|                                                          |
|----------------------------------------------------------|
|                                                          |  |
| California(State or other jurisdiction of incorporation) | 94-2723335(IRS Employer Identification No.) |

|                               |
|-------------------------------|
|                               |  |
| Title of Each Class           | Name of Each Exchange On Which Registered |
| Common Stock, Par Value $.001 | NASDAQ Stock Market LLC |

|                                    |
|------------------------------------|
|                                    |  |  |  |
| Large accelerated filer Yes x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |

----

|          |                                         |
|----------|-----------------------------------------|
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |

|     |                                   |
|-----|-----------------------------------|
| (a) | FINANCIAL SCHEDULES AND EXHIBITS. |

|    |                                     |
|----|-------------------------------------|
| 1. | Financial Statements and Schedules. |

|          |
|----------|
|          |  |  |
| Schedule |   | Description |
|  VI |   | Spigit, Inc. Consolidated Financial Statements for the year ended December 31, 2011, 2010, and 2009. |

----

|    |          |
|----|----------|
| 2. | Exhibits |

|               |
|---------------|
|               |  |  |  |
| ExhibitNumber |   | Description |
| 23.2          |  |   | Consent of Independent Accountants of Spigit, Inc. - PricewaterhouseCoopers LLP |
| 31.1          |  |   | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2          |  |   | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1          |  |   | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002). |
| 32.2          |  |   | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002). |
| 101           |  |   | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheet as of December 31, 2011 and December 31, 2010, (ii) the Consolidated Statement of Operations for the three years ended December 31, 2011, (iii) the Consolidated Statement of Shareholders’ Equity for the three years ended December 31, 2011, (iv) the Consolidated Statement of Cash Flows for the three years ended December 31, 2011, (v) the Consolidated Statement of Comprehensive Income (Loss) for the three years ended December 31, 2011 and (vi) the Notes to the Consolidated Financial Statements.* |

----

----

----

----

|                                                                                    |
|------------------------------------------------------------------------------------|
|                                                                                    |  |  |  |  |  |  |  |
| (In thousands, except per share amount)                                            | 2011 |   | 2010 |
|                                                                               |   |   |   |
| Assets                                                                             |   |   |   |
| Current assets                                                                     |   |   |   |
| Cash and cash equivalents                                                          | $ | 5,446 |  |   | $ | 4,533 |  |
| Accounts receivable                                                                | 3,811 |  |   | 1,868 |  |
| Prepaid assets and other current assets                                            | 299 |  |   | 410 |  |
| Total current assets                                                               | 9,556 |  |   | 6,811 |  |
| Property and equipment, net                                                        | 2,139 |  |   | 586 |  |
| Total assets                                                                       | $ | 11,695 |  |   | $ | 7,397 |  |
| Liabilities, Convertible Redeemable Preferred Stock, and                           |   |   |   |
|  Stockholders’ Deficit                                                  |   |   |   |
| Current liabilities                                                                |   |   |   |
| Accounts payable                                                                   | $ | 1,639 |  |   | $ | 743 |  |
| Accrued liabilities                                                                | 3,128 |  |   | 1,497 |  |
| Deferred revenue                                                                   | 6,678 |  |   | 2,377 |  |
| Warrant liability                                                                  | 55 |  |   | — |  |
| Other liabilities                                                                  | 16 |  |   | 16 |  |
| Current portion of debt                                                            | 8,039 |  |   | — |  |
| Total current liabilities                                                          | 19,555 |  |   | 4,633 |  |
| Deferred revenue                                                                   | 39 |  |   | — |  |
| Long‐term debt                                                               | — |  |   | 4,004 |  |
| Total liabilities                                                                  | 19,594 |  |   | 8,637 |  |
| Convertible redeemable preferred stock                                             |   |   |   |
| Series A‐1 convertible preferred stock, par value $0.01 – 780 shares   |   |   |   |
|  authorized; 553  and 580 shares issued and outstanding at                    |   |   |   |
|  December 31, 2011 and 2010 (liquidation preference of $638)                  | 638 |  |   | 670 |  |
| Series A‐2 convertible preferred stock, par value $0.01 – 1,000 shares |   |   |   |
|  authorized; 1,000 shares issued and outstanding                              |   |   |   |
|  at December 31, 2011 and 2010 (liquidation preference $1,000)                | 1,000 |  |   | 1,000 |  |
| Series B‐1 convertible preferred stock, par value $0.01 – 1,267 shares |   |   |   |
|  authorized; 1,267 shares issued and outstanding at                           |   |   |   |
|  December 31, 2011 and 2010 (liquidation preference of $4,481)                | 3,308 |  |   | 3,061 |  |
| Series B‐2 convertible preferred stock, par value $0.01 – 497 shares   |   |   |   |
|  authorized; 497 shares issued and outstanding                                |   |   |   |
|  at December 31, 2011 and 2010 (liquidation preference $2,577)                | 1,868 |  |   | 1,719 |  |
| Series C convertible preferred stock, par value $0.01 – 3,299 shares         |   |   |   |
|  authorized; 3,299 shares issued and outstanding                              |   |   |   |
|  at December 31, 2011 and 2010 (liquidation preference of $16,961)            | 12,158 |  |   | 11,151 |  |
| Series D convertible preferred stock, par value $0.01 – 1,121 shares         |   |   |   |
|  authorized; 1,121 shares issued and outstanding                              |   |   |   |
|  at December 31, 2011 (liquidation preference $16,205)                        | 11,026 |  |   | — |  |
| Series E convertible preferred stock, par value $0.01 – 1,117 shares         |   |   |   |
|  authorized; 605 shares issued and outstanding                                |   |   |   |
|  at December 31, 2011 (liquidation preference of $12,393)                     | 8,183 |  |   | — |  |
| Total convertible redeemable preferred stock                                       | 38,181 |  |   | 17,601 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |
| Stockholders’ deficit                                                     |   |   |   |
| Common stock, par value $0.01; authorized shares – 14,000; 602 and 600    |   |   |   |
|  shares issued and outstanding at December 31, 2011 and 2010, respectively | — |  |   | — |  |
| Additional paid‐in capital                                                | — |  |   | — |  |
| Accumulated deficit                                                             | (46,080 | ) |   | (18,841 | ) |
|                                                                            | (46,080 | ) |   | (18,841 | ) |
| Total liabilities, convertible redeemable                                       |   |   |   |
|  preferred stock, and stockholders’ deficit                          | $ | 11,695 |  |   | $ | 7,397 |  |

----

|                                        |
|----------------------------------------|
|                                        |  |  |  |  |  |  |  |  |  |  |  |
| (In thousands)                         | 2011 |   | 2010 |   | 2009 |
|                                   |   |   |   |   | (Unaudited) |
|                                   |   |   |   |   |   |
| Revenues                               | $ | 9,029 |  |   | $ | 4,982 |  |   | $ | 2,519 |  |
| Cost of revenue                        | 4,092 |  |   | 1,265 |  |   | 155 |  |
| Gross profit                           | 4,937 |  |   | 3,717 |  |   | 2,364 |  |
| Operating expenses                     |   |   |   |   |   |
| Research and development               | 7,653 |  |   | 5,055 |  |   | 1,850 |  |
| Sales and marketing                    | 18,924 |  |   | 7,326 |  |   | 2,097 |  |
| General and administrative             | 2,854 |  |   | 1,712 |  |   | 550 |  |
| Total operating expenses               | 29,431 |  |   | 14,093 |  |   | 4,497 |  |
| Operating loss                         | (24,494 | ) |   | (10,376 | ) |   | (2,133 | ) |
| Interest expense                       | (277 | ) |   | (1 | ) |   | — |  |
| Other expense, net                     | (103 | ) |   | — |  |   | — |  |
| Loss before provision for income taxes | (24,874 | ) |   | (10,377 | ) |   | (2,133 | ) |
| Provision for income taxes             | (60 | ) |   | (2 | ) |   | (2 | ) |
| Net loss                               | $ | (24,934 | ) |   | $ | (10,379 | ) |   | $ | (2,135 | ) |

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                         | Convertible Redeemable Preferred Stock |   | Common Stock |   |   |   | Additional Paid-In |   | Accumulated |   | Total Stockholders’ |
| (In thousands)                                               | Shares |   | Amount |   | Shares |   | Amount |   | Capital |   | Deficit |   | Deficit |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008 (Unaudited)                     | 2,280 |  |   | $ | 2,993 |  |   | 142 |  |   | — |  |   | — |  |   | $ | (4,512 | ) |   | $ | (4,512 | ) |
| Conversion of notes payable into Series B-1                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  convertible preferred stock at $2.00 per share         | 767 |  |   | 1,533 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Issuance of Series B-2 convertible preferred  stock at       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  $3.02 per share in cash, net of issuance costs         | 497 |  |   | 1,492 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Issuance of Series C convertible preferred stock at          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  $3.03 per share in cash, net of  issuance costs        | 3,299 |  |   | 9,850 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Restricted stock                                             | — |  |   | — |  |   | 458 |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Repurchase of Series A-1 preferred stock                     | (200 | ) |   | (230 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Stock-based compensation                                     | — |  |   |   |   | — |  |   | — |  |   | 49 |  |   | — |  |   | 49 |  |
| Accretion of preferred dividends, premium and issuance costs |   |   | 480 |  |   |   |   |   |   | (49 | ) |   | (431 | ) |   | (480 | ) |
| Net loss                                                     | — |  |   |   |   | — |  |   | — |  |   | — |  |   | (2,135 | ) |   | (2,135 | ) |
| Balance at December 31, 2009 (Unaudited)                     | 6,643 |  |   | 16,118 |  |   | 600 |  |   | — |  |   | — |  |   | (7,078 | ) |   | (7,078 | ) |
| Stock-based compensation                                     | — |  |   | — |  |   | — |  |   | — |  |   | 99 |  |   | — |  |   | 99 |  |
| Accretion of preferred dividends, premium and issuance costs |   |   | 1,483 |  |   |   |   |   |   | (99 | ) |   | (1,384 | ) |   | (1,483 | ) |
| Net loss                                                     | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (10,379 | ) |   | (10,379 | ) |
| Balance at December 31, 2010                                 | 6,643 |  |   | 17,601 |  |   | 600 |  |   | — |  |   | — |  |   | (18,841 | ) |   | (18,841 | ) |
| Issuance of common stock                                     |   |   |   |   | 2 |  |   |   |   | 5 |  |   |   |   | 5 |  |
| Issuance of Series D convertible preferred  stock at         |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  $9.14 per share in cash, net of issuance costs         | 1,121 |  |   | 10,113 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Issuance of Series E convertible preferred stock at          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  $13.43 per share in cash, net of  issuance costs       | 605 |  |   | 8,010 |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Repurchase of Series A-1 preferred stock                     | (27 | ) |   | (32 | ) |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Stock-based compensation                                     | — |  |   |   |   | — |  |   | — |  |   | 179 |  |   | — |  |   | 179 |  |
| Accretion of preferred dividends, premium and issuance costs |   |   | 2,489 |  |   |   |   |   |   | (184 | ) |   | (2,305 | ) |   | (2,489 | ) |
| Net loss                                                     | — |  |   |   |   | — |  |   | — |  |   | — |  |   | (24,934 | ) |   | (24,934 | ) |
| Balance at December 31, 2011                                 | 8,342 |  |   | $ | 38,181 |  |   | 602 |  |   | — |  |   | — |  |   | $ | (46,080 | ) |   | $ | (46,080 | ) |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |
| (In thousands)                                       | 2011 |   | 2010 |   | 2009 |
|                                                 |   |   |   |   | (Unaudited) |
|                                                 |   |   |   |   |   |
| Operating activities                                 |   |   |   |   |   |
| Net loss                                             | $ | (24,934 | ) |   | $ | (10,379 | ) |   | $ | (2,135 | ) |
| Adjustments to reconcile net loss to net             |   |   |   |   |   |
|  cash used in operating activities              |   |   |   |   |   |
| Depreciation and amortization                        | 617 |  |   | 95 |  |   | 22 |  |
| Amortization of debt discount                        | 9 |  |   | — |  |   | — |  |
| Stock-based compensation                             | 179 |  |   | 99 |  |   | 49 |  |
| Revaluation of warrant liability                     | 6 |  |   |   |   |   |
| Write-off of fixed assets and others                 | 63 |  |   | 45 |  |   | — |  |
| Changes in operating assets and liabilities          |   |   |   |   |   |
| Accounts receivable                                  | (1,943 | ) |   | (980 | ) |   | 50 |  |
| Prepaid assets and other assets                      | 151 |  |   | (160 | ) |   | (232 | ) |
| Accounts payable                                     | 896 |  |   | 613 |  |   | 104 |  |
| Accrued liabilities                                  | 1,606 |  |   | 1,267 |  |   | 99 |  |
| Deferred revenue                                     | 4,339 |  |   | 1,020 |  |   | 278 |  |
| Other liabilities                                    | — |  |   | (171 | ) |   | 179 |  |
| Net cash used in operating activities                | (19,011 | ) |   | (8,551 | ) |   | (1,586 | ) |
| Investing activities                                 |   |   |   |   |   |
| Purchases of property and equipment                  | (2,207 | ) |   | (620 | ) |   | (100 | ) |
| Net cash used in investing activity                  | (2,207 | ) |   | (620 | ) |   | (100 | ) |
| Financing activities                                 |   |   |   |   |   |
| Proceeds from line of credit                         | 4,035 |  |   | 4,004 |  |   | — |  |
| Proceeds from issuance of common stock               | 5 |  |   | — |  |   | — |  |
| Proceeds from issuance of preferred stock, net of    |   |   |   |   |   |
|  issuance costs                                 | 18,123 |  |   | — |  |   | 11,415 |  |
| Repurchase of preferred stock                        | (32 | ) |   | — |  |   | (230 | ) |
| Net cash provided by financing activities            | 22,131 |  |   | 4,004 |  |   | 11,185 |  |
| Net increase (decrease) in cash and cash equivalents | 913 |  |   | (5,167 | ) |   | 9,499 |  |
| Cash and cash equivalents                            |   |   |   |   |   |
| Beginning of year                                    | 4,533 |  |   | 9,700 |  |   | 201 |  |
| End of year                                          | $ | 5,446 |  |   | $ | 4,533 |  |   | $ | 9,700 |  |
|                                                 |   |   |   |   |   |

----

|    |             |
|----|-------------|
| 1. | The Company |

|    |                                            |
|----|--------------------------------------------|
| 2. | Summary of Significant Accounting Policies |

----

----

|         |                                               |
|---------|-----------------------------------------------|
| • | Persuasive evidence of an arrangement exists; |

|         |                                                               |
|---------|---------------------------------------------------------------|
| • | Subscription or services have been delivered to the customer; |

|         |                                                       |
|---------|-------------------------------------------------------|
| • | Collection of related fees is reasonably assured; and |

|         |                                         |
|---------|-----------------------------------------|
| • | Related fees are fixed or determinable. |

----

|         |                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Provide updated guidance on whether multiple deliverables exist, how the deliverables in an arrangement should be separated, and how the consideration should be allocated; |

|         |                                                                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Require an entity to allocate revenue in an arrangement using estimated selling prices (“ESP”) of each deliverable if a vendor does not have vendor-specific objective evidence of selling price (“VSOE”) or third-party evidence of selling price (“TPE”); and |

|         |                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------|
| • | Eliminate the use of the residual method and require a vendor to allocate revenue using the relative selling price method. |

----

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |
|                                           | 2011 |   | 2010 |   | 2009(1) |
|                                           |   |   |   |   |   |
| Expected dividend yield                        | — |  |   | — |  |   | — |  |
| Expected volatility                            |          55.0 % |  |   |          70.0 % |  |   | — |  |
| Risk-free interest rate                        |          1.78 % |  |   |          1.17 % |  |   | — |  |
| Expected term                                  | 5.0 years |  |   | 5.0 years |  |   | — |  |
| Weighted average fair value of options granted | $ | 0.75 |  |   | $ | 0.65 |  |   | — |  |

----

|    |               |
|----|---------------|
| 3. | Balance Sheet |

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |
| (in thousands)                                                 | 2011 |   | 2010 |
|                                                           |   |   |   |
| Furniture                                                      | $ | 121 |  |   | $ | 117 |  |
| Leasehold improvements                                         | 113 |  |   | 19 |  |
| Computer hardware                                              | 330 |  |   | 217 |  |
| Software (includes $2,206 and $272 of capitalized internal use |   |   |   |
|  software at December 31, 2011 and 2010, respectively)    | 2,259 |  |   | 320 |  |
|                                                           | 2,823 |  |   | 673 |  |
| Less:  Accumulated depreciation and amortization               | (684 | ) |   | (87 | ) |
| Total property and equipment, net                              | $ | 2,139 |  |   | $ | 586 |  |

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |
| (in thousands)                  | 2011 |   | 2010 |
|                            |   |   |   |
| Accrued commissions and bonuses | $ | 1,621 |  |   | $ | 830 |  |
| Accrued paid-time-off           | 638 |  |   | 368 |  |
| Accrued taxes                   | 730 |  |   | 257 |  |
| Other                           | 139 |  |   | 42 |  |
|                            | $ | 3,128 |  |   | $ | 1,497 |  |

|                |
|----------------|
|                |  |  |  |
| (in thousands) |   |
|           |   |
| 2012           | $ | 281 |  |
| 2013           | 89 |  |
| Thereafter     | — |  |
|           | $ | 370 |  |

----

|    |                        |
|----|------------------------|
| 4. | Fair Value Measurement |

|         |                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------|
| • | Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities. |

|         |                                                                                                                                                                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |

|         |                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |

|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |  |  |  |  |  |  |
|              | December 31, 2011 Fair Value Measurement |
|         | Level 1 |   | Level 2 |   | Level 3 |   | Total |
|              |   |   |   |   |   |   | Balance |
|              |   |   |   |   |   |   |   |
| Liabilities       |   |   |   |   |   |   |   |
| Warrant liability | — |  |   | — |  |   | $ | 55 |  |   | $ | 55 |  |
|              | — |  |   | — |  |   | $ | 55 |  |   | $ | 55 |  |

|                                      |
|--------------------------------------|
|                                      |  |  |  |
|                                 | Fair  Value |
| (in thousands)                       | Measurements |
|                                 |   |
| Balance as of December 31, 2010 | $ | — |  |
| Warrant issued                       | 49 |  |
| Total change in fair value           | 6 |  |
| Balance as of December 31, 2011 | $ | 55 |  |

----

|    |                 |
|----|-----------------|
| 5. | Credit Facility |

|    |                   |
|----|-------------------|
| 6. | Warrant Liability |

|    |                                                                        |
|----|------------------------------------------------------------------------|
| 7. | Redeemable Convertible Preferred Stock and Stockholders’ Deficit |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Preferred Stock (1)          | Shares Authorized |   | Shares Issued and Outstanding |   | Original Issuance Value (less Issuance Costs) |   | Liquidation Value (2) |
|                              |   |   |   |   |   |   |   |
| Series A-1 preferred stock (3)    | 780 |  |   | 553 |  |   | $ | 638 |  |   | $ | 638 |  |
| Series A-2 preferred stock (3)    | 1,000 |  |   | 1,000 |  |   | $ | 1,000 |  |   | $ | 1,000 |  |
| Series B-1 preferred stock (4)(5) | 1,267 |  |   | 1,267 |  |   | $ | 2,533 |  |   | $ | 4,481 |  |
| Series B-2 preferred stock (4)    | 497 |  |   | 497 |  |   | $ | 1,492 |  |   | $ | 2,577 |  |
| Series C preferred stock          | 3,299 |  |   | 3,299 |  |   | $ | 9,850 |  |   | $ | 16,961 |  |
| Series D preferred stock          | 1,121 |  |   | 1,121 |  |   | $ | 10,113 |  |   | $ | 16,205 |  |
| Series E preferred stock          | 1,117 |  |   | 605 |  |   | $ | 8,010 |  |   | $ | 12,393 |  |

|     |                                                                                                                                  |
|-----|----------------------------------------------------------------------------------------------------------------------------------|
| (1) | All of the classes of preferred stock presented in the table above are collectively referred hereinafter as the Preferred Stock. |

|     |                                                                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Includes cumulative accruing dividends through October 24, 2016 and a liquidation premium equal to 10% of the original issue price of each class of the preferred stock accreted using the interest rate method through October 24, 2016, the earliest optional redemption date by their holders. |

|     |                                                                                                                          |
|-----|--------------------------------------------------------------------------------------------------------------------------|
| (3) | The Series A-1 together with the Series A-2 preferred stock are hereinafter referred to as the Series A preferred stock. |

|     |                                                                                                                          |
|-----|--------------------------------------------------------------------------------------------------------------------------|
| (4) | The Series B-1 together with the Series B-2 preferred stock are hereinafter referred to as the Series B preferred stock. |

|     |                                                                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (5) | Of the $2.5 million carrying value of the Series B-1 preferred stock, approximately $1.5 million represents the conversion of a promissory note by an investor in July 2009. |

----

|                            |
|----------------------------|
|                            |  |  |  |
|                       | Conversion Price |
|                       |   |
| Series A-1 preferred stock | $ | 1.15 |  |
| Series B-1 preferred stock | $ | 2.00 |  |
| Series B-2 preferred stock | $ | 3.02 |  |
| Series C preferred stock   | $ | 3.03 |  |
| Series D preferred stock   | $ | 9.14 |  |
| Series E preferred stock   | $ | 13.43 |  |

----

|    |                          |
|----|--------------------------|
| 8. | Stock-Based Compensation |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)             | 2011 |   | 2010 |   | 2009 |
|                       |   |   |   |   | (Unaudited) |
|                       |   |   |   |   |   |
| Cost of revenue            | $ | 9 |  |   | $ | 1 |  |   | $ | — |  |
| Research and development   | 35 |  |   | 7 |  |   | 2 |  |
| Sales and marketing        | 23 |  |   | 4 |  |   | 1 |  |
| General and administrative | 112 |  |   | 87 |  |   | 46 |  |
|                       | $ | 179 |  |   | $ | 99 |  |   | $ | 49 |  |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |
|  (in thousands, except per share and term data) | Shares | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Term |
|                                                 |   |   |   |   |
| January 1, 2011                                      | 584 |  | $ | 1.35 |  |   |   |
| Granted                                              | 339 |  | 1.54 |  |   |   |
| Exercised                                            | (2 | ) | 2.00 |  |   |   |
| Forfeited/cancelled                                  | (256 | ) | 1.73 |  |   |   |
| Balance at December 31, 2011                         | 665 |  | $ | 1.30 |  |   | 8.9 |  |
| Vested and expected to vest                          |   |   |   |   |
|  as of December 31, 2011                        | 623 |  | $ | 1.37 |  |   | 8.9 |  |
| Exercisable as of December 31, 2011                  | 171 |  | $ | 1.37 |  |   | 8.1 |  |

----

|    |              |
|----|--------------|
| 9. | Income Taxes |

|                |
|----------------|
|                |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands) | 2011 |   | 2010 |   | 2009 |
|           |   |   |   |   | (Unaudited) |
|           |   |   |   |   |   |
| Domestic       | $ | (25,076 | ) |   | $ | (10,377 | ) |   | $ | (2,133 | ) |
| Foreign        | 202 |  |   | — |  |   | — |  |
|           | $ | (24,874 | ) |   | $ | (10,377 | ) |   | $ | (2,133 | ) |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                   | 2011 |   | 2010 |   | 2009 |
|                             |   |   |   |   | (Unaudited) |
|                             |   |   |   |   |   |
| Current                          |   |   |   |   |   |
| Federal                          | $ | — |  |   | $ | — |  |   | $ | — |  |
| State                            | 8 |  |   | 2 |  |   | 2 |  |
| Foreign                          | 52 |  |   | — |  |   | — |  |
|                             | 60 |  |   | 2 |  |   | 2 |  |
| Deferred                         |   |   |   |   |   |
| Federal                          | — |  |   | — |  |   | — |  |
| State                            | — |  |   | — |  |   | — |  |
| Foreign                          | — |  |   | — |  |   | — |  |
|                             | — |  |   | — |  |   | — |  |
| Total provision for income taxes | $ | 60 |  |   | $ | 2 |  |   | $ | 2 |  |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |
| (in thousands)                       | 2011 |   | 2010 |
|                                 |   |   |   |
| Deferred tax assets                  |   |   |   |
| Depreciation and amortization        | $ | 3,716 |  |   | $ | 1,564 |  |
| Accruals and other                   | 217 |  |   | 441 |  |
| Research and development tax credits | 1,086 |  |   | 416 |  |
| Net operating loss carryforward      | 11,844 |  |   | 4,132 |  |
|                                 | 16,863 |  |   | 6,553 |  |
| Deferred tax liabilities             |   |   |   |
| Deferred revenue change              | (328 | ) |   | (54 | ) |
|                                 | (328 | ) |   | (54 | ) |
| Valuation allowance                  | (16,535 | ) |   | (6,499 | ) |
| Net deferred tax assets              | $ | — |  |   | $ | — |  |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                          | 2011 |   | 2010 |   | 2009 |
|                                    |   |   |   |   | (Unaudited) |
|                                    |   |   |   |   |   |
| Tax at statutory federal rate           | $ | (8,457 | ) |   | $ | (3,530 | ) |   | $ | (726 | ) |
| State tax, net of federal benefit       | (1,328 | ) |   | (547 | ) |   | (125 | ) |
| Foreign income taxes at different rates | (17 | ) |   | — |  |   | — |  |
| Permanent differences                   | 334 |  |   | 146 |  |   | 150 |  |
| Research and development tax credits    | (670 | ) |   | (273 | ) |   | (76 | ) |
| Change in valuation allowance           | 10,191 |  |   | 4,206 |  |   | 780 |  |
| Other                                   | 7 |  |   | — |  |   | (1 | ) |
|                                    | $ | 60 |  |   | $ | 2 |  |   | $ | 2 |  |

----

|                                                                   |
|-------------------------------------------------------------------|
|                                                                   |  |  |  |  |  |  |  |
| (in thousands)                                                    | 2011 |   | 2010 |
|                                                              |   |   |   |
| Gross unrecognized tax benefits at January 1                      | $ | 119 |  |   | $ | 40 |  |
| Gross increases (decreases) related to prior year tax positions   | — |  |   | — |  |
| Gross increases (decreases) related to current year tax positions | 187 |  |   | 79 |  |
| Gross unrecognized tax benefits at December 31                    | $ | 306 |  |   | $ | 119 |  |

|     |                            |
|-----|----------------------------|
| 10. | Related Party Transactions |

|     |                   |
|-----|-------------------|
| 11. | Subsequent Events |

----

----

|                   |
|-------------------|
|                   |  |  |
| Date:   | March 29, 2012 | PICO Holdings, Inc.  By:  /s/ John R. HartJohn R. HartChief Executive OfficerPresident and Director |