          $
                          450,000
                          
                          
                          $
                          -Net
      noncash liabilities assumed in reverse merger
                          
                          $
                          (363,903
                          )
                          
                          $
                          -Cash
      paid for interest
                          
                          $
                          120,250
                          
                          
                          $
                          125,667





See
accompanying notes to unaudited consolidated financial statements.




5





Note 1:  Background and Basis
of Presentation





Until
June 23, 2008, Insignia Solutions plc, a corporation organized under the laws of
England and Wales (“Insignia”) operated as a shell company.  On June
23, 2008, DollarDays International LLC (“DollarDays”) entered into a series of
transactions to effect a reverse merger with Insignia (the
“Merger”).  These transactions consisted of the
following:





·
            DollarDays
      formed a wholly owned Delaware corporation DollarDays International, Inc.
      (“DDI Inc.”) and contributed all its assets and liabilities in exchange
      for 100% of the stock of DDI Inc.





·
            DDI
      Inc. merged with Joede, Inc., a Delaware corporation and a wholly-owned
      subsidiary of Insignia, whereby DDI Inc. was the surviving corporation and
      a wholly-owned subsidiary of Insignia and Insignia agreed to issue
      73,333,333 American Depository Receipts (“ADRs”), which are common stock
      equivalents of Insignia in exchange for all of the outstanding common
      stock of DDI Inc.





·
            The
      combined entity was to issue an aggregate of 7,682,926 ADRs to a new
      investor in exchange for cash of


$550,000 and the conversion of note
payable of $450,000.





Under the
agreement and plan of merger, Insignia shareholders maintained approximately
37.1% ownership of the combined company, DDI Inc. shareholders obtained 56.7%,
and a new investor obtained 6.2% of the combined company stock.  The
Merger is accounted for as a reverse merger whereby DDI Inc. is the accounting
acquirer resulting in a recapitalization of DDI Inc.
equity.  Accordingly, the Company has retroactively restated all
equity and per share amounts for periods prior to the Merger to reflect the
equivalent amounts based on the exchange ratio set forth in the Merger. See Note
3 for a complete description of these transactions.





DDI Inc.,
through its website, www.DollarDays.com is an Internet based wholesaler of
general merchandise to small independent resellers.  Orders are placed
by customers through the website where, upon successful payment, the merchandise
is shipped directly from the vendors’ warehouses.





The
financial statements set forth herein include the accounts and results of DDI
Inc and include the results of Insignia and its subsidiaries beginning with the
date of acquisition (collectively the “Company”).  Because DDI Inc. is
the accounting acquirer, all historical financial information for periods prior
to June 23, 2008 are those of DDI Inc. and do not reflect the activities of
Insignia.  All intercompany amounts are eliminated in
consolidation.





As
indicated in Note 3, the Company has not issued all of the consideration
required to be issued in connection with the Merger.  However, the
accompanying financial statements reflect as shares outstanding all amounts that
are to be issued under the terms of the Merger and the Company is presenting a
liability for the shares in excess of the authorized shares..  The
Company believes this presentation provides the most meaningful information to
investors with respect to the Company’s financial position, capitalization and
per share financial information.





Certain
reclassifications have been made to prior period reported amounts to conform to
current year presentation.





Note
2:  Going Concern





The
accompanying unaudited consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business.  The Company has a recent history of operating losses and
negative operating cash flows. These factors raise substantial doubt about the
Company’s ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from this
uncertainty.





Note
3:  Business Combinations





On June
23, 2008, Insignia and its wholly-owned subsidiary, Joede, Inc., a Delaware
corporation (“Joede”), entered into an agreement and plan of merger (the “Merger
Agreement”) with DDI Inc and all of the stockholders of DollarDays (the
“DollarDays Stockholders”), whereby Joede was merged with and into DollarDays,
with DollarDays being the surviving entity.


6





Pursuant
to the Merger, Insignia acquired all of the issued and outstanding capital stock
of DDI Inc.  (the “DollarDays Capital Stock”).  In exchange
for all of the DollarDays Capital Stock, Insignia was required to: (1) issue
73,333,333 American Depository Shares (“ADSs”), as evidenced by American
Depository Receipts (“ADRs”), of Insignia to DollarDays’ Stockholders, with each
ADS representing one ordinary share of Insignia, (2) issue a warrant for
8,551,450 ADSs at a price of $0.01 per ADS to Peter Engel, the chief executive
officer of DDI Inc. , (3) issue a warrant for 3,603,876 ADSs at a price of $0.13
per ADS to a financial advisor to DDI Inc. , and (4) issue options to purchase
7,360,533 ADSs, in replacement of outstanding DDI
Inc.  options.  In addition, Insignia agreed to issue
7,682,926 ADSs at a price of $0.13 to an investor in DollarDays (“Amorim”) in
repayment of a note of $450,000 and for cash of $550,000.  Also, the
Company intends to issue warrants to purchase 570,962 shares at an exercise
price of $0.12 per share to an investment bank for merger related
services.





As a
result of Insignia not having enough authorized capital to issue all of the
consideration due pursuant to the Merger Agreement, as a closing condition to
the Merger Agreement, Insignia was required to (1) issue 46,978,375 ADSs to
Dollardays’ Stockholders at the time of the closing of the Merger, (2) issue
4,921,791 ADSs to Amorin and (3) take all necessary actions, including obtaining
stockholder approval as may be necessary, to authorize and deliver the remaining
consideration due under the terms of the Merger Agreement.





As of the
date of this Report on Form 10-Q, Insignia has issued 44,695,981 ADSs to
DollarDays Stockholders and 5,596,984 ADSs to Amorim, representing approximately
49.7% of the issued and outstanding ordinary shares of
Insignia.  Insignia intends to propose to stockholders, for their
approval, a resolution to increase the authorized capital of the Company at its
next Annual General Meeting so that Insignia can fulfill its obligations to
issue the remaining consideration under the terms of the Merger
Agreement.  On November 12, 2008, our Board of Directors approved an
increase of the authorized capital from 110,000,000 ordinary shares to
300,000,000 ordinary shares, which it intends to submit for stockholder
approval.  Assuming the increased authorized share capital is approved
and the remaining Merger consideration is issued, the DollarDays Stockholders
will own approximately 63% of the issued and outstanding ordinary shares of
Insignia.





As the
total number of ordinary shares to be issued, 126,682,430, exceeds the currently
authorized number of ordinary shares, the Company recognized a liability of
$521,485 at September 30, 2008 for the fair value of unauthorized, unissued
shares.  The fair value of the liability for unauthorized, unissued
shares has been recorded at market value as of September 30, 2008 and a
corresponding loss of $179,896 has been recognized due to the changes in the
fair value of the liability during the nine months ended September 30,
2008.





In
connection with accounting for the Merger as a reverse merger whereby DDI Inc is
the accounting acquirer resulting in a recapitalization of DDI Inc. equity, the
Company has retroactively recast all equity and per share amounts for periods
prior to the Merger to reflect DDI Inc. shares of 16,209,663 and Insignia shares
of 50,943,080.  The Insignia shares were recast at a value of
$2,769,790.





Note
4:  Net Income (Loss) Per Share





Basic
income (loss) per share is computed based on the weighted average number of
common shares outstanding and excludes any potential dilution. Diluted per share
reflect potential dilution from the exercise or conversion of securities into
common stock. The effects of certain stock options and warrants are excluded
from the determination of the weighted average common shares outstanding for
diluted income per share in each of the periods presented as the effects were
antidilutive or the exercise price for the outstanding options exceeded the
average market price for the Company’s common stock.    The
following table includes the stock options and warrants that are dilutive for
each of the periods presented and are therefore included in the Company’s
diluted earnings per share calculation.


7





Three Months Ended September 30,
                    
                    
                    Nine Months Ended September 30,2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007Net
      income (loss)
                    
                    $
                    (253,807
                    )
                    
                    $
                    (395,961
                    )
                    
                    $
                    115,050
                    
                    
                    $
                    (1,363,883
                    )Basic
      weighted average common shares outstanding
                    
                    
                    126,682,430
                    
                    
                    
                    16,209,663
                    
                    
                    
                    56,125,006
                    
                    
                    
                    16,209,663Add
      incremental shares for:Stock
      options
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Warrants
                    
                    
                    5,700,967
                    
                    
                    
                    -
                    
                    
                    
                    2,317,318
                    
                    
                    
                    -Diluted
      weighted average common shares outstanding
                    
                    
                    132,383,397
                    
                    
                    
                    16,209,663
                    
                    
                    
                    58,442,324
                    
                    
                    
                    16,209,663Net
      income per share:Basic
                    
                    $
                    -
                    
                    
                    $
                    (0.02
                    )
                    
                    $
                    -
                    
                    
                    $
                    (0.08
                    )Diluted
                    
                    $
                    -
                    
                    
                    $
                    (0.02
                    )
                    
                    $
                    -
                    
                    
                    $
                    (0.08
                    )





Note 5:  Stock
Options





The
Company has historically granted stock options to certain vendors and employees
as well as in connection with certain financing transactions.





The
following table summarizes the Company’s stock option activity:





Number of
                        Units
                      
                      
                      Weighted-
                        Average
                        Exercise Price
                      
                      
                      Weighted-
                        Average
                        Remaining
                        Contractual Term
                        (in years)Outstanding
      at December 31, 2007
                      
                      
                      7,360,533
                      
                      
                      $
                      0.22Grants
                      
                      
                      2,778,376
                      
                      
                      
                      0.90Forfeitures
                      
                      
                      (4,019,818
                      )
                      
                      
                      0.67Exercises
                      
                      
                      -
                      
                      
                      
                      -Outstanding
      at September 30, 2008
                      
                      
                      6,119,091
                      
                      
                      $
                      0.23
                      
                      
                      
                      3.1Exerciseable
      at September 30, 2008
                      
                      
                      6,119,091
                      
                      
                      $
                      0.23
                      
                      
                      
                      3.1





The
7,360,533 options outstanding at December 31, 2007 represents the replacement
options granted to existing option holders of DDI Inc. as set forth in the
Merger Agreement.





The
grants set forth in the table above represent the existing pre-Merger
outstanding options of Insignia that are reflected as grants beginning with the
date of the Merger.  As these represent existing outstanding awards
for which the requisite service period has already been rendered, no
compensation expense has been recorded during the nine months ended September
30, 2008.





The
options have no intrinsic value as of September 30, 2008.





The
following table sets forth exercise prices of outstanding options at September
30, 2008:


8





ExercisePrice
                    
                    Number of
                      Options$0.09
      - $0.20
                    
                    
                    3,914,244$0.21
      - $0.40
                    
                    
                    1,647,951$0.41
      - $0.70
                    
                    
                    517,146$0.71
      - $1.00
                    
                    
                    10,000>
      $1.00
                    
                    
                    29,750





Note
6:  Warrants





The
following table summarizes the Company’s warrant activity:





Number of
                    Units
                  
                  
                  Weighted-
                    Average
                    ExercisePrice
                  
                  
                  Weighted-
                    Average
                    Remaining
                    ContractualTerm
                    (in years)Outstanding
      at December 31, 2007
                  
                  
                  -
                  
                  
                  $
                  -Grants
                  
                  
                  17,074,499
                  
                  
                  
                  0.15Forfeitures
                  
                  
                  -
                  
                  
                  
                  -Exercises
                  
                  
                  -
                  
                  
                  
                  -Outstanding
      at September 30, 2008
                  
                  
                  17,074,499
                  
                  
                  $
                  0.15
                  
                  
                  
                  4.0Exerciseable
      at September 30, 2008
                  
                  
                  17,074,499
                  
                  
                  $
                  0.15
                  
                  
                  
                  4.0





Grants
for the nine months ended September 30, 2008 include the following:





·
            Warrants to purchase 4,348,211
      shares that represent existing pre-Merger outstanding warrants that are
      reflected as grants as of the date of Merger.  As these
      represent existing outstanding awards for which the requisite service
      period has already been rendered, no compensation expense has been
      recorded during the nine months ended September 30,
      2008.


·
            Warrants to purchase 8,551,450
      shares at an exercise price of $0.01 per share that were granted to the
      Company’s Chairman in connection with Merger related
      services.  All warrants were fully vested at the date of
      grant.  The Company recorded stock based compensation expense of
      $115,445 during the  nine months ended September 30, 2008
      associated with this award based on the following assumptions used in the
      Black Scholes model:


o
            Stock
      price:  $0.02


o
            Volatility:
      58%


o
            Expected life:  5
      years


o
            Risk free
      rate:  3.5%


·
            Warrants to purchase 3,603,876
      shares at an exercise price of $0.13 per share that were granted to an
      investment bank for Merger related services.  As these amounts
      were consideration associated with the recapitalization, they were
      recorded as part of the recapitalization accounting and no expense was
      recognized during the three or nine months ended September 30,
      2008.


·
            Warrants to purchase 570,962
      shares at an exercise price of $0.12 per share that were granted to an
      investment bank for Merger related services.  As these amounts
      were consideration associated with the recapitalization, they were
      recorded as part of the recapitalization accounting and no expense was
      recognized during the three or nine months ended September 30,
      2008.





All
warrants granted during the nine months ended September 30, 2008 are immediately
vested.  All pre-Merger outstanding warrants expire between February
2010 and December 2010, and the warrants granted for Merger related services
expire on June 23, 2013.





The
warrants had an intrinsic value of $171,029 at September 30,
2008.


9





Note
7:  Debt Conversion





During
the nine months ended September 30, 2008 certain noteholders of the Company
converted their principal and accrued interest to ordinary shares of the
Company.  The conversion of debt to equity resulted in a conversion of
$6,256,046 debt to 51,855,761 of ordinary shares of the Company.  The
Company also recognized a gain of $1,113,849 related to the conversion of debt
to equity from non-related parties.





Note
8:  Subsequent Events





On
February 25, 2009, the Company’s Board of Directors approved  the
grant of an aggregate of 14,756,360 shares of restricted stock vesting as
follows:


·
            Twenty percent at the date of
      grant


·
            Twenty percent on the first
      anniversary of the date of grant conditional upon the achievement of a
      closing price not less than $0.06 and daily volume of 50,000 shares for 25
      days of the 30 day period immediately prior to the anniversary
      date


·
            Thirty percent on the second
      anniversary of the date of grant conditional upon the achievement of a
      closing price not less than $0.10 and daily volume of 50,000 shares for 25
      days of the 30 day period immediately prior to the anniversary
      date


·
            Thirty percent on the third
      anniversary of the date of grant conditional upon the achievement of a
      closing price not less than $0.15 and daily volume of 50,000 shares for 25
      days of the 30 day period immediately prior to the anniversary
      date





As
the Company did not have available authorized shares available for the grant of
restricted stock, the Company will issue the shares at a future date when shares
are available.




10


Item
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.
 
 The
following discussion and analysis provides information that management believes
is relevant for an assessment and understanding of our results of operations and
financial condition.  The following selected financial information is
derived from our historical financial statements and should be read in
conjunction with such financial statements and notes thereto set forth elsewhere
herein and the “Forward-Looking Statements” explanation included
herein.  This information should also be read in conjunction with our
audited historical consolidated financial statements which are included in our
Form 10-K for the fiscal year ended December 31, 2007 filed with the Securities
and Exchange Commission on December 23, 2008..
 
 Overview
 
 We
provide general merchandise for resale to smaller, independent businesses
through our Internet website at www.DollarDays.com, and have been recognized as
a leader in the Internet wholesale market of discount brand name merchandise by
a leading business periodical and trade associations.  Our objective
is to provide a one-stop discount shopping destination for general merchandise
for distributors, retailers and non-profits nationwide seeking case-sized lots
at bulk pricing.  We launched our first website through which
customers could purchase products in October 2001.  The site offers
customers an opportunity to shop for bargains conveniently, while offering our
suppliers an alternative sales channel.  We believe our website offers
a unique benefit to smaller businesses in that they are able to purchase goods
from wholesalers and importers in single discounted case lots, with no minimum
purchase requirements.  We believe the prevailing reason our business
has been able to obtain bulk pricing for single case lots is our sales channel
and ability to reach smaller distributors, retailers and non-profits that most
general merchandise suppliers cannot economically reach. We provide all the
logistics and customer support to serve this sales channel and are responsible
for growing our customer base.
 
 We
continually add new, limited inventory products to our website in order to
create an atmosphere that encourages customers to visit frequently and purchase
products before the inventory sells out.  Through our Internet
catalog, we offer approximately 25,000 products, including up to 10,000 closeout
items at further discounted prices.  Closeout merchandise is typically
available in inconsistent quantities and prices.
 
 We accept orders, either online or via
telephone sales staff, collect payment in the form of credit or debit card,
PayPal or similar means, and coordinate with manufacturers, importers and
close-out specialists regarding delivery particulars.  PayPal refers
to the online payment platform located at www.paypal.com and its localized
counterparts.  Our proprietary software and service procedures allow
us to sell merchandise to a single customer, and bill as a singer order, items
purchased and delivered from multiple suppliers.  We do not take
possession of inventory, but we are responsible for processing customer claims
and returns.
 
 Our
website has a registered base of approximately 1,250,000 small businesses and
receives approximately 2 million monthly page views.  We receive an
average of approximately 3,000 orders per month.  Our target audience,
typically smaller businesses, accounts for approximately 20% of overall US
retail market.
 
 Our
historical success has resulted largely from the size of our community of active
users.  We had approximately 29,000 active users at the end of 2007,
compared to approximately 26,000 users at the end of 2006.  We define
an active user as any user who bought or sold an item during the most recent
12-month period. We
believe our sales and marketing efforts make inefficient markets more efficient
because:
  •      Our
website includes more than 25,000 items on any given day and makes available to
our users a wide variety of goods; and
 •      We
bring buyers and sellers together for lower costs than traditional
intermediaries.
 
 We have
had increased success throughout the years attracting repeat
customers.  In 2006, approximately 27% of our sales volume was
purchased by individuals who purchased through our website four times or
more.  In 2007 and 2008, the sales volume of individuals who purchased
through our website four times or more increased to 31% and 40%,
respectively.
 
 Reverse
Merger with Insignia Solutions plc
 
 On June
23, 2008, we entered into a series of transactions to effect a reverse merger
with Insignia (the “Merger”).  These transactions consisted of the
following:
  11
  
 •      We
formed a wholly owned Delaware corporation DollarDays International, Inc. (“DDI
Inc.”) and contributed all our assets and liabilities in exchange for 100% of
the stock of DDI Inc.
 
 •   DDI
Inc. merged with Joede, Inc., a Delaware corporation and a wholly-owned
subsidiary of Insignia, whereby DDI Inc. was the surviving corporation and a
wholly-owned subsidiary of Insignia and Insignia agreed to issue 73,333,333
American Depository Receipts (“ADRs”), which are common stock equivalents of
Insignia in exchange for all of the outstanding common stock of DDI
Inc.
 
 •      The
combined entity was to issue an aggregate of 7,682,926 ADRs to Amorim in
exchange for cash of $550,000 and the conversion of note payable of
$450,000.
 
 Under the
agreement and plan of Merger, Insignia shareholders maintained approximately
37.1% ownership of the combined company, DDI Inc. shareholders obtained 56.7%,
and Amorin obtained 6.2% of the combined company stock.  The Merger is
accounted for as a reverse merger whereby DDI Inc is the accounting acquirer
resulting in a recapitalization of DDI Inc. equity.  Accordingly, the
Company has retroactively restated all equity and per share amounts for periods
prior to the Merger to reflect the equivalent amounts based on the exchange
ratio set forth in the Merger Agreement.
 
 As a
result of Insignia not having enough authorized capital to issue all of the
consideration due pursuant to the Merger Agreement, as a closing condition to
the Merger Agreement, Insignia was required to (1) issue 46,978,375 ADSs to
Dollardays’ Stockholders at the time of the closing of the Merger, (2) issue
4,921,791 ADSs to Amorin and (3) take all necessary actions, including obtaining
stockholder approval as may be necessary, to authorize and deliver the remaining
consideration due under the terms of the Merger Agreement.
 
 As of the
date of this Report on Form 10-Q, Insignia has issued 44,695,981 ADSs to
DollarDays Stockholders and 5,596,984 ADSs to Amorim, representing approximately
49.7% of the issued and outstanding ordinary shares of
Insignia.  Insignia intends to propose to stockholders, for their
approval, to increase the authorized capital of the Company at its next Annual
General Meeting so that Insignia can fulfill its obligations to issue the
remaining consideration under the terms of the Merger Agreement.  On
November 12, 2008, our Board of Directors approved an increase of the authorized
capital from 110,000,000 ordinary shares to 300,000,000 ordinary shares, which
it intends to submit for stockholder approval.  Assuming the increased
authorized share capital is approved and the remaining Merger consideration is
issued, the DollarDays Stockholders will own approximately 63% of the issued and
outstanding ordinary shares of Insignia.
 
 Because
DDI Inc. is the accounting acquirer, all historical financial information for
periods prior to June 23, 2008 are those of DDI Inc. and do not reflect the
activities of Insignia.
 
 Results
of Operations
  Net
Revenues
  Change from
                    
                    
                    Percent ChangeNet revenues
                    
                    2008
                    
                    
                    2007
                    
                    
                    Prior Year
                    
                    
                    from Prior YearThree
      months ended September 30,
                    
                    
                    3,623,771
                    
                    
                    
                    2,789,314
                    
                    
                    
                    834,457
                    
                    
                    
                    29.9
                    %Nine
      months ended September 30,
                    
                    
                    8,858,418
                    
                    
                    
                    7,927,923
                    
                    
                    
                    930,495
                    
                    
                    
                    11.7
                    %
  Net revenues increased during the three
and nine months ended September 30, 2008 as compared to the three and nine
months ended September 30, 2007, as a result of increased marketing efforts,
more favorable vendor pricing and improved economic conditions.  The
Company increased marketing in several different areas including pay-per-click,
search optimization and shipping incentives. Factors that influence future
revenue growth include general economic conditions, our ability to attract
vendors that offer compelling products and the impact of our marketing
activities.
  Cost
of Goods Sold
  Change from
                    
                    
                    Percent ChangeCost of goods sold
                    
                    2008
                    
                    
                    2007
                    
                    
                    Prior Year
                    
                    
                    from Prior YearThree
      months ended September 30,
                    
                    
                    2,513,754
                    
                    
                    
                    1,999,457
                    
                    
                    
                    514,297
                    
                    
                    
                    25.7
                    %Nine
      months ended September 30,
                    
                    
                    6,222,344
                    
                    
                    
                    5,600,730
                    
                    
                    
                    621,614
                    
                    
                    
                    11.1
                    %
  12
  Cost of goods sold increased during the
three and nine months ended September 30, 2008 as compared to the three and nine
months ended September 30, 2007 due primarily to increased revenues generated by
the Company.
  Factors which may influence the cost of
goods sold include our general sales volumes, negotiated terms with vendors and
general economic conditions.
  Sales
and Marketing
  Change from
                    
                    
                    Percent ChangeSales and marketing
                    
                    2008
                    
                    
                    2007
                    
                    
                    Prior Year
                    
                    
                    from Prior YearThree
      months ended September 30,
                    
                    
                    713,281
                    
                    
                    
                    447,674
                    
                    
                    
                    265,607
                    
                    
                    
                    59.3
                    %Nine
      months ended September 30,
                    
                    
                    1,755,182
                    
                    
                    
                    1,364,890
                    
                    
                    
                    390,292
                    
                    
                    
                    28.6
                    %
  Sales and marketing expenses include
fees for attracting users to our site, including search engine optimization,
telemarketing and other marketing efforts as well as promotional activities to
increase sales by end users.  Sales and marketing expenses increased
in the three and nine months ended September 30, 2008 as compared to the three
and nine months ended September 30, 2007 due to increased efforts to generate
revenues through increased pay-per-click advertising, increased search
optimization fees and greater  shipping promotions.
  Factors influencing sales and marketing
expenses include strategic decisions with respect to the cost-effectiveness of
each of our marketing activities.
  General
and Administrative
  Change from
                    
                    
                    Percent ChangeGeneral and administrative
                    
                    2008
                    
                    
                    2007
                    
                    
                    Prior Year
                    
                    
                    from Prior YearThree months
      ended September 30,
                    
                    
                    733,842
                    
                    
                    
                    465,884
                    
                    
                    
                    267,958
                    
                    
                    
                    57.5
                    %Nine
      months ended September 30,
                    
                    
                    1,705,395
                    
                    
                    
                    1,658,290
                    
                    
                    
                    47,105
                    
                    
                    
                    2.8
                    %
  General and administrative expenses
increased in the three and nine months ended September 30, 2008 as compared to
the three months and nine months ended September 30, 2007 based on the
following:
  ·
              Transaction
      costs incurred related to the merger between Insignia Solutions and
      DollarDays.  These costs include legal fees, consulting fees,
      severance costs and other professional fees and totaled approximately
      $313,000 and $606,000 for the three and nine months ended September 30,
      2008.
  ·
              An
      increase in stock based compensation
expense
  Factors that influence the amount of
general and administrative expenses include the amount and extent by which we
compensate our consultants, executives and directors with stock-based or other
compensation, the rate of growth of our business and the extent to which we
outsource or bring certain activities in-house.
  Interest
Expense
  Change from
                      
                      
                      Percent ChangeInterest expense
                      
                      2008
                      
                      
                      2007
                      
                      
                      Prior Year
                      
                      
                      from Prior YearThree
      months ended September 30,
                      
                      
                      (2,641
                      )
                      
                      
                      (302,917
                      )
                      
                      
                      300,276
                      
                      
                      
                      -99.1
                      %Nine
      months ended September 30,
                      
                      
                      (176,874
                      )
                      
                      
                      (737,453
                      )
                      
                      
                      560,579
                      
                      
                      
                      -76.0
                      %
  Interest expense represents interest
incurred on our convertible notes and other notes payable.   In
June 2008, our debtholders agreed to convert all but $600,000 of our outstanding
debt into shares of common stock in connection with Merger.  As part
of this transaction, the participating debtholders agreed to waive interest
incurred after February 29, 2008.
  13
  Advertising
Revenue and Other
  Change from
                    
                    
                    Percent ChangeAdvertising revenue and other
                    
                    2008
                    
                    
                    2007
                    
                    
                    Prior Year
                    
                    
                    from Prior YearThree
      months ended September 30,
                    
                    
                    85,941
                    
                    
                    
                    30,657
                    
                    
                    
                    55,283
                    
                    
                    
                    180.3
                    %Nine
      months ended September 30,
                    
                    
                    182,474
                    
                    
                    
                    69,557
                    
                    
                    
                    112,916
                    
                    
                    
                    162.3
                    %
  Advertising revenue and other increased
during the three and nine months ended September 30, 2008 as compared to the
three and nine months ended September 30, 2007 as the Company increased its
promotion and sale of banner and other website advertising on its
site.
  Net
Income (Loss)
  Change from
                    
                    
                    Percent ChangeNet income (loss)
                    
                    2008
                    
                    
                    2007
                    
                    
                    Prior Year
                    
                    
                    from Prior YearThree
      months ended September 30,
                    
                    
                    (253,807
                    )
                    
                    
                    (395,961
                    )
                    
                    
                    142,154
                    
                    
                    
                    35.9
                    %Nine
      months ended September 30,
                    
                    
                    115,050
                    
                    
                    
                    (1,363,883
                    )
                    
                    
                    1,478,932
                    
                    
                    
                    108.4
                    %
  The Company recognized net income
during the nine months ended September 30, 2008 as compared to a net loss the
three and nine months ended September 30, 2007 due primarily to a gain of
$1,113,849 recognized related to the Company’s debt conversion.
  Liquidity
and Capital Resources
  Our operating cash outflows were
$803,259 for the nine months ended September 30, 2008, as compared to $974,007
for the nine months ended September 30, 2007, a decrease of
$170,748.  Our operating cash flows improved as gains in operating
efficiencies were realized.
  Investing cash inflows for the
nine months ended September 30, 2008 consisted of $3,133,692 of cash acquired in
connection with our reverse merger with Insignia Solutions plc, net of
acquisition costs of approximately $308,000, partially offset by $76,674 of
investments in additional equipment to support our business
operations.   We had investments of $20,545 in additional
equipment in the nine months ended September 30, 2007
  Financing cash inflows were $122,500
for the nine months ended September 30, 2008 as compared to $804,108 for the
nine months ended September 30, 2007.  Financing cash inflows in the
nine months ended September 30, 2008 consisted of $470,000 of proceeds from
equity issuances (net of offering costs of $80,000) and $517,500 of proceeds
from the issuance of long term debt, offset by $865,000 of repayments of long
term debt.  Financing cash flows in the nine months ended September
30, 2007 consisted of proceeds from the issuance of long term debt and advances
on our line of credit offset by repayments of long-term debt.
  Our
financial statements have been prepared assuming we will continue as a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  We have a recent
history of operating losses and operating cash outflows.  These
factors raise substantial doubt about our ability to continue as a going
concern.  The financial statements do not include any adjustments that
might result from this uncertainty.
 
 Off-balance
sheet arrangements
 
 We did
not have any off-balance sheet arrangements at September 30, 2008.
 
 Recent
Accounting Pronouncements
 
 In
December 2007, the FASB issued SFAS No. 141 (revised
2007) “Business Combinations” (“SFAS 141R”). SFAS 141R
establishes the requirements for how an acquirer recognizes and measures the
identifiable assets acquired, the liabilities assumed, any non-controlling
interest in the acquiree and the goodwill acquired. SFAS 141R requires
acquisition costs be expensed instead of capitalized as is required currently
under SFAS 141 and also establishes disclosure requirements for business
combinations. SFAS 141R applies to business combinations for which the
acquisition date is on or after fiscal years beginning on or after
December 15, 2008 and, as such, SFAS 141R is effective beginning in
the Company’s fiscal year 2009.  We are still evaluating the potential
impact on our consolidated financial statements upon adoption of
SFAS 141R.
  14
 
 In
September 2006, the FASB issued SFAS No. 157, “ Fair Value
Measurements ” (“SFAS 157”), which defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS 157 does not
require any new fair value measurements, but provides guidance on how to measure
fair value by providing a fair value hierarchy used to classify the source of
the information. In February 2008, the FASB issued FASB Staff Position 157-1, “
Application of FASB Statement No. 157 to FASB Statement No. 13 and
Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13. ”
(“FSP 157-1”). FSP 157-1 amends SFAS 157 to exclude leasing
transactions accounted for under SFAS 13 and related guidance from the
scope of SFAS 157. In February 2008, the FASB issued FASB Staff Position
157-2 (“FSP 175-2”), “ Effective Date of FASB Statement 157, ” which delays
the effective date of SFAS 157 for all non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed as
fair value in the financial statements on a recurring basis (at least annually).
SFAS 157 is effective for fiscal year 2009, however, FSP 157-2 delays
the effective date for certain items to fiscal year 2010. We are evaluating the
potential impact on our consolidated financial statements upon adoption of
SFAS 157.
 
 In
February 2006, the FASB issued SFAS No. 155, “Accounting for Certain
Hybrid Financial Instruments — an Amendment of FASB Statements No. 133
and 140” (“SFAS 155”). SFAS 155 allows financial instruments that
contain an embedded derivative and that otherwise would require bifurcation to
be accounted for as a whole on a fair value basis, at the holders’ election.
SFAS 155 also clarifies and amends certain other provisions of
SFAS 133 and SFAS 140. SFAS 155 was effective beginning with our
2007 fiscal year. The adoption of SFAS 155 did not have a material effect
on our consolidated financial statements.
  Item
4T. Controls and Procedures.
 
 Disclosure Controls and
Procedures
 
 We
carried out an evaluation, under the supervision and with the participation of
our management, including our principal executive officer and principal
financial officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)).  Based upon that evaluation, our principal executive
officer and principal financial officer concluded that, as of the end of the
period covered in this report, our disclosure controls and procedures were not
effective to ensure that information required to be disclosed in reports filed
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the required time periods and is accumulated and communicated to
our management, including our principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required
disclosure.  These controls were not effective based on the following
factors:
 
 ·
              We
      have recently merged with an entity that maintains accounts in foreign
      countries with which we are unfamiliar in doing
business·
              Because
      of our small size and limited financial resources, we have limited finance
      staff, who are not likely to be able to maintain a comprehensive knowledge
      of all relevant elements of changing reporting and accounting
      requirements, and who may not provide adequate resources in all
      circumstances to manage the complex accounting of a software company with
      operations in several countries.·
              We
      have had to rely on contract consulting staff who are less likely to
      remain with us over the long term.·
              Our
      accounting system and related infrastructure was acquired or built to
      handle the finances of a company significantly larger than we are
      currently, and any turnover in our finance staff may lead us to lose the
      ability to operate the system
effectively.
  15
  Our
management, including our principal executive officer and principal financial
officer, does not expect that our disclosure controls and procedures of our
internal controls will prevent all error or fraud.  A control system,
no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are
met.  Further, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs.  Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, have been
detected.
 
 We began
remediation efforts in 2009 to address deficiencies in our disclosure controls
and procedures.  We expect most deficiencies to be corrected during
2009.
 
 Changes in Internal Controls
Over Financial Reporting
 
 There
have not been  any changes in our internal controls over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that
occurred during the fiscal quarter ending September 30, 2008 that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.
 
 PART
II – OTHER INFORMATION
 
 Item
1. Legal Proceedings.
 
 As of the
date of this report, the Company is not currently involved in any legal
proceedings.
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.
 
 Pursuant
to the Merger, Insignia acquired all of the DollarDays Capital
Stock.  In exchange for all of the DollarDays Capital Stock, Insignia
was required to: (1) issue 73,333,333 ADSs, evidenced by ADRs, to Dollardays’
Stockholders, with each ADS representing one ordinary share of Insignia, (2)
issue a warrant for 8,551,450 ADSs at a price of $0.01 per ADS to Peter Engel,
the chief executive officer of Dollardays, (3) issue a warrant for 3,603,876
ADSs at a price of $0.13 per ADS to a financial advisor to Dollardays, and (4)
issue options to purchase 7,360,533 ADSs, in replacement of outstanding
Dollardays options.  In addition, Insignia agreed to issue 7,682,926
ADSs at a price of $0.13 to Amorim in repayment of a note.  Also, the
Company will issue warrants to purchase 570,962 shares at an exercise price of
$0.12 per share to an investment bank for merger related services.
 
 As a
result of Insignia not having enough authorized capital to issue all of the
consideration due pursuant to the Merger Agreement, as a closing condition to
the Merger Agreement, Insignia was required to (1) issue 46,978,375 ADSs to
Dollardays’ Stockholders at the time of the closing of the Merger, (2) issue
4,921,791 ADSs to Amorim and (3) take all necessary actions, including obtaining
stockholder approval as may be necessary, to authorize and deliver the remaining
consideration due under the terms of the Merger Agreement.
 
 As of the
date of this Report on Form 10-Q, Insignia has issued 44,695,981 ADSs to
DollarDays Stockholders and 5,596,984 ADSs to Amorim, representing approximately
49.7% of the issued ordinary shares of Insignia.
 
 Item
3. Defaults Upon Senior Securities.
 
 None.
 
 Item
4.  Submission of Matters to a Vote of Security Holders.
 
 None.
 
 Item
5. Other Information.
 
 None.
  16
  Item
6.   Exhibits.
  Exhibit
                  Number
                
                Description
                
                By
      Reference
                  fromDocument31.1
                
                Certification
      of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 of the
      Securities Exchange Act of 1934
                
                *31.2
                
                Certification
      of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14 of the
      Securities Exchange Act of 1934
                
                *32.1
                
                Certification
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
                
                *32.2
                
                Certification
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
                
                *
 *           Filed
herewith
  17
  SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
 
 INSIGNIA
      SOLUTIONS PLCBy:
                      /s/  Peter
      EngelPeter
      EngelPresident,
      Chairman  and Chief Executive Officer(Principal
      Executive Officer)By:
                      /s/ Michael
      MooreMichael
      MooreChief
      Financial Officer(Principal
      Financial
Officer)
  18