| x      | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934     |
|--------|------------------------------------------------------------------------------------------|
|   |                                                                                     |
|   | For the fiscal year ended December 31, 2010.                                             |
|   |                                                                                     |
| o      | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|   |                                                                                     |
|   | For the transition period from ________  to ________ .                         |

| Michigan                                                       | 38-2191935                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 49113 Wixom Tech Drive, Wixom, Michigan                        | 48393                                |
| (Address of principal executive offices)                       | (Zip Code)                           |

| Large accelerated filer  o                                                        |   | Accelerated filer  o               |
|---------------------------------------------------------------------------------------------|--------|----------------------------------------------|
| Non-accelerated filer  o  (Do not check if a smaller reporting company) |   | Smaller reporting company   x |

----

----

----

----

|   |   | 2010   |   |   | 2009   |   |
|--------|--------|--------|--------|--------|--------|--------|
|   |   | Mar 31 |   |   | Jun 30 |   |   | Sept 30 |   |   | Dec 31 |   |   | Mar 31 |   |   | Jun 30 |   |   | Sept 30 |   |   | Dec 31 |   |
| High   |   | $      | 0.07   |   |   | $      | 0.07 |   |   | $ | 0.13 |   |   | $ | 0.08 |   |   | $ | 0.18 |   |   | $ | 0.18 |   |   | $ | 0.15 |   |   | $ | 0.09 |   |
| Low    |   |   | 0.04   |   |   |   | 0.02 |   |   |   | 0.04 |   |   |   | 0.03 |   |   |   | 0.10 |   |   |   | 0.06 |   |   |   | 0.05 |   |   |   | 0.04 |   |

----

|                                                                     |   | Equity Compensation Plan Information                                                         |      |
|--------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|-----------|
| Plan Category                                                            |   | Number of securities to be issued upon exercise of outstanding options, warrants, and rights |      |   | Weighted-average exercise price of outstanding options, warrants, and rights |   |   | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |   |
|                                                                     |   | (a)                                                                                          |      |   | (b) |   |   | (c) |   |
| Equity compensation plans approved by security holders  (1)(2) |   |                                                                                         | 6,260,000 |   |   | $ | 0.06 |   |   |   | 6,572,000 |   |

----

| (1) | The remaining number of securities available for future issuance under equity compensation plans may be for either option grants or stock grants. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | On May 5, 2010, 2,375,000 stock options were awarded from the 2008 Plan to various key employees and is contingent on shareholder approval of an amendment to the 2008 Plan to increase the number of shares of common stock available for awards. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                        |   | Payments due by period |    |
|-----------------------------|--------|------------------------|---------|
|                        |   | Total                  |    |   | Less than 1 year |   |   | 1-3 years |   |   | 3-5 years |   |   | More than 5 years |   |
| Operating lease obligations |   | $                      | 474,681 |   |   | $ | - |   |   | $ | 284,965 |   |   | $ | 189,716 |   |   | $ | - |   |

----

----

| Name               |   | Company Present Position with the                                                        |   | Age    |   |   | Served as Director Since |   |
|--------------------|--------|------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------------------------|--------|
| Charles J. Drake   |   | Chairman of the Board and Chief Executive Officer of Integral Vision, Inc.               |   |   | 70     |   |                     |   | 1978 |   |
|               |   |                                                                                     |   |   |   |   |                     |   |   |   |
| Max A. Coon        |   | Secretary and Vice Chairman of the Board of Integral Vision, Inc.                        |   |   | 76     |   |                     |   | 1978 |   |
|               |   |                                                                                     |   |   |   |   |                     |   |   |   |
| Vincent Shunsky    |   | Treasurer and Director of Integral Vision, Inc.                                          |   |   | 61     |   |                     |   | 1978 |   |
|               |   |                                                                                     |   |   |   |   |                     |   |   |   |
| William B. Wallace |   | Director of Integral Vision, Inc.                                                        |   |   | 66     |   |                     |   | 1990 |   |
|               |   |                                                                                     |   |   |   |   |                     |   |   |   |
| Mark R. Doede      |   | President, Chief Operating Officer, and Chief Financial Officer of Integral Vision, Inc. |   |   | 53     |   |                     |   | 2009 |   |

----

----

| Name               |   | Principle Occupation and Business Experience During Past 5 Years (1)                                                      |   | Age as of April 14, 2011 |   |   | Served as Officer Since |   |
|--------------------|--------|---------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|------------------------------|--------|
| Charles J. Drake   |   | Chairman of the Board since 1983 and Chief Executive Officer since 1998                                                   |   |                     | 70     |   |                         |   | 1978 |   |
| Mark R. Doede      |   | President and Chief Operating Officer since 1998 and Chief Financial Officer since 2002                                   |   |                     | 53     |   |                         |   | 1989 |   |
| Jeffery Jay Becker |   | Senior Vice President since 2007 and Sales Engineer from 2005 to 2007                                                     |   |                     | 50     |   |                         |   | 2007 |   |
| Andrew Blowers     |   | Chief Technical Officer since March of 2004                                                                               |   |                     | 43     |   |                         |   | 2002 |   |
| Paul Zink          |   | Vice President Applications Engineering since May 2007 and Director Vision Applications from November 1998 to May of 2007 |   |                     | 45     |   |                         |   | 2007 |   |

----

| (1) | All officers have been employed by the Company for more than the past five years. |
|-----|-----------------------------------------------------------------------------------|

----

----

----

|                                    |   |   |   | Annual Compensation |       |   | Long Term Compensation (1) |   |      | All Other Compensation |   |   |             |   |   |
|-----------------------------------------|--------|--------|--------|---------------------|------------|--------|----------------------------|--------|-----------|------------------------|--------|--------|------------------|--------|--------|
| Name and Principal Position             |   | Year   |   |                | Salary ($) |   |                       |   | Bonus ($) |                   |   |   | Stock Awards ($) |   |   |   | Option Awards ($) |   |   |   | ($) |   |   |   | Total $ |   |
| Charles J. Drake                        |   | 2010   |   |                | 160,000    |   |                       |   | 75,000    |                   |   |   | 68,154           | 5      |   |   | 24,916 |   |   |   | 16,770 | 2 |   |   | 344,840 |   |
| Chief Executive Officer                 |   | 2009   |   |                | 160,000    |   |                       |   | 80,000    |                   |   |   | -                |   |   |   | - |   |   |   | 15,410 |   2 |   |   | 255,410 |   |
|                                    |   |   |   |                |       |   |                       |   |      |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mark R. Doede                           |   | 2010   |   |                | 120,000    |   |                       |   | 36,000    |                   |   |   | 11,100           |   |   |   | 13,875 |   |   |   | 11,842 |   3 |   |   | 192,817 |   |
| President & Chief Operating Officer |   | 2009   |   |                | 120,000    |   |                       |   | 36,000    |                   |   |   | 18,560           |   |   |   | - |   |   |   | 13,265 |   3 |   |   | 187,825 |   |
|                                    |   |   |   |                |       |   |                       |   |      |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Andrew Blowers                          |   | 2010   |   |                | 117,000    |   |                       |   | 33,000    |                   |   |   | -                |   |   |   | 12,403 |   |   |   | 8,682 |   4 |   |   | 171,085 |   |
| Chief Technical Officer                 |   | 2009   |   |                | 117,000    |   |                       |   | 33,000    |                   |   |   | -                |   |   |   | - |   |   |   | 20,082 |   4 |   |   | 170,082 |   |

----

----

|             |   |       |   | Grants of Plan Based Awards during Fiscal Year 2010 |   |
|------------------|--------|------------|--------|-----------------------------------------------------|--------|
| Name             |   | Grant Date |   | Estimated Future Payout Target (#)                  |   |   | All Other Stock Awards |   |   | All Other Stock Options |   |   |   | Option Exercise Price ($) |   |   |  Grant Date Fair Value ($) |   |
| Charles J. Drake |   | 5/5/2010   | 1      |                                                |   |   | 1,342,000 | 2 |   |   |   |   |   | - |   |   | 49,654 |   |
|             |   | 5/5/2010   | 1      |                                                |   |   |   |   |   |   | 857,906 | 2 |   | $ | 0.04 |   |   | 24,916 |   |
|             |   | 4/2/2010   | 3      |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 13,814 |   |
| Mark R. Doede    |   | 5/5/2010   | 1      |                                                |   |   |   |   |   |   | 477,755 | 2 |   | $ | 0.04 |   |   | 13,875 |   |
|             |   | 4/2/2010   | 3      |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,868 |   |
| Andrew Blowers   |   | 5/5/2010   | 1      |                                                |   |   |   |   |   |   | 427,061 | 2 |   | $ | 0.04 |   |   | 12,403 |   |
|             |   | 4/2/2010   | 3      |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,412 |   |

----

|             |   | Number of Securities Underlying Unexercised Options at FY-End (#) |
|------------------|--------|-------------------------------------------------------------------|
| Name             |   | Exercisable                                                       |   | Unexercisable |   | Option Exercise Price ($) |   | Option Expiration Date |
| Charles J. Drake |   |                                                              | 1,000,000 |   |   |   |   | 0.07 |   | 4/2/2020 |
|             |   |                                                              | 857,906 |   |   |   |   | 0.04 |   | 5/5/2020 |
|             |   |                                                              |   |   |   |   |   |   |   |   |
| Mark R. Doede    |   |                                                              | 50,000 |   |   |   |   | 0.14 |   | 8/1/2011 |
|             |   |                                                              | 50,000 |   |   |   |   | 0.24 |   | 3/12/2012 |
|             |   |                                                              | 40,000 |   |   |   |   | 0.15 |   | 5/7/2013 |
|             |   |                                                              | 12,000 |   |   |   |   | 0.13 |   | 1/21/2018 |
|             |   |                                                              | 256,000 |   |   |   |   | 0.07 | 1 | 4/2/2020 |
|             |   |                                                              | 216,000 |   |   |   |   | 0.07 | 2 | 4/2/2020 |
|             |   |                                                              | 477,755 |   |   |   |   | 0.04 |   | 5/5/2020 |
|             |   |                                                              |   |   |   |   |   |   |   |   |
| Andrew Blowers   |   |                                                              | 30,000 |   |   |   |   | 0.14 |   | 8/1/2011 |
|             |   |                                                              | 40,000 |   |   |   |   | 0.15 |   | 5/7/2013 |
|             |   |                                                              | 33,000 |   |   |   |   | 0.13 |   | 1/21/2018 |
|             |   |                                                              | 300,000 |   |   |   |   | 0.07 | 3 | 4/2/2020 |
|             |   |                                                              | 40,000 |   |   |   |   | 0.22 | 4 | 4/30/2018 |
|             |   |                                                              | 400,000 |   |   |   |   | 0.07 |   | 4/2/2010 |
|             |   |                                                              | 363,061 |   | 64,000 |   |   | 0.04 |   | 5/5/2020 |

----

----

| Name            |   | Fees Earned ($) |   |
|-----------------|--------|-----------------|--------|
| Vincent Shunsky |   |            | 5,662  |   |
| William Wallace |   |            | 7,800  |   |

| Equity Compensation Plan Information                                     |   |
|--------------------------------------------------------------------------|--------|
| Plan Category                                                            |   | Number of securities to be issued upon exercise of outstanding options, warrants, and rights |   |   | Weighted-average exercise price of outstanding options, warrants, and rights |   |   | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |   |
|                                                                     |   | (a) |   |   | (b) |   |   | (c) |   |
| Equity compensation plans approved by security holders  (1)(2) |   |   | 6,260,000 |   |   | $ | 0.06 |   |   |   | 6,572,000 |   |

----

----

| Amount and Nature of Beneficial Ownership  |   |
|--------------------------------------------|--------|
| Name and Addressof Beneficial Owner        |   | Title of Class |   | Amount and Nature ofBeneficial Ownership |   |   | Percent ofClass |   |
| Austin W. Marxe                            |   | Common Stock |   |   | 5,450,000 |   |   |   | 13.88 | % |
| David M. Geenhouse (1)                     |   |   |   |   |   |   |   |   |   |   |
| 153 East 53rd Street, 55th Floor           |   |   |   |   |   |   |   |   |   |   |
| New York, NY 10022                         |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Bonanza Master Fund, LTD (2)               |   | Common Stock |   |   | 4,970,600 |   |   |   | 13.93 | % |
| 300 Crescent Court, Suite 1740             |   |   |   |   |   |   |   |   |   |   |
| Dallas, TX 75201                           |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |
| J. N. Hunter (3)                           |   | Common Stock |   |   | 8,725,579 |   |   |   | 20.97 | % |
| Industrial Boxboard Corporation            |   |   |   |   |   |   |   |   |   |   |
| 2249 Davis Court                           |   |   |   |   |   |   |   |   |   |   |
| Hayward, CA 94545                          |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |
| John R. Kiely, III (4)                     |   | Common Stock |   |   | 9,142,170 |   |   |   | 22.13 | % |
| 17817 Davis Road                           |   |   |   |   |   |   |   |   |   |   |
| Dundee, MI 48131                           |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Charles J. Drake (5)                       |   | Common Stock |   |   | 6,645,709 |   |   |   | 17.71 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Max A. Coon (6)                            |   | Common Stock |   |   | 1,727,173 |   |   |   | 4.74 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Mark R. Doede (7)                          |   | Common Stock |   |   | 1,443,255 |   |   |   | 3.92 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Jeffery B. Becker (8)                      |   | Common Stock |   |   | 883,742 |   |   |   | 2.42 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Andrew Blowers (9)                         |   | Common Stock |   |   | 1,261,111 |   |   |   | 3.42 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Paul M. Zink (10)                          |   | Common Stock |   |   | 765,053 |   |   |   | 2.10 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Vincent Shunsky (11)                       |   | Common Stock |   |   | 24,253 |   |   |   | * |   |
|                                       |   |   |   |   |   |   |   |   |   |   |
| William B. Wallace                         |   | Common Stock |   |   | 0 |   |   |   | * |   |
|                                       |   |   |   |   |   |   |   |   |   |   |
| All Directors and Officers as a Group (12) |   | Common Stock |   |   | 12,750,296 |   |   |   | 30.19 | % |

----

| * | Beneficial ownership does not exceed 1%. |
|---|------------------------------------------|

| (1) | Austin W. Marxe and David M. Greenhouse are the principal owners of AWM, SSTA and MG. AWM is the general partner of and investment adviser to Special Situations Cayman Fund, L.P. SSTA is the general partner of and investment adviser to Special Situations Technology Fund, L.P. and Special Situations Technology Fund II, L.P. MG is the general partner of and investment adviser to Special Situations Private Equity Fund, L.P. Through their control of AWM, SSTA and MG, Messrs. Marxe and Greenhouse share voting and investment control over the portfolio securities of each of the funds listed below. The total beneficial ownership of Messrs. Marxe and Greenhouse includes: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | 105,000 shares of common stock and warrants for the purchase of 204,325 shares which expire on September 15, 2013 held by Special Situations Technology Fund, L.P.; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | 645,000 shares of common stock and warrants for the purchase of 1,255,135 shares which expire on September 15, 2013 held by Special Situations Technology Fund II, L.P.; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | 350,000 shares of commons stock and warrants for the purchase of 681,081 shares which expire on September 15, 2013 held by Special Situations Cayman Fund, L.P.; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv)   | 750,000 shares of common stock and warrants for the purchase of 1,459,459 shares which expire on September 15, 2013 held by Special Situations Private Equity Fund, L.P.; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                          |
|   | (v)    | 309,841 shares of common stock currently held by Special Situations Fund III QP, L.P.                                                                                         |

| (2) | The total beneficial ownership includes 4,970,600 shares of common stock currently held but does not include warrants for the purchase of 3,000,000 shares which expire on September 15, 2013 and are subject to a 4.99% blocker clause. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The total beneficial ownership J.N. Hunter includes: |
|-----|------------------------------------------------------|

|   | (i) | 263,846 shares of common stock held directly by J.N. Hunter in the J.N. Hunter IRA; |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (ii) | 187,846 shares held by the Industrial Boxboard Company, of which Mr. Hunter and his spouse are the sole general partners; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | 2,343,272 shares held by the Industrial Boxboard Corporation Profit Sharing Plan and Trust, of which Mr. Hunter and his spouse are the sole trustees; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | 5,237,484 shares issuable upon the conversion of convertible notes held by the Industrial Boxboard Corporation Profit Sharing Plan and Trust which mature on July 1, 2010; and |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | 693,131 shares issuable upon the exercise of warrants held by the Industrial Boxboard Corporation Profit Sharing Plan and Trust which expire September 15, 2012; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Shares |      | Issued | Expire  | Type and Price |                               | Blocker % |   |
|--------|-----------|--------|---------|----------------|------------------------------------|-----------|--------|
|   | 432,567   |   | 1/8/09  | 7/1/10         | Convertible Note @ $0.15 per share |      |   | 4.90 |   |
|   | 372,033   |   | 7/1/09  | 7/1/10         | Convertible Note @ $0.15 per share |      |   | 4.90 |   |
|   | 400,707   |   | 1/1/10  | 7/1/10         | Convertible Note @ $0.15 per share |      |   | 4.90 |   |
|   | 115,068   |   | 2/24/09 | 2/24/13        | Warrant @ $0.15 per share          |      |   | 9.90 |   |
|   | 28,767    |   | 2/24/09 | 2/24/13        | Warrant @ $0.15 per share          |      |   | 9.90 |   |
|   | 57,535    |   | 4/10/09 | 4/10/13        | Warrant @ $0.15 per share          |      |   | 9.90 |   |
|   | 14,384    |   | 4/10/09 | 4/10/13        | Warrant @ $0.15 per share          |      |   | 9.90 |   |
|   | 285,252   |   | 4/10/09 | 4/10/13        | Warrant @ $0.15 per share          |      |   | 9.90 |   |
|   | 22,603    |   | 6/4/09  | 6/4/13         | Warrant @ $0.15 per share          |      |   | 9.90 |   |
|   | 28,767    |   | 7/3/09  | 7/3/13         | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 65,753    |   | 7/28/09 | 7/28/13        | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 45,205    |   | 8/28/09 | 8/28/13        | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 349,518   |   | 7/3/09  | 7/3/13         | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 376,705   |   | 10/8/09 | 10/8/13        | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 699,041   |   | 2/1/10  | 2/1/14         | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 551.469   |   | 3/23/10 | 3/23/14        | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 154,110   |   | 7/23/10 | 7/23/14        | Warrant @ $0.15 per share          |      |   | 4.90 |   |
|   | 6,558,247 |   | 8/17/10 | 8/17/14        | Warrant @ $0.15 per share          |      |   | 4.90 |   |

| (4) | The total beneficial ownership for John R. Kiely, III includes: |
|-----|-----------------------------------------------------------------|

|   | (i)    | 2,211,988 shares of common stock held directly;                                                                                                                               |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                          |
|   | (ii)   | 156,281 shares of common stock issuable upon the exercise of warrants which expire July 30, 2011 and are held directly;                                                       |
|   |   |                                                                                                                                                                          |
|   | (iii)  | 2,622,032 shares of common stock issuable upon the conversion of convertible notes which mature July 1, 2010 and are held by John R. Kiely, III in his personal living trust; |
|   |   |                                                                                                                                                                          |
|   | (iv)   | 191,733 shares of common stock issuable upon the exercise of warrants which expire January 2, 2012 and are held by John R. Kiely, III in his personal living trust;           |
|   |   |                                                                                                                                                                          |
|   | (v)    | 1,291,693 shares held by John R. and Margaret Lee Kiely Revocable Trust, of which John R. Kiely, III is the sole trustee;                                                |

|   | (vi)   | 2,410,465 shares issuable upon the conversion of convertible notes held by the John R. and Margaret Lee Kiely Revocable Trust, which mature on July 1, 2010;                                                                             |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                     |
|   | (vii)  | 67,730 shares and 180,048 shares of common stock issuable upon the exercise of warrants which expire July 30, 2011 and January 2, 2012,  respectively, and are held by the John R. and Margaret Lee Kiely Revocable Trust; and |

|   | (viii) | 10,200 shares held by Michael H. Kiely Trust, of which John R. Kiely is the co-trustee; |
|--------|--------|----------------------------------------------------------------------------------------------|

| Shares |    | Issued |    | Expire |    | Type and Price |                               | Held By |            | Blocker % |   |
|--------|---------|--------|---------|--------|---------|----------------|------------------------------------|---------|-----------------|-----------|--------|
|   | 158,027 |   | 7/1/09  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Revocable Trust |      |   | 4.90 |   |
|   | 170,207 |   | 1/1/10  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Revocable Trust |      |   | 4.90 |   |
|   | 184,467 |   | 7/3/09  |   | 7/3/13  |           | Warrant @ $0.15 per share          |    | Revocable Trust |      |   | 4.90 |   |
|   | 198,817 |   | 10/8/09 |   | 10/8/13 |           | Warrant @ $0.15 per share          |    | Revocable Trust |      |   | 4.90 |   |
|   | 368,938 |   | 2/1/10  |   | 2/1/14  |           | Warrant @ $0.15 per share          |    | Revocable Trust |      |   | 4.90 |   |
|   | 291,054 |   | 3/23/10 |   | 3/23/14 |           | Warrant @ $0.15 per share          |    | Revocable Trust |      |   | 4.90 |   |
|   | 221,943 |   | 8/17/10 |   | 8/17/14 |           | Warrant @ $0.15 per share          |    | Revocable Trust |      |   | 4.90 |   |
|   | 172,127 |   | 7/1/09  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Personal Trust  |      |   | 4.90 |   |
|   | 185,393 |   | 1/1/10  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Personal Trust  |      |   | 4.90 |   |
|   | 246,575 |   | 2/18/10 |   | 2/18/14 |           | Warrant @ $0.15 per share          |    | Joint Trust     |      |   | 4.90 |   |
|   | 139,161 |   | 7/3/09  |   | 7/3/13  |           | Warrant @ $0.15 per share          |    | Personal Trust  |      |   | 4.90 |   |
|   | 149,985 |   | 10/8/09 |   | 10/8/13 |           | Warrant @ $0.15 per share          |    | Personal Trust  |      |   | 4.90 |   |
|   | 278,322 |   | 2/1/10  |   | 2/1/14  |           | Warrant @ $0.15 per share          |    | Personal Trust  |      |   | 4.90 |   |
|   | 219,565 |   | 3/23/10 |   | 3/23/14 |           | Warrant @ $0.15 per share          |    | Personal Trust  |      |   | 4.90 |   |
|   | 62,815  |   | 8/17/10 |   | 8/17/14 |           | Warrant @ $0.15 per share          |    | Joint Trust     |      |   | 4.90 |   |
|   | 25,204  |   | 8/17/10 |   | 8/17/14 |           | Warrant @ $0.15 per share          |    | Personal Trust  |      |   | 4.90 |   |
|   | 243,836 |   | 8/17/10 |   | 8/17/14 |           | Warrant @ $0.15 per share          |    | Joint Trust     |      |   | 4.90 |   |
|   | 22,808  |   | 8/23/10 |   | 8/23/14 |           | Warrant @ $0.15 per share          |    | Joint Trust     |      |   | 4.90 |   |
|   | 20,938  |   | 8/23/10 |   | 8/23/14 |           | Warrant @ $0.15 per share          |    | Joint Trust     |      |   | 4.90 |   |

----

| (5) | The total beneficial ownership for Mr. Drake includes: |
|-----|--------------------------------------------------------|

|   | (i) | 2,945,803 shares of common stock currently held; |
|--------|-----|--------------------------------------------------|

|   | (ii) | 500,000 shares of restricted common stock which vest when all Class 2 Notes are repaid; and |
|--------|------|---------------------------------------------------------------------------------------------|

|   | (iii) | 1,000,000 options to purchase common stock which are immediately exercisable. |
|--------|-------|-------------------------------------------------------------------------------|

| (6) | The total beneficial ownership for Mr. Coon includes: |
|-----|-------------------------------------------------------|

|   | (i) | 929,072 shares of common stock held directly; |
|--------|-----|-----------------------------------------------|

|   | (ii) | 34,467 shares of common stock issuable upon the conversion of convertible notes which mature July 1, 2010 and are held directly by Max A. Coon; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | 17,059 shares held by Max A. Coon IRA; |
|--------|-------|----------------------------------------|

|   | (iv)   | 541,096 shares of common stock issuable upon the conversion of convertible notes which mature July 1, 2010 and are held by Charlevoix Drive Properties, LLC of which Mr. Coon is a member;                                                                                                                                                                                                                                      |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (v)    | 205,479 shares of common stock issuable upon the exercise of warrants which expire September 15, 2012 and are held by Charlevoix Drive Properties, LLC of which Mr. Coon is a member; but does not include 1,151,601 shares issuable on the conversion of convertible notes and exercise of warrants held by Max A. Coon or held by Charlevoix Drive Properties, LLC, all of which are subject to a blocker clauses as follows: |

| Shares |    | Issued |    | Expire |    | Type and Price |                               | Held By |                        | Blocker % |   |
|--------|---------|--------|---------|--------|---------|----------------|------------------------------------|---------|-----------------------------|-----------|--------|
|   | 503,452 |   | 1/2/08  |   | 7/1/10  |           | Convertible Note @ $0.25 per share |    | Max A. Coon                 |      |   | 4.90 |   |
|   | 19,860  |   | 1/8/09  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Max A. Coon                 |      |   | 4.90 |   |
|   | 37,127  |   | 1/1/10  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Max A. Coon                 |      |   | 4.90 |   |
|   | 72,147  |   | 1/8/09  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Charlevoix Drive Properties |      |   | 4.90 |   |
|   | 40,067  |   | 7/1/09  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Charlevoix Drive Properties |      |   | 4.90 |   |
|   | 43,160  |   | 1/1/10  |   | 7/1/10  |           | Convertible Note @ $0.15 per share |    | Charlevoix Drive Properties |      |   | 4.90 |   |
|   | 77,055  |   | 7/3/09  |   | 7/3/13  |           | Warrant @ $0.15 per share          |    | Charlevoix Drive Properties |      |   | 4.90 |   |
|   | 83,048  |   | 10/8/09 |   | 10/8/13 |           | Warrant @ $0.15 per share          |    | Charlevoix Drive Properties |      |   | 4.90 |   |
|   | 154,110 |   | 2/1/10  |   | 2/1/14  |           | Warrant @ $0.15 per share          |    | Charlevoix Drive Properties |      |   | 4.90 |   |
|   | 121,575 |   | 3/23/10 |   | 3/23/14 |           | Warrant @ $0.15 per share          |    | Charlevoix Drive Properties |      |   | 4.90 |   |

| (7) | The total beneficial ownership for Mr. Doede includes; |
|-----|--------------------------------------------------------|

|   | (i) | 41,500 shares of common stock currently held; |
|--------|-----|-----------------------------------------------|

----

|   | (ii) | 300,000 shares of restricted common stock which vest when all Class 2 Notes are repaid; and |
|--------|------|---------------------------------------------------------------------------------------------|

|   | (iii) | 624,000 options to purchase common stock which are immediately exercisable. |
|--------|-------|-----------------------------------------------------------------------------|

| (8) | The total beneficial ownership for Mr. Becker includes: |
|-----|---------------------------------------------------------|

|   | (i) | 24,200 shares of common stock currently held; and |
|--------|-----|---------------------------------------------------|

|   | (ii) | 567,000 options to purchase common stock which are immediately exercisable. |
|--------|------|-----------------------------------------------------------------------------|

| (9) | The total beneficial ownership for Mr. Blowers includes: |
|-----|----------------------------------------------------------|

|   | (i) | 55,050 shares of common stock currently held; and |
|--------|-----|---------------------------------------------------|

|   | (ii) | 843,500 options to purchase common stock which are immediately exercisable. |
|--------|------|-----------------------------------------------------------------------------|

| (10) | The total beneficial ownership for Mr. Zink includes: |
|------|-------------------------------------------------------|

|   | (i) | 15,800 shares of common stock currently held; and |
|--------|-----|---------------------------------------------------|

|   | (ii) | 496,000 options to purchase common stock which are immediately exercisable. |
|--------|------|-----------------------------------------------------------------------------|

| (11) | The total beneficial ownership includes 22,253 shares of common stock held directly by Vincent Shunsky and 2,000 shares held by Mr. Shunsky’s IRA. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | The total beneficial ownership includes 4,850,737 shares of common stock currently held by our officers and directors which includes 1,300,000 shares which vest when all Class 2 Notes are paid; options to purchase 3,530,000 shares held by five officers, which they are eligible to exercise immediately; and 781,042 shares of common stock issuable on the conversion or exercise of convertible notes and warrants held by Max A. Coon and Charlevoix Properties, LLC as detailed in note 7 above; but does not include 1,151,601 shares of common stock issuable on the conversion or exercise of convertible notes and warrants held by Max A. Coon and Charlevoix Drive Properties, LLC as detailed in note 7 above. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                     |   | Greater than 5% shareholder |      |   | Director            |   |      |        |   |
|----------------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------|--------|-----------|-------------|--------|
|                                                     |   | John Hunter                 |      |   | John R. Kiely, III. |   |      | Max A. Coon |   |   | Total |   |
| Outstanding balance as of December 31, 2009              |   |                        |      |   |                |   |      |        |   |   |   |   |
| Class 2 Notes                                            |   | $                           | 1,656,112 |   |                | $      | 525,000   |        |   | $ | 125,000 |   |   |   |   |
| Class 3 Notes                                            |   | $                           | 1,430,061 |   |                | $      | 1,268,504 |        |   | $ | 286,118 |   |   |   |   |
| Total                                                    |   | $                           | 3,086,173 |   |                | $      | 1,793,504 |        |   | $ | 411,118 |   |   | $ | 5,290,795 |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Largest aggregate amount of principle outstanding during |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| 2010                                                     |   | $                           | 3,271,279 |   |                | $      | 2,422,539 |        |   | $ | 423,161 |   |   |   |   |   |
| 2009                                                     |   | $                           | 3,086,173 |   |                | $      | 1,893,504 |        |   | $ | 411,118 |   |   |   |   |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Outstanding balance as of December 31, 2010              |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Class 2 Notes                                            |   | $                           | 1,781,112 |   |                | $      | 1,100,695 |        |   | $ | 125,000 |   |   |   |   |   |
| Class 3 Notes                                            |   | $                           | 1,490,167 |   |                | $      | 1,321,844 |        |   | $ | 298,161 |   |   |   |   |   |
| Total                                                    |   | $                           | 3,271,279 |   |                | $      | 2,422,539 |        |   | $ | 423,161 |   |   | $ | 6,116,979 |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Outstanding balance as of March 18, 2011                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Class 2                                                  |   | $                           | 1,781,112 |   |                | $      | 1,640,695 |        |   | $ | 125,000 |   |   |   |   |   |
| Class 3                                                  |   | $                           | 1,490,167 |   |                | $      | 1,321,844 |        |   | $ | 298,161 |   |   |   |   |   |
| Total                                                    |   | $                           | 3,271,279 |   |                | $      | 2,962,539 |        |   | $ | 423,161 |   |   | $ | 6,656,979 |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Amount of principal paid during year                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| 2010                                                     |   | $                           | —   |   |                | $      | 171,689   |        |   | $ | — |   |   |   |   |   |
| 2009                                                     |   | $                           | —   |   |                | $      | 100,000   |        |   | $ | — |   |   |   |   |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Amount of interest paid during year Cash 2010            |   | $                           | 2,000     |   |                | $      | 14,839    |        |   | $ |   |   |   | $ | 16,839 |   |
| Notes issued in payment of interest 2010                 |   | $                           | 60,106    |   |                | $      | 53,340    |        |   | $ | 12,043 |   |   |   |   |   |
| Value of warrants issued 2010                            |   | $                           | 94,148    |   |                | $      | 19,628    |        |   | $ | 2,408 |   |   |   |   |   |
| Total 2010                                               |   | $                           | 156,254   |   |                | $      | 87,807    |        |   | $ | 14,451 |   |   | $ | 258,512 |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Cash 2009                                                |   | $ ‐                   |      |   | $                   | 395    |      |        |   |   |   |   | $ |   |   |
| Notes issued in payment of interest 2009                 |   | $                           | 134,802   |   |                | $      | 108,238   |        |   | $ | 24,981 |   |   |   |   |   |
| Value of warrants issued 2009                            |   | $                           | 58,404    |   |                | $      | 13,221    |        |   | $ | 3,148 |   |   |   |   |   |
| Total 2009                                               |   | $                           | 193,206   |   |                | $      | 121,854   |        |   | $ | 28,129 |   |   | $ | 343,189 |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Accrued interest at Cash 2010                            |   | $                           | 578,706   |   |                | $      | 364,746   |        |   | $ | 84,825 |   |   |   |   |   |
| Value of warrants                                        |   | $                           | 15,635    |   |                | $      | 6,358     |        |   | $ | 1,066 |   |   |   |   |   |
| Total 2010                                               |   | $                           | 594,341   |   |                | $      | 371,104   |        |   | $ | 85,891 |   |   | $ | 1,051,336 |   |
|                                                     |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Cash 2009                                                |   | $                           | 294,460   |   |                | $      | 205,117   |        |   | $ | 51,360 |   |   |   |   |   |
| Value of warrants                                        |   | $                           | 56,690    |   |                | $      | 5,029     |        |   | $ | 1,197 |   |   |   |   |   |
| Total 2009                                               |   | $                           | 351,150   |   |                | $      | 210,146   |        |   | $ | 52,557 |   |   | $ | 613,853 |   |

----

|                                      |   | Greater than 5% shareholder |    |   |                |   |        |     |     |     |      |     |   |
|-------------------------------------------|--------|-----------------------------|---------|--------|---------------------|--------|-------------|----------|----------|----------|-----------|----------|--------|
|                                      |   | John Hunter                 |    |   | John R. Kiely, III. |   | Director    |     |     |     |      |     |   |   | Warrant |   |
|                                      |   | Class 2                |    |   | Classs 3       |   | Max A. Coon |     | Total    |     |      | Interest |   |   |  accrual |   |
| Related Party Transaction Detail for 2010 |   |  Note                  |    |   |  Note          |   | Date issued |     | Date due |     |      | rate (1) |   |   |  rate (3) |   |
| J.N. Hunter (1)                           |   |                        |    |   |                | 60,106 |        | 01/01/10 |     | 10/01/10 |      |     |   | 12 | % |   |   | N/A |   |
| J.N. Hunter                               |   |                        | 125,000 |   |                |   |        |     | 07/23/10 |     | 03/31/11  |     |   |   | 10 | % |   |   | 5 |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |
| Total net transactions                    |   | $                           | 125,000 |   |                | $      | 60,106      |     |     |     |      |     |   |   |   |   |   |   |   |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |
| John R. Kiely, III (1)                    |   |                        |    |   |                |   | 27,809      |     | 01/01/10 |     | 10/01/10  |     |   |   | 12 | % |   |   | N/A |   |
| John R. Kiely, III (1)                    |   |                        |    |   |                |   | 25,531      |     | 01/01/10 |     | 10/01/10  |     |   |   | 12 | % |   |   | N/A |   |
| John R. Kiely, III                        |   |                        | 200,000 |   |                |   |        |     | 02/18/10 |     | 09/30/10  |     |   |   | 10 | % |   |   | 5 |   |
| John R. Kiely, III                        |   |                        | 50,950  |   |                |   |        |     | 08/24/10 |     | 09/30/10  |     |   |   | 10 | % |   |   | 5 |   |
| John R. Kiely, III                        |   |                        | 55,500  |   |                |   |        |     | 08/31/10 |     | 09/30/10  |     |   |   | 10 | % |   |   | 5 |   |
| John R. Kiely, III (2)                    |   |                        | (50,950 | )      |                |   |        |     | 09/07/10 |     |  N/A |     |   |   | N/A |   |   |   | N/A |   |
| John R. Kiely, III                        |   |                        | 86,000  |   |                |   |        |     | 09/27/10 |     | 10/31/10  |     |   |   | 12 | % |   |   | N/A |   |
| John R. Kiely, III                        |   |                        | 39,000  |   |                |   |        |     | 09/28/10 |     | 10/31/10  |     |   |   | 12 | % |   |   | N/A |   |
| John R. Kiely, III                        |   |                        | 79,150  |   |                |   |        |     | 09/29/10 |     | 10/31/10  |     |   |   | 12 | % |   |   | N/A |   |
| John R. Kiely, III (2)                    |   |                        | (55,500 | )      |                |   |        |     | 10/13/10 |     |  N/A |     |   |   | N/A |   |   |   | N/A |   |
| John R. Kiely, III (2)                    |   |                        | (24,042 | )      |                |   |        |     | 10/14/10 |     |  N/A |     |   |   | N/A |   |   |   | N/A |   |
| John R. Kiely, III (2)                    |   |                        | (31,370 | )      |                |   |        |     | 10/14/10 |     |  N/A |     |   |   | N/A |   |   |   | N/A |   |
| John R. Kiely, III (2)                    |   |                        | (9,827  | )      |                |   |        |     | 10/25/10 |     |  N/A |     |   |   | N/A |   |   |   | N/A |   |
| John R. Kiely, III                        |   |                        | 111,784 |   |                |   |        |     | 10/26/10 |     | 11/30/10  |     |   |   | 12 | % |   |   | N/A |   |
| John R. Kiely, III                        |   |                        | 125,000 |   |                |   |        |     | 12/17/10 |     | 01/31/11  |     |   |   | 12 | % |   |   | N/A |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
| Total net transactions                    |   | $                           | 575,695 |   |                | $      | 53,340      |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
| Max A. Coon (1)                           |   |                        |    |   |                |   | 5,569       |     | 01/01/10 |     | 10/01/10  |     |   |   | 12 | % |   |   | N/A |   |
| Max A. Coon (1)                           |   |                        |    |   |                |   | 6,474       |     | 01/01/10 |     | 10/01/10  |     |   |   | 12 | % |   |   | N/A |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
| Total net transactions                    |   | $                           | 0       |   |                | $      | 12,043      |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
|                                      |   |                        |    |   |                |   |        |     |     |     |      |     |   |   |   |   |   |   |   |   |   |
| Total net transactions                    |   | $                           | 700,695 |   |                | $      | 125,489     |     |     |     |      |     |   |   |   |   |   |   |   |   |   |

----

| 2009: |   | $ | 50,950 |   |
|-------|--------|---|--------|--------|
| 2010: |   | $ | 58,500 |   |

| 2009: |   | $ | 3,000 |   |
|-------|--------|---|-------|--------|
| 2010: |   | $ | 3,000 |   |

| 2009: |   | $ | 12,950 |   |
|-------|--------|---|--------|--------|
| 2010: |   | $ | 4,825  |   |

----

| Exhibit Number |   | Description of Document                                                                                                                                                                                                                                                                                                                                   |
|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1            |   | Articles of Incorporation, as amended (filed as Exhibit 3.1 to the registrant’s Form 10-K for the year ended December 31, 1995, SEC file 000-12728, and incorporated herein by reference).                                                                                                                                                          |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 3.2            |   | Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the registrant’s Form 10-K for the year ended December 31, 1994, SEC file 000-12728, and incorporated herein by reference).                                                                                                                                                           |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 3.3            |   | Certificate of Designation effective April 11, 2005 and amendment to the By-Laws of the Registrant effective March 23, 2005 (filed as Exhibit 4(b) to the registrant’s Form 8-K dated April 14, 2005, SEC file 000-12728, and incorporated herein by reference).                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 3.4            |   | Certificate of Amendment of Restated Articles of Incorporation, filed with the Secretary of State of the State of Michigan on May 27, 2005 (filed as Exhibit 3.4 to the registrant’s Registration Statement on Form SB-2 filed on June 9, 2005, SEC File No. 333-125669, and incorporated herein by reference).                                     |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 3.5            |   | Certificate of Amendment of Restated Articles of Incorporation, filed with the Secretary of State of the State of Michigan on April 19, 2007 (filed as Exhibit 3.5 to the registrant’s Registration Statement on Form S-1 filed on April 18, 2008, SEC file No. 333-125669, and incoprorated herein by reference).                                  |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 3.6            |   | Certificate of Amendment of Restated Articles of Incorporation, filed with the Secretary of State of the State of Michigan on May 28, 2008 (filed as Exhibit 3.6 to the registrant’s Form 10-Q for the quarter ended June 30, 2008, SEC file No. 000-12728, and incorporated herein by reference).                                                  |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 3.7            |   | Certificate of Amendment of Restated Articles of Incorporation, filed with the Secretary of State of the State of Michigan on May 21, 2009 (filed as Exhibit 3.7 to the registrant’s Form 10-Q for the quarter ended September 30, 2009, SEC file No. 000-12728, and incorporated herein by reference).                                             |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.1            |   | Form of Fourth Amended Note and Warrant Purchase Agreement including Form of Integral Vision, Inc. Class 3 Note (filed as Exhibit 4.8 to registrant’s Form 10-K for the year ended December 31, 2003, SEC file 000-12728, and incorporated herein by reference).                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.2            |   | Securities Purchase Agreement, Effective April 12, 2005 (filed as Exhibit 4.(A) to registrant’s Form 8-K filed April 14, 2005, SEC file 000-12728, and incorporated herein by reference).                                                                                                                                                           |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.3            |   | Form of Consent to Modifications dated November 14, 2006 modifying the terms of the Fourth Amended Note and Warrant Purchase Agreement including Form of Integral Vision, Inc. Class 2 Warrant (filed as Exhibit 4.9 to registrant’s Form 10-Q for the quarter ended September 30, 2006, SEC file 000-12728, and incorporated herein by reference). |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.4            |   | Form of Consent to Modifications dated August 13, 2007 modifying the terms of the Fourth Amended Note and Warrant Purchase Agreement (filed as Exhibit 4.4 to registrant’s Form 10-QSB for the quarter ended June 30, 2007, SEC file 000-12728, and incorporated herein by reference).                                                              |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.5            |   | Form of Consent to Modifications dated October 10, 2007 modifying the terms of the Fourth Amended Note and Warrant Purchase Agreement (filed as Exhibit 4.6 to registrant’s Form 10-QSB for the quarter ended September 30, 2007, SEC file 000-12728, and incorporated herein by reference).                                                        |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.6            |   | Form of Consent to Modifications dated January 18, 2008 modifying the terms of the Fourth Amended Note and Warrant Purchase Agreement (filed as Exhibit 4.6 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                        |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.7            |   | Form of Amended Collateral Assignment of Proprietary Rights dated March 5, 2008 (filed as Exhibit 4.7 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                                                                              |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.8            |   | Form of Amended Security Agreement dated March 6, 2008 (filed as Exhibit 4.8 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                                                                                                       |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.9            |   | Form of Consent to Amend and Replace Agreements dated March 12, 2008 (filed as Exhibit 4.9 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                                                                                         |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.10           |   | Form of Fifth Amended and Restated Note and Warrant Purchase Agreement (filed as Exhibit 4.10 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                                                                                      |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.11           |   | Waiver and Amendment Agreement, effective September 15, 2008, and the Registration Rights Agreement and common stock Warrants, made a part thereof, among the respective parties thereto (filed as Exhibit 4.1 to the registrant’s Form 8-K filed September 15, 2008, SEC file 000-12728, and incorporated herein by reference).                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.12           |   | Exchange Agreements, effective September 15, 2008, among the respective parties thereto (filed as Exhibit 4.3 to the registrant’s Form 8-K filed September 15, 2008, SEC file 000-12728, and incorporated herein by reference).                                                                                                                     |
|           |   |                                                                                                                                                                                                                                                                                                                                                      |
| 4.13           |   | Form of Consent to Amend and Replace Agreements dated June 10, 2009 (filed as Exhibit 4.13 to the registrant’s Form 10-Q for the quarter ended September 30, 2009, SEC file 000-12728, and incorporated herein by reference).                                                                                                                       |

----

| 4.14   |   | Form of Consent to Amend and Replace Agreements dated June 24, 2009 (filed as Exhibit 4.13 to the registrant’s Form 10-Q for the quarter ended September 30, 2009, SEC file 000-12728, and incorporated herein by reference).                                                                         |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                        |
| 4.15   |   | Form of Consent to Amend and Replace Agreements dated September 16, 2009 (filed as Exhibit 4.13 to the registrant’s Form 10-Q for the quarter ended September 30, 2009, SEC file 000-12728, and incorporated herein by reference).                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 4.16   |   | Form of Consent to Modifications dated April 19, 2010, modifying the terms of the Fifth Amended Note and Warrant Purchase Agreement (filed as Exhibit 4.16 to the registrant’s Form 10-Q for the quarter ended March 30, 2010, SEC file 000-12728, and incorporated herein by reference).             |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 4.17   |   | Form of Amendment Agreement dated April 22, 1010, modifying the terms of certain warrants issued pursuant to the Waiver and Amendment Agreement (filed as Exhibit 4.17 to the registrant’s Form 10-Q for the quarter ended March 30, 2010, SEC file 000-12728, and incorporated herein by reference). |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.1   |   | Integral Vision, Inc. Employee Stock Option Plan (filed as Exhibit 10.5 to the registrant’s Form 10-Q for the quarter ended September 30, 1995, SEC file 000-12728, and incorporated herein by reference).                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.2   |   | Form of Confidentiality and Non-Compete Agreement Between the Registrant and its Employees (filed as Exhibit 10.4 to the registrant’s Form 10-K for the year ended December 31, 1992, SEC File 000-12728, and incorporated herein by reference).                                                      |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.3   |   | Integral Vision, Inc. 1999 Employee Stock Option Plan (filed as exhibit 10.5 to the registrant’s Form 10-Q for the quarter ended June 30, 1999, SEC file 000-12728, and incorporated herein by reference).                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.4   |   | Integral Vision, Inc. 2004 Employee Stock Option Plan (filed as exhibit 10.11 to the registrant’s   Form 10-Q for the quarter ended June 30, 2004, SEC file 000-12728, and incorporated herein by reference).                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.5   |   | Integral Vision, Inc. 2008 Equity Incentive Plan (filed as Exhibit 10.5 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.6   |   | Amendment and Restatement of Integral Vision, Inc. 2008 Equity Incentive Plan (filed as Exhibit 10.6 to the registrant’s Schedule 14A filed March 26, 2009, SEC file 000-12728, and incorporated herein by reference).                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 10.7   |   | Form of Amendment and Restatement of Integral Vision, Inc. 2008 Equity Incentive Plan. (filed as Exhibit 10.7 to the registrant’s Form 10-Q for the quarter ended March 30, 2010, SEC file 000-12728, and incorporated herein by reference).                                                          |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 14     |   | Code of Ethics (filed as Exhibit 14 to the registrant’s Form 10-KSB for the year ended December 31, 2007, SEC file 000-12728, and incorporated herein by reference).                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 23.1   |   | Consent of Rehmann Robson, independent registered public accounting firm.                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 31.1   |   | Certification of Chief Executive Officer of Periodic Report pursuant to Rule 13a-14(a) or Rule 15d-14(a).                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 31.2   |   | Certification of Chief Financial Officer of Periodic Report pursuant to Rule 13a-14(e) or Rule 15d-14(a).                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 32.1   |   | Certification by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 32.2   |   | Certification by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                             |

----

|                 | INTEGRAL VISION, INC. |                                                                |
|----------------------|-----------------------|---------------------------------------------------------------------|
|                 |                  |                                                                |   |
| Date: April 15, 2011 | By:              | /S/ CHARLES J. DRAKE                                                |   |
|                 |                  | Charles J. Drake, Chairman of the Board and Chief Executive Officer |   |

| Date: April 15, 2011 | By:  | /S/ MARK R. DOEDE                                                                                            |   |
|----------------------|-----------|--------------------------------------------------------------------------------------------------------------|--------|
|                 |      | Mark R. Doede, President, Chief Operating Officer, Chief Financial Officer, and Principal Accounting Officer |   |

| /S/ CHARLES J. DRAKE |   | Chairman of the Board, Chief               |   |   |
|----------------------|--------|--------------------------------------------|--------|--------|
| Charles J. Drake     |   | Executive  Officer, and Director |   |   |
|                 |   |                                       |   |   |
| Date: April 15, 2011 |   |                                       |   |   |
|                 |   |                                       |   |   |
| /S/ MAX A. COON      |   | Vice Chairman and Director                 |   |   |
| Max A. Coon          |   |                                       |   |   |
|                 |   |                                       |   |   |
| Date: April 15, 2011 |   |                                       |   |   |
|                 |   |                                       |   |   |
| /S/ VINCENT SHUNSKY  |   | Director                                   |   |   |
| Vincent Shunsky      |   |                                       |   |   |
|                 |   |                                       |   |   |
| Date: April 15, 2011 |   |                                       |   |   |
|                 |   |                                       |   |   |

| /S/ WILLIAM B. WALLACE |   | Director |   |   |
|------------------------|--------|----------|--------|--------|
| William B. Wallace     |   |     |   |   |
|                   |   |     |   |   |
| Date: April 15, 2011   |   |     |   |   |
|                   |   |     |   |   |
| /S/ MARK R. DOEDE      |   | Director |   |   |
| Mark R. Doede          |   |     |   |   |
| Date: April 15, 2011   |   |     |   |   |

----

----

|                                                                                                                         |   | December 31    |    |
|------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                                                         |   | 2010           |    |   | 2009 |   |
|                                                                                                                         |   | (in thousands) |    |
| Assets                                                                                                                       |   |           |    |   |   |   |
| Current assets                                                                                                               |   |           |    |   |   |   |
| Cash                                                                                                                         |   | $              | 23      |   |   | $ | 28 |   |
| Accounts receivable                                                                                                          |   |           | 49      |   |   |   | 50 |   |
| Inventories                                                                                                                  |   |           | 213     |   |   |   | 190 |   |
| Other current assets                                                                                                         |   |           | 93      |   |   |   | 98 |   |
| Total current assets                                                                                                         |   |           | 378     |   |   |   | 366 |   |
|                                                                                                                         |   |           |    |   |   |   |   |   |
| Property and equipment                                                                                                       |   |           |    |   |   |   |   |   |
| Building improvements                                                                                                        |   |           | 4       |   |   |   | 4 |   |
| Production and engineering equipment                                                                                         |   |           | 357     |   |   |   | 354 |   |
| Furniture and fixtures                                                                                                       |   |           | 80      |   |   |   | 80 |   |
| Computer equipment                                                                                                           |   |           | 201     |   |   |   | 193 |   |
| Marketing/demonstration equipment                                                                                            |   |           | 139     |   |   |   | 139 |   |
|                                                                                                                         |   |           | 781     |   |   |   | 770 |   |
| Less accumulated depreciation                                                                                                |   |           | 670     |   |   |   | 580 |   |
| Net property and equipment                                                                                                   |   |           | 111     |   |   |   | 190 |   |
|                                                                                                                         |   |           |    |   |   |   |   |   |
| Other assets - net of accumulated amortization of $1,583,000 for 2010 and $1,559,000 for 2009                                |   |           | 43      |   |   |   | 61 |   |
|                                                                                                                         |   |           | 43      |   |   |   | 61 |   |
| Total assets                                                                                                                 |   | $              | 532     |   |   | $ | 617 |   |
|                                                                                                                         |   |           |    |   |   |   |   |   |
| Liabilities and Stockholders' Deficit                                                                                        |   |           |    |   |   |   |   |   |
| Current liabilities                                                                                                          |   |           |    |   |   |   |   |   |
| Notes payable                                                                                                                |   | $              | 2,462   |   |   | $ | 2,086 |   |
| Notes payable to related parties and directors                                                                               |   | $              | 6,116   |   |   | $ | 5,291 |   |
| Accounts payable                                                                                                             |   |           | 221     |   |   |   | 114 |   |
| Customer deposits                                                                                                            |   |           | -       |   |   |   | 249 |   |
| Accrued compensation and related costs                                                                                       |   |           | 318     |   |   |   | 276 |   |
| Accrued interest                                                                                                             |   |           | 354     |   |   |   | 160 |   |
| Accrued interest related parties and directors                                                                               |   |           | 1,051   |   |   |   | 614 |   |
| Accrued product warranty                                                                                                     |   |           | 87      |   |   |   | 108 |   |
| Accrued sales commissions                                                                                                    |   |           | 48      |   |   |   | - |   |
| Accrued professional services                                                                                                |   |           | 79      |   |   |   | 95 |   |
| Other accrued liabilities                                                                                                    |   |           | 18      |   |   |   | - |   |
| Deferred revenue                                                                                                             |   |           | 346     |   |   |   | 72 |   |
| Total current liabilities                                                                                                    |   |           | 11,100  |   |   |   | 9,065 |   |
|                                                                                                                         |   |           |    |   |   |   |   |   |
| Commitments and contingencies (Note C, H, and J)                                                                             |   |           |    |   |   |   |   |   |
| Stockholders' deficit                                                                                                        |   |           |    |   |   |   |   |   |
| Preferred stock, 400,000 shares authorized; none issued                                                                      |   |           | -       |   |   |   | - |   |
| Common stock, without par value; 90,000,000 shares authorized; 35,675,409 shares issued and outstanding (30,866,409 in 2009) |   |           | 54,020  |   |   |   | 6,173 |   |
| Additional paid-in capital                                                                                                   |   |           | -       |   |   |   | 47,528 |   |
| Accumulated deficit                                                                                                          |   |           | (64,588 | ) |   |   | (62,149 | ) |
| Total stockholders' deficit                                                                                                  |   |           | (10,568 | ) |   |   | (8,448 | ) |
| Total liabilities and stockholders' deficit                                                                                  |   | $              | 532     |   |   | $ | 617 |   |

----

|                                                                                                              |   | Year Ended December 31,               |   |
|-------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                              |   | 2010                                  |   |   | 2009 |   |
| Revenues:                                                                                                         |   | (In thousands, except per share data) |   |
| Net product sales                                                                                                 |   | $                                     | 1,606  |   |   | $ | 1,754 |   |
| Costs of sales:                                                                                                   |   |                                  |   |   |   |   |   |   |
| Costs of sales for products                                                                                       |   |                                  | 596    |   |   |   | 850 |   |
| Depreciation and amortization                                                                                     |   |                                  | 18     |   |   |   | 21 |   |
| Total costs of sales                                                                                              |   |                                  | 614    |   |   |   | 871 |   |
| Gross margin                                                                                                      |   |                                  | 992    |   |   |   | 883 |   |
|                                                                                                              |   |                                  |   |   |   |   |   |   |
| Other costs and expenses:                                                                                         |   |                                  |   |   |   |   |   |   |
| Marketing                                                                                                         |   |                                  | 419    |   |   |   | 487 |   |
| General and administrative                                                                                        |   |                                  | 1,207  |   |   |   | 1,383 |   |
| Engineering and development                                                                                       |   |                                  | 804    |   |   |   | 939 |   |
| Total other costs and expenses                                                                                    |   |                                  | 2,430  |   |   |   | 2,809 |   |
| Operating loss                                                                                                    |   |                                  | (1,438 | ) |   |   | (1,926 | ) |
| Other income                                                                                                      |   |                                  | 2      |   |   |   | 1 |   |
| Interest expense                                                                                                  |   |                                  | (302   | ) |   |   | (228 | ) |
| Interest expense related parties and directors                                                                    |   |                                  | (700   | ) |   |   | (586 | ) |
| Extinguishment loss from modification and exchange of debt instruments                                            |   |                                  | -      |   |   |   | (10 | ) |
| Extinguishment loss from modification and exchange of debt instruments for related parties                        |   |                                  | -      |   |   |   | (8 | ) |
| Foreign currency translation loss                                                                                 |   |                                  | (1     | ) |   |   | (4 | ) |
| Loss from operations before income taxes                                                                          |   |                                  | (2,439 | ) |   |   | (2,761 | ) |
| Income taxes                                                                                                      |   |                                  | -      |   |   |   | - |   |
| Net loss                                                                                                          |   | $                                     | (2,439 | ) |   | $ | (2,761 | ) |
|                                                                                                              |   |                                  |   |   |   |   |   |   |
| Basic and diluted loss per share                                                                                  |   | $                                     | (0.07  | ) |   | $ | (0.09 | ) |
|                                                                                                              |   |                                  |   |   |   |   |   |   |
| Weighted average number of shares outstanding of common stock and common stock equivalents, where applicable |   |                                  | 34,346 |   |   |   | 30,268 |   |

----

|                                                                                |   | Number of Common Shares Outstanding                        |       |   | Common Stock |   |   | Preferred Stock |   |   | AdditionalPaid-In Capital |   |   | Accumulated Deficit |    |   | Total  |   |
|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------|------------|--------|--------------|--------|--------|-----------------|--------|--------|---------------------------|--------|--------|---------------------|---------|--------|--------|--------|
|                                                                                |   | (in thousands, except number of common shares outstanding) |       |
|  Balances at January 1, 2009                                                   |   |                                                       | 29,566,409 |   |         | $      | 5,913  |            |   | $      | -                         |   |   | $                   | 47,391  |   |   | $      | (59,388 | ) |   | $ | (6,084 | ) |
|  Net loss for the year                                                         |   |                                                       |       |   |         |   |   |            |   |   |                      |   |   |                |    |   |   |   | (2,761 | ) |   |   | (2,761 | ) |
|  Vested Stock Grants                                                           |   |                                                       | 1,300,000  |   |         |   | 260    |            |   |   |                      |   |   |                | (260    | )      |   |   |   |   |   |   |   |   |
| Issuance of warrants for settlement of interest on Class 2 Notes (See Note C )      |   |                                                       |       |   |         |   |   |            |   |   |                      |   |   |                | 86      |   |   |   |   |   |   |   | 86 |   |
| Extinguishment loss from modification and exchange of debt instruments (See Note C) |   |                                                       |       |   |         |   |   |            |   |   |                      |   |   |                | 18      |   |   |   |   |   |   |   | 18 |   |
|  Share-based compensation                                                      |   |                                                       |       |   |         |   |   |            |   |   |                      |   |   |                | 293     |   |   |   |   |   |   |   | 293 |   |
|  Balances at December 31, 2009                                                 |   |                                                       | 30,866,409 |   |         | $      | 6,173  |            |   | $      | -                         |   |   | $                   | 47,528  |   |   | $      | (62,149 | ) |   | $ | (8,448 | ) |
| Changed stated value of common stock from  from $0.20 to no stated value  |   |                                                       |       |   |         | $      | 47,528 |            |   |   |                      |   |   | $                   | (47,528 | )      |   |   |   |   |   | $ | - |   |
|  Net loss for the year                                                         |   |                                                       |       |   |         |   |   |            |   |   |                      |   |   |                |    |   |   |   | (2,439 | ) |   |   | (2,439 | ) |
|  Exercise of warrants                                                          |   |                                                       | 3,467,000  |   |         |   | 2      |            |   |   |                      |   |   |                |    |   |   |   |   |   |   |   | 2 |   |
| Issuance of warrants for settlement of interest on Class 2 Notes (See Note C ) |   |                                                       | -          |   |         |   | 139    |            |   |   | -                         |   |   |                |    |   |   |   | - |   |   |   | 139 |   |
|  Share-based compensation                                                      |   |                                                       | 1,342,000  |   |         |   | 178    |            |   |   | -                         |   |   |                |    |   |   |   | - |   |   |   | 178 |   |
|  Balances at December 31, 2010                                                 |   |                                                       | 35,675,409 |   |         | $      | 54,020 |            |   | $      | -                         |   |   | $                   | -       |   |   | $      | (64,588 | ) |   | $ | (10,568 | ) |

----

|                                                                                            |   | Year Ended December 31 |   |
|-------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                            |   | 2010                   |   |   | 2009 |   |
|                                                                                            |   | (in thousands)         |   |
| Cash Flows From Operating Activities:                                                           |   |                   |   |   |   |   |
| Net loss                                                                                        |   | $                      | (2,439 | ) |   | $ | (2,761 | ) |
|                                                                                            |   |                   |   |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash used in operating activities:                     |   |                   |   |   |   |   |   |   |
| Depreciation                                                                                    |   |                   | 90     |   |   |   | 89 |   |
| Amortization                                                                                    |   |                   | 25     |   |   |   | 47 |   |
| Gain on sale of equipment                                                                       |   |                   | (2     | ) |   |   | - |   |
| Warrants issued in settlement of interest                                                       |   |                   | 23     |   |   |   | 12 |   |
| Warrants issued in settlement of interest to related parties                                    |   |                   | 116    |   |   |   | 74 |   |
| Share-based compensation                                                                        |   |                   | 178    |   |   |   | 293 |   |
| Issuance of Class 3 Notes in settlement of interest                                             |   |                   | 51     |   |   |   | 184 |   |
| Issuance of Class 3 Notes in settlement of interest to related parties                          |   |                   | 125    |   |   |   | 128 |   |
| Issuance of Class 2 Notes in settlement of interest to related parties                          |   |                   | -      |   |   |   | 14 |   |
| Extinguishment loss from modification and exchange of debt  instruments               |   |                   | -      |   |   |   | 10 |   |
| Extinguishment loss from modification and exchange of debt instruments for related parties |   |                   | -      |   |   |   | 8 |   |
| Changes in operating assets and liabilities:                                                    |   |                   |   |   |   |   |   |   |
| Accounts receivable                                                                             |   |                   | 1      |   |   |   | 158 |   |
| Inventories                                                                                     |   |                   | (23    | ) |   |   | 22 |   |
| Other current assets                                                                            |   |                   | 5      |   |   |   | 33 |   |
| Accounts payable and other current liabilities                                                  |   |                   | 178    |   |   |   | 31 |   |
| Accrued interest                                                                                |   |                   | 631    |   |   |   | 328 |   |
| Customer deposits                                                                               |   |                   | (249   | ) |   |   | 249 |   |
| Deferred revenue                                                                                |   |                   | 274    |   |   |   | (584 | ) |
| Net cash used in operating activities                                                           |   |                   | (1,016 | ) |   |   | (1,665 | ) |
|                                                                                            |   |                   |   |   |   |   |   |   |
| Cash Flows Provided By (Used In) Investing Activities:                                          |   |                   |   |   |   |   |   |   |
|     Proceeds from sale of equipment                                         |   |                   | 2      |   |   |   | - |   |
| Purchase of property and equipment                                                              |   |                   | (12    | ) |   |   | (9 | ) |
| Additional patent expenditures                                                                  |   |                   | (5     | ) |   |   | (36 | ) |
| Net cash used in investing activities                                                           |   |                   | (15    | ) |   |   | (45 | ) |
|                                                                                            |   |                   |   |   |   |   |   |   |
| Cash Flows Provided By (Used In) Financing Activities:                                          |   |                   |   |   |   |   |   |   |
| Proceeds from sale of Class 2 Notes                                                             |   |                   | 325    |   |   |   | 250 |   |
| Proceeds from sale of Class 2 Notes to related parties                                          |   |                   | 872    |   |   |   | 1,075 |   |
| Payment of Class 2 Note                                                                         |   |                   | (86    | ) |   |   | (60 | ) |
| Payment of Class 2 Note to related parties                                                      |   |                   | (172   | ) |   |   | (100 | ) |
| Proceeds from sale of Class 3 Notes                                                             |   |                   | 85     |   |   |   | 429 |   |
| Proceeds from exercise of stock warrants                                                        |   |                   | 2      |   |   |   | - |   |
| Net cash provided by financing activities                                                       |   |                   | 1,026  |   |   |   | 1,594 |   |
| (Decrease) in cash                                                                              |   |                   | (5     | ) |   |   | (116 | ) |
| Cash at beginning of  year                                                            |   |                   | 28     |   |   |   | 144 |   |
| Cash at end of year                                                                             |   | $                      | 23     |   |   | $ | 28 |   |
|                                                                                            |   |                   |   |   |   |   |   |   |
| Supplemental cash flows information:                                                            |   |                   |   |   |   |   |   |   |
| Interest paid                                                                                   |   | $                      | 44     |   |   | $ | 40 |   |

----

|            |   | 2010           |   |   | 2009   |   |
|-----------------|--------|----------------|--------|--------|--------|--------|
|            |   | (in thousands) |   |
| Raw materials   |   | $              | 80     |   |   | $      | 85 |   |
| Work in process |   |           | -      |   |   |   | 69 |   |
| Finished goods  |   |           | 133    |   |   |   | 36 |   |
|            |   | $              | 213    |   |   | $      | 190 |   |

----

----

----

----

----

|                             |   | Notes Issued for Cash |      |   | Class 3 Notes Issued for Class 2 Note Payment |   |     | Cash Redemption |   |   | Notes Issued for Interest Payment |   |   | Class 2 Note Balance |   |   | Warrants Issued for Interest |   |
|----------------------------------|--------|-----------------------|-----------|--------|-----------------------------------------------|--------|----------|-----------------|--------|--------|-----------------------------------|--------|--------|----------------------|--------|--------|------------------------------|--------|
| Balance January 1, 2010          |   | $                     | -         |   |                                          | $      | -        |            |   | $      | -                                 |   |   | $                    | -      |   |                         | $      | 2,855,112 |   |   | $ | - |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended March 31, 2010     |   |                  | 370,000   |   |                                          |   | (170,000 | )               |   |   | -                                 |   |   |                 | -      |   |                         |   | 200,000 |   |   |   | 32,843 |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended June 30, 2010      |   |                  | -         |   |                                          |   | -        |            |   |   |                              |   |   |                 | -      |   |                         |   | - |   |   |   | - |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended September 30, 2010 |   |                  | 435,600   |   |                                          |   | -        |            |   |   | (50,950                           | )      |   |                 | -      |   |                         |   | 384,650 |   |   |   | 104,936 |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended December 31, 2010  |   |                  | 391,784   |   |                                          |   | -        |            |   |   | (207,374                          | )      |   |                 | -      |   |                         |   | 184,410 |   |   |   | - |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Balance December 31, 2010        |   | $                     | 1,197,384 |   |                                          | $      | (170,000 | )               |   | $      | (258,324                          | )      |   | $                    | -      |   |                         | $      | 3,624,172 |   |   | $ | 137,779 |   |

----

|                             |   | Notes Issued For Cash |   |   | Exchange of Class 2 Note and Related Interest |   |    | Cash Redemption |   |   | Notes Issued For Interest |   |   | Class 3 Note Balance |    |
|----------------------------------|--------|-----------------------|--------|--------|-----------------------------------------------|--------|---------|-----------------|--------|--------|---------------------------|--------|--------|----------------------|---------|
| Balance January 1, 2010          |   | $                     | -      |   |                                          | $      | -       |            |   | $      | -                         |   |   | $                    | -       |   |   | $ | 4,522,325 |   |
|                             |   |                  |   |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended March 31, 2010     |   |                  | -      |   |                                          |   | 170,000 |            |   |   | -                         |   |   |                 | 176,308 |   |   |   | 346,308 |   |
|                             |   |                  |   |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended June 30, 2010      |   |                  | 85,000 |   |                                          |   | -       |            |   |   | -                         |   |   |                 | -       |   |   |   | 85,000 |   |
|                             |   |                  |   |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended September 30, 2010 |   |                  | -      |   |                                          |   | -       |            |   |   | -                         |   |   |                 | -       |   |   |   | - |   |
|                             |   |                  |   |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended December 31, 2010  |   |                  | -      |   |                                          |   | -       |            |   |   | -                         |   |   |                 | -       |   |   |   | - |   |
|                             |   |                  |   |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Balance December 31, 2010        |   | $                     | 85,000 |   |                                          | $      | 170,000 |            |   | $      | -                         |   |   | $                    | 176,308 |   |   | $ | 4,953,633 |   |

----

----

|                             |   | Notes Issued for Cash |      |   | Class 3 Notes Issued for Class 2 Note Payment |   |     | Cash Redemption |   |   | Notes Issued for Interest Payment |   |   | Class 2 Note Balance |   |   | Warrants Issued for Interest |   |
|----------------------------------|--------|-----------------------|-----------|--------|-----------------------------------------------|--------|----------|-----------------|--------|--------|-----------------------------------|--------|--------|----------------------|--------|--------|------------------------------|--------|
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |
| Balance January 1, 2009          |   | $                     | -         |   |                                          | $      | -        |            |   | $      | -                                 |   |   | $                    | -      |   |                         | $      | 1,786,000 |   |   | $ | - |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended March 31, 2009     |   |                  | 780,000   |   |                                          |   | (110,000 | )               |   |   | -                                 |   |   |                 | -      |   |                         |   | 670,000 |   |   |   | 7,807 |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended June 30, 2009      |   |                  | 125,000   |   |                                          |   | -        |            |   |   | (100,000                          | )      |   |                 | 14,112 |   |                         |   | 39,112 |   |   |   | 34,543 |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended September 30, 2009 |   |                  | 270,000   |   |                                          |   | -        |            |   |   | (55,000                           | )      |   |                 | -      |   |                         |   | 215,000 |   |   |   | 19,519 |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Quarter Ended December 31, 2009  |   |                  | 150,000   |   |                                          |   | -        |            |   |   | (5,000                            | )      |   |                 | -      |   |                         |   | 145,000 |   |   |   | 24,730 |   |
|                             |   |                  |      |   |                                          |   |     |            |   |   |                              |   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Balance December 31, 2009        |   | $                     | 1,325,000 |   |                                          | $      | (110,000 | )               |   | $      | (160,000                          | )      |   | $                    | 14,112 |   |                         | $      | 2,855,112 |   |   | $ | 86,599 |   |

|                             |   | Notes Issued For Cash |    |   | Exchange of Class 2 Note and Related Interest |   |    | Cash Redemption |   |   | Notes Issued For Interest |   |   | Class 3 Note Balance |    |
|----------------------------------|--------|-----------------------|---------|--------|-----------------------------------------------|--------|---------|-----------------|--------|--------|---------------------------|--------|--------|----------------------|---------|
|                             |   |                  |    |   |                                          |   |    |            |   |   |                      |   |   |                 |    |
| Balance January 1, 2009          |   | $                     | -       |   |                                          | $      | -       |            |   | $      | -                         |   |   | $                    | -       |   |   | $ | 3,671,644 |   |
|                             |   |                  |    |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended March 31, 2009     |   |                  | 90,000  |   |                                          |   | 110,000 |            |   |   | -                         |   |   |                 | 160,022 |   |   |   | 360,022 |   |
|                             |   |                  |    |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended June 30, 2009      |   |                  | 19,000  |   |                                          |   | -       |            |   |   | -                         |   |   |                 | -       |   |   |   | 19,000 |   |
|                             |   |                  |    |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended September 30, 2009 |   |                  | 170,000 |   |                                          |   | -       |            |   |   | -                         |   |   |                 | 151,659 |   |   |   | 321,659 |   |
|                             |   |                  |    |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Quarter Ended December 31, 2009  |   |                  | 150,000 |   |                                          |   | -       |            |   |   | -                         |   |   |                 | -       |   |   |   | 150,000 |   |
|                             |   |                  |    |   |                                          |   |    |            |   |   |                      |   |   |                 |    |   |   |   |   |   |
| Balance December 31, 2009        |   | $                     | 429,000 |   |                                          | $      | 110,000 |            |   | $      | -                         |   |   | $                    | 311,681 |   |   | $ | 4,522,325 |   |

|                         |   | 2010           |   |   | 2009   |   |
|------------------------------|--------|----------------|--------|--------|--------|--------|
|                         |   | (in thousands) |   |
| Short Term Notes Payable:    |   |           |   |   |   |   |
| Class 2 Notes                |   | $              | 3,624  |   |   | $      | 2,855 |   |
| Class 3 Notes                |   |           | 4,954  |   |   |   | 4,522 |   |
| Net Short Term Notes Payable |   | $              | 8,578  |   |   | $      | 7,377 |   |

----

|                                                 |   | Greater than 5% shareholder |      |   | Director            |   |      |        |   |
|------------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------|--------|-----------|-------------|--------|
|                                                 |   | John Hunter                 |      |   | John R. Kiely, III. |   |      | Max A. Coon |   |   | Total |   |
| Outstanding balance as of December 31, 2009          |   |                        |      |   |                |   |      |        |   |   |   |   |
| Class 2 Notes                                        |   | $                           | 1,656,112 |   |                | $      | 525,000   |        |   | $ | 125,000 |   |   |   |   |
| Class 3 Notes                                        |   | $                           | 1,430,061 |   |                | $      | 1,268,504 |        |   | $ | 286,118 |   |   |   |   |
| Total                                                |   | $                           | 3,086,173 |   |                | $      | 1,793,504 |        |   | $ | 411,118 |   |   | $ | 5,290,795 |   |
|                                                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Outstanding balance as of December 31, 2010          |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Class 2 Notes                                        |   | $                           | 1,781,112 |   |                | $      | 1,100,695 |        |   | $ | 125,000 |   |   |   |   |   |
| Class 3 Notes                                        |   | $                           | 1,490,167 |   |                | $      | 1,321,844 |        |   | $ | 298,161 |   |   |   |   |   |
| Total                                                |   | $                           | 3,271,279 |   |                | $      | 2,422,539 |        |   | $ | 423,161 |   |   | $ | 6,116,979 |   |
|                                                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Amount of principal paid during year                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| 2010                                                 |   | $                           | -         |   |                | $      | 171,689   |        |   | $ | - |   |   |   |   |   |
| 2009                                                 |   | $                           | -         |   |                | $      | 100,000   |        |   | $ | - |   |   |   |   |   |
|                                                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Amount of interest paid during year                  |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Cash 2010                                            |   | $                           | 2,000     |   |                | $      | 14,839    |        |   | $ | - |   |   | $ | 16,839 |   |
| Notes issued in payment of interest 2010             |   | $                           | 60,106    |   |                | $      | 53,340    |        |   | $ | 12,043 |   |   |   |   |   |
| Value of warrants issued 2010                        |   | $                           | 94,148    |   |                | $      | 19,628    |        |   | $ | 2,408 |   |   |   |   |   |
| Total 2010                                           |   | $                           | 156,254   |   |                | $      | 87,807    |        |   | $ | 14,451 |   |   | $ | 258,512 |   |
|                                                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Cash 2009                                            |   | $                           | -         |   |                | $      | 395       |        |   | $ | - |   |   |   |   |   |
| Notes issued in payment of interest 2009             |   | $                           | 134,802   |   |                | $      | 108,238   |        |   | $ | 24,981 |   |   |   |   |   |
| Value of warrants issued 2009                        |   | $                           | 58,404    |   |                | $      | 13,221    |        |   | $ | 3,148 |   |   |   |   |   |
| Total 2009                                           |   | $                           | 193,206   |   |                | $      | 121,854   |        |   | $ | 28,129 |   |   | $ | 343,189 |   |
|                                                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Accrued interest at December 31                      |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Cash 2010                                            |   | $                           | 578,706   |   |                | $      | 364,746   |        |   | $ | 84,825 |   |   |   |   |   |
| Value of warrants accrued not issued  2009 |   | $                           | 15,635    |   |                | $      | 6,358     |        |   | $ | 1,066 |   |   |   |   |   |
| Total 2010                                           |   | $                           | 594,341   |   |                | $      | 371,104   |        |   | $ | 85,891 |   |   | $ | 1,051,336 |   |
|                                                 |   |                        |      |   |                |   |      |        |   |   |   |   |   |   |   |   |
| Cash 2009                                            |   | $                           | 294,460   |   |                | $      | 205,117   |        |   | $ | 51,360 |   |   |   |   |   |
| Value of warrants accrued not issued  2008 |   | $                           | 56,690    |   |                | $      | 5,029     |        |   | $ | 1,197 |   |   |   |   |   |
| Total 2009                                           |   | $                           | 351,150   |   |                | $      | 210,146   |        |   | $ | 52,557 |   |   | $ | 613,853 |   |

----

|                                        |   | 2010           |   |   | 2009   |   |
|---------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                        |   | (in thousands) |   |
| Deferred tax liabilities:                   |   |           |   |   |   |   |
| Tax depreciation                            |   | $              | 14     |   |   | $      | 16 |   |
| Total deferred tax liabilities              |   |           | 14     |   |   |   | 16 |   |
|                                        |   |           |   |   |   |   |   |   |
| Deferred tax assets:                        |   |           |   |   |   |   |   |   |
| Net operating loss carryforwards            |   |           | 16,266 |   |   |   | 18,085 |   |
| Credit carryforwards                        |   |           | 331    |   |   |   | 331 |   |
| Inventory reserve                           |   |           | 5      |   |   |   | (51 | ) |
| Accrued vacation                            |   |           | 23     |   |   |   | 18 |   |
| Warranty reserve                            |   |           | 30     |   |   |   | 37 |   |
| Accrued interest                            |   |           | 478    |   |   |   | 263 |   |
| Deferred revenue                            |   |           | 118    |   |   |   | 24 |   |
| Stock compensation expense                  |   |           | 472    |   |   |   | 411 |   |
| Warrants issued to PIPE investors           |   |           | 1,434  |   |   |   | 1,434 |   |
| Other                                       |   |           | 5      |   |   |   | 4 |   |
| Total deferred tax assets                   |   |           | 19,162 |   |   |   | 20,556 |   |
| Valuation allowance for deferred tax assets |   |           | 19,148 |   |   |   | 20,540 |   |
| Net deferred tax assets                     |   |           | 14     |   |   |   | 16 |   |
| Net deferred taxes                          |   | $              | -      |   |   | $      | - |   |

|                                            |   | 2010           |   |   | 2009   |   |
|-------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                            |   | (in thousands) |   |
| Net income (loss)                               |   | $              | (2,439 | )      |   | $      | (2,761 | ) |
| Foreign net income (loss)                       |   |           | -      |   |   |   | - |   |
| U.S. net income (loss)                          |   | $              | (2,439 | )      |   | $      | (2,761 | ) |
|                                            |   |           |   |   |   |   |   |   |
| Tax provision (benefit) at U.S. statutory rates |   | $              | (829   | )      |   | $      | (939 | ) |
| Change in valuation allowance                   |   |           | (1,392 | )      |   |   | 777 |   |
| Net operating loss expired                      |   |           | 2,358  |   |   |   |   |   |
| Other                                           |   |           | (137   | )      |   |   | 162 |   |
|                                            |   | $              | -      |   |   | $      | - |   |

----

|                                                                                   |   | 2010                                  |   |   | 2009   |   |
|----------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------|--------|
|                                                                                   |   | (in thousands, except per share data) |   |
| Numerator for basic and diluted loss per share - loss available to common stockholders |   |                                  |   |   |   |   |
| Net loss                                                                               |   | $                                     | (2,439 | )      |   | $      | (2,761 | ) |
|                                                                                   |   |                                  |   |   |   |   |   |   |
| *there was no effect of dilutive securities, see below                                 |   |                                  |   |   |   |   |   |   |
|                                                                                   |   |                                  |   |   |   |   |   |   |
| Denominator for basic and diluted loss per share - weighted average shares             |   |                                  | 34,346 |   |   |   | 30,268 |   |
| *there was no effect of dilutive securities, see below                                 |   |                                  |   |   |   |   |   |   |
|                                                                                   |   |                                  |   |   |   |   |   |   |
| Basic and diluted loss per share:                                                      |   |                                  |   |   |   |   |   |   |
| Net loss                                                                               |   | $                                     | (0.07  | )      |   | $      | (0.09 | ) |

----

----

| Year Ended December 31   |   | 2010   |   |
|--------------------------|--------|--------|--------|
| Expected Life (in years) |   |   | 5.0    |   |
| Expected volatility      |   |   | 92.4   | % |
| Risk-free interest rate  |   |   | 2.4    | % |
| Expected dividend yield  |   |   | 0      | % |
| Expected forfeiture rate |   |   | 0      | % |

|                                                 |   | 2010                                  |   |   | 2009                            |   |
|------------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------|--------|
|                                                 |   | Shares                                |   |   | Weighted Average Exercise Price |   |   | Shares |   |   | Weighted Average Exercise Price |   |
|                                                 |   |  (number of shares in thousands) |   |
| Outstanding at January 1                             |   |                                  | 3,785  |   |                            | $      | 0.23 |   |   |   | 3,795 |   |   | $ | 0.23 |   |
| Granted                                              |   |                                  | 5,776  |   |                            |   | 0.06 |   |   |   | 0 |   |   |   | 0.00 |   |
| Exercised                                            |   |                                  | 0      |   |                            |   | 0.00 |   |   |   | 0 |   |   |   | 0.00 |   |
| Expired                                              |   |                                  | (3,301 | )      |                            |   | 0.24 |   |   |   | (10 | ) |   |   | 0.26 |   |
| Outstanding at December 31 ($.04 to $0.30 per share) |   |                                  | 6,260  |   |                            | $      | 0.06 |   |   |   | 3,785 |   |   | $ | 0.23 |   |
| Exercisable ($.04 to $.30 per share)                 |   |                                  | 6,196  |   |                            | $      | 0.06 |   |   |   | 3,195 |   |   | $ | 0.23 |   |

|                     |   | 2010   |       |   | 2009                                   |   |
|--------------------------|--------|--------|------------|--------|----------------------------------------|--------|
|                     |   | Shares |       |   | Weighted Average Grant-Date Fair Value |   |   | Shares |   |   | Weighted Average Grant-Date Fair Value |   |
| Nonvested at January 1   |   |   | 590,000    |   |                                   | $      | 0.25 |   |   |   | 2,496,000 |   |   | $ | 0.27 |   |
| Granted                  |   |   | 5,776,000  |   |                                   |   | 0.06 |   |   |   | 0 |   |   |   | 0.00 |   |
| Exchanged                |   |   | (590,000   | )      |                                   |   | 0.25 |   |   |   | (10,000 | ) |   |   | 0.26 |   |
| Vested                   |   |   | (5,712,000 | )      |                                   |   | 0.06 |   |   |   | (1,896,000 | ) |   |   | 0.20 |   |
| Nonvested at December 31 |   |   | 64,000     |   |                                   | $      | 0.04 |   |   |   | 590,000 |   |   | $ | 0.25 |   |

----

|                                   |   | 2010           |   |   | 2009   |   |
|----------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                   |   | (in thousands) |   |
| Marketing                              |   | $              | 22     |   |   | $      | 33 |   |
| Engineering and Development            |   |           | 43     |   |   |   | 49 |   |
| General and Administrative             |   |           | 113    |   |   |   | 211 |   |
| Total share-based compensation expense |   | $              | 178    |   |   | $      | 293 |   |

|                     |          |   | 2010                            |   |   | 2009                            |   |
|--------------------------|---------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
| Range of Exercise Prices |          |   | Number Outstanding              |   |   | Weighted Average Remaining Life |   |   | Number Exercisable |   |   | Number Outstanding |   |   | Weighted Average Remaining Life |   |   | Number Exercisable |   |
|                     |          |   | (number of shares in thousands) |   |   | (number of shares in thousands) |   |
| $                        | 0.04 to $0.07 |   |                            |   | 5,776  |                            |   |   | 9.2 |   |   |   | 5,712 |   |   |   |   |   |   |   |   |   |   |
| $                        | 0.10 to $0.24 |   |                            |   | 484    |                            |   |   | 0.2 |   |   |   | 484 |   |   |   | 3,785 |   |   |   | 7.9 |   |   |   | 3,195 |   |
| $                        | 0.10 to $0.30 |   |                            |   | 6,260  |                            |   |   | 8.5 |   |   |   | 6,196 |   |   |   | 3,785 |   |   |   | 8.9 |   |   |   | 3,195 |   |

|                                     |   |  2010                      |   |   |  2009                      |   |
|------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
|                                     |   | Weighted Average Exercise Price |   |   | Number Outstanding              |   |   | Weighted Average Remaining Life |   |   | Number Exercisable |   |   | Weighted Average Exercise Price |   |   | Number Outstanding |   |   | Weighted Average Remaining Life |   |   | Number Exercisable |   |
|                                     |   | (number of shares in thousands) |   |   | (number of shares in thousands) |   |
| PIPE Warrants                            |   | $                               | 0.001  |   |                            |   | 7,000 |   |   |   | 2.71 |   |   |   | 7,000 |   |   | $ | 0.001 |   |   |   | 10,500 |   |   |   | 2.57 |   |   |   | 10,500 |   |
| Class 2 Note Warrants                    |   | $                               | 0.162  |   |                            |   | 16,904 |   |   |   | 3.10 |   |   |   | 16,904 |   |   | $ | 0.190 |   |   |   | 4,616 |   |   |   | 3.06 |   |   |   | 4,616 |   |
| Class 3 Convertible Notes                |   | $                               | 0.213  |   |                            |   | 23,233 |   |   |   | - |   |   |   | 23,233 |   |   | $ | 0.220 |   |   |   | 20,358 |   |   |   | 0.50 |   |   |   | 20,358 |   |
| 1995 Employee Stock Option Plan          |   | $                               | 0.170  |   |                            |   | 184 |   |   |   | 0.95 |   |   |   | 184 |   |   | $ | 0.170 |   |   |   | 184 |   |   |   | 1.96 |   |   |   | 184 |   |
| 1999 Employee Stock Option Plan          |   | $                               | 0.170  |   |                            |   | 290 |   |   |   | 5.19 |   |   |   | 290 |   |   | $ | 0.170 |   |   |   | 290 |   |   |   | 6.19 |   |   |   | 290 |   |
| 2004 Employee Stock Option Plan          |   | $                               | 0.067  |   |                            |   | 1,000 |   |   |   | 9.26 |   |   |   | 1,000 |   |   | $ | 0.250 |   |   |   | 983 |   |   |   | 8.13 |   |   |   | 517 |   |
| 2008 Equity  Compensation Plan |   | $                               | 0.052  |   |                            |   | 4,786 |   |   |   | 9.21 |   |   |   | 4,722 |   |   | $ | 0.240 |   |   |   | 2,328 |   |   |   | 8.55 |   |   |   | 2,204 |   |
|                                     |   | $                               | 0.152  |   |                            |   | 53,397 |   |   |   | 2.37 |   |   |   | 53,333 |   |   | $ | 0.159 |   |   |   | 39,259 |   |   |   | 2.07 |   |   |   | 38,669 |   |

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|                         |   | Amount         |   |   | Amount |   |
|------------------------------|--------|----------------|--------|--------|--------|--------|
|                         |   | 2010           |   |   | 2009   |   |
|                         |   | (in thousands) |   |
| Balance as of January 1      |   | $              | 108    |   |   | $      | 84 |   |
| Charges (credits) to expense |   |           | (12    | )      |   |   | 30 |   |
| Utilization/payment          |   |           | (9     | )      |   |   | (6 | ) |
| Balance as of December 31    |   | $              | 87     |   |   | $      | 108 |   |

|                             |   | Year Ended December 31 |   |
|----------------------------------|--------|------------------------|--------|
|                             |   | 2010                   |   |   | 2009 |   |
|                             |   | (in thousands)         |   |
| Net revenues by geographic area: |   |                   |   |   |   |   |
| North America                    |   | $                      | 491    |   |   | $ | 64 |   |
| Europe                           |   |                   | 397    |   |   |   | 17 |   |
| Asia                             |   |                   | 718    |   |   |   | 1,673 |   |
|                             |   | $                      | 1,606  |   |   | $ | 1,754 |   |

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| Corporate Officers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Corporate Directory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Charles J. Drake, 70, is CEO and Chairman of the Board of Integral Vision, Inc.  Mr. Drake founded the Company (originally known as Medar) in 1969 and has served as Chief Executive Officer since 1978. Mark R. Doede, 53, is President, Chief Operating Officer, and Chief Financial Officer of Integral Vision Inc.  Mr. Doede has served as an officer since 1989. Jeffrey J. Becker, 50, is Senior Vice President of Integral Vision, Inc. Andrew Blowers, 43, is Chief Technical Officer of Integral Vision, Inc. Paul Zink, 45, is Vice President of Applications of Integral Vision, Inc. Board of Directors Charles J. DrakeChairman of the Board of Directors, Integral Vision, Inc.Chief Executive Officer, Integral Vision, Inc. Max A. CoonVice Chairman and Secretary of the Board of Directors, Integral Vision, Inc.President and Chairman of the Board, Maxco, Inc. Vincent ShunskyDirector, Integral Vision, Inc.Treasurer, Integral Vision, Inc. William B. WallaceDirector, Integral Vision, Inc.Senior Managing Director, Equity Partners Ltd. Mark R. DoedeDirector, Integral Vision, Inc.President, Integral Vision, Inc.Chief Operating Officer, Integral Vision, Inc.Chief Finacial Officer, Integral Vision, Inc.   |   | Corporate Headquarters49113 Wixom Tech DriveWixom, MI 48393+1 (248) 668-9230+1 (248) 668-9384 fax Independent AuditorsRehmann RobsonTroy, MI General CounselHonigman Miller Shwartz and Cohn LLPAnn Arbor, MI Stock TradingOver the Counter Bulletin Board (OTCBB)Symbol:  INVI Stock Registrar and Transfer AgentRegistrar and Transfer CompanyCranford, NJ+1 (908) 497-2300 Form 10-KInterested stockholders may obtain, without charge, a copy of the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, upon written request to:      Investor Relations     Integral Vision, Inc.     49113 Wixom Tech Drive     Wixom, MI 48393 Investor/Analyst InformationStockholder and analyst inquiries concerning the Company should be addressed to:      Investor Relations     Integral Vision, Inc.     49113 Wixom Tech Drive     Wixom, MI 48393      Guerrant Associates     Laura Guerrant     +1 (808) 882-1467 E-Mail Investor Relationscdrake@iv-usa.comlguerrant@guerrantir.com On the World Wide Webwww.iv-usa.com |

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| ExhibitNumber |   | Exhibit Index Description                                                                                       |
|---------------|--------|-----------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                            |
| 23.1          |   | Consent of Rehmann Robson, independent registered public accounting firm.                                  |
| 31.1          |   | Certification of Chief Executive Officer of periodic report pursuant to Rule 13a-14(a) or Rule 15d-14(a).  |
| 31.2          |   | Certification of Chief Financial Officer of periodic report pursuant to Rule 13a-14(a) or Rule 15d-14(a).  |
| 32.1          |   | Certification by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.            |
| 32.2          |   | Certification by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.                 |

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