----

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|   x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2009. |
|----------|---------------------------------------------------------------------------------------------------------------------------------|

|   o | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|----------|------------------------------------------------------------------------------------|

| Delaware(State or other Jurisdiction ofIncorporation or Organization) | 77-0312442(I.R.S. Employer Number) |
|-----------------------------------------------------------------------|------------------------------------|

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

----

----

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GLOWPOINT

|                                                                                                                |   | PAGE   |
|---------------------------------------------------------------------------------------------------------------------|--------|--------|
| PART I – FINANCIAL INFORMATION                                                                                |   |   |
|                                                                                                                |   |   |
| Item 1. Financial Statements                                                                                        |   |   |
|                                                                                                                |   |   |
| Condensed Consolidated Balance Sheets at June 30, 2009 (unaudited) and December 31, 2008*                           |   | 1      |
|                                                                                                                |   |   |
| Unaudited Condensed Consolidated Statements of Operations for the six and three months ended June 30, 2009 and 2008 |   | 2      |
|                                                                                                                |   |   |
| Unaudited Condensed Consolidated Statements of Stockholders’ Deficit for the six months ended June 30, 2009   |   | 3      |
|                                                                                                                |   |   |
| Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008           |   | 4      |
|                                                                                                                |   |   |
| Notes to Condensed Consolidated Financial Statements                                                                |   | 5      |
|                                                                                                                |   |   |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                 |   | 25     |
|                                                                                                                |   |   |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                  |   | 36     |
|                                                                                                                |   |   |
| Item 4. Controls and Procedures                                                                                     |   | 37     |
|                                                                                                                |   |   |
| PART II – OTHER INFORMATION                                                                                   |   |   |
|                                                                                                                |   |   |
| Item 1. Legal Proceedings                                                                                           |   | 38     |
|                                                                                                                |   |   |
| Item 1A. Risk Factors                                                                                               |   | 38     |
|                                                                                                                |   |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                 |   | 38     |
|                                                                                                                |   |   |
| Item 3. Defaults upon Senior Securities                                                                             |   | 38     |
|                                                                                                                |   |   |
| Item 4. Submission of Matters to a Vote of Security Holders                                                         |   | 38     |
|                                                                                                                |   |   |
| Item 5. Other Information                                                                                           |   | 38     |
|                                                                                                                |   |   |
| Item 6. Exhibits                                                                                                    |   | 38     |
|                                                                                                                |   |   |
| Signatures                                                                                                          |   | 39     |
|                                                                                                                |   |   |
| Certifications                                                                                                      |   | 40     |
|                                                                                                                |   |   |

| * | The Condensed Consolidated Balance Sheet at December 31, 2008 has been derived from the audited consolidated financial statements filed as an exhibit to our Report on Form 10-K on March 31, 2009. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

BALANCE 

|                                                                                                                                                                                                                                                                                                           |   | June 30,2009 |     |   | December 31, 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|----------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                                                         |   | (Unaudited)  |     |   |              |   |
| Current assets:                                                                                                                                                                                                                                                                                                |   |         |     |   |              |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                      |   | $            | 925      |   |              | $      | 1,227 |   |
| Accounts receivable, net of allowance for doubtful accounts of $255 and $301, respectively                                                                                                                                                                                                                     |   |         | 3,477    |   |              |   | 3,090 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                                                                                                      |   |         | 414      |   |              |   | 294 |   |
| Total current assets                                                                                                                                                                                                                                                                                           |   |         | 4,816    |   |              |   | 4,611 |   |
| Property and equipment, net                                                                                                                                                                                                                                                                                    |   |         | 2,633    |   |              |   | 2,533 |   |
| Other assets                                                                                                                                                                                                                                                                                                   |   |         | 31       |   |              |   | 33 |   |
| Total assets                                                                                                                                                                                                                                                                                                   |   | $            | 7,480    |   |              | $      | 7,177 |   |
|                                                                                                                                                                                                                                                                                                           |   |         |     |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                                                                                                                    |   |         |     |   |              |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                                           |   |         |     |   |              |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                                                               |   | $            | 2,809    |   |              | $      | 2,367 |   |
| Accrued expenses                                                                                                                                                                                                                                                                                               |   |         | 1,041    |   |              |   | 842 |   |
| Accrued sales taxes and regulatory fees                                                                                                                                                                                                                                                                        |   |         | 4,307    |   |              |   | 4,535 |   |
| Customer deposits                                                                                                                                                                                                                                                                                              |   |         | 526      |   |              |   | 606 |   |
| Deferred revenue                                                                                                                                                                                                                                                                                               |   |         | 264      |   |              |   | 325 |   |
| Current portion of capital lease                                                                                                                                                                                                                                                                               |   |         | 157      |   |              |   | 161 |   |
| Total current liabilities                                                                                                                                                                                                                                                                                      |   |         | 9,104    |   |              |   | 8,836 |   |
| Long term liabilities:                                                                                                                                                                                                                                                                                         |   |         |     |   |              |   |   |   |
| Derivative financial instruments                                                                                                                                                                                                                                                                               |   |         | 3,594    |   |              |   | — |   |
| Senior Secured Notes, net of discount of $240                                                                                                                                                                                                                                                                  |   |         | —  |   |              |   | 1,482 |   |
| Capital lease, less current portion                                                                                                                                                                                                                                                                            |   |         | —  |   |              |   | 72 |   |
| Total long term liabilities                                                                                                                                                                                                                                                                                    |   |         | 3,594    |   |              |   | 1,554 |   |
| Total liabilities                                                                                                                                                                                                                                                                                              |   |         | 12,698   |   |              |   | 10,390 |   |
|                                                                                                                                                                                                                                                                                                           |   |         |     |   |              |   |   |   |
| Commitments and contingencies                                                                                                                                                                                                                                                                                  |   |         |     |   |              |   |   |   |
|                                                                                                                                                                                                                                                                                                           |   |         |     |   |              |   |   |   |
| Stockholders’ deficit:                                                                                                                                                                                                                                                                                   |   |         |     |   |              |   |   |   |
| Preferred stock, $.0001 par value 7,500 shares authorized and convertible; and 4,509 and 3,790 shares issued and outstanding recorded at fair value, respectively (liquidation value of $33,815 and $28,423, respectively) (see Note 12 for information related to Insider Purchasers – related parties) |   |         | 16,210   |   |              |   | 11,574 |   |
| Common stock, $.0001 par value;150,000,000 shares authorized; 49,149,954 and 48,374,954 shares issued; 47,585,063 and 46,810,063 shares outstanding, respectively                                                                                                                                              |   |         | 5        |   |              |   | 5 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                                     |   |         | 143,887  |   |              |   | 172,000 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                                            |   |         | (163,937 | )      |              |   | (185,409 | ) |
|                                                                                                                                                                                                                                                                                                           |   |         | (3,835   | )      |              |   | (1,830 | ) |
| Less: Treasury stock, 1,564,891 shares at cost                                                                                                                                                                                                                                                                 |   |         | (1,383   | )      |              |   | (1,383 | ) |
| Total stockholders’ deficit                                                                                                                                                                                                                                                                              |   |         | (5,218   | )      |              |   | (3,213 | ) |
| Total liabilities and stockholders’ deficit                                                                                                                                                                                                                                                              |   | $            | 7,480    |   |              | $      | 7,177 |   |
|                                                                                                                                                                                                                                                                                                           |   |         |     |   |              |   |   |   |

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Table of Contents

OPERATIONS

|                                                                                                                                            |   | Six Months Ended June 30, |    |   | Three Months Ended June 30, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|-----------------------------|--------|
|                                                                                                                                            |   | 2009                      |    |   | 2008                        |   |   | 2009 |   |   | 2008 |   |
| Revenue                                                                                                                                         |   | $                         | 13,387  |   |                        | $      | 12,491 |   |   | $ | 6,945 |   |   | $ | 6,492 |   |
| Cost of revenue                                                                                                                                 |   |                      | 6,836   |   |                        |   | 7,127 |   |   |   | 3,423 |   |   |   | 3,776 |   |
| Gross margin                                                                                                                                    |   |                      | 6,551   |   |                        |   | 5,364 |   |   |   | 3,522 |   |   |   | 2,716 |   |
|                                                                                                                                            |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                                                                                                             |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing                                                                                                                             |   |                      | 1,865   |   |                        |   | 1,906 |   |   |   | 1,003 |   |   |   | 1,027 |   |
| General and administrative                                                                                                                      |   |                      | 5,607   |   |                        |   | 4,296 |   |   |   | 2,481 |   |   |   | 2,164 |   |
| Total operating expense                                                                                                                         |   |                      | 7,472   |   |                        |   | 6,202 |   |   |   | 3,484 |   |   |   | 3,191 |   |
| Income (loss) from operations                                                                                                                   |   |                      | (921    | )      |                        |   | (838 | ) |   |   | 38 |   |   |   | (475 | ) |
|                                                                                                                                            |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Interest and other expense (income):                                                                                                            |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, including $0, $90, $0 and $48, respectively, for Insider Purchasers                                                           |   |                      | 213     |   |                        |   | 2,132 |   |   |   | 66 |   |   |   | 1,115 |   |
| Loss on extinguishment of debt                                                                                                                  |   |                      | 254     |   |                        |   | — |   |   |   | — |   |   |   | — |   |
| Interest income                                                                                                                                 |   |                      | — |   |                        |   | (16 | ) |   |   | — |   |   |   | (5 | ) |
| Increase (decrease) in fair value of derivative financial instruments, including $20, $3, ($11) and ($40), respectively, for Insider Purchasers |   |                      | 691     |   |                        |   | 58 |   |   |   | (434 | ) |   |   | (1,398 | ) |
| Amortization of deferred financing costs, including $24 and $12, respectively, for Insider Purchasers                                           |   |                      | — |   |                        |   | 238 |   |   |   | — |   |   |   | 125 |   |
| Total interest and other expense, net                                                                                                           |   |                      | 1,158   |   |                        |   | 2,412 |   |   |   | (368 | ) |   |   | (163 | ) |
| Net income (loss)                                                                                                                               |   |                      | (2,079  | )      |                        |   | (3,250 | ) |   |   | 406 |   |   |   | (312 | ) |
| Loss on redemption of preferred stock                                                                                                           |   |                      | (1,999  | )      |                        |   | — |   |   |   | — |   |   |   | — |   |
| Net income (loss) attributable to common stockholders                                                                                           |   | $                         | (4,078  | )      |                        | $      | (3,250 | ) |   | $ | 406 |   |   | $ | (312 | ) |
|                                                                                                                                            |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to common stockholders per share:                                                                                |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                           |   | $                         | (0.09   | )      |                        | $      | (0.07 | ) |   | $ | 0.01 |   |   | $ | (0.01 | ) |
| Diluted                                                                                                                                         |   | $                         | (0.09   | )      |                        | $      | (0.07 | ) |   | $ | 0.00 |   |   | $ | (0.01 | ) |
|                                                                                                                                            |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares:                                                                                                       |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                           |   |                      | 45,959  |   |                        |   | 46,305 |   |   |   | 46,212 |   |   |   | 45,543 |   |
| Diluted                                                                                                                                         |   |                      | 45,959  |   |                        |   | 46,305 |   |   |   | 92,717 |   |   |   | 45,543 |   |
|                                                                                                                                            |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

STOCKHOLDERS’ 

|                                                                            |   |         |    |   | Additional |   |    |        |   |   | Series A -1(Note A) |   |   |           |     |
|---------------------------------------------------------------------------------|--------|--------------|---------|--------|------------|--------|---------|-------------|--------|--------|---------------------|--------|--------|----------------|----------|
|                                                                            |   | Common Stock |    |   | Paid In    |   |    | Accumulated |   |   | Preferred Stock     |   |   | Treasury Stock |     |   |   |   |
|                                                                            |   | Shares       |    |   | Amount     |   |    | Capital     |   |   | Deficit             |   |   | Shares         |     |   | Amount |   |   | Shares |   |   | Amount |   |   | Total |   |
| Balance at January 1, 2009                                                      |   |         | 48,375  |   |       | $      | 5       |        |   | $      | 172,000             |   |   | $              | (185,409 | ) |   |   | 3,790 |   |   | $ | 11,574 |   |   |   | 1,565 |   |   | $ | (1,383 | ) |   | $ | (3,213 | ) |
| Cumulative effect of reclassification of warrants (EITF 07-05)                  |   |         | — |   |       |   | — |        |   |   | (26,173             | )      |   |           | 23,551   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (2,622 | ) |
| Balance at January 1, 2009, as adjusted                                         |   |         | 48,375  |   |       |   | 5       |        |   |   | 145,827             |   |   |           | (161,858 | ) |   |   | 3,790 |   |   |   | 11,574 |   |   |   | 1,565 |   |   |   | (1,383 | ) |   |   | (5,835 | ) |
| Net loss                                                                        |   |         | — |   |       |   | — |        |   |   | —             |   |   |           | (2,079   | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (2,079 | ) |
| Stock-based compensation  - options                                   |   |         | — |   |       |   | — |        |   |   | 155                 |   |   |           | —  |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 155 |   |
| Stock-based compensation  - restricted stock                          |   |         | 775     |   |       |   | — |        |   |   | 167                 |   |   |           | —  |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 167 |   |
| Series A-1 Preferred Stock issued in connection with the 2009 Private Placement |   |         | — |   |       |   | — |        |   |   | —             |   |   |           | —  |   |   |   | 719 |   |   |   | 2,637 |   |   |   | — |   |   |   | — |   |   |   | 2,637 |   |
| Loss on redemption of Series A  Preferred Stock                       |   |         | — |   |       |   | — |        |   |   | (1,999              | )      |   |           | —  |   |   |   | — |   |   |   | 1,999 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Costs related to 2009 Private Placement                                         |   |         | — |   |       |   | — |        |   |   | (263                | )      |   |           | —  |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (263 | ) |
| Balance at June 30, 2009                                                        |   |         | 49,150  |   |       | $      | 5       |        |   | $      | 143,887             |   |   | $              | (163,937 | ) |   |   | 4,509 |   |   | $ | 16,210 |   |   |   | 1,565 |   |   | $ | (1,383 | ) |   | $ | (5,218 | ) |
|                                                                            |   |         |    |   |       |   |    |        |   |   |                |   |   |           |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

OF 

|                                                                                                          |   | Six Months Ended June 30, |    |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|
|                                                                                                          |   | 2009                      |    |   | 2008 |   |
| Cash flows from Operating Activities:                                                                         |   |                      |    |   |   |   |
| Net loss                                                                                                      |   | $                         | (2,079  | ) |   | $ | (3,250 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                     |   |                      |    |   |   |   |   |   |
| Depreciation and amortization                                                                                 |   |                      | 537     |   |   |   | 647 |   |
| Other expense recognized for the increase in the estimated fair value of the derivative financial instruments |   |                      | 691     |   |   |   | 58 |   |
| Amortization of deferred financing costs                                                                      |   |                      | — |   |   |   | 238 |   |
| Bad debt expense                                                                                              |   |                      | 122     |   |   |   | 48 |   |
| Accretion of discount on Senior Secured Notes                                                                 |   |                      | 23      |   |   |   | 1,336 |   |
| Loss on disposal of equipment                                                                                 |   |                      | 10      |   |   |   | — |   |
| Loss on extinguishment of debt                                                                                |   |                      | 254     |   |   |   | — |   |
| Stock-based compensation                                                                                      |   |                      | 322     |   |   |   | 314 |   |
| Increase (decrease) attributable to changes in assets and liabilities:                                        |   |                      |    |   |   |   |   |   |
| Accounts receivable                                                                                           |   |                      | (509    | ) |   |   | (972 | ) |
| Prepaid expenses and other current assets                                                                     |   |                      | (120    | ) |   |   | (152 | ) |
| Other assets                                                                                                  |   |                      | 2       |   |   |   | 3 |   |
| Accounts payable                                                                                              |   |                      | 442     |   |   |   | 872 |   |
| Customer deposits                                                                                             |   |                      | (80     | ) |   |   | (74 | ) |
| Accrued expenses, sales taxes and regulatory fees                                                             |   |                      | 39      |   |   |   | 334 |   |
| Deferred revenue                                                                                              |   |                      | (61     | ) |   |   | 11 |   |
| Net cash used in operating activities                                                                         |   |                      | (407    | ) |   |   | (587 | ) |
|                                                                                                          |   |                      |    |   |   |   |   |   |
| Cash flows from Investing Activities:                                                                         |   |                      |    |   |   |   |   |   |
| Purchases of property and equipment                                                                           |   |                      | (647    | ) |   |   | (681 | ) |
| Net cash used in investing activities                                                                         |   |                      | (647    | ) |   |   | (681 | ) |
|                                                                                                          |   |                      |    |   |   |   |   |   |
| Cash flows from Financing Activities:                                                                         |   |                      |    |   |   |   |   |   |
| Proceeds from preferred stock offering                                                                        |   |                      | 1,800   |   |   |   | — |   |
| Principal payments for capital lease                                                                          |   |                      | (77     | ) |   |   | (58 | ) |
| Purchase of Senior Secured Notes                                                                              |   |                      | (750    | ) |   |   | — |   |
| Costs related to private placement                                                                            |   |                      | (221    | ) |   |   | — |   |
| Net cash provided by (used in) financing activities                                                           |   |                      | 752     |   |   |   | (58 | ) |
|                                                                                                          |   |                      |    |   |   |   |   |   |
| Decrease in cash and cash equivalents                                                                         |   |                      | (302    | ) |   |   | (1,326 | ) |
| Cash and cash equivalents at beginning of period                                                              |   |                      | 1,227   |   |   |   | 2,312 |   |
| Cash and cash equivalents at end of period                                                                    |   | $                         | 925     |   |   | $ | 986 |   |
|                                                                                                          |   |                      |    |   |   |   |   |   |
| Supplement disclosures of cash flow information:                                                              |   |                      |    |   |   |   |   |   |
| Cash paid during the period for                                                                               |   |                      |    |   |   |   |   |   |
|     Interest                                                                              |   | $                         | 43      |   |   | $ | 59 |   |
|                                                                                                          |   |                      |    |   |   |   |   |   |
| Non-cash investing and financing activities:                                                                  |   |                      |    |   |   |   |   |   |
|     Exchange of Senior Secured Notes for Series A-1 Preferred Stock                            |   | $                         | 1,076   |   |   | $ | — |   |
|     Additional Senior Secured Notes issued as payment for interest                        |   |                      | 55      |   |   |   | 644 |   |
|     Costs related to private placement incurred by issuance of placement agent warrants        |   |                      | 133     |   |   |   | — |   |
|     Settlement of accrued 2007 management bonus with restricted stock                          |   |                      | — |   |   |   | 179 |   |
|                                                                                                          |   |                      |    |   |   |   |   |   |

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Table of Contents

STATEMENTS

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|                                              |   | Six Months Ended June 30, |   |   | Three Months Ended June 30, |   |
|---------------------------------------------------|--------|---------------------------|--------|--------|-----------------------------|--------|
|                                              |   | 2009                      |   |   | 2008                        |   |   | 2009 |   |   | 2008 |   |
| Risk free interest rate                           |   |                      | 1.7    | %      |                        |   | 3.2 | % |   |   | 2.3 | % |   |   | 3.3 | % |
| Expected option lives                             |   | 5 Years                   |   |   | 5 Years                     |   |   | 5 Years |   |   | 5 Years |   |
| Expected volatility                               |   |                      | 112.1  | %      |                        |   | 95.1 | % |   |   | 113.6 | % |   |   | 95.6 | % |
| Estimated forfeiture rate                         |   |                      | 10     | %      |                        |   | 10 | % |   |   | 10 | % |   |   | 10 | % |
| Expected dividend yields                          |   | None                      |   |   | None                        |   |   | None |   |   | None |   |
| Weighted average grant date fair value of options |   | $                         | 0.27   |   |                        | $      | 0.38 |   |   | $ | 0.32 |   |   | $ | 0.40 |   |
|                                              |   |                      |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

|                                 |   | Outstanding       |    |   | Exercisable                  |   |
|--------------------------------------|--------|-------------------|---------|--------|------------------------------|--------|
|                                 |   | Number of Options |    |   | WeightedAverageExercisePrice |   |   | Number of Options |   |   | WeightedAverageExercisePrice |   |
| Options outstanding, January 1, 2009 |   |              | 4,973   |   |                         | $      | 1.31 |   |   |   | 3,334 |   |   | $ | 1.72 |   |
| Granted                              |   |              | 586     |   |                         |   | 0.39 |   |   |   |   |   |   |   |   |   |
| Exercised                            |   |              | — |   |                         |   | — |   |   |   |   |   |   |   |   |   |
| Expired                              |   |              | — |   |                         |   | — |   |   |   |   |   |   |   |   |   |
| Forfeited                            |   |              | (160    | )      |                         |   | 0.49 |   |   |   |   |   |   |   |   |   |
| Options outstanding, June 30, 2009   |   |              | 5,399   |   |                         | $      | 1.23 |   |   |   | 3,882 |   |   | $ | 1.54 |   |
|                                 |   |              |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |

|                       |   | Six Months Ended June 30, |   |   | Three Months Ended June 30, |   |
|----------------------------|--------|---------------------------|--------|--------|-----------------------------|--------|
|                       |   | 2009                      |   |   | 2008                        |   |   | 2009 |   |   | 2008 |   |
| Cost of revenue            |   | $                         | 8      |   |                        | $      | 10 |   |   | $ | 4 |   |   | $ | 5 |   |
| Sales and marketing        |   |                      | 24     |   |                        |   | 35 |   |   |   | 11 |   |   |   | 16 |   |
| General and administrative |   |                      | 123    |   |                        |   | 161 |   |   |   | 64 |   |   |   | 85 |   |
|                       |   | $                         | 155    |   |                        | $      | 206 |   |   | $ | 79 |   |   | $ | 106 |   |

|                                                    |   | Restricted Shares |   |   | Weighted AverageExercise Price |   |
|---------------------------------------------------------|--------|-------------------|--------|--------|-------------------------------------|--------|
| Unvested restricted shares outstanding, January 1, 2009 |   |              | 1,220  |   |                                | $      | 0.49 |   |
| Granted                                                 |   |              | 1,225  |   |                                |   | 0.34 |   |
| Vested                                                  |   |              | (723   | )      |                                |   | 0.42 |   |
| Forfeited                                               |   |              | (450   | )      |                                |   | 0.50 |   |
| Unvested restricted shares outstanding, June 30, 2009   |   |              | 1,272  |   |                                | $      | 0.38 |   |
|                                                    |   |              |   |   |                                |   |   |   |

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|                       |   | Six Months Ended June 30, |    |   | Three Months Ended June 30, |   |
|----------------------------|--------|---------------------------|---------|--------|-----------------------------|--------|
|                       |   | 2009                      |    |   | 2008                        |   |   | 2009 |   |   | 2008 |   |
| General and administrative |   | $                         | 161     |   |                        | $      | 207 |   |   | $ | 66 |   |   | $ | 207 |   |
| Sales and marketing        |   |                      | 6       |   |                        |   | 8 |   |   |   | 4 |   |   |   | 8 |   |
| Accrued Expenses (Note A)  |   |                      | — |   |                        |   | 179 |   |   |   | — |   |   |   | 179 |   |
|                       |   | $                         | 167     |   |                        | $      | 394 |   |   | $ | 70 |   |   | $ | 394 |   |
|                       |   |                      |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |

|                                 |   | June 30, |    |
|--------------------------------------|--------|----------|---------|
|                                 |   | 2009     |    |   | 2008 |   |
| Warrants                             |   |     | 44,262  |   |   |   | 22,875 |   |
| Options                              |   |     | 5,399   |   |   |   | 4,500 |   |
| Unvested restricted stock            |   |     | 1,272   |   |   |   | 960 |   |
| Senior Secured Notes                 |   |     | — |   |   |   | 22,641 |   |
| Series C Convertible Preferred Stock |   |     | — |   |   |   | 4,748 |   |
|                                 |   |     | 50,933  |   |   |   | 55,724 |   |
|                                 |   |     |    |   |   |   |   |   |

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|                                             |   | Sale of Series A-1 Preferred Stock |   |   | Preferred Stock Exchange |   |    | Senior Secured Note Exchange |   |   | Senior Secured Note Purchase |   |   | Placement AgentWarrant Fee |   | Total  |
|--------------------------------------------------|--------|------------------------------------|--------|--------|--------------------------|--------|---------|------------------------------|--------|--------|------------------------------|--------|--------|----------------------------|--------|--------|
| Consideration received:                          |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |
| Gross proceeds – cash                      |   | $                                  | 1,800  |   |                     | $      | -       |                         |   | $      | -                            |   |   | $                          | (750   | )      |   | $ | - |   | $ | 1,050 |   |
| Senior Secured Notes                             |   | $                                  | -      |   |                     | $      | -       |                         |   | $      | (1,076                       | )      |   | $                          | (713   | )      |   | $ | - |   | $ | (1,789 | ) |
| Series A Preferred Stock – shares          |   |                               | -      |   |                     |   | (3,790  | )                            |   |   | -                            |   |   |                       | -      |   |   |   | - |   |   | (3,750 | ) |
| Series A Preferred Stock – carrying amount |   | $                                  | -      |   |                     | $      | (11,574 | )                            |   | $      | -                            |   |   | $                          | -      |   |   | $ | - |   | $ | (11,574 | ) |
|                                             |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |   |   |   |   |   |   |   |   |   |   |
| Consideration provided to holders:               |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |   |   |   |   |   |   |   |
| Series A-3 Warrants issued:                      |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |   |   |   |   |   |   |   |   |   |   |
| Shares                                           |   |                               | 2,250  |   |                     |   | -       |                         |   |   | 594                          |   |   |                       | -      |   |   |   | 500 |   |   | 3,344 |   |
| Carrying amount                                  |   | $                                  | 189    |   |                     | $      | -       |                         |   | $      | 50                           |   |   | $                          | -      |   |   | $ | 42 |   | $ | 281 |   |
|                                             |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |   |   |   |   |   |   |   |   |   |   |
| Series A-1 Preferred Stock issued:               |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |   |   |   |   |   |   |   |   |   |   |
| Shares                                           |   |                               | 450    |   |                     |   | 3,790   |                         |   |   | 269                          |   |   |                       | -      |   |   |   | - |   |   | 4,509 |   |
| Carrying amount                                  |   | $                                  | 1,611  |   |                     | $      | 13,573  |                         |   | $      | 1,026                        |   |   | $                          | -      |   |   | $ | - |   | $ | 16,210 |   |
|                                             |   |                               |   |   |                     |   |    |                         |   |   |                         |   |   |                       |   |   |   |   |   |   |   |   |   |   |

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|                                           |   | Total Costs |   |
|------------------------------------------------|--------|-------------|--------|
| Cash financing costs:                          |   |        |   |
| Burnham Hill Partners placement agent fees     |   | $           | 201    |   |
| Legal and other professional fees              |   |        | 21     |   |
|                                           |   |        | 221    |   |
| Non-cash financing costs:                      |   |        |   |   |
| Burnham Hill Partners placement agent warrants |   |        | 42     |   |
|                                           |   | $           | 263    |   |
|                                           |   |        |   |   |

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|                                                |   | December 31, 2008 |   |   | 2009 Activity |   |    | 2009 Private Placements Entries, Net |   |   | June 30, 2009 |   |
|-----------------------------------------------------|--------|-------------------|--------|--------|---------------|--------|---------|--------------------------------------|--------|--------|---------------|--------|
| Principal of Senior Secured Notes:                  |   |              |   |   |          |   |    |                                 |   |   |          |   |
| 2006 Private Placements                             |   | $                 | 1,500  |   |          | $      | — |                                 |   | $      | (1,500        | )      |   | $ | — |   |
| Senior Secured Notes issued as payment for interest |   |              | 222    |   |          |   | 55      |                                 |   |   | (277          | )      |   |   | — |   |
|                                                |   |              | 1,722  |   |          |   | 55      |                                 |   |   | (1,777        | )      |   |   | — |   |
| Discount:                                           |   |              |   |   |          |   |    |                                 |   |   |          |   |   |   |   |   |
| Series A-3 warrants                                 |   |              | (260   | )      |          |   | — |                                 |   |   | 260           |   |   |   | — |   |
|                                                |   |              | (260   | )      |          |   | — |                                 |   |   | 260           |   |   |   | — |   |
| Accretion of discount                               |   |              | 20     |   |          |   | 23      |                                 |   |   | (43           | )      |   |   | — |   |
|                                                |   |              | (240   | )      |          |   | 23      |                                 |   |   | 217           |   |   |   | — |   |
| Senior Secured Notes, net of discount               |   | $                 | 1,482  |   |          | $      | 78      |                                 |   | $      | (1,560        | )      |   | $ | — |   |
|                                                |   |              |   |   |          |   |    |                                 |   |   |          |   |   |   |   |   |

|                                                              |   | Six Months EndedJune 30, |    |   | Three Months EndedJune 30, |   |
|-------------------------------------------------------------------|--------|--------------------------|---------|--------|----------------------------|--------|
|                                                              |   | 2009                     |    |   | 2008                       |   |   | 2009 |   |   | 2008 |   |
| Interest expense for sales and use taxes and regulatory fees      |   | $                        | 60      |   |                       | $      | 90 |   |   | $ | 29 |   |   | $ | 40 |   |
| Interest on Senior Secured Notes                                  |   |                     | 57      |   |                       |   | 624 |   |   |   | — |   |   |   | 316 |   |
| Accretion of discount on Senior Secured Notes                     |   |                     | 23      |   |                       |   | 1,269 |   |   |   | — |   |   |   | 677 |   |
| Other interest expense                                            |   |                     | 73      |   |                       |   | 59 |   |   |   | 37 |   |   |   | 34 |   |
| Accretion of discount on Senior Secured Notes, Insider Purchasers |   |                     | — |   |                       |   | 67 |   |   |   | — |   |   |   | 36 |   |
| Interest on Senior Secured Notes, Insider Purchasers              |   |                     | — |   |                       |   | 23 |   |   |   | — |   |   |   | 12 |   |
|                                                              |   | $                        | 213     |   |                       | $      | 2,132 |   |   | $ | 66 |   |   | $ | 1,115 |   |

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|                                                                             |   | December 31, 2008 |    |   | Cumulative Effect of Change in Accounting Principle |   |   | Activity during the period |   |   | Increase in Fair Value |   |   | June 30, 2009 |   |
|----------------------------------------------------------------------------------|--------|-------------------|---------|--------|-----------------------------------------------------|--------|--------|----------------------------|--------|--------|------------------------|--------|--------|---------------|--------|
| (i)   Derivative financial instrument – warrants            |   | $                 | — |   |                                                | $      | 2,546  |                       |   | $      | 281                    |   |   | $             | 671    |   |   | $ | 3,498 |   |
| (ii) Derivative financial instrument – warrants – insider purchasers |   |              | — |   |                                                |   | 76     |                       |   |   | —                |   |   |          | 20     |   |   |   | 96 |   |
|                                                                             |   | $                 | — |   |                                                | $      | 2,622  |                       |   | $      | 281                    |   |   | $             | 691    |   |   | $ | 3,594 |   |
|                                                                             |   |              |    |   |                                                |   |   |                       |   |   |                   |   |   |          |   |   |   |   |   |   |

|                            |   | (i)        |   |   | (ii)               |   |   |   |   |
|---------------------------------|--------|------------|--------|--------|--------------------|--------|--------|--------|--------|
|                            |   | All Others |   |   | Insider Purchasers |   |   | Total  |   |
| Number of warrants              |   |       | 43,161 |   |               |   | 1,101  |   |   |   | 44,262 |   |
| Exercise price                  |   | $          | 0.53   |   |               | $      | 0.40   |   |   | $ | 0.53 |   |
| Risk free interest rate         |   |       | 0.8    | %      |               |   | 0.8    | %      |   |   | 0.8 | % |
| Expected warrant lives in years |   |       | 1.4    |   |               |   | 1.4    |   |   |   | 1.4 |   |
| Expected volatility             |   |       | 142.7  | %      |               |   | 140.3  | %      |   |   | 142.7 | % |
| Expected dividend yields        |   | None       |   |   | None               |   |   | None   |   |
| Fair value per share            |   | $          | 0.08   |   |               | $      | 0.09   |   |   | $ | 0.08 |   |
| Common stock price note (A)     |   | $          | 0.18   |   |               | $      | 0.19   |   |   | $ | 0.18 |   |
| Fair value of warrants          |   | $          | 3,498  |   |               | $      | 96     |   |   | $ | 3,594 |   |
|                            |   |       |   |   |               |   |   |   |   |   |   |   |

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|   | • | Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Level 2 - inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Level 3 - unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | Fair Value as of June 30, 2009 |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |    | Significant other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |   | Increases (decreases) during the three months ended June 30, 2009 |    |   | Increases (decreases) during the six months ended June 30, 2009 |   |
|----------------------------------|--------|--------------------------------|--------|--------|----------------------------------------------------------------|--------|---------|-----------------------------------------------|--------|--------|------------------------------------------|--------|--------|-------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------|--------|
| Assets:                          |   |                           |   |   |                                                           |   |    |                                          |   |   |                                     |   |   |                                                              |    |   |                                                            |   |
| Cash equivalents                 |   | $                              | 925    |   |                                                           | $      | — |                                          |   | $      | 925                                      |   |   | $                                                                 | — |   |                                                            | $      | — |   |   | $ | — |   |
| Liabilities:                     |   |                           |   |   |                                                           |   |    |                                          |   |   |                                     |   |   |                                                              |    |   |                                                            |   |   |   |   |   |   |   |
| Derivative financial instruments |   | $                              | 3,594  |   |                                                           | $      | — |                                          |   | $      | —                                  |   |   | $                                                                 | 3,594   |   |                                                            | $      | (434 | ) |   | $ | 691 |   |
|                             |   |                           |   |   |                                                           |   |    |                                          |   |   |                                     |   |   |                                                              |    |   |                                                            |   |   |   |   |   |   |   |

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|                                                                          |   | Increases (decreases) during the six months ended June 30, 2009 |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|
| Liabilities:                                                                  |   |                                                            |   |
|      Balance as of January 1, 2009                        |   | $                                                               | 2,622  |   |
|      Initial measurement of warrants issued in the period |   |                                                            | 281    |   |
|      Increase in fair value of warrants                   |   |                                                            | 691    |   |
|      Balance as of June 30, 2009                          |   | $                                                               | 3,594  |   |
|                                                                          |   |                                                            |   |   |

|                            |   | Original Value |   |   | December 31,2008 |   |   | March 16, 2009 |   |   | March 31, 2009 |   |   | June 30,2009 |   |
|---------------------------------|--------|----------------|--------|--------|------------------|--------|--------|----------------|--------|--------|----------------|--------|--------|--------------|--------|
| Number of warrants              |   |           | 40,917 |   |             |   | 40,917 |           |   |   | 3,345          |   |   |         | 44,262 |   |   |   | 44,262 |   |
| Exercise price                  |   | $              | 0.97   |   |             | $      | 0.54   |           |   | $      | 0.40           |   |   | $            | 0.53   |   |   | $ | 0.53 |   |
| Risk free interest rate         |   |           | 3.3    | %      |             |   | 0.7    | %              |   |   | 1.0            | %      |   |         | 0.8    | % |   |   | 0.8 | % |
| Expected warrant lives in years |   |           | 5.0    |   |             |   | 1.9    |           |   |   | 1.8            |   |   |         | 1.7    |   |   |   | 1.4 |   |
| Expected volatility             |   |           | 102.7  | %      |             |   | 132.3  | %              |   |   | 139.0          | %      |   |         | 143.5  | % |   |   | 142.7 | % |
| Expected dividend yields        |   | None           |   |   | None             |   |   | None           |   |   | None           |   |   | None         |   |
| Fair value per share            |   | $              | 0.64   |   |             | $      | 0.06   |           |   | $      | 0.08           |   |   | $            | 0.09   |   |   | $ | 0.08 |   |
| Common stock price              |   | $              | 0.83   |   |             | $      | 0.15   |           |   | $      | 0.17           |   |   | $            | 0.19   |   |   | $ | 0.18 |   |
| Fair value of warrants          |   | $              | 26,173 |   |             | $      | 2,622  |           |   | $      | 281            |   |   | $            | 4,028  |   |   | $ | 3,594 |   |
|                            |   |           |   |   |             |   |   |           |   |   |           |   |   |         |   |   |   |   |   |   |

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|                                |   | Fair Value at Measurement Date |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |    | Significant other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |   | Gains(losses) |   |
|-------------------------------------|--------|--------------------------------|--------|--------|----------------------------------------------------------------|--------|---------|-----------------------------------------------|--------|--------|------------------------------------------|--------|--------|---------------|--------|
| Liabilities:                        |   |                           |   |   |                                                           |   |    |                                          |   |   |                                     |   |   |          |   |
| Warrants issued in connection with: |   |                           |   |   |                                                           |   |    |                                          |   |   |                                     |   |   |          |   |
| Sale of Series A-1 Preferred Stock  |   | $                              | 189    |   |                                                           | $      | — |                                          |   | $      | —                                  |   |   | $             | 189    |   |   | $ | — |   |
| Senior Secured Note Exchange        |   |                           | 50     |   |                                                           |   | — |                                          |   |   | —                                  |   |   |          | 50     |   |   |   | — |   |
| Placement agent warrant fee         |   |                           | 42     |   |                                                           |   | — |                                          |   |   | —                                  |   |   |          | 42     |   |   |   | — |   |
|                                |   | $                              | 281    |   |                                                           | $      | — |                                          |   | $      | —                                  |   |   | $             | 281    |   |   | $ | — |   |

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|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| Severance pay plus payroll taxes                                           |   | $      | 300    |   |
| Restricted stock award and extension of exercise period for vested options |   |   | 57     |   |
| Other benefits and costs                                                   |   |   | 36     |   |
|                                                                       |   |   | 393    |   |
| Less:                                                                      |   |   |   |   |
| Amounts paid or vested                                                     |   |   | (161   | ) |
| Reduction in severance amounts                                             |   |   | (75    | ) |
| Accrual as of June 30, 2009                                                |   | $      | 157    |   |
|                                                                       |   |   |   |   |

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|                                        |   | Series A as of December 31, 2008Note A |   |   | Series A & A-1 ExchangeNote B |   |    | 2009 Private Placement |   |   | Series A-1 as of June 30, 2009 |   |
|---------------------------------------------|--------|----------------------------------------|--------|--------|-----------------------------------|--------|---------|------------------------|--------|--------|--------------------------------|--------|
| Shares of Preferred Stock:                  |   |                                   |   |   |                              |   |    |                   |   |   |                           |   |
|      Investors          |   |                                   | 3,675  |   |                              |   | — |                   |   |   | 719                            |   |   |   | 4,394 |   |
|      Insider Purchasers |   |                                   | 115    |   |                              |   | — |                   |   |   | —                        |   |   |   | 115 |   |
|                                        |   |                                   | 3,790  |   |                              |   | — |                   |   |   | 719                            |   |   |   | 4,509 |   |
| Book Value:                                 |   |                                   |   |   |                              |   |    |                   |   |   |                           |   |   |   |   |   |
|      Investors     |   | $                                      | 11,226 |   |                              | $      | 1,934   |                   |   | $      | 2,637                          |   |   | $ | 15,797 |   |
|      Insider Purchasers |   |                                   | 348    |   |                              |   | 65      |                   |   |   | —                        |   |   |   | 413 |   |
|                                        |   | $                                      | 11,574 |   |                              | $      | 1,999   |                   |   | $      | 2,637                          |   |   | $ | 16,210 |   |
|                                        |   |                                   |   |   |                              |   |    |                   |   |   |                           |   |   |   |   |   |
| Liquidation Value:                          |   |                                   |   |   |                              |   |    |                   |   |   |                           |   |   |   |   |   |
|      Investors          |   | $                                      | 27,560 |   |                              | $      | — |                   |   | $      | 5,392                          |   |   | $ | 32,952 |   |
|      Insider Purchasers |   |                                   | 863    |   |                              |   | — |                   |   |   | —                        |   |   |   | 863 |   |
|                                        |   | $                                      | 28,423 |   |                              | $      | — |                   |   | $      | 5,392                          |   |   | $ | 33,815 |   |
|                                        |   |                                   |   |   |                              |   |    |                   |   |   |                           |   |   |   |   |   |

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Management’s 

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|                                                                                                                                                          |   | (Unaudited)Six Months EndedJune 30, |    |   | (Unaudited)Three Months EndedJune 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|--------|---------------------------------------|--------|
|                                                                                                                                                          |   | 2009                                |    |   | 2008                                  |   |   | 2009 |   |   | 2008 |   |
| Revenue                                                                                                                                                       |   |                                | 100.0   | %      |                                  |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Cost of revenue                                                                                                                                               |   |                                | 51.1    |   |                                  |   | 57.1 |   |   |   | 49.3 |   |   |   | 58.2 |   |
|         Gross margin                                                                                                  |   |                                | 48.9    |   |                                  |   | 42.9 |   |   |   | 50.7 |   |   |   | 41.8 |   |
|                                                                                                                                                          |   |                                |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                                                                                                                           |   |                                |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing                                                                                                                                           |   |                                | 13.9    |   |                                  |   | 15.3 |   |   |   | 14.4 |   |   |   | 15.8 |   |
| General and administrative                                                                                                                                    |   |                                | 41.9    |   |                                  |   | 34.4 |   |   |   | 35.8 |   |   |   | 33.4 |   |
| Total operating expenses                                                                                                                                      |   |                                | 55.8    |   |                                  |   | 49.7 |   |   |   | 50.2 |   |   |   | 49.2 |   |
| (Loss) income  from operations                                                                                                                      |   |                                | (6.9    | )      |                                  |   | (6.8 | ) |   |   | 0.5 |   |   |   | (7.4 | ) |
| Interest and other expense (income):                                                                                                                          |   |                                |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, including 0.0%, 0.7%, 0.0% and 0.7% respectively, for Insider Purchasers                                                                    |   |                                | 1.6     |   |                                  |   | 17.0 |   |   |   | 0.9 |   |   |   | 17.2 |   |
| Loss on extinguishment of debt                                                                                                                                |   |                                | 1.9     |   |                                  |   | — |   |   |   | — |   |   |   | — |   |
| Interest income                                                                                                                                               |   |                                | — |   |                                  |   | (0.1 | ) |   |   | — |   |   |   | (0.1 | ) |
| Increase (decrease)  in fair value of derivative financial instruments, including 0.1%, 0.0%, (0.2%) and (0.6%) respectively for Insider Purchasers |   |                                | 5.2     |   |                                  |   | 0.5 |   |   |   | (6.2 | ) |   |   | (21.5 | ) |
| Amortization of deferred financing costs, including 0.2% and 0.2% respectively, for Insider Purchasers                                                        |   |                                | — |   |                                  |   | 1.9 |   |   |   | — |   |   |   | 1.9 |   |
| Total interest and other expense, net                                                                                                                         |   |                                | 8.7     |   |                                  |   | 19.3 |   |   |   | (5.3 | ) |   |   | (2.5 | ) |
| Net (loss) income                                                                                                                                             |   |                                | (15.6   | )      |                                  |   | (26.1 | ) |   |   | 5.8 |   |   |   | (4.9 | ) |
| Loss on redemption of preferred stock                                                                                                                         |   |                                | (14.9   | )      |                                  |   | — |   |   |   | — |   |   |   | — |   |
| Net (loss) income attributable to common stockholders                                                                                                         |   |                                | (30.5   | )%     |                                  |   | (26.1 | )% |   |   | 5.8 | % |   |   | (4.9 | )% |
|                                                                                                                                                          |   |                                |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |

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|                                                   |   | Six Months Ended June 30, |   |   |  Increase |   |   |       |   |
|--------------------------------------------------------|--------|---------------------------|--------|--------|----------------|--------|--------|------------|--------|
|                                                   |   | 2009                      |   |   | 2008           |   |   | (Decrease) |   |   | % Change |   |
| Revenue                                                |   |                      |   |   |           |   |   |       |   |   |   |   |
| Core revenue:                                          |   |                      |   |   |           |   |   |       |   |   |   |   |
| Subscription and related revenue (Note A)              |   | $                         | 9,770  |   |           | $      | 8,591  |       |   | $ | 1,179 |   |   |   | 13.7 | % |
| Non-subscription revenue                               |   |                      |   |   |           |   |   |       |   |   |   |   |   |   |   |   |
| Bridging (Note B)                                      |   |                      | 2,343  |   |           |   | 2,057  |       |   |   | 286 |   |   |   | 13.9 | % |
| Special events and professional services               |   |                      | 490    |   |           |   | 342    |       |   |   | 148 |   |   |   | 43.3 | % |
|                                                   |   |                      | 12,603 |   |           |   | 10,990 |       |   |   | 1,613 |   |   |   | 14.7 | % |
| Non-core revenue:                                      |   |                      |   |   |           |   |   |       |   |   |   |   |   |   |   |   |
| Integration services for a broadcast customer (Note C) |   |                      | 63     |   |           |   | 249    |       |   |   | (186 | ) |   |   | (74.7 | %) |
| ISDN resale revenue (Note D)                           |   |                      | 721    |   |           |   | 1,252  |       |   |   | (531 | ) |   |   | (42.4 | %) |
|                                                   |   |                      | 784    |   |           |   | 1,501  |       |   |   | (717 | ) |   |   | (47.8 | %) |
| Total revenue                                          |   | $                         | 13,387 |   |           | $      | 12,491 |       |   | $ | 896 |   |   |   | 7.2 | % |
|                                                   |   |                      |   |   |           |   |   |       |   |   |   |   |   |   |   |   |

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|                              |   | 2009   |   |   | % of 2009 Revenues |   |   | 2008   |   |   | % of 2008 Revenues |   |   | Increase (Decrease) |   |   | % Change |   |
|-----------------------------------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|--------|--------|---------------------|--------|--------|----------|--------|
| Telecommunication carrier charges |   | $      | 4,683  |   |               |   | 35.0   | %      |   | $      | 4,892              |   |   |                | 39.2   | %      |     | $      | (209 | ) |   |   | (4.3 | %) |
| Sales taxes and regulatory fees   |   |   | 899    |   |               |   | 6.7    | %      |   |   | 893                |   |   |                | 7.1    | %      |     |   | 6 |   |   |   | 0.7 | % |
| Salaries and benefits             |   |   | 633    |   |               |   | 4.7    | %      |   |   | 464                |   |   |                | 3.7    | %      |     |   | 169 |   |   |   | 36.4 | % |
| Depreciation                      |   |   | 397    |   |               |   | 3.0    | %      |   |   | 481                |   |   |                | 3.9    | %      |     |   | (84 | ) |   |   | (17.5 | %) |
| General overhead costs            |   |   | 179    |   |               |   | 1.4    | %      |   |   | 148                |   |   |                | 1.2    | %      |     |   | 31 |   |   |   | 20.9 | % |
| Integration costs                 |   |   | 45     |   |               |   | 0.3    | %      |   |   | 249                |   |   |                | 2.0    | %      |     |   | (204 | ) |   |   | (81.9 | %) |
|                              |   | $      | 6,836  |   |               |   | 51.1   | %      |   | $      | 7,127              |   |   |                | 57.1   | %      |     | $      | (291 | ) |   |   | (4.1 | %) |
|                              |   |   |   |   |               |   |   |   |   |   |               |   |   |                |   |   |     |   |   |   |   |   |   |   |

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|                                                   |   | Three Months Ended June 30, |    |   |  Increase |   |   |       |   |
|--------------------------------------------------------|--------|-----------------------------|---------|--------|----------------|--------|--------|------------|--------|
|                                                   |   | 2009                        |    |   | 2008           |   |   | (Decrease) |   |   | % Change |   |
| Revenue                                                |   |                        |    |   |           |   |   |       |   |   |   |   |
| Core revenue:                                          |   |                        |    |   |           |   |   |       |   |   |   |   |
| Subscription and related revenue (Note A)              |   | $                           | 4,942   |   |           | $      | 4,296  |       |   | $ | 646 |   |   |   | 15.0 | % |
| Non-subscription revenue                               |   |                        |    |   |           |   |   |       |   |   |   |   |   |   |   |   |
| Bridging (Note B)                                      |   |                        | 1,173   |   |           |   | 1,051  |       |   |   | 122 |   |   |   | 11.6 | % |
| Special events and professional services               |   |                        | 471     |   |           |   | 261    |       |   |   | 210 |   |   |   | 80.5 | % |
|                                                   |   |                        | 6,586   |   |           |   | 5,608  |       |   |   | 978 |   |   |   | 17.4 | % |
| Non-core revenue:                                      |   |                        |    |   |           |   |   |       |   |   |   |   |   |   |   |   |
| Integration services for a broadcast customer (Note C) |   |                        | — |   |           |   | 249    |       |   |   | (249 | ) |   |   | (100.0 | %) |
| ISDN resale revenue (Note D)                           |   |                        | 359     |   |           |   | 635    |       |   |   | (276 | ) |   |   | (43.5 | %) |
|                                                   |   |                        | 359     |   |           |   | 884    |       |   |   | (525 | ) |   |   | (59.4 | %) |
| Total revenue                                          |   | $                           | 6,945   |   |           | $      | 6,492  |       |   | $ | 453 |   |   |   | 7.0 | % |
|                                                   |   |                        |    |   |           |   |   |       |   |   |   |   |   |   |   |   |

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|                              |   | 2009   |    |   | % of 2009 Revenues |   |    | 2008   |   |   | % of 2008 Revenues |   |   | Increase (Decrease) |   |   | % Change |   |
|-----------------------------------|--------|--------|---------|--------|--------------------|--------|---------|--------|--------|--------|--------------------|--------|--------|---------------------|--------|--------|----------|--------|
| Telecommunication carrier charges |   | $      | 2,370   |   |               |   | 34.1    | %      |   | $      | 2,498              |   |   |                | 38.5   | %      |     | $      | (128 | ) |   |   | (5.1 | %) |
| Sales taxes and regulatory fees   |   |   | 461     |   |               |   | 6.6     | %      |   |   | 458                |   |   |                | 7.1    | %      |     |   | 3 |   |   |   | 0.7 | % |
| Salaries and benefits             |   |   | 306     |   |               |   | 4.4     | %      |   |   | 262                |   |   |                | 4.0    | %      |     |   | 44 |   |   |   | 16.8 | % |
| Depreciation                      |   |   | 194     |   |               |   | 2.8     | %      |   |   | 234                |   |   |                | 3.6    | %      |     |   | (40 | ) |   |   | (17.1 | %) |
| General overhead costs            |   |   | 92      |   |               |   | 1.4     | %      |   |   | 75                 |   |   |                | 1.2    | %      |     |   | 17 |   |   |   | 22.7 | % |
| Integration costs                 |   |   | — |   |               |   | — |   |   |   | 249                |   |   |                | 3.8    | %      |     |   | (249 | ) |   |   | (100.0 | %) |
|                              |   | $      | 3,423   |   |               |   | 49.3    | %      |   | $      | 3,776              |   |   |                | 58.2   | %      |     | $      | (353 | ) |   |   | (9.3 | %) |
|                              |   |   |    |   |               |   |    |   |   |   |               |   |   |                |   |   |     |   |   |   |   |   |   |   |

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| Contractual Obligations:    |   | Total  |   |   | Less Than1 Year |   |   | 1-3 Years |   |   | 3-5 Years |   |   | More than5 Years |    |
|-----------------------------|--------|--------|--------|--------|-----------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------------|---------|
| Operating lease obligations |   | $      | 399    |   |            | $      | 221    |      |   | $      | 177       |   |   | $                | 1       |   |   | $ | — |   |
| Capital lease obligations   |   |   | 173    |   |            |   | 173    |      |   |   | —   |   |   |             | — |   |   |   | — |   |
| Commercial commitments      |   |   | 691    |   |            |   | 691    |      |   |   | —   |   |   |             | — |   |   |   | — |   |
| Total                       |   | $      | 1,263  |   |            | $      | 1,085  |      |   | $      | 177       |   |   | $                | 1       |   |   | $ | — |   |
|                        |   |   |   |   |            |   |   |      |   |   |      |   |   |             |    |   |   |   |   |   |

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Quantitative 

|                                                                  |   |                      |    |   | Proforma Information         |   |
|-----------------------------------------------------------------------|--------|---------------------------|---------|--------|------------------------------|--------|
|                                                                  |   | As Reported June 30, 2009 |    |   | Common Stock Price Reduction |   |   | Common Stock Price Increase |   |
| Common stock price                                                    |   | $                         | 0.37    |   |                         | $      | 0.12 |   |   | $ | 0.62 |   |
|                                                                  |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Condensed Consolidated Balance Sheet:                                 |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Derivative financial instruments                                      |   | $                         | 3,594   |   |                         | $      | 631 |   |   | $ | 7,374 |   |
|                                                                  |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Increase (decrease) in fair value of derivative financial instruments |   | $                         | — |   |                         | $      | (2,963 | ) |   | $ | 3,780 |   |
|                                                                  |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Condensed Consolidated Statement of Operations:                       |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Interest and other expense (income):                                  |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Increase (decrease) in fair value of derivative financial instruments |   | $                         | — |   |                         | $      | (3,397 | ) |   | $ | 3,346 |   |
|                                                                  |   |                      |    |   |                         |   |   |   |   |   |   |   |
| Net Income (loss) attributable to common stockholders                 |   | $                         | 406     |   |                         | $      | 3,369 |   |   | $ | (3,374 | ) |
|                                                                  |   |                      |    |   |                         |   |   |   |   |   |   |   |

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Controls 

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OTHER 

1

Risk 

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Item 

Item 

Item 

|   | 31.1        | Rule 13a-14(a)/15d-14(a) Certificate of Chief Executive Officer                                                   |
|--------|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 31.2   | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                 |
|   | 32.1   | Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|   | 32.2   | Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

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Signatures

|                             | GLOWPOINT, INC.Registrant                                                                                                                                                   |
|----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                        |
| Date:  August 12, 2009 | By:  /s/ Joseph Laezza                         |
|                             | Joseph Laezza, Co-Chief Executive Officer(principal executive officer)                                                                                                      |
|                             |                                                                                                                                                                        |
| Date:  August 12, 2009 | By:  /s/ Edwin F. Heinen                                                |
|                             | Edwin F. Heinen, Chief Financial Officer(principal financial and accounting officer)                                                                                        |