##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2005ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission file number
    0-27012
      Insignia Solutions
    plc
 (Exact name of Registrant as
    specified in its charter)
  England and Wales

Not applicable(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. employer
    identification number)       51 East Campbell Avenue,
    Suite 130

Insignia HouseCampbell

The Mercury CentreCalifornia 95008

Wycombe Lane, Wooburn
    GreenUnited States of
    America

High Wycombe, Bucks HP10
    0HH(408) 874-2600

United Kingdom
    (44) 1628-539500  (Address and telephone number of
    principal executive offices and principal places of
    business)
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
    Ordinary Shares (1p nominal value)
  o þ
  o þ
  o þ
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ




---



##### 



TABLE OF
    CONTENTS
  
  PagePART IItem 1.


Business


3Item 1A.


Risk
    Factors


9Item 1B.


Unresolved Staff
    Comments


19Item 2.


Properties


19Item 3.


Legal
    Proceedings


19Item 4.


Submission of
    Matters to a Vote of Security Holders


19PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters,
    and Issuer Purchases of Equity Securities


20Item 6.


Selected Financial
    Data


21Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


22Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


38Item 8.


Financial
    Statements and Supplementary Data


39Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


74Item 9A.


Controls and
    Procedures


74Item 9B.


Other
    Information


74PART IIIItem 10.


Directors and
    Executive Officers of the Registrant


75Item 11.


Executive
    Compensation


77Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


81Item 13.


Certain
    Relationships and Related Transactions


82Item 14.


Principal
    Accountant Fees and Services


83PART IVItem 15.


Exhibits and
    Financial Statement Schedules


84Signatures


85Index to
    Exhibits Filed Together with this Annual Report


86EXHIBIT 4.08EXHIBIT 4.09EXHIBIT 4.10EXHIBIT 14.01EXHIBIT 21.01EXHIBIT 23.01EXHIBIT 31.01EXHIBIT 32.01EXHIBIT 99.01   2




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##### Table of Contents



PART I  This Report contains forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended (the Securities Act) and Section 21E of
    the Securities Exchange Act of 1934, as amended (the
    Exchange Act) regarding Insignia Solutions plc (the
    Company, Insignia, we,
    us or our) and its business, financial
    condition, results of operations and prospects. Words such as
    expects, anticipates,
    intends, plans, believes,
    seeks, estimates and similar expressions
    or variations of such words are intended to identify
    forward-looking statements, but are not the exclusive means of
    identifying forward-looking statements in this Report.
  Although forward-looking statements in this Report reflect
    the good faith judgment of our management, such statements can
    only be based on facts and factors currently known by us.
    Consequently, forward-looking statements are inherently subject
    to risks and uncertainties, and actual results and outcomes may
    differ materially from the results and outcomes discussed in the
    forward-looking statements. Factors that could cause or
    contribute to such differences in results and outcomes include
    without limitation those discussed below, as well as those
    discussed elsewhere in this Report. You are urged not to place
    undue reliance on these forward-looking statements, which speak
    only as of the date of this Report. We undertake no obligation
    to revise or update any forward-looking statements in order to
    reflect any event or circumstance that may arise after the date
    of this Report. You are urged to review and consider carefully
    the various disclosures made by us in this Report, which
    attempts to advise interested parties of the risks and factors
    that may affect our business, financial condition and results of
    operations.
 Item 1  Business  Company
    Overview
  over-the-air tm tm tm ® tm over-the-air
 3




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
    initial licensing fees;
    royalties paid based on volume of users or transaction capacity;
    support and maintenance fees;
    trial and installation;
    subscription fees for hosting services; and
    engineering services.    period-to-period.
  Industry
    Overview
    The
    Trend Towards More Complex Software
    Over-The-Air tm through-the-mail
  Evolution
    of Mobile Terminals
   4




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
    Highly targeted configuration of devices to suit a mobile
    subscribers interests, including downloading audio and
    video, graphics, applications and games, all capabilities that
    mobile operators around the world are seeking to increase
    revenues;
    Automatic monitoring and corrective response to failures, which
    reduce technical support costs and subscriber frustration with
    ever-more complex devices;
    Automatic device configuration to eliminate the need for
    subscriber intervention to insure that the supported data
    services work out of the box; and
    Enterprise control over their dispersed work force mobile
    devices to remotely deploy and update mobile applications,
    insure that they work, and to insure that the correct security
    measures are in place and that only authorized applications are
    being used.      14-year-old 40-year-old
   5




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##### Table of Contents



Products
    and Support
  Summary
    Insignias
    Device Management Suite Platform
  over-the-air. tm
  Insignias
    Open Management Client Platform
    Support  IDMS
    and OMC Platforms
   6




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Research
    and Development
    Proprietary
    Rights
      Sales and
    Marketing
       7




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e-marketing
  Competition
      Employees
    Incorporation
  (408) 874-2600. (44) 1628-539500.
 8




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##### Table of Contents



Item 1A  Risk
    Factors  You should carefully consider the following risk factors,
    together with all other information contained or incorporated by
    reference in this filing, before you decide to purchase shares
    of our ordinary shares. These factors could cause our future
    results to differ materially from those expressed in or implied
    by forward-looking statements made by us. Additional risks and
    uncertainties not presently known to us or that we currently
    deem immaterial may also harm our business. The trading price of
    our ordinary shares could decline due to any of these risks, and
    you may lose all or part of your investment.
  We may
    need additional financing to sustain our operations, and we may
    not be able to continue to operate as a going
    concern.
         9




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360-day
     10




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##### Table of Contents



S-1
       11




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##### Table of Contents



Our
    stock was recently delisted from NASDAQ.
      The
    sale of our shares to Fusion Capital and other investors may
    cause dilution, and the sale of the such shares by Fusion
    Capital and other investors could cause the price of our shares
    to decline.
  Form S-1, S-1 Form S-1 S-1 S-1 S-1
  Our
    future performance depends upon sales of products of our IDMS
    and OMC product lines, which are our sole
    products.
    over-the-air over-the-air
   12




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The
    long and complex process of licensing our IDMS and OMC products
    makes our revenue unpredictable.
    We
    rely on third parties for software development tools, which we
    distribute with some of our products.
    If
    handset manufacturers (and other third parties) do not achieve
    substantial sales of their products that incorporate our IDMS
    and OMC technology, we will not receive royalty payments on our
    licenses.
    We
    have a history of losses and we must generate significantly
    greater revenue if we are to achieve
    profitability.
    We
    need to increase our sales and marketing expenditures in order
    to achieve sales of our OMC and IDMS products; however, this
    increase in expenses is expected to decrease our cash
    position.
    If we
    are unable to stay abreast of technological changes, evolving
    industry standards and rapidly changing customer requirements,
    our business will likely suffer and revenue may
    decline.
   13




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
    accurately anticipate industry trends and changes in technology
    standards;
    complete and introduce new product designs and features in a
    timely manner;
    continue to enhance our existing product lines; and
    respond promptly to customers requirements and preferences.    Our
    targeted market is highly competitive.
      Our
    revenue model may not succeed.
    Fluctuations
    in our quarterly results could cause the market price of our
    shares to decline.
    
    the volume and timing of orders received during the quarter;
    the mix of and changes in customers to whom our products are
    sold;
    the mix of product and service revenue received during the
    quarter;
    the mix of development license fees and commercial use royalties
    received;
    the timing and acceptance of new products and product
    enhancements by us or by our competitors;
    changes in product pricing; 14




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
    foreign currency exchange rate fluctuations; and
    ability to recognize revenue on orders received.  period-to-period
  We
    have engineering and other operations both in the United States
    and foreign countries, which is expensive and can create
    logistical challenges.
        International
    sales of our products, which we expect to comprise a significant
    portion of total revenue, expose us to the business and economic
    risks of international operations.
    
    longer receivable collection periods and greater difficulty in
    accounts receivable collection;
    foreign government regulation;
    reduced protection of intellectual property rights in some
    countries where we do business;
    unexpected changes in, or imposition of, regulatory
    requirements, tariffs, import and export restrictions and other
    barriers and restrictions;
    potentially adverse tax consequences;
    the burdens of complying with a variety of foreign laws and
    staffing and managing foreign operations; 15




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
    general geopolitical risks, such as political and economic
    instability, terrorism, hostilities with neighboring countries
    and changes in diplomatic and trade relationships; and
    possible recessionary environments in economies outside the
    United States.  Our
    technology depends on the adoption of standards such as those
    set forth by the Open Mobile Alliance (OMA). If such
    standards are not effectively established our business could
    suffer. Use of open industry standards, however, may also make
    us more vulnerable to competition.
      Product
    defects can be expensive to fix and may cause us to lose
    customers.
      If we
    lose key personnel or are unable to hire additional qualified
    personnel as necessary, we may not be able to successfully
    manage our business or sell our products.
   16




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Our
    performance depends significantly on our ability to protect our
    intellectual property and proprietary rights in the technologies
    used in our products. If we are not adequately protected, our
    competitors could use the technologies that we have developed to
    enhance their products and services, which could harm our
    business.
        Our
    products may infringe the intellectual property rights of third
    parties, which may result in lawsuits and prevent us from
    selling our products.
    If we
    fail to deploy our products successfully or to an agreed
    schedule, our customers may seek damages.
   17




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We are
    at risk of securities litigation which, regardless of the
    outcome, could result in substantial costs and divert management
    attention and resources.
    If we
    are unable to favorably assess the effectiveness of our internal
    control over financial reporting, or if our independent
    registered public accounting firm is unable to provide an
    unqualified attestation report on our assessment our stock price
    could be adversely affected.
  Form 10-K
    Form 10-K
  Our
    investors may have difficulty enforcing judgments against us in
    U.S. courts because many of our assets and some of our
    directors and management are located in England and
    Sweden.
   18




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Item 1B  Unresolved
    Staff Comments   Item 2  Properties  th
 Item 3  Legal
    Proceedings   Item 4  Submission
    of Matters to a Vote of Security Holders   19




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##### Table of Contents



PART II  Item 5 
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Price
    Range of Ordinary Shares
    2005 Quarters EndedDec 31


Sept 30


June 30


Mar 31Quarterly per share stock price:High

$
1.25


$
0.69


$
1.29


$
1.04Low

$
0.23


$
0.40


$
0.25


$
0.43   2004 Quarters EndedDec 31


Sept 30


June 30


Mar 31Quarterly per share stock price:High

$
1.30


$
0.92


$
2.14


$
3.47Low

$
0.68


$
0.50


$
0.75


$
0.88     Dividends
   20




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##### Table of Contents



Item 6  Selected
    Financial Data      Selected
    Consolidated Financial Data
  Year Ended
    December 31,2005


2004


2003


2002


2001(In thousands, except per share
    data)Consolidated Statement of
    Operations DataNet revenues

$
3,178


$
541


$
710


$
7,256


$
10,273Cost of net revenues


621



42



340



2,584



4,275Gross profit


2,557



499



370



4,672



5,998Operating expenses:Sales and marketing


2,637



2,511



1,757



5,558



7,058Research and development


2,666



2,807



3,373



5,640



6,220General and administrative


3,664



2,579



2,676



3,356



4,155Amortization of intangible assets


71















Restructuring










498



296



292Total operating expenses


9,038



7,897



8,304



14,850



17,725Operating loss


(6,481
)


(7,398
)


(7,934
)


(10,178
)


(11,727
)Interest and other income
    (expense), net


(1,910
)


255



3,101



(356
)


567Net loss before income taxes


(8,391
)


(7,143
)


(4,833
)


(10,534
)


(11,160
)Benefit from income taxes


(29
)


(81
)


(510
)


(2,114
)


(152
)Net loss


(8,362
)


(7,062
)


(4,323
)


(8,420
)


(11,008
)Accretion of dividend on
    subsidiary preferred stock


(108
)














Deemed dividend related to
    beneficial conversion feature of subsidiary preferred stock


(611
)














Net loss attributable to ordinary
    shareholders

$
(9,081
)

$
(7,062
)

$
(4,323
)

$
(8,420
)

$
(11,008
)Net loss per share:Basic and diluted

$
(0.22
)

$
(0.23
)

$
(0.20
)

$
(0.42
)

$
(0.57
)Weighted average ordinary shares
    and ordinary share equivalents:Basic and diluted


41,742



30,191



21,231



19,937



19,248  21




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##### Table of Contents



December 31,2005


2004


2003


2002


2001Consolidated Balance Sheet
    DataCash, cash equivalents, short-term
    investments and restricted cash

$
1,284


$
952


$
2,232


$
976


$
8,893Working capital (deficit)


(4,194
)


900



2,254



1,964



10,633Total assets


6,117



2,587



6,794



6,453



17,768Mandatorily redeemable warrants










38



1,440



1,440Total shareholders equity
    (deficit)

$
(1,206
)

$
1,341


$
2,589


$
2,673


$
9,895  Item 7  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Except for the historical information contained in this
    Annual Report on
    Form 10-K,
    the matters discussed herein are forward-looking statements.
    Words such as anticipates, believes,
    expects, future, and
    intends, and similar expressions are used to
    identify forward-looking statements. These and other statements
    regarding matters that are not historical are forward-looking
    statements. These matters involve risks and uncertainties that
    could cause actual results to differ materially from those in
    the forward-looking statements. Factors that could cause or
    contribute to such differences in results and outcomes include
    without limitation those discussed below as well as those
    discussed elsewhere in this Report. Readers are cautioned not to
    place undue reliance on these forward-looking statements, which
    reflect managements analysis only as of the date hereof.
    We assume no obligation to update these forward-looking
    statements to reflect actual results or changes in factors or
    assumptions affecting such forward-looking statements.
  Overview
  over-the-air tm tm ®
    over-the-air over-the-air
    
    Initial licensing fees; 22




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
    Royalties paid based on volume of users;
    Support and maintenance fees;
    Trial and installation;
    Subscription fees for hosting services; and
    Engineering services.  International
    period-to-period.
  Critical
    Accounting Policies and Estimates
    Revenue
    recognition
  No. 97-2 (SOP 97-2), No. 98-9,
   23




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##### Table of Contents



Accounts
    receivable and allowance for doubtful accounts
      Long-Lived
    Assets
   24




---



##### Table of Contents



Tax
    Accounting
      Business
    Combinations
      Sale of
    Jeode Product Line and Java Virtual Machine Assets
         25




---



##### Table of Contents



Results
    of Operations
  Revenues
    % Change





% Change2005


2004 to 2005


2004


2003 to 2004


2003($ in thousands)License revenues

$
2,394



360
%

$
521



0
%

$
522Service revenues


784



3,820
%


20



(89
)%


188Total revenues

$
3,178



487
%

$
541



(24
)%

$
710   tm tm
  tm tm tm tm tm tm tm
   26




---



##### Table of Contents



Sales
    to OEMs and Distributors
    Year Ended
    December 31,2005


2004


2003Distributors:Distributor A


10
%






Distributor B


13
%






Distributor C


10
%






Distributor D






28
%


Distributor E






17
%


*Distributor F


*



14
%


All Distributors


63
%


60
%


47
%OEMs:OEM A






21
%


OEM B






18
%


OEM C










26
%All OEMs


7
%


40
%


49
%     *
    
    Less than 10%  Cost of
    revenues and gross margin
  % Change





% Change2005


2004 to 2005


2004


2003 to 2004


2003($ in thousands)Cost of license revenues

$
365



1,204
%

$
28



(90
)%

$
288Gross margin: license revenues


85
%






95
%






45
%Cost of service revenues

$
256



1,729
%

$
14



(73
)%

$
52Gross margin: service revenues


67
%






30
%






72
%Total cost of revenues

$
621



1,379
%

$
42



(88
)%

$
340Gross margin: total revenues


80
%






92
%






52
%   ®
 27




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##### Table of Contents



Operating
    expenses
  Year Ended
    December 31,% Change





% Change2005


2005 to 2004


2004


2004 to 2003


2003($ in thousands)Sales and marketing

$
2,637



5
%

$
2,511



43
%

$
1,757Percentage of total revenues


83
%






464
%






247
%Research and development

$
2,666



(5
)%

$
2,807



(17
)%

$
3,373Percentage of total revenues


84
%






519
%






475
%General and administrative

$
3,664



42
%

$
2,579



(4
)%

$
2,676Percentage of total revenues


115
%






477
%






377
%Amortization of intangible assets

$
71



N/A


$
0



0
%

$
0Percentage of total revenues


2
%






0
%






0
%Restructuring

$
0



0
%

$
0



(100
)%

$
498Percentage of total revenues


0
%






0
%






70
%   Sales
    and marketing
      Research
    and development
  tm tm
 28




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##### Table of Contents



General
    and administrative
    tm tm
  Amortization
    of intangible assets
    Restructuring
      Interest
    income (expense), net
  % Change





% Change2005


2004 to 2005


2004


2003 to 2004


2003($ in thousands)Interest income (expense), net

$
(2,080
)


(34,767
)%

$
6



115
%

$
(40
)Percentage of total revenues


(65
)%






1
%






(6
)%     Other
    income (expense), net
  % Change





% Change2005


2004 to 2005


2004


2003 to 2004


2003($ in thousands)Other income (expense), net

$
170



(32
)%

$
249



92
%

$
3,141Percentage of total revenues


5
%






46
%






442
%     available-for-sale-securities.
 29




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##### Table of Contents



Benefit
    from income taxes
  % Change





% Change2005


2004 to 2005


2004


2003 to 2004


2003($ in thousands)Benefit from income taxes

$
(29
)


(64
)%

$
(81
)


(84
)%

$
(510
)Effective income tax rate


(0.3
)%






(1.1
)%






(11
)%   Form 10-K
  Liquidity
    and capital resources
  2005


2004


2003(In thousands)Cash, cash equivalents and
    restricted cash at December 31

$
1,284


$
952


$
2,232Working capital (deficit) at
    December 31

$
(4,194
)

$
900


$
2,254Net cash used in operating
    activities

$
(4,680
)

$
(7,583
)

$
(4,235
)     tm tm tm
 30




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##### Table of Contents



Notes


OperatingPayable


Leases


TotalYear ending December 31,2006

$
524


$
399


$
9232007






353



3532008






319



3192009






189



1892010






181



181Thereafter






482



482$
524


$
1,923


$
2,447          31




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S-1
       32




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##### Table of Contents



S-1
  No. 00-27, No. 98-5, (EITF 00-27) paid-in-capital
   33




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360-day
       34




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##### Table of Contents



No. 00-19, (EITF 00-19). EITF 00-19 EITF 00-19,
  EITF 00-19. EITF 00-27, EITF 00-27,
    Form 10-K, Form 10-K
 35




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##### Table of Contents



EITF 00-19
  INSIGNIA
    SOLUTIONS PLC
  UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
  Actual





Pro FormaDecember 31,


Pro Forma


December 31,2005


Adjustment


2005(Amounts in thousands)(Unaudited)ASSETS:Current assets:Cash and cash equivalents

$
1,216


$



$
1,216Restricted cash


68







68Accounts receivable, net of
    allowances


1,271







1,271Other receivables


81







81Tax receivable


192







192Prepaid expenses


251







251Note Receivable  Related
    Party


50







50Total current assets


3,129







3,129Property and equipment, net


87







87Intangible assets, net


2,095







2,095Goodwill


592







592Investment in affiliate










Other assets


214







214$
6,117






$
6,117LIABILITIES AND
    SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable

$
1,240






$
1,240Accrued liabilities


1,426







1,426Preferred stock liability


1,975



(1,975
)


Warrant liability


1,975



(1,975
)


Notes payable


524







524Deferred revenue


183







183Total current liabilities


7,323



(3,950
)


3,373Shareholders equity
    (deficit):Preferred shares










Ordinary shares


14,634







14,634Additional paid-in capital


66,850



1,975



68,825Ordinary share subscriptions


729







729Accumulated deficit


(82,958
)


1,975



(80,983
)Accumulated other comprehensive
    loss


(461
)






(461
)Total shareholders equity
    (deficit)


(1,206
)


3,950



2,744$
6,117


$




6,117Working capital (deficit)

$
(4,194
)

$
3,950


$
(244
)  36




---



##### Table of Contents



New
    accounting pronouncements
        05-5, (EITF 05-5). EITF 05-5 EITF 05-5 EITF 05-5
  No. 00-19 EITF 00-19,
 37




---



##### Table of Contents



Item 7A
     Quantitative
    and Qualitative Disclosures about Market Risk       38




---



##### Table of Contents



Item 8
     Financial
    Statements and Supplementary Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Document

PageConsolidated
    Balance Sheets as of December 31, 2005 and 2004


40Consolidated
    Statements of Operations for each of the three years in the
    period ended December 31, 2005


41Consolidated
    Statements of Shareholders Equity (Deficit) for each of
    the three years in the period ended December 31,
    2005


42Consolidated
    Statements of Cash Flows for each of the three years in the
    period ended December 31, 2005


43Notes to
    Consolidated Financial Statements


44Schedule II  Valuation
    and Qualifying Accounts for each of the three years in the
    period ended December 31, 2005


71Selected Quarterly
    Financial Data for the three years ended December 31,
    2005


72Report of
    Independent Registered Public Accounting Firm


73  39




---



##### Table of Contents



INSIGNIA
    SOLUTIONS PLC
  CONSOLIDATED BALANCE SHEETS
  December 31,2005


2004(Amounts in thousands, except
    share and per share data)ASSETSCurrent assets:Cash and cash equivalents

$
1,216


$
902Restricted cash


68



50Accounts receivable, net of $175
    doubtful account reserve in 2005 and zero in 2004


1,271



175Other receivables


81



241Tax receivable


192



322Prepaid expenses


251



456Note receivable from related party


50



Total current assets


3,129



2,146Property and equipment, net


87



140Intangible assets, net


2,095



Goodwill


592



Investment in affiliate






68Other assets


214



233$
6,117


$
2,587LIABILITIES AND
    SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable

$
1,240


$
241Accrued liabilities


1,426



995Subsidiary preferred stock
    liability


1,975



Warrant liability


1,975



Notes payable


524



Deferred revenue


183



10Total current liabilities


7,323



1,246Commitments and contingencies
    (Note 7)Shareholders equity
    (deficit):Preferred shares, 1 pence par
    value: 3,000,000 shares authorized; no shares issued






Ordinary shares, 1 pence par
    value: 110,000,000 shares authorized;
    42,897,776 shares and 35,722,205 shares issued and
    outstanding in 2005 and 2004, respectively


14,634



11,939Additional paid-in capital


66,850



64,459Ordinary share subscription


729



Accumulated deficit


(82,958
)


(74,596
)Accumulated other comprehensive
    loss


(461
)


(461
)Total shareholders equity
    (deficit)


(1,206
)


1,341$
6,117


$
2,587    40




---



##### Table of Contents



INSIGNIA
    SOLUTIONS PLC
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended
    December 31,2005


2004


2003(Amounts in thousands,except per share data)Net revenues:License

$
2,394


$
521


$
522Service


784



20



188Total net revenues


3,178



541



710Costs of net revenues:License


365



28



288Service


256



14



52Total costs of net revenues


621



42



340Gross profit


2,557



499



370Operating expenses:Sales and marketing


2,637



2,511



1,757Research and development


2,666



2,807



3,373General and administrative


3,664



2,579



2,676Amortization of intangible assets


71







Restructuring










498Total operating expenses


9,038



7,897



8,304Operating loss


(6,481
)


(7,398
)


(7,934
)Interest income (expense), net


(2,080
)


6



(40
)Other income (expense), net


170



249



3,141Loss before income taxes


(8,391
)


(7,143
)


(4,833
)Benefit from income taxes


(29
)


(81
)


(510
)Net loss


(8,362
)


(7,062
)


(4,323
)Accretion of dividend on
    subsidiary preferred stock


(108
)






Deemed dividend related to
    beneficial conversion feature of subsidiary preferred stock


(611
)






Net loss attributable to ordinary
    shareholders

$
(9,081
)

$
(7,062
)

$
(4,323
)Net loss per share:Basic and diluted

$
(0.22
)

$
(0.23
)

$
(0.20
)Weighted average shares and
    ordinary share equivalents:Basic and diluted


41,742



30,191



21,231    41




---



##### Table of Contents



INSIGNIA
    SOLUTIONS PLC
  CONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY (DEFICIT)
  Accumulated


TotalAdditional


Ordinary





Other


Share-Ordinary Shares


Paid-In


Share


Accumulated


Comprehensive


holdersShares


Amount


Capital


Subscription


Deficit


Loss


Equity (Deficit)(Amounts in thousands, except
    share data)Balances, December 31, 2002


20,083,599


$
6,444


$
59,901






$
(63,211
)

$
(461
)

$
2,673Shares issued under employee stock
    plans


25,673



8



1















9Shares issued upon exercise of
    warrants


2,446,677



796



45















841Warrant issue costs per
    Black-Scholes model










38















38Reclassification of mandatorily
    redeemable warrants










1,490















1,490Shares issued under private
    placement, net of issuance costs


2,613,545



863



423



575











1,861Net loss


















(4,323
)






(4,323
)Balances, December 31, 2003


25,169,494



8,111



61,898



575



(67,534
)


(461
)


2,589Shares issued under employee stock
    plans


142,079



52



24















76Shares issued upon exercise of
    warrants


470,000



172



218















390Warrant issue costs per
    Black-Scholes model










353















353Shares issued upon the exercise of
    employee stock options


602,906



220



314















534Shares issued under private
    placement, net of issuance costs


9,337,726



3,384



1,614



(575
)










4,423Reclassification of expired
    mandatorily redeemable warrants










38















38Net loss


















(7,062
)






(7,062
)Balances, December 31, 2004


35,722,205



11,939



64,459







(74,596
)


(461
)


1,341Shares issued under employee stock
    plans


45,369



17



4















21Warrant issue costs per
    Black-Scholes model










329















329Options issued to non employees










54















54Shares issued upon the exercise of
    employee stock options


245,951



92



2















94Shares issued for acquired
    business, net of issuance costs


2,969,692



1,117



892



687











2,696Shares issuable in connection with
    convertible notes payable and with consulting agreement














42











42Shares issued under private
    placements and proceeds from subsidiarys private placements


3,519,808



1,330



1,173















2,503Shares issued upon conversion of
    subsidiary stock to parent company ordinary shares


194,751



68



(68
)














Shares issued in connection with
    debt


200,000



71



5















76Beneficial conversion feature and
    accretion related to subsidiary preferred stock










719















719Deemed dividend and accretion
    related to subsidiary preferred stock










(719
)














(719
)Net loss


















(8,362
)






(8,362
)Balances, December 31, 2005


42,897,776


$
14,634


$
66,850


$
729


$
(82,958
)

$
(461
)

$
(1,206
)    42




---



##### Table of Contents



INSIGNIA
    SOLUTIONS PLC
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended
    December 31,2005


2004


2003(Amounts in thousands)Cash flows from operating
    activities:Net loss

$
(8,362
)

$
(7,062
)

$
(4,323
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization


92



104



143Amortization of intangible assets


305







Allowance for doubtful accounts


175







(50
)Gain on sale of product line






(302
)


(3,056
)Non-cash charge for warrants,
    shares and stock options


380



353



126Gain on sale of property and
    equipment


18







Equity in net loss of affiliate


68



82



Interest accretion on warrant
    liability


1,975







Interest accretion on warrant


7







Accrued interest on note payable


38







Net changes in assets and
    liabilities:Accounts receivable


(1,130
)


(125
)


931Other receivables


222



(40
)


(53
)Tax receivable


135



69



311Prepaid royalties










196Prepaid expenses


216



(46
)


163Other noncurrent assets


19



(14
)


319Accounts payable


846



(155
)


(187
)Accrued liabilities


177



(392
)


160Deferred revenue


139



(55
)


1,085Net cash used in operating
    activities


(4,680
)


(7,583
)


(4,235
)Cash flows from investing
    activities:Loan to affiliate


(50
)






Investment in affiliate






(150
)


(Increase) decrease in restricted
    cash


(18
)


(30
)


230Purchases of property and equipment


(31
)


(90
)


(89
)Proceeds from sale of product line,
    net






1,268



1,869Acquisition of Mi4e, net of cash
    acquired


107







Net cash provided by investing
    activities


8



998



2,010Cash flows from financing
    activities:Proceeds from convertible
    promissory notes


275







Proceeds from notes payable/bank
    loans


1,100







1,000Repayment of bank loans


(354
)






Proceeds from financing


1,675







Proceeds from issuance of shares,
    net of issuance costs


2,175



4,275



1,861Proceeds from exercise of warrants,
    net of issuance costs






390



841Proceeds from exercise of stock
    options and employee stock purchase plan, net


115



610



9Net cash provided by financing
    activities


4,986



5,275



3,711Net increase (decrease) in cash and
    cash equivalents


314



(1,310
)


1,486Cash and cash equivalents at
    beginning of the year


902



2,212



726Cash and cash equivalents at the
    end of the year

$
1,216


$
902


$
2,212Supplemental non-cash investing and
    financing activities:Reclassification of mandatorily
    redeemable warrants to additional paid-in capital

$



$
38


$
1,407Notes payable converted to
    subsidiary preferred stock liability


250







Other receivable issued in exchange
    for subsidiary preferred stock liability


50







Non-cash issuance of shares for
    acquired business


2,749







Non-cash issuance of Series A
    subsidiary preferred stock upon conversion of promissory notes


275







Discount on Fusion promissory note
    allocating warrant value to additional paid in capital


120







Accrual of acquisition earn-out


198







Non-cash settlement of assets and
    liabilities related to sale of product line:Change in assets






2,400



Change in liabilities






(2,904
)


     43




---



##### Table of Contents



INSIGNIA
    SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  Note 1  Summary
    of Significant Accounting Policies:
  Organization
    and business
  over-the-air tm tm tm ® tm
  tm
  Liquidity  going
    concern
       44




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Form S-1 Form S-1
  Use of
    estimates
    Principles
    of consolidation
    Financial
    instruments
      Revenue
    recognition
  (SOP 97-2), SOP 97-2
     45




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           Accounts
    receivable and allowance for doubtful accounts
      Intangible
    Assets and Goodwill
   46




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Property
    and equipment
    Impairment
    of long-lived assets
    Foreign
    currency translation
  non-U.S. operations non-U.S. operating non-U.S. currency non-U.S. denominated Non-U.S. dollar non-U.S. operations.
   47




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Foreign
    currency financial instruments
    Software
    development costs
    Research
    and development
    Stock-based
    compensation
    Year Ended
    December 31,2005


2004


2003Net loss attributable to ordinary
    shareholders-as reported

$
(9,081
)

$
(7,062
)

$
(4,323
)Less stock based compensation
    expense determined under fair value based method


(176
)


(636
)


(1,131
)Net loss attributable to ordinary
    shareholders pro forma

$
(9,257
)

$
(7,698
)

$
(5,454
)Basic and diluted net loss per
    share  as reported

$
(0.22
)

$
(0.23
)

$
(0.20
)Basic and diluted net loss per
    share  pro forma

$
(0.22
)

$
(0.25
)

$
(0.26
)  48




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended
    December 31,2005

2004

2003Stock Options:Expected volatility range

104%-277%

139%-276%

47%-264%Risk-free interest rate range

3.79%-4.43%

1.11%-4.07%

1.05%-3.16%Dividend yield

0%

0%

0%Expected life (years)

4

4

4Employee Stock Purchase
    Plan:Expected volatility range

84%

66%-198%

59%Risk-free interest rate range

2.93%

1.13%-1.25%

1.17%Dividend yield

0%

0%

0%Expected life (years)

0.5

0.5

0.5   Income
    taxes
    Concentrations
    of risk
    tm
    Comprehensive
    income (loss)
   49




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Net
    income (loss) per share
      New
    accounting pronouncements
  Black-Scholes
     50




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    05-5, (EITF 05-5). EITF 05-5 EITF 05-5 EITF 05-5
  No. 00-19 EITF 00-19,
    Note 2  Mi4e
    Acquisition:
  over-the-air
   51




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Allocation of Purchase
    Price:Tangible assets acquired

$
497Liabilities assumed


(275
)Goodwill(a)


394Customer relationships(b)


900Technology(c)


1,500Total purchase price

$
3,016     (a)
    
    Goodwill represents the excess of the purchase price over the
    fair value of the net assets acquired and liabilities assumed.(b)
    
    Customer relationships are being amortized over 10 years,
    the period of time Insignia estimates it will benefit from the
    acquired customer relationship.(c)
    
    Technology is being amortized over 5 years, the period of
    time Insignia estimates it will benefit from the technology
    acquired.        Year EndedDecember 31,2005


2004Net revenues

$
3,314


$
1,187Net loss attributable to ordinary
    shareholders

$
(9,304
)

$
(7,519
)Net loss per
    share  Basic and diluted

$
(0.22
)

$
(0.22
)  52




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Note 3  Balance
    Sheet Detail:
    December 31,2005


2004Property and equipment, net:Computers and other equipment

$
1,722


$
1,692Leasehold improvements


381



381Furniture and fixtures


79



752,182



2,148Less accumulated depreciation and
    amortization


(2,095
)


(2,008
)$
87


$
140Accrued liabilities:Accrued legal and professional
    services

$
620


$
666Accrued compensation and payroll
    taxes


459



242Accrued interest on note payable


14



Other


333



87$
1,426


$
995   Goodwill
    Intangible
    Assets
    Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountTechnology

$
1,500


$
(234
)

$
1,266Customer relationships


900



(71
)


829Intangible assets

$
2,400


$
(305
)

$
2,095    53




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ending
    December 31,2006

$
3902007


3902008


3902009


3902010


155Thereafter


380Total

$
2,095   Note 4  Stock
    Plans:
      1986 and 1996


1988 and 1995





WeightedU.K.


U.S.





AverageShare Option


Stock Option





ExerciseSchemes


Plans


Total


PriceOutstanding at December 31,
    2002


744,708



2,840,631



3,585,339


$
3.04Granted


611,400



1,687,700



2,299,100


$
0.43Exercised


(9,896
)


(10,667
)


(20,563
)

$
0.39Lapsed


(633,199
)


(705,572
)


(1,338,771
)

$
2.94Outstanding at December 31,
    2003


713,013



3,812,092



4,525,105


$
1.69Granted


229,962



1,080,038



1,310,000


$
1.23Exercised


(48,958
)


(553,948
)


(602,906
)

$
0.89Lapsed


(62,423
)


(708,702
)


(771,125
)

$
2.62Outstanding at December 31,
    2004


831,594



3,629,480



4,461,074


$
1.59Granted






1,960,000



1,960,000


$
0.49Exercised






(245,951
)


(245,951
)

$
0.37Lapsed


(94,170
)


(1,644,322
)


(1,738,492
)

$
0.99Outstanding at December 31,
    2005


737,424



3,699,207



4,436,631


$
1.39  54




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Weighted


WeightedAverage


AverageNumber


Remaining


ExerciseRange of Exercise
    Prices

Outstanding


Contractual Life


Price$0.01-$2.00


3,425,917



8.3 years


$
0.67$2.01-$4.00


575,464



4.3 years


$
2.84$4.01-$6.00


430,250



3.9 years


$
5.15$6.01-$8.00


5,000



4.0 years


$
7.224,436,631



5.7 years


$
1.39     WeightedAverageNumber


ExerciseRange of Exercise
    Prices

Exercisable


Price$0.01-$2.00


1,717,229


$
0.81$2.01-$4.00


560,523


$
2.85$4.01-$6.00


430,250


$
5.15$6.01-$8.00


5,000


$
7.222,713,002


$
1.93   December 31,2005


2004


2003Exercisable options


2,713,002



2,520,507



2,644,401Weighted average exercise price of
    exercisable options

$
1.93


$
2.09


$
2.41Weighted average fair value of
    options granted

$
0.40


$
0.89


$
0.26      55




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 5  Employee
    Benefit and Pension Plans:
    Note 6  Income
    Taxes:
    Year Ended
    December 31,2005


2004


2003Net operating loss carry forwards

$
22,032


$
18,846


$
15,998Tax credit carry forwards


452



452



402Accrued expenses, allowance and
    other temporary differences


270



109



98Net deferred income tax assets
    before valuation allowance


22,754



19,407



16,498Deferred income tax asset
    valuation allowance


(22,754
)


(19,407
)


(16,498
)Net deferred income tax asset

$



$



$
     Year Ended
    December 31,2005


2004


2003United States

$
(5,864
)

$
(4,288
)

$
(3,798
)United Kingdom and other countries


(2,527
)


(2,855
)


(1,035
)$
(8,391
)

$
(7,143
)

$
(4,833
)     Year Ended
    December 31,2005


2004


2003Current:U.S. federal

$



$



$
U.S. state and local






(182
)


2United Kingdom and other countries


(29
)


101



(512
)Total provision (benefit)

$
(29
)

$
(81
)

$
(510
)  56




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended
    December 31,2005


2004


2003U.S. federal statutory rate


(34.0
)%


(34.0
)%


(34.0
)%State and local taxes, net of
    U.S. federal benefit






(2.5
)


Foreign income taxes at other than
    U.S. rate


(0.3
)


1.4



(10.6
)Valuation allowance for net
    deferred income tax assets


34.0



34.0



34.0Effective tax rate


(0.3
)%


(1.1
)%


(10.6
)%           Form 10-K
   57




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 7  Commitments
    and Contingencies:
  Commitments
      OperatingYear Ending
    December 31,

Leases2006

$
3992007


3532008


3192009


1892010


181Thereafter


482Total minimum lease payments

$
1,923     Guarantee
    Agreements
          Change
    of Control Severance Arrangements
   58




---



##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Contingencies
    Note 8  Segment
    Reporting:
    over-the-air tm tm tm
    Year Ended
    December 31,2005


2004


2003IDMS and OMC

$
3,178


$
450


$
20Jeode






91



670SoftWindows










20Total

$
3,178


$
541


$
710     Year Ended
    December 31,2005


2004


2003U.S.

$
420


$
150


$
410Asia Pacific


691



300



59EMEA


2,067



91



241$
3,178


$
541


$
710Percentage of total revenue:U.S.


13
%


28
%


58
%Asia Pacific


22
%


55
%


8
%EMEA


65
%


17
%


34
%100
%


100
%


100
%    59




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Note 9  Equity
    Transactions and Warrants:
  Recent
    Sales of Securities
             60




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Form S-3
        S-1
   61




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  S-1
  Black-Scholes
   62




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  S-1
    No. 00-27, No. 98-5, (EITF 00-27)based paid-in-capital paid-in-capital
  360-day
   63




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         64




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 00-19, (EITF 00-19). EITF 00-19 EITF 00-19,
  EITF 00-19. EITF 00-27, EITF 00-27,
  EITF 00-19
    Share
    Changes
   65




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Warrants
    Warrants


WarrantsOutstanding


Outstandingand Exercisable


Exercise PriceBalance, December 31, 2002


4,191,334



par value-$6.00
(1)Granted






Exercised


(2,446,677
)


$0.345-$0.8371Lapsed


(1,005,000
)


$6.00
(1)Balance, December 31, 2003


739,657



$4.77-$6.00
(1)Granted


1,880,911



$0.92-$1.09Exercised


(470,000
)


$6.00
(1)Lapsed


(19,657
)


$4.77
(1)Balance, December 31, 2004


2,130,911



$0.92-$5.00Granted


18,199,875



$0.35-$1.11Exercised






Lapsed


(225,000
)


5.00Balance, December 31, 2005


20,105,786



$0.35-$5.00
(2)     (1)
    
    The $6.00 warrants are the lesser of $6.00 or 90% of
    10-day
    average market value.(2)
    
    The exercise price of certain warrants have been amended to a
    price below $0.35. See
    Note 15  Subsequent Events
    below.  Note 10  Sale
    of Jeode product line and Java Virtual Machine Assets:
         66




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Note 11  Lines
    of Credit and Notes Payable:
  EITF 00-19
  360-day
   67




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Note 12  Related
    Party Transactions:
         68




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      360-day
    Note 13  Joint
    Venture Agreement:
    Note 14  Restructuring:
    Note 15  Subsequent
    Events:
     69




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##### Table of Contents



INSIGNIA SOLUTIONS PLC
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              70




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##### Table of Contents



SCHEDULE II



Valuation and Qualifying Accounts Balance at








Balance atBeginning of





Deductions


End ofPeriod


Additions


(Write-Offs)


Period(In thousands)Allowance for doubtful accounts:Year ended December 31, 2005

$



$
175


$



$
175Year ended December 31, 2004

$



$



$



$
Year ended December 31, 2003

$
50


$



$
(50
)

$
  71




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##### Table of Contents



UNAUDITED
    SELECTED QUARTERLY FINANCIAL DATA      Quarter EndedDecember 31


September 30


June 30


March 31(Unaudited, in thousands, except
    per share amounts)2005:Revenues

$
1,180


$
802


$
734


$
462Gross profit


1,009



535



565



448Net loss


(3,486
)


(1,387
)


(1,600
)

$
(1,889
)Net loss attributable to ordinary
    shareholders


(3,540
)


(1,637
)


(2,015
)


(1,889
)Basic and diluted net loss per
    share

$
(0.08
)

$
(0.04
)

$
(0.05
)

$
(0.05
)2004:Revenues

$
8


$
107


$
107


$
319Gross profit (loss)


(6
)


107



102



296Net income (loss)


(2,119
)


(1,729
)


(1,304
)


(1,910
)Basic and diluted net income
    (loss) per share

$
(0.06
)

$
(0.06
)

$
(0.04
)

$
(0.07
)2003:Revenues

$
130


$
201


$



$
379Gross profit


63



131



(36
)


212Net loss


(1,741
)


(1,656
)


2,273



(3,199
)Basic and diluted net income
    (loss) per share

$
(0.07
)

$
(0.08
)

$
0.11


$
(0.16
)  72




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             
    73




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##### Table of Contents



Item 9  Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   Item 9A  Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures.
  Rule 13a-15(e)
  Form 10-K
    Internal
    Control Over Financial
    Reporting.
  Changes in internal control over financial
    reporting. and/or
 Item 9B  Other
    Information  Form 8-K.
 74




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##### Table of Contents



PART III Item 10  Directors
    and Executive Officers of the Registrant  Executive
    Officers and Directors of the Registrant
    Name

Age

PositionNicholas, Viscount Bearsted*(1)(2)


55


DirectorDavid G. Frodsham(2)


49


DirectorRichard M. Noling


57


DirectorVincent S. Pino(1)(2)


57


DirectorMark E. McMillan


42


Chief Executive Officer, President
    and a DirectorJohn Davis(3)


50


Chief Financial Officer and Vice
    President of Finance     *
    
    Chairman of the Board of Directors(1)
    
    Member of the Compensation Committee.(2)
    
    Member of the Audit Committee.(3)
    
    John Davis resigned May 31, 2006  Nicholas, Viscount Bearsted
  David G. Frodsham
  Richard M. Noling
  Vincent S. Pino
  Mark E. McMillan
 75




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##### Table of Contents



John Davis
  Audit
    Committee and Audit Committee Financial Expert
      Section 16(a)
    Beneficial Ownership Reporting Compliance
          Code of
    Ethics
  Form 10-K.
 76




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##### Table of Contents



Item 11  Executive
    Compensation    Summary
    Compensation Table
  Long Term CompensationSecuritiesAnnual Compensation


UnderlyingOther Annual


Options


All OtherName and Principal
    Positions

Year


Salary ($)


Bonus ($)(1)


Compensation ($)


Granted (#)


Compensation ($)Mark E. McMillan


2005



230,000



37,748







100,000



1,080
(2)Chief Executive Officer


2004



230,000



60,248











1,080
(2)and President


2003



230,000



9,607







500,000



1,080
(2)John Davis


2005



12,179











400,000



Chief Financial Officer,
    Senior Vice President and Secretary(6)Priyen Doshi


2005



171,975



23,648







100,000



1,080
(2)Vice President,


2004



140,000



21,723







12,000



1,080
(2)Product Marketing(3)


2003



140,000



20,000







40,000



1,080
(2)Ian Anderson


2005



127,417















17,128
(5)Vice President,


2004



125,573











44,393



3,531
(5)Engineering(4)


2003



31,500











50,000




(5)     (1)
    
    Bonuses paid to the executive officers are based on a target
    bonus set for each officer each quarter, adjusted by
    Insignias operating results over plan and the executive
    officers performance against quarterly qualitative goals.
    All executive officer bonuses are at the discretion of the
    Compensation Committee of the Board.(2)
    
    Represents Insignia contributions to defined contribution
    employee benefit plans.(3)
    
    Mr. Doshi resigned from Insignia as of February 10,
    2006.(4)
    
    Mr. Anderson joined Insignia in October 2003 and resigned
    on December 3, 2005.(5)
    
    Mr. Anderson was loaned a Company auto from October 2003
    through October 2004. From October 2004 through his resignation
    in December 2005, Mr. Anderson received an auto allowance.
    The auto allowance totaled $17,128 for the year ended
    December 31, 2005 and $3,531 for the year ended
    December 31, 2004.(6)
    
    Mr. Davis joined Insignia on December 8, 2005 and
    resigned on May 31, 2006. 77




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##### Table of Contents



Option
    Grants in 2005
    Percent of








Potential RealizableNumber of


Total








Value at AssumedSecurities


Options








Annual Rates of ShareUnderlying


Granted to


Exercise





Price Appreciation forOptions


Employees


Price


Expiration


Option Term(1)Name

Granted (#)


in 2005


($/Sh)


Date


5% ($)


10% ($)Mark E. McMillian


100,000
(2)


5.1
%


0.75



2/10/2015


$
47,167


$
119,531John Davis(4)


400,000
(3)


20.4
%


0.39



12/8/2015


$
98,108


$
248,624Priyen Doshi(4)


100,000
(2)


5.1
%


0.41



10/20/2015


$
25,785


$
65,343Ian Anderson






















     (1)
    
    The 5% and 10% assumed annual compound rates of share price
    appreciation are mandated by rules of the SEC and do not
    represent Insignias estimate or projection of future
    ordinary share or ADS prices.(2)
    
    These incentive options were granted pursuant to Insignias
    1995 Incentive Stock Option Plan for U.S. Employees. These
    options vest and become exercisable at the rate of 2.0833% of
    the shares for each full month that the optionee renders service
    to Insignia. The option exercise price is equal to the fair
    market value of Insignias ordinary shares on the date of
    grant and the options expire ten years from the date of grant,
    subject to earlier termination upon termination of employment.(3)
    
    These incentive options were granted pursuant to Insignias
    1995 Incentive Stock Option Plan for U.S. Employees. These
    options vest and become exercisable as to 25% of the shares on
    the first anniversary of the date of the grant and thereafter at
    the rate of 2.0833% of the shares for each full month that the
    optionee renders service to Insignia. The option exercise price
    is equal to the fair market value of Insignias ordinary
    shares on the date of grant and the options expire ten years
    from the date of grant, subject to earlier termination upon
    termination of employment.(4)
    
    Mr. Davis resigned on May 31, 2006. Mr. Doshi
    resigned on February 10, 2006.  Aggregated
    Option Exercises in 2005 and Year-End Option Values
  in-the-money
  Number of Securities


Value of UnexercisedShares





Underlying Unexercised


In-the-MoneyAcquired on


Value


Options at Year-End
    (#)


Options at Year-End
    ($)(2)Name

Exercise (#)


Realized ($)(1)


Exercisable


Unexercisable


Exercisable


UnexercisableMark E. McMillan










805,333



204,167







Priyen Doshi(3)










43,250



104,167







Ian Anderson(4)










61,685



32,708







     (1)
    
    Value Realized represents the fair market value of
    the shares underlying the options on the date of exercise less
    the aggregate exercise price of the options. 78




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##### Table of Contents



(2)
    
    For purposes of the table, all amounts in pounds sterling were
    converted to U.S. dollars using $1.89 per pound
    sterling, the exchange rate in effect as of December 31,
    2005.(3)
    
    Mr. Doshi resigned from Insignia as of February 10,
    2006.(4)
    
    Mr. Anderson resigned from Insignia on December 3,
    2005.  Employment
    Contracts, Termination of Employment and
    Change-in-Control
    Arrangements
        Director
    Compensation
      Board
    Composition
   79




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##### Table of Contents



Board
    Meetings and Committees
        over-the-counter
    Communications
    with Directors
  94538-3115, e-mail
    Compensation
    Committee Interlocks and Insider Participation
   80




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##### Table of Contents



Item 12 
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters      Amount and Nature ofName of Beneficial
    Owner

Beneficial Ownership


Percent of ClassFusion Capital Fund II LLC(1)


4,178,805



9.7
%222 Merchandise Mart Plaza,
    Suite 9-112
    Chicago, IL 60654Anders Furehed(2)


1,484,846



3.5
%Nicholas, Viscount Bearsted(3)


846,696



2.0
%Mark E. McMillan(4)


885,637



2.0
%Vincent S. Pino(5)


522,665



1.2
%Richard M. Noling(6)


671,505



1.5
%David G. Frodsham(7)


148,650



*Priyen Doshi(8)


43,250



*Ian Anderson(9)


61,685



*All current directors and
    executive officers as group (6 persons)(10)


4,559,999



10.2
%     *
    
    Less than 1%(1)
    
    Does not include 2,397,031 ADSs issuable on exchange of
    preferred stock of Insignia Solutions Inc. (which number
    reflects accruable dividends at a rate of 15% per year
    compounded annually until June 30, 2007, at which time no
    further dividends will accrue) that was issued at the first
    closing of the private placement that took place on
    June 30, 2005 and a warrant issued at such closing to
    purchase 1,812,500 ADSs at an exercise price equal to the
    greater of the U.S. Dollar equivalent of 20.5 U.K. pence or
    U.S. $0.50 per share calculated upon exercise of such
    warrant. Also does not include a warrant issued in November
    2005, as amended and reissued in March 2006, to purchase 562,500
    ADSs at an exercise price equal to $0.35 per share, which
    was issued to Fusion Capital in connection with a loan by Fusion
    Capital to Insignia in the aggregate amount of $450,000. Also
    excludes up to $12 million of ADSs that may from time to
    time be sold and issued to Fusion Capital under the 2005 Fusion
    Capital securities subscription agreement and two warrants to
    purchase an aggregate of 4,000,000 ADSs issued to Fusion Capital
    under the 2005 Fusion Capital securities subscription agreement.
    In March 2006, Fusion Capital exercised such warrants with
    respect to 2,720,000 ADSs. Fusion Capital exercised a warrant to
    purchase 2,000,000 ADSs at $0.356 per share and a warrant
    to purchase 720,000 ADSs at $0.40 per share. Fusion
    Capital may not purchase shares under the 2005 Fusion Capital
    securities subscription agreement if Fusion Capital, together
    with its affiliates, would beneficially own more than 9.9% of
    our shares outstanding at the time of the purchase by Fusion
    Capital. If the 9.9% limitation is ever reached, we have the
    option to increase the limit above 9.9% upon twenty
    (20) trading days notice to Fusion Capital. Fusion Capital
    has the right at any time to sell any shares purchased under the
    2005 Fusion Capital 81




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##### Table of Contents



securities subscription agreement, which would allow it to avoid
    the 9.9% limitation. Steven G. Martin and Joshua B. Scheinfeld,
    the principals of Fusion Capital, are deemed to be beneficial
    owners of all of the shares owned by Fusion Capital.
    Messrs. Martin and Scheinfeld have shared voting and
    disposition power over the shares held by Fusion Capital.(2)
    
    Represents 1,484,846 shares issued to Mr. Furehed in
    connection with our acquisition of mi4e on March 16, 2005.(3)
    
    Includes 209,750 shares subject to options that are
    exercisable within 60 days after December 31, 2005.(4)
    
    Includes 805,333 shares subject to options that are
    exercisable within 60 days after December 31, 2005 and
    a warrant issued at the closing of the private placement that
    took place on October 18, 2004 to purchase 13,021 ADSs
    at an exercise price of $1.06 per share.(5)
    
    Includes 104,126 shares subject to options that are
    exercisable within 60 days after December 31, 2005.(6)
    
    Includes 659,517 shares subject to options that are
    exercisable within 60 days after December 31, 2005.(7)
    
    Includes 107,250 shares subject to options that are
    exercisable within 60 days after December 31, 2005.(8)
    
    Represents 43,250 shares subject to options that are
    exercisable within 60 days after December 31, 2005.
    Mr. Doshi resigned from Insignia as of February 10,
    2006.(9)
    
    Represents 61,685 shares subject to options that are
    exercisable within 60 days after December 31, 2005.
    Mr. Anderson resigned from Insignia as of December 3,
    2005.(10)
    
    Includes 1,885,976 shares subject to options exercisable
    within 60 days after December 31, 2005.  Equity
    Compensation Plan Information
    (c)(a)





Number of SecuritiesNumber of Securities


(b)


Remaining Availableto be Issued


Weighted-Average


for Issuance UnderUpon Exercise of


Exercise Price of


Equity Compensation PlansOutstanding Options,


Outstanding Options,


(Excluding SecuritiesPlan Category

Warrants and Rights


Warrants and Rights


Reflected in
    Column(a))Equity compensation plans approved
    by security holders


24,542,417


$
0.57



1,840,069Equity compensation plans not
    approved by security holders










Total


24,542,417


$
0.57



1,840,069  Item 13  Certain
    Relationships and Related Transactions       82




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##### Table of Contents



360-day
   Item 14  Principal
    Accountant Fees and Services    Total


Audit Fees


Tax Fees


All Other Fees2005BPM

$
331,805


$
311,805


$
10,000


$
10,000MacIntyre Hudson


64,143



51,009



13,134



2004BPM

$
179,993


$
125,955


$
43,647


$
10,391MacIntyre Hudson


17,597



2,408



15,189



   Form 10-Q, Form S-1
   83




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##### Table of Contents



PART IV Item 15  Exhibits
    and Financial Statement Schedules    Financial Statements and Reports
  Form 10-K
  Financial Statements Schedule
  Form 10-K
  Form 10-K.
  Exhibits
   84




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##### Table of Contents



SIGNATURES      By:
    /s/  MARK
    E. MCMILLAN  Mark E. McMillan
  Chief Executive Officer
  POWER OF
    ATTORNEY
  attorney-in-fact Form 10-K attorney-in-fact attorney-in-fact
    Signature

Capacity

Date/s/  MARK
    E. MCMILLANMark
    E. McMillan

Chief Executive Officer, President
    and
    a Director (Principal Executive Officer, Director, Principal
    Financial Officer and Principal Accounting Officer)

July 6, 2006Additional Directors:/s/  NICHOLAS,
    VISCOUNT BEARSTEDNicholas,
    Viscount Bearsted

Director

July 6, 2006/s/  VINCENT
    S. PINOVincent
    S. Pino

Director

July 6, 2006/s/  DAVID
    G. FRODSHAMDavid
    G. Frodsham

Director

July 6, 2006/s/  RICHARD
    M. NOLINGRichard
    M. Noling

Director

July 6, 2006  85




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##### Table of Contents



INDEX TO
    EXHIBITS  ExhibitNumber

Exhibit Title3
.02(1)

Registrants Articles of
    Association.3
.04(1)

Registrants Memorandum of
    Association.4
.01(1)

Form of Specimen Certificate for
    Registrants Ordinary Shares.4
.02(2)

Deposit Agreement between
    Registrant and The Bank of New York.4
.03(2)

Form of American Depositary
    Receipt (included in Exhibit 4.02).4
.04(3)

American Depositary
    Shares Purchase Agreement dated January 5, 2004.4
.05(3)

Registration Rights Agreement
    dated January 5, 2004.4
.06(3)

Form of Warrant to Purchase
    American Depositary Shares dated January 5, 2004 and issued
    to the purchasers of American Depositary Shares.4
.07(3)

Form of Warrant to Purchase
    American Depositary Shares dated January 5, 2004 and issued
    to the principals of Nash Fitzwilliams, Ltd., as placement agent.4
.08

Warrant dated February 10,
    2005 (reissued on March 15, 2006) and issued to Fusion
    Capital Fund II, LLC.4
.09

Warrant dated November 4,
    2005 (reissued on March 15, 2006) and issued to Fusion
    Capital Fund II, LLC.4
.10

Form of Warrant to Purchase
    American Depositary Shares dated July 18, 2005, issued to
    certain investors pursuant to the American Depositary
    Shares Purchase Agreement between the Registrant and the
    Purchasers, as defined therein, dated October 18, 2004.10
.01(1)***

Registrants 1986 Executive
    Share Option Scheme, as amended, and related documents.10
.02(1)***

Registrants 1988
    U.S. Stock Option Plan, as amended, and related documents.10
.03(5)***

Registrants 1995 Incentive
    Stock Option Plan for U.S. Employees and related documents,
    as amended.10
.05(1)***

Insignia Solutions Inc. 401(k)
    Plan.10
.06(1)***

Registrants Small
    Self-Administered Pension Plan Definitive Deed and Rules.10
.14(1)

Form of Indemnification Agreement
    entered into by Registrant with each of its directors and
    executive officers.10
.28(6)***

Registrants U.K. Employee
    Share Option Scheme 1996, as amended.10
.34(3)***

Consulting Agreement effective
    April 1, 1997 between Registrant and Nicholas, Viscount
    Bearsted.10
.38(7)

Lease Agreement between Insignia
    Solutions, Inc. and Lincoln-Whitehall Pacific, LLC, dated
    December 22, 1997.10
.42(5)***

Registrants 1995 Employee
    Share Purchase Plan, as amended.10
.44(8)

Lease agreement between Registrant
    and Comland Industrial and Commercial Properties Limited dated
    August 12, 1998 for the Apollo House premises and the
    Saturn House premises.10
.62(9)

Warrant Agreement, dated as of
    November 24, 2000, between Registrant and
    Jefferies & Company, Inc.10
.63(10)

Form of ADSs Purchase Warrant
    issued November 24, 2000.10
.64(11)

ADSs Purchase Warrant issued to
    Jefferies & Company, Inc., dated November 24, 2000.10
.67(12)

Warrant Agreement, dated as of
    February 12, 2001, between Registrant and
    Jefferies & Company, Inc.10
.68(13)

Form of ADSs Purchase Warrant
    issued February 12, 2001.10
.69(14)

ADSs Purchase Warrant issued to
    Jefferies & Company, Inc., dated February 12, 2001.10
.85(15)**

Warrant Agreement between the
    Registrant and International Business Machines Corporation dated
    November 24, 2003. 86




---



##### Table of Contents



ExhibitNumber

Exhibit Title10
.87(16)

American Depositary
    Shares Purchase Agreement between the Registrant and the
    Purchasers, as defined therein, dated October 18, 2004 (the
    October 2004 ADS Purchase Agreement).10
.88(16)

Form of Warrant issued to
    Purchasers, as defined in the October 2004 ADS Purchase
    Agreement.10
.89(16)

Registration Rights Agreement
    between the Registrant and the Purchasers, as defined in the
    October 2004 ADS Purchase Agreement, dated October 18, 2004.10
.90(17)

Stock Purchase and Sale Agreement
    dated February 9, 2005 between, among others, the
    Registrant, Kenora Ltd and the Sellers (as defined therein).10
.91(18)

Securities Subscription Agreement
    by and between the Registrant and Fusion Capital Fund II,
    LLC dated February 10, 2005.10
.92(18)

Registration Rights Agreement by
    and between the Registrant and Fusion Capital Fund II, LLC
    dated February 10, 2005.10
.93(18)

Warrant, dated as of
    February 10, 2005, by and between the Registrant and Fusion
    Capital Fund II, LLC.10
.94(18)

Warrant, dated as of
    February 10, 2005, by and between the Registrant and Fusion
    Capital Fund II, LLC.10
.96(19)

Termination and Waiver Agreement
    dated June 30, 2004 between the Registrant and Esmertec A.G.10
.97(20)

Registration Rights Agreement,
    dated March 16, 2005, between the Registrant, Noel Mulkeen
    and Anders Furehed.10
.98(21)

Agreement, dated May 21,
    2005, amending the Securities Subscription Agreement by and
    between the Registrant and Fusion Capital Fund II, LLC
    dated February 10, 2005 and related warrants.10
.99(22)

Form of Securities Subscription
    Agreement, dated as of June 30, 2005, by and among the
    Registrant, Insignia Solutions Inc. and the investors in the
    closings of the private placement that took place on
    June 30, 2005 and July 5, 2005 (the June/July
    2005 Private Placement).10
.100(23)

Form of Warrant, dated as of
    June 30, 2005, issued by the Registrant to each of the
    investors in the June/July 2005 Private Placement.10
.101(24)

Form of Registration Rights
    Agreement, dated as of June 30, 2005, by and between the
    Registrant and each of the investors in the June/July 2005
    Private Placement.10
.102(25)

Agreement, dated June 30,
    2005, amending the Securities Subscription Agreement by and
    between the Registrant and Fusion Capital Fund II, LLC
    dated February 10, 2005.10
.103(26)

Agreement, dated August 31,
    2005, amending the Securities Subscription Agreement by and
    between the Registrant and Fusion Capital Fund II, LLC
    dated February 10, 2005.10
.104(31)***

Employment Offer Letter between
    the Registrant and Richard Noling dated September 14, 2005.10
.105(31)

Loan and Security Agreement
    between the Registrant and Silicon Valley Bank dated
    October 3, 2005.10
.106(27)***

Employment Offer Letter between
    the Registrant and John Davis dated November 21, 2005.10
.107(28)

Securities Subscription Agreement,
    dated as of December 29, 2005, by and among the Registrant,
    Insignia Solutions Inc. and the investors in the private
    placement that took place on December 29, 2005 (the
    December 2005 Private Placement).10
.108(29)

Form of Warrant, dated as of
    December 29, 2005, issued by the Registrant to each of the
    investors in the December 2005 Private Placement.10
.109(30)

Registration Rights Agreement,
    dated as of December 29, 2005, by and between the
    Registrant and each of the investors in the December 2005
    Private Placement.14
.01

Code of Ethics.21
.01

Subsidiaries of the Registrant.23
.01

Consent of Burr, Pilger &
    Mayer LLP, Independent Registered Public Accounting Firm.24
.01

Power of Attorney (included on
    signature page). 87




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##### Table of Contents



ExhibitNumber

Exhibit Title31
.01

Certification of Principal
    Executive Officer and Principal Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.01*

Certification of Principal
    Executive Officer and Principal Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.99
.01

Press release dated
    November 10, 2005.     
    
    Filed or furnished herewith.*
    
    This exhibit is being furnished, rather than filed, as shall not
    be deemed to be incorporated by reference into any filing of the
    Registrant, in accordance with Item 601 of
    Regulation S-K.**
    
    Confidential treatment has been granted with respect to certain
    portions of this agreement. Such portions were omitted from this
    filing and filed separately with the Securities and Exchange
    Commission.***
    
    This exhibit is a management contract or compensatory plan or
    arrangement.(1)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Registration Statement on
    Form F-1
    (File
    No. 33-98230)
    declared effective by the Commission on November 13, 1995.(2)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 1995.(3)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Registration Statement on
    Form S-3
    (File
    No. 333-112607)
    filed on February 9, 2004.(4)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 1997.(5)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2004.(6)
    
    Incorporated by reference to Exhibit 4.05 from
    Registrants Registration Statement on
    Form S-8
    (File
    No. 333-51760)
    filed on December 13, 2000.(7)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 1998.(8)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 1998.(9)
    
    Incorporated by reference to Exhibit 10.53 from
    Registrants Current Report on
    Form 8-K
    filed on November 29, 2000.(10)
    
    Incorporated by reference to Exhibit 4.11 from
    Registrants Current Report on
    Form 8-K
    filed on November 29, 2000.(11)
    
    Incorporated by reference to Exhibit 4.12 from
    Registrants Current Report on
    Form 8-K
    filed on November 29, 2000.(12)
    
    Incorporated by reference to Exhibit 10.55 from
    Registrants Current Report on
    Form 8-K
    filed on February 15, 2001.(13)
    
    Incorporated by reference to Exhibit 4.13 from
    Registrants Current Report on
    Form 8-K
    filed on February 15, 2001.(14)
    
    Incorporated by reference to Exhibit 4.14 from
    Registrants Current Report on
    Form 8-K
    filed on February 15, 2001.(15)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2003.(16)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Current Report on
    Form 8-K
    filed on October 22, 2004.(17)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Current Report on
    Form 8-K
    filed on February 10, 2005 (Items 1.01 and 9.01). 88




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##### Table of Contents



(18)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Current Report on
    Form 8-K
    filed on February 10, 2005 (Items 1.01, 1.02 and 9.01).(19)
    
    Incorporated by reference to Exhibit 10.87 from
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2004.(20)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Current Report on
    Form 8-K
    filed on March 22, 2005, as amended on July 1, 2005.(21)
    
    Incorporated by reference to Exhibit 10.97 from
    Registrants Current Report on
    Form 8-K
    filed on May 20, 2005.(22)
    
    Incorporated by reference to Exhibit 10.01 from
    Registrants Current Report on
    Form 8-K
    filed on July 7, 2005.(23)
    
    Incorporated by reference to Exhibit 10.02 from
    Registrants Current Report on
    Form 8-K
    filed on July 7, 2005.(24)
    
    Incorporated by reference to Exhibit 10.03 from
    Registrants Current Report on
    Form 8-K
    filed on July 7, 2005.(25)
    
    Incorporated by reference to Exhibit 10.04 from
    Registrants Current Report on
    Form 8-K
    filed on July 7, 2005.(26)
    
    Incorporated by reference to Exhibit 10.01 from
    Registrants Current Report on
    Form 8-K
    filed on September 7, 2005.(27)
    
    Incorporated by reference to Exhibit 10.01 from
    Registrants Current Report on
    Form 8-K
    filed on December 12, 2005.(28)
    
    Incorporated by reference to Exhibit 10.01 from
    Registrants Current Report on
    Form 8-K
    filed on January 4, 2006.(29)
    
    Incorporated by reference to Exhibit 10.02 from
    Registrants Current Report on
    Form 8-K
    filed on January 4, 2006.(30)
    
    Incorporated by reference to Exhibit 10.03 from
    Registrants Current Report on
    Form 8-K
    filed on January 4, 2006.(31)
    
    Incorporated by reference to the exhibit of the same number from
    Registrants Registration Statement on
    Form S-1
    filed on February 14, 2006. 89