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&lt;p style="margin-top:18px;margin-bottom:0px"&gt;&lt;font style="font-family:Times New Roman" size="2"&gt;&lt;b&gt;7. Shareholders&amp;#x2019;
Equity&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="margin-top:6px;margin-bottom:0px"&gt;&lt;font style="font-family:Times New Roman" size="2"&gt;During the three- and
six-month periods ended June&amp;#xA0;30, 2013, the Company issued
2,756 and 6,923 shares of Class&amp;#xA0;A common stock, respectively,
in lieu of cash compensation, to its independent directors for
services rendered during 2013. Additionally, the Company issued to
employees 60,000 and 618,000 options, during the three- and
six-month periods ending June&amp;#xA0;30, 2013, respectively, to
purchase shares of Class&amp;#xA0;A common stock upon vesting and
exercise.&lt;/font&gt;&lt;/p&gt;
&lt;p style="margin-top:12px;margin-bottom:0px"&gt;&lt;font style="font-family:Times New Roman" size="2"&gt;During March 2013, the
Company issued warrants to purchase shares of our Class&amp;#xA0;A
common stock pursuant to our SVB Loan agreements (see Note 3.
Revolving Line of Credit). On June&amp;#xA0;18, 2013, SVB completed a
cashless exercise of the SVB Warrants resulting in the Company
issuing 78,973 shares of Class&amp;#xA0;A common stock to SVB. The
cashless exercise is based on the closing price of the
Company&amp;#x2019;s stock on the day before notification of exercise is
received. On June&amp;#xA0;17, 2013, the Company&amp;#x2019;s stock closed
at $2.92 per share.&lt;/font&gt;&lt;/p&gt;
&lt;p style="margin-top:12px;margin-bottom:0px"&gt;&lt;font style="font-family:Times New Roman" size="2"&gt;On June&amp;#xA0;3, 2013, the
Company closed the private placement (the &amp;#x201C;Private
Placement&amp;#x201D;) contemplated by the Securities Purchase Agreement
(the &amp;#x201C;SPA&amp;#x201D;) entered into on May&amp;#xA0;24, 2013 with
unaffiliated investors (each an &amp;#x201C;Investor&amp;#x201D; and
collectively, the &amp;#x201C;Investors&amp;#x201D;). Upon closing, the
Company issued 3,366,974 shares of Class&amp;#xA0;A common stock (the
&amp;#x201C;Common Stock&amp;#x201D;) at a purchase price of $2.75 per share,
or $9,259 in the aggregate, and Common Stock Purchase Warrants (the
&amp;#x201C;Private Placement Warrants&amp;#x201D;) to purchase up to an
aggregate of 1,683,488 shares of Common Stock with an exercise
price of $2.75 per share, which are immediately exercisable and
have a term of 5 years. The Company received net proceeds of $8,414
after offering expenses.&amp;#xA0;Proceeds from the transaction will be
used for general corporate and working capital purposes.&lt;/font&gt;&lt;/p&gt;
&lt;p style="margin-top:12px;margin-bottom:0px"&gt;&lt;font style="font-family:Times New Roman" size="2"&gt;The Company reviewed the
accounting treatment for the warrants issued under the Private
Placement and determined the warrants met the applicable
requirement under ASC 480 for classification as a liability (See
Note 3. Fair Value Measurements).&amp;#xA0;Under the terms of a
Registration Rights Agreement between the Company and the Investors
in conjunction with the Private Placement, the Company filed a Form
S-3 Registration Statement with the SEC on June&amp;#xA0;20, 2013, for
the purpose of registering under the Securities Act the shares of
common stock issued pursuant to the Private Placement and the
shares of common stock to be issued upon exercise of the Private
Placement Warrants issued pursuant to the Private
Placement.&amp;#xA0;The SEC declared the registration statement
effective on July&amp;#xA0;3, 2013.&lt;/font&gt;&lt;/p&gt;
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