UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

or

Note 1 - Business Description and Basis of Presentation and Liquidity

The Business Description

Note 2 - Liquidity

As of September 30, 2014,March 31, 2015, we had $2,153,000$1,871,000 of cash and working capital of $1,970,000.$2,284,000. Our cash balance as of September 30, 2014March 31, 2015 includes restricted cash of $185,000$148,000 (as discussed in Note 3)4). For the ninethree months ended September 30, 2014,March 31, 2015, we generated a net loss of $635,000$234,000 and net cash provided by operating activities of $1,560,000.$602,000. We generated cash flow from operations even though we incurred a net loss as our net loss includes non-cash operating expenses (as shown on the condensed consolidated statements of cash flows).

In October 2013, the Company entered into a loan agreement by and among the Company and its subsidiaries, and Main Street Capital Corporation (“Main Street”), as lender and as administrative agent and collateral agent for itself and the other lenders from time to time party thereto (thethereto. On February 27, 2015, the Company and Main Street entered into an amendment to the loan agreement to revise certain of the Company's financial covenants and ratio levels (as amended, the "Main Street Loan Agreement"). The Main Street Loan Agreement provides for an $11,000,000 senior secured term loan facility (“Main Street Term Loan”) and a $2,000,000 senior secured revolving loan facility (the “Main Street Revolver”).

Note 23 - Summary of Significant Accounting Policies

Use of Estimates

Preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates made. We continually evaluate estimates used in the preparation of the condensed consolidated financial statements for reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. The significant areas of estimation include determining the allowance for doubtful accounts, deferred tax valuation allowance, accrued sales taxes, the valuation of goodwill, the valuation of intangible assets and their estimated lives, and the estimated lives and recoverability of property and equipment.

On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. TheThis ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The FASB has issued for public comment a proposed ASU that would defer the effective date of ASU 2014-09 by one year. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

In August 2014, the FASB issued ASU No. 2014-15, “PresentationPresentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU 2014-15Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December

Revenue Recognition

Allowance for Doubtful Accounts

Taxes Billed to Customers and Remitted to Taxing Authorities

Impairment of Long-Lived Assets and Intangible Assets

Capitalized Software Costs

The Company capitalizes certain costs incurred in connection with developing or obtaining internal-use software. All software development costs have been appropriately accounted for as required by ASC Topic 350-40 “Intangible – Goodwill and Other – Internal-Use Software”. Capitalized software costs are included in Property and Equipment on our condensed consolidated balance sheets and are amortized over three to four years. Software costs that do not meet

Note 34 - Restricted Cash

Note 45 - Accrued Expenses and Other Liabilities

Note 56 - Debt

Long-term debt consisted of the following (in thousands):

The Company may prepay borrowings under the Main Street Loan Agreement at any time without premium or penalty, subject to certain notice and minimum prepayment requirements. The obligations of the Company under the Main Street Loan Agreement are secured by substantially all of the assets of the Company, including all intellectual property, equity interests in subsidiaries, equipment and other personal property. The Main Street Loan Agreement contains standard representations, warranties and covenants for a transaction of its nature, including, among other things, covenants relating to (i) financial reporting and notification, (ii) payment of obligations, (iii) compliance with applicable laws and (iv) notification of certain events. The Main Street Loan Agreement also contains variousevents and covenants and restrictive provisions which may, among other things, limit the Company's ability to sell assets, incur additional indebtedness, make investments or loans and create liens. The Main Street Loan Agreement also contains financial covenants, including a fixed charge coverage ratio covenant and a debt to Adjusted EBITDA (“AEBITDA”) ratio covenant. Adjusted EBITDA, a non-GAAP financial measure, iscovenant as defined as net income (loss) before depreciation, amortization, taxes, severance, acquisition costs, stock-based compensation, impairment charges and interest and other expense, net.in the Main Street Loan Agreement. The Main Street Loan Agreement contains events of default customary for similar financings with corresponding grace periods, including failure to pay any principal or interest when due, failure to perform or observe covenants, breaches of representations and warranties, certain cross defaults, certain bankruptcy related events, monetary judgments defaults and a change in control. Upon the occurrence of an event of default, the outstanding obligations under the Main Street Loan Agreement may

Note 67 - Capital Lease Obligations

Note 78 - Preferred Stock

Note 89 - Common Stock

On September 16, 2014, the Company entered into an At Market Issuance Sales Agreement, with MLV & Co. LLC (“MLV”), under which the Company may, at its discretion, sell its common stock with a sales value of up to a maximum of $8,000,000 through at-the-market sales on the NYSE MKT (the "ATM Offering"). On March 20, 2015, the Company and MLV actsmutually agreed to terminate this agreement. MLV acted as the sole sales agent for any sales made in the ATM Offering for a 3% commission on gross proceeds. The common stock is beingwas sold at market prices at the time of the sale, and, as a result, prices may vary.varied. Sales in the ATM Offering arewere being made pursuant to the prospectus supplement dated September 16, 2014, which supplementssupplemented the Company's prospectus dated January 22, 2013, filed as part of the shelf registration statement that was declared effective by the Securities and Exchange Commission (“SEC”) on January 22, 2013. Through September 30, 2014,During the three months ended March 31, 2015, the Company sold 89,00017,000 shares in the ATM Offering at a weighted-average selling price of $1.33$1.11 per share for gross proceeds of $118,000.$19,000. Net proceeds totaled $108,000,$18,000, reflecting reductions for the 3% commission to MLV and other offering expenses. The Company hasinitially recorded approximately $100,000$125,000 of expenses for the offering, excluding MLV commissions and other fees, in prepaid expenses and other current assets as of September 30, 2014.assets. The Company will chargecharged approximately $100,000 of these costs against additional paid-in capital as shares are sold underduring the three months ended March 31, 2015 upon the termination of the ATM Offering. During the three and nine ended September 30, 2014, $6,000 of such costs were recorded against additional paid-in capital.offering.

Note 910 - Stock OptionsBased Compensation

On April 22,May 28, 2014, the Board of Directors of the Company (the “Board”) adopted the Glowpoint, Inc. 2014 Equity Incentive Plan (the “2014 Plan”), subject to requisite stockholder approval. On May 28, 2014, the 2014 Plan was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. Also on May 28, 2014, the Board terminated the Company’s 2007 Stock Incentive Plan (the “2007 Plan”). Notwithstanding the termination of the 2007 Plan, outstanding awards under the 2007 Plan will remain in effect accordance with their terms.

In June 2010, the Board terminated the Glowpoint 2000 Stock Incentive Plan (as amended, the “2000 Plan”). Notwithstanding the termination of the 2000 Plan, outstanding awards were granted under the 20142000 Plan during the three and nine months ended September 30, 2014.will remain in effect accordance with their terms. As of March 31, 2015, options to purchase a total of 87,000 shares of common stock were outstanding.

There was no tax benefit recognized for stock-based compensation for the three and nine months ended September 30, 2014March 31, 2015 or 2013.2014. No compensation costs were capitalized as part of the cost of an asset during the periods presented.

Note 10 - Restricted Stock

During the ninethree months ended September 30, 2014, additional paidMarch 31, 2015, the Company recorded a reversal of $88,000 in capital was increased by $204,000 relatingstock-based compensation expense of which $26,000 related to the issuance ofexpense for unvested awards that were forfeited and $62,000 related to revised estimates for expense previously recorded on performance-based awards.

Certain restricted stock for settlementawards have performance-based vesting provisions and are subject to forfeiture, in whole or in part, if these performance conditions are not achieved. Management assesses, on an ongoing basis, the probability of bonuses, of which $165,000 was recorded in accrued expenses as of December 31, 2013. Stock basedwhether the performance criteria will be achieved and, once it is deemed probable, compensation expense relatedis recognized over the relevant performance period. For those awards not subject to these accrued bonuses was recorded duringperformance criteria, the year ended December 31, 2013.cost of the restricted stock awards is expensed, which is determined to be the fair market value of the shares at the date of grant, on a straight-line basis over the vesting period. 

There was no tax benefit recognized for stock-based compensation for the three and nine months ended September 30, 2014March 31, 2015 or 2013.2014. No compensation costs were capitalized as part of the cost of an asset during the periods presented.

Note 11 - Earnings (Loss)Loss Per Share

Basic earningsloss per share is computed by dividing net incomeloss available to common stockholders by the weighted-averageweighted average number of shares of common stock outstanding during the period. The weighted-average number shares of common stock outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding at September 30,March 31, 2015 and 2014, and 2013, are considered contingently returnable until the restrictions lapse and will not be included in the basic earnings per share calculation until the shares are vested. Unvested shares of our restricted stock do not contain non-forfeitable rights to dividends and dividend equivalents. Unvested restricted stock units are not included in calculations of basic loss per share, as they are not considered issued and outstanding at time of grant.

Diluted earningsloss per share includes the effect of all potentially dilutive securities on earnings per share. The difference between basic and diluted weighted-averageweighted average shares outstanding was the dilutive effect of unvested restricted stock, unvested restricted stock units, stock options, and preferred stock, forstock. For the three months ended September 30, 2014.

The following table sets forth the potential shares of common stock that were excluded from diluted weighted-averageweighted average shares of common stock outstanding (in thousands):

Note 12 - Commitments and Contingencies

Operating Leases

Commercial Commitments

We have entered into a number of agreements with telecommunications companiesour suppliers to purchase communications and consulting services. Some of the agreements require a minimum amount of services to be purchased over the life of the agreement, or during a specified period of time.

Letters of Credit

As of September 30, 2014,March 31, 2015, the Company had an outstanding irrevocable standby letter of credit with Comerica Bank for $185,000$148,000 to serve as our security deposit for our lease of office space in Colorado. See Note 3.4.

Note 13 – Major Customers

Note 14 - Related Party Transactions

As of September 30, 2014, GP Investment Holdings, LLC (“GPI”)March 31, 2015, Main Street owns 15,276,1387,711,517 shares, or 43%22%, of the Company’sCompany's common stock. GPI is an investment vehicle affiliated with Main Street Capital Corporation, ouris the Company's debt lender along with individual investors (see Note 5)6).

Transactions with related parties, including the transactions referred to above, are reviewed and approved by independent members of the Board of Directors of the Company.

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

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss) before depreciation, amortization, taxes, severance, acquisition costs, stock-based compensation, impairment charges and interest and other expense, net. Adjusted EBITDA is not intended to replace operating income (loss), net income (loss), cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles. Rather, Adjusted EBITDA is an

Liquidity and Capital Resources

As of March 31, 2015 the Company had outstanding borrowings of $1,785,000 on the SRS Note. On February 27, 2015, the Company amended and restated the SRS Note. The amended SRS Note, (i) extended the maturity date from January 4, 2016 to July 6, 2017, (ii) increased the interest rate from 10% to 15% per annum effective March 1, 2015 and (iii) revised the payment of interest from quarterly in arrears to payment on July 6, 2017 of all interest earned after March 1, 2015, unless certain trailing AEBITDA targets are met as defined in the agreement. The Company is required to make monthly principal payments in the amount of $50,000 in the event the Company's trailing three month AEBITDA exceeds $1,500,000. The Company is required to make additional payments on the principal amount over the remaining term of the SRS Note in an amount equal to 40% of the Company’s trailing six month Adjusted EBITDA less $3,000,000. During the three and nine months ended September 30, 2014,March 31, 2015, the Company received advancesmade no principal payments on the Main Street Revolver of $249,000.SRS Note.

Off-Balance Sheet Arrangements

Inflation

Management does not believe inflation had a significant effect on the condensed consolidated financial statements for the periods presented.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by Glowpoint in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by Glowpoint in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, Glowpoint has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2014,March 31, 2015, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.

No change in our internal control over financial reporting occurred during the ninethree months ended September 30, 2014March 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

A description of the risks associated with our business, financial conditions and results of operations is set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 20132014 and filed with the SEC on March 6, 2014.5, 2015. There have been no material changes to these risks during the ninethree months ended September 30, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There have been no unregistered sales of securities during the period covered by this Report that have not been previously reported in a Current Report on Form 8-K. The Company has not made any purchases of its own securities during the time period covered by this Report.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.