Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In many but not all cases you can identify forward-looking statements by words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "should," "will" and "would" or the negative of these terms or other similar expressions. These forward-looking statements include statements regarding our expectations, beliefs, or intentions about the future, and are based on information available to us at this time. We assume no obligation to update any of these statements and specifically decline any obligation to update or correct any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Actual events and results could differ materially from our expectations as a result of many factors, including those identified in this report. We urge you to review and consider those factors, and those identified from time to time in our reports and filings with the SEC, for information about risks and uncertainties that may affect our future results. All forward-looking statements we make after the date of this filing are also qualified by this cautionary statement and identified risks. Additional risk factors are discussed in our Annual Report on Form 10-KSB for the fiscal year ended March 31, 2008 and our other reports filed with the SEC, to which reference should be made.

EXECUTIVE SUMMARY AND RECENT BUSINESS DEVELOPMENTS

For the quarter ending September 30, 2008, we continued executing against our business plan and achieved the highest quarterly revenue in our history. Recurring revenue from maintenance and support continues to become a more significant piece of our revenues as our installed base grows, and our pipeline of opportunities is increasing in both number and project size.

Our business model relies upon the leverage of a network of strong reseller partners to sell our products. During the quarter, we continued to invest in building out our internal technical, sales and business development organizations as required to properly support our channel reseller program - CollaborNET™, which was launched in August. We are pleased at the commitments we have received from both existing and new partners. As a result of the program, we have seen increased joint pipeline planning, joint marketing programs and commitments to obtain certification for installation engineers.

We continued to make good penetration into the public sector markets where our solutions are increasingly well received as the answer to critical communication challenges. We also took early steps to begin to explore opportunities in the Federal market. We are seeing continued support from the Cisco Industry Solutions Partner Network (ISPN) program where we enjoy significant visibility due to our product certification for multiple vertical markets.

In light of the clear signs of general economic weakness, we are carefully monitoring our sales pipeline. While we expect that portions of our market will undoubtedly be affected, we believe that the Company is positioned to endure a challenging economy. We expect that market segments, such as government, and education will be more resilient due to continued demand for event alerting and notification solutions for public safety and campus safety requirements. With the demographics of an aging population, healthcare is an industry that is continuing to grow. And because there are fewer employees to operate facilities, the efficiencies and increased productivity our products provide can measurably enhance business operations.

We remain focused on driving the Company to profitability, and believe our emphasis on leveraging our reseller partner relationships will lead to the continued pipeline growth, completed installations and increased average deal size that will be necessary to achieve that goal. Our program of certifying partner installation engineers is a key piece of this effort, as it will allow us to significantly extend our reach while providing partners with enhanced customer interaction. We believe that this focus will continue the trending of our product mix toward the higher margin convergence solutions, maintenance and support areas, offsetting the proportionally lower revenue generated by low margin professional services.

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RESULTS OF OPERATIONS

Selected Consolidated Statements of Operations Data

The following tables present consolidated statements of operations data for the three and six months ended September 30, 2008 and 2007 based on the percentage of revenue for each line item, as well as the dollar and percentage change of each of the items.