UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Commission File Number 001-33368

Glu Mobile Inc.

(Exact name of the Registrant as Specified in its Charter)

Delaware		91-2143667
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

45 Fremont Street, Suite 2800
San Francisco, California 94105
(Address of Principal Executive Offices, including Zip Code)

(415) 800-6100
(Registrant’s Telephone number, including Area Code)

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Shares of Glu Mobile Inc. common stock, $0.0001 par value per share, outstanding as of October 31, 2011: 63,698,619.

 

 

GLU MOBILE INC.

FORM 10-Q

Quarterly Period Ended September 30, 2011

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010			3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2011 and 2010			4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010			5
Notes to Unaudited Condensed Consolidated Financial Statements			6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			39
ITEM 4. CONTROLS AND PROCEDURES			40
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS			41
ITEM 1A. RISK FACTORS			41
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			59
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			59
ITEM 4. RESERVED			60
ITEM 5. OTHER INFORMATION			60
ITEM 6. EXHIBITS			60
SIGNATURES			61
Exhibit 10.01
Exhibit 10.02
Exhibit 10.03
Exhibit 10.05
Exhibit 31.01
Exhibit 31.02
Exhibit 32.01
Exhibit 32.02
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS

GLU MOBILE INC.

		September 30,				December 31,
		2011				2010
ASSETS
Current assets:
Cash and cash equivalents		$	36,869			$	12,863
Accounts receivable, net			9,963				10,660
Prepaid royalties			679				2,468
Prepaid expenses and other			4,027				2,557
Total current assets			51,538				28,548
Property and equipment, net			3,871				2,134
Other long-term assets			575				574
Intangible assets, net			12,107				8,794
Goodwill			21,966				4,766
Total assets		$	90,057			$	44,816
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	7,368			$	5,666
Accrued liabilities			1,056				939
Accrued compensation			4,858				4,414
Accrued royalties			4,494				7,234
Accrued restructuring			1,297				1,689
Deferred revenues			2,393				842
Current portion of long-term debt			—				2,288
Total current liabilities			21,466				23,072
Other long-term liabilities			10,423				7,859
Total liabilities			31,889				30,931
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000 shares authorized at September 30, 2011 and December 31, 2010; no shares issued and outstanding at September 30, 2011 and December 31, 2010			—				—
Common stock, $0.0001 par value: 250,000 shares authorized at September 30, 2011 and December 31, 2010; 63,645 and 44,585 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively			6				4
Additional paid-in capital			259,697				203,464
Accumulated other comprehensive income			289				1,159
Accumulated deficit			(201,824	)			(190,742	)
Total stockholders’ equity			58,168				13,885
Total liabilities and stockholders’ equity		$	90,057			$	44,816

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these financial statements.

GLU MOBILE INC.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Revenues		$	16,905			$	15,468			$	51,011			$	48,709
Cost of revenues:
Royalties and impairment of prepaid royalties and guarantees			3,383				3,934				10,344				13,568
Amortization of intangible assets			2,375				1,009				3,895				3,243
Total cost of revenues			5,758				4,943				14,239				16,811
Gross profit			11,147				10,525				36,772				31,898
Operating expenses:
Research and development			10,808				5,858				26,413				18,748
Sales and marketing			3,576				2,692				10,677				8,100
General and administrative			3,748				3,107				10,188				9,972
Amortization of intangible assets			330				53				330				160
Restructuring charge			—				—				637				1,287
Total operating expenses			18,462				11,710				48,245				38,267
Loss from operations			(7,315	)			(1,185	)			(11,473	)			(6,369	)
Interest and other income/(expense), net:
Interest income			4				7				33				20
Interest expense			—				(98	)			(72	)			(539	)
Other income/(expense), net			340				177				892				(586	)
Interest and other income/(expense), net			344				86				853				(1,105	)
Loss before income taxes			(6,971	)			(1,099	)			(10,620	)			(7,474	)
Income tax benefit/(provision)			813				(504	)			(462	)			(1,003	)
Net loss		$	(6,158	)		$	(1,603	)		$	(11,082	)		$	(8,477	)
Net loss per common share — basic and diluted		$	(0.10	)		$	(0.04	)		$	(0.20	)		$	(0.26	)
Weighted average common shares outstanding — basic and diluted			60,461				36,042				55,699				32,392

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these financial statements.

GLU MOBILE INC.

		Nine Months Ended September 30,
		2011				2010
Cash flows from operating activities:
Net loss		$	(11,082	)		$	(8,477	)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Depreciation and accretion			1,303				1,561
Amortization of intangible assets			4,225				3,403
Stock-based compensation			1,740				1,229
Change in fair value of Blammo earnout			(178	)			—
Interest expense on debt			2				407
Amortization of loan agreement costs			70				132
Non-cash foreign currency remeasurement (gain)/loss			(905	)			584
Impairment of prepaid royalties and guarantees			531				663
Changes in allowance for doubtful accounts			326				(53	)
Changes in operating assets and liabilities:
Accounts receivable			1,996				6,050
Prepaid royalties			1,262				2,966
Prepaid expenses and other assets			(107	)			(713	)
Accounts payable			961				(730	)
Other accrued liabilities			(67	)			(1,137	)
Accrued compensation			433				1,313
Accrued royalties			(2,783	)			(4,378	)
Deferred revenues			1,451				60
Accrued restructuring charge			(1,165	)			(586	)
Other long-term liabilities			(483	)			275
Net cash (used in)/provided by operating activities			(2,470	)			2,569
Cash flows from investing activities:
Purchase of property and equipment			(1,972	)			(517	)
Net cash received from acquisitions			10,342				—
Net cash provided by/(used in) investing activities			8,370				(517	)
Cash flows from financing activities:
Proceeds from line of credit			—				31,457
Payments on line of credit			(2,288	)			(34,548	)
Net proceeds from Public Offering			15,661				—
Net proceeds from Private Placement			—				13,297
MIG loan payments			(698	)			(7,239	)
Proceeds from exercise of warrants and issuance of common stock			3,572				—
Proceeds from exercise of stock options and ESPP			1,872				602
Net cash provided by financing activities			18,119				3,569
Effect of exchange rate changes on cash			(13	)			(242	)
Net increase in cash and cash equivalents			24,006				5,379
Cash and cash equivalents at beginning of period			12,863				10,510
Cash and cash equivalents at end of period		$	36,869			$	15,889
Supplemental disclosure of cash flow information:
Common stock issued for the acquisitions of Griptonite and Blammo		$	33,158			$	—

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these financial statements.

GLU MOBILE INC.

Note 1 — The Company, Basis of Presentation and Summary of Significant Accounting Policies

Glu Mobile Inc. (the “Company” or “Glu”) was incorporated in Nevada in May 2001 and reincorporated in the state of Delaware in March 2007. The Company creates mobile games and related applications based on its own original intellectual property, as well as third-party licensed brands and other intellectual property.

The Company has incurred recurring losses from operations since inception and had an accumulated deficit of $201,824 as of September 30, 2011. For the three months ended September 30, 2011, the Company incurred a net loss from operations of $6,158. For the nine months ended September 30, 2011, the Company incurred a net loss from operations of $11,082. The Company may incur additional operating losses and negative cash flows in the future. Failure to generate sufficient revenues, reduce spending or raise additional capital could adversely affect the Company’s ability to achieve profitability and its intended business objectives.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) in the United States for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on March 21, 2011. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, which the Company believes are necessary for a fair statement of the Company’s financial position as of September 30, 2011 and its results of operations for the three and nine months ended September 30, 2011 and 2010, respectively. These unaudited condensed consolidated financial statements are not necessarily indicative of the results to be expected for the entire year. The unaudited consolidated balance sheet presented as of December 31, 2010 has been derived from the audited consolidated financial statements as of that date, and the consolidated balance sheet presented as of September 30, 2011 has been derived from the unaudited condensed consolidated financial statements as of that date.

Basis of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and accounts receivable.

The Company derives its accounts receivable from revenues earned from customers located in the United States and locations outside of the United States. The Company performs ongoing credit evaluations of its customers’ financial condition and currently does not require any collateral from its customers. The Company bases its allowance for doubtful accounts on management’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company reviews past due balances over a specified amount individually for collectability on a monthly basis and all other balances quarterly. The Company writes off accounts receivable balances against the allowance when it determines that the amount will not be recovered.

The following table summarizes the revenues from customers that accounted for more than 10% of the Company’s revenues for the periods indicated:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Apple			22.2	%			*	%			19.1	%			*	%
Google			11.0				*				*				*
Tapjoy			*				*				13.2				*
China Mobile			*				10.5				*				*
Verizon Wireless			*				14.1				*				16.0

At September 30, 2011, Telecomunicaciones Movilnet accounted for 18.9% and Apple accounted for 11.6% of total accounts receivable. At December 31, 2010, Verizon Wireless accounted for 18.3% and Telecomunicaciones Movilnet accounted for 14.8% of total accounts receivable. No other carrier represented more than 10% of the Company’s total accounts receivable as of these dates.

Net Loss Per Share

The Company computes basic net loss per share attributable to common stockholders by dividing its net loss for the period by the weighted average number of common shares outstanding.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Net loss		$	(6,158	)		$	(1,603	)		$	(11,082	)		$	(8,477	)
Basic and diluted shares:
Weighted average common shares outstanding			60,958				36,042				55,876				32,392
Weighted average unvested common shares subject to restrictions			(497	)			—				(177	)			—
Weighted average shares used to compute basic and diluted net loss per share			60,461				36,042				55,699				32,392
Net loss per share — basic and diluted		$	(0.10	)		$	(0.04	)		$	(0.20	)		$	(0.26	)

The following weighted average options to purchase common stock, warrants to purchase common stock and unvested shares of common stock subject to restrictions have been excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have had an anti-dilutive effect:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Warrants to purchase common stock			4,534				2,673				5,665				962
Unvested common shares subject to restrictions			497				—				177				—
Options to purchase common stock			8,175				6,499				7,660				6,187
			13,206				9,172				13,502				7,149

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, (“ASU 2011-04”). ASU 2011-04 changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively for reporting periods beginning on or after December 15, 2011. The Company anticipates that the adoption of this standard will not materially impact the Company’s condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, (“ASU 2011-05”). ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in equity. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This new guidance is to be applied retrospectively for interim and annual periods beginning after December 15, 2011. The Company anticipates that the adoption of this standard will not materially impact the Company’s condensed consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (the “revised standard”). The revised standard is intended to reduce the cost and complexity of the annual goodwill impairment test by providing entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. An entity can choose to early adopt if its annual test date is before the issuance of the final standard, provided that the entity has not yet performed its 2011 annual impairment test or issued its financial statements. Entities considering early adoption are advised to begin assessing relevant factors for the qualitative assessment. An entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The Company is currently evaluating the early adoption option. The Company anticipates that the adoption of this standard will not materially impact the Company’s condensed consolidated financial statements.

Business Combination

In the first quarter of fiscal year 2010, the Company adopted a new accounting standard related to business combinations, ASC 805, which revised the accounting guidance applied to business combinations. The new standard: expands the definition of a business and a business combination; requires recognition of assets acquired, liabilities assumed, and contingent consideration at their fair value on the acquisition date with subsequent changes recognized in earnings; requires acquisition-related expenses and restructuring costs to be recognized separately from the business combination and expensed as incurred; requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset until completion or abandonment; and requires that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of provision for taxes.

While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, these estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the preliminary purchase price allocation period, the Company records adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in its operating results in the period in which the adjustments were determined.

Note 2 — Fair Value Measurements

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, 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.

Effective January 1, 2010, the Company adopted ASU 2010-06, which amended ASC 820 to require new disclosures for transfers of financial assets and liabilities into and out of Levels 1 and 2 in the fair value hierarchy and for activity in Level 3 in the fair value hierarchy. The adoption of the amended disclosure requirements for fair value measurements did not affect the disclosures because the Company did not transfer financial assets or liabilities between levels in the fair value hierarchy. The Company’s cash and investment instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, sovereign government obligations, and money market securities. Such instruments are generally classified within Level 1 of the fair value hierarchy. As of September 30, 2011 and December 31, 2010, the Company had $36,869 and $12,863 in cash equivalents.

Liabilities for Contingent Consideration

Level 3 liabilities consist of acquisition-related non-current liabilities for contingent consideration (i.e., earnouts) related to the acquisition of Blammo Games Inc., a company organized under the laws of Ontario (“Blammo”), which was acquired on August 1, 2011. The former Blammo shareholders have the opportunity to earn additional shares of the Company’s common stock based on future net revenues generated by Blammo during the fiscal years ending March 31, 2013, March 31, 2014 and March 31, 2015. See Note 4 for further details regarding the Blammo acquisition. The expected number of shares to be issued in each year depends on the probability of Blammo achieving the net revenue targets, and the Company used a risk-neutral framework to estimate the probability of achieving these revenue targets for each year. The fair value of the contingent consideration was determined using a digital option, which captures the present value of the expected payment multiplied by the probability of reaching the revenue targets for each year. Key assumptions included the discount rate of 25.0%, volatility of 49.0%, risk free rates of between 0.33% and 0.81% and probability-adjusted revenue levels. Probability-adjusted revenue is a significant input that is not observable in the market, which ASC 820-10-35 refers to as a Level 3 input. The fair value of these contingent liabilities recorded on the Company’s condensed consolidated balance sheet as of September 30, 2011, was $235. In accordance with ASC 805-30-35-1, changes in the fair value of contingent consideration subsequent to the acquisition date have been recognized in general and administrative expense.

Note 3 — Balance Sheet Components

Accounts Receivable

		September 30,				December 31,
		2011				2010
Accounts receivable		$	10,793			$	11,164
Less: Allowance for doubtful accounts			(830	)			(504	)
		$	9,963			$	10,660

Accounts receivable includes amounts billed and unbilled as of the respective balance sheet dates. The Company had no significant write-offs or recoveries during the three and nine months ended September 30, 2011 and 2010.

Property and Equipment

		September 30,				December 31,
		2011				2010
Computer equipment		$	5,189			$	4,974
Furniture and fixtures			473				487
Software			4,392				2,919
Leasehold improvements			1,836				2,392
			11,890				10,772
Less: Accumulated depreciation and amortization			(8,019	)			(8,638	)
		$	3,871			$	2,134

Depreciation expense for the three months ended September 30, 2011 and September 30, 2010 was $470 and $450, respectively. Depreciation expense for the nine months ended September 30, 2011 and September 30, 2010 was $1,303 and $1,561, respectively.

Prepaid Expense and Other

		September 30,				December 31,
		2011				2010
Deferred tax asset			2,105				54
Prepaid expenses			1,358				1,069
Deposits			182				843
Other			382				591
		$	4,027				2,557

Other Long-Term Liabilities

		September 30,				December 31,
		2011				2010
Uncertain tax position obligations			5,175				4,991
Deferred income tax liability			3,676				1,170
Unfavorable lease obligations			729				—
Restructuring			—				773
Other			843				925
		$	10,423				7,859

Note 4 — Business Combinations

Griptonite, Inc.

On August 2, 2011, the Company completed the acquisition of Griptonite, Inc., a Washington corporation (“Griptonite”) and formerly a wholly owned subsidiary of Foundation 9 Entertainment, Inc., a Delaware corporation (“Foundation 9”), pursuant to an Agreement and Plan of Merger, as amended on August 15, 2011 (the “Merger Agreement”), by and among the Company, Granite Acquisition Corp., a Washington corporation and wholly owned subsidiary of the Company (“Sub”), Foundation 9 and Griptonite. Pursuant to the terms of the Merger Agreement, Sub merged with and into Griptonite in a statutory reverse triangular merger (the “Merger”), with Griptonite surviving the Merger as a wholly owned subsidiary of the Company. Griptonite, which is based in Kirkland, Washington, is a developer of games for advanced platforms, including handheld devices. The Company acquired Griptonite to increase its studio development capacity and augment its existing development efforts to accelerate the introduction of new titles on smartphones and tablets.

In connection with the Merger, the Company issued to Foundation 9, as Griptonite’s sole shareholder, in exchange for all of the issued and outstanding shares of Griptonite capital stock, a total of 6,106 shares of the Company’s common stock, for consideration of approximately $28,088, using the $4.60 closing price of the Company’s common stock on The NASDAQ Global Market on August 2, 2011; 600 shares will be held in escrow until November 2, 2012 as security to satisfy potential indemnification claims under the Merger Agreement. In addition, the Company may be required to issue additional shares (not to exceed 5,302 shares) or in specified circumstances pay additional cash (i) in satisfaction of indemnification obligations in the case of breaches of the Company’s and Sub’s representations, warranties and covenants in the Merger Agreement or (ii) pursuant to potential working capital adjustments.

The preliminary allocation of the Griptonite purchase price was based upon valuations for certain assets and liabilities assumed. The valuation was based upon preliminary calculations and valuations, and the Company’s estimates and assumptions are subject to change as the Company obtains additional information for its estimates during the respective measurement periods (up to one year from the acquisition date). The following table summarizes the preliminary fair values of assets acquired and liabilities assumed at the date of acquisition:

Assets acquired:
Cash		$	10,300
Accounts receivable			1,558
Costs and estimated earnings in excess of billings on uncompleted contracts			495
Prepaid and other current assets			533
Property and equipment			731
Other long term assets			33
Intangible assets:
Non-compete agreements			3,200
Developed Technology			2,500
Goodwill			12,735
Total assets acquired			32,085
Liabilities assumed:
Accounts payable			(492	)
Accrued liabilities			(679	)
Billings in excess of costs and earnings on uncompleted contracts			(55	)
Other long-term liabilities			(2,771	)
Total liabilities			(3,997	)
Net acquired assets		$	28,088

Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives ranging from three months to two years. The estimated fair value of the excess earnings from the work-for-hire contracts is amortized as a reduction to service revenue as services are performed. Pursuant to ASC 805, the Company incurred and expensed a total of $828 in acquisition and transitional costs associated with the acquisition of Griptonite, during the three and nine months ended September 30, 2011, which were primarily general and administrative related.

The Company allocated the residual value of $12,735 to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill will not be amortized but will be tested for impairment at least annually. Goodwill created as a result of the Griptonite acquisition is not deductible for tax purposes.

Assumption of Griptonite Lease

In connection with the Merger, the Company assumed lease obligations related to the premises located in Kirkland, Washington (the “Griptonite Lease”). The Griptonite Lease covers approximately 54 rentable square feet and has a term that ends on September 30, 2015. As part of the purchase accounting adjustments for Griptonite, the Company eliminated the existing deferred rent balance and recorded a fair value adjustment to reflect the current market value of the unfavorable operating lease commitment. The current and long-term fair value of the unfavorable operating lease obligation was $274 and $698, respectively, as of September 30, 2011. The Griptonite Lease has been included in the future lease obligations disclosed in Note 6.

Revenue Recognition

Griptonite develops video games primarily under fixed-price contracts with third-party publishers that may extend for 24 months or longer. The Company accounts for such contracts using the percentage-of-completion method. The Company has multiple contracts that are in various stages of completion, and progress toward completion is measured based on the ratio of cumulative costs incurred to total estimated costs. Such contracts require estimates to determine the appropriate revenue and cost recognition. The Company periodically reviews revisions of contract values and estimated costs at completion and any changes in such estimates are made prospectively. Amounts representing contract change orders or claims are included in revenues only when they meet specified criteria. If estimates of costs at completion indicate a loss, provision is made for the total loss anticipated in the period in which the loss is identified. Contract costs include direct materials, direct labor costs and allocable production overhead. These costs are included in cost of services. Legacy revenues under the existing Griptonite business will not continue after the contractual obligations have been satisfied, and after the fourth quarter of 2011, this business will be fully transitioned to developing titles directly for the Company. Future revenues from Griptonite related to titles that are developed directly for the Company will be recognized under the Company’s existing corporate revenue recognition policy.

Cumulative revenues recognized may be less or greater than cumulative costs and profits billed at any point in time during a contract’s term. The resulting difference is recognized as “costs and estimated earnings in excess of billings on uncompleted contracts” or “billings in excess of costs and estimated earnings on uncompleted contracts.”

Blammo Games Inc.

On August 1, 2011, the Company completed the acquisition of Blammo, by entering into a Share Purchase Agreement (the “Share Purchase Agreement”) by and among the Company, Blammo and each of the owners of the outstanding share capital of Blammo (the “Sellers”). Blammo is a developer of freemium games for the iOS platform located in Toronto, Canada.

Pursuant to the terms of the Share Purchase Agreement, the Company purchased from the Sellers all of the issued and outstanding share capital of Blammo (the “Share Purchase”), and in exchange for such Blammo share capital, the Company (i) issued to the Sellers, in the aggregate, 1,000 shares of the Company’s common stock (the “Initial Shares”), which resulted in initial consideration of $5,070 using the $5.07 closing price of the Company’s common stock on The NASDAQ Global Market on August 1, 2011, and (ii) agreed to issue to the Sellers, in the aggregate, up to an additional 3,313 shares of the Company’s common stock (the “Additional Shares”) if Blammo achieves certain net revenue targets during the years ending March 31, 2013, March 31, 2014 and March 31, 2015, as more fully described below under “Contingent Consideration.” 100 of the Initial Shares will be held in escrow until August 1, 2012 to satisfy indemnification claims under the Share Purchase Agreement.

The preliminary allocation of the Blammo purchase price was based upon valuations for certain assets and liabilities assumed. The valuation was based upon preliminary calculations and valuations, and the Company’s estimates and assumptions are subject to change as the Company obtains additional information for its estimates during the respective measurement periods (up to one year from the acquisition date). The following table summarizes the preliminary fair values of assets acquired and liabilities assumed at the date of acquisition:

Assets acquired:
Cash		$	42
Prepaid and other current assets			11
Property and equipment			16
Intangible assets:
Non-compete agreements			1,400
In-process research and development			300
Goodwill			4,309
Total assets acquired			6,078
Liabilities assumed:
Accounts payable			(23	)
Accrued liabilities			(164	)
Payables to affiliates			(100	)
Total current liabilities			(287	)
Other long-term liabilities			(721	)
Total liabilities			(1,008	)
Net acquired assets		$	5,070

Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives ranging from one to four years. Pursuant to ASC 805, the Company incurred and expensed a total of $153 in acquisition and transitional costs associated with the acquisition of Blammo, during the three and nine months ended September 30, 2011, which were primarily general and administrative related.

The Company allocated the residual value of $4,309 to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. In accordance with ASC 350, goodwill will not be amortized but will be tested for impairment at least annually. Goodwill created as a result of the Blammo acquisition is not deductible for tax purposes.

Contingent Consideration

The Additional Shares will be issued to the Sellers if, and to the extent that, Blammo achieves certain Net Revenue (as such term is defined in the Share Purchase Agreement) performance targets as follows: (i) for fiscal 2013 (April 1, 2012 through March 31, 2013), (a) 227 Additional Shares will be issued to the Sellers if, and only in the event that, Blammo meets its Baseline Net Revenue goal for such fiscal year, and (b) up to an additional 682 Additional Shares will be issued to the Sellers to the extent that Blammo exceeds its Baseline Net Revenue goal and meets its Upside Net Revenue goal for such fiscal year, (ii) for fiscal 2014 (April 1, 2013 through March 31, 2014), (a) 417 Additional Shares will be issued to the Sellers if, and only in the event that, Blammo meets its Baseline Net Revenue goal for such fiscal year, and (b) up to an additional 833 Additional Shares will be issued to the Sellers to the extent that Blammo exceeds its Baseline Net Revenue goal and meets its Upside Net Revenue goal for such fiscal year, and (iii) for fiscal 2015 (April 1, 2014 through March 31, 2015), (a) no Additional Shares will be issued to the Sellers if Blammo does not meet its Baseline Net Revenue goal for such fiscal year and (b) up to 1,154 Additional Shares will be issued to the Sellers to the extent that Blammo exceeds its Baseline Net Revenue goal and meets its Upside Net Revenue goal for such fiscal year. To the extent that Blammo meets its Baseline Net Revenue goal for a fiscal year but does not meet its Upside Net Revenue goal for such fiscal year, Additional Shares will be issued to the Sellers on a straight-line basis based on the amount by which Blammo exceeded the Baseline Net Revenue goal. Blammo’s Baseline and Upside Net Revenue goals for fiscal 2013, 2014 and 2015 are as follows:

Fiscal Year		Baseline Net Revenue				Upside Net Revenue
Fiscal 2013		$	3,500			$	5,000
Fiscal 2014		$	5,500			$	10,000
Fiscal 2015		$	8,500			$	15,000

Three of the five Sellers are also employees of Blammo. If any of these employee Sellers voluntarily terminates his employment with Blammo (other than because of a disability that prevents him or her from performing his job) or if the Company or Blammo terminates such Seller’s employment for Cause (as such term is defined in the Share Purchase Agreement), then such Seller will be eligible to receive Additional Shares if and when such Additional Shares are earned as described above only with respect to the fiscal year in which such termination of employment occurs (and all previous fiscal years to the extent applicable), but not with respect to any Additional Shares issued in any subsequent fiscal year. In such an event, the Additional Shares that such Seller would have otherwise received will be forfeited and will not be issued by the Company or distributed to the other Sellers, but the other Sellers’ rights to receive Additional Shares will not otherwise be affected. The fair value of the contingent consideration issued to the three Sellers who are also employees of Blammo is not considered part of the purchase price, as vesting is contingent upon these employees’ continued service during the earn-out periods. The Company will record the contingent consideration issued to these employees as a compensation expense over the earn-out period of one to three years. See Note 9 for further details. In accordance with ASC 815, Business Combinations, the Company recorded $306 of the contingent consideration as part of the purchase accounting allocation, this amount represents the fair value of the portion of the forecasted Additional Shares to be issued to the Sellers who are not employees of Blammo. This amount will be fair valued in every reporting period, and the Company recorded a non-cash adjustment of $178 as of September 30, 2011, which represents the change in fair value since the date of acquisition.

Valuation Methodology

The Company engaged a third party valuation firm to aid management in its analyses of the fair value of Griptonite and Blammo. All estimates, key assumptions and forecasts were either provided by or reviewed by the Company. While the Company chose to utilize a third party valuation firm, the fair value analyses and related valuations represent the conclusions of management and not the conclusions or statements of any third party.

Intangible assets acquired consist of non-compete agreements, acquired technology and in-process research and development (“IPR&D”). Each valuation methodology assumes a discount rate of 25%.

The Blammo and Griptonite non-compete agreements were valued using the loss of income method, which is an income approach. Two separate cashflows were prepared, one to model the cashflow with the non-compete agreements in place, and one without the agreements. The difference between the debt-free cashflow of the two models was then discounted to present value using a discount rate.

In the valuation of Griptonite developed technology, the replacement cost method of the cost approach was used; although the Company does not expect to use the acquired technology, it was deemed likely that a market participant would perceive value in acquiring and integrating these technologies into their own platforms. The value was determined based on the engineering costs to replace or recreate the developed technology. Key assumptions used included, man hours to recreate, costs per month and remaining total and economic life.

As of the valuation date, Blammo was in the process of developing a game, which is expected to be launched in December 2011, and the Company has estimated the majority of the revenues associated with this game will be generated in 2012 and 2013. The fair value was calculated using the multi-period excess earning method of the income approach, and significant assumptions used included the discount rate, forecasted revenues, forecasted cost of goods sold and forecasted operating expense.

Pro Forma Financial Information

The results of operations for both Griptonite and Blammo and the estimated fair market values of the assets acquired and liabilities assumed have been included in the Company’s condensed consolidated financial statements since the date of each acquisition. For the three months ended September 30, 2011, Griptonite contributed approximately $687 to the Company’s net revenue and increased net losses by $4,280. The results of the acquisitions resulted in an increase to the Company’s net loss due to lower revenue generated from the work-for-hire contracts that were substantially completed during the three month ended September 30, 2011 and to the amortization of acquired identified intangible assets. For the three and nine months ended September 30, 2011, net revenues and income contributed by Blammo was immaterial.

The unaudited pro forma financial information in the table below summarizes the combined results of the Company’s operations and those of Griptonite for the periods shown as if the acquisition of Griptonite had occurred on January 1, 2010. The pro forma financial information includes the business combination accounting effects of the acquisition, including amortization charges from acquired intangible assets. The pro forma financial information presented below is for informational purposes only, and is subject to a number of estimates, assumptions and other uncertainties. In addition, the pro forma financial information presented below does not include the unaudited financial information of Blammo, as this acquisition did not constitute a “significant business combination” under Regulation S-X.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Total pro forma revenues		$	18,443			$	19,637			$	61,690			$	60,642
Pro forma net loss			(4,694	)			(2,638	)			(11,235	)			(11,294	)
Pro forma net loss per share — basic and diluted		$	(0.07	)		$	(0.06	)		$	(0.19	)		$	(0.29	)

All of the goodwill related to both the Blammo and Griptonite transactions was assigned to the Company’s Americas reporting unit. See Note 5 for additional information related to the changes in the carrying amount of goodwill.

Note 5 — Goodwill and Intangible Assets

The Company’s intangible assets were acquired in connection with the acquisitions of Macrospace in 2004, iFone in 2006, MIG in 2007, Superscape in 2008 and Griptonite and Blammo in the third quarter of 2011. The carrying amounts and accumulated amortization expense of the acquired intangible assets, including the impact of foreign currency exchange translation, at September 30, 2011 and December 31, 2010 were as follows:

						September 30, 2011												December 31, 2010
										Accumulated												Accumulated
										Amortization												Amortization
										Expense												Expense
										(Including												(Including
		Estimated				Gross				Impact of				Net				Gross				Impact of				Net
		Useful				Carrying				Foreign				Carrying				Carrying				Foreign				Carrying
		Life				Value				Exchange)				Value				Value				Exchange)				Value
Intangible assets amortized to cost of revenues:
Titles, content and technology		2.5 yrs				$	11,088			$	(10,254	)		$	834			$	13,545			$	(13,545	)		$	—
Catalogs		1 yr					1,215				(1,215	)			—				1,203				(1,203	)			—
ProvisionX Technology		6 yrs					200				(200	)			—				198				(198	)			—
Carrier contract and related relationships		5 yrs					19,157				(12,719	)			6,438				18,832				(10,352	)			8,480
Licensed content		5 yrs					2,911				(2,911	)			—				2,829				(2,810	)			19
Service provider license		9 yrs					460				(194	)			266				446				(151	)			295
Trademarks		3 yrs					221				(221	)			—				547				(547	)			—
							35,252				(27,714	)			7,538				37,600				(28,806	)			8,794
Other intangible assets amortized to operating expenses:
Emux Technology		6 yrs					1,296				(1,296	)			—				1,283				(1,283	)			—
Noncompete agreement		3 yrs					5,167				(898	)			4,269				562				(562	)			—
							6,463				(2,194	)			4,269				1,845				(1,845	)			—
Total intangibles assets subject to amortization							41,715				(29,908	)			11,807				39,445				(30,651	)			8,794
In-process research and development							300				—				300				—				—				—
Total intangibles assets, net						$	42,015			$	(29,908	)		$	12,107			$	39,445			$	(30,651	)		$	8,794

The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenues. During the second quarter of 2011, the Company wrote off $5,330 of its Superscape intangible assets and accumulated amortization relating to trademarks, titles and technology, all of which were fully amortized. The Company has included amortization of acquired intangible assets not directly attributable to revenue-generating activities in operating expenses. The Company acquired approximately $7,400 of intangible assets as part of the Griptonite and Blammo acquisitions in the third quarter of 2011; see Note 4 for further details. During the three months ended September 30, 2011 and 2010, the Company recorded amortization expense in the amounts of $2,375 and $1,009 respectively, in cost of revenues. During the nine months ended September 30, 2011 and 2010, the Company recorded amortization expense in the amounts of $3,895 and $3,243 respectively, in cost of revenues. During the three months ended September 30, 2011 and 2010, the Company recorded amortization expense in the amounts of $330 and $53, respectively, in operating expenses. During the nine months ended September 30, 2011 and 2010, the Company recorded amortization expense in the amounts of $330 and $160, respectively, in operating expenses.

As of September 30, 2011, the total expected future amortization related to intangible assets was as follows:

		Amortization				Amortization
		Included in				Included in				Total
		Cost of				Operating				Amortization
Year Ending December 31,		Revenues				Expenses				Expense
2011 (remaining three months)		$	1,546			$	494			$	2,040
2012			2,845				1,982				4,827
2013			2,774				1,315				4,089
2014			273				382				655
2015 and thereafter			100				96				196
Total intangible assets subject to amortization			7,538				4,269				11,807
In-process research and development			—				—				300
Total intangible assets, net		$	7,538			$	4,269			$	12,107

Goodwill

The Company attributes all of the goodwill resulting from the Macrospace acquisition to its Europe, Middle East and Africa (“EMEA”) reporting unit. The goodwill resulting from the iFone acquisition is evenly attributed to the Americas and EMEA reporting units. The Company attributes all of the goodwill resulting from the MIG acquisition to its Asia and Pacific (“APAC”) reporting unit and all of the goodwill resulting from the Superscape acquisition to the Americas reporting unit. The Company acquired $17,044 of goodwill during the third quarter of 2011 as part of the Blammo and Griptonite acquisitions; see Note 4 for further details. During the third quarter of 2011, the goodwill resulting from both the Blammo and Griptonite acquisitions was fully assigned to the Americas reporting unit. The goodwill allocated to the Americas reporting unit is denominated in U.S. Dollars (“USD”), the goodwill allocated to the EMEA reporting unit is denominated in Pounds Sterling (“GBP”) and the goodwill allocated to the APAC reporting unit is denominated in Chinese Renminbi (“RMB”). As a result, the goodwill attributed to the EMEA and APAC reporting units is subject to foreign currency fluctuations.

Goodwill by geographic region for the periods indicated was as follows:

		September 30, 2011																December 31, 2010
		Americas				EMEA				APAC				Total				Americas				EMEA				APAC				Total
Balance as of January 1
Goodwill		$	24,871			$	25,354			$	24,039			$	74,264			$	24,871			$	25,354			$	23,881			$	74,106
Accumulated Impairment Losses			(24,871	)			(25,354	)			(19,273	)			(69,498	)			(24,871	)			(25,354	)			(19,273	)			(69,498	)
			—				—				4,766				4,766				—				—				4,608				4,608
Goodwill Acquired during the year			17,044				—				—				17,044				—				—				—				—
Effects of Foreign Currency Exchange			—				—				156				156				—				—				158				158
Balance as of period ended:			17,044				—				4,922				21,966				—				—				4,766				4,766
Goodwill			41,915				25,354				24,195				91,464				24,871				25,354				24,039				74,264
Accumulated Impairment Losses			(24,871	)			(25,354	)			(19,273	)			(69,498	)			(24,871	)			(25,354	)			(19,273	)			(69,498	)
		$	17,044			$	—			$	4,922			$	21,966			$	—			$	—			$	4,766			$	4,766

In accordance with ASC 350, the Company’s goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, the Company performs the annual impairment review of its goodwill balance as of September 30 or more frequently if triggering events occur.

ASC 350 requires a two-step approach to testing goodwill for impairment for each reporting unit annually, or whenever events or changes in circumstances indicate the fair value of a reporting unit is below its carrying amount. The first step measures for impairment by applying the fair value-based tests at the reporting unit level. The second step (if necessary) measures the amount of impairment by applying the fair value-based tests to individual assets and liabilities within each reporting unit. The fair value of the reporting units is estimated using a combination of the market approach, which utilizes comparable companies’ data, and/or the income approach, which uses discounted cash flows.

The Company has three geographic segments comprised of the 1) Americas, 2) EMEA and 3) APAC regions. As of September 30, 2011, the Company had goodwill attributable to its APAC and Americas reporting units. The Company performed an annual impairment review as of September 30, 2011 as prescribed in ASC 350 and concluded that it was not at risk of failing the first step, as the fair value of the reporting units exceeded its carrying value and thus no adjustment to the carrying value of goodwill was necessary. As a result, the Company was not required to perform the second step. In order to determine the fair value of the Company’s reporting units, the Company utilizes the discounted cash flow method and market methods. The Company has consistently utilized both methods in its goodwill impairment tests and weights both results equally. The Company uses both methods in its goodwill impairment tests as it believes both, in conjunction with each other, provide a reasonable estimate of the determination of fair value of the reporting unit — the discounted cash flow method being specific to anticipated future results of the reporting unit and the market method, which is based on the Company’s market sector including its competitors. The assumptions supporting the discounted cash flow method were determined using the Company’s best estimates as of the date of the impairment review.

Note 6 — Commitments and Contingencies

Leases

The Company leases office space under non-cancelable operating facility leases with various expiration dates through September 2015. Rent expense for the three months ended September 30, 2011 and 2010 was $577 and $608, respectively. Rent expense for the nine months ended September 30, 2011 and 2010 was $1,668 and $1,875, respectively. The terms of the facility leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. The deferred rent balance was $211 and $379 at September 30, 2011 and December 31, 2010, respectively, and was included within other long-term liabilities

At September 30, 2011, future minimum lease payments under non-cancelable operating leases were as follows:

		Minimum
		Operating								Net
		Lease				Sub-lease				Lease
Year Ending December 31,		Payments				Income				Payments
2011 (remaining three months)		$	1,105			$	167			$	938
2012			3,724				391				3,333
2013			2,097				—				2,097
2014			1,082				—				1,082
2015 and thereafter			830				—				830
		$	8,838			$	558			$	8,280

Minimum Guaranteed Royalties and Developer Commitments

The Company has entered into license and development agreements with various owners of brands and other intellectual property to develop and publish games for mobile handsets. Pursuant to some of these agreements, the Company is required to pay minimum royalties over the term of the agreement regardless of actual game sales. The Company also has contracts with various external software developers (“third-party developers”) to design and develop games as part of its “Glu Partners” initiative. The Company advances funds to these third-party developers, in installments, payable upon the completion of specified development milestones.

Future minimum royalty payments and developer commitments for those agreements as of September 30, 2011 were as follows:

		Minimum
		Guaranteed				Developer
Year Ending December 31,		Royalties				Commitments				Total
2011 (remaining three months)		$	33			$	344			$	377
2012			416				354				770
		$	449			$	698			$	1,147

These minimum guaranteed royalty payments are included in current prepaid and accrued royalties. The developer commitments reflected in the above table are the Company’s minimum cash obligations but do not necessarily represent the periods in which they will be expensed. The Company expenses developer commitments as services are provided, as payment is contingent upon performance by the developer.

Income Taxes

As of September 30, 2011, unrecognized tax benefits and potential interest and penalties are classified within “Other long-term liabilities” on the Company’s condensed consolidated balance sheets. As of September 30, 2011, the settlement of the Company’s income tax liabilities could not be determined; however, the liabilities are not expected to become due within the next 12 months.

Indemnification Agreements

The Company has entered into agreements under which it indemnifies each of its officers and directors during his or her lifetime for certain events or occurrences while the officer or director is or was serving at the Company’s request in that capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company had recorded no liabilities for these agreements as of September 30, 2011 or December 31, 2010.

In the ordinary course of its business, the Company includes standard indemnification provisions in most of its license agreements with carriers and other distributors. Pursuant to these provisions, the Company generally indemnifies these parties for losses suffered or incurred in connection with its games, including as a result of intellectual property infringement and viruses, worms and other malicious software. The term of these indemnity provisions is generally perpetual after execution of the corresponding license agreement, and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions is often unlimited; however, the Company has insurance policies that limit to some extent its exposure and enable the Company to recover a portion of any future amounts paid. To date, the Company has not incurred costs to defend lawsuits or settle indemnified claims of these types. As a result, the Company believes the estimated fair value of these indemnity provisions is minimal. Accordingly, the Company had recorded no liabilities for these provisions as of September 30, 2011 or December 31, 2010.

Contingencies

From time to time, the Company is subject to various claims, complaints and legal actions in the normal course of business. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information. The Company’s estimate of losses is developed in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. After taking all of the above factors into account, the Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed reasonable probable and the amount can be reasonable estimated. The Company further determines whether an estimated loss from a contingency should be disclosed by assessing whether a loss is deemed reasonably possible. Such disclosure will include an estimate of the additional loss or range of loss or will state that an estimate cannot be made.

The Company does not believe it is party to any currently pending litigation, the outcome of which is reasonably likely to have a material adverse effect on its operations, financial position or liquidity. However, the ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, potential negative publicity, diversion of management resources and other factors.

Note 7 — Debt

MIG Notes

In December 2007, the Company acquired MIG to accelerate its presence in China. In December 2008, the Company amended the MIG merger agreement to acknowledge the full achievement of the earnout milestones and at the same time entered into secured promissory notes in the aggregate principal amount of $20,000 payable to the former MIG shareholders (the “Earnout Notes”) as full satisfaction of the MIG earnout. The Earnout Notes required that the Company pay off the remaining principal and interest in installments. In December 2008, the Company also entered into secured promissory notes in the aggregate principal amount of $5,000 payable to two former shareholders of MIG (the “Special Bonus Notes”) as full satisfaction of the special bonus provisions of their employment agreements. In January 2011, the Company paid $698 of taxes that had been withheld on the December 31, 2010 Special Bonus Notes payment made to the former MIG shareholders in China. As of September 30, 2011, the Company had fully repaid both the Earnout Notes and Special Bonus Notes.

Credit Facility

In December 2008, the Company entered into a revolving credit facility (the “Credit Facility”), which amended and superseded the Loan and Security Agreement that the Company had previously entered into with the lender in February 2007, as amended. On August 24, 2009 and February 10, 2010, the Company and the lender entered into amendments to the Credit Facility, which reduced certain of the minimum targets specified in the EBITDA-related covenant contained in the Credit Facility. The February 10, 2010 amendment also changed the measurement period for the EBITDA covenant from a rolling six month calculation to a quarterly calculation. On March 18, 2010, the Company and the lender entered into a third amendment to the agreement which extended the maturity date of the Credit Facility from December 22, 2010 until June 30, 2011 and increased the interest rate for borrowings under the Credit Facility by 0.75% to the lender’s prime rate, plus 1.75%, but no less than 5.0%. On February 2, 2011, the Company and the lender entered into a fourth amendment which waived the Company’s default in maintaining minimum levels of EBITDA specified in the Credit Facility for the period beginning October 1, 2010 and ending December 31, 2010. Prior to this date, the Company was in compliance with all covenants under the Credit Facility. This amendment also removed the EBITDA financial covenant from the Credit Facility in its entirety and replaced this covenant with a net cash covenant, which required the Company to maintain at least $10,000 in unrestricted cash at the lender or an affiliate of the lender, net of any indebtedness that was owed to the lender under the Credit Facility.

The Credit Facility provided for borrowings of up to $8,000, subject to a borrowing base equal to 80% of the Company’s eligible accounts receivable. The Company’s obligations under the Credit Facility were guaranteed by certain of the Company’s domestic and foreign subsidiaries and were secured by substantially all of the Company’s assets, including all of the capital stock of certain of the Company’s domestic subsidiaries and 65% of the capital stock of certain of its foreign subsidiaries.

Interest under the Credit Facility was due monthly, with all outstanding obligations due at maturity. The Company was also required to pay the lender a monthly unused revolving line facility fee of 0.35% on the unused portion of the $8,000 commitment. In addition, the Company paid the lender a non-refundable commitment fee of $55 in December 2008 and paid an additional fee of $55 during December 2009. The Credit Facility limited the Company and certain of its subsidiaries’ ability to, among other things, dispose of assets, make acquisitions, incur additional indebtedness, incur liens, pay dividends and make other distributions, and make investments. The Credit Facility required the Company to establish a separate account at the lender for collection of its accounts receivables. All deposits into this account were automatically applied by the lender to the Company’s outstanding obligations under the Credit Facility.

The Company’s failure to comply with the financial or operating covenants in the Credit Facility would not only have prohibited the Company from borrowing under the facility, but would also have constituted a default, which would have permitted the lender to, among other things, declare any outstanding borrowings, including all accrued interest and unpaid fees, becoming immediately due and payable. A change in control of the Company (as defined in the Credit Facility) would have also constituted an event of default, permitting the lender to accelerate the indebtedness and terminate the Credit Facility.

The Credit Facility also included a “material adverse change” clause. As a result, if a material adverse change occurred with respect to the Company’s business, operations or financial condition, then that change could have constituted an event of default under the terms of the Credit Facility. If an event of default had occurred, the lender could have, among other things, declared all obligations immediately due and payable, could have stopped advancing money or extending credit under the Credit Facility and could have terminated the Credit Facility.

The Credit Facility expired on June 30, 2011.

Note 8 — Stockholders’ Equity

Acquisitions

On August 1, 2011, the Company issued an aggregate of 1,000 shares of its common stock to the Sellers in connection with the Company’s acquisition of Blammo.

On August 2, 2011, the Company issued an aggregate of 6,106 shares of its common stock to Foundation 9 in connection with the Company’s acquisition of Griptonite.

See Note 4 — Business Combinations — for more information about these acquisitions.

Public Offering

In January 2011, the Company sold in an underwritten public offering an aggregate of 8,415 shares of its common stock at a public offering price of $2.05 per share for net cash proceeds of approximately $15,661 after underwriting discounts and commissions and offering expenses. The underwriters of this offering were Roth Capital Partners, LLC, Craig-Hallum Capital Group LLC, Merriman Capital, Inc. and Northland Capital Markets.

Shelf Registration Statement

In December 2010, the Securities and Exchange Commission declared effective the Company’s shelf registration statement which allows the Company to issue various types of debt and equity instruments, including common stock, preferred stock and warrants. Issuances under the shelf registration will require the filing of a prospectus supplement identifying the amount and terms of the securities to be issued. The ability to issue debt and equity is subject to market conditions and other factors impacting the Company’s borrowing capacity. The Company has a $30,000 limit on the amount securities that can be issued under this shelf registration statement and has utilized $17,250 of this amount as of September 30, 2011 pursuant to the public offering in January 2011 described above.

Private Placement

On August 2010, the Company completed a private placement of its common stock (the “2010 Private Placement”) in which it issued to its investors (i) an aggregate of 13,495 shares of the Company’s common stock at $1.00 per share and (ii) warrants initially exercisable to purchase up to 6,748 shares of the Company’s common stock at $1.50 per share (the “Warrants”), for initial proceeds of approximately $13,218 net of issuance costs (excluding any proceeds the Company may receive upon exercise of the Warrants). Of this amount, $2,198 was allocated to the value of the Warrants and $11,020 was allocated to the common stock. All amounts are recorded within stockholders’ equity. During the nine months ended September 30, 2011, investors fully exercised their warrants to purchase 2,475 shares of the Company’s common stock, and the Company received gross proceeds of $3,713 in connection with these exercises.

Warrants to Purchase Common Stock

The Warrants issued in connection with the 2010 Private Placement have an initial exercise price of $1.50 per share of common stock, can be exercised immediately, have a five-year term and provide for weighted-average anti-dilution protection in addition to customary adjustment for dividends, reorganization and other common stock events.

Warrants outstanding as of September 30, 2011 were as follows:

Number

Exercise

of Shares

Price

Outstanding

Term

per

Under

Issue Date

(Years)

Share

Warrant

May 2006

7

9.03

106

August 2010

5

$

1.50

4,273

4,379

Comprehensive Loss

Comprehensive loss consists of two components, net loss and other comprehensive income/(loss). Other comprehensive income/(loss) refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net income. The Company’s other comprehensive income/(loss) consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. Comprehensive loss for the three months ended September 30, 2011 and 2010 was $6,693 and $1,606, respectively. Comprehensive loss for the nine months ended September 30, 2011 and 2010 was $11,950 and $8,335, respectively.

Note 9 — Stock Option and Other Benefit Plans

2007 Equity Incentive Plan

In January 2007, the Company’s Board of Directors adopted, and in March 2007 the Company’s stockholders approved, the 2007 Equity Incentive Plan (the “2007 Plan”). At the time of adoption, there were 1,766 shares of common stock authorized for issuance under the 2007 Plan plus 195 shares of common stock from the Company’s 2001 Stock Option Plan (the “2001 Plan”) that were unissued. In addition, shares that were not issued or subject to outstanding grants under the 2001 Plan on the date of adoption of the 2007 Plan and any shares issued under the 2001 Plan that are forfeited or repurchased by the Company or that are issuable upon exercise of options that expire or become unexercisable for any reason without having been exercised in full, will be available for grant and issuance under the 2007 Plan. On June 3, 2010, at the Company’s 2010 Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the 2007 Plan to increase the aggregate number of shares of common stock authorized for issuance under the 2007 Plan by 3,000 shares. Furthermore, the number of shares available for grant and issuance under the 2007 Plan was increased automatically on January 1 of each of 2008 through 2011 by an amount equal to 3% of the Company’s shares outstanding on the immediately preceding December 31.

The Company may grant options under the 2007 Plan at prices no less than 85% of the estimated fair value of the shares on the date of grant as determined by its Board of Directors, provided, however, that (i) the exercise price of an incentive stock option (“ISO”) or non-qualified stock options (“NSO”) may not be less than 100% or 85%, respectively, of the estimated fair value of the underlying shares of common stock on the grant date, and (ii) the exercise price of an ISO or NSO granted to a 10% stockholder may not be less than 110% of the estimated fair value of the shares on the grant date. Prior to the Company’s IPO, the Board determined the fair value of common stock in good faith based on the best information available to the Board and Company’s management at the time of the grant. Following the IPO, the fair value of the Company’s common stock is determined by the last sale price of such stock on the NASDAQ Global Market on the date of determination. The stock options granted to employees generally vest with respect to 25% of the underlying shares one year from the vesting commencement date and with respect to an additional 1/48 of the underlying shares per month thereafter. Stock options granted during 2007 prior to October 25, 2007 have a contractual term of ten years and stock options granted on or after October 25, 2007 have a contractual term of six years.

The 2007 Plan also provides the Board of Directors the ability to grant restricted stock awards, stock appreciation rights, restricted stock units, performance shares and stock bonuses. As of September 30, 2011, 4,186 shares were available for future grants under the 2007 Plan.

2007 Employee Stock Purchase Plan

In January 2007, the Company’s Board of Directors adopted, and in March 2007 the Company’s stockholders approved, the 2007 Employee Stock Purchase Plan (the “2007 Purchase Plan”). The Company initially reserved 667 shares of its common stock for issuance under the 2007 Purchase Plan. On each January 1 for the first eight calendar years after the first offering date, the aggregate number of shares of the Company’s common stock reserved for issuance under the 2007 Purchase Plan will be increased automatically by the number of shares equal to 1% of the total number of outstanding shares of the Company’s common stock on the immediately preceding December 31, provided that the Board of Directors may reduce the amount of the increase in any particular year and provided further that the aggregate number of shares issued over the term of this plan may not exceed 5,333. The 2007 Purchase Plan permits eligible employees, including employees of certain of the Company’s subsidiaries, to purchase common stock at a discount through payroll deductions during defined offering periods. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or after a purchase period ends.

In January 2009, the 2007 Purchase Plan was amended to provide that the Compensation Committee of the Company’s Board of Directors may fix a maximum number of shares that may be purchased in the aggregate by all participants during any single offering period (the “Maximum Offering Period Share Amount”). The Committee may later raise or lower the Maximum Offering Period Share Amount. The Committee established the Maximum Offering Period Share Amount of 500 shares for the offering period that commenced on February 15, 2009 and ended on August 14, 2009, and a Maximum Offering Period Share Amount of 200 shares for each offering period thereafter. In October 2011, the Committee increased the Maximum Offering Period Share Amount for the offering period that commenced on August 22, 2011 and for each offering period thereafter to 300 shares.

As of September 30, 2011, 603 shares were available for issuance under the 2007 Purchase Plan.

2008 Equity Inducement Plan

In March 2008, the Company’s Board of Directors adopted the 2008 Equity Inducement Plan (the “Inducement Plan”) to augment the shares available under its existing 2007 Plan. The Inducement Plan did not require the approval of the Company’s stockholders. The Company initially reserved 600 shares of its common stock for grant and issuance under the Inducement Plan. On December 28, 2009, the Company’s Board of Directors appointed Niccolo de Masi as the Company’s President and Chief Executive Officer and the Compensation Committee of the Company’s Board of Directors awarded him a non-qualified stock option to purchase 1,250 shares of the Company’s common stock, which was issued on January 4, 2010 under the Inducement Plan. Immediately prior to the grant of this award, the Compensation Committee amended the Inducement Plan to increase the number of shares available for grant under the plan by 819 shares to 1,250 shares. In connection with the Merger and the Share Purchase, the Compensation Committee of the Company’s Board of Directors increased the number of shares reserved for issuance under the Company’s 2008 Equity Inducement Plan by 1,050 shares. The Company utilized these additional shares to grant stock options to certain of the new non-executive employees of Griptonite and Blammo to purchase shares of the Company’s common stock. The Company may only grant NSOs under the Inducement Plan. Grants under the Inducement Plan may only be made to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such individual’s entering into employment with the Company and to provide incentives for such persons to exert maximum efforts for the Company’s success. The Company may grant NSOs under the Inducement Plan at prices less than 100% of the fair value of the shares on the date of grant, at the discretion of its Board of Directors. The fair value of the Company’s common stock is determined by the last sale price of such stock on the NASDAQ Global Market on the date of determination.

As of September 30, 2011, 151 shares were reserved for future grants under the Inducement Plan.

Stock Option Activity

The following table summarizes the Company’s stock option activity for the three months ended September 30, 2011:

						Options Outstanding
										Weighted				Weighted
						Number				Average				Average				Aggregate
		Shares				of				Exercise				Contractual				Intrinsic
		Available				Shares				Price				Term (Years)				Value
Balances at December 31, 2010			4,148				6,928			$	2.02
Increase in authorized shares			2,388
Options granted			(3,271	)			3,271				4.04
Options canceled			1,072				(1,072	)			2.27
Options exercised			—				(755	)			2.00
Balances at September 30, 2011			4,337				8,372			$	2.78				4.77			$	3,882
Options vested and expected to vest at September 30, 2011							6,786			$	2.75				4.66			$	3,357
Options exercisable at September 30, 2011							2,443			$	2.89				3.96			$	1,611

The aggregate intrinsic value in the preceding table is calculated as the difference between the exercise price of the underlying awards and the quoted closing price of the Company’s common stock of $2.11 per share as of September 30, 2011. Consolidated net cash proceeds from option exercises were $1,512 and $278 for the nine months ended September 30, 2011 and 2010, respectively. The Company realized no significant income tax benefit from stock option exercises during the nine months ended September 30, 2011 or 2010. As required, the Company presents excess tax benefits from the exercise of stock options, if any, as financing cash flows rather than operating cash flows.

The Company applies the fair value provisions of ASC 718, Compensation-Stock Compensation (“ASC 718”). Under ASC 718, the Company estimated the fair value of each option award on the grant date using the Black-Scholes option valuation model and the weighted average assumptions noted in the following table.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Dividend yield			—	%			—	%			—	%			—	%
Risk-free interest rate			0.80	%			0.81	%			1.25	%			1.23	%
Expected volatility			64.9	%			78.3	%			64.2	%			77.0	%
Expected term (years)			4.04				3.10				4.01				3.12

The Company based its expected volatility on its own historic volatility and the historical volatility of a peer group of publicly traded entities. The expected term of options gave consideration to early exercises, post-vesting cancellations and the options’ contractual term, which was extended for all options granted subsequent to September 12, 2005 but prior to October 25, 2007 from five to ten years. Stock options granted on or after October 25, 2007 have a contractual term of six years. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury Constant Maturity Rate as of the date of grant. The weighted-average fair value of stock options granted during the nine months ended September 30, 2011 and 2010 was $2.00 and $0.62, respectively.

The Company calculated employee stock-based compensation expense recognized in the nine months ended September 30, 2011 and 2010 based on awards ultimately expected to vest and reduced it for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table summarizes the consolidated stock-based compensation expense by line items in the consolidated statement of operations:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Research and development		$	356			$	104			$	587			$	385
Sales and marketing			96				50				256				163
General and administrative			386				201				897				681
Total stock-based compensation expense		$	838			$	355			$	1,740			$	1,229

The above table includes compensation expense attributable to the contingent consideration potentially issuable to the Blammo employees, which is recorded as research and development expense over the term of the earn-out periods, as these employees are primarily employed in product development. The Company will re-measure the fair value of the contingent consideration each reporting period and will only record a compensation expense for the portion of the earn-out target which is likely to be achieved. The total fair value of this liability has been estimated at $607, of which $108 of stock-based compensation expense has been recorded during each of the three and nine months ended September 30, 2011.

As of September 30, 2011, the Company had $5,126 of total unrecognized compensation expense under ASC 718, net of estimated forfeitures, which will be recognized over a weighted average period of 2.96 years. As permitted by ASC 718, the Company has deferred the recognition of its excess tax benefit from non-qualified stock option exercises.

Note 10 — Income Taxes

The Company recorded an income tax benefit of $813 and a provision of $504 for the three months ended September 30, 2011 and 2010, respectively, primarily related to foreign withholding taxes and income taxes. The Company recorded an income tax provision of $462 and $1,003 for the nine months ended September 30, 2011 and 2010, respectively, also primarily related to foreign withholding taxes and income taxes. The Company recorded a release of its valuation allowance of $1,702 in the three months ended September 30, 2011. This release is associated with the acquisition of Griptonite in August 2011. Pursuant to ASC 805-740, changes in the Company’s valuation allowance that stem from a business combination should be recognized as an element of the Company’s deferred income tax expense or benefit. The Company previously recognized a valuation allowance against its net operating loss carryforwards and determined that it should be able to utilize the benefit of those net operating losses against the deferred tax liabilities of Griptonite; therefore, it has partially released its pre-existing valuation allowance. This release of the valuation allowance caused the Company to recognize an income tax benefit for the three months ended September 30, 2011. The Company also amended the 2007, 2008 and 2009 income tax returns of its Brazilian subsidiary in the three months ended September 30, 2011. The total amount due to the Brazilian taxing authority, including tax, interest and penalties, was approximately $327, of which approximately $166 was recognized as an income tax expense in the three months ended September 30, 2011. The income tax rates vary from the Federal and State statutory rates due to the valuation allowances on the Company’s net operating losses, foreign tax rate differences and withholding taxes.

In connection with the acquisition of Griptonite, in the three months ended September 30, 2011, the Company recorded current deferred tax assets of $350 and long-term deferred tax liabilities of $2,052, with a corresponding adjustment to goodwill. These deferred taxes were primarily related to identifiable intangible assets, prepaid expenses and accrued expenses.

In connection with the acquisition of Blammo, in the three months ended September 30, 2011, the Company recorded current deferred tax assets of $60 and long-term deferred tax liabilities of $476, with a corresponding adjustment to goodwill. These deferred taxes were primarily related to identifiable intangible assets and net operating losses.

The Company estimates its annual effective tax rate at the end of each quarterly period and records the tax effect of certain discrete items, which are unusual or occur infrequently, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized and jurisdictions where a reliable estimate of ordinary income cannot be made are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections. The Company’s ability to use its net operating loss carryforwards and federal and state tax credit carryforwards to offset future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that result in changes in ownership as defined by Internal Revenue Code Section 382.

The Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”). As of September 30, 2011 and December 31, 2010, the total amount of unrecognized tax benefits was $3,287 and $3,326, respectively. As of September 30, 2011 and December 31, 2010, approximately $19 and $73, respectively, of unrecognized tax benefits, if recognized, would impact the Company’s effective tax rate. The remaining balance, if recognized, would adjust the Company’s goodwill from acquisitions or would adjust the Company’s deferred tax assets, which are subject to a valuation allowance.

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. The Company recorded $62 and $60 of interest on uncertain tax positions during the three months ended September 30, 2011 and 2010, respectively. The Company recorded $185 and $177 of interest on uncertain tax positions during the nine months ended September 30, 2011 and 2010, respectively. As of September 30, 2011 and December 31, 2010, the Company had a liability of $3,853 and $3,630, respectively, related to interest and penalties for uncertain tax positions.

One of the Company’s subsidiaries in China has received the High & New Technology Enterprise qualification from the Ministry of Science and Technology, and also the Software Enterprise Qualification from the Ministry of Industry and Information Technology. During the third quarter of 2010, the State Administration of Taxation approved the Company’s application to apply the favorable tax benefits to operations beginning January 1, 2009. The Company has revalued certain deferred tax assets and liabilities during the fourth quarter of 2010, and certain taxes that were expensed in 2009 were refunded in 2010, and the tax benefit was recognized. These qualifications are reviewed annually, and if circumstances change and the Company no longer meets the requirements of the original qualification, the Company would need to revalue certain deferred tax assets and liabilities.

The Company is subject to taxation in the United States and various foreign jurisdictions. The material jurisdictions subject to examination by tax authorities are primarily the State of California, the State of Washington, United States, United Kingdom, Brazil, Canada and China. The Company’s federal tax return is open by statute for tax years 2001 and forward and could be subject to examination by the tax authorities. The Company’s California income tax returns are open by statute for tax years 2001 and forward. The statute of limitations for the Company’s 2008 filed tax return in the United Kingdom will begin to expire (close) in 2011. The Company’s Brazil income tax returns are open by statute for tax years 2007 and forward. The Company’s China income tax returns are open by statute for tax years 2006 and forward. In practice, a tax audit, examination or tax assessment notice issued by the Chinese tax authorities does not represent finalization or closure of a tax year.

Note 11 — Segment Reporting

ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. It defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision-maker is its Chief Executive Officer. The Company’s Chief Executive Officer reviews financial information on a geographic basis, however this information is included within one operating segment for purposes of allocating resources and evaluating financial performance.

Accordingly, the Company reports as a single operating segment — mobile games. It attributes revenues to geographic areas based on the country in which the distributor’s or carrier’s principal operations are located.

A breakdown of the Company’s total sales to customers in the feature phone and smartphone markets is shown below:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
		(in thousands)								(in thousands)
Feature phone		$	7,248			$	13,090			$	25,979			$	41,903
Smartphone			9,657				2,378				25,032				6,806
Revenues		$	16,905			$	15,468			$	51,011			$	48,709

The Company generates its revenues in the following geographic regions:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
United States of America		$	8,769			$	6,817			$	25,262			$	22,407
China			885				1,638				3,197				4,393
Americas, excluding the USA			1,225				2,550				4,596				6,958
EMEA			4,499				3,757				14,559				12,897
Other			1,527				706				3,397				2,054
		$	16,905			$	15,468			$	51,011			$	48,709

The Company attributes its long-lived assets, which primarily consist of property and equipment, to a country primarily based on the physical location of the assets. Property and equipment, net of accumulated depreciation and amortization, summarized by geographic location was as follows:

		September 30,				December 31,
		2011				2010
Americas		$	3,087			$	1,013
EMEA			379				714
Other			405				407
		$	3,871			$	2,134

Note 12 — Restructuring

Restructuring information as of September 30, 2011 was as follows:

		Restructuring
		2011								2010								2009
						Facilities								Facilities								Facilities				Superscape
		Workforce				Related				Workforce				Related				Workforce				Related				Plan				Total
Balance as of January 1, 2010		$	—			$	—			$	—			$	—			$	629			$	737			$	40			$	1,406
Charges to operations			—				—				1,540				1,854				—				235				—				3,629
Non Cash Adjustments			—				—				—				(269	)			—				—				(3	)			(272	)
Charges settled in cash			—				—				(1,244	)			—				(629	)			(414	)			(14	)			(2,301	)
Balance as of December 31, 2010			—				—				296				1,585				—				558				23				2,462
Charges to operations			500				96				41				—				—				—				—				637
Non Cash Adjustments			—				(86	)			—				—				—				—				—				(86	)
Charges settled in cash			(500	)			(10	)			(220	)			(738	)			—				(248	)			—				(1,716	)
Balance as of September 30, 2011		$	—			$	—			$	117			$	847			$	—			$	310			$	23			$	1,297