----

----

| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2011. |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

| 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 Identification No.) |
|-----------------------------------------------------------------------|------------------------------------------------|

----

----

----

| PART I – FINANCIAL INFORMATION |   |   |
|--------------------------------------|--------|--------|

|   | Item 1. Financial Statements | 1 |
|--------|------------------------------|---|

|   | Condensed Consolidated Balance Sheets at June 30, 2011 (unaudited) and December 31, 2010* | 1 |
|--------|-------------------------------------------------------------------------------------------|---|

|   | Unaudited Condensed Consolidated Statements of Operations for the six and three months ended June 30, 2011 and 2010 |  2 |
|--------|---------------------------------------------------------------------------------------------------------------------|---------|

|   | Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2011 | 3 |
|--------|-----------------------------------------------------------------------------------------------------------------|---|

|   | Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010 | 4 |
|--------|-----------------------------------------------------------------------------------------------------------|---|

|   | Notes to unaudited Condensed Consolidated Financial Statements | 5 |
|--------|----------------------------------------------------------------|---|

|   | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14 |
|--------|-----------------------------------------------------------------------------------------------------|----|

|   | Item 3. Quantitative and Qualitative Disclosures about Market Risk | 19 |
|--------|--------------------------------------------------------------------|----|

|   | Item 4. Controls and Procedures | 19 |
|--------|---------------------------------|----|

| PART II – OTHER INFORMATION |   |   |
|-----------------------------------|--------|--------|

|   | Item 1. Legal Proceedings | 20 |
|--------|---------------------------|----|

|   | Item 1A. Risk Factors | 20 |
|--------|-----------------------|----|

|   | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 20 |
|--------|---------------------------------------------------------------------|----|

|   | Item 3. Defaults upon Senior Securities | 20 |
|--------|-----------------------------------------|----|

|   | Item 4. [Removed and Reserved] | 20 |
|--------|--------------------------------|----|

|   | Item 5. Other Information | 20 |
|--------|---------------------------|----|

|   | Item 6. Exhibits | 20 |
|--------|------------------|----|

|   | Signatures |   |
|--------|------------|--------|

| * | The Condensed Consolidated Balance Sheet at December 31, 2010 has been derived from the audited consolidated financial statements filed as an exhibit to our Annual Report on Form 10-K that was filed on March 16, 2011. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                              |   | June 30,2011 |     |   | December 31, 2010 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|----------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                                            |   | (Unaudited)  |     |   |              |   |
| Current assets:                                                                                                                                                                                                                                                                                   |   |         |     |   |              |   |
| Cash                                                                                                                                                                                                                                                                                              |   | $            | 1,258    |   |              | $      | 2,035 |   |
| Accounts receivable, net of allowance for doubtful accounts of $200 and $250, respectively                                                                                                                                                                                                        |   |         | 2,866    |   |              |   | 2,706 |   |
| Net current assets of discontinued operations                                                                                                                                                                                                                                                     |   |         | —  |   |              |   | 15 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                                                                                         |   |         | 476      |   |              |   | 377 |   |
| Total current assets                                                                                                                                                                                                                                                                              |   |         | 4,600    |   |              |   | 5,133 |   |
| Property and equipment, net                                                                                                                                                                                                                                                                       |   |         | 5,233    |   |              |   | 3,148 |   |
| Other assets                                                                                                                                                                                                                                                                                      |   |         | 95       |   |              |   | 83 |   |
| Total assets                                                                                                                                                                                                                                                                                      |   | $            | 9,928    |   |              | $      | 8,364 |   |
|                                                                                                                                                                                                                                                                                              |   |         |     |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                        |   |         |     |   |              |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                              |   |         |     |   |              |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                                                  |   | $            | 1,889    |   |              | $      | 2,333 |   |
| Accrued expenses                                                                                                                                                                                                                                                                                  |   |         | 1,059    |   |              |   | 1,352 |   |
| Net current liabilities of discontinued operations                                                                                                                                                                                                                                                |   |         | 25       |   |              |   | — |   |
| Accrued sales taxes and regulatory fees                                                                                                                                                                                                                                                           |   |         | 725      |   |              |   | 739 |   |
| Revolving loan facility                                                                                                                                                                                                                                                                           |   |         | 750      |   |              |   | 750 |   |
| Customer deposits                                                                                                                                                                                                                                                                                 |   |         | 158      |   |              |   | 243 |   |
| Current portion of capital lease                                                                                                                                                                                                                                                                  |   |         | 120      |   |              |   | — |   |
| Deferred revenue                                                                                                                                                                                                                                                                                  |   |         | 281      |   |              |   | 242 |   |
| Total current liabilities                                                                                                                                                                                                                                                                         |   |         | 5,007    |   |              |   | 5,659 |   |
| Noncurrent liabilities:                                                                                                                                                                                                                                                                           |   |         |     |   |              |   |   |   |
| Capital lease, less current portion                                                                                                                                                                                                                                                               |   |         | 392      |   |              |   | — |   |
| Total liabilities                                                                                                                                                                                                                                                                                 |   |         | 5,399    |   |              |   | 5,659 |   |
|                                                                                                                                                                                                                                                                                              |   |         |     |   |              |   |   |   |
| Commitments and contingencies                                                                                                                                                                                                                                                                     |   |         |     |   |              |   |   |   |
|                                                                                                                                                                                                                                                                                              |   |         |     |   |              |   |   |   |
| Stockholders’ equity:                                                                                                                                                                                                                                                                       |   |         |     |   |              |   |   |   |
| Preferred stock Series B, non-convertible; $.0001 par value; $100,000 stated value; 100 shares authorized and 100 and 100 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively,  liquidation value of $10,000                                        |   | $            | 10,000   |   |              | $      | 10,000 |   |
| Preferred stock Series A-2, convertible; $.0001 par value; $7,500 stated value; 7,500 shares authorized and 1,059 and 1,059 shares issued and outstanding at June 30, 2011 and December 31, 2010 recorded at fair value, respectively (liquidation value of $7,945 and $7,945, respectively) |   |         | 3,354    |   |              |   | 3,354 |   |
| Common stock, $.0001 par value;150,000,000 shares authorized; 22,285,462 and 21,353,604 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively                                                                                                                   |   |         | 2        |   |              |   | 9 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                        |   |         | 156,192  |   |              |   | 154,410 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                               |   |         | (165,019 | )      |              |   | (165,068 | ) |
| Total stockholders’ equity                                                                                                                                                                                                                                                                  |   |         | 4,529    |   |              |   | 2,705 |   |
| Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                  |   | $            | 9,928    |   |              | $      | 8,364 |   |
|                                                                                                                                                                                                                                                                                              |   |         |     |   |              |   |   |   |

----

|                                                             |   | Six Months EndedJune 30, |    |   | Three Months EndedJune 30, |
|------------------------------------------------------------------|--------|--------------------------|---------|--------|----------------------------|
|                                                             |   | 2011                     |    |   | 2010                       |   |   | 2011 |   | 2010 |
| Revenue                                                          |   | $                        | 13,935  |   |                       | $ | 13,597 |   |   | $ | 6,954 |   | $ | 7,082 |
|                                                             |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                              |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Network and infrastructure                                       |   |                     | 4,883   |   |                       |   | 5,876 |   |   |   | 2,471 |   |   | 3,041 |
| Global managed services                                          |   |                     | 3,873   |   |                       |   | 4,154 |   |   |   | 1,979 |   |   | 2,102 |
| Sales and marketing                                              |   |                     | 1,824   |   |                       |   | 2,101 |   |   |   | 902 |   |   | 1,209 |
| General and administrative                                       |   |                     | 2,688   |   |                       |   | 2,355 |   |   |   | 1,282 |   |   | 1,233 |
| Depreciation and amortization                                    |   |                     | 573     |   |                       |   | 542 |   |   |   | 297 |   |   | 276 |
| Total operating expenses                                         |   |                     | 13,841  |   |                       |   | 15,028 |   |   |   | 6,931 |   |   | 7,861 |
| Income (loss) from operations                                    |   |                     | 94      |   |                       |   | (1,431 | ) |   |   | 23 |   |   | (779) |
|                                                             |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Interest and other expense:                                      |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Interest expense                                                 |   |                     | 32      |   |                       |   | 54 |   |   |   | 14 |   |   | 18 |
| Amortization of financing costs                                  |   |                     | 31      |   |                       |   | 2 |   |   |   | 16 |   |   | 2 |
| Total interest and other expense                                 |   |                     | 63      |   |                       |   | 56 |   |   |   | 30 |   |   | 20 |
| Net income (loss) from continuing operations                     |   |                     | 31      |   |                       |   | (1,487 | ) |   |   | (7 | ) |   | (799) |
| Income from discontinued operations                              |   |                     | 18      |   |                       |   | 112 |   |   |   | 24 |   |   | 35 |
| Net income (loss)                                                |   |                     | 49      |   |                       |   | (1,375 | ) |   |   | 17 |   |   | (764) |
| Redemption of preferred stock                                    |   |                     | — |   |                       |   | (778 | ) |   |   | — |   |   | — |
| Net income (loss) attributable to common stockholders            |   | $                        | 49      |   |                       | $ | (2,153 | ) |   | $ | 17 |   | $ | (764) |
|                                                             |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to common stockholders per share: |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
|                                                             |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Continuing operations                                            |   | $                        | 0.00    |   |                       | $ | (0.13 | ) |   | $ | 0.00 |   | $ | (0.04) |
| Discontinued operations                                          |   | $                        | 0.00    |   |                       | $ | 0.01 |   |   | $ | 0.00 |   | $ | 0.00 |
| Basic net (loss) income per share                                |   | $                        | 0.00    |   |                       | $ | (0.12 | ) |   | $ | 0.00 |   | $ | (0.04) |
|                                                             |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Continuing operations                                            |   | $                        | 0.00    |   |                       | $ | (0.13 | ) |   | $ | 0.00 |   | $ | (0.04) |
| Discontinued operations                                          |   | $                        | 0.00    |   |                       | $ | 0.01 |   |   | $ | 0.00 |   | $ | 0.00 |
| Diluted net income (loss) per share                              |   | $                        | 0.00    |   |                       | $ | (0.12 | ) |   | $ | 0.00 |   | $ | (0.04) |
|                                                             |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares:                        |   |                     |    |   |                       |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   |                     | 20,714  |   |                       |   | 17,985 |   |   |   | 20,753 |   |   | 19,868 |
| Diluted                                                          |   |                     | 24,594  |   |                       |   | 17,985 |   |   |   | 24,594 |   |   | 19,868 |

----

|                                                              |   | Series B        |    |   | Series A-2      |   |    |         |   |   | Additional |   |   |        |    |   |   |   |
|-------------------------------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|---------|--------------|--------|--------|------------|--------|--------|-------------|---------|--------|--------|--------|
|                                                              |   | Preferred Stock |    |   | Preferred Stock |   |    | Common Stock |   |   | Paid In    |   |   | Accumulated |    |   |   |   |
|                                                              |   | Shares          |    |   | Amount          |   |    | Shares       |   |   | Amount     |   |   | Shares      |    |   | Amount |   |   | Capital |   |   | Deficit |   |   | Total |   |
| Balance at January 1, 2011                                        |   |            | 100     |   |            | $      | 10,000  |         |   |   | 1          |   |   | $           | 3,354   |   |   |   | 21,354 |   |   | $ | 9 |   |   | $ | 154,410 |   |   | $ | (165,068 | ) |   | $ | 2,705 |   |
| Net income                                                        |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 49 |   |   |   | 49 |   |
| Settlement of liabilities with restricted stock and stock options |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | — |   |   |   | — |   |   |   | 48 |   |   |   | — |   |   |   | 48 |   |
| Stock-based compensation                                          |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | — |   |   |   | — |   |   |   | 147 |   |   |   | — |   |   |   | 147 |   |
| Issuance of restricted stock                                      |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | 169 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Forfeiture of restricted stock                                    |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | (38 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Cashless exercise of options                                      |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | 31 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Property and equipment purchased with common stock                |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | 769 |   |   |   | — |   |   |   | 1,580 |   |   |   | — |   |   |   | 1,580 |   |
| Adjustment to par value resulting from reverse stock split        |   |            | — |   |            |   | — |         |   |   | —    |   |   |        | — |   |   |   | — |   |   |   | (7 | ) |   |   | 7 |   |   |   | — |   |   |   | — |   |
| Balance at June 30, 2011                                          |   |            | 100     |   |            | $      | 10,000  |         |   |   | 1          |   |   | $           | 3,354   |   |   |   | 22,285 |   |   | $ | 2 |   |   | $ | 156,192 |   |   | $ | (165,019 | ) |   | $ | 4,529 |   |

----

|                                                                                 |   | Six Months Ended June 30, |
|--------------------------------------------------------------------------------------|--------|--------------------------------|
|                                                                                 |   | 2011                           |   | 2010 |
| Cash flows from Operating Activities:                                                |   |                           |   |   |
| Net income (loss)                                                                    |   | $                              | 49 |   | $ | (1,375 | ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |   |                           |   |   |   |   |   |   |
| Depreciation and amortization                                                        |   |                           | 573 |   |   | 542 |   |
| Amortization of deferred financing costs                                             |   |                           | 31 |   |   | 2 |   |
| Loss on disposal of equipment                                                        |   |                           | (12 | ) |   | (19 | ) |
| Bad debt expense                                                                     |   |                           | (9 | ) |   | 180 |   |
| Stock-based compensation                                                             |   |                           | 147 |   |   | 231 |   |
| Increase (decrease) attributable to changes in assets and liabilities:               |   |                           |   |   |   |   |   |   |
| Accounts receivable                                                                  |   |                           | (151 | ) |   | (565 | ) |
| Prepaid expenses and other current assets                                            |   |                           | (100 | ) |   | (255 | ) |
| Other assets                                                                         |   |                           | (43 | ) |   | (83 | ) |
| Accounts payable                                                                     |   |                           | (444 | ) |   | (381 | ) |
| Customer deposits                                                                    |   |                           | (85 | ) |   | (48 | ) |
| Accrued expenses, sales taxes and regulatory fees                                    |   |                           | (258 | ) |   | 113 |   |
| Deferred revenue                                                                     |   |                           | 39 |   |   | (39 | ) |
| Net cash used in operating activities – continuing operations                  |   |                           | (263 | ) |   | (1,697 | ) |
| Net cash provided by operating activities - discontinued operations                  |   |                           | 40 |   |   | 67 |   |
| Net cash used in operating activities                                                |   |                           | (223 | ) |   | (1,630 | ) |
|                                                                                 |   |                           |   |   |   |   |   |   |
| Cash flows from Investing Activities:                                                |   |                           |   |   |   |   |   |   |
| Purchases of property and equipment                                                  |   |                           | (554 | ) |   | (607 | ) |
|    Net cash used in investing activities                                   |   |                           | (554 | ) |   | (607 | ) |
|                                                                                 |   |                           |   |   |   |   |   |   |
| Cash flows from Financing Activities:                                                |   |                           |   |   |   |   |   |   |
| Proceeds from stock offerings                                                        |   |                           | — |   |   | 3,007 |   |
| Proceeds from revolving loan facility, net                                           |   |                           | — |   |   | 750 |   |
| Costs related to private placements                                                  |   |                           | — |   |   | (230 | ) |
|    Net cash provided by financing activities                               |   |                           | — |   |   | 3,527 |   |
| Increase (decrease) in cash and cash equivalents                                     |   |                           | (777 | ) |   | 1,290 |   |
| Cash at beginning of period                                                          |   |                           | 2,035 |   |   | 587 |   |
| Cash at end of period                                                                |   | $                              | 1,258 |   | $ | 1,877 |   |
|                                                                                 |   |                           |   |   |   |   |   |   |
| Supplement disclosures of cash flow information:                                     |   |                           |   |   |   |   |   |   |
| Cash paid during the period for interest                                             |   | $                              | 32 |   | $ | 54 |   |
|                                                                                 |   |                           |   |   |   |   |   |   |
| Non-cash investing and financing activities:                                         |   |                           |   |   |   |   |   |   |
| Costs related to private placements incurred by issuance of placement agent warrants |   | $                              | — |   | $ | 443 |   |
| Settlement of liabilities with restricted stock and stock options                    |   | $                              | 48 |   | $ | — |   |
| Property and equipment purchased with common stock                                   |   | $                              | 1,580 |   | $ | — |   |
| Acquisition of network equipment under capital lease                                 |   | $                              | 512 |   | $ | — |   |
|                                                                                 |   |                           |   |   |   |   |   |   |

----

----

----

----

|                                              |   | Six Months EndedJune 30, |                           |   | Three Months EndedJune 30, |   |
|---------------------------------------------------|--------|--------------------------|--------------------------------|--------|----------------------------|--------|
|                                              |   | 2011                     |                           |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| Risk free interest rate                           |   |                     | 2.1                            | %      |                       |   | 2.6 | % |   |   | N/A |   |   |   | 2.6 | % |
| Expected option lives                             |   | 5 Years                  |                           |   | 5 Years                    |   |   |   | N/A |   |   | 5 Years |   |
| Expected volatility                               |   |                     | 117.4                          | %      |                       |   | 113.9 | % |   |   | N/A |   |   |   | 114.0 | % |
| Estimated forfeiture rate                         |   |                     | 10                             | %      |                       |   | 10 | % |   |   | N/A |   |   |   | 10 | % |
| Expected dividend yields                          |   | None                     |                           |   | None                       |   |   | None |   |   | None |   |
| Weighted average grant date fair value of options |   |                     | $     1.87 |   |                       |   | $     2.04 |   |   |   | N/A |   |   |   |   $     2.00 |   |

----

|                                                                                          |   | Outstanding       |   |   | Exercisable                   |   |
|-----------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------------------|--------|
|                                                                                          |   | Number of Options |   |   | WeightedAverage ExercisePrice |   |   | Number of Options |   |   | Weighted Average Exercise Price |   |
| Options outstanding, January 1, 2011                                                          |   |              | 1,260  |   |                          | $      | 3.19 |   |   |   | 848 |   |   | $ | 3.72 |   |
| Granted                                                                                       |   |              | 12     |   |                          |   | 2.27 |   |   |   |   |   |   |   |   |   |
| Exercised (1)                                                                                 |   |              | (124   | )      |                          |   | 1.61 |   |   |   |   |   |   |   |   |   |
| Expired                                                                                       |   |              | (26    | )      |                          |   | 15.96 |   |   |   |   |   |   |   |   |   |
| Forfeited                                                                                     |   |              | (196   | )      |                          |   | 3.11 |   |   |   |   |   |   |   |   |   |
| Options outstanding, June 30, 2011                                                            |   |              | 926    |   |                          | $      | 3.05 |   |   |   | 619 |   |   | $ | 3.49 |   |
|                                                                                          |   |              |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| (1)    31 common shares were issued in cashless exercises of 124 options. |   |
|                                                                                          |   |

|                       |   | Six Months Ended June 30, |   |   | Three Months Ended June 30, |   |
|----------------------------|--------|---------------------------|--------|--------|-----------------------------|--------|
|                       |   | 2011                      |   |   | 2010                        |   |   | 2011 |   |   | 2010 |   |
| Global managed services    |   | $                         | 38     |   |                        | $      | 66 |   |   | $ | 19 |   |   | $ | 33 |   |
| Sales and marketing        |   |                      | 10     |   |                        |   | 21 |   |   |   | 4 |   |   |   | 11 |   |
| General and administrative |   |                      | 16     |   |                        |   | 39 |   |   |   | 8 |   |   |   | 20 |   |
|                       |   | $                         | 64     |   |                        | $      | 126 |   |   | $ | 31 |   |   | $ | 64 |   |
|                       |   |                      |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Restricted Shares |   |   | Weighted AverageGrant Price |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|----------------------------------|--------|
| Unvested restricted shares outstanding, January 1, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |              | 689    |   |                             | $      | 2.13 |   |
| Granted                                                                                 |   |              | 169    |   |                             |   | 2.18 |   |
| Vested                                                                                  |   |              | (92    | )      |                             |   | 1.69 |   |
| Forfeited                                                                               |   |              | (38    | )      |                             |   | 2.52 |   |
| Unvested restricted shares outstanding, June 30, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |              | 728    |   |                             | $      | 2.18 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |   |   |                             |   |   |   |

|                            |   | Six Months Ended June 30, |   |   | Three Months Ended June 30, |   |
|---------------------------------|--------|---------------------------|--------|--------|-----------------------------|--------|
|                            |   | 2011                      |   |   | 2010                        |   |   | 2011 |   |   | 2010 |   |
| Restricted stock shares granted |   |                      | 169    |   |                        |   | 360 |   |   |   | 69 |   |   |   | 332 |   |
|                            |   |                      |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Global managed services         |   | $                         | 18     |   |                        | $      | 11 |   |   | $ | 8 |   |   | $ | 5 |   |
| Sales and marketing             |   |                      | 9      |   |                        |   | 2 |   |   |   | 7 |   |   |   | 1 |   |
| General and administrative      |   |                      | 56     |   |                        |   | 92 |   |   |   | 24 |   |   |   | 50 |   |
|                            |   | $                         | 83     |   |                        | $      | 105 |   |   | $ | 39 |   |   | $ | 56 |   |
|                            |   |                      |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Warrants |    |   | Weighted AverageExercise Price |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|---------|--------|-------------------------------------|--------|
| Warrants outstanding, January 1, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |     | 712     |   |                                | $      | 1.98 |   |
| Granted                                                                                 |   |     | — |   |                                |   |   |   |
| Exercised                                                                               |   |     | — |   |                                |   |   |   |
| Forfeited                                                                               |   |     | — |   |                                |   |   |   |
| Warrants outstanding, June 30, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |     | 712     |   |                                | $      | 1.98 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |     |    |   |                                |   |   |   |

|                             |   | June 30, 2010 |   |   |
|----------------------------------|--------|---------------|--------|--------|
| Series A-2 Preferred Stock  |   |          | 4,075  |   |
| Warrants                    |   |          | 712    |   |
| Options                          |   |          | 1,354  |   |
| Unvested restricted stock        |   |          | 543    |   |
|                             |   |          | 6,684  |   |

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|   |   |   | Total  |   |   | Interest |   |   | Principal |   |
|--------|--------|--------|--------|--------|--------|----------|--------|--------|-----------|--------|
| 2011   |   |   | $      | 62     |   |     | $      | 9      |      |   | $ | 53 |   |
| 2012   |   |   |   | 185    |   |     |   | 21     |      |   |   | 164 |   |
| 2013   |   |   |   | 186    |   |     |   | 12     |      |   |   | 174 |   |
| 2014   |   |   |   | 124    |   |     |   | 3      |      |   |   | 121 |   |
|   |   |   | $      | 557    |   |     | $      | 45     |      |   | $ | 512 |   |
|   |   |   |   |   |   |     |   |   |      |   |   |   |   |

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| ·   | OV Connect – Providing business exchange services by enabling customers to connect to other video users through peering arrangements with Metro Private Line Service carriers, mobile provider networks, ethernet exchanges, the public Internet, and cross connects at co-location facilities. Glowpoint supports the convergence of voice, data and video using the customer’s existing network connection or a dedicated private network if required. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | OV Collaborate – Providing collaboration services such as hosted bridging by offering comprehensive conferencing services, including scalable, pre-scheduled and “ad-hoc” conferencing resources, using hosted infrastructure in the cloud or a client’s infrastructure. In addition to connecting virtually any device to a call, our conference producers can manage, record, and stream video events to the Internet. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | OV Manage – Providing help desk and concierge and endpoint monitoring by offering video operations management services with complete solutions for end-to-end management of immersive and non-immersive telepresence rooms.  OV Manage offers flexible options, including a complete cloud-based infrastructure that offers customers the opportunity to purchase only the endpoints themselves, as well as packages that cater to customers who elect to purchase their own video infrastructure. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Managed video services combined, which represents subscription OV Managed video services generally tied to contracts of 12 months or more and OV Collaborate usage based services increased 25.7% and 19.3% in the 2011 Period and 2011 Quarter respectively. These revenues account for 44.3% of total current revenue in the 2011 Period, compared to 36.2% in the 2010 Period and continue to represent the core focus of the company’s growth strategy.  The increases in these revenues are primarily attributed to increased customer usage of our cloud-based video managed services by existing customers as well as new customers. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Network and related services, represented as OV Connect, which are generally tied to contracts of 12 months or more, decreased 15.9% and 17.3% in the 2011 Period and 2011 Quarter respectively. These revenues account for 49.4% of total current revenue in the 2011 Period, compared to 60.2% in the 2010 Period. The decrease in these revenues is primarily attributed to the churn of the commodity network services revenue. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Professional and other services, which include broadcast events, increased 75.9% and 18.3% in the 2011 Period and 2011 Quarter, respectively.  These revenues account for 6.3% of total current revenue in the 2011 Period, compared to 3.7% in the 2010 Period.  The increase in these revenues is primarily attributed to a greater number of broadcast events. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   | Six Months Ended June 30, |   |   | Three Months Ended June 30, |   |
|---------------------------------|--------|---------------------------|--------|--------|-----------------------------|--------|
|                            |   | 2011                      |   |   | 2010                        |   |   | Increase (Decrease) |   |   | % Change |   |   | 2011 |   |   | 2010 |   |   | Increase (Decrease) |   |   | % Change |   |
| Revenue                         |   |                      |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Managed video services combined |   | $                         | 6,180  |   |                        | $      | 4,918 |   |   | $ | 1,262 |   |   |   | 25.7% |   |   | $ | 3,046 |   |   | $ | 2,554 |   |   | $ | 492 |   |   |   | 19.3% |   |
| OV Connect                      |   |                      | 6,879  |   |                        |   | 8,181 |   |   |   | (1,302) |   |   |   | (15.9) |   |   |   | 3,366 |   |   |   | 4,070 |   |   |   | (704) |   |   |   | (17.3) |   |
| Professional and other services |   |                      | 876    |   |                        |   | 498 |   |   |   | 378 |   |   |   | 75.9 |   |   |   | 542 |   |   |   | 458 |   |   |   | 84 |   |   |   | 18.3 |   |
| Total revenue                   |   | $                         | 13,935 |   |                        | $      | 13,597 |   |   | $ | 338 |   |   |   | 2.5% |   |   | $ | 6,954 |   |   | $ | 7,082 |   |   | $ | (128) |   |   |   | (1.8%) |   |

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|                                         |   | Six Months EndedJune 30, |   |   | Three Months EndedJune 30, |   |
|----------------------------------------------|--------|--------------------------|--------|--------|----------------------------|--------|
|                                         |   | 2011                     |   |   | 2010                       |   |   | 2011 |   |   | 2010 |   |
| Net income (loss) from continuing operations |   | $                        | 31     |   |                       | $      | (1,487 | ) |   | $ | (7 | ) |   | $ | (799 | ) |
| Depreciation and amortization                |   |                     | 573    |   |                       |   | 542 |   |   |   | 297 |   |   |   | 276 |   |
| Amortization of financing costs              |   |                     | 31     |   |                       |   | 2 |   |   |   | 16 |   |   |   | 2 |   |
| Interest expense                             |   |                     | 32     |   |                       |   | 54 |   |   |   | 14 |   |   |   | 18 |   |
| EBITDA                                       |   |                     | 667    |   |                       |   | (889 | ) |   |   | 320 |   |   |   | (503 | ) |
| Stock-based compensation                     |   |                     | 147    |   |                       |   | 231 |   |   |   | 70 |   |   |   | 114 |   |
|     Severance            |   |                     | 11     |   |                       |   | 125 |   |   |   | 11 |   |   |   | 125 |   |
| Adjusted EBITDA                              |   | $                        | 825    |   |                       | $      | (533 | ) |   | $ | 401 |   |   | $ | (264 | ) |

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| 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 and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

| 101.INS* | XBRL Instance Document                        |
|----------|-----------------------------------------------|
| 101.SCH* | XBRL Taxonomy Extension Schema                |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase  |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase   |
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase        |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase |

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|                            | GLOWPOINT, INC.                                                                       |
|---------------------------------|---------------------------------------------------------------------------------------|
|                            |                                                                                  |
| Date:  August 8, 2011 | By:/s/ Joseph Laezza                                                                  |
|                            | Joseph Laezza, Chief Executive Officer(principal executive officer)                   |
|                            |                                                                                  |
| Date:  August 8, 2011 | By:/s/ John R. McGovern                                                               |
|                            | John R. McGovern, Chief Financial Officer(principal financial and accounting officer) |