----

----

----

----

| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

----

----

| Delaware                                                      | 77-0432030                          |
|---------------------------------------------------------------|-------------------------------------|
| (State or Other Jurisdiction ofIncorporation or Organization) | (I.R.S. EmployerIdentification No.) |

| Title of Each Class                      |   | Name of Each Exchange On Which Registered |
|------------------------------------------|--------|-------------------------------------------|
| Common Stock, $0.002 par value per share |   | The Nasdaq Global Market                  |

----

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

----

----

----

----

| Item 10. | Directors, Executive Officers and Corporate Governance. |
|---------------|---------------------------------------------------------|

| Name                        |   | Age |   | Position              |   | DirectorSince |   |   | End ofTerm |   |
|-----------------------------|--------|-----|--------|-----------------------|--------|---------------|--------|--------|-----------------|--------|
| Brenda Zawatski             |   | 49  |   | Director              |   | 2005          |   |   | 2010            |   |
| Jim Thanos                  |   | 61  |   | Director              |   | 2007          |   |   | 2010            |   |
| James Arnold, Jr. (1)(2)(3) |   | 53  |   | Co-Chair of the Board |   | 2003          |   |   | 2010            |   |
| Lloyd Sems (1)(2)(3)        |   | 39  |   | Director              |   | 2008          |   |   | 2010            |   |
| Alan Howe (1)(2)(3)         |   | 48  |   | Co-Chair of the Board |   | 2009          |   |   | 2010            |   |

----

| (1) | Member of the Audit Committee |
|-----|-------------------------------|

| (2) | Member of the Compensation Committee |
|-----|--------------------------------------|

| (3) | Member of the Nominating/Corporate Governance Committee |
|-----|---------------------------------------------------------|

----

| Name        |   | Age |   | Position                              |
|-------------|--------|-----|--------|---------------------------------------|
| Jason Stern |   | 40  |   | President and Chief Operating Officer |
| Todd Spartz |   | 45  |   | Chief Financial Officer and Secretary |

----

| Item 11. | Executive Compensation. |
|---------------|-------------------------|

| Name and Principal Position                |   | Year   |   | Salary ($) |   | StockAwards ($)(1)(7) |    | OptionAwards ($)(1)(7) |   | Non-Equity Incentive Plan Compensation ($)(2) |   | All OtherCompensation ($) |   | Total ($) |
|--------------------------------------------|--------|--------|--------|------------|--------|-----------------------|---------|------------------------|--------|-----------------------------------------------|--------|---------------------------|--------|-----------|
| Jason Stern (3)                            |   |   | 2010   |       |   |                  | 201,421 |                   |   | 67,500                                        |   | 21,252                    |   | 1,150     |   | 42,469 |   | 333,792 |
|     President and Chief     |   |   | 2009   |       |   |                  | 175,000 |                   |   | 90,950                                        |   |                      |   | 37,713    |   |   |   |   |
|     Operating Officer       |   |   |   |       |   |                  |    |                   |   |                                          |   |                      |   |      |   |   |   |   |
| Todd Spartz (4)                            |   |   | 2010   |       |   |                  | 120,833 |                   |   | 124,000                                       |   |                      |   |      |   | 1,643 |   | 246,476 |
|     Chief Financial Officer |   |   |   |       |   |                  |    |                   |   |                                          |   |                      |   |      |   |   |   |   |
| James Thanos (5)                           |   |   | 2010   |       |   |                  |    |                   |   | 25,000                                        |   |                      |   |      |   | 162,208 |   | 253,707 |
|     Former Co-Chairman      |   |   | 2009   |       |   |                  |    |                   |   | 24,999                                        |   |                      |   |      |   | 228,708 |   | 253,707 |
| Brenda Zawatski (5)                        |   |   | 2010   |       |   |                  |    |                   |   | 25,000                                        |   |                      |   |      |   | 396,881 |   | 421,881 |
|     Former Co-Chairman      |   |   | 2009   |       |   |                  |    |                   |   | 24,999                                        |   | 20,063                    |   |      |   | 351,273 |   | 396,335 |
| Richard Heaps (6)                          |   |   | 2010   |       |   |                  | 136,213 |                   |   | 0                                             |   |                      |   |      |   | 157,421 |   | 293,634 |
|     Former Chief Financial  |   |   | 2009   |       |   |                  | 142,046 |                   |   | 160,500                                       |   |                      |   | 15,972    |   |   |   | 318,518 |
|     Officer and General     |   |   |   |       |   |                  |    |                   |   |                                          |   |                      |   |      |   |   |   |   |
|     Counsel                 |   |   |   |       |   |                  |    |                   |   |                                          |   |                      |   |      |   |   |   |   |

| (1) | The amounts in the Stock Awards and Option Awards columns reflect the grant date fair value of stock awards and option awards granted in the fiscal years shown, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of option award amounts are included in Note 9 to the financial statements set forth in our annual report on Form 10-K filed on June 29, 2010 (Commission File No. 000-29637). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) | The amounts in this column represent bonus payments based on the achievement of certain Company milestones. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (3) | Mr. Stern was elected President and Chief Operating Officer on January 12, 2010, and became an executive officer at that time. All other compensation for Mr. Stern are for medical, dental, vision and life insurance. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr. Spartz’s employment with us started on September 14, 2009. All other compensation for Mr. Spartz are for life insurance. |
|-----|------------------------------------------------------------------------------------------------------------------------------------|

| (5) | On August 19, 2009, Mr. Thanos stepped down as Co-Chair of our Board and terminated his consulting relationship with the Company.  Ms. Zawatski stepped down as Chair of our Board on November 12, 2009. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Mr. Heaps’ employment with us started on September 8, 2008 and ended on October 1, 2009. |
|-----|------------------------------------------------------------------------------------------------|

| (7) | The material terms of the referenced grants are included in the footnotes to the Outstanding Euqity Awards table below and incorporated herein by reference. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                | Option Awards   |   | Stock Awards      |
|---------------------|-----------------|--------|-------------------|
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | Equity   |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | Incentive  |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   | Plan Awards: |
|                |            |   |              |   | Equity   |   |   |   |   |   |   |   |   |   |   |   |  Market or  |
|                |            |   |              |   | Incentive |   |   |   |   |   |   |   |   |   |   |   | Payout Value |
|                |            |   |              |   | Plan Awards:  |   |   |   |   |   |   |   |   |   |   |   | or Unearned |
|                | Number of       |   | Number of         |   | Number of |   |   |   |    |   |   |   | Number of |   | Market Value |   | Shares, |
|                | Securities      |   | Securities        |   | Securities |   |   |   |    |   |   |   | Shares or |   | of Shares or |   | Units or |
|                | Underlying      |   | Underlying        |   | Underlying |   |   |   |   |   |   |   | Units of |   | Units of |   | Other Rights |
|                | Unexercised     |   | Unexercised       |   | Unexercised |   | Option |   | Option |   | Stock That |   | Stock That |   | of Stock |
|                | Options―  |   | Options―    |   | Unearned |   | Exercise |   | Expiration |   | Have Not |   | Have Not |   | That Have |
| Name                | Exercisable (#) |   | Unexercisable (#) |   | Options (#) |   | Price ($) |   | Date |   | Vested (#) |   | Vested ($)(1) |   | Not Vested (#) |
| Jason Stern (2)     | 4,166           |   |              | 834 |   |   |   |   |   | $17.00 |   | 11/12/2016 |   |   |   |   |   |   |   |   |   |   |   |
|                | 1,875           |   |              |   |   |   | 5,625 |   |   | $5.20 |   | 1/12/2020 |   |   |   |   |   |   |   |   |   |   |   |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   | 8,998 |   |   |   | $44,720 |   |   |   |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   | 2,812 |   |   |   |   |   |   | $13,976 |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Todd Spartz (3)     |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   | 10,000 |   |   |   | $49,700 |   |   |   |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   |  7,500 |   |   |   |   |   |   | $37,275 |
| James Thanos (4)    | 3,334           |   |              | 1,666 |   |   |   |   |   | $18.10 |   | 11/15/2017 |   |   |   |   |   |   |   |   |   |   |   |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   | 5,000 |   |   |   | $24,850 |   |   |   |
| Brenda Zawatski (5) | 5,000           |   |              | 0 |   |   |   |   |   | $27.90 |   | 11/8/2015 |   |   |   |   |   |   |   |   |   |   |   |
|                | 1,700           |   |              | 3,300 |   |   |   |   |   | $10.80 |   | 9/9/2018 |   |   |   |   |   |   |   |   |   |   |   |
|                |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   | 5,000 |   |   |   | $24,850 |   |   |   |
| Richard Heaps       |            |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) | Computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing market price of our Common Stock at the end of the 2010 fiscal year, which was $4.97 on March 31, 2010.  The actual value (if any) to be realized by the officer depends on whether the shares vest and on the future performance of our Common Stock. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr. Stern was granted 5,000 shares of non-qualified incentive stock options on November 13, 2006, one quarter of which will vest upon completion of one year of continuous service from November 13, 2006, the vesting commencement date, and 1/48 shall vest when after each month of continuous service thereafter; provided that 100% of such shares shall be vested upon a change of control of the Company. In addition, Mr. Stern was granted 7,500 shares of performance-based non-qualified incentive stock options on January 12, 2010, 1,875 of these shares vested based achievement of certain performance targets for fiscal 2010, and the remaining 5,625 shares shall vest upon achievement of certain performance targets for fiscal 2011. Mr. Stern was granted 8,500 restricted stock units on September 9, 2008, half of which vested on September 9, 2009 after one year of continuous service from the September 9, 2008 vesting commencement date, and 1/8 has or will vest after each quarter of continuous service thereafter. Mr. Stern was also granted 5,000 restricted stock units on September 1, 2009, 1/16 of which has or will vest after each quarter of continuous service from the September 1, 2009 vesting commencement date and will vest in full upon a change of control of the Company. Mr. Stern was granted 2,500 restricted stock units on January 12, 2010, one quarter of which will vest after one year of continuous service from January 12, 2010, the vesting commencement date, and 1/16 will vest after each quarter of continuous service thereafter. Lastly, Mr. Stern was granted 3,750 performance-based restricted stock units on January 12, 2010, 938 units vested based on achievement of certain performance targets for fiscal 2010, and the remaining 2,812 units shall vest upon achievement of certain performance targets for fiscal 2011. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (3) | Mr. Spartz was granted 10,000 restricted stock units on September 14, 2009, one quarter of which will vest upon completion of one year of continuous service from September 14, 2009, the vesting commencement date, and 1/16 shall vest after each quarter of continuous service thereafter; provided that 100% of such shares shall be vested upon a change of control of the Company. Additionally, Mr. Spartz was granted 10,000 performance-based restricted stock units on January 12, 2010, 2,500 vested based on achievement of certain performance targets for fiscal 2010, and the remaining 7,500 units shall vest upon achievement of certain performance targets for fiscal 2011. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr. Thanos was granted 5,000 shares of non-qualified incentive stock options on November 15, 2007, one third of which has or will vest after each year of continuous service from the November 15, 2007 vesting commencement date. In addition, Mr. Thanos was granted 5,000 restricted stock units on November 12, 2009, all of which will vest upon the earlier of a) one year of continuous service from November 12, 2009, the vesting commencement date or b) a change of control of the Company. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Ms. Zawatski was granted 5,000 shares of non-qualified incentive stock options on November 9, 2005, one quarter of which will vest upon completion of one year of continuous service from November 9, 2005, the vesting commencement date, and 1/48 shall vest when after each month of continuous service thereafter. Additionally, Ms. Zawatski was granted 5,000 shares of non-qualified incentive stock options on November 18, 2008, 1,700 shares of which vested upon completion of one year of service from September 9, 2008, the vesting commencement date, and 1,650 shares will vest after each year of continuous service thereafter; provided that 100% of such shares shall be vested upon a change of control of the Company. Lastly, Ms. Zawatski was granted 5,000 restricted stock units on November 12, 2009, all of which will vest upon the earlier of a) one year of continuous service from November 12, 2009, the vesting commencement date or b) a change of control of the Company. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|         |   | Fees Earned |   |          |   |          |   |      |
|--------------|--------|-------------|--------|---------------|--------|---------------|--------|-----------|
|         |   | or Paid in  |   | Stock         |   | Option        |   |      |
| Name         |   | Cash ($)    |   | Awards ($)(1) |   | Awards ($)(1) |   | Total ($) |
| Jamie Arnold |   | 72,750      |   |          | 25,000 |          |   | -         |   |   | 97,750 |   |
| Alan Howe    |   | 62,046      |   |          | 25,000 |          |   | -         |   |   | 87,046 |   |
| Lloyd Sems   |   | 73,028      |   |          | 25,000 |          |   | -         |   |   | 98,028 |   |

| (1) | The amounts in the Stock Awards and Option Awards columns reflect the grant date fair value of stock awards and option awards granted in the fiscal year 2010, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of option award amounts are included in Note 9 to the financial statements set forth in our annual report on From 10-K filed on June 29, 2010 (Commission File No. 000-29637).  Our directors held the following stock awards at March 31, 2010: Jamie Arnold, 5,000 shares; Alan Howe, 5,000 shares; and Lloyd Sems, 5,000 shares.  Our directors held the following options at March 31, 2010: Jamie Arnold, 12,500 shares; Alan Howe, 5,000 shares; and Lloyd Sems, 5,000 shares. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
|---------------|-------------------------------------------------------------------------------------------------|

----

| Title of Class | Name and Address of Beneficial Owner                                              | Amount and Nature of Beneficial Ownership | Percent of Class |
|----------------|-----------------------------------------------------------------------------------|-------------------------------------------|------------------|
| Common         | Steel Partner Holdings, L.P. (1)590 Madison Avenue, 32nd Floor New York, NY 10022 | 420,768                                   | 14.96%           |
| Common         | Dimensional Fund Advisors, Inc. (2)1299 Ocean Avenue Santa Monica, CA 90401       | 144,708                                   | 5.14%            |
| Common         | Lloyd I. Miller III (3)4550 Gordon Drive Naples, FL, 34102                        | 547,619                                   | 19.47%           |
| Common         | Bank of America Corporation (4)100 North Tryon Street Charlotte, NC 28255         | 165,942                                   | 5.90%            |

----

| (1) | Steel Partners LLC is the manager of Steel Partner Holdings L.P.  Steel Partners II GP LLC is the general partner of Steel Partner Holdings L.P.  Warren G. Lichtenstein is the manager of Steel Partners LLC and the managing member of Steel Partners II GP LLC.  By virtue of these relationships, each of Steel Partners LLC, Steel Partners II GP LLC and Mr. Lichtenstein may be deemed to beneficially own the shares owned by Steel Partner Holdings L.P. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Dimensional Fund Advisors LP (“Dimensional”), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts.  These investment companies, trusts and accounts are the “Funds.” In its role as investment advisor or manager, Dimensional possesses investment and/or voting power over the securities of the Company described above that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds.  However, all securities reported above are owned by the Funds.  Dimensional has disclaimed beneficial ownership of such securities.  The Funds have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities held in their respective accounts.  To the knowledge of Dimensional, the interest of any one such Fund does not exceed 5% of the class of securities. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Mr. Miller has sole voting and dispositive power with respect to 341,180 of the reported securities as a manager of a limited liability company that is the general partner of a certain limited partnership.  Mr. Miller has shared voting and dispositive power with respect to 206,439 of the reported securities as an investment advisor to the trustee of certain family trusts. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Bank of America Corporation, NB Holdings Corporation, BAC North America Holding Company, BANA Holding Corporation, Bank of America, N.A. and Columbia Management Group, LLC have shared voting power to vote 2,570,742 shares of the Company and shared dispositive power over 3,653,342 shares of the Company.  Columbia Management Advisors, LLC has sole voting power over 2,570,742 shares of the Company, sole dispositive power over 3,641,542 shares of the Company and shared dispositive power over 11,800 shares of the Company. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Title of Class | Name of Beneficial Owner                                    | Amount and Nature of Beneficial Ownership | Percent of Class |
|----------------|-------------------------------------------------------------|-------------------------------------------|------------------|
| Common         | James Arnold, Jr. (1)                                       | 19,266                                    | *                |
| Common         | Alan Howe (2)                                               | 1,667                                     | *                |
| Common         | Jim Thanos (3)                                              | 8,508                                     | *                |
| Common         | Lloyd Sems (4)                                              | 121,443                                   | 4.31%            |
| Common         | Brenda Zawatski (5)                                         | 13,432                                    | *                |
| Common         | Jason Stern (6)                                             | 20,001                                    | *                |
| Common         | Todd Spartz (7)                                             | 12,500                                    | *                |
| Common         | Richard Heaps (8)                                           | 0                                         | *                |
| Common         | All executive officers and directors as a group (8 persons) | 196,817                                   | 7.00%            |

----

| * | Less than 1% of the outstanding shares of Common Stock. |
|---|---------------------------------------------------------|

| (1) | Includes 6,766 shares of Common Stock held by Mr. Arnold and 12,500 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 29, 2010. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes 1,667 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of July 29, 2010. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes 5,175 shares Common Stock held by Mr. Thanos and 3,333 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 29, 2010. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes 2,336 shares of Common Stock held by Mr. Sems, 3,350 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 29, 2009 and 115,757 shares of Common Stock held beneficially by Sems Capital, LLC, of which Mr. Sems is the managing member. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Includes 6,766 shares of Common Stock held by Ms. Zawatski and 6,667 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 29, 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Includes 18,438 shares of Common Stock held by Mr. Stern and 1,563 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of July 29, 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Includes 12,500 shares of Common Stock held by Mr. Spartz. |
|-----|------------------------------------------------------------|

| (8) | Mr. Heaps does not hold shares of Common Stock and does not have any options exercisable for shares of Common Stock within 60 days of July 29, 2010.  Mr. Heaps’s employment with us ended on October 1, 2009. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Plan Category                                        |   | (a)Number of Securitiesto be Issued UponExercise ofOutstanding Options,Warrants and Rights |   |   | (b)Weighted-AverageExercise Price ofOutstandingOptions,Warrants and Rights(1) |   |   | (c)Number of SecuritiesRemaining Available forFuture Issuance UnderEquity CompensationPlans (Excluding SecuritiesReflected in Column (a)) |   |
|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | (in thousands, except per share amounts)                                                   |   |   |
| Equity compensation plans approved by security holders     |   |                                                                                       | 178    | (2)    |                                                                          |   | $      | 21.07                                                                                                                                     |   |   |   | 1,370 | (3) |   |
| Equity compensation plans not approved by security holders |   |                                                                                       | 3      |   |                                                                          |   |   | 38.91                                                                                                                                     |   |   |   | 181 |   |   |
| Total                                                      |   |                                                                                       | 181    |   |                                                                          |   | $      | 21.86                                                                                                                                     |   |   |   | 1,551 |   |   |

----

| (1) | The weighted average exercise price is calculated basely solely on outstanding options. |
|-----|-----------------------------------------------------------------------------------------|

| (2) | Includes options and rights to acquire shares outstanding under our 1996 Stock Plan and 1999 Equity Incentive Plan. |
|-----|---------------------------------------------------------------------------------------------------------------------|

| (3) | Represents 142,000 shares available for issuance under our 1996 Stock Plan and 1,228,000 shares available for issuance under our 1999 Equity Incentive Plan. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 13. | Certain Relationships and Related Transactions, and Director Independence |
|---------------|---------------------------------------------------------------------------|

|   | · | We have been or are to be a participant; |
|--------|--------|------------------------------------------|

|   | · | The amount involved exceeds $120,000; and |
|--------|--------|-------------------------------------------|

|   | · | Any of our directors, executive officers or holders of more than 5% of our capital stock, or any immediately family member of or person sharing the household with any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 14. | Principal Accounting Fees and Services |
|---------------|----------------------------------------|

|                  |   | Fiscal 2010      |   |   | Fiscal 2009 |   |
|-----------------------|--------|------------------|--------|--------|-------------|--------|
|                  |   | (In thousands $) |   |   |
| Audit fees(1)         |   |             | 376    |   |        |   |   | 400 |   |   |
| Audit-related fees(2) |   |             | 0      |   |        |   |   | 0 |   |   |
| Tax fees(3)           |   |             | 15     |   |        |   |   | 23 |   |   |
| All other fees        |   |             | 13     |   |        |   |   | 19 |   |   |
| Total fees            |   |             | 404    |   |        |   |   | 442 |   |   |

----

| (1) | Audit fees consist of fees incurred for professional services rendered for the audit of our annual consolidated financial statements and review of the quarterly consolidated financial statements that are normally provided by Armanino McKenna LLP in connection with regulatory filings or engagements. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Audit-related fees relate to assurance and related services that are reasonably related to the audit or review of our financial statements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Tax fees consist of fees for tax planning and tax compliance services. |
|-----|------------------------------------------------------------------------|

----

|   | SELECTICA, INC.                        |   |
|--------|----------------------------------------|--------|
|   | Registrant                             |   |
|   |                                   |   |   |
|   |  /s/ Jason Stern   |   |
|   | Jason Stern                            |   |
|   | Chief Operating Officer and President  |   |
|   |                                   |   |
|   | /s/ Todd Spartz                   |   |
|   | Todd Spartz                            |   |
|   | Chief Financial Officer                |   |

| Signature                              |   | Title                                                               |   | Date          |
|----------------------------------------|--------|---------------------------------------------------------------------|--------|---------------|
|                                   |   |                                                                |   |          |
| /S/    Jason Stern |   | President and Chief Operating Officer (Principal Executive Officer) |   | July 29, 2010 |
| Jason Stern                            |   |                                                                |   |          |
|                                   |   |                                                                |   |          |
| /S/    Todd Spartz |   | Chief Financial Officer (Principal Financial Officer and            |   | July 29, 2010 |
| Todd Spartz                            |   | Principal Accounting Officer) and Secretary                         |   |          |
|                                   |   |                                                                |   |          |
| Directors:                             |   |                                                                |   |          |
|                                   |   |                                                                |   |          |
| *                                      |   | Director                                                            |   | July 29, 2010 |
| Jamie Arnold                           |   |                                                                |   |          |
|                                   |   |                                                                |   |          |
| *                                      |   | Director                                                            |   | July 29, 2010 |
| Brenda Zawatski                        |   |                                                                |   |          |
|                                   |   |                                                                |   |          |
| *                                      |   | Director                                                            |   | July 29, 2010 |
| Lloyd Sems                             |   |                                                                |   |          |
|                                   |   |                                                                |   |          |
| *                                      |   | Director                                                            |   | July 29, 2010 |
| Jim Thanos                             |   |                                                                |   |          |
|                                   |   |                                                                |   |          |
| *                                      |   | Director                                                            |   | July 29, 2010 |
| Alan Howe                              |   |                                                                |   |          |

| /S/    Jason Stern |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|
| Jason Stern                            |   |   |   |   |
| (Attorney-in-fact)                     |   |   |   |   |
|                                   |   |   |   |   |
| /S/    Todd Spartz |   |   |   |   |
| Todd Spartz                            |   |   |   |   |
| (Attorney-in-fact)                     |   |   |   |   |

----

| Exhibit No. |   | Description                                                                                                       |
|-------------|--------|-------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                              |
| 31.1**      |   | Certification of President and Chief Operating Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|        |   |                                                                                                              |
| 31.2**      |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.               |
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| 32.1**      |   | Certification of President and Chief Operating Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| 32.2**      |   | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.               |

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| ** | This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Selectica, Inc. specifically incorporates it by reference. |
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