Avistar Announces Continuation of Nasdaq Listing Extension

SAN MATEO, CA - July 2, 2008 - Avistar Communications Corporation (NASDAQ: AVSR), a provider of unified visual communications solutions, today announced that on June 30, 2008, it received a notice from The Nasdaq Stock Market's Listing Qualifications Panel that the Panel has decided to grant Avistar an exception to the continued listing requirements of the Nasdaq Capital Market through August 29, 2008.  Under the terms of the exception, during the period from July 1, 2008 to August 29, 2008, Avistar must demonstrate the ability to close above a $35 million market value for its listed securities for ten consecutive trading days.

"Avistar continues to make significant strides in the market as its restructuring plan establishes the platform for the company's turnaround," stated Simon Moss, Avistar's Chief Executive Officer.  "We appreciate the Panel's action, and consider it to be recognition of the progress that the Avistar team has accomplished in addressing both historical challenges and re-positioning the Company to participate in the rapidly-expanding Unified Communications market. I am personally proud of the team, its resiliency, and the impressive results to-date."

The Panel's exception is subject to certain conditions, such as requiring Avistar to inform the Panel of material business developments that could influence the company's long term compliance with the continued listing requirements of the Capital Market, and is subject to review by the Nasdaq Listing and Hearing Review Council for a period of 45 days from the date of the Panel's determination letter. Failure to establish compliance during the exception period would result in the delisting of Avistar's shares from the Nasdaq Capital Market.

About Avistar Communications Corporation

Avistar creates technology that provides the missing critical element in unified communications: bringing people in organizations face-to-face through enhanced communications, for true collaboration anytime, anyplace. Its latest product, C3, draws on over a decade of market experience to deliver a single-click desktop or room-based videoconferencing and collaboration experience, that moves business communications into a new era. Available as a stand-alone solution, or integrated with existing unified communications software from other vendors, Avistar's C3 users gain instant messaging-style ability to initiate video communications and collaborate across and outside the enterprise. Patented bandwidth management enables thousands of users to access desktop videoconferencing, Voice over IP (VoIP), collaboration services, and streaming media without requiring substantial new network investment or impairing network performance.

Avistar's desktop videoconferencing and collaboration installations are among the world's largest, including more than 18,000 seats sold in more than 40 countries. Clients report as much as a 20 percent reduction in travel expense and carbon emissions, 3 percent increase in productivity, and immeasurably improved relationship building within their organizations, as well as with suppliers and customers. Avistar holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc., Polycom, Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON.

For more information, visit www.avistar.com

Cautionary Note Regarding Forward Looking Statements
The statements made in this press release that are not historical facts are "forward-looking statements." These forward-looking statements, include, but are not necessarily limited to statements regarding the company's prospects for sustaining compliance with the continued listing requirements of The Nasdaq Stock Market.  Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. The company cautions readers of this press release that a number of important factors could cause actual future events and results to differ materially from those expressed in any such forward-looking statements. Such factors include, without limitation, difficulties or delays in regaining and sustaining compliance, and the possibility that the company will be subject to delisting from The Nasdaq Stock Market due to its failure to satisfy the requirements for continued listing. These important factors and other factors that potentially could cause actual future results to differ materially from current expectations are described in our filings with the SEC, including the company's most recent annual report on Form 10-K, quarterly report on Form 10-Q and current reports on Form 8-K. Readers of this press release are referred to such filings. The forward-looking statements in this press release are based upon information available to the company as of the date of the release, and the company assumes no obligations to update any such forward-looking statements.

Contact: Robert J. Habig
650.525.3300
ir@avistar.com