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| Delaware                                      |   | 98-0166007                          |
|-----------------------------------------------|--------|-------------------------------------|
| (State or Other Jurisdictionof Incorporation) |   | (I.R.S. EmployerIdentification No.) |

| Large accelerated filer |  ̈ | Accelerated filer      |  ̈ |
|-------------------------|--------|---------------------------------------|--------|
| Non-accelerated filer   |  ̈ | Smaller reporting company   | þ |

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|       | PART I – FINANCIAL INFORMATION                                                                                                |   |   |   |
|------------|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|       |                                                                                                                                |   |   |   |
| Item 1.    | Financial Statements                                                                                                                |   |   | 4      |   |
|       |                                                                                                                                |   |   |   |   |
|       | Consolidated Balance Sheets September 30, 2010 (Unaudited) and December 31, 2009 (Audited)                                          |   |   | 4      |   |
|       |                                                                                                                                |   |   |   |   |
|       | Consolidated Statements of Operations for the nine and three months ended September 30, 2010  (Unaudited) and 2009 (Unaudited) |   |   | 5      |   |
|       |                                                                                                                                |   |   |   |   |
|       | Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 (Unaudited) and 2009 (Unaudited)                 |   |   | 6      |   |
|       |                                                                                                                                |   |   |   |   |
|       | Notes to the Unaudited Consolidated Financial Statements                                                                            |   |   | 7      |   |
|       |                                                                                                                                |   |   |   |   |
| Item 2.    | Management's Discussion and Analysis of Financial Condition and  Results of Operation                                          |   |   | 11     |   |
|       |                                                                                                                                |   |   |   |   |
| Item 4.    | Controls and Procedures                                                                                                             |   |   | 16     |   |
|       |                                                                                                                                |   |   |   |   |
|       | PART II – OTHER INFORMATION                                                                                                   |   |   |   |   |
|       |                                                                                                                                |   |   |   |   |
| Item 6.    | Exhibits                                                                                                                            |   |   | 17     |   |
|       |                                                                                                                                |   |   |   |   |
| SIGNATURES |                                                                                                                                |   |   | 18     |   |

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| AMBIENT CORPORATION         |
|-----------------------------|
| CONSOLIDATED BALANCE SHEETS |

|                                                                                                                                           |   | September 30, |         |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------------|--------|--------------|--------|
|                                                                                                                                           |   | 2010          |         |   | 2009         |   |
|                                                                                                                                           |   | (Unaudited)   |         |   |         |   |
| ASSETS                                                                                                                                         |   |          |         |   |         |   |
| CURRENT ASSETS                                                                                                                                 |   |          |         |   |         |   |
|      Cash and  cash equivalents                                                                             |   | $             | 1,041,375    |   |         | $      | 987,010 |   |
|      Accounts receivable                                                                                              |   |          | 1,358,871    |   |         |   | 1,238,708 |   |
|      Inventory                                                                                                        |   |          | 769,106      |   |         |   | 361,201 |   |
|      Prepaid expenses and other current assets                                                                        |   |          | 166,258      |   |         |   | 202,568 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
|                Total current assets                                 |   |          | 3,335,610    |   |         |   | 2,789,487 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
| Property and equipment, net                                                                                                                    |   |          | 698,270      |   |         |   | 603,412 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
|                Total assets                                         |   | $             | 4,033,880    |   |         | $      | 3,392,899 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                 |   |          |         |   |         |
| CURRENT LIABILITIES                                                                                                                            |   |          |         |   |         |   |   |   |
|      Accounts payable                                                                                                 |   | $             | 2,639,981    |   |         | $      | 2,015,771 |   |
|      Accrued expenses and other current liabilities (including related party interest                                 |   |          | 849,514      |   |         |   | 829,041 |   |
|        of $466,484 and $690,027 respectively)                                                               |   |          |         |   |         |   |   |   |
|      Deferred revenue                                                                                                 |   |          | 18,863       |   |         |   | 158,686 |   |
|      Capital lease obligations, current portion                                                                       |   |          | 13,602       |   |         |   | 11,463 |   |
|      Convertible debt, current portion (net of discount of $-0- and $183,609)                                         |   |          | -            |   |         |   | 9,816,391 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
|                Total current liabilities                            |   |          | 3,521,960    |   |         |   | 12,831,352 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
| NON-CURRENT LIABILITIES                                                                                                                        |   |          |         |   |         |   |   |   |
|      Deferred rent                                                                                                    |   |          | 178,577      |   |         |   | 84,906 |   |
|      Capital lease obligations, less current portion                                                                  |   |          | -            |   |         |   | 11,504 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
|                Total  liabilities                         |   |          | 3,700,537    |   |         |   | 12,927,762 |   |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
| STOCKHOLDERS' EQUITY  (DEFICIT)                                                                                                      |   |          |         |   |         |   |   |   |
|     Common stock, $.001 par value;                                                                                         |   |          |         |   |         |   |   |   |
| 2,000,000,000 and 2,000,000,000 shares authorized in 2010 and 2009;                                                                            |   |
|         1,599,190,354 and 899,039,687                                                                  |   |          |         |   |         |   |   |   |
|         issued; 1,598,190,354 and 898,039,687 outstanding, respectively                                |   |          | 1,599,190    |   |         |   | 899,040 |   |
|      Additional paid-in capital                                                                                       |   |          | 142,506,092  |   |         |   | 130,008,365 |   |
|      Accumulated deficit                                                                                              |   |          | (143,571,939 | )      |         |   | (140,242,268 | ) |
|       Less: treasury stock; 1,000,000 shares at cost                                                             |   |          | (200,000     | )      |         |   | (200,000 | ) |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
|                Total stockholders' equity (deficit)                 |   |          | 333,343      |   |         |   | (9,534,863 | ) |
|                                                                                                                                           |   |          |         |   |         |   |   |   |
|                Total liabilities and stockholders' equity (deficit) |   | $             | 4,033,880    |   |         | $      | 3,392,899 |   |

----

|                                                             |   | Nine Months Ended |          |   | Three Months Ended |   |
|------------------------------------------------------------------|--------|-------------------|---------------|--------|--------------------|--------|
|                                                             |   | September 30,     |          |   | September 30,      |   |
|                                                             |   | 2010              |          |   | 2009               |   |   | 2010 |   |   | 2009 |   |
|                                                             |   | (Unaudited)       |          |   | (Unaudited)        |   |   | (Unaudited) |   |   | (Unaudited) |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |
| Revenues                                                         |   | $                 | 11,233,949    |   |               | $      | 918,260 |   |   | $ | 4,975,807 |   |   | $ | 61,077 |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Less Cost of goods sold                                          |   |              | 6,779,743     |   |               |   | 935,188 |   |   |   | 2,997,620 |   |   |   | 178,334 |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit (loss)                                              |   |              | 4,454,206     |   |               |   | (16,928 | ) |   |   | 1,978,187 |   |   |   | (117,257 | ) |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                         |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Research and Development                                         |   |              | 4,226,600     |   |               |   | 3,265,443 |   |   |   | 1,268,046 |   |   |   | 1,248,338 |   |
| Operating, general and administrative expenses                   |   |              | 3,524,104     |   |               |   | 3,143,977 |   |   |   | 1,237,616 |   |   |   | 1,007,077 |   |
| Stock based compensation - operating, general and administrative |   |              | 72,187        |   |               |   | 704,057 |   |   |   | 36,997 |   |   |   | 232,995 |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total expenses                                                   |   |              | 7,822,891     |   |               |   | 7,113,477 |   |   |   | 2,542,659 |   |   |   | 2,488,410 |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Loss on disposition of property and equipment                    |   |              | -             |   |               |   | (9,513 | ) |   |   | - |   |   |   | (578 | ) |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss                                                   |   |              | (3,368,685    | )      |               |   | (7,139,918 | ) |   |   | (564,472 | ) |   |   | (2,606,245 | ) |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Interest and finance expenses                                    |   |              | (213,384      | )      |               |   | (4,791,700 | ) |   |   | (416 | ) |   |   | (430,069 | ) |
| Gain on conversion of debentures                                 |   |              | 251,840       |   |               |   |   |   |   |   | 251,840 |   |   |   |   |   |
| Interest income                                                  |   |              | 558           |   |               |   | 28,021 |   |   |   | 199 |   |   |   | 1,895 |   |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                         |   | $                 | (3,329,671    | )      |               | $      | (11,903,597 | ) |   | $ | (312,849 | ) |   | $ | (3,034,419 | ) |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted loss per share:                                |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
|       Net loss                     |   | $                 | (0.00         | )      |               | $      | (0.02 | ) |   | $ | (0.00 | ) |   | $ | (0.00 | ) |
|                                                             |   |              |          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of shares outstanding                    |   |              | 1,538,475,035 |   |               |   | 752,581,202 |   |   |   | 1,593,190,354 |   |   |   | 816,742,937 |   |

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|                                                                                                                                              |   | Nine Months Ended |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                                                              |   | September 30,     |       |
|                                                                                                                                              |   | 2010              |       |   | 2009 |   |
|                                                                                                                                              |   | (Unaudited)       |       |   | (Unaudited) |   |
|                                                                                                                                              |   |              |       |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                              |   |              |       |   |   |   |
|      Net loss                                                                                                            |   | $                 | (3,329,671 | ) |   | $ | (11,903,597 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:                                                                       |   |
|          Depreciation and amortization                                                               |   |              | 272,259    |   |   |   | 210,352 |   |
|          Amortization of beneficial conversion feature of convertible debt                           |   |              | 183,609    |   |   |   | 3,161,448 |   |
|          Financing costs related to warrant modification                                             |   |              |       |   |   |   | 1,147,167 |   |
| Financing, consulting and other expenses paid via the                                                                                        |   |              |       |   |   |
|                   issuance of common stock and warrants |   |              | 72,187     |   |   |   | 704,057 |   |
|          Gain on conversion of debentures                                                            |   |              | (251,840   | ) |   |   |   |   |
|          Loss on disposition of property and equipment                                               |   |              | -          |   |   |   | 9,513 |   |
|           Changes in operating assets and liabilities                                           |   |              |       |   |   |   |   |   |
|               (Increase) decrease in:                                       |   |              |       |   |   |   |   |   |
|               Accounts receivables                                          |   |              | (290,391   | ) |   |   | 1,661,053 |   |
|               Inventory                                                     |   |              | (407,905   | ) |   |   | (166,399 | ) |
|               Prepaid expenses and other current assets                     |   |              | 36,310     |   |   |   | 34,413 |   |
|               Increase (decrease) in:                                       |   |              |       |   |   |   |   |   |
|               Accounts payable                                              |   |              | 794,439    |   |   |   | (58,744 | ) |
|               Deferred rent                                                 |   |              | 93,671     |   |   |   | - |   |
|               Accrued expenses and other current liabilities                |   |              | 272,304    |   |   |   | 149,022 |   |
|               Deferred revenue                                              |   |              | (139,823   | ) |   |   | 60,373 |   |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| Net cash used in operating activities                                                                                                             |   |              | (2,694,851 | ) |   |   | (4,991,342 | ) |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| CASH FLOWS FROM  INVESTING ACTIVITIES                                                                                                   |   |              |       |   |   |   |   |   |
|          Redemption of marketable securities                                                         |   |              | -          |   |   |   | 125,000 |   |
|          Additions to property and equipment                                                         |   |              | (367,118   | ) |   |   | (217,794 | ) |
|          Proceeds from sale of property and equipment                                                |   |              | -          |   |   |   | 460 |   |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| Net cash used in investing activities                                                                                                             |   |              | (367,118   | ) |   |   | (92,334 | ) |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                              |   |              |       |   |   |   |   |   |
|          Proceeds from issuance of common stock                                                      |   |              | 3,000,000  |   |   |   | - |   |
|          Proceeds from exercise of warrants                                                          |   |              | 100,065    |   |   |   | 857,263 |   |
|          Proceeds from exercise of options                                                           |   |              | 25,633     |   |   |   | - |   |
|          Payments of capitalized lease obligations                                                   |   |              | (9,364     | ) |   |   | (8,491 | ) |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| Net cash provided by financing activities                                                                                                         |   |              | 3,116,334  |   |   |   | 848,772 |   |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                                  |   |              | 54,365     |   |   |   | (4,234,904 | ) |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                                                                                   |   |              | 987,010    |   |   |   | 8,011,764 |   |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS - END OF PERIOD                                                                                                         |   | $                 | 1,041,375  |   |   | $ | 3,776,860 |   |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| Noncash financing and investing activities:                                                                                                       |   |              |       |   |   |   |   |   |
|      Issuance of common stock in connection with conversion of debt                                                      |   | $                 | 10,000,000 |   |   | $ | 2,500,000 |   |
|                                                                                                                                              |   |              |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                                                                                |   |              |       |   |   |   |   |   |
|     Cash paid during the period for:                                                                                          |   |              |       |   |   |   |   |   |
|           Interest                                                                              |   | $                 | 1,478      |   |   | $ | 425,913 |   |

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|                                                                                                                                                                                                                                                                                                                                  |   | Shares of Common StockIssuable upon Conversion/Exerciseof as September 30, |        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|-------------|
|                                                                                                                                                                                                                                                                                                                                  |   | 2010                                                                            |        |   | 2009 |   |
| Stock options                                                     |   |                                                                            | 55,987,000  |    |   |   | 58,937,000 |   |
| Warrants                                                                                                                                                                                                                                                                                                                              |   |                                                                            | 105,968,831 |   |   |   | 81,783,331 |   |
| Convertible debentures                                                                                                                                                                                                                                                                                                                |   |                                                                            | ---         |   |   |   | 666,666,667 |   |

|                                                                                                                                          | Nine Months Ended       |   | Three Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|--------|--------------------|--------|
|                                                                                                                                          | September 30, 2010 |   | September 30,2009  |   | September  30, 2010 |   | September 30,2009 |   |
|                                                                                                                                          | (Unaudited)             |   | (Unaudited)        |   |
| Products                                                                                                                                 |                    | $      | 11,177,368         |   |   | $ | 871,758 |   |   | $ | 4,956,947 |   |   | $ | 48,505 |   |
| Software and services                     |                    |   | 56,581             |   |   |   | 46,502 |   |   |   | 18,860 |   |   |   | 12,572 |   |
|                                                                                                                                          |                    | $      | 11,233,949         |   |   | $ | 918,260 |   |   | $ | 4,975,807 |   |   | $ | 61,077 |   |

|           | September 30,2010 |   | December 31,  2009 |   |
|----------------|------------------------|--------|-----------------------------------|--------|
|           | (Unaudited)            |   |                              |   |
| Raw materials  |                   | $      | 149,232                           |   |   | $ | 137,026 |   |
| Finished goods |                   |   | 619,874                           |   |   |   | 224,175 |   |
|           |                   | $      | 769,106                           |   |   | $ | 361,201 |   |

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| Exhibit No. |   | Description                                                                                                                                                                                                                                               |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                      |
| 31          |   | Certification of John J. Joyce, Chief Executive Officer (Principal Executive officer and Principal Financial and Accounting Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.                                  |
| 32          |   | Certification of John J. Joyce, Chief Executive Officer (Principal Executive officer and Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | AMBIENT CORPORATION |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                |   |
| Dated: November 8. 2010                                                                                        | By:            | /s/ John J. Joyce |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                | John J. Joyce |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                | Chief Executive Officer (Principal Executive Officer andPrincipal Financial and Accounting Officer) |

----

| Exhibit No. |   | Description                                                                                                                                                                                                                                               |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                      |
| 31          |   | Certification of John J. Joyce, Chief Executive Officer (Principal Executive officer and Principal Financial and Accounting Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.                                  |
| 32          |   | Certification of John J. Joyce, Chief Executive Officer (Principal Executive officer and Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. |