10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended August 31, 2013

or

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

Commission file number: 001-35598

E2open, Inc.

(Exact name of registrant as specified in its charter)

Delaware	94-3366487
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

4100 East Third Avenue, Suite 400

Foster City, California 94404

(Address of principal executive offices)

(650) 645-6500

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  x    No  ¨

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	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  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 26,507,320 shares of the registrant’s Common Stock issued and outstanding as of September 30, 2013.

E2OPEN, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION			2
Item 1.	Financial Statements (Unaudited)		2
	Condensed Consolidated Balance Sheets as of August 31, 2013 and February 28, 2013		2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended August 31, 2013 and 2012		3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended August 31, 2013 and 2012		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		38
Item 4.	Controls and Procedures		39
PART II. OTHER INFORMATION			40
Item 1.	Legal Proceedings		40
Item 1A.	Risk Factors		40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		59
Item 6.	Exhibits		59
Signatures

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts”, “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements include, but are not limited to, statements about:

• Our growth strategy;

• Our plans for future products;

• Our operating results;

• Our ability to anticipate future market demands and future needs of our customers;

• Our customer concentration;

• Our ability to effectively manage our growth;

• Our expectations regarding our expenses, sales and operations;

• Our anticipated trends and challenges in the markets in which we operate;

• Our competition;

• Our ability to successfully enter new markets and manage our international expansion; and

• Our intellectual property.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in the section entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

1

PART I. FINANCIAL INFORMATION

Item  1. Financial Statements

E2OPEN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	August 31, 2013			February 28, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	12,949		$	20,262
Short-term investments		3,735			15,289
Accounts receivable, net of allowance of $53 and $55		11,345			20,670
Prepaid expenses and other current assets		3,134			2,212
Total current assets		31,163			58,433
Long-term investments		4,871			11,692
Goodwill		25,708			—
Intangibles		12,817			—
Property and equipment, net		3,228			2,438
Other assets		1,089			905
Total Assets	$	78,876		$	73,468
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	12,600		$	10,769
Deferred revenue		29,879			39,789
Acquisition payable to seller		5,309			—
Current portion of notes payable and capital lease obligations		2,180			849
Total current liabilities		49,968			51,407
Deferred revenue		1,930			1,898
Notes payable and capital lease obligations, net of current portion		1,889			562
Deferred tax liability		3,689			—
Other noncurrent liabilities		1,052			508
Total liabilities		58,528			54,375
Commitments and contingencies (note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value. 10,000,000 authorized shares, no shares issued and outstanding		—			—
Common stock, $0.001 par value. 100,000,000 authorized shares, 26,460,524 and 25,424,361 shares issued and outstanding as of August 31, 2013 and February 28, 2013		26			25
Additional paid-in capital		372,876			360,280
Accumulated other comprehensive loss		(42	)		(17	)
Accumulated deficit		(352,512	)		(341,195	)
Total stockholders’ equity		20,348			19,093
Total liabilities and stockholders’ equity	$	78,876		$	73,468

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

E2OPEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Revenue
Subscriptions and support	$	13,433		$	11,131		$	25,725		$	20,945
Professional services and other		4,579			11,760			7,886			17,419
Total revenue		18,012			22,891			33,611			38,364
Cost of revenue
Subscriptions and support		2,645			1,998			5,173			4,037
Professional services and other		4,486			3,664			8,543			7,317
Amortization of acquired intangibles		58			—			58			—
Total cost of revenue		7,189			5,662			13,774			11,354
Gross profit
Subscriptions and support		10,730			9,133			20,494			16,908
Professional services and other		93			8,096			(657	)		10,102
Total gross profit		10,823			17,229			19,837			27,010
Operating expenses:
Research and development		4,533			3,557			8,606			7,649
Sales and marketing		8,752			6,628			16,651			12,775
General and administrative		2,641			2,277			5,089			4,059
Acquisition related expenses		791			—			791			—
Amortization of acquired intangibles		25			—			25			—
Total operating expenses		16,742			12,462			31,162			24,483
Income (loss) from operations		(5,919	)		4,767			(11,325	)		2,527
Interest and other income (expense), net		31			(169	)		82			(264	)
Income (loss) before income taxes		(5,888	)		4,598			(11,243	)		2,263
Provision for income taxes		(35	)		(32	)		(74	)		(75	)
Net income (loss)	$	(5,923	)	$	4,566		$	(11,317	)	$	2,188
Net income (loss) per share:
Basic	$	(0.23	)	$	0.33		$	(0.44	)	$	0.21
Diluted	$	(0.23	)	$	0.19		$	(0.44	)	$	0.09
Weighted average shares used to compute net income (loss) per share:
Basic		26,018			13,875			25,822			10,606
Diluted		26,018			24,421			25,822			24,106
Other comprehensive loss, net:
Net unrealized losses on investments		(8	)		(1	)		(20	)		(1	)
Net foreign currency translation losses		(9	)		(7	)		(6	)		(24	)
Total other comprehensive loss		(17	)		(8	)		(26	)		(25	)
Total comprehensive income (loss)	$	(5,940	)	$	4,558		$	(11,343	)	$	2,163

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

E2OPEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended August 31,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(11,317	)	$	2,188
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		2,563			961
Depreciation and amortization		983			795
Other		176			68
Changes in operating assets and liabilities:
Accounts receivable, net		10,599			312
Prepaid expenses and other current assets		(739	)		(549	)
Accounts payable and accrued liabilities		878			(547	)
Deferred revenue		(11,032	)		(9,614	)
Other noncurrent liabilities		506			(21	)
Net cash used in operating activities		(7,383	)		(6,407	)
Cash flows from investing activities:
Capital expenditures		(97	)		(1,047	)
Purchase of marketable securities		(10,357	)		(14,336	)
Proceeds from sale and maturities of marketable securities		28,908			—
Payment for acquisition, net of cash acquired		(11,489	)		—
Other assets		73			28
Net cash provided by (used in) investing activities		7,038			(15,355	)
Cash flows from financing activities:
Proceeds from bank credit facilities		536			30,300
Repayments of bank credit facilities		(653	)		(39,950	)
Repayments of notes payable and capital lease obligations		(894	)		(1,745	)
Repayment of debt assumed from acquired company		(7,126	)		—
Proceeds from initial public offering, net of underwriting discounts and commissions		—			52,313
Payments of deferred initial public offering costs		—			(729	)
Proceeds from exercise of common share options		1,178			160
Proceeds from exercise of warrants		—			700
Repurchase of fractional shares from reverse stock split		—			(3	)
Net cash provided by (used in) financing activities		(6,959	)		41,046
Effect of exchange rate changes on cash and cash equivalents		(9	)		(24	)
Net increase (decrease) in cash and cash equivalents		(7,313	)		19,260
Cash and cash equivalents at beginning of period		20,262			10,219
Cash and cash equivalents at end of period	$	12,949		$	29,479
Supplemental cash flow information:
Cash paid during the period:
Interest	$	76		$	179
Income taxes	$	77		$	62
Noncash financing and investing activities:
Property, software and equipment acquired under notes payable and capital leases	$	1,677		$	41
Prepaid software, maintenance and services acquired under notes payable and capital leases	$	2,072		$	920
Automatic conversion of preferred stock to common stock in connection with IPO	$	—		$	84,191
Issuance of common stock in connection with a business acquisition	$	8,849		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

E2OPEN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Organization and Business Description

E2open, Inc. and subsidiaries (the Company), a Delaware corporation, was incorporated in September 2003. The Company provides cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to procure, manufacture, sell and distribute products more efficiently. The Company’s customers depend on outsourced manufacturing strategies and complex trading networks to compete in today’s global economy. They use the Company’s solutions to gain visibility into and control over their trading networks. The Company’s solutions enable its customers and their trading partners to overcome problems arising from communications across disparate systems by offering a reliable source of data, processes and analytics, which its customers rely on as the single version of the truth. The Company’s solutions empower its customers to manage demand they cannot predict and supply they do not control.

The Company acquired ICON-SCM AG (ICON) on July 30, 2013 (see note 3 to the condensed consolidated financial statements).

The Company’s corporate headquarters are located in Foster City, California, with additional offices in San Jose, California, Austin and Dallas, Texas, China, France, Germany, Malaysia, Finland, Taiwan and the United Kingdom.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (SEC).

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of August 31, 2013, the interim condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended August 31, 2013 and 2012, and the interim condensed consolidated statements of cash flows for the six months ended August 31, 2013 and 2012 and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position and operating results for the periods presented. The results for the three and six months ended August 31, 2013 are not necessarily indicative of the results expected for the full fiscal year or any other period.

Accounting Policies

The accompanying unaudited interim condensed consolidated financial statements and accompanying related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2013. There have been no changes in the Company’s significant accounting policies during the six months ended August 31, 2013 compared to such policies described in the audited consolidated financial statements included in Company’s Annual Report on Form 10-K for year ended February 28, 2013 except for the adoption of the following policies in connection with the acquisition of ICON:

Acquisition Related Expenses—Acquisition related expenses consist of third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of a business or an asset group.

Goodwill—Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and intangible assets of acquired entities. The Company performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse change in customer demand or business climate, obsolescence of acquired technology and related competitive considerations.

The Company performs a goodwill impairment test in accordance with Account Standards Update (“ASU”) 2011-08, “Intangibles – Goodwill and Other: Testing Goodwill for Impairment,” which allows the Company to make a qualitative assessment to determine whether it is more likely than not that goodwill is impaired before applying the two-step goodwill impairment test. If the conclusion is that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company then performs a two-step goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value, and, if an indication of goodwill impairment exists for the reporting unit, the Company must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill as determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company did not record any charges related to goodwill impairment for the three and six months ended August 31, 2013.

5

Intangible assets—Intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, ranging up to 20 years. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Accounting Updates

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to the Company’s condensed consolidated results of operations or financial position.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported results of operations during the reporting period. Such estimates include the allowance for doubtful accounts receivable, deferred tax asset valuation allowance, unrecognized tax benefits, fair value of acquired net assets including intangibles, accrued liabilities, and stock-based compensation. Actual results could differ from those estimates.

6

Revenue Recognition

The Company generates revenue from the sale of subscriptions and support and professional services.

Subscriptions and Support. The Company offers on-demand software solutions, which enable its customers to have constant access to its solutions without the need to manage and support the software and associated hardware themselves. The Company houses the hardware and software in third-party facilities, and provides its customers with access to the software solutions, along with data security and storage, backup and recovery services and solution support. The Company’s customer contracts typically have a term of three to five years. The Company invoices its customers for subscriptions and support in advance for annual use of the software solutions. The Company’s payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services. Professional services revenue is derived primarily from fees for enabling services, including solution consulting and solution deployment. These services are sold in conjunction with the sale of the Company’s on-demand software solutions. The Company provides professional services, both on a fixed fee and a time and materials basis, and invoices customers either in advance, monthly, or upon reaching project milestones.

The Company enters into arrangements with multiple elements, comprised of subscriptions and support and professional services. Arrangements with customers typically do not provide the customer with the right to take possession of the software supporting the on-demand solutions. The Company commences revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company’s price to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

The Company evaluates each of these criteria as follows:

Evidence of an Arrangement . The Company considers a binding agreement signed by it and the customer to be evidence of an arrangement.

Delivery . The Company typically considers delivery to have occurred when the on-demand software solutions are made available to the customer or services have been rendered. In arrangements where an existing customer purchases additional solutions, delivery occurs upon commencement of the contractual term.

Fixed or Determinable Fee . The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within its standard payment terms. If the fee is not fixed or determinable, the Company recognizes the revenue as amounts become due and payable.

Collectability of the Fees is Reasonably Assured . Collectability of the fees is reasonably assured if the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not reasonably assured, the Company defers the recognition of revenue until cash collection.

The Company accounts for subscriptions and support and professional services revenue as separate units of accounting and allocates revenue to each deliverable in an arrangement based on a selling price hierarchy. As the Company has been unable to establish vendor specific objective evidence (VSOE) or third party evidence (TPE) for the elements of its arrangements, the Company determines the estimated selling price (ESP) for each element primarily by considering prices the Company charges for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time and material basis is recognized as services are delivered.

The Company acquired ICON on July 30, 2013. Historically, ICON sold perpetual or term licenses and related post-contract support (PCS) and professional services. During the post-acquisition period of approximately one month, all revenue recognized from legacy ICON revenue arrangements represented primarily post-contract support or professional services.

Accounting for the Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, which consist principally of property and equipment and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset is not recoverable, an impairment loss is recorded for the amount by which the carrying amount of the asset exceeds its fair value. The Company did not incur any long-lived asset impairment charges during the three and six month ended August 31, 2013 and 2012.

7

(3) Acquisition

On July 30, 2013, the Company acquired all of the outstanding shares of ICON, a market leader in supply chain planning and collaboration, for approximately $26.6 million. The total initial purchase consideration comprised the following (in thousands):

Cash payment	$	12,412
Acquisition costs payable to seller, to be placed in escrow		5,309
451,593 shares of the Company’s common stock		8,849
Total	$	26,570

Transaction costs of $0.8 million associated with the acquisition of ICON were expensed as incurred and presented as Acquisition-related expenses as a part of operating expenses on our condensed consolidated statements of operations for the three and six months ended August 31, 2013.

Allocation of Consideration Transferred

The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values. The excess of the fair value of consideration transferred over estimated fair value of the net tangible assets and intangible assets was recorded as goodwill.

The Company is accounting for the ICON acquisition under the purchase method of accounting as a business combination. The following table summarizes the preliminary estimates of fair values of the assets and liabilities assumed at the acquisition date based on the preliminary purchase price allocation. The Company is in the process of validating and refining the assumptions and estimates required in establishing the fair values of the identifiable assets and liabilities, including identifiable intangible assets. The final purchase price allocation may differ from the preliminary amounts disclosed below (in thousands):

Cash and cash equivalents	$	923
Accounts receivable		1,274
Prepaid expenses and other current assets		219
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		15,958
Accounts payable and accrued liabilities		(3,080	)
Deferred revenue		(1,154	)
Convertible bond and long-term debt		(7,126	)
Deferred tax liability		(3,689	)
Other noncurrent liabilities		(47	)
Total liabilities assumed		(15,096	)
Net identifiable assets acquired		862
Goodwill		25,708
Total consideration	$	26,570

The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with the Company’s Business Network, the Company expands its market opportunity and solution portfolio, accelerates its product roadmap, and extends its position as the leader in the collaborative planning and execution space.

As of the date of acquisition, the identifiable intangibles are comprised of developed technology of approximately $7.0 million and a customer relationship intangible of approximately $5.9 million. The Company is currently evaluating the expected useful life of these identifiable intangible assets and they may range up to 20 years. The amortization for the post acquisition period of approximately one month was not material to consolidated financial statements.

ICON’s results of operations have been included in our condensed consolidated financial statements subsequent to the date of acquisition. Revenue earned by ICON was $1,062,000 for the period from the acquisition date of July 30, 2013 to August 31, 2013. Immediately following the acquisition, ICON’s operations in the United States were merged into the Company’s operations, as such, the standalone ICON net income (loss) post-acquisition is not readily determinable. The unaudited pro forma Revenue and Net Loss for six months ended August 31, 2013 presented below combine the consolidated results of the Company and ICON giving effect to the acquisition of ICON

8

as if it had been completed on March 1, 2012, the beginning of the annual reporting period prior to the year of acquisition. The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition. This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of March 1, 2012. The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of ICON’s amortizable assets acquired in the transaction, adjustments to net interest expense based upon settlement of debt assumed upon acquisition, and adjustments to net income to reflect the decrease of interest income arising from the reduction of investments in available-for-sale securities. The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

(in thousands, except per share data)	Six Months Ended August 31, 2013			Six Months Ended August 31, 2012
Pro forma revenue	$	37,442		$	44,321
Pro forma net loss		(13,213	)		(1,700	)
Pro forma net loss per share:
Basic		(0.50	)		(0.15	)
Diluted		(0.50	)		(0.15	)

(4) Cash and investments

The following table presents cash, cash equivalents and available-for-sale securities for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of August 31, 2013:
Cash	$	5,925	$	—	$	—		$	5,925
Cash equivalents:
Money market accounts		4,929		—		—			4,929
Money market funds		2,095		—		—			2,095
Total cash and cash equivalents	$	12,949	$	—	$	—		$	12,949
Short-term investments:
Corporate debt securities		1,592		1		—			1,593
Mortgage-backed securities		508		—		(2	)		506
Municipal debt securities		350		—		—			350
Asset-backed securities		1,288		—		(2	)		1,286
Total short-term investments	$	3,738	$	1	$	(4	)	$	3,735
Long-term investments:
Corporate debt securities		2,092		2		(3	)		2,091
Asset-backed securities		929		—		(1	)		928
Mortgage-backed securities		442		2		(1	)		443
Municipal debt securities		1,287		—		(2	)		1,285
Common trust fund		109		—		—			109
Insurance company contract		15		—		—			15
Total long-term investments	$	4,874	$	4	$	(7	)	$	4,871
Total	$	21,561	$	5	$	(11	)	$	21,555
As of February 28, 2013:
Cash	$	1,436	$	—	$	—		$	1,436
Cash equivalents:
Money market accounts		2,501		—		—			2,501
Money market funds		3,879		—		—			3,879
Commercial paper		12,445		1		—			12,446
Total cash and cash equivalents	$	20,261	$	1	$	—		$	20,262
Short-term investments:
Commercial paper		12,322		1		—			12,323
Corporate debt securities		2,373		2		—			2,375
Mortgage-backed securities		594		—		(3	)		591
Total short-term investments	$	15,289	$	3	$	(3	)	$	15,289
Long-term investments:
Corporate debt securities		5,981		10		(1	)		5,990
Asset-backed securities		3,044		2		—			3,046
Mortgage-backed securities		1,803		5		(3	)		1,805
Municipal debt securities		851		—		—			851
Total long-term investments	$	11,679	$	17	$	(4	)	$	11,692
Total	$	47,229	$	21	$	(7	)	$	47,243

9

The available-for-sale securities that the Company intends to hold for less than one year are classified as short-term investments, and the securities that the Company intends to hold for more than one year are classified as long-term investments.

The following table presents available-for-sale securities, recorded in short-term and long-term investments, by contractual maturity date as of August 31, 2013 (in thousands):

	Amortized Cost		Estimated Fair Market Value
Due in one year or less	$	3,738	$	3,735
Due after one year through two years		4,874		4,871
Total	$	8,612	$	8,606

For the three and six months ended August 31, 2013, the realized gains and losses, and unrealized losses on these available-for-sale securities were not material. Additionally, none of these securities were in a continuous unrealized loss position for more than 12 months. As of August 31, 2013, the Company did not consider any of its available-for-sale securities to be other-than-temporarily impaired.

10

(5) Consolidated Balance Sheet Components

Consolidated balance sheet components as of the dates presented comprised the following (in thousands):

	August 31, 2013		February 28, 2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$	1,562	$	1,109
Other prepaid expenses and other current assets		1,572		1,103
	$	3,134	$	2,212

Software licenses, maintenance, services and insurance premiums financed through capital leases and notes payable included above aggregated $3,462,000 and $1,615,000 as of August 31, 2013 and February 28, 2013. Accumulated amortization on software licenses aggregated $792,000 and $344,000 as of August 31, 2013 and February 28, 2013. Amortization of software licenses held under capital leases and notes payable is included in software license expense. Prepaid maintenance and insurance are expensed over the term of the agreements.

11

	August 31, 2013			February 28, 2013
Property and equipment, net:
Software	$	8,870		$	8,543
Computer equipment		8,943			7,718
Leasehold improvements		485			484
Furniture and fixtures		149			119
		18,447			16,864
Less: accumulated depreciation and amortization		(15,219	)		(14,426	)
	$	3,228		$	2,438

Property and equipment financed through capital leases and notes payable included above aggregated $2,338,000 and $662,000 as of August 31, 2013 and February 28, 2013. Accumulated depreciation and amortization on these assets aggregated $422,000 and $100,000 as of August 31, 2013 and February 28, 2013.

	August 31, 2013		February 28, 2013
Accounts payable and accrued liabilities:
Accrued compensation costs	$	6,762	$	7,701
Trade accounts payable		3,405		1,582
Accrued taxes and other		2,433		1,486
	$	12,600	$	10,769

12

(6) Notes Payable and Capital Lease Obligations

The Company financed the purchase of certain equipment, software and related support and maintenance with notes payable and capital leases. The terms of the notes payable are from nine months to three years, and the notes bear interest at rates ranging from 3.03% to 13.13% per annum. The total principal payments remaining under the notes payable and capital lease obligations of $4,069,000 as of August 31, 2013 as follows (in thousands):

Fiscal year ending:
2014 (remaining 6 months)	$	1,250
2015		1,997
2016		1,157
Total minimum lease payments		4,404
Less: amount representing interest		(335	)
Present value of minimum lease payments		4,069
Less: current portion		(2,180	)
Total, net of current portion	$	1,889

(7) Related Party Transactions

One of the Company’s directors, Patrick J. O’Malley, III, is the Chief Financial Officer of Seagate Technology Public Limited Company, or Seagate PLC. Seagate LLC, a wholly owned subsidiary of Seagate PLC (Seagate), is one of the Company’s customers and the Company received payments from Seagate of $242,000 and $484,000 for the three months ended August 31, 2013 and 2012, and $1,275,000 and $905,000 for the six months ended August 31, 2013 and 2012. The Company has outstanding receivable from Seagate of $1,550,000 and $1,031,000 as of August 31, 2013 and February 28, 2013.

(8) Commitments and Contingencies

Acquisition cost payable to seller, to be placed in an escrow

In accordance with the share purchase agreement for the acquisition of ICON, the Company will place in escrow $5,309,000 payable to ICON’s former shareholders. The amount in escrow will be released to ICON’s former shareholders on July 31, 2014, the escrow expiration date, net of claims arising during the escrow period. The Company and the former shareholders have not selected the escrow agent as of August 31, 2013.

Leases

The Company leases its primary office space under noncancelable operating leases with various expiration dates through July 2018. Rent expense was $632,000 and $459,000 for the three months ended August 31, 2013 and 2012, and $1,228,000 and $885,000 for the six months ended August 31, 2013 and 2012. Future minimum lease payments under noncancelable operating leases as of August 31, 2013 are as follows (in thousands):

Fiscal year ending:
2014 (remaining 6 months)	$	1,246
2015		2,172
2016		1,678
2017		1,564
2018		1,449
Thereafter		540
Total minimum lease payments	$	8,649

Several of the operating lease agreements require the Company to provide security deposits. As of August 31, 2013 and February 28, 2013, lease deposits totaled $420,000 and $335,000. The deposits are generally refundable at the expiration of the lease, assuming all of the Company’s obligations under the lease agreement have been met, and are included in other assets in the condensed consolidated balance sheets.

13

Contingencies

From time to time, the Company is subject to contingencies that arise in the ordinary course of business. The Company records an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not currently believe the resolution of any such contingencies will have a material effect upon the Company’s financial position, results of operations or cash flows.

(9) Interest and other income (expense), net

Interest and other income (expense), net for the periods presented consisted of the following (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Interest income	$	33		$	7		$	81		$	7
Interest expense		(46	)		(106	)		(68	)		(179	)
Bank financing fees		(1	)		(52	)		(1	)		(116	)
Foreign exchange gains (losses)—realized and unrealized, net		10			(33	)		(43	)		192
Gains (losses) from foreign currency contracts—realized and unrealized, net		26			16			103			(172	)
Other, net		9			(1	)		10			4
	$	31		$	(169	)	$	82		$	(264	)

(10) Income Taxes

The Company records its interim provision for income taxes based on its estimated annual effective tax rate for the year. The income tax provision for the three months ended August 31, 2013 and 2012 was $35,000 and $32,000, and for the six months ended August 31, 2013 and 2012 was $74,000 and $75,000. The Company has incurred operating losses for most years since inception. As of February 28, 2013, it had net operating loss, or NOL, carryforwards for federal income tax purposes of $318,323,000, which begin to expire in fiscal 2023, and had NOL carryforwards for state income tax purposes of $100,320,000, which begin to expire in fiscal 2014. In order to utilize the NOLs, the Company must generate consolidated taxable income which can offset such carryforwards. The deferred tax asset associated with the NOLs is $93,992,000. As a result of those continuing losses, management has determined that insufficient evidence exists to support that it is more likely than not that the Company will realize the benefits of its U.S. net deferred tax assets and therefore has recorded a valuation allowance to reduce the net carrying value of these deferred tax assets to zero. Accordingly, the Company has not recorded a provision for income taxes for any of the periods presented other than provisions for estimated federal alternative minimum taxes, state and foreign taxes, as well as income taxes in foreign jurisdictions. The Company’s effective tax rate differs from the statutory rate due primarily to valuation allowances on deferred taxes, state taxes, foreign taxes, and tax contingencies.

As of August 31, 2013, the Company has recorded a $3,689,000 noncurrent deferred tax liability in connection with the acquisition of ICON. The deferred tax liability represents primarily the tax effect of the difference between the estimated fair value of the acquired intangible assets and the tax basis ($0) of such assets. The estimated amount is determined by multiplying the difference by the German marginal tax rate of 29%.

The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income taxes. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are expected to be reinvested indefinitely. There is $813,000 of undistributed earnings of the Company’s foreign subsidiaries as of August 31, 2013. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be repatriated.

As of February 28, 2013, the total amount of gross unrecognized tax benefits was $4,500,000, of which $300,000, if recognized, would affect the Company’s effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. The total amount of gross interest and penalties accrued was $68,000 as of February 28, 2013, and was classified as other noncurrent liabilities in the consolidated balance sheets. The Company believes that it has adequately provided for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. The Company is not currently under examination or audit by any taxing authorities. For the six months ended August 31, 2013, there has been no material change in the total amount or composition of the Company’s unrecognized tax benefits. The Company is subject to taxation in the U.S., various states and foreign jurisdictions. The 2000 to 2013 tax years’ statutes of limitations generally remain open and are subject to U.S. federal and state tax examinations. The statutes of limitations in foreign jurisdictions range from four to seven years, and the open tax years subject to examination are from 2007 to 2013.

14

(11) Stock-based Compensation

Options and Awards Granted to Employees

In June 2012, the Board adopted the 2012 Stock Plan (2012 Plan), which was subsequently approved by the Company’s stockholders. Upon the completion of the IPO, all shares that were reserved under the 2003 Stock Plan but not issued were assumed by the 2012 Plan. No additional shares will be issued under the 2003 Plan. Under the 2012 Plan, the Company has the ability to issue incentive stock options (ISOs), nonstatutory stock options (NSOs), stock appreciation rights, restricted stock, restricted stock units (RSUs), performance units and performance shares. No awards under the 2012 Plan were granted prior to the Company’s IPO. As of August 31, 2013 and February 28, 2013, there were 5,819,041 and 5,112,830 shares of common stock reserved for issuance under the 2012 Plan.

Options under the 2012 Plan may be granted for periods of up to 10 years; provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares of common stock on the date of grant, and (ii) the exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the underlying shares on the date of grant. Options generally vest 25% on the one-year anniversary of the option grant date, and then monthly for three additional years, or monthly for a period of four years, and are exercisable for a period of 10 years after the date of grant. RSUs generally vest 25% on the first annual anniversary of the award grant date, and 25% each year thereafter on the annual anniversary of the award grant date for three additional years.

Some options granted are immediately exercisable and any unvested portion of the shares acquired upon early exercise is subject to a right of repurchase by the Company upon the employee’s termination at the original purchase price. The right of repurchase lapses as the options vest, which is generally over the four-year vesting period of the related options. As of February 28, 2013, there were 18,761 shares exercised that were subject to repurchase. The $6,566 aggregate exercise price of the options subject to repurchase as of February 28, 2013 is recorded in other noncurrent liabilities and is amortized to equity as the options vest. As of August 31, 2013, all of the early-exercised options have vested.

The determination of the fair value of stock-based payment awards on the date of grant using a pricing model is affected by the Company’s stock price as well as by certain assumptions including the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behavior, risk-free interest rates, and expected dividends. The estimated grant date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Three Months Ended August 31,		Six Months Ended August 31,
	2013	2012	2013	2012
Expected term (in years)	6.04	6.08	5.91	5.96
Expected stock price volatility	50.96%	50.0%	50.96% - 51.76%	50.0% - 55.0%
Risk-free interest rate	1.63% - 1.81%	0.9%	0.73% - 1.81%	0.9% - 1.3%
Expected dividend yield	—	—	—	—

The expected term represents the period that stock-based awards are expected to be outstanding, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior as influenced by changes to the terms of the Company’s stock-based awards. The Company estimated the expected term, using the simplified method due to limited exercise data, to be the period of time between the date of grant and the midpoint between option vesting and expiration. The Company estimated the expected volatility of its common stock based on the average of historical and implied volatility of comparable companies from a representative peer group based on industry and market capitalization data. The risk-free interest rate represents the yield on a constant maturity U.S. Treasury security with a term equal to the expected term of the options. Expected dividend yield is set at 0% because the Company does not expect to pay dividends during the term of the option, and historically has not paid any dividends to its stockholders. Management made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest.

In July 2011, the Company awarded 749,464 stock options that were subject to certain financial performance requirements to be achieved by February 28, 2013, before vesting could occur. The vesting of these stock options was also dependent upon the employees’ continued employment after February 28, 2013. In March 2012, the Board of Directors approved a modification of the financial performance requirements. At the date of the modification, the Company determined that the achievement of the modified performance requirements was probable and, accordingly, compensation cost related to the modified awards of $149,000 was recorded in the condensed consolidated statement of operations for the three months ended May 31, 2012. Prior to this date, the Company had not recognized compensation expense associated with these grants because the Company believed that, based on the then-current and expected operational results, it was not probable that the associated financial performance requirements would be achieved. The financial performance requirements were achieved by February 28, 2013. The unrecognized compensation cost related to these options is $1,368,000 as of August 31, 2013, and is being recognized over the remaining vesting term of three years from February 28, 2013.

15

In July 2013, the Company awarded 125,250 restricted stock units that are subject to certain financial performance requirements to be achieved by February 28, 2014, before vesting can occur. The vesting of these stock options is also dependent upon the employees’ continued employment after February 28, 2014. The Company determined that, based on current and expected achievement of the performance requirements, certain of these awards are probable of vesting. Accordingly, compensation cost related to the awards deemed probable of vesting amounting to $116,000 was recorded in the condensed consolidated statement of operations for the three and six months ended August 31, 2013. The unrecognized compensation cost related to the awards is $1,419,000 as of August 31, 2013, and is being recognized over the remaining vesting term of two years from September 1, 2013.

16

Stock Options:

Stock option activity under the Company’s 2012 Plan for the years presented is as follows:

	Number of shares			Weighted average exercise price		Weighted average remaining term
Balance of options outstanding, February 28, 2013		2,674,335		$	4.59		8.00 years
Options granted		623,575			18.35
Options exercised		(565,808	)		2.08
Options canceled and forfeited		(331,386	)		4.68
Balance of options outstanding, August 31, 2013		2,400,716			8.75		8.25 years
Balance of options expected to vest as of February 28, 2013		2,485,050			4.41		7.94 years
Balance of options exercisable as of February 28, 2013		1,005,204			2.68		7.03 years
Balance of options expected to vest as of August 31, 2013		2,315,813			8.60		8.23 years
Balance of options exercisable as of August 31, 2013		766,623			4.91		7.36 years

The weighted average grant date fair value of the employee stock options granted during the three months ended August 31, 2013 and August 31, 2012 was $18.63 and $16, and for the six months ended August 31, 2013 and August 31, 2012 was $18.35 and $10.04.

The intrinsic values of employee stock options exercised during the three months ended August 31, 2013 and August 31, 2012 was $4,455,000 and $1,356,000, and for the six months ended August 31, 2013 and August 31, 2012 was $8,770,000 and $1,957,000. The intrinsic values of vested shares as of August 31, 2013 and February 28, 2013 were $11,743,000 and $17,168,000.

As of August 31, 2013, and February 28, 2013 the number of unvested options was 1,634,093 and 1,669,131.

As of August 31, 2013 and February 28, 2013, the Company had $7,173,000 and $5,370,000 of unrecognized compensation cost excluding estimated forfeitures, related to unvested stock option awards, which is expected to be recognized over a weighted average period of 2.64 years and 2.28 years.

Restricted Stock Units:

The RSU activity under the Company’s 2012 Plan for the years presented is as follows:

	Number of shares			Weighted average grant date fair value per share		Weighted average remaining term
Balance of awards outstanding, February 28 2013		118,500		$	14.42		3.62 years
Awards granted		172,714			17.86
Awards released		—			—
Awards canceled and forfeited		(16,000	)		16.61
Balance of awards outstanding, August 31, 2013		275,214		$	16.45		2.46 years
Balance of awards expected to vest, February 28, 2013		92,136		$	14.42		3.62 years
Balance of awards vested, February 28, 2013		—		$	—		—
Balance of awards expected to vest, August 31, 2013		254,192		$	16.45		2.46 years
Balance of awards vested, August 31, 2013		—		$	—		—

The weighted average grant date fair value per share of the RSUs granted during the three months ended August 31, 2013 and August 31, 2012 was $19.26 and $0, and for the six months ended August 31, 2013 and August 31, 2012 was $17.86 and $0.

The intrinsic value of outstanding RSUs as of August 31, 2013 and February 28, 2013 was $5,568,000 and $2,342,000.

Total compensation expense for these awards recorded in the condensed consolidated statement of operations for the three months ended August 31, 2013 and August 31, 2012 was $260,000 and $0, and for the six months ended August 31, 2013 and August 31, 2012 was $390,000 and $0. As of August 31, 2013, none of the awards were vested or released. As of August 31, 2013 and February 28, 2013, the Company had $3,151,000 and $1,162,000 of unrecognized compensation expense related to these RSUs, which is expected to be recognized over a weighted average period of 2.46 years and 3.62 years.

17

Total share-based compensation:

Total compensation expense recorded for share-based payments for the three months ended August 31, 2013 and August 31, 2012 was $1,718,000 and $482,000, and for the six months ended August 31, 2013 and August 31, 2012 was $2,563,000 and $961,000. No compensation cost was capitalized during the three and six months ended August 31, 2013 and August 31, 2012.

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Cost of revenue	$	497	$	142	$	729	$	263
Research and development		148		25		216		78
Sales and marketing		617		137		907		282
General and administrative		456		178		711		338
	$	1,718	$	482	$	2,563	$	961

18

(12) Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income by the weighted-average number of common shares outstanding, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, restricted stock units and warrants using the treasury stock method. For periods in which the Company has generated a net loss, the Company does not include stock options, warrants, and unvested restricted stock units in its computation of diluted net income (loss) per share, as the impact of these awards is anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

	Three Months Ended August 31,					Six Months Ended August 31,
	2013			2012		2013			2012
Net income (loss)	$	(5,923	)	$	4,566	$	(11,317	)	$	2,188
Basic shares:
Weighted average common shares outstanding		26,018			13,875		25,822			10,606
Diluted shares:
Weighted average common shares outstanding		—			13,875		—			10,606
Weighted average effect of dilutive stock options		—			1,671		—			1,640
Weighted average effect of convertible preferred stock		—			8,875		—			11,860
		26,018			24,421		25,822			24,106
Net income (loss) per share:
Basic	$	(0.23	)	$	0.33	$	(0.44	)	$	0.21
Diluted	$	(0.23	)	$	0.19	$	(0.44	)	$	0.09

The following outstanding shares, options, restricted stock units and warrants were excluded from the computation of diluted net income per share in the periods presented because including them would have had an anti-dilutive effect (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Options to purchase common stock		1,275		27		1,375		13
Restricted stock units		235		—		185		—

19

(13) Fair Value Measurements

The Company’s financial instruments include cash and cash equivalents, investments, accounts receivable, net, accounts payable, payable to ICON shareholders, capital lease obligations and notes payable. Accounts receivable, net, accounts payable and payable to ICON shareholders are stated at their carrying value, which approximates fair value, due to their short maturity. The Company measures its cash equivalents, investments and foreign currency forward contracts at fair value based on an exchange or exit price as defined by the authoritative guidance on fair value measurements which represents the amount that would be received for an asset sale or an exit price, or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. The Company estimates the fair value for capital lease obligations and notes payable by discounting the future cash flows of the lease and note payments.

20

As a basis for considering such assumptions, accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1	—	Observable inputs such as quoted prices in an active market;
Level 2	—	Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and
Level 3	—	Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of August 31, 2013 and February 28, 2013, are summarized as follows (in thousands):

	August 31, 2013										February 28, 2013
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	4,929	$	—		$	—	$	4,929		$	2,501	$	—		$	—	$	2,501
Money market funds		2,095		—			—		2,095			3,879		—			—		3,879
Commercial paper		—		—			—		—			—		12,446			—		12,446
Short-term investments:
Commercial paper		—		—			—		—			—		12,323			—		12,323
Corporate debt securities		—		1,593			—		1,593			—		2,375			—		2,375
Asset backed securities		—		1,286			—		1,286			—		—			—		—
Mortgage backed securities		—		506			—		506			—		591			—		591
Municipal bonds		—		350					350			—		—			—		—
Other current assets:
Foreign currency forward contracts		—		—			—		—			—		4			—		4
Long-term investments:
Corporate debt securities		—		2,091			—		2,091			—		5,990			—		5,990
Asset backed securities		—		928			—		928			—		3,046			—		3,046
Mortgage backed securities		—		443			—		443			—		1,805			—		1,805
Municipal bonds		—		1,285			—		1,285			—		851			—		851
Common trust fund		—		109			—		109			—		—			—		—
Insurance Company Contract		—		15			—		15			—		—			—		—
Other noncurrent assets:
Certificate of deposit		16		—			—		16			16		—			—		16
Total assets	$	7,040	$	8,606		$	—	$	15,646		$	6,396	$	39,431		$	—	$	45,827
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(170	)		—		(170	)		—		(158	)		—		(158	)
Total liabilities	$	—	$	(170	)	$	—	$	(170	)	$	—	$	(158	)	$	—	$	(158	)

The fair value of the Company’s Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair value of the Company’s Level 2 financial instruments are based on quoted market prices for comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. The Company’s foreign currency forward contracts are valued using pricing models that use observable market inputs and, therefore, are classified as Level 2.

21

In fiscal 2013 and the six months ended August 31, 2013, the Company sought to hedge the risks associated with exchange rate fluctuations through entry into forward exchange contracts. The contracts are classified as Level 2. The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of contracts outstanding as of August 31, 2013 and February 28, 2013 (in USD thousands, except average contract rate):

	August 31, 2013								February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value
Foreign currency forward exchange contracts:
Euro	$	5,935			1.3	$	(63	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(5,706	)		3.1		(50	)		(2,255	)		3.1		(8	)
British Pound		(973	)		1.5		(57	)		—			—		—
Total	$	(744	)			$	(170	)		5,067				$	(154	)

The Company entered into the foreign exchange contracts with two counterparties. The Company has the right of offset for gains earned and losses incurred under contracts with the same counterparty, and therefore has recorded contracts with the same counterparty on a net basis in the balance sheet.

The Company does not use derivatives for speculative or trading purposes.

(14) Significant Customer Information

Customers accounting for 10% or more of revenue or accounts receivable were as follows:

Three months ended August 31, 2013

Three months ended August 31, 2012

Six months ended August 31, 2013

Six months ended August 31, 2012

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Customer A

*

*

13

%

13

%

*

*

12

%

13

%

Customer B

*

*

28

*

*

*

22

*

Customer C

*

*

*

15

*

*

*

15

Customer D

*

17

%

*

14

*

17

%

*

14

Customer E

*

20

*

*

*

20

*

*

* Indicates less than 10%

Revenue by geographic region, based on the billing address of the customer, was as follows (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Revenue by geographic region:
Americas	$	15,058	$	18,774	$	27,557	$	31,259
Europe		2,766		4,000		5,670		6,898
Asia		188		117		384		207
Total	$	18,012	$	22,891	$	33,611	$	38,364

22

Countries accounting for 10% or more of revenue were as follows:

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Revenue by country:
United States		79.2	%		52.1	%		77.2	%		57.4	%
Canada		*			29.9			*			24.1
United Kingdom		*			*			*			*

* Indicates less than 10%

(15) Credit Facility

On October 7, 2013, the Company entered into a Business Financing Agreement for a revolving loan facility with a borrowing capacity of up to $20,000,000, with availability to be subject to a borrowing formula, and secured by the Company’s accounts receivable and contracted backlog. The revolving loan facility bears interest at a per annum rate equal to the Wall Street Journal prime rate minus 0.25%, with a floor for the prime rate of 3.25%. The revolving loan facility is a general obligation of the Company secured by the Company’s tangible and intangible assets, as well as a negative pledge whereby the Company agrees not to give any creditor a security interest on the Company’s intellectual property.

23

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) dated April 30, 2013 (the “Annual Report”). The following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Statements that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,”, “predict”, “if”, “future”, “project,” “seek,” “should,” “target,” “will,” “would” and similar words and phrases, including the negatives of these terms, or other expressions or variations intended to identify forward-looking statements. Such statements include, but are not limited to, statements concerning market opportunity, our future financial and operating results, investment strategy, sales and marketing strategy, management’s plans, beliefs and objectives for future operations, research and development, economic and industry trends or trend analysis, expectations about seasonality, use of non-GAAP financial measures, operating expenses, taxes, capital expenditures, cash flows and liquidity. These statements are based on the beliefs and assumptions of our management based on information currently available to us. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included under Part II, Item 1A below. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

We are a leading provider of cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to procure, manufacture, sell and distribute products more efficiently. Our software applications allow network participants to input, access and share data and execute business processes across internal operating units and external entities in a secure, real-time and cost-effective manner. We refer to the combination of our software applications delivered on our cloud-based platform, the content contributed by our network participants and our enabling services as the E2open Business Network. The E2open Business Network supports key operational business processes of our customers and their trading partners, including supply chain management, procurement, sales and finance functions. These functions enable our customers to share product information, forecasts, inventory positions, sales orders, purchase orders, manufacturing work orders, quality and environmental data, shipments, invoices and payments with their trading partners.

The accelerating trends of supply chain globalization and outsourced manufacturing and distribution have combined to increase complexity and risk for brand owners while decreasing visibility into their expanding and evolving supply chains and distribution networks. These trends have created a fundamental shift in the way companies source and distribute goods and services. They have led to an ever more complex product and service delivery paradigm which increasingly relies on specialized, globally distributed trading partners to reduce costs.

As trading networks become more complex, companies are increasingly demanding integrated solutions that facilitate not only collaborative inventory management, but also the demand and supply forecasts, procurement systems, order management and analytics required to efficiently coordinate a company’s entire business ecosystem. We believe a significant opportunity exists to help companies improve their competitive advantage by delivering the visibility and control once characteristic of vertically integrated companies while retaining the advantages of outsourcing. The ability to navigate modern supply chain complexities and to resolve problems in a timely and collaborative manner, combined with enhanced knowledge of end customer demand, is critical to enabling businesses to better match supply and demand.

On July 30, 2013, we acquired icon-scm AG (“ICON”), a market leader in supply chain planning and collaboration, in a transaction valued at approximately $26.6 million in total consideration. We acquired assets of $15.9 million, including $12.9 million intangible assets, and assumed $15.1 million of liabilities. We recorded goodwill of approximately $25.8 million. The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with the Company’s Business Network, the Company expands its market opportunity and solution portfolio, accelerates its product roadmap, and extends its position as the leader in the collaborative planning and execution space. As of the date of acquisition, the identifiable intangibles are comprised of developed technology of approximately $7.0 million and a customer relationship intangible of approximately $5.9 million. We intend to make additional investments outside of the United States in order to expand our geographic reach.

Our agreements with customers are typically three to five years in length with billings in advance for annual use of the software solutions. The annual contract value for each customer agreement is largely related to the size of the customer, the number of solutions the customer has purchased, the number of the customer’s unique registered users, and the maturity of our relationship with the customer. Average annual contract value can therefore fluctuate period to period depending upon the size of new customers and the pace at which we upsell additional solutions and services to existing customers. Additionally, these new and upsell customer agreements can create significant variability in the aggregate annual contract value of agreements signed in any given fiscal quarter.

24

As of August 31, 2013, we had 329 customers, of which 101 are what we refer to as Enterprise Customers who purchase both on-demand software solutions and network connectivity solutions. The remaining 228 customers purchase our network connectivity solutions directly. For the six months ended August 31, 2013, Enterprise Customers represented 99.4% of total revenue. Our customers represent a wide range of industries and include many of the Fortune 500, among them four of the top five as designated in the Gartner Supply Chain Top 25. The E2open Business Network is a community comprised of our customers, over 37,000 unique registered trading partners and approximately 117,000 unique registered users.

On July 25, 2012, we sold 4,687,500 shares of common stock to the public (inclusive of 937,500 shares of common stock sold by selling stockholders). The public offering price of the shares sold in the offering was $15.00 per share. After deducting underwriting discounts and commissions and offering expenses paid by us, the aggregate net proceeds received by us totaled approximately $49.3 million.

We are headquartered in Foster City, California. We continue to expand our operations internationally. We currently generate a portion of our revenue outside the United States, including through our offices in the United Kingdom, Germany, China, France, Sweden, Malaysia and Taiwan. For the three months ended August 31, 2013 and 2012, the percentage of our revenue generated outside of the United States was 20.8% and 47.9%. For the six months ended August 31, 2013 and 2012, the percentage of our revenue generated outside of the United States was 22.8% and 42.6%. As part of our growth strategy, we expect the percentage of our revenue generated outside of the United States to increase as we invest in and enter new and emerging markets. In 2011, we grew our sales team in Europe. In fiscal 2012, we opened an office and established a direct sales force and a sales, hosting and distribution alliance with a local partner in China. In fiscal 2013, we opened offices in Paris, France and Scandinavia, and continued to hire sales personnel in the United States, Europe and China. Our financial objective is to create sustainable revenue, earnings and cash flow growth over the long term. Consistent with this objective, we intend to continue to invest in the development of our solutions and network. We expect to continue the aggressive expansion of our field sales organization and alliances to market our solutions both in the United States and internationally. We intend to continue making focused investments to upgrade our network infrastructure in order to improve our ability to profitably scale the business. We intend to further enable partners to deploy E2open solutions. This will allow E2open to grow deployment service capabilities for customers while maintaining focus as a cloud-based software products company and may mitigate potential constraints on company growth caused by challenges in scaling our own professional services organization. We may also evaluate acquisitions to further augment our strategies and objectives and will base our evaluation on a number of factors which may include strategic fit, stage of company, price, geography and industry.

We face challenges and risks related to the growth of our business, similar to other software companies, including the general economic environment, aggressive competition and prospective customers electing to postpone purchase decisions or maintain the status quo. We also face challenges and risks that may be unique to our own growth initiatives. We mitigate those risks, in part, by creating a balanced portfolio of growth initiatives while managing such risks to the best of our ability based on our prior experience and operating history. For example, one of our strategies relies upon our entrance into new vertical markets. Through our experience of entering into new markets, such as the Telecommunications, Technology and Consumer Products sectors, we believe we are better prepared to enter into adjacent markets due to this experience. A subsequent strategy involves expanding our target market to include mid-market customers. We believe our understanding of the complexities surrounding our existing customers has prepared us for evaluating and transitioning our solutions to be applicable to mid-market customers. Historically, we have collaborated, and will continue to interact, with our existing customers to define our product roadmap and specific functionalities. Many of our products, which resulted from such collaboration, have been purchased by our customers. For a more detailed analysis of the risks we face, see “Risk Factors.”

25

Sources of Revenue

We generate our revenue primarily from selling access to our cloud-based platform of on-demand software solutions, which we refer to as subscriptions and support, through our field sales organization and alliance partners. We also generate revenue from professional services to deploy our on-demand software solutions. Our customer contracts typically have a term of three to five years in length and we generally invoice our customers for subscriptions and support in advance for annual use of our software solutions.

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
	(In thousands)
Revenue by type:
Subscriptions and support	$	13,433		$	11,131		$	25,725		$	20,945
Professional services		4,579			11,760			7,886			17,419
Total	$	18,012		$	22,891		$	33,611		$	38,364
Percentage of revenue by type:
Subscriptions and support		74.6	%		48.6	%		76.5	%		54.6	%
Professional services		25.4			51.4			23.5			45.4
Total		100.0	%		100.0	%		100.0	%		100.0	%

Subscriptions and Support . We offer on-demand software solutions, which enable our customers to have constant access to our solutions without the need to manage and support the software and associated hardware themselves. We house the hardware and software in third-party facilities, and provide our customers with access to the software applications, along with data security and storage, backup and recovery services, and solution support. We invoice our customers for subscriptions and support in advance for annual use of our software solutions.

Professional Services . Professional services revenue is derived primarily from fees for enabling services, including solution consulting and solution deployment. These services are sold in conjunction with the sale of our on-demand software solutions or on a standalone basis. We provide professional services both on a fixed fee and a time and materials basis, and invoice our customers in advance, monthly, or upon reaching project milestones.

Our future revenue growth will depend on our ability to increase sales of our existing and new on-demand software solutions and services to new and existing customers. Our revenue generally fluctuates, and we expect it to continue to fluctuate, between periods due primarily to inconsistent timing of sales of our software solutions, revenue recognition requirements and seasonality, among other factors. As a result, transactions that were expected to be recognized in one period may be recognized in a subsequent period, which may materially affect our financial performance in a reporting period.

26

Key Operating Performance Measures

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Bookings, Billings and Backlog . We generally recognize subscription and support revenue from our customer agreements over the contractual term. For this reason, a significant portion of our revenue in any period will be from customer agreements signed in prior periods rather than new business activity signed during such period. In order to assess our business performance with metrics that more fully reflect current period business activity, we track bookings, billings and backlog. Bookings represent the full value of customer orders or contracts signed during a reporting period. The value of our bookings is impacted by new contracts, renewals, amendments and terminations. Billings represent invoices issued to customers during the period. Backlog represents the cumulative value of bookings existing at the end of the period less the cumulative amount billed to customers. Due to the seasonality of our sales, bookings and backlog fluctuate from quarter to quarter throughout the fiscal year.

Number of Unique Registered Trading Partners. We define the number of unique registered trading partners as the number of distinct trading partner entities currently connected to the E2open Business Network as of the balance sheet date. We believe the number of unique registered trading partners is a key indicator of the growth of our network and both our ability and our customers’ ability to receive the benefits of the network effects resulting from such growth. Growth in the number of unique registered trading partners depends, in part, on our ability to successfully develop and market our solutions to our existing customers and companies that have not yet become part of our network. In addition to the growth in number of these entities, we view a large, existing network as providing greater incentive and ease for new customers seeking to join if they share existing trading partners already operating on our system.

The number of unique registered trading partners in the E2open Business Network increased from 35,302 as of February 28, 2013 to 37,048 as of August 31, 2013. While growth in the number of unique registered trading partners is an important indicator of expected revenue growth, it also informs our management of areas of our business that will require further investment to support such growth.

Number of Unique Registered Users . We define the number of unique registered users as individuals within our customers’ organizations and their trading partners who are currently authorized to use and access our software applications as of a balance sheet date. We view unique registered users as a key indicator of growth and whether we are providing our customers with useful tools and applications, thereby increasing user engagement. Growth in unique registered users will be driven by our business expansion, growth in the number of unique registered trading partners and improvements to features and products available to our customers. The number of unique registered users increased from 108,846 as of February 28, 2013 to 117,212 as of August 31, 2013.

27

Key Financial Performance Measures

We monitor the key financial metrics set forth below as well as cash and cash equivalents and available debt capacity, which are discussed in “—Liquidity and Capital Resources,” to help us evaluate trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational effectiveness and efficiencies.

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
	(In thousands)
Revenue	$	18,012		$	22,891		$	33,611		$	38,364
Gross profit	$	10,823		$	17,229		$	19,837		$	27,010
Gross margin		60.1	%		75.3	%		59.0	%		70.4	%
Net income (loss) (1)	$	(5,923	)	$	4,566		$	(11,317	)	$	2,188
Adjusted EBITDA (1)	$	(2,831	)	$	5,635		$	(6,988	)	$	4,283
Operating cash flow	$	(4,087	)	$	5,584		$	(7,383	)	$	(6,407	)
Free cash flow (2)	$	(4,145	)	$	(5,977	)	$	(7,480	)	$	(7,454	)

⁽¹⁾ We define Adjusted EBITDA as net income (loss) adjusted for interest and other expense, net, provision for income taxes, depreciation and amortization, and stock-based compensation expense. See “Adjusted EBITDA” below for more information and for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with US generally accepted accounting principles, or GAAP.

⁽²⁾ Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures. See “Free Cash Flow” below for more information and for a reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Gross Profit and Gross Margin. Gross profit and gross margin have been and will continue to be affected by a variety of factors, including the average sales price of our products, the mix of solutions sold, the mix of revenue between subscriptions and support and professional services, and our level of investment in operating infrastructure. Our gross profit and gross margin for the three months ended August 31, 2013 was $10.8 million, or 60.1% compared to $17.2 million, or 75.3% for the three months ended August 31, 2012, and our gross profit and gross margin for the six months ended August 31, 2013 was $19.8 million, or 59.0% compared to $27.0 million, or 70.4% for the six months ended August 31, 2012. We expect gross profit and gross margin to decline for fiscal 2014 compared to fiscal 2013 as we continue to invest in the enablement of partners to deploy our solutions.

Gross margin on subscriptions and support revenue was 80.3% and gross margin on professional services revenue was 2.0% for the three months ended August 31, 2013. Gross margin on subscriptions and support revenue was 79.9% and gross margin on professional services revenue was (8.3)% for the six months ended August 31, 2013. Gross margin on subscriptions and support revenue was 82.1% and gross margin on professional services revenue was 68.8% for the three months ended August 31, 2012. Gross margin on subscriptions and support revenue was 80.7% and gross margin on professional services revenue was 58.0% for the six months ended August 31, 2012. An increase in the proportion of our total revenue generated by sales of subscriptions and support for our on-demand software applications would increase our overall margins, due to the higher margins on subscriptions and support compared to professional services. Our gross margin may also fluctuate due to the timing of revenue recognition for our on-demand software solutions and services, since our cost of revenue is recognized as incurred whereas revenue on certain arrangements with customers is recognized over the contractual term. Additionally, while we invest in the growth of our deployment service capabilities through partner enablement, our professional services revenues and margins may decrease.

Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) adjusted for interest and other expense, net, provision for income taxes, depreciation and amortization, and stock-based compensation expense. Management believes that the use of Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period to period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their reported GAAP results.

28

Management believes that it is useful to exclude certain non-cash charges, such as depreciation and amortization and stock-based compensation, and non-core operational charges, such as other expense, net and acquisition-related expenses from Adjusted EBITDA because (1) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (2) such expenses can vary significantly between periods as a result of the timing of new stock-based awards, acquisitions or restructurings, as the case may be.

For the three months ended August 31, 2013, Adjusted EBITDA was $(2.8) million compared to $5.6 million for the three months ended August 31, 2012 and for the six months ended August 31, 2013, Adjusted EBITDA was $(7.0) million compared to $4.3 million for the six months ended August 31, 2012. The fluctuation in Adjusted EBITDA resulted primarily from our continued investment in research and development and sales and marketing, fluctuations in revenue as described in Results of Operations section, and executing our strategy to grow deployment service capabilities through partner enablement.

The following table presents a reconciliation of Adjusted EBITDA to net income for each of the periods indicated:

	Three Months Ended August 31,					Six Months Ended August 31,
	2013			2012		2013			2012
	(In thousands)
Reconciliation of Adjusted EBITDA
Net income (loss)	$	(5,923	)	$	4,566	$	(11,317	)	$	2,188
Interest and other expense (income), net		(31	)		169		(82	)		264
Provision for income taxes		35			32		74			75
Depreciation and amortization		579			386		983			795
Acquisition-related expenses		791			—		791			—
Stock-based compensation		1,718			482		2,563			961
Adjusted EBITDA	$	(2,831	)	$	5,635	$	(6,988	)	$	4,283

Free Cash Flow. Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures. Capital expenditures consist of purchases of property, equipment and software. The following table details our calculation (and reconciliation to net cash provided by (used in) operating activities) of free cash flow. Free cash flow is a key measure used in our internal operating reports and allows us to manage the cash available to fund our debt obligations and potential strategic initiatives. Management believes that free cash flow is useful to investors as a supplemental measure to evaluate our business over time. Further, the use of free cash flow provides consistency and comparability with our past financial performance, facilitates period to period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

We have historically made significant investments in product development and in selling and marketing our solutions, resulting in net use of cash in operating activities since inception. Our free cash flow was $(4.1) million for the three months ended August 31, 2013, compared to $(6.0) million for the three months ended August 31, 2012, and our free cash flow was $(7.5) million for the six months ended August 31, 2013, compared to $(7.5) million for the six months ended August 31, 2012. The decrease in free cash flow was due primarily to increased investment in research and development, sales and marketing and deployment capacity. This is consistent with our strategy to expand our product offerings and customer base to help drive future revenue growth.

	Three Months Ended  August 31,						Six Months Ended  August 31,
	2013			2012			2013			2012
	(In thousands)
Free Cash Flow Data:
Net cash used in operating activities	$	(4,087	)	$	(5,584	)	$	(7,383	)	$	(6,407	)
Capital expenditures		(58	)		(393	)		(97	)		(1,047	)
Free cash flow	$	(4,145	)	$	(5,977	)	$	(7,480	)	$	(7,454	)

We expect to continue to experience negative free cash flow for fiscal 2014 as we continue to invest in the development and implementation of new solutions and software applications, expand our sales and marketing resources in order to further penetrate our market both in the United States and internationally, and invest in growing our deployment service capabilities.

29

Costs and Expenses

Cost of Revenue

Total cost of revenue consists of costs related to third-party hosting of our equipment and delivery of our software solutions, software license fees, salaries, benefits and other personnel-related expenses included in our operations, professional services, and support departments, as well as allocated facilities, information technology and supporting overhead costs. The cost associated with providing professional services is significantly higher as a percentage of revenue than the cost associated with delivering our on-demand software applications due to the labor intensive nature of providing professional services. We expect the absolute cost of revenue to increase as we continue to invest in our business, but at a lower rate than that of our total revenue on an annual basis.

Operating Expenses

Operating expenses consist of research and development, sales and marketing, general and administrative, and acquisition-related expenses.

Research and Development

Research and development expense consists of salaries, benefits and other personnel-related expenses, software development tools, as well as allocated facilities, information technology and supporting overhead costs. We expect to continue to invest in research and development to enhance and expand our existing solutions and develop new solutions and tools for improved deployment and customer support and, consequently, we expect research and development expense to increase in absolute dollars in future periods.

Sales and Marketing

Sales and marketing expense consists of salaries, benefits and other personnel-related expenses, including sales commissions, advertising and marketing materials, trade shows and other marketing events, travel and entertainment expenses, as well as an allocation of facilities, information technology and supporting overhead expenses. We intend to continue to invest in sales and marketing to pursue new customers and expand relationships with existing customers. Accordingly, we expect sales and marketing expense to increase in absolute dollars in future periods.

General and Administrative

General and administrative expense consists of salaries, benefits and other personnel-related expenses for our finance, accounting, legal, human resources, facilities and information technology employees; third-party professional fees; communication expenses; allocated facilities expenses; and other administrative expenses. We expect that the costs of being a public company, including the costs of compliance with the Sarbanes-Oxley Act of 2002 and other regulations governing public companies, increased directors and officers insurance, and professional and other services, will increase our general and administrative expense in absolute dollars in future periods.

Acquisition-related expense

Acquisition related expense consists of third-party accounting and legal service fees, salaries expenses, travel expenses and other personnel-related expenses incurred solely to prepare for and execute an acquisition.

Interest and Other Income (Expense), Net

Interest and other income (expense), net, consists primarily of interest income on our cash and cash equivalents, and investments, interest expense on our credit facilities, notes payable and capital leases, financing fees, and foreign exchange currency transaction and translation gains and losses.

Provision for Income Taxes

We are subject to income tax in the United States as well as other jurisdictions or countries in which we conduct business. Earnings from our non-U.S. activities are subject to local country income tax. Our effective tax rates differ from the statutory rate due primarily to valuation allowances on our deferred taxes, state taxes, foreign taxes, research and development tax credits and tax contingencies.

30

Results of Operations

Revenue, Cost of Revenue and Gross Margin

	Three Months Ended August 31,						Change						Six Months Ended August 31,						Change
	2013			2012			$			%			2013			2012			$			%
	(In thousands)												(In thousands)
Revenue
Subscriptions and support	$	13,433		$	11,131		$	2,302			20.7	%	$	25,725		$	20,945		$	4,780			22.8	%
Professional services		4,579			11,760			(7,181	)		(61.1	)		7,886			17,419			(9,533	)		(54.7	)
Total revenue		18,012			22,891			(4,879	)		(21.3	)		33,611			38,364			(4,753	)		(12.4	)
Cost of revenue
Subscriptions and support		2,645			1,998			647			32.4			5,173			4,037			1,136			28.1
Professional services		4,486			3,664			822			22.4			8,543			7,317			1,226			16.8
Amortization of acquired intangibles		58			—			58			100.0			58			—			58			100.0
Total cost of revenue		7,189			5,662			1,527			27.0			13,774			11,354			2,420			21.3
Gross profit
Subscriptions and support		10,730			9,133			1,597			17.5			20,494			16,908			3,586			21.2
Professional services		93			8,096			(8,003	)		(98.9	)		(657	)		10,102			(10,759	)		(106.5	)
Total gross profit	$	10,823		$	17,229		$	(6,406	)		(37.2	)%	$	19,837		$	27,010		$	(7,173	)		(26.6	)%
Gross margin (1)
Subscriptions and Support		79.9	%		82.1	%					(2.2	)%		79.7	%		80.7	%					(1.0	)%
Professional Services		2.0			68.8						(66.8	)		(8.3	)		58.0						(66.3	)
Total gross margin		60.1	%		75.3	%					(15.2	)%		59.0	%		70.4	%					(11.4	)%

(1) The table presents gross margin as a percentage of each component of revenue.

The table below sets forth the functional classification of stock-based compensation expense included in cost of revenue for the periods presented:

	Three Months Ended August 31,				Change					Six Months Ended August 31,				Change
	2013		2012		$		%			2013		2012		$		%
	(In thousands)									(In thousands)
Subscriptions and support	$	82	$	40	$	42		105.0	%	$	145	$	74	$	71		95.9	%
Professional services		415		102		313		306.9			584		189		395		209.0
	$	497	$	142	$	355		250.0	%	$	729	$	263	$	466		177.2	%

Total revenue for the three months and six months ended August 31, 2013 was $18.0 million and $33.6 million. Subscriptions and support revenue and professional services revenue comprised 74.6% and 25.4% of total revenue, for the three months ended August 31, 2013. Subscriptions and support revenue and professional services revenue comprised 76.5% and 23.5% of total revenue, for the six months ended August 31, 2013.

Total revenue for the three months ended August 31, 2013 was $18.0 million compared to $22.9 million for the three months ended August 31, 2012. Total revenue for the three months and six months ended August 31, 2012 included $4.5 million of revenue accelerated from future periods associated with a contract amendment, which would have been recognized in the remainder of fiscal 2013 through fiscal 2015, absent the amendment.

Subscriptions and support revenue for the three months ended August 31, 2013 was $13.4 million compared to $11.1 million for the three months ended August 31, 2012, and $25.7 million for the six months ended August 31, 2013 compared to $20.9 million for the six months ended August 31, 2012. Subscription and support revenue for the three and six months ended August 31, 2012 included $0.7 million of revenue accelerated from future periods associated with a contract amendment, which would have been recognized in the remainder of fiscal 2013 through fiscal 2015, absent the amendment.

Professional services revenue for the three months ended August 31, 2013 was $4.6 million compared to $11.8 million for the three months ended August 31, 2012, and $7.9 million for the six months ended August 31, 2013 compared to $17.4 million for the six months ended August 31, 2012. Professional services revenue for the three months ended August 31, 2012 included $3.8 million of revenue accelerated from future periods associated with a contract amendment, which would have been recognized in the remainder of fiscal 2013 through fiscal 2015, absent the amendment.

Total revenue for the three months ended August 31, 2013 was $18.0 million compared to $22.9 million for the three months ended August 31, 2012. The decrease was due primarily to the $4.5 million of revenue associated with a contract amendment in the three months ended August 31, 2012 that was accelerated from future periods. Apart from the impact of the aforementioned revenue acceleration, there was $2.5 million of sales to new customers, offset by a $2.9 million decrease in revenue from existing customers for the three months ended August 31, 2013. Subscriptions and support revenue from existing customers increased $1.7 million; professional services revenue decreased $4.6 million due primarily to the impact of the aforementioned contract amendment, timing of deployments and revenue recognition. Revenue for the three months ended August 31, 2013 included $0.2 million of subscriptions and support revenue and $0.8 million of professional services revenue attributable to the acquisition of ICON. The increase in subscriptions and support revenue and decrease in professional services revenue is in line with our strategy to maintain focus as a cloud-based software products company and enabling partners to deploy E2open solutions.

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For the three months ended August 31, 2013, we had no customer that accounted for more than 10% of revenue. For the three months ended August 31, 2012, we had two customers, RIM and Vodafone, that each accounted for more than 10% of revenue. For the three months ended August 31, 2013, revenue attributable to customers headquartered in the United States accounted for 79.2% of total revenue. For the three months ended August 31, 2012, revenue attributable to customers headquartered in Canada and the United States each accounted for more than 10% of total revenue.

Total revenue for the six months ended August 31, 2013 was $33.6 million compared to $38.4 million for the six months ended August 31, 2012. The decrease was due primarily to the $4.5 million of revenue associated with a contract amendment in the six months ended August 31, 2012 that was accelerated from future periods. Apart from the impact of the aforementioned revenue acceleration, there was $4.0 million of sales to new customers, offset by a $4.3 million decrease in revenue from existing customers for the three months ended August 31, 2013. Subscriptions and support revenue from existing customers increased $3.4 million; professional services revenue decreased $7.7 million due primarily to the impact of the aforementioned contract amendment, timing of deployments and revenue recognition. Revenue for the six months ended August 31, 2013 included $0.2 million of subscriptions and support revenue and $0.8 million of professional services revenue attributable to the acquisition of ICON. This increase in subscriptions and support revenue and decrease in professional services revenue is in line with our strategy to maintain focus as a cloud-based software products company and enabling partners to deploy E2open solutions.

For the six months ended August 31, 2013, we had no customer that accounted for more than 10% of revenue. For the six months ended August 31, 2012, we had two customers, RIM and Vodafone, that each accounted for more than 10% of revenue. For the six months ended August 31, 2013, revenue attributable to customers headquartered in the United States accounted for 77.2% of total revenue. For the six months ended August 31, 2012, revenue attributable to customers headquartered in Canada and the United States each accounted for more than 10% of total revenue.

Total cost of revenue fluctuates period-to-period depending on the growth of our professional services business and any associated increased costs relating to the delivery of our on-demand software solutions and professional services, as well as the timing of significant expenditures.

Total cost of revenue increased $1.5 million, or 27.0%, for the three months ended August 31, 2013 compared to the three months ended August 31, 2012. The increase in total cost of revenue was attributable primarily to a $1.0 million increase in employee-related expenses driven by increased headcount, an increase of $0.3 million in fees paid to third-party contractors, and a $0.3 million increase in software and hardware maintenance costs.

Total cost of revenue increased $2.4 million, or 21.3%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012. The increase in total cost of revenue was attributable primarily to a $2.3 million increase in employee-related expenses driven by increased headcount.

Gross margin is impacted by the timing of when we record our revenue and costs related to arrangements with customers. We recognize revenue on certain arrangements over the contractual term or only upon completion of work performed, whereas we recognize costs as incurred. As such, this may cause our gross margins to fluctuate between periods.

Total gross profit decreased $6.4 million, or 37.2%, for the three months ended August 31, 2013 compared to the three months ended August 31, 2012, and gross margin declined from 75.3% to 60.1%. The decrease in gross profit and margin reflects the impact of our strategy to accelerate the investment in the enablement of partners to deploy our solutions for fiscal 2014.

Total gross profit decreased $7.2 million, or 26.6%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012, and gross margin declined from 70.4% to 59.0%. The decrease in gross profit and margin reflects the impact of our strategy to accelerate the investment in the enablement of partners to deploy our solutions for fiscal 2014.

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Operating Expenses

	Three Months Ended August 31,				Change					Six Months Ended August 31,				Change
	2013		2012		$		%			2013		2012		$		%
	(In thousands)									(In thousands)
Operating expenses
Research and development	$	4,533	$	3,557	$	976		27.4	%	$	8,606	$	7,649	$	957		12.5	%
Sales and marketing		8,752		6,628		2,124		32.0			16,651		12,775		3,876		30.3
General and administrative		2,641		2,277		364		16.0			5,089		4,059		1,030		25.4
Acquisition-related expenses		791		—		791		100.0			791		—		791		100.0
Amortization of acquired intangibles		25		—		25		100.0			25		—		25		100.0
Total operating expenses	$	16,742	$	12,462	$	4,280		34.3	%	$	31,162	$	24,483	$	6,679		27.3	%

The table below sets forth the functional classification of stock-based compensation expense for the periods presented:

	Three Months Ended August 31,				Change					Six Months Ended August 31,				Change
	2013		2012		$		%			2013		2012		$		%
	(In thousands)									(In thousands)
Research and development	$	148	$	25	$	123		492.0	%	$	216	$	78	$	138		176.9	%
Sales and marketing		617		137		480		350.4			907		282		625		221.6
General and administrative		456		178		278		156.2			711		338		373		110.4
	$	1,221	$	340	$	881		259.1	%	$	1,834	$	698	$	1,136		162.8	%

Research and Development

Research and development expense increased $1.0 million, or 27.4%, for the three months ended August 31, 2013 compared to the three months ended August 31, 2012. The increase was attributable to an increase in employee-related costs. As a percentage of revenue, research and development expense was 25.2% for the three months ended August 31, 2013 and 15.5% for the three months ended August 31, 2012.

Research and development expense increased $1.0 million, or 12.5%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012. The increase was attributable to an increase of $0.8 million in employee-related costs. As a percentage of revenue, research and development expense was 25.6% for the six months ended August 31, 2013 and 19.9% for the six months ended August 31, 2012.

Sales and Marketing

Sales and marketing expense increased $2.1 million, or 32.0%, for the three months ended August 31, 2013 compared to the three months ended August 31, 2012. The increase was attributable to an increase in employee-related costs as we continue to expand our field sales organization globally. Average headcount in sales and marketing increased from 81 for the three months ended August 31, 2012 to 101 for the three months ended August 31, 2013.

Sales and marketing expense increased $3.9 million, or 30.3%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012. The increase was attributable to an increase in employee-related costs as we continue to expand our field sales organization globally. Average headcount in sales and marketing increased from 76 for the six months ended August 31, 2012 to 92 for the six months ended August 31, 2013.

Total sales and marketing headcount increased by 30.9% from 81 as of August 31, 2012 to 106 as of August 31, 2013. As a percentage of revenue, sales and marketing expense increased from 29.0% and 33.3% for the three and six months ended August 31, 2012 to 48.6% and 49.5% for the three and six months ended August 31, 2013 reflecting our investment in sales and marketing to drive revenue growth.

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General and Administrative

General and administrative expense increased $0.4 million, or 16.0%, for the three months ended August 31, 2013 compared to the three months ended August 31, 2012. The increase was driven by a $0.3 million increase in employee-related expense resulting from increased headcount to support the growth of the business and the infrastructure required to support a public company. As a percentage of revenue, general and administrative expense was 9.9% for the three months ended August 31, 2012 and 14.7% for the three months ended August 31, 2013.

General and administrative expense increased $1.0 million, or 25.4%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012. The increase was driven primarily by a $0.7 million increase in employee-related expense resulting from increased headcount to support the growth of the business and the infrastructure required to support a public company, $0.2 million increase in facilities expense and $0.1 million increase in third-party professional fees. As a percentage of revenue, general and administrative expense was 10.6% for the six months ended August 31, 2012 and 15.1% for the six months ended August 31, 2013.

Acquisition- related Expense

Acquisition-related expense was $0.8 million for the three months and six months ended August 31, 2013, and there was no acquisition-related expense for the three months and six months ended August 31, 2012. This expense comprised third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of ICON. As a percentage of revenue, acquisition related expense was 4.4% for the three months ended August 31, 2013 and 2.4% for the six months ended August 31, 2013.

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Liquidity and Capital Resources

	Six Months Ended August 31,
	2013			2012
	(In thousands)
Cash and cash equivalents at the end of the period	$	12,949		$	29,479
Net cash used in operating activities		(7,383	)		(6,407	)
Net cash provided by (used in) investing activities		7,038			(15,355	)
Net cash provided by (used in) financing activities		(6,959	)		41,046

As of August 31, 2013, we had total cash, cash equivalents, short-term and long-term investments of $21.6 million, including cash and cash equivalents of $12.9 million, and short-term investments in available for sale debt securities of $3.7 million. As of August 31, 2013, we also had $4.9 million of long-term investments in available for sale debt securities.

On July 31, 2012, we received proceeds from our initial public offering of $52.3 million, net of underwriting discounts and commissions, but before deducting offering expenses.

Operating Cash Flow

Our cash flow from operating activities is significantly influenced by the amount and timing of customer payments and the amount of cash we invest in personnel and infrastructure to support the anticipated future growth of our business. Net cash used in operating activities has historically resulted from losses from operations and changes in working capital.

Net cash used in operating activities was $7.4 million for the six months ended August 31, 2013. The timing of our billings and collections relating to our sales and the timing of the payment of our liabilities have a significant impact on our cash flows. The use of cash in operating activities reflects our $(11.3) million net loss adjusted by non-cash stock-based compensation of $2.6 million, depreciation and amortization of $1.0 million and other non-cash charges of $0.1 million. This was offset by $0.2 million provided by the net change in our operating assets and liabilities. The net change in our operating assets and liabilities resulted primarily from a decrease in accounts receivable of $10.6 million due to the timing of collections from customers, increase in accounts payable and accruals of $0.8 million due to timing of payments to our suppliers, and an increase in other noncurrent liabilities due to deferred rent of $0.5 million. This was offset by a decrease in deferred revenue of $11.0 million as a consequence of the recognition of revenue for the six months ended August 31, 2013 associated with cash collected in previous periods and an increase in prepayments and other current assets of $0.7 million associated with prepayment for software and hardware maintenance expense and other receivables.

Net cash used in operating activities was $6.4 million for the six months ended August 31, 2012. The timing of our billings and collections relating to our sales and the timing of the payment of our liabilities have a significant impact on our cash flows. The use of cash in operating activities reflects our $2.2 million net income adjusted by non-cash stock-based compensation of $1.0 million and depreciation and amortization of $0.8 million. Additionally, we used $10.4 million from the net change in our operating assets and liabilities. The net change in our operating assets and liabilities resulted primarily from a decrease in deferred revenue of $9.6 million as a consequence of the recognition of revenue for the six months ended August 31, 2012 associated with cash collected in previous periods, an increase in prepayments of $0.5 million associated with software and hardware maintenance expense and a decrease in accounts payable of $0.5 million due to timing of payments to our suppliers, offset by a decrease in accounts receivable of $0.3 million due to the timing of collections from customers.

Investing Cash Flow

Historically, our primary investing activities have consisted of capital expenditures associated with expanding our cloud-based, on-demand software solutions infrastructure and growing our workforce. We invested a portion of the proceeds from our initial public offering in available for sale securities.

Net cash provided by investing activities for the six months ended August 31, 2013 was $7.0 million, which was comprised primarily of $28.9 million in proceeds from the sale and maturities of investments in available-for-sale securities, offset by $11.5 million net payment for acquisition of ICON and $10.4 million for the purchase of investments in available-for-sale securities.

Net cash used in investing activities for the six months ended August 31, 2012 was $15.4 million, which was comprised primarily of $14.3 million purchase of investments in available for sale securities, and $1.0 million of capital expenditures.

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Financing Cash Flow

Net cash used in financing activities for the six months ended August 31, 2013 was $7.0 million, which was comprised of $7.1 million payment of debt assumed from ICON, net payments of $0.9 million on our notes payable and capital lease obligation and $0.2 million of net payments under our credit facility, offset by $1.2 million in proceeds received from the exercise of stock options.

Net cash provided by financing activities for the six months ended August 31, 2012 was $41.0 million, which was comprised primarily of $52.3 million in proceeds from our initial public offering after deducting broker discounts and commissions and $0.7 million in costs paid in connection with our initial public offering. We also made net payments of $9.7 million under our credit facility and $1.7 million on our term loan. For the six months ended August 31, 2012, we received $0.7 million from the issuance of Series BB preferred stock upon the exercise of warrants and $0.2 million in proceeds received from the exercise of stock options during the period.

Adequacy of Capital Resources

We believe our existing cash, cash equivalents and investment balances, together with anticipated cash flow from operations, will be sufficient to meet our working capital and operating resource requirements for at least the next twelve months.

Our Indebtedness

We maintained a credit facility with Bridge Bank, National Association (Bridge Bank), which has provided us revolving lines of credit and term loans. The total borrowing limit under the credit facility was $26.8 million, subject to borrowing base limitations. In August 2012, we paid in full all of our outstanding borrowings under the lines of credit and the term loan. The revolving line of credit expired effective August 14, 2012 and the term loan facility was cancelled effective September 10, 2012. On October 7, 2013 the Company entered into a Business Financing Agreement for a revolving loan facility with a borrowing capacity of up to $20,000,000, with availability to be subject to a borrowing formula, and secured by the Company’s accounts receivable and contracted backlog. The revolving loan facility bears interest at a per annum rate equal to the Wall Street Journal “prime rate” minus 0.25%, with a floor for the prime rate of 3.25%. The revolving loan facility is a general obligation of the Company secured by the Company’s tangible and intangible assets, as well as a negative pledge whereby the Company agrees not to give any creditor a security interest on the Company’s intellectual property.

Our wholly-owned subsidiary in Germany maintains credit facilities with three local banks used primarily to fund working capital. The total amount available under the credit facilities is approximately $1,985,000 (€1,500,000). As of August 31, 2013, the total outstanding balance borrowed under the credit facilities is approximately $1,173,000, and it is included in accounts payable and accrued liabilities in the balance sheets.

Contractual Obligations, Commitments and Contingencies

We generally do not enter into long-term minimum purchase commitments. Our principal commitments, in addition to those related to our line of credit discussed above, consist of obligations under capital leases for equipment and furniture and operating leases for computer equipment and office space. The following table summarizes our outstanding contractual obligations:

	As of August 31, 2013
	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years
	(In thousands)
Notes payable (1)	$	473	$	237	$	236	$	—
Capital lease obligations (1)		3,596		881		2,715		—
Operating lease obligations (2)		8,649		1,246		3,850		3,553
Acquisition payable to seller (4)		5,309		—		5,309		—
Tax contingencies (3)		—		—		—		—
Total contractual obligations	$	18,027	$	2,364	$	12,110	$	3,553

⁽¹⁾ In fiscal 2013 and the six months ended August 31, 2013, we financed the purchase of certain software licenses and related support and maintenance, and payments of insurance premiums with notes payable and capital leases. The term of the notes and capital leases range from nine months to three years, and bear interest ranging from 3.03% to 13.13%.

⁽²⁾ We lease our primary office space under noncancelable operating leases with various expiration dates through 2018.

⁽³⁾ As of February 28, 2013, we had gross unrecognized tax benefits of $4.5 million and an additional $0.1 million for gross interest and penalties classified as other noncurrent liabilities in the consolidated balance sheet. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years due to uncertainties in the timing of settlement for potential tax audit outcomes. As a result, such amounts are not included in the above contractual obligations table.

⁽⁴⁾ In accordance with the share purchase agreement for the acquisition of ICON, we are contractually obliged to place in escrow $5.3 million payable to ICON’s former shareholders. The amount in escrow will be released to ICON’s former shareholders on July 31, 2014, the escrow expiration date, net of claims arising during the escrow period.

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Off-Balance Sheet Arrangements

During the six months ended August 31, 2013, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually limited purposes.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Accordingly, actual results may differ from these estimates under other assumptions or conditions.

Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We have identified below our critical accounting policies and estimates that we believe require the greatest amount of judgment. Our critical accounting policies and estimates include those related to:

• revenue recognition;

• income taxes;

• stock-based compensation;

• impairment of goodwill and other long-lived assets; and

• valuation of acquired intangibles;

We previously did not consider the valuation of acquired intangibles and impairment of goodwill and other long-lived assets as critical estimates because these were historically not material to the financial statements in the prior years. Except for the valuation of acquired intangibles and impairment of goodwill and other long-lived assets, there have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies disclosed in the Company’s audited consolidated financial statements for the fiscal year ended February 28, 2013 included in the Company’s Annual Report on Form 10-K dated April 30, 2013 as filed with the Securities and Exchange Commission.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is a result primarily of fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue financial instruments for trading purposes.

Interest Rate Risk

We had cash, cash equivalents and investments in available for sale instruments of $21.6 million as of August 31, 2013 and $47.2 million at February 28, 2013.

Our cash and cash equivalents and investments consist of cash, money market funds and fixed income investments. Our fixed income portfolio is primarily invested in corporate bonds and commercial paper. We use a professional investment management firm to manage a large portion of our invested cash. Because the majority of our portfolio consists of cash and cash equivalents, which have a relatively short maturity, our portfolio’s fair value is relatively insensitive to interest rate changes. However, our fixed income investments carry a degree of interest rate risk. Fixed income investments may have their fair market value adversely impacted by a rise in interest rates. We believe a hypothetical 10% increase in interest rates as of August 31, 2013 would have an immaterial impact on our investment portfolio.

Foreign Currency Exchange Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly the exchange rates for the Euro, the Malaysian Ringgit and the British Pound. For the six months ended August 31, 2013 and the year ended February 28, 2013, we sought to hedge the risks associated with exchange rate fluctuations through entry into forward exchange contracts. The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of our contracts outstanding as of August 31, 2013 and February 28, 2013.

	As of August 31, 2013								As of February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value
	(Dollars in thousands except average contract rates)
Foreign currency forward exchange contracts:
Euro	$	5,935			1.3	$	(63	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(5,706	)		3.1		(50	)		(2,255	)		3.1		(8	)
British Pound		(973	)		1.5		(57	)		—			—		—
Total	$	(744	)			$	(170	)	$	5,067				$	(154	)

We entered into the foreign exchange contracts with two counterparties. Typically, we have the right of offset for gains earned and losses incurred under contracts with the same counterparty, and we therefore record contracts with the same counterparty on a net basis on our balance sheet.

The following table presents a sensitivity analysis of our foreign forward exchange contract portfolio using a statistical model to estimate the potential gain or loss in fair value that could arise from hypothetical appreciation or depreciation of foreign currency.

	As of August 31, 2013
Foreign Forward Exchange Contracts	Value of Contracts Given X% Appreciation of Foreign Currency						Notional Amount Sell (Buy)			Value of Contracts Given X% Depreciation of Foreign Currency
	10%			5%						-5%			-10%
	(In thousands)
Euro	$	5,342		$	5,638		$	5,935		$	6,232		$	6,529
Malaysian Ringgit		(5,135	)		(5,421	)		(5,706	)		(5,991	)		(6,277	)
British Pound		(876	)		(924	)		(973	)		(1,022	)		(1,070	)

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	As of February 28, 2013
Foreign Forward Exchange Contracts	Value of Contracts Given X% Appreciation of Foreign Currency						Notional Amount Sell (Buy)			Value of Contracts Given X% Depreciation of Foreign Currency
	10%			5%						-5%			-10%
	(In thousands)
Euro	$	6,590		$	6,956		$	7,322		$	7,688		$	8,054
Malaysian Ringgit		(2,029	)		(2,142	)		(2,255	)		(2,367	)		(2,480	)

As our international operations continue to grow, we may choose to utilize more foreign currency forward and option contracts to manage currency exposures.

We do not use derivative financial instruments for speculative or trading purposes; however, this does not mean that we may not adopt specific hedging strategies in the future.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of August 31, 2013. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of August 31, 2013, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently engaged in any material legal proceedings.

Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties including those described below. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that affect us. If any of the following risks or others not specified below materialize, our business, financial condition, results of operations and prospects could be materially adversely affected. In that case, the trading price of our common stock could decline.

Risks Related to Our Business and Industry

We have incurred operating losses in the past and may incur operating losses in the future.

We began our operations in 2000. Throughout most of our history, we have experienced net losses and negative cash flows from operations. As of August 31, 2013 and February 28, 2013, we had an accumulated deficit of $352.5 million and $341.2 million. We expect our operating expenses to increase in the future as we expand our operations. Furthermore, as a public company, we incur legal, accounting and other expenses that we did not incur as a private company. If our revenue does not grow to offset these increased expenses, we will not be profitable. We cannot assure you that we will be able to achieve or maintain profitability. You should not consider recent revenue growth as indicative of our future performance.

If we are unable to attract new customers or sell additional products to our existing customers, our revenue growth and profitability will be adversely affected.

To increase our revenue and achieve and maintain profitability, we must regularly add new customers or sell additional solutions to our existing customers, which we plan to do. Numerous factors, however, may impede our ability to add new customers and sell additional solutions to our existing customers, including our inability to convert companies that have been referred to us by our existing network into paying customers, failure to attract and effectively train new sales and marketing personnel, failure to retain and motivate our current sales and marketing personnel, failure to develop relationships with resellers or failure to ensure the effectiveness of our marketing programs. In addition, if prospective customers do not perceive our solutions to be of sufficiently high value and quality, we will not be able to attract the number and types of new customers that we are seeking.

If we are unable to attract and enable third-party service providers, our revenue and margin growth will be adversely affected.

To enable anticipated growth of product subscriptions, we intend to utilize partners to provide integration and deployment services. This strategy depends upon successful marketing to and recruitment of partners. It also assumes successful training and transfer of the knowledge and skills required to deploy system integration and software functionality. We cannot assure the recruitment of sufficient partners to meet anticipated demand or that those partners who are recruited can be made effective substitutes for internal professional services resources.

We derive a significant portion of our revenue from a relatively small number of customers, and our growth depends on our ability to retain existing customers and add new customers.

We derive a significant percentage of our revenue from a relatively small number of customers, and the loss of any one or more of those customers for any reason, including without limitation, early termination of our contract with them could decrease our revenue and harm our current and future results of operations. For example, RIM may terminate its agreement with us upon 90 days written notice. For the six months ended August 31, 2013, our top ten customers accounted for 58.4% of our total revenue. Although our largest customers may vary from period to period, we anticipate that we will continue to depend on revenue from a relatively small number of customers.

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We encounter long sales cycles, particularly with our larger customers, and seasonality in sales, which could have an adverse effect on the amount, timing and predictability of our revenue.

Our products have lengthy sales cycles, which typically extend from four to 12 months and may in some instances take longer than one year. Potential and existing customers, particularly larger enterprises, often commit significant resources to an evaluation of available solutions and services and require us to expend substantial time and resources in connection with our sales efforts. The length of our sales cycles also varies depending on the type of customer to which we are selling, the product being sold and customer requirements. We may incur substantial sales and marketing expenses and expend significant management effort during this time, regardless of whether we make a sale. Many of the risks relating to sales processes are beyond our control, including:

• Our customers’ budgetary and scheduling constraints;

• The timing of our customers’ budget cycles and approval processes;

• Our customers’ willingness to augment or replace their currently deployed software products; and

• General economic conditions.

As a result of the lengthy and uncertain sales cycles of our products and services, it is difficult for us to predict when customers may purchase products or services from us, thereby affecting when we can recognize the associated revenue, and our results of operations may vary significantly and may be adversely affected. The length of our sales cycle makes us susceptible to having pending transactions delayed or terminated by our customers if they decide to delay or withdraw funding for information technology, projects. Our customers may decide to delay or withdraw funding for various reasons, including global economic cycles and capital market fluctuations.

In addition, we may experience seasonality in the sales of our solutions. For instance, historically, the agreements we have signed in our fiscal first quarter have had an aggregate value less than that of the agreements signed in our preceding fiscal fourth quarter. Seasonal variations in our sales may lead to significant fluctuations in our cash flows and deferred revenue on a quarterly basis. If we fail to sign a significant customer agreement in any particular quarter, then our results of operations for such quarter and for subsequent quarters may be below the expectations of securities analysts or investors, which may result in a decline in our stock price.

Our quarterly results of operations may fluctuate. As a result, we may fail to meet or exceed the expectations of investors or securities analysts which could cause our stock price to decline.

Our quarterly revenue and results of operations may fluctuate as a result of a variety of factors, many of which are outside of our control. If our quarterly revenue or results of operations fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Fluctuations in our results of operations may be due to a number of factors, including, but not limited to, those listed below:

• Demand for and market acceptance of our products;

• Our ability to retain and increase sales to customers and attract new customers;

• The timing of product deployment which determines when we can recognize the associated revenue;

• The timing and success of introductions of new solutions or upgrades by us or our competitors;

• The strength of the economy;

• Changes in our pricing policies or those of our competitors;

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• Competition, including entry into the industry by new competitors and new offerings by existing competitors;

• The impact of seasonality on our business;

• The amount and timing of expenditures related to expanding our operations, research and development or introducing new solutions; and

• Changes in the payment terms for our solutions.

Due to the foregoing factors, and the other risks discussed in this Quarterly Report on Form 10-Q, you should not rely on quarter-to-quarter comparisons of our results of operations as an indication of our future performance.

We operate in an emerging and evolving market, which may make it difficult to evaluate our business and future prospects. If this market does not develop or develops more slowly than we expect, our revenue may decline or fail to grow, and we may incur additional operating losses.

The market for trading network solutions, including our integrated platform, is in an early stage of development, and it is uncertain how rapidly this market will develop, and even if it does develop, whether our software and solutions will achieve and sustain high levels of demand and market acceptance.

Some companies may be reluctant or unwilling to use our solutions for a number of reasons, including existing investments in demand and supply network management technology. For example, supply chain management functions traditionally have been performed using purchased or licensed hardware and software implemented by each company in the supply chain. Because this traditional approach often requires significant initial investments to purchase the necessary technology and to establish systems that comply with customers’ unique requirements, suppliers may be unwilling to abandon their current options for our integrated, multi-enterprise solution.

Other factors that may limit market acceptance of our solutions include:

• Our ability to maintain high levels of customer satisfaction;

• Our ability to maintain availability of service across all users of our products;

• The price, performance and availability of competing products;

• Our ability to address confidentiality concerns about information stored outside of our customers’ controlled computing environments; and

• Concerns about data protection and confidentiality of data stored in the United States, for customers with headquarters outside of the United States.

If companies do not perceive or value the benefits of our solutions, or if companies are unwilling to accept our platform as an alternative to the traditional approach, the market for our products might not continue to develop or might develop more slowly than we expect, either of which would significantly adversely affect our revenue and growth prospects.

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Downturns in general economic and market conditions and reductions in IT spending may reduce demand for our solutions, which could negatively affect our revenue, results of operations and cash flows.

Our revenue, results of operations and cash flows depend on the overall demand for our solutions. Concerns about the systemic impact of a potential widespread recession, energy costs, geopolitical issues U.S. federal budget issues and the availability of credit have contributed to increased market volatility, decreased consumer confidence and diminished growth expectations in the U.S. economy and abroad. This in turn has resulted in reductions in IT spending by some of our customers.

Further worsening, broadening or protracted extension of the economic downturn could have a significant negative impact on our business, revenue, results of operations and cash flows. Prolonged economic slowdowns may result in customers requiring us to renegotiate existing contracts on less advantageous terms to us than those currently in place or defaulting on payments due on existing contracts.

Furthermore, during weak economic times, there is an increased risk that one or more of our customers will file for bankruptcy protection, which may adversely affect our revenue, profitability and results of operations. If a customer files for bankruptcy, we may be required to forego collection of pre-petition amounts owed and to repay amounts remitted to us during the 90-day preference period preceding the filing, which may be significant due to extended payment terms for software contract fees, and significant billings for professional services on large projects. We also face risk from international customers that file for bankruptcy protection in foreign jurisdictions, in that the outcome of the application of foreign bankruptcy laws may be more difficult to predict. In addition, we may determine that the cost of pursuing any claim may outweigh the recovery potential of such claim.

If we are unable to develop new products and services, sell our solutions into new markets or further penetrate our existing markets, our revenue will not grow as expected.

Our ability to attract new customers and increase revenue from existing customers will depend in large part on our ability to enhance and improve our solutions, to introduce new products and services in a timely manner, to sell into new markets and to further penetrate our existing markets. The success of any enhancement or new product or service depends on several factors, including the timely completion, introduction and market acceptance of the enhancement or new product or service. Any new product or service we develop or acquire may not be introduced in a timely or cost-effective manner and may not achieve the broad market acceptance necessary to generate significant revenue. Any new markets into which we attempt to sell our solutions, including new vertical markets and new countries or regions, may not be receptive. If we are unable to successfully develop or acquire new products or services, enhance our existing products or services to meet customer requirements, sell products and services into new markets or sell our products and services to additional customers in our existing markets, our revenue will not grow as expected. Moreover, we are frequently required to enhance and update our products and services as a result of changing standards and technological developments, which makes it difficult to recover the cost of development and forces us to continually qualify new products with our customers.

If we do not maintain the compatibility of our solutions with third-party applications that our customers use in their business processes, demand for our solutions could decline.

Our solutions can be used alongside a wide range of other systems, such as enterprise software systems and business software applications used by our customers in their businesses. If we do not support the continued integration of our solutions with third-party applications, including through the provision of application programming interfaces that enable data to be transferred readily between our solutions and third-party applications, demand for our solutions could decline, and we could lose sales. We will also be required to make our solutions compatible with new or additional third-party applications that are introduced into the markets that we serve. We may not be successful in making our solutions compatible with these third-party applications, which could reduce demand for our solutions. In addition, prospective customers, especially large enterprise customers, may require heavily customized features and functions unique to their business processes. If prospective customers require customized features or functions that we do not offer, then the market for our solutions will be adversely affected.

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Our inability to adapt to rapid technological change could impair our ability to remain competitive.

The industry in which we compete is characterized by rapid technological change, frequent introductions of new products and evolving industry standards. Our ability to attract new customers and increase revenue from customers will depend in significant part on our ability to anticipate industry standards and to continue to enhance existing solutions or introduce or acquire new solutions on a timely basis to keep pace with technological developments. The success of any enhancement or new solution depends on several factors, including the timely completion and market acceptance of the enhancement or new solution. Any new solution we develop or acquire might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate significant revenue. If any of our competitors implements new technologies before we are able to implement them, those competitors may be able to provide more effective solutions than ours at lower prices. Any delay or failure in the introduction of new or enhanced solutions could adversely affect our business, results of operations and financial condition.

Our solutions are complex and customers may experience difficulty in implementing or upgrading our products successfully or otherwise achieving the benefits attributable to our products.

Due to the scope and complexity of the solutions that we provide, our implementation cycle can be lengthy and unpredictable. Our products may require modification or customization and must integrate with many existing computer systems and software programs of our customers and their trading partners. This can be time-consuming and expensive for our customers and can result in delays in the implementation and deployment of our products. As a result, some customers have had, and may in the future have, difficulty implementing our products successfully or otherwise achieving the expected benefits of our products. Delayed or ineffective implementation or upgrades of our software may limit our future sales opportunities, impact revenue, delay deployment of security patches, result in customer dissatisfaction and harm our reputation.

The markets in which we participate are highly competitive, and our failure to compete successfully would make it difficult for us to add and retain customers and would reduce or impede the growth of our business.

The markets for supply chain management solutions are increasingly competitive and global. We expect competition to increase in the future both from existing competitors and new companies that may enter our markets. Increased competition could result in pricing pressure, reduced sales, lower margins or the failure of our solutions to achieve or maintain broad market acceptance. We currently face, or may face in the future, competition from:

• SaaS providers that deliver B2B information systems;

• Traditional on-premise software providers; and

• Managed service providers that combine traditional on-premise software with professional information technology services.

To remain competitive, we will need to invest continuously in software development, marketing, customer service and support and product delivery infrastructure. However, we cannot assure you that new or established competitors will not offer solutions that are superior to or lower in price than ours. We may not have sufficient resources to continue the investments in all areas of software development and marketing needed to maintain our competitive position. In addition, some of our competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing and other resources than us, which may provide them with an advantage in developing, marketing or servicing new solutions. Increased competition could reduce our market share, revenue and operating margins, increase our operating costs and otherwise adversely affect our business.

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If we are unable to manage our diverse and complex operations, our reputation in the market and our ability to generate revenue from new or existing customers may be adversely affected.

Because our operations are geographically diverse and complex, our personnel resources and infrastructure could become strained and our reputation in the market and our ability to successfully implement our business plan may be adversely affected. We have experienced a period of rapid growth in our headcount and operations. For the six months ended August 31, 2013, our employee headcount grew from 379 to 454. The growth in the size, complexity and diverse nature of our business and the expansion of our product lines and customer base have placed increased demands on our management and operations, and further growth, if any, may place additional strains on our resources in the future. Our ability to effectively compete and to manage our planned future growth will depend on, among other things, the following:

• Maintaining continuity in our senior management and key personnel;

• Increasing the productivity of our existing employees;

• Attracting, retaining, training and motivating our employees, particularly our technical and management personnel;

• Deploying our solutions using third-party systems integrators, which will require changes to our applications, documentation and operational processes;

• Improving our operational, financial and management controls; and

• Improving our information reporting systems and procedures.

If we do not manage the size, complexity and diverse nature of our business effectively, we could experience delayed software releases and longer response times for assisting our customers with implementation of our products and services, and could lack adequate resources to support our customers on an ongoing basis, any of which could adversely affect our reputation in the market, our ability to successfully implement our business plan and our ability to generate revenue from new or existing customers.

If we fail to retain our key employees, our business would be harmed and we might not be able to implement our business plan successfully.

Given the complex nature of the technology on which our business is based and the speed with which such technology advances, our future success is dependent, in large part, upon our ability to attract and retain highly qualified managerial, technical and sales personnel. In particular, Mark E. Woodward, our Chief Executive Officer, is critical to the management of our business and operations. Competition for talented personnel is intense, and we cannot be certain that we can retain our managerial, technical and sales personnel or that we can attract, assimilate or retain such personnel in the future. Our inability to attract and retain such personnel could have an adverse effect on our business, results of operations and financial condition.

Our growth is dependent upon the continued development of our direct sales force.

We believe that our future growth will depend on the continued development of our direct sales force and their ability to obtain new customers, particularly large enterprise customers, and to manage our existing customer base. Our ability to achieve significant growth in revenue in the future will depend, in large part, on our success in recruiting, training and retaining a sufficient number of direct sales personnel. New sales personnel require significant training and may, in some cases, take more than a year before becoming productive, if at all. If we are unable to hire and develop sufficient numbers of productive direct sales personnel, sales of our software and services will suffer and our growth will be impeded.

If we experience significant fluctuations in our rate of anticipated growth and fail to balance our expenses with our revenue forecasts, our results could be harmed.

Due to our evolving business model and the unpredictability of future general economic and financial market conditions, we may not be able to accurately forecast our rate of growth. We plan our expense levels and investment on estimates of future revenue and future anticipated rate of growth. We may not be able to adjust our spending quickly enough if the addition of new subscriptions or the renewal rate for existing subscriptions falls short of our expectations. As a result, we expect that our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis. We believe that period to period comparisons of our revenues, operating results and cash flows may not be meaningful and should not be relied upon as an indication of future performance.

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Interruptions or delays in the services provided by third-party data centers and/or internet service providers could impair the delivery of our solutions and our business could suffer.

In North America, we host our solutions in Equinix co-location facilities in Sunnyvale and San Jose, California and a suburb of Chicago, Illinois. Exostar hosts our solutions for the aerospace and defense industry in third-party data centers and with third-party internet service providers outside of Washington, D.C. All of our solutions reside on hardware owned or leased and operated by us and Exostar in these locations. In China, we host our solutions in a data center in Shanghai operated by Shanghai Telecom. Our operations depend on the protection of the equipment and information we store in these third-party data centers and which third-party internet service providers transmit against damage or service interruptions that may be caused by fire, flood, severe storm, earthquake, power loss, telecommunications failures, unauthorized intrusion, computer viruses and disabling devices, natural disasters, war, criminal act, military action, terrorist attack and other similar events beyond our control. A prolonged service disruption affecting our solutions for any of the foregoing reasons could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers from whom we receive recurring revenue or otherwise adversely affect our business. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data centers we use.

Our solutions are accessed by a large number of customers often at the same time. As we continue to expand the number of our customers and solutions available to our customers, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in service. In addition, the failure of our third-party data centers or third-party internet service providers to meet our capacity requirements could result in interruptions or delays in access to our solutions or impede our ability to scale our operations. In the event that our data center or third-party internet service provider arrangements are terminated, or there is a lapse of service, interruption of internet service provider connectivity, or damage to such facilities, we could experience interruptions in access to our solutions as well as delays and additional expense in arranging new facilities and services.

We may experience service failures or interruptions due to defects in the software, infrastructure, third-party components or processes that comprise our existing or new solutions, any of which could adversely affect our business.

Our products may contain undetected defects in the software, infrastructure, third-party components or processes that are part of the solutions we provide. If these defects lead to service failures after introduction of a solution or an upgrade to the solution, we could experience delays or lost revenue during the period required to correct the cause of the defects. We cannot be certain that defects will not be found in new solutions or upgraded solutions, resulting in loss of, or delay in, market acceptance, which could have an adverse effect on our business, results of operations and financial condition.

Because customers use our solutions for critical business processes, any defect in our solutions, any disruption to our solutions or any error in execution could cause recurring revenue customers to cancel their contracts with us, prevent potential customers from purchasing our solutions and harm our reputation. Although our contracts with our customers limit our liability to our customers for these defects, disruptions or errors, we nonetheless could be subject to litigation for actual or alleged losses to our customers’ businesses, which may require us to spend significant time and money in litigation or arbitration or to pay significant settlements or damages. We do not currently maintain any warranty reserves. Defending a lawsuit, regardless of its merit, could be costly and divert management’s attention and could cause our business to suffer.

The insurers under our existing liability insurance policy could deny coverage of a future claim that results from an error or defect in our technology or a resulting disruption in our solutions, or our existing liability insurance might not be adequate to cover all of the damages and other costs of such a claim. Moreover, we cannot assure you that our current liability insurance coverage will continue to be available to us on acceptable terms or at all. The successful assertion against us of one or more large claims that exceeds our insurance coverage, or the occurrence of changes in our liability insurance policy, including an increase in premiums or imposition of large deductible or co-insurance requirements, could have an adverse effect on our business, financial condition and results of operations. Even if we succeed in litigation with respect to a claim, we are likely to incur substantial costs and our management’s attention will be diverted from our operations.

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We may be required to defer recognition of some of our revenue, which may adversely affect our financial results in any given period.

We may be required to defer recognition of revenue for a significant period of time after entering into an agreement due to a variety of factors, including whether:

• The transaction involves both current on-demand software solutions and on-demand software solutions that are under development;

• The customer requires significant modifications, configurations or complex interfaces that could delay delivery or acceptance of our solutions;

• The transaction involves extended payment terms;

• The transaction involves acceptance criteria or other terms that may delay revenue recognition; or

• The transaction involves performance milestones or payment terms that depend upon the resolution of contingencies.

Because of these factors and other specific revenue recognition requirements under generally accepted accounting principles in the United States, or GAAP, we must have very precise terms in our contracts in order to recognize revenue when we initially provide access to our software solutions or perform services. Although we strive to enter into agreements that meet the criteria under GAAP for current revenue recognition on delivered elements, our agreements are often subject to negotiation and revision based on the demands of our customers. The final terms of our agreements sometimes result in deferred revenue recognition well after the time of delivery, which may adversely affect our financial results in any given period. In addition, because of prevailing economic conditions, more customers may require extended payment terms, shorter term contracts or alternative licensing arrangements that could reduce the amount of revenue we recognize upon delivery of our solutions and could adversely affect our short-term profitability.

Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition. In some instances, we could reasonably use different estimates and assumptions, and changes in estimates are likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.

If we are unable to substantially utilize our net operating loss carryforward, our future cash tax liability may increase.

As of February 28, 2013, our net operating loss, or NOL, carryforward amounts for U.S. federal income and state tax purposes were approximately $318.3 million and $100.3 million. Under Section 382 of the Internal Revenue Code, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders (generally 5% stockholders, applying certain look-through and aggregation rules) increases by more than 50% over such stockholders’ lowest percentage ownership during the testing period (generally three years). We believe that there was an ownership change in a prior year, which resulted in an annual NOL limitation. In addition, new issuances of our common stock, which is within our control, and purchases of our common stock in amounts greater than specified levels, which will be beyond our control, could create an additional limitation on our ability to utilize our NOLs for tax purposes in the future. Limitations imposed on our ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs. Furthermore, we may not be able to generate sufficient taxable income to utilize our NOLs before they expire. If any of these events occur, we may not derive some or all of the expected benefits from our NOLs. In addition, at the state level there may be periods during which the use of NOLs is suspended or otherwise limited, which would accelerate or may permanently increase state taxes owed.

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A failure to protect the integrity and security of our customers’ information could expose us to litigation, materially damage our reputation and harm our business. Furthermore, the unanticipated costs of protecting against such a failure could adversely affect our results of operations.

Our business involves the collection and use of confidential information of our customers and their trading partners. We cannot assure you that our efforts to protect this confidential information will be successful. If any compromise of this information security were to occur, we could be subject to legal claims and government action, experience an adverse effect on our reputation and need to incur significant additional costs to protect against similar information security breaches in the future, each of which could adversely affect our financial condition, results of operations and growth prospects. In addition, because of the critical nature of data security, any perceived breach of our security measures could cause existing or potential customers not to use our solutions and could harm our reputation.

Evolving regulation of the Internet may increase our expenditures related to compliance efforts, which may adversely affect our financial condition.

As Internet commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. We are particularly sensitive to these risks because the Internet and cloud computing are critical components of our business model. For example, we believe that increased regulation is likely in the area of data privacy on the Internet, and laws and regulations applying to the solicitation, collection, processing or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing demand for solutions accessed via the Internet and restricting our ability to store, process and share data with our clients via the Internet. In addition, taxation of services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet may be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based services, which could harm our business.

If we fail to protect our intellectual property and proprietary rights adequately, our business could be adversely affected.

We believe that proprietary technology is essential to establishing and maintaining our leadership position. We seek to protect our intellectual property through trade secrets, copyrights, confidentiality, non-compete and nondisclosure agreements, patents, trademarks, domain names and other measures, some of which afford only limited protection. We also rely on patent, trademark, trade secret and copyright laws to protect our intellectual property. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our technology or to obtain and use information that we regard as proprietary. We cannot assure you that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar or superior technology or design around our intellectual property. In addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of the United States. Intellectual property protections may also be unavailable, limited or difficult to enforce in some countries, which could make it easier for competitors to capture market share. Our failure to adequately protect our intellectual property and proprietary rights could adversely affect our business, financial condition and results of operations.

An assertion by a third party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses which could harm our business.

The industries in which we compete are characterized by the existence of a large number of patents, copyrights, trademarks and trade secrets and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. As we seek to extend our solutions, we could be constrained by the intellectual property rights of others. In addition, our customer contracts require us to indemnify our customers against certain liabilities they may incur as a result of our infringement of any third-party intellectual property.

We might not prevail in any intellectual property infringement litigation given the complex technical issues and inherent uncertainties in such litigation. Defending such claims, regardless of their merit, could be time-consuming and distracting to management, result in costly litigation or settlement, cause development delays or require us to enter into royalty or licensing agreements. Furthermore, if our solutions exceed the scope of in-bound licenses or violate any third-party proprietary rights, we could be required to withdraw those solutions from the market, re-develop those solutions or seek to obtain licenses from third parties, which might not be available on reasonable terms or at all. Any efforts to re-develop our solutions, obtain licenses from third parties on favorable terms or license a substitute technology might not be successful and, in any case, might substantially increase our costs and harm our business, financial condition and results of operations. If we were compelled to withdraw any of our solutions from the market, our business, financial condition and results of operations could be harmed.

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The use of open source software in our products may expose us to additional risks and harm our intellectual property.

We incorporate open source software into our platform. Given the nature of open source software, third parties might assert copyright and other intellectual property infringement claims against us based on our use of certain open source software programs. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our solutions. In that event, we could be required to seek licenses from third parties in order to continue offering our solutions, to re-develop our solutions, to discontinue sales of our solutions or to release our proprietary software code under the terms of an open source license, any of which could adversely affect our business.

Some of our products use or incorporate software that is subject to one or more open source licenses. Open source software is typically freely accessible, usable and modifiable. Certain open source software licenses require a user who intends to distribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software. In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on unfavorable terms or at no cost. This can subject previously proprietary software to open source license terms.

While we monitor the use of all open source software in our products, processes and technology and try to ensure that no open source software is used in such a way as to require us to disclose the source code to the related product or solution when we do not wish to do so, such use may have inadvertently occurred in deploying our proprietary solutions. Additionally, if a third-party software provider has incorporated certain types of open source software into software we license from such third party for our products and solutions, we could, under certain circumstances, be required to disclose the source code to our products and solutions. This could harm our intellectual property position and have a material adverse effect on our business, results of operations and financial condition.

Our strategy has included and will continue to include pursuing acquisitions and our potential inability to successfully integrate newly-acquired companies or businesses may adversely affect our financial results.

We believe part of our growth will be driven by acquisitions of other companies or their businesses. We recently completed the acquisition of ICON, our largest transaction to date. Our acquisitions, including ICON, entail a high degree of risk and may not generate the financial returns we expect. Any acquisitions we complete will give rise to risks, including:

• Incurring significantly higher than anticipated capital expenditures and operating expenses;

• Failing to assimilate the operations and personnel or failing to retain the key personnel of the acquired company or business;

• Failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies into our solutions;

• Disrupting our ongoing business;

• Incurring significant accounting charges;

• Dissipating our management resources;

• Failing to maintain uniform standards, controls and policies;

• Impairing relationships with employees and customers as a result of changes in management;

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• Finding that the acquired company, asset or technology does not further our business strategy, that we overpaid for the company, asset or technology or that we may be required to write off acquired assets or investments partially or entirely;

• Not realizing the expected synergies of the transaction;

• Facing delays in customer purchases due to difficulty in retaining customers of acquired businesses;

• Exposure to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and

• An inability to generate sufficient revenue from acquisitions to offset the associated acquisition costs.

Fully integrating an acquired company or business into our operations may take a significant amount of time. We cannot assure you that we will be successful in overcoming these risks or any other problems encountered with acquisitions. To the extent we do not successfully avoid or overcome the risks or problems related to any acquisitions, our results of operations and financial condition could be adversely affected. Acquisitions also could impact our financial position and capital needs, and could cause substantial fluctuations in our quarterly and annual results of operations. Acquisitions could include significant goodwill and intangible assets, which may result in future impairment charges that would reduce our stated earnings. We may incur significant costs in our efforts to engage in strategic transactions and these expenditures may not result in successful acquisitions.

Future acquisitions of technologies or companies, which are paid for partially or entirely through the issuance of stock or stock rights, could dilute the ownership of our existing stockholders.

We expect that the consideration we might pay for any future acquisitions of companies or technologies could include stock, rights to purchase stock, cash or some combination of the foregoing. In July 2013, we issued 451,593 shares of our common stock as partial consideration in connection with the acquisition of ICON. If we issue stock or rights to purchase stock in connection with future acquisitions, net income (loss) per share and then-existing holders of our common stock may experience dilution.

Mergers or other strategic transactions involving our competitors could weaken our competitive position, which could harm our results of operations.

Our industry is highly fragmented, and we believe it is likely that some of our existing competitors will consolidate or will be acquired. In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with systems integrators, third-party consulting firms or other parties. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could have a material adverse effect on our business, results of operations and financial condition.

We may not receive significant revenue as a result of our current research and development efforts.

We have made and expect to continue to make significant investments in research and development and related product opportunities. For the six months ended August 31, 2013, we spent $8.6 million on research and development expenses. High levels of expenditures for research and development could adversely affect our results of operations if not offset by corresponding future revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, it is difficult to estimate when, if ever, we will receive significant revenue as a result of these investments.

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We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our results of operations and our ability to attract and retain qualified executives and board members.

As a public company, we incur legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), as well as rules implemented by the Securities and Exchange Commission (“SEC”), the NASDAQ Stock Market (“NASDAQ”), and other applicable securities or exchange-related rules and regulations. In addition, our management team also has to adapt to the requirements of being a public company. We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

The increased costs associated with operating as a public company decreases our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management’s attention from other business concerns, our results of operations could be adversely effected.

However, for as long as we remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We will remain an “emerging growth company” for up to five years, although we would cease to be an “emerging growth company” prior to such time if we have more than $1.0 billion in annual revenue, more than $700 million in market value of our common stock is held by non-affiliates or we issue more than $1.0 billion of non-convertible debt over a three-year period.

As a public company, it is more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

We rely significantly on recurring revenue, which may decline or fail to be renewed, and our future results of operations could be harmed.

Our revenue from subscriptions to our software and software-related support services accounted for approximately 76.5% of our total revenue for the six months ended August 31, 2013. Revenue from our subscriptions is recognized over the contractual term of the license, which is typically three to five years, and is generally recurring in nature. Sales of new or recurring subscriptions and software-related support service contracts and renewals after expiration of the initial term may decline or fluctuate as a result of a number of factors, including end customers’ level of satisfaction with our software solutions, the prices of our software solutions, the prices of products and services offered by our competitors or reductions in our customers’ spending levels. A software industry-wide movement towards shorter contractual license terms led by other SaaS providers, which competitive pressures may compel us to follow, could lead to increased volatility and diminished visibility into future recurring revenue. If our sales of new or recurring subscriptions and software related support service contracts decline, our revenue and revenue growth may decline, and our business will suffer.

Because we recognize certain revenue from subscriptions and support services over the term of the relevant service period, downturns or upturns in sales are not immediately fully reflected in our results of operations.

We recognize recurring subscriptions and software-related support services revenue monthly over the term of the relevant service period, which is typically three years. As a result, much of the revenue we report each quarter is the recognition of deferred revenue from recurring subscriptions and software-related support service contracts entered into during previous quarters. Consequently, a decline in new or renewed recurring subscriptions and software-related support service contracts in any one quarter will not be fully reflected in revenue in that quarter, but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our recurring subscriptions and software-related support services are not reflected in full in our results of operations until future periods. Revenue from our recurring subscriptions and software-related support services also makes it difficult for us to rapidly increase our revenue through additional service sales in any period, as revenue from new and renewal software-related service contracts must be recognized over the applicable service period.

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Our failure to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies in the future could reduce our ability to compete successfully and adversely affect our results of operations.

We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing on favorable terms, if at all. If we raise additional equity financing, our security holders may experience significant dilution of their ownership interests and the value of shares of our common stock could decline. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. If we need additional capital and cannot raise it on acceptable terms, if at all, we may not be able to, among other things:

• Develop and enhance our solutions;

• Continue to expand our technology development, sales and marketing organizations;

• Hire, train and retain employees;

• Respond to competitive pressures or unanticipated working capital requirements; or

• Pursue acquisition opportunities.

Our inability to do any of the foregoing could reduce our ability to compete successfully and adversely affect our results of operations.

Because our long-term success depends, in part, on our ability to expand the sales of our solutions to customers located outside of the United States, our business will be susceptible to risks associated with international operations.

We have limited experience operating in foreign jurisdictions. Conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. Customers in countries outside of the United States accounted for 36.0% of our total revenue for the fiscal year ended February 28, 2013 and 22.8% of our total revenue for the six months ended August 31, 2013. The decrease was due to revenue associated with a contract amendment that was accelerated into the three months ended August 31, 2012, which would have been recognized in the remainder of fiscal 2013 through fiscal 2015 as discussed in the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations, and timing of deployment of professional services. Our limited experience in operating our business outside of the United States increases the risk that our current and any future international expansion efforts will not be successful. Conducting international operations subjects us to new risks that, generally, we have not faced in the United States, including:

• Fluctuations in currency exchange rates;

• Unexpected changes in foreign regulatory requirements;

• Longer accounts receivable payment cycles and difficulties in collecting accounts receivable;

• Difficulties in managing and staffing international operations, including differences in labor laws;

• Potentially adverse tax consequences, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings;

• Localization of our solutions, including translation into foreign languages and associated expenses;

• The burdens of complying with a wide variety of foreign laws and different legal standards, including laws and regulations related to privacy and data security;

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• Requirements for regional hosting of customer solutions and data, which may require additional capital expenditures necessary to set up new data centers;

• Increased financial accounting and reporting burdens and complexities;

• Political, social and economic instability abroad, terrorist attacks and security concerns in general; and

• Reduced or varied protection for intellectual property rights in some countries.

The occurrence of any one of these risks could negatively affect our international business and, consequently, our results of operations generally. Additionally, operating in international markets also requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing, acquiring or integrating operations in other countries will produce desired levels of revenue or profitability.

From time to time, we may become defendants in legal proceedings as to which we are unable to assess our exposure and which could become significant liabilities in the event of an adverse judgment.

We may become defendants in legal proceedings from time to time. Companies in our industry have been subject to claims related to patent infringement and product liability, as well as contract and employment-related claims. We may not be able to accurately assess the risk related to these suits, and we may be unable to accurately assess our level of exposure.

We are required to comply with U.S. export control laws and regulations. Noncompliance with those laws and regulations could have a material adverse effect on our business.

Our solutions are subject to U.S. export controls and we incorporate encryption technology into certain of our solutions. These encrypted solutions and the underlying technology may be exported outside the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations, including the filing of an encryption registration. U.S. export control laws and economic sanctions prohibit the shipment of certain solutions and services to U.S. embargoed or sanctioned countries, governments and persons and complying with export control and sanctions regulations for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Penalties for violations of the U.S. export control laws include fines of up to $250,000 or twice the value of the transaction, whichever is greater, per violation, the possible loss of export or import privileges and criminal action for knowing or willful violations.

Further, if our operating partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, become the subject of government investigations or penalties, and incur reputational harm.

In addition, various countries regulate the import of certain encryption technology, including import permitting and licensing requirements, and have enacted laws that could limit our ability to sell our solutions or could limit our customers’ ability to implement our solutions in those countries. Changes in our solutions or changes in export and import regulations may create delays in the introduction of our solutions in international markets, prevent our customers with international operations from deploying our solutions globally or, in some cases, prevent the export or import of our solutions to certain countries, governments or persons altogether. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our solutions by, or in our decreased ability to export or sell our solutions to, existing or potential customers with international operations. Any decreased use of our solutions or limitation on our ability to export or sell our solutions would likely adversely affect our business, financial condition and results of operations.

Our facilities in California are located near known earthquake faults, and the occurrence of an earthquake or other catastrophic disaster could cause damage to our facilities and equipment, which could negatively impact our operations.

Our facilities in the San Francisco Bay Area are located near known earthquake fault zones and are vulnerable to damage from earthquakes. We are also vulnerable to damage from other types of disasters, including fire, floods, power loss, communications failures and similar events. If any disaster were to occur, our ability to operate our business at our facilities would be seriously, or potentially completely, impaired. The insurance we maintain may not be adequate to cover our losses resulting from disasters or other business interruptions. Accordingly, an earthquake or other disaster could materially and adversely harm our ability to conduct business.

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We may be subject to additional tax liabilities.

We are subject to income, sales, use, value added and other taxes in the United States and other countries in which we conduct business, which such laws and rates vary greatly by jurisdiction. Certain jurisdictions in which we do not collect sales, use, value added or other taxes on our sales may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future. Significant judgment is required in determining our worldwide provision for income taxes. These determinations are highly complex and require detailed analysis of the available information and applicable statutes and regulatory materials. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and accruals. If we receive an adverse ruling as a result of an audit, or we unilaterally determine that we have misinterpreted provisions of the tax regulations to which we are subject, there could be a material effect on our tax provision, net income or cash flows in the period or periods for which that determination is made. In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may be subject to additional tax liability (including penalties and interest) for a particular year for extended periods of time.

Changes in existing financial accounting standards or practices, or taxation rules or practices, may adversely affect our results of operations.

Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practice could have a significant adverse effect on our results of operations or the manner in which we conduct our business. Further, such changes could potentially affect our reporting of transactions completed before such changes are effective.

Risks Relating to Owning Our Common Stock

Our share price may be volatile.

The market price of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

• Actual or anticipated fluctuations in our financial condition and results of operations;

• Overall conditions in our industry and market;

• Addition or loss of significant customers;

• Changes in laws or regulations applicable to our products;

• Actual or anticipated changes in our growth rate relative to our competitors;

• Announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

• Additions or departures of key personnel;

• Competition from existing products or new products that may emerge;

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• Issuance of new or updated research or reports by securities analysts;

• Fluctuations in the valuation of companies perceived by investors to be comparable to us;

• Disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies;

• Sales of our common stock by us or our stockholders;

• Share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

• The expiration of contractual lock-up agreements with our executive officers, directors and stockholders; and

• General economic and market conditions.

Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our common stock will depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Future sales of our common stock in the public market could cause our share price to fall.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. In addition, certain holders of our shares of common stock will be entitled to rights with respect to registration of such shares under the Securities Act pursuant to a registration rights agreement between such holders and us and pursuant to the acquisition agreement between us and ICON. If such holders, by exercising their registration rights, sell a large number of shares, the market price for our common stock could be adversely affected. If we file a registration statement for the purpose of selling additional shares to raise capital and are required to include shares held by these holders pursuant to the exercise of their registration rights, our ability to raise capital may be impaired.

All of the common stock sold in our IPO in July 2012 is freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act.

We filed a registration statement on Form S-8 under the Securities Act to register shares for issuance under our 2003 Stock Plan and 2012 Equity Compensation Plan. Our 2012 Equity Compensation Plan provides for automatic increases in the shares reserved for issuance under the plan which could result in additional dilution to our stockholders. These shares can be freely sold in the public market upon issuance and vesting, subject to a lock-up period and other restrictions provided under the terms of the applicable plan and/or the option agreements entered into with option holders.

We may also issue shares of our common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

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As a result of becoming a public company, we are obligated to develop and maintain a system of effective internal controls over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report we file with the SEC. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our auditors have issued an attestation report on effectiveness of our internal controls. However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act if we take advantage of the exemptions available to us through the JOBS Act.

We are in the very early stages of the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to remediate future material weaknesses, or to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our common stock.

We are an “emerging growth company” and we cannot be certain whether the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual non-binding advisory vote on executive compensation and nonbinding stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may become more volatile.

In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

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Our directors, executive officers and principal stockholders have substantial control over us and could delay or prevent a change in corporate control.

As of August 31, 2013, our executive officers and directors, and entities that are affiliated with them, beneficially owned (as determined in accordance with the rules of the SEC) an aggregate of 28.0% of our outstanding common stock. As a result, these stockholders, acting together, have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, acting together, would have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by:

• Delaying, deferring or preventing a change in corporate control;

• Impeding a merger, consolidation, takeover or other business combination involving us; or

• Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

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Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our amended and restated certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and bylaws include provisions that:

• Authorize our board of directors to issue, without further action by the stockholders up to 10,000,000 shares of undesignated preferred stock;

• Require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

• Specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of the Board, the Chief Executive Officer or the President;

• Establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

• Provide that directors may be removed only for cause;

• Provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

• Establish that our board of directors is divided into three classes — Class I, Class II and Class III — with each class serving staggered terms; and

• Require a super-majority of votes to amend certain of the above-mentioned provisions.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control. These provisions may also frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock.

Any provision of our amended and restated certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

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We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

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

On July 30, 2013, the Company issued 451,593 shares of Company common stock in connection with the acquisition of ICON, in a private transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(2) and/or Regulation S under the Securities Act. See Note 3, “Acquisition,” of Notes to Condensed Consolidated Financial Statements for further details on the transaction.

Item 6. Exhibits.

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Quarterly Report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 10, 2013	E2OPEN, INC.
	By:	/s/ Mark E. Woodward
		Mark E. Woodward
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: October 10, 2013	By:	/s/ Peter J. Maloney
		Peter J. Maloney
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit Number	Description
10.1*	Share Purchase Agreement between ICON-SCM AG and the Company, dated July 30, 2013.
31.1*	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1* (1)	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS†	XBRL Instance Document
101.SCH†	XBRL Taxonomy Schema Linkbase Document
101.CAL†	XBRL Taxonomy Calculation Linkbase Document
101.DEF†	XBRL Taxonomy Definition Linkbase Document
101.LAB†	XBRL Taxonomy Labels Linkbase Document
101.PRE†	XBRL Taxonomy Presentation Linkbase Document

* Filed herewith.

† In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise are not subject to liability under these sections.

(1) The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-10.1

Exhibit 10.1

EXECUTION VERSION

SHARE PURCHASE AGREEMENT

BY AND AMONG E2OPEN, INC.,

ICON-SCM AG,

ICON GESELLSCHAFT FÜR SUPPLY CHAIN MANAGEMENT MBH,

DR. MICHAEL KEPPLER AND

DR. KURT MANNCHEN

DATED AS OF JULY 30, 2013

TABLE OF CONTENTS

			Page
ARTICLE 1 PURCHASE AND SALE OF ALL SHARES IN THE COMPANY				2
	1.1	Purchase and Sale of Company Capital Stock		2
	1.2	Closing		2
	1.3	RESERVED		3
	1.4	Escrow		3
	1.5	Exchange Procedures		3
	1.6	Shares of Purchaser’s Common Stock		3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY, SELLER AND THE FOUNDERS				4
	2.1	Representations and Warranties		4
	2.2	Organization, Good Standing and Qualification		4
	2.3	Capitalization and Voting Rights		4
	2.4	Authorization		5
	2.5	Noncontravention		6
	2.6	Governmental Consents and Permits		6
	2.7	Litigation		6
	2.8	Intellectual Property		7
	2.9	Compliance with Other Instruments		11
	2.10	Agreements; Action		11
	2.11	Taxes		11
	2.12	Corporate Documents		13
	2.13	Title to Property and Assets		13
	2.14	Financial Statements		13
	2.15	Absence of Certain Changes; Undisclosed Liabilities		14
	2.16	Employee Benefit Plans		15
	2.17	Employee Matters		18
	2.18	Insurance		19
	2.19	Compliance with Laws; Certain Business Practices		20
	2.20	Minute Books		21
	2.21	Customers		21
	2.22	Material Contracts		22
	2.23	Property		24
	2.24	Brokers’ Fees; Transaction Expenses		25
	2.25	Investor Representations		25
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER				27
	3.1	Organization and Power		27
	3.2	Authorization; Enforceability		27
	3.3	Noncontravention		27
	3.4	Sufficient Funds		28
	3.5	Absence of Litigation		28
	3.6	Access to Information		28
	3.7	No Government Review		28
	3.8	Investment Experience		28

-i-

ARTICLE 4 ADDITIONAL AGREEMENTS			30
	4.1	Payoff Letters	30
	4.2	Tax Matters	30
	4.3	Certain Taxes and Fees	31
	4.4	Release of Claims	31
	4.5	Section 280G	33
ARTICLE 5 CLOSING CONDITIONS			33
	5.1	Conditions to Obligations of Each Party	33
	5.2	Additional Conditions to Obligations of the Company, Seller and the Founders	33
	5.3	Additional Conditions to the Obligations of Purchaser	34
ARTICLE 6 SURVIVAL, ESCROW FUND AND INDEMNIFICATION			35
	6.1	Survival	35
	6.2	Escrow Fund	36
	6.3	Indemnification	36
	6.4	Limitations on Indemnification	37
	6.5	Escrow Claim Period	39
	6.6	Claims for Indemnification	39
	6.7	Objections to and Payment of Claims	39
	6.8	Resolution of Objections to Claims	40
	6.9	Third-Party Claims	41
ARTICLE 7 GENERAL PROVISIONS			41
	7.1	Certain Interpretations	41
	7.2	Assignment	42
	7.3	Notices	42
	7.4	Confidentiality	43
	7.5	Public Disclosure	43
	7.6	Entire Agreement	44
	7.7	No Third Party Beneficiaries	44
	7.8	Specific Performance and Other Remedies	44
	7.9	Severability	44
	7.10	Governing Law	44
	7.11	Dispute Resolution/Mediation/Jurisdiction. The Parties agree that they will, prior to commencing any litigation, attempt in good faith, to resolve any dispute or conflict by mediation as set forth in this Section 7.11	44
	7.12	Waiver of Jury Trial	45
	7.13	USA Patriot Act	46
	7.14	Counterparts	46

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EXHIBITS

Exhibit A - Form of Founder Non-Competition Agreement

Exhibit B - Escrow Agreement

Exhibit C - Form of Legal Opinion

ANNEXES

Annex A - Definitions

SCHEDULES

Schedule 4.1 - Holders of Company Indebtedness

Schedule Error! Reference source not found. - Director and Officer Indemnification Agreements

Schedule 5.3(b)(1) - Third Party Consents

APPENDICES

Appendix A - List of Agreements

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SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT (the “Agreement”) dated as of July 30, 2013 (the “Agreement Date”) is by and among E2OPEN, INC., a Delaware corporation (“Purchaser”), ICON-SCM AG, a German stock corporation (the “Company”), ICON GESELLSCHAFT FÜR SUPPLY CHAIN MANAGEMENT MBH, a German limited liability company (“Seller”) and Drs. Michael Keppler and Kurt Mannchen (the “Founders”). All capitalized terms that are used but not defined herein shall have the respective meaning ascribed thereto in Annex A.

RECITALS

A. Seller owns legal and beneficial title to two hundred and fifty thousand (250,000) shares of Company Common Stock representing one hundred percent (100%) of the issued and outstanding Company Capital Stock and believe it is in their best interests and the boards of directors of each of Purchaser and the Company believe it is advisable and in the best interests of each corporation and its respective shareholders that Purchaser acquire the Company through the purchase of all of the Company Capital Stock, in accordance with the terms and conditions of this Agreement.

B. Subject to the terms and conditions of this Agreement, all issued and outstanding Company Capital Stock will be purchased by Purchaser for the consideration set forth herein.

C. Seller is the owner of and has good and valid title to the Company Capital Stock, free and clear of any encumbrances or liens, and Seller is the sole shareholder of the Company.

D. Concurrently with the execution and delivery of this Agreement by the Parties hereto, as a material inducement to Purchaser to enter into this Agreement, each Founder shall enter into a Non-Competition and Non-Solicitation Agreement with Purchaser in the form attached hereto as Exhibit A (collectively, the “Founder Non-Competition Agreements”).

E. Concurrently with the execution of this Agreement, and as material inducement to Purchaser to enter into this Agreement, Purchaser, Seller and J.P. Morgan (the “Escrow Agent”) shall enter into an escrow agreement substantially in the form attached hereto as Exhibit B (with such changes as the Escrow Agent may reasonably request and as are mutually approved by Purchaser and Seller, such approval to not be unreasonably withheld, delayed or conditioned, the “Escrow Agreement”), pursuant to which a portion of the aggregate merger consideration shall be placed in an escrow account to secure the obligations set forth in Article 6 hereof.

F. The Company and Seller, on the one hand, and Purchaser, on the other hand, desire to make certain representations, warranties, covenants and other agreements in connection with the purchase of Company Capital Stock.

NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF ALL SHARES IN THE COMPANY

1.1 Purchase and Sale of Company Capital Stock. Upon the terms and subject to the conditions of this Agreement, Seller hereby sells to Purchaser, and Purchaser hereby purchases and acquires, any and all rights, title and interest in and to all Company Capital Stock owned beneficially, of record or otherwise by Seller from and after the Agreement Date, free and clear of all Encumbrances and with the benefit of all rights of whatsoever nature attaching or accruing to such Company Capital Stock, including all rights to any dividends and distributions declared, paid or made in respect of such Company Capital Stock on or after the Agreement Date. Effective as of the Closing, and subject to Purchaser’s performance of its obligations and conditions under this Agreement, Seller hereby conveys, assigns and transfers any and all rights, title and interest in and to all Company Capital Stock owned by Seller to Purchaser, and Purchaser assumes such Company Capital Stock and accepts the assignment and transfer of all such Company Capital Stock. With respect to the purchase and sale of Company Capital Stock provided for in this Agreement, Seller waives all rights of pre-emption or first refusal or other rights of or restrictions on the transfer of any of the Company Capital Stock conferred on such Seller by the Charter Documents or any Contract.

(a) At the Closing, Seller shall become entitled to receive, without interest:

(1) the Stock Consideration shall have a value as of the Closing equal to €6,666,667 of Purchaser’s Common Stock, calculated in accordance with the definition of Stock Consideration (the “Shares”);

(2) an amount equal to €9,333,333 (the “Cash Consideration”); and

(3) an amount equal to the remaining Escrow Amount (originally €4,000,000; see definition of Escrow Fund), payable solely in cash in accordance with Section 1.4(b).

(b) For the avoidance of doubt, the net consideration received by Seller shall be equal to €20,000,000 as set forth above.The right of Seller to receive each Future Payment pursuant to Section 1.1(a), if any, is an integral part of the consideration payable to Seller in connection with the Transactions. The rights to receive such Future Payments will not be represented by any form of certificate, are not transferable, except by operation of Law, and do not constitute an equity or ownership interest in, or rights as a security holder of, the Company or Purchaser. No interest shall be payable as additional consideration with respect to the Final Cash Consideration or any of the Future Payments, except and to the extent that Purchaser is past due with respect to such payment.

1.2 Closing. Upon the satisfaction or waiver of the conditions set forth in Article 5, the Parties shall cause the closing of the Transactions (the “Closing”) on the Agreement Date. The Closing shall take place at the offices of Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304 or at such other location as the Parties agree. The date on which the Closing occurs is herein referred to as the “Closing Date.” All acts and proceedings to be taken and all documents to be executed and delivered by the Parties at the Closing will be deemed to have been taken and executed simultaneously, and, except as permitted hereunder, no acts or proceedings will be deemed taken nor any documents executed or delivered until all have been taken, executed and delivered.

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1.3 RESERVED.

1.4 Escrow.

(a) As promptly as practicable (but in any event within three Business Days) after the Closing Date, Purchaser shall deposit the Escrow Amount with the Escrow Agent by wire transfer of immediately available funds, the Escrow Amount, to be held by the Escrow Agent in the Escrow Fund.

(b) Subject to the terms and conditions of the Escrow Agreement, in the event that an Escrow Payment is to be released for the benefit of Seller, Seller shall deliver to Purchaser a Future Payment Spreadsheet with respect to the Escrow Payment and as promptly as practicable (but in any event within three Business Days) following its receipt of such Future Payment Spreadsheet, Purchaser and Seller shall jointly instruct the Escrow Agent to deposit with Purchaser, the Escrow Payment that is owed to Seller, for distribution to Seller, and Purchaser shall pay to Seller, as promptly as practicable (but in any event within three Business Days), the Escrow Payment as is set forth opposite Seller’s name on such Future Payment Spreadsheet less any deductions and withholdings required by applicable Law.

1.5 Exchange Procedures. At Closing, Seller shall deliver to Purchaser a digital copy of the electronic stock ledger (“Elektronisches Aktienbuch”) representing its shares of Company Capital Stock (the “Company Stock Certificates”) and any other documents (including applicable tax forms) that Purchaser may reasonably require in connection therewith (the “Exchange Documents”), duly completed and validly executed in accordance with the instructions thereto. At Closing, Purchaser shall pay to Seller in exchange therefor, the Cash Consideration, less any deductions and withholdings required by applicable Law, via certified and bank guaranteed check, and Purchaser shall cause its transfer agent to issue to Seller the stock portion of the merger consideration pursuant to Section 1.1(a) in book entry form, and Purchaser shall cause Seller to instruct the Share Register (Aktienregister) that the transfer of all Company Capital Stock from Seller to Purchaser has occurred.

1.6 Shares of Purchaser’s Common Stock. Until such shares become validly registered or are otherwise freely transferrable, the shares of Purchaser’s Common Stock issued by Purchaser to Seller pursuant to Section 1.1(a) and this Section 1.6 shall be placed in a restrictive class bearing the following restrictive legend:

THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN EXEMPTION FROM SUCH REGISTRATION UNDER SAID ACT. THE ISSUER OF THESE SHARES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR OTHER TRANSFER OTHERWISE COMPLIES WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

(a) If Purchaser registers shares of Purchaser’s Common Stock on an effective registration statement during the period in which Seller’s shares of Purchaser’s Common Stock are restricted securities (as defined under the Act), subject to applicable Law, Purchaser shall use its reasonable best efforts to include Seller’s shares in any such registration.

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ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY, SELLER AND THE FOUNDERS

2.1 Representations and Warranties. The Company and Seller, jointly and severally (gesamtschuldnerisch), hereby represent and warrant, in each case in the form of an absolute and independent guarantee (selbständiges Garantieversprechen) within the meaning of Section 311 para. 1 BGB, to Purchaser that the statements in the following paragraphs of this Article 2 are all true and complete on the date hereof, subject to the disclosures and other responses set forth in the applicable Disclosure Schedules (which disclosures and responses are arranged in parts that correspond to the Sections or, in the case of Subsections, such Subsections in this Article 2 to which they apply, and qualify other Sections or Subsections of this Article 2 only to the extent that it is reasonably apparent from the text of the disclosure or response that such disclosure or response is applicable to such other Section or Subsection). The Founders represent and warrant ( the same as set forth in Section 2.1), however, strictly limited to the Fundamental Representations (Section 2.8 and 2.11).

2.2 Organization, Good Standing and Qualification. The Company is a stock corporation, duly incorporated and organized, and validly existing under the laws of Germany. The Company is duly qualified to transact business and is in good standing in each other jurisdiction in which the failure to so qualify would have a material adverse effect on the assets, liabilities, financial condition, results of operations, business or prospects of the Company (a “Material Adverse Effect”). The Company has all requisite power and authority to own and operate its property, to conduct its business as now conducted and as presently proposed to be conducted, and to comply with the provisions of and consummate the transactions contemplated by the Transaction Documents. The Company has Made Available correct and complete copies of its deed of incorporation (Gründungsurkunde), articles of association (Statuten), and by-laws and rules of procedure (Geschäftsordnungen), each as amended to date and each as in full force and effect on the Agreement Date (collectively, the “Charter Documents”). The board of directors of the Company has not approved any amendment to any of the Charter Documents. The Company is not in violation of any of the provisions of its Charter Documents, and no changes thereto are pending.

2.3 Capitalization and Voting Rights.

(a) The Company has a total stated capital (Grundkapital) of EUR250,000, represented by the shares which represent all the equity interests (Geschäftsanteile) of the Company and are divided into 250,000 common shares (Stammaktien) with no par value (Stückaktien) (the “Company Capital Stock”). The Company has not issued, and does not have any obligations to issue, any phantom stock arrangements.

(b) The Company Capital Stock are owned legally and beneficially by Seller hereto, free and clear of any Liens and include all ancillary rights (including any pre-emptive rights (Bezugsrechte)) attributable thereto. The Seller have not granted any Person any proxy or other rights with respect to the voting rights of Company Capital Stock nor are they a party to any arrangement or agreement (including any Stimmbindungsvertrag) granting such rights with respect to the Company Capital Stock. The Company Capital Stock are each duly authorized, validly issued, registered in the share register, fully paid, have not been repaid, and are not subject to assessment. Other than the Company Capital Stock, there are no other securities of the Company of any class or kind issued, reserved for issuance, convertible, or outstanding and there are no restrictions with respect to transferability of the Company Capital Stock. There are no options, offers, warrants, restricted stock, restricted stock units, stock appreciation rights, conversion rights, take-along rights, co-sale rights, preemptive rights, subscriptions or agreements or rights of any kind to subscribe for, or to sell or purchase, or commitments to issue (either formal or informal, firm or contingent), existing or future share or equity capital or securities of or interests or rights in the Company (whether debt, equity, or a

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combination thereof) or otherwise with respect to the equity of the Company (whether payable in equity, cash or otherwise) or obligating the Company or any shareholders to grant, extend, or enter into any such agreement or commitment. Except for the “Betriebführungsvertrag” by and between the Company and the Seller, which has been Made Available to Purchaser, the Company is not party to any other enterprise agreements within the meaning of Sections 291 and 292 AktG. The Company Group has never adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for issuance of equity to any Person.

(c) Schedule 2.3(c) of the Disclosure Schedule lists each entity in which the Company owns any shares of capital stock or any interest in, or controls, directly or indirectly, any other corporation, limited liability company, partnership, association, joint venture or other business entity. Schedule 2.3(c) of the Disclosure Schedule lists each corporation, limited liability company, partnership, association, joint venture or other business entity of which the Company owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interest entitled to vote on the election of the members of the board of directors or similar governing body (each, a “Subsidiary”). Other than the Subsidiaries, the Company does not have and has never had any subsidiaries or affiliated companies and does not otherwise own and has never otherwise owned any shares of capital stock or any interest in, or control, directly or indirectly, any other corporation, limited liability company, partnership, association, joint venture or other business entity. Each entity listed on Schedule 2.3(c) of the Disclosure Schedule that is no longer in existence has been duly dissolved in accordance with its charter documents and the laws of the jurisdiction of its incorporation or organization and there are no outstanding liabilities or obligations (outstanding, contingent or otherwise), including taxes, with respect to any such entity. Each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. Each Subsidiary has the corporate power to own its properties and to carry on its business as currently conducted and as currently contemplated to be conducted. Each Subsidiary is duly qualified or licensed to do business and in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or properties (whether owned, leased or licensed) or the nature of its business make such qualifications necessary. A true and correct copy of each Subsidiary’s charter documents and bylaws, each as amended to date and in full force and effect on the date hereof, has been Made Available to Purchaser. The operations now being conducted by each Subsidiary are not now and have never been conducted under any other name. All of the outstanding shares of capital stock of each Subsidiary are owned of record and beneficially by the Company. All outstanding shares of stock of each Subsidiary are duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights created by statute, the charter documents or bylaws of such Subsidiary, or any agreement to which such Subsidiary is a party or by which it is bound, and have been issued in compliance with all applicable legal requirements. There are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which any Subsidiary is a party or by which it is bound obligating the Subsidiary to issue, deliver, sell, repurchase or redeem, or cause to be issued, sold, repurchased or redeemed, any shares of the capital stock of such Subsidiary or obligating such Subsidiary to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call right, commitment or agreement. Except for Seller’s ICON Phantom Stock Plan 2012 I (the “Seller Phantom Stock Plan”), there are no other outstanding or authorized stock appreciation, phantom stock, restricted stock unit, profit participation, or other similar rights (whether payable in equity, cash or otherwise) with respect to any of the Subsidiaries. Neither the Company nor any Subsidiary has agreed or is obligated to make any future investment in or capital contribution to any Person.

2.4 Authorization. All action on the part of the Company, its officers, director, partners and Seller necessary for the authorization, execution and delivery of the Transaction Documents, performance of all obligations of the Company and Seller hereunder and thereunder, and the Transaction Agreements, constitute valid and legally binding obligations of the Company and Seller, enforceable in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws of general application affecting enforcement of creditors’ rights generally.

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2.5 Noncontravention. The execution, delivery and performance of the Transaction Documents by Seller and the consummation of the Transactions do not and will not (a) conflict with, result in or constitute a violation of or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation, renegotiation, modification or acceleration of any obligation or loss of any benefit under, or require any consent, approval or waiver from any Person, in each case, in accordance with, any provision of the Charter Documents or the organizational or constituting documents of any member of the Company Group, (b) result in the creation of an Encumbrance on any Assets or Properties of any member of the Company Group, (c) subject to the making of filings and registrations and the receipt of consents and approvals provided for in Schedule 2.5 of the Disclosure Schedule, conflict with, result in or constitute a material violation of or material default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, renegotiation, modification or acceleration of any obligation or loss or modification of any benefit under, or require consent, approval or waiver from any Person in accordance with any Law or Permit applicable to any member of the Company Group, or (4) conflict with, result in or constitute a material violation of or material default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, renegotiation, modification or acceleration of any obligation or loss or modification of any benefit under, or require consent, approval or waiver from any Person in accordance with any Company Material Contract of any member of the Company Group.

2.6 Governmental Consents and Permits. No consent, approval, notice, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by the Transaction Documents. The Company has all franchises, permits, licenses, and any similar authority necessary for the conduct of its business as now being conducted by it, and the Company believes it can obtain, without undue burden or expense, any additional franchises, permits, licenses, and any similar authority necessary for the conduct of its business as proposed to be conducted. The Company is not in default in any material respect under any of such franchises, permits, licenses, or other similar authority.

2.7 Litigation. There is no action, suit, proceeding or investigation pending or currently threatened against the Company Group (or any officer or director of the Company Group) or Seller relating to, or otherwise affecting the transactions as contemplated by the Transaction Documents, nor is the Company or Seller aware that there is any basis for the foregoing. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company currently pending or that the Company intends to initiate.

(a) There is no material Action by any member of the Company Group pending or threatened against any other Person.

(b) No insolvency, bankruptcy or composition proceeding has been initiated, to the knowledge of the Company Group, threatened in writing with respect to any member of the Company Group. No member of the Company Group is illiquid (zahlungsunfähig); however: Purchaser understands and acknowledges that the Company is currently over-indebted (überschuldet) ), but Company has been issued a positive operational outlook or prognosis (positive Fortführungsprognose) as part of the FY2012 statutory audit opinion by Mörk & Krämer. Seller has provided Purchaser with the audited financial statement for FY2012 and quarterly profit and loss statement, balance sheet and cash flow calculation (dated April 30, 2013 and June 30, 2013), which indicates the Company’s over-indebtedness. However, Company is convinced of the positive operational outlook or prognosis of the Company in accordance with the “going concern principle” set forth in Section 252 (1) No.2 of the HGB (German Commercial Code).

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(c) There are no internal investigations or internal inquiries that, since January 1, 2009, have been conducted by or at the direction of the board of directors of the Company (or any committee thereof) concerning any material financial, accounting or other misfeasance or malfeasance issues or that would reasonably be expected to lead to a voluntary disclosure or enforcement action involving any member of the Company Group.

(d) There is no Action by any Person pending or to the knowledge of the Company Group threatened against any director or officer of the Company Group in their capacities as such.

(e) Seller has no claims, disputes, grievances, Actions, or controversies pending or threatened or reasonably anticipated against any member of the Company Group.

2.8 Intellectual Property.

(a) Definitions.

(1) “Company Intellectual Property” means any Intellectual Property that is owned by or exclusively licensed to the Company.

(2) “Company Products” means all products and service offerings, including all Software, of the Company that currently are or in the past have been sold, licensed, distributed or otherwise disposed of, as applicable, or from which the Company has generated revenue, or that the Company intends to sell, license, distribute or otherwise dispose of in the future, including any products or services offerings under development.

(3) “Company Source Code” means, collectively, any human readable Software source code, or any material portion or aspect of the Software source code, or any material proprietary information or algorithm contained, embedded or implemented in, in any manner, any Software source code, in each case for any Company Product.

(4) “Intellectual Property” means the rights associated with or arising out of any of the following; (i) domestic and foreign patents and patent applications, together with all reissuances, divisionals, continuations, continuations-in-part, revisions, renewals, extensions, and reexaminations thereof, and any identified invention disclosures; (ii) trade secret rights and corresponding rights in confidential information and other non-public information (whether or not patentable), including ideas, formulas, compositions, inventor’s notes, discoveries and improvements, know how, manufacturing and production processes and techniques, testing information, research and development information, inventions, invention disclosures, unpatented blueprints, drawings, specifications, designs, plans, proposals and technical data, business and marketing plans, market surveys, market know-how and customer lists and information (“Trade Secrets”); (iii) all copyrights, copyrightable works, usage rights (Nutzungsrechte), rights in databases, data collections, “moral” rights, mask works, copyright registrations and applications therefore and corresponding rights in works of authorship; (iv) all trademarks, service marks, logos, trade dress and trade names and domain names indicating the source of goods or services, and other indicia of commercial source or origin (whether registered, statutory or otherwise), all registrations and applications to register the foregoing anywhere in the world and all

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goodwill associated therewith; (v) all computer software and code, including assemblers, applets, compilers, source code, object code, development tools, design tools, user interfaces and data, in any form or format, however fixed (“Software”); (vi) all Internet electronic addresses, uniform resource locators and alphanumeric designations associated therewith and all registrations for any of the foregoing; and (vii) any similar, corresponding or equivalent rights to any of the foregoing anywhere in the world.

(5) “Registered Intellectual Property” means Intellectual Property that has been registered, filed, certified or otherwise perfected or recorded with or by any government or other governmental entity or quasi-public legal authority (including domain name registrars), or any applications for any of the foregoing.

(b) Schedule 2.8(b) of the Disclosure Schedule contains a complete and accurate list (by name and version number) of all Company Products.

(c) Schedule 2.8(c) of the Disclosure Schedule sets forth a complete and accurate list of all Company Intellectual Property that is Registered Intellectual Property (the “Company Registered Intellectual Property”). For each listed item, Schedule 2.8(c) of the Disclosure Schedule indicates, as applicable, the owner of such Company Registered Intellectual Property, the countries in which such Company Registered Intellectual Property is patented or registered, the patent or registration number, and the filing and expiration dates thereof. There are no facts or circumstances that would render any Company Registered Intellectual Property invalid or unenforceable.

(d) The Company solely and exclusively owns all right, title and interest in and to the Company Products, including all Company Source Code, free and clear of all Liens (other than non-exclusive end user licenses granted to customers of the Company), and none of the Seller, the Founders, and the Company has sold, transferred, assigned or otherwise disposed of any rights or interests therein or thereto (other than non-exclusive end user licenses granted to customers of the Company in the ordinary course of business) and to the licenses granted to SAP AG according to the “Software License and Reseller Agreement” entered into by and between Company and SAP AG on September 22, 2010 (“SAP Reseller Agreement”), which Purchaser has viewed as set forth in Section 3.6 hereof. Except as set forth in Disclosure Schedule 2.8(d), neither the Company nor any other Person acting on its behalf has disclosed, delivered or licensed to any Person, agreed to disclose, deliver or license to any Person, or permitted the disclosure or delivery to any escrow agent or other Person of, any Company Source Code except for disclosures to employees, contractors or consultants under binding written agreements that prohibit use or disclosure except in the performances of services to the Company or any subsidiary.

(e) Except for inbound licenses for commercial off-the-shelf Software not embedded in Company Products, Company is not a party to any contract or agreement related to Intellectual Property of a third party. No person or entity who has licensed Intellectual Property to the Company has ownership rights or license rights to improvements, enhancements, modifications and other amendments made by the Company in such Intellectual Property. Other than Intellectual Property licensed to the Company under (i) licenses for the Open Source Software listed in Schedule 2.8(k) of the Disclosure Schedule, (ii) licenses for commercial off-the-shelf Software not embedded in Company Products and (iii) the licenses set forth in Schedule 2.8(e) of the Disclosure Schedule, the Company Intellectual Property includes all Intellectual Property that is used in or necessary for the conduct of the business of the Company as it currently is conducted or as currently proposed to be conducted by the Company, including the design, development, manufacture, use, marketing, import for resale, distribution, licensing out and sale of all Company Products.

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(f) Copies of the Company’s standard forms, including attachments, of non-exclusive end user licenses and terms of service for the Company Products (collectively, the “Standard Form Agreements”) are attached to Schedule 2.8(f) of the Disclosure Schedule. Other than non-disclosure agreements and non-exclusive licenses of the Company Products to end-users that do not materially differ in substance from the Standard Form Agreements and that have been entered into in the ordinary course of business, Schedule 2.8(f) of the Disclosure Schedule lists all Contracts under which the Company or any of its subsidiaries has granted, licensed or provided any Company Intellectual Property to third parties (other than rights granted to contractors or vendors to use Company Intellectual Property for the sole benefit of the Company or any subsidiary thereof), including any Contracts containing covenants not to sue or non-assertion provisions that relate to Intellectual Property.

(g) Subject to any licensing rights contained in the SAP Reseller Agreement, which has been Made Available to Purchaser, all of the Company Intellectual Property (i) is wholly and exclusively owned by the Company, free and clear of all options, rights, licenses, restrictions and Liens, and (ii) was created or developed solely by either (1) employees of the Company acting within the scope of their employment, or (2) other Persons who have validly and irrevocably assigned all of their rights therein, including Intellectual Property rights, to the Company. The marks “ICON” and “ICON-SCM” are owned by Seller. With respect to any and all trademarks, service marks, logos, trade dress and trade names and domain names indicating the source of goods or services Company has the right to use the aforesaid marks and domain names for an indefinite period, free of charge. Upon written request by Purchaser, Seller shall promptly transfer and assign any and all rights in the marks “ICON” and “ICON-SCM” to Company, free of any charge. The Founders have validly and irrevocably assigned all of their rights to the Company Intellectual Property. All Company Intellectual Property will be fully transferable, alienable and licensable by the Company or Purchaser without restriction and without payment of any kind to any third party.

(h) The operation of the business as it currently is conducted or as currently contemplated to be conducted, including the design, development, use, import, export, manufacture, licensing, sale or other disposition of the Company Products and Company Intellectual Property, does not infringe or misappropriate the Intellectual Property rights of any Person, violate the rights of any Person (including rights to privacy or publicity), or constitute unfair competition or trade practices under applicable Laws. The Company has not received any written notice from any Person claiming or implying that such operation or any Company Product infringes or misappropriates the Intellectual Property rights of any Person or constitutes unfair competition or trade practices under the Laws. No third party owns any Intellectual Property used in, or necessary for the conduct of the business of the Company as currently conducted or as currently proposed to be conducted or the complete utilization of the Company Products or Company Intellectual Property.

(i) Each item of the Company Registered Intellectual Property is subsisting valid and enforceable, and all necessary registration, maintenance and renewal fees in connection with such registered Company Intellectual Property have been paid and all necessary documents and articles in connection with such registered Company Intellectual Property have been filed with the relevant patent, copyright, trademark or other Governmental Authorities, as the case may be, for the purposes of maintaining such Company Registered Intellectual Property.

(j) The Company has taken adequate and commercially reasonable steps required to protect the Company’s rights in the Company Intellectual Property, or as provided by any other Person to the Company. Without limiting the foregoing, the Company has and enforces a policy requiring each Employee of the Company to execute proprietary information, confidentiality and assignment agreements. All Employees of the Company have executed such an agreement, all former Employees of the Company or Seller who were involved in, or who contributed to, the creation or development of any Company Intellectual Property have executed such an agreement and no employee, officer, director, consultant or advisor of the Company or the Seller is in violation of any term of any employment contract or any other contract or agreement, or any restrictive covenant, relating to the right to use Company Intellectual Property or proprietary information of others.

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(k) Schedule 2.8(k) of the Disclosure Schedule lists all software that is distributed as “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, and the Apache License) (collectively, “Open Source Software”) that has been incorporated into any Company Product in any way and describes the manner in which such Open Source Software was incorporated (such description shall include whether (and, if so, how) the Open Source Software was modified or distributed by the Company or any of its subsidiaries and whether (and if so, how) such Open Source Software was incorporated into and linked in any Company Product). The Company has not used Open Source Software in any manner that would or could, with respect to any Company Product or any Company Intellectual Property (including Company Software), (i) require its disclosure or distribution in source code form, (ii) require the licensing thereof for the purpose of making derivative works, (iii) impose any restriction on the consideration to be charged for the distribution thereof, (iv) create, or purport to create, obligations for the Company or any of its subsidiaries with respect to Intellectual Property owned by the Company or grant, or purport to grant, to any third party, any rights or immunities under Intellectual Property owned by the Company or (v) impose any other material limitation, restriction, or condition on the right of the Company with respect to its use or distribution. With respect to any Open Source Software that is or has been used by the Company in any way, the Company has been and is in compliance with all applicable licenses with respect thereto.

(l) Schedule 2.8(l) of the Disclosure Schedule identifies all categories of Personally Identifiable Information collected by the Company through Internet websites owned, maintained or operated by the Company or any of its subsidiaries (“Company Sites”), and through any services provided to customers of the Company. “Personally Identifiable Information” means any information that alone or in combination with other information held by the Company can be used to specifically identify a Person. The Company has complied with all applicable laws, contractual and fiduciary obligations, and its internal privacy policies relating to (i) the privacy of users of Company Sites and (ii) the collection, storage, transfer and any other processing of any Personally Identifiable Information collected or used by the Company in any manner or maintained or by third parties having authorized access to such information. The execution, delivery and performance of this Agreement complies with all applicable laws relating to privacy and with the Company’s privacy policies. Copies of all current and prior privacy policies of the Company that apply to the Company Sites or the Company Services are attached to Schedule 2.8(l) of the Disclosure Schedule. Each such privacy policy and all materials distributed or marketed by the Company have at all times made all disclosures to users or customers required by applicable laws, and none of such disclosures made or contained in any such privacy policy or in any such materials has been inaccurate, misleading or deceptive or in violation of any applicable laws.

(m) The Company has at all times taken all steps reasonably necessary (including implementing and monitoring compliance with adequate measures with respect to technical and physical security) to ensure that Personally Identifiable Information is protected against loss and against unauthorized access, use, modification, disclosure or other misuse. There has been no unauthorized access to or other misuse of Personally Identifiable Information.

(n) The Company has taken the steps and implemented the procedures specified in Schedule 2.8(n) of the Disclosure Schedule to protect the information technology systems used in connection with the operation of the Company from intrusions and contaminants. The Company has the disaster recovery and security plans, procedures and facilities specified in Schedule 2.8(n) of the Disclosure Schedule. There have been no material unauthorized intrusions or breaches of the security of information technology systems.

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(o) The Company has made available to Seller all material documentation and notes relating to the testing of all Company Products that have been requested by Seller (other than any such document that does not exist or is not in the Company’s possession) in each case as of the Agreement Date. The Company has documented all material known bugs, errors and defects in all the Company Products, and such documentation is retained and is available internally at the Company.

(p) No (i) government funding or (ii) facilities of a university, college, other educational institution or research center was used in the development of the Company Intellectual Property. No current or former employee, consultant or independent contractor of the Company or any subsidiary, who was involved in, or who contributed to, the creation or development of any Company Intellectual Property, has performed services for any government, university, college or other educational institution or research center during a period of time during which such employee, consultant or independent contractor was also performing services for the Company or any Subsidiary. No university, college, other educational institution or research center, or Bundesland where such institution is located, has any ownership or usage rights to the Company Intellectual Property.

2.9 Compliance with Other Instruments. The Company is not in violation of or default under any provision of its articles of association or bylaws, or any material provision of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality, contract, agreement or instrument, or to any federal, state or local statute, rule or regulation. The execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or otherwise conflict with or result in, with or without the passage of time and giving of notice, any such default or in the creation of any lien or the suspension, revocation, impairment, forfeiture, or non-renewal of any material permit, license, authorization, approval, right or benefit of the Company.

2.10 Agreements; Action.

(a) The Company has not sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory or nonexclusive license of software in the ordinary course of business.

(b) No officer or director of any member of the Company Group or holder of more than five percent of the Company Capital Shares (nor, to the knowledge of the Company Group, any immediate family member of any of such Persons or any trust, partnership or company in which any of such Persons has or has had an interest) (each a “Related Party”) (1) any interest in any third party which furnished, licensed or sold, or furnishes, licenses or sells, services, products, goods, property, technology, intellectual or other property rights that any member of the Company Group furnishes, licenses or sells, or proposes to furnish, license or sell, (2) any interest in any third party that purchases from or sells or furnishes to or license to any member of the Company Group any goods or services or (3) other than with respect to Employee Benefit Plans made in the ordinary course of business, any interest in any Contract to which any member of the Company Group is a party, except that ownership of no more than one percent of the outstanding voting stock of a publicly traded company shall not be deemed to be an “interest in any third party” for purposes of this Section 2.10.

2.11 Taxes.

(a) Each member of the Company Group, and any affiliated, consolidated, combined, unitary or aggregate group for Tax purposes of which any member of the Company Group is a member, has properly completed and timely filed (after taking into account any extension of time to file) all Tax Returns

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required to be filed by it. All such Tax Returns are accurate and have been completed in accordance with applicable Law in all material respects, and each member of the Company Group has paid or withheld and paid to the appropriate Tax Authority all Taxes due from it (whether or not shown to be due on such Tax Returns). Each member of the Company Group has maintained in all material respects, at all applicable times, all records in relation to Tax as it is required to maintain.

(b) The Interim Balance Sheet reflects all unpaid Taxes of each member of the Company Group for periods (or portions of periods) through the Interim Balance Sheet Date. No member of the Company Group has any Liability for unpaid Taxes accruing after the Interim Balance Sheet Date, other than Taxes accruing in the ordinary course of business conducted after the Interim Balance Sheet Date.

(c) There is (1) no lien for Taxes against the property of any member of the Company Group other than liens for Taxes not yet delinquent or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established, nor is any such property the subject of any trust arising under Tax Law, (2) no audit of any Tax Return of any member of the Company Group being conducted by a Tax Authority, and (3) no extension of any statute of limitations on the assessment of any Taxes granted to any member of the Company Group currently in effect (other than any such extension resulting from an automatic extension of the time within which to file any Tax Return). No member of the Company Group has been informed in writing by any jurisdiction that the jurisdiction may open an audit, proceeding or other review of the Taxes of such entity or that the jurisdiction believes that such entity was required to file any Tax Return that was not filed.

(d) No member of the Company Group has (1) filed any disclosure with any Tax Return to prevent the imposition of penalties with respect to any Tax reporting position taken on any Tax Return, (2) engaged in a tax avoidance transaction or similar arrangement or plan, (3) ever been a member of a consolidated, combined, unitary or aggregate group of which any member of the Company Group was not the ultimate parent company, or (4) incurred any Liability for the Taxes of another member of a consolidated, combined unitary or aggregate group, or as a transferee or successor.

(e) No member of the Company Group is a party to or bound by any profit and loss sharing, Tax sharing, Tax ruling or Tax allocation agreement, nor does any member of the Company Group have any Liability or potential Liability to another party under any such agreement.

(f) Each member of the Company Group has withheld or collected and timely paid over to the appropriate Tax Authority (or are properly holding for such timely payment) all Taxes required by Law to be withheld or collected by it.

(g) Each member of the Company Group is in compliance with all applicable transfer pricing laws and regulations and has maintained transfer pricing documentation in accordance with the applicable Tax Laws. The prices for property or services (or for the use of property) provided by or to any member of the Company Group are arm’s length prices for purposes of applicable transfer pricing laws.

(h) No member of the Company Group will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period (or any portion thereof) ending after the Closing Date as a result of any: (1) installment sale or other open transaction disposition made on or before the Closing Date, (2) prepaid amount received on or before the Closing Date, (3) settlement agreement or closing agreement executed on or before the Closing Date, or (4) change in method of accounting for a taxable period or portion thereof ending on or before the Closing Date.

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(i) Schedule 2.11(i) of the Disclosure Schedule lists all income, franchise and other material Tax Returns (federal, state, local and foreign) filed with respect to each member of the Company Group for taxable periods ended on or after January 1, 2009 and indicates all Tax Returns that currently are the subject of audit.

(j) No member of the Company Group has been or is subject to Tax in a country other than its country of organization by virtue of having (during any taxable period remaining open for the assessment of Tax by any foreign Tax Authority under its applicable statute of limitations) a place of business, place of management or otherwise carrying on business in any country outside the country of its organization.

(k) The Company Group is in compliance in all material respects with all terms and conditions of any Tax exemption, Tax holiday, Tax credit or other Tax reduction agreement or Tax order that applies to the Company Group and no Tax exemption, Tax holiday, Tax credit, Tax reduction agreement or Tax order that applies to the Company Group will be adversely affected by the Transactions.

(l) There is no Contract, agreement, plan or arrangement to which any member of the Company Group is a party, including the provisions of this Agreement, covering any Employee, which, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to Section 280G or Section 404 of the Code or that would be characterized as a “parachute payment” within the meaning of Section 280G(b)(1) of the Code. No member of the Company Group has no obligation to gross up or otherwise reimburse or compensate any Employee for any tax incurred by such person under Section 4999 of the Code.

(m) Schedule 2.11(m) of the Disclosure Schedule lists each “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) sponsored or maintained by any member of the Company Group. Each such nonqualified deferred compensation plan has since (i) January 1, 2005 been maintained and operated in good faith compliance with Section 409A of the Code and Notice 2005-1, (ii) October 3, 2004, not been “materially modified” (within the meaning of Notice 2005-1) and (iii) January 1, 2009, been in documentary and operational compliance with Section 409A of the Code. No compensation shall be includable in the gross income of any Employee as the result of the operation of Section 409A of the Code with respect to any arrangements or agreements in effect prior to the Closing.

2.12 Corporate Documents. Except for the loan agreement and the “Betriebführungsvertrag” by and between Company and Seller, which have been Made Available to Purchaser, there are no agreements between the Company on the one hand and Seller or the Founders, on the other hand. There are no resolutions that have been passed but have not been registered, and the commercial register excerpt dated within five Business Days of the Closing represents the current status of the Company.

2.13 Title to Property and Assets. The Company owns its property and assets free and clear of all Liens. With respect to the property and assets it leases, the Company is in compliance with such leases and holds a valid and subsisting leasehold interest in such property and assets, free and clear of any Liens.

2.14 Financial Statements.

(a) The Company has provided to Purchaser the Company’s and its Subsidiaries’ unaudited consolidated statements of operations, statements of income and statements of cash flows for the years ended 2009, 2010, 2011 and 2012, the unaudited management reports as of December 31, 2012 the Interim Balance Sheet as well as the profit and loss statement as of April 30, 2013 and the Closing Balance Sheet as of July 30, 2013 (collectively, the “Financial Statements”). The Financial Statements (a) have been prepared in accordance with German GAAP applied on a consistent basis throughout the periods presented,

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or, in case of Icon Industry Consulting, Inc., US GAAP applied on a consistent basis throughout the periods presented, and (b) fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries as of the dates, and for the periods, indicated therein (subject, in the case of interim period financial statements, to normally recurring year-end audit adjustments, none of which individually or in the aggregate are material). All reserves established by the Company Group that are set forth in or reflected in the Interim Balance Sheet have been established in accordance with German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP, using the same assumptions and methods as were used to prepare the Company’s consolidated balance sheet as of December 31, 2012. Since December 31, 2012, there has been no change in any accounting principle, procedure or practice followed by the Company Group or in the method of applying such principle, procedure or practice.

(b) No member of the Company Group is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar Contract relating to any transaction or relationship between or among any member of the Company Group, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose Person on the other hand, or any “off-balance sheet arrangement” (as defined in Item 303(a) of Regulation S-K promulgated under the U.S. Securities Act of 1933).

(c) The Company Group has in place systems and processes (including the maintenance of proper books and records) that are customary for a company at the same stage of development as the Company Group designed to (1) provide reasonable assurances regarding the reliability of the Financial Statements and (2) in a timely manner accumulate and communicate to the Company Group’s principal executive officer and principal financial officer the type of information that would be required to be disclosed in the Financial Statements (such systems and processes being herein referred to as the “Financial Controls”). The Company Group has in place revenue recognition policies that are all consistent with German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP. The members of the Company Group, their respective officers and the Company Group’s independent auditors have not identified or been made aware of any complaint, allegation, deficiency, assertion or claim, whether written or oral, regarding the Financial Controls or the Financial Statements that has not been resolved. There have been no instances of fraud by any officer or, to the knowledge of the Company Group, any other employee of any member of the Company Group, whether or not material, that occurred during any period covered by the Financial Statements.

2.15 Absence of Certain Changes; Undisclosed Liabilities.

(a) Since the Interim Balance Sheet Date, (1) each member of the Company Group has conducted its business only in the ordinary course of business, except for the preparation, negotiation and execution of this Agreement and the consummation of the Transactions or as listed in Schedule 2.15(a) of the Disclosure Schedule, (2) there has not occurred any Material Adverse Effect relating to the Company Group and (3) no member of the Company Group has experienced any material damage, destruction, loss or interruption in the use of any of the Properties and Assets of any member of the Company Group (whether or not covered by insurance).

(b) No member of the Company Group has any Liabilities that are required to be reflected in the Financial Statements in accordance with German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP, except for Liabilities that (1) are reflected in, reserved against or shown on the balance sheet included in the Financial Statements as of the Interim Balance Sheet Date or (2) have arisen or were incurred after the Interim Balance Sheet Date in the ordinary course of business, except to the extent directly related to the preparation, negotiation and execution of this Agreement and the consummation of the Transactions or as listed in Schedule 2.15(b) of the Disclosure Schedule (none of which Liabilities results from, arises out of, relates to, is in the nature of, or was caused by any breach of Contract, breach of warranty, tort, infringement, or violation of Law).

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2.16 Employee Benefit Plans.

(a) Schedule 2.16(a) of the Disclosure Schedule sets forth an accurate and complete list of (1) all “employee benefit plans,” as defined in Section 3(3) of ERISA, (2) all other severance pay, salary continuation, bonus, incentive, phantom stock plan, stock option, retirement, pension, profit sharing or deferred compensation plans, contracts, programs, funds, policies, practices or arrangements of any kind, and (3) all Employee Agreements, and (4) all other employee benefit plans, contracts, programs, funds, policies, practices or arrangements (whether written or oral, qualified or nonqualified, funded or unfunded, foreign or domestic, currently effective or terminated) and any trust, escrow or similar agreement related thereto, whether or not funded, that are sponsored, maintained or contributed to by any member of the Company Group or any ERISA Affiliate for the benefit of any Employees or with respect to which any member of the Company Group or any ERISA Affiliate has or could reasonably be expected to incur any Liability in excess of USD50,000 (all of the items referenced in the foregoing clauses (1)—(4) being hereinafter individually or collectively referred to as an “Employee Benefit Plan” or “Employee Benefit Plans”).

(b) The Company Group has Made Available to Purchaser correct and complete copies of: (1) all documents embodying each Employee Benefit Plan including (without limitation) all amendments thereto and all related trust documents, administrative service agreements, group annuity contracts, group insurance contracts, and policies pertaining to fiduciary liability insurance covering the fiduciaries for each Employee Benefit Plan; (2) the most recent annual actuarial valuations, if any, prepared for each Employee Benefit Plan; (3) the three most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code in connection with each Employee Benefit Plan; (4) if the Employee Benefit Plan is funded, the most recent annual and periodic accounting of Employee Benefit Plan assets; (5) the most recent summary plan description together with the summary(ies) of material modifications thereto, if any, required under ERISA with respect to each Employee Benefit Plan; (6) all IRS determination, opinion, notification and advisory letters, and all applications and correspondence to or from the IRS or the Department of Labor with respect to any such application or letter; (7) all communications material to any Employee or Employees relating to any Employee Benefit Plan and any proposed Employee Benefit Plan, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events which would result in any material liability to the Company; (8) all correspondence to or from any governmental agency relating to any Employee Benefit Plan; and (9) the three most recent plan years discrimination tests for each Employee Benefit Plan.

(c) No Key Employee and, as of the Agreement Date, has given written notice to the Company Group of such employee’s termination of employment with the Company Group. To the knowledge of the Company Group, no such Key Employee intends to terminate his or her employment with the Company Group.

(d) Each Employee Benefit Plan has been maintained, operated and administered in compliance with its terms and any related documents or agreements and in compliance with all Laws. There have been no prohibited transactions or breaches of any of the duties imposed by ERISA on “fiduciaries” (within the meaning of Section 3(21) of ERISA) with respect to the Employee Benefit Plans that has resulted or would reasonably be expected to result in any Liability or excise tax under ERISA or the Code being imposed on any member of the Company Group.

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(e) Each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code is so qualified and has heretofore been determined by the IRS to be so qualified, and each trust created thereunder (1) has either applied for, prior to the expiration of the requisite period under applicable Treasury Regulations or IRS pronouncements, or obtained a favorable determination, notification, advisory, and/or opinion letter, as applicable, as to its qualified status from the IRS or still has a remaining period of time under applicable Treasury Regulations or IRS pronouncements in which to apply for such letter and to make any amendments necessary to obtain a favorable determination, and (2) to the knowledge of the Company Group nothing has occurred since the date of any such determination, notification, advisor and/or opinion letter that could reasonably be expected to adversely affect such qualified status.

(f) No member of the Company Group or any ERISA Affiliate has or has had an obligation to contribute to a “defined benefit plan” as defined in Section 3(35) of ERISA, a pension plan subject to Title IV of ERISA or to the funding standards of Section 302 of ERISA or Section 412 of the Code, a “multiemployer plan” as defined in Section 3(37) of ERISA or Section 414(f) of the Code or a “multiple employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code.

(g) No Employee Benefit Plan is or at any time was funded through a “welfare benefit fund” as defined in Section 419(e) of the Code, and no benefits under any Employee Benefit Plan or at any time have been provided through a voluntary employees’ beneficiary association (within the meaning of subsection 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code).

(h) There is no pending or threatened Action in or by any court or Governmental Authority with respect to any Employee Benefit Plan or, to the knowledge of the Company Group, nor is there any basis for one to the knowledge of the Company Group.

(i) Each member of the Company Group and each ERISA Affiliate has timely made all contributions and other payments required by and due under the terms of each Employee Benefit Plan. All (1) benefits, expenses, and other amounts due and payable under an Employee Benefit Plan, (2) contributions, transfers, or payments required to be made to, any Employee Benefit Plan (including any trust or fund under an Employee Benefit Plan) and (3) amounts required to have been paid to any Governmental Authority in respect of Employees, in each case, before the Closing Date will have been paid, made or timely accrued as a liability in the Financial Statements on or before the Closing Date and to the extent accrued as a liability in the Financial Statements and unpaid as of the Closing Date, will be included in the Company Group’s good faith estimate of the Closing Balance Sheet. Schedule 2.16(i) of the Disclosure Schedule sets forth a complete and accurate list of all pension Liabilities or obligations (in any country or jurisdiction) of each of the members of the Company Group as of December 31, 2012 arising from or in connection with pension promises of the respective member of the Company Group.

(j) No Employee Benefit Plan provides benefits, including retiree, death or medical benefits, beyond termination of service or retirement other than (1) coverage mandated by Law or (2) death or retirement benefits under any Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code and no member of the Company Group or any ERISA Affiliate has ever represented, promised or contracted (whether in oral or written form) to any Employee (either individually or to Employees as a group) or any other Person that such Employee(s) or other Person would be provided with post-termination or retiree welfare benefits, except to the extent required by Law.

(k) With respect to any insurance policy providing funding for benefits under any Employee Benefit Plan, no insurance company issuing any such policy is in receivership, conservatorship, liquidation or similar proceedings and, to the knowledge of the Company Group, no such proceedings with respect to any such insurance company are imminent. No Employee Benefit Plan provides health benefits that are not fully insured through an insurance contract.

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(l) The Company Group has reserved all rights necessary to amend or terminate each of the Employee Benefit Plans without the consent of any other Person and without incurring any Liability (other than ordinary administration expenses or routine claims for benefits).

(m) No member of the Company Group has planned, agreed or committed to institute any plan, program, arrangement or agreement for the benefit of Employees, other than the Employee Benefit Plans, or to make any amendments to any of the Employee Benefit Plans.

(n) Neither the execution and delivery of this Agreement nor the consummation of the Transactions will, alone or in connection with any other event (including the termination of employment or service with Purchaser or any member of the Company Group following the consummation of the Transactions), (1) result in any payment (including severance, unemployment compensation or golden parachute) becoming due under any Employee Benefit Plan, (2) increase any benefits (including severance, deferred compensation and equity benefits) otherwise payable under any Employee Benefit Plan, (3) result in the acceleration of the time of payment or vesting of any such benefits to any extent, or (4) result in the forgiveness in whole or in part of any outstanding loans made by any member of the Company Group to any Person. No member of the Company Group will make or is obligated to make any Change of Control Payments.

(o) To the extent applicable, each International Employee Plan has been approved by the relevant taxation and other Governmental Authorities so as to enable: (i) any member of the Company Group and the participants and beneficiaries under the relevant International Employee Plan and (ii) in the case of any International Employee Plan under which resources are set aside in advance of the benefits being paid (a “Funded International Employee Plan”), the assets held for the purposes of the Funded International Employee Plans, to enjoy the most favorable taxation status possible and no member of the Company Group is aware of any ground on which such approval may cease to apply.

(p) Non-U.S. Employees.

a) All Contracts of employment or for services with any employee of the Company Group who provide services outside the United States (“Non-U.S. Employees”) are subject to Employment Agreements and are also subject to, and have in all cases, complied with, applicable local law).

b) no promise has been made to any Non-U.S. Employee that his defined contribution benefits under any Funded International Employee Plan will at any point in the future equate to or not be less than any particular amount. Furthermore, no International Employee Plan has liabilities, that as of the Closing Date, will not be offset in full by insurance or otherwise be fully accounted for on a basis which complies with International Accounting Standard 19 (IAS 19) (whether or not IAS 19 applies to the Company or, if relevant, any other member of the Company Group).

c) No International Employee Plan has unfunded liabilities, that as of the Effective Time, will not be offset by insurance or fully accrued in accordance with US GAAP and, as of the Effective Time, the assets of each International Employee Plan and the Company’s pension plan are in excess of the liabilities of such plan, as determined in accordance with US GAAP.

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2.17 Employee Matters.

(a) Schedule 2.17(a) of the Disclosure Schedule sets forth a correct and complete list of all form offer letters, Employee Agreements and stand-alone non-competition Contracts (i.e., those not included in the employment contract) used in each jurisdiction in which Employees are based or located, as well as a list of any such agreements, signed by Employees, which deviate from the forms.

(b) The Company Group is not a party to or bound by any collective bargaining agreement, shop agreement, company practice, collective promise or any other labor-related agreement with any labor union, labor organization, works council or other body of employee representation, as each relates to the Employees. No such agreement is being negotiated by any member of the Company Group. The Company Group has no duty to bargain with any labor union, labor organization or works council, as each relates to the Employees. No member of the Company Group has any works council or similar employee representation body, or is or was a member in any employers’ associations, and no labor union, labor organization or works council has made a pending demand for recognition or certification. There have not been any and are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or, to the knowledge of the Company Group, threatened in writing to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority. There is no labor dispute, strike, slowdown, lockout, or work stoppage against any member of the Company Group pending now, that has occurred in the past, or, to the knowledge of the Company Group, threatened that would reasonably be expected to interfere with the business activities of any member of the Company Group. To the knowledge of the Company Group, neither any member of the Company Group has engaged in any unfair labor practice that relates to the Employees.

(c) Schedule 2.17(c) of the Disclosure Schedule contains a correct and complete list as of the Agreement Date of the employee identification number, positions, date of commencement of employment, years of service credit recognized by the Company Group and rates of compensation of all current employees (including commissions), classifications as exempt or non-exempt under applicable laws, if required, accrued paid time off or vacation balances, location and severance or termination payment obligations payable in excess of mandatory Law.

(d) Current and complete copies of the written personnel manuals, handbooks, policies, rules or procedures currently in effect and applicable to any Employee of any member of the Company Group have been Made Available to Purchaser.

(e) None of the members of the Company Group have received or expects to receive any claim by any Employee for any compensation due to inventors under all applicable Laws, including the Law on Inventions of Employees (Arbeitnehmererfindungsgesetz).

(f) There are no claims, disputes, grievances, Actions, or controversies pending or, to the knowledge of the Company Group, threatened or reasonably anticipated involving any Employee, group of Employees, or individual, including claims arising from wage and hour violations, misclassification of Employees or hours worked. There are no charges, investigations, administrative proceedings or formal complaints of discrimination (including discrimination based upon sex, age, marital status, race, national origin, sexual orientation, disability or veteran status or any other category protected by federal, state, or local law), retaliation, or violation of any Law pending or, to the knowledge of the Company Group, threatened before the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, the U.S. Department of Labor, the U.S. Occupational Health and Safety Administration, the Workers Compensation Appeals Board, or any other Governmental Authority against any member of the Company Group pertaining to any Employee. The Company Group is not a party to a conciliation agreement, consent decree or other agreement or order with any Governmental Authority with respect to employment practices relating to the Employees.

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(g) The Company Group is and has been at all times in compliance with all applicable Laws, rules and regulations respecting employment, employment practices, harassment, discrimination, retaliation, terms and conditions of employment, worker classification, Tax withholding, prohibited discrimination, equal employment, fair employment practices, meal and rest periods, immigration status, employee safety and health, wages (including overtime wages), compensation, and hours of work, as each relates to Employees, and in each case, with respect to Employees: (1) has withheld and reported all amounts required by Law or by agreement to be withheld and reported with respect to wages, salaries, and other payments to Employees and (2) is not Liable for any arrears of wages, severance pay or any Taxes or any penalty or failure to comply with any of the foregoing. The Company Group has no Liability with respect to the misclassification of: (A) any person as an independent contractor rather than as an employee, (B) any Employee leased from another employer, or (C) any Employee currently or formerly classified as exempt from overtime wages.

(h) Each member of the Company Group is in compliance with all applicable visa and work permit requirements. No visa or work permit held by an Employee will expire prior to December 31, 2013. Each member of the Company Group has completed and retained the necessary employment verification paperwork under the Immigration Reform and Control Act of 1986 (the “IRCA”) for the Employees hired prior to the Closing Date to the extent required by Law. Each member of the Company Group is and has been in compliance with both the employment verification provisions (including the paperwork and documentation requirements) and the anti-discrimination provisions of the IRCA.

(i) The Company Group is in compliance with its obligations pursuant to the Worker Readjustment and Notification Act (the “WARN Act”) (29 U.S.C. § 2101) and any applicable other Laws. The Company Group has no Liability with respect to any action that would constitute a “mass layoff” or “plant closing” within the meaning of the WARN Act or would otherwise trigger notice requirements or Liability under any other state or local Law in the United States or Law of any other jurisdiction that is comparable to the WARN Act, as each relates to the Employees. The Company Group has not taken any action in the last 90 days that will result in the termination of employment of 50 or more Employees or more than 10 percent of the Employees in the United States of America or any country outside of the United States of America during any 90-day period.

(j) To the knowledge of the Company Group, no Employee is in violation of any term of any employment contract, non-disclosure, confidentiality agreement, or consulting agreement with any member of the Company Group or non-competition agreement, non-solicitation agreement or any restrictive covenant with a former employer relating to the right of any such employee to be employed by or provide service to any member of the Company Group because of the nature of the business conducted or presently proposed to be conducted by it or to the use of trade secrets or proprietary information of others.

2.18 Insurance. Correct and complete copies of all insurance policies of fire, liability, product liability, workers’ compensation, health and other forms of insurance and indemnity bonds issued at the request or for the benefit of any member of the Company Group as of the Agreement Date have been Made Available to Purchaser. Each member of the Company Group benefiting therefrom is in material compliance with the terms of such policies and bonds, including timely payment of all premiums payable, and no notice of cancellation or termination has been received by any member of the Company Group with respect to any such policy. To the knowledge of the Company Group, there is no threatened termination of, or material premium increase with respect to, any of such policies or bonds, nor is there any basis for any termination or material premium increase. All insurance policies are valid, outstanding and enforceable policies and provide

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insurance coverage in the amounts and against the risks required to comply with applicable Law or any contractual or other obligation. To the knowledge of the Company Group, no member of the Company Group has been refused any insurance for its business. Schedule 2.18 of the Disclosure Schedule sets forth, as of the Agreement Date, an accurate and complete list of all claims filed by any member of the Company Group since January 1, 2012 under any such policies or bonds.

2.19 Compliance with Laws; Certain Business Practices.

(a) Each member of the Company Group is, and since January 1, 2009 has been, in compliance with all applicable Laws and Permits with respect to the conduct of its business, or the ownership by the Company Group of its Assets and Properties, except for such non-compliance that has resulted or as would reasonably be expected to result in aggregate Liability to the Company Group in an amount less than €50,000. Each Permit that is required for the operation of the Company Group’s business as presently conducted or the holding of any such interest has been issued or granted to any member of the Company Group, except for Permits whose failure to be issued or granted has resulted or would reasonably be expected to result in aggregate Liability to the Company Group in an amount less than €50,000. Each of such Permits is in full force and effect. There is no Order binding upon any member of the Company Group or its Assets and Properties that has or would reasonably be expected to have, whether before or after consummation of the Transactions, the effect of prohibiting or impairing any current or future business practice of any member of the Company Group, any acquisition of property (tangible or intangible) by any member of the Company Group or the conduct of business by any member of the Company Group as currently conducted by any member of the Company Group. To the knowledge of the Company Group, no officer or other employee of the Company Group is subject to any Action or Order that prohibits such officer or other employee from engaging in or continuing any conduct, activity or practice relating to the business of the Company Group.

(b) No member of the Company Group or any of their respective directors, officers, employees, distributors or agents while retained by a member of the Company Group or any other Person acting on behalf of any such Person have, with respect to the business of any member of the Company Group, (1) used any funds for unlawful contributions, gifts, entertainment or other unlawful payments relating to any political activity, (2) made any unlawful payment to any government official or employee or any political party or campaign or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, the German Criminal Act or any other Law applicable to the conduct of business with Governmental Authorities (collectively, “Anti-bribery Laws”), (3) in conjunction with the development or anticipated exploitation of the Company Products and operation of any member of the Company Group’s business, violated or failed to comply with any applicable Law related to the sale, marketing, promotion or export of goods or (4) or made any bribe, rebate, payoff, kickback or other unlawful payment of any nature using corporate funds or on behalf of any member of the Company Group. The Company has Made Available to Purchaser correct and complete copies of each arrangement in effect, if any, as of the Agreement Date between any member of the Company Group, on the one hand, and any foreign sales agent or foreign sales representative thereof, on the other hand.

(c) No member of the Company Group has applied for or received, is or will be entitled to or is or will be the beneficiary of any grant, subsidy or financial assistance from any Governmental Authority, except for the grants listed on Schedule 2.11(m) of the Disclosure Schedule.

(d) Each member of the Company Group has at all times conducted its export transactions in compliance with (1) all applicable U.S. export and re-export controls, including the United States Export Administration Act of 2001, as amended, and Regulations and Foreign Assets Control Regulations and (2) all other applicable import/export controls in other countries in which the Company Group conducts business, including the European Union, except to the extent any such non-compliance would

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be reasonably likely to result in Liability to the Company Group in an amount, individually or in the aggregate, that is less than €50,000. Without limiting the foregoing, except to the extent any such non-compliance would be reasonably likely to result in Liability to the Company Group in an amount, individually or in the aggregate, that is less than €50,000:

(1) Each member of the Company Group has obtained all export licenses, license exceptions and other consents, notices, waivers, approvals, orders, authorizations, registrations, declarations, classifications and filings with any Governmental Authority required for (1) the export, import and re-export of Company Products, services, software and technologies and (2) releases of technologies and software to foreign nationals located in the United States and abroad (“Export Approvals”);

(2) Each member of the Company Group is in compliance with the terms of all applicable Export Approvals;

(3) There are no pending or, to the knowledge of the Company Group, threatened claims against any member of the Company Group with respect to such Export Approvals;

(4) To the knowledge of the Company Group, there are no actions, conditions or circumstances pertaining to any member of the Company Group’s export transactions that may give rise to any future claims; and

(5) No Export Approvals for the transfer of export licenses to Purchaser or any member of the Company Group are required, or such Export Approvals can be obtained expeditiously without material cost.

(e) If any takeover statute is or becomes applicable to this Agreement or the Transactions, Seller shall and shall cause each member of the Company Group to (1) take all necessary action to ensure that the Transactions may be consummated as promptly as practicable upon the terms and subject to the conditions set forth in this Agreement and (2) otherwise act to eliminate or minimize the effects of such takeover statute.

2.20 Minute Books. The minute book of of ICON Industry Consulting, Inc. contains a complete and accurate summary of all meetings of directors and stockholders or actions by written consent of each member of the Company Group’s directors or stockholders and the share registers and share ledgers of each member of the Company Group since their time of formation and reflect all transactions referred to in such minutes, registers and ledgers accurately in all material respects.

2.21 Customers. Schedule 2.21 of the Disclosure Schedule accurately identifies the Company’s top 10 customers calculated by revenue for the fiscal year ended December 31, 2012 and the two quarters ended March 31, 2013 (each, a “Key Customer” together the “Key Customers”). As of the Agreement Date, there are no outstanding material disputes concerning Company Products with any Customers. As of Agreement Date, the Company has not received any written notice or other formal written communication from any Customer that such Customer will not continue as a Customer of the Company Group after Closing or that any such Customer intends to terminate or materially modify existing Contracts or arrangements with the Company Group.

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2.22 Material Contracts. Schedule 2.22 of the Disclosure Schedule sets forth, as of the Agreement Date, a complete and accurate list of each Contract of any member of the Company Group under which any member of the Company Group has ongoing executory obligations or the ability to enforce rights thereunder and that is included within any of the following categories:

(a) any Contract that materially limits, curtails or restricts the right of any member of the Company Group or any of the Company’s current or future Affiliates in any material respect to (1) engage or compete in any line of business or sell, supply, license or distribute any product or service, in each case, in any geographic area, with any Person or during any period of time (or pursuant to which a benefit or right is required to be given or would be lost as a result of so competing, engaging, selling, supplying or distributing), (2) solicit or hire any Person or group of Persons or (3) acquire the securities of any other Person;

(b) any material Contract or any Contract with a Customer that grants any Person other than a member of the Company Group any (1) “most favored nation” or similar preferred pricing rights, (2) rights of first refusal, rights of first negotiation or similar rights or that materially limits the ability of any member of the Company Group to own, operate, sell, transfer, pledge or otherwise dispose of any assets or business, or (3) right to require any member of the Company Group to purchase all or any portion of a member of the Company Group’s requirements from any third party, or similar provision;

(c) any Contract that obligates a member of the Company Group to provide maintenance and/or support with respect to any discontinued Company Products or any prior version of any Company Product for more than three years following the Agreement Date (including within such term of the Contract any renewals that are at the sole election of the counterparty thereto);

(d) any Contract that by its terms limits the ability of any member of the Company Group to declare or pay any dividend or distribution in respect of its Equity Participations;

(e) any Contract pursuant to which the Company Group has provided, agreed to provide, or is required to provide any third party with rights in or access to Company Source Code (including on a contingent basis), or to provide for Company Source Code to be put in escrow (a “Software Escrow Agreement”) as listed in Disclosure Schedule 2.22(e);

(f) any material Contract with any original equipment manufacturer, co-location service provider, data center service vendor, joint-marketing partner, joint development partner or joint venturer;

(g) any Contract with a distributor or reseller pursuant to which the Company received more than €50,000 in the fiscal year ending December 31, 2012;

(h) (1) any Contract with a sales representative (other than Employees) where the Company or any of its Subsidiaries under the Contract (together with any series of related Contracts) has made or was obligated to make payments that (A) exceed €50,000 in the fiscal year ending December 31, 2012, or (B) is reasonably expected to exceed €50,000 in the fiscal year ending December 31, 2013, or (2) any material Contract with a web hosting service provider;

(i) any Contract pursuant to which any member of the Company Group is obligated to provide services at a price fixed regardless of the scope of the Company Group’s obligations before performance of such services, and for which the fully burdened cost of complete performance by such member of the Company Group currently exceeds or is reasonably expected by the member of the Company Group to exceed such price (excluding Contracts pursuant to which the primary services provided by the Company Group are customer training and education in each case involving less than €50,000);

(j) any Contract evidencing outstanding Company Indebtedness;

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(k) any Contract that is a collective bargaining agreement or other agreements or arrangements with any labor union, trade union or works council;

(l) any material hedging, futures, options or other derivative Contract;

(m) any material agreement of guarantee, support, assumption or endorsement of, or any similar commitment with respect to, the Liabilities of any other Person other than Customer License Agreements;

(n) any Contract for any capital expenditure in excess of €50,000;

(o) any Contract under which any member of the Company Group is a lessee of any machinery, equipment, motor vehicles, office furniture, fixtures or other personal property and involving in the case of any such Contract more than €50,000 remaining over the life of the Contract at the Interim Balance Sheet Date;

(p) any Contract providing for indemnification of any Person with respect to Liabilities relating to any current or former business of the Company Group or any predecessor of a member of the Company Group, other than indemnification obligations of the Company Group pursuant to the provisions of a Contract entered into in the ordinary course of business that would not reasonably be expected to be material to the Company Group, taken as a whole;

(q) other than Employee Benefit Plans, any Contract with any Related Party or any Person with whom any member of the Company Group does not deal at arms’ length;

(r) any Contract relating to the disposition or acquisition of any business, division, product line, group of operating assets, entity or enterprise, except for the sale or non-exclusive license of Company Products or services in the ordinary course of business;

(s) any Contract relating to the settlement of any material Action other than (1) a Contract that solely involves the payment by the Company Group of cash amounts prior to the Closing or (2) ongoing non-material obligations of the Company incurred in connection with the settlement of Actions arising out of the termination of Employees in Europe in the ordinary course of business;

(t) any Contract that results in any Person holding a power of attorney from any member of the Company Group; or

(u) any Contract with any investment banker, broker, advisor or similar Person, or any accountant, legal counsel or other person retained by any member of the Company Group, in connection with this Agreement and the Transactions.

Each Contract disclosed in Schedules 2.8 or 2.22 of the Disclosure Schedule, or required to be disclosed pursuant to Sections 2.8 or 2.22 is referred to herein as a “Company Material Contract.” As of the Agreement Date, a correct and complete copy of each Company Material Contract has been Made Available to Purchaser. All Company Material Contracts are in executed written form. No member of the Company Group is in default of any material provision in respect of, any Company Material Contract. Each of the Company Material Contracts is a valid and binding agreement of a member of the Company Group and, to the knowledge of the Company Group, against the other parties thereto except to the extent the enforceability thereof may be limited by applicable bankruptcy, insolvency, moratorium and other Laws affecting creditors rights generally and by equitable principles (regardless of whether enforcement is sought in equity or in Law).

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There exists no, nor has there been within the last 12 months any, default, or event of default or event, occurrence, condition or act, which would conflict with, result in or constitute a material violation of or material default under (with or without notice or lapse of time, or both) or give rise to a right of termination (other than upon the expiration of its term as provided therein), cancellation, renegotiation, modification or acceleration of any obligation or loss or modification of any benefit under, any Company Material Contract. No member of the Company Group has received any written notice or, to the knowledge of the Company Group, other communication from any Person regarding (x) any actual or alleged default under or failure to comply with any term or requirement of any Company Material Contract (other than Customer License Agreements); or (y) any actual or proposed revocation, withdrawal, suspension, cancellation, termination or amendment to any Company Material Contract (other than Customer License Agreements).

2.23 Property.

(a) No member of the Company Group owns or has ever owned any real property.

(b) Each member of the Company Group has good and marketable title to, or, in the case of leased or licensed Assets and Properties, marketable leasehold or license interests in, all of its tangible Assets and Properties, used or held for use in its business, free and clear of any Encumbrances, and such properties and assets have been maintained in accordance with the ordinary course of business save for normal wear and tear, except (1) as reflected in the Interim Balance Sheet, (2) liens for Taxes not yet delinquent or that are being contested in good faith by appropriate proceedings and for which adequate reserves according to German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP are included in the Interim Balance Sheet, (3) such imperfections of title and Encumbrances that do not detract materially from the value or interfere materially with the present use of the property subject thereto or affected thereby (collectively, “Permitted Encumbrances”). Schedule 2.23(b) of the Disclosure Schedule lists, and the Company has Made Available to Purchaser a correct and complete copy of, each real property lease to which any member of the Company Group is a party.

(c) The tangible Assets and Properties owned, leased or licensed by any member of the Company Group are in good condition and repair in all material respects (subject to normal wear and tear).

(d) All interests held by any member of the Company Group as lessee or licensee of real property are free and clear of all Encumbrances, except as set forth in the applicable lease or license to the Company Group and for Permitted Encumbrances. Each member of the Company Group has enjoyed uninterrupted and undisputed possession of the real properties that have been taken on lease or license by them, and there are no material disputes with respect to any such lease or license.

(e) All payments required to be made by any member of the Company Group pursuant to the real property that is taken by them on lease or license have been duly paid and no member of the Company Group is in material default in performing any of their other obligations under any Contract with respect to such real property.

(f) No member of the Company Group has sub-leased or sub-licensed, or otherwise granted to any Person, the right to use or occupy any real property.

(g) No member of the Company Group has any outstanding options or rights of first refusal to purchase any leased real property or any portion thereof or interest therein.

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2.24 Brokers’ Fees; Transaction Expenses. No member of the Company Group has any Liability to pay any fees or commissions to any broker, finder, securities intermediary or agent with respect to the Transactions based upon arrangements made by or on behalf of any member of the Company Group. Neither Purchaser nor any member of the Company Group (after the Closing Date) will incur, directly or indirectly, any such Liability based on arrangements made by or on behalf of the Company in connection with the transactions contemplated by this Agreement or otherwise.

2.25 Investor Representations.

(a) This Agreement is made with Seller, who is a Non-U.S. person, in reliance upon Seller’s representations, warranties and covenants made in this Section.

(b) Seller has been advised and acknowledges that:

(1) the Shares have not been, and when issued, will not be registered under the Act, the securities laws of any state of the United States or the securities laws of any other country;

(2) in issuing and selling the Shares to Seller pursuant hereto, the Company is relying upon the “safe harbor” provided by Regulation S under the Act;

(3) it is a condition to the availability of the Regulation S “safe harbor” that the Shares not be offered or sold in the United States or to a U.S. person until the expiration of a six-month “distribution compliance period” following the Closing Date; and

(4) notwithstanding the foregoing, prior to the expiration of the six-month “distribution compliance period,” after the Closing (the “Restricted Period”), the Shares may be offered and sold by the holder thereof only if such offer and sale is made in compliance with the terms of this Agreement and either: (A) if the offer or sale is within the United States or to or for the account of a U.S. person (as such terms are defined in Regulation S), the securities are offered and sold pursuant to an effective registration statement or pursuant to Rule 144 under the Act or pursuant to an exemption from the registration requirements of the Act; or (B) the offer and sale is outside the United States and to other than a U.S. person.

(c) As used herein, the term “United States” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia, and the term “U.S. person” (as defined in Regulation S) means:

(1) a natural person resident in the United States;

(2) any partnership or corporation organized or incorporated under the laws of the United States;

(3) any estate of which any executor or administrator is a U.S. person;

(4) any trust of which any trustee is a U.S. person;

(5) any agency or branch of a foreign entity located in the United States;

(6) any nondiscretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

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(7) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated and (if an individual) resident in the United States; and

(8) a corporation or partnership organized under the laws of any foreign jurisdiction and formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Act) who are not natural persons, estates or trusts.

As used herein, the term “Non-U.S. person” means any person who is not a U.S. person or is deemed not to be a U.S. person under Rule 902(k)(2) of the Act.

(d) Seller agrees that with respect to the Shares, until the expiration of the Restricted Period:

(1) Seller, its agents or its representatives have not and will not solicit offers to buy, offer for sale or sell any of the Shares, or any beneficial interest therein in the United States or to or for the account of a U.S. person; and

(2) notwithstanding the foregoing, the Shares may be offered and sold by the holder thereof only if such offer and sale is made in compliance with the terms of this Agreement and either: (A) if the offer or sale is within the United States or to or for the account of a U.S. person (as such terms are defined in Regulation S), the securities are offered and sold pursuant to an effective registration statement or pursuant to Rule 144 under the Act or pursuant to an exemption from the registration requirements of the Act; or (B) the offer and sale is outside the United States and to other than a U.S. person; and

(3) Seller shall not engage in hedging transactions with regard to the Shares unless in compliance with the Act.

The foregoing restrictions are binding upon subsequent transferees of the Shares, except for transferees pursuant to an effective registration statement. Seller agrees that after the Restricted Period, the Shares may be offered or sold within the United States or to or for the account of a U.S. person only pursuant to applicable securities laws.

(e) Seller has not engaged, nor is it aware that any party has engaged, and Seller not engage or cause any third party to engage, in any directed selling efforts (as such term is defined in Regulation S) in the United States with respect to the Shares.

(f) Seller: (i) is domiciled and has its principal place of business outside the United States; (ii) certifies it is not a U.S. person and is not acquiring the Shares for the account or benefit of any U.S. person; and (iii) at the time of the Closing Date, the Non-U.S. person or persons acting on Non-U.S. person’s behalf in connection therewith will be located outside the United States.

(g) At the time of offering to Seller and communication of Seller’s order to purchase the Shares and at the time of Seller’s execution of this Agreement, the Non-U.S. person or persons acting on Seller’s behalf in connection therewith were located outside the United States.

(h) Seller is not a “distributor” (as defined in Regulation S) or a “dealer” (as defined in the Act).

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(i) Seller acknowledges that the Company shall make a notation in its stock books regarding the restrictions on transfer set forth in this Section and shall transfer such shares on the books of the Company only to the extent consistent therewith.

In particular, Seller acknowledges that the Company shall refuse to register any transfer of the Shares not made in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an available exemption from registration.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Company, Seller the Founders as follows:

3.1 Organization and Power. Purchaser (a) is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted and (c) is qualified to do business and is in good standing in every jurisdiction where such qualification is required, except where the failure so to qualify would not have a material adverse effect on the ability of Purchaser to consummate the Transactions.

3.2 Authorization; Enforceability. Purchaser has the power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Transactions. The execution, delivery and performance of this Agreement and the consummation of the Transactions by Purchaser have been duly authorized by all requisite corporate action on the part of Purchaser and its stockholders. This Agreement has been duly executed and delivered by Purchaser and, assuming due authorization, execution and delivery by the other parties, represents the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to the effect of (a) applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws now and hereunder in effect relating to the rights of creditors generally and (b) rules of law and equity governing specific performance, injunctive relief and other equitable remedies.

3.3 Noncontravention.

(a) The execution, delivery and performance of this Agreement and the Other Transaction Documents by Purchaser and the consummation of the Transactions do not and will not (1) conflict with, result in or constitute a violation of or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation, renegotiation, modification or acceleration of any obligation or loss of any benefit under, or require any consent, approval or waiver from any Person in each case in accordance with, any provision of the organizational documents of Purchaser, (2) result in the creation of an Encumbrance on any Properties or Assets of Purchaser, (3) subject to the making of filings and registrations and the receipt of consents and approvals provided for in Section 3.3(b), conflict with, result in or constitute a material violation of or material default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, renegotiation, modification or acceleration of any obligation or loss or modification of any benefit under, or require consent, approval or waiver from any Person in accordance with any Law or Permit applicable to Purchaser, or (4) conflict with, result in or constitute a material violation of or material default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, renegotiation, modification or acceleration of any obligation or loss or modification of any benefit under, or require consent, approval or waiver from any Person in accordance with any Contract applicable to Purchaser or any of its Assets or Properties, except in the case of the foregoing clauses (2), (3) and (4) as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Purchaser to consummate the Transactions.

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(b) No Permit or Order of, or registration or filing with or declaration or notification to any Governmental Authority is required by or with respect to Purchaser in connection with the execution, delivery and performance of the Transaction Documents or the consummation of the Transactions.

3.4 Sufficient Funds. Purchaser will have all of the funds available as and when needed that are necessary to consummate the Transactions and to perform its obligations under this Agreement. Purchaser’s obligations under this Agreement are not subject to a condition regarding Purchaser’s obtaining of funds to consummate the Transactions.

3.5 Absence of Litigation. Purchaser is not subject to any pending or, to the knowledge of Purchaser, threatened Action that would prevent or delay Purchaser from (a) executing and delivering this Agreement or the Related Agreements to which Purchaser is a party, or (b) performing Purchaser’s obligations pursuant to, or observing any of the terms and provisions of, this Agreement or the Related Agreements to which Purchaser is a party.

3.6 Access to Information. The Purchaser acknowledges that it and its authorized employees, agents, accountants, legal counsel and other representatives has had access to and has reviewed all documents and records relating to the Transactions that Purchaser has deemed necessary for it to make an informed investment decision with respect to the Company Capital Stock. Such documents and records include any and all documents listed on the Index List which is made part of this Agreement by reference as Appendix A as well as any and all documents and records included in Disclosure Schedules referenced in this Agreement. The Purchaser acknowledges that it has had the opportunity to ask the Seller, its attorneys, accountants, employees and advisors, and has requested and reviewed information regarding the Company Capital Stock, the Company and the Transactions, that it has had any and all such questions and requests answered to Purchaser’s satisfaction, and that Purchaser understands the risks and other considerations relating to its purchase of the Company Capital Stock.

3.7 No Government Review. Purchaser understands that no securities commission or other governmental authority of any state, country or other jurisdiction has approved the Company Capital Stock or the Transactions or passed upon or endorsed the merits of the Company Capital Stock or the Transaction, or confirmed the accuracy of, determined the adequacy of, or reviewed this Agreement.

3.8 Investment Experience. Purchaser has such knowledge, sophistication and experience in financial, tax and business matters in general, and investments in securities in particular, that it is capable of evaluating the merits and risks of this investment in the Company Capital Stock, and Purchaser has made such investigations in connection herewith as it deemed necessary or desirable so as to make an informed investment decision without relying upon Seller or Company for legal or tax advice related to this investment. In making Purchaser’s decision to acquire the Company Capital Stock, Purchaser has not relied upon any information other than information contained in this Agreement.

Purchaser’s certificate of incorporation, as amended from time to time, and other information required by the rules promulgated by the Act and the Securities Exchange Act of 1934, as amended, regarding the capitalization of Purchaser as is available on the Securities and Exchange Commission’s website at www.sec.gov.

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(a) The Shares, when issued and sold in compliance with the provisions of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, and the Shares will be free of any liens or encumbrances, other than any liens or encumbrances created by Seller; provided, however, that the Shares may be subject to restrictions on transfer under state and federal securities laws and as set forth in the Transaction Agreements.

(b) No consent, approval or authorization of or designation, declaration, registration, qualification or filing with any governmental authority on the part of Purchaser is required in connection with the valid execution, delivery and performance of the transaction agreements, or the offer, issuance or sale of the Shares, or the consummation of any other transaction contemplated herein or therein, except qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Shares under applicable federal and state securities laws, which filings and qualifications, if required, will be accomplished in a timely manner.

(c) Subject to Sellers representations and warranties provided in Article 2, the offer, sale and issuance of the Shares to be issued in conformity with the terms of this Agreement constitute transactions exempt from the registration requirements of the Act and applicable state securities laws.

(d) The execution, delivery and performance of and compliance with the Transaction Agreements, and the issuance of the Shares, have not resulted and will not result (with the passing of time or the giving of notice, or both) in any material violation of, or conflict with, or constitute a material default under, any provision of law, any order of any court or other governmental body, the Purchaser’s certificate of incorporation or bylaws or any material agreement to which Purchaser is a party or by which Purchaser or its property is bound or affected; nor will result in antidilution rights being implemented by any existing security holder of Purchaser; nor result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of Purchaser; nor result in the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to Purchaser, its current and proposed business or operations or any of its assets or properties.

(e) Purchaser has complied with all of its reporting and filing obligations under applicable federal and state securities laws and regulations. None of such reports or filings contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading. The audited financial statements and unaudited financial statements included in such reports and filings fairly present the financial position of Purchaser as of the dates of such financial statements in accordance with generally accepted accounting principles. Purchaser is, and has been for at least the 90 days immediately preceding Closing, subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. Purchaser satisfies and will continue to satisfy the current public information requirements of Rule 144(c) promulgated under the Act. Form S-3 is currently available to Purchaser for the registration of its securities and Purchaser shall continue to comply with the requirements for the availability of Form S-3.

(f) Neither Purchaser nor Seller has incurred, nor will incur, directly or indirectly, as a result of any action taken by Purchaser, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Transaction Agreements or any transaction contemplated thereby.

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ARTICLE 4

ADDITIONAL AGREEMENTS

4.1 Payoff Letters. The Seller shall cause each member of the Company Group to ensure that at least three Business Days before the Closing, Purchaser shall receive from all holders of Company Indebtedness set forth on Schedule 4.1, payoff letters, in commercially reasonable form, specifying the amount necessary to be paid to fully repay, satisfy, release and discharge all obligations (other than contingent obligations that customarily survive debt repayment obligations) of all members of the Company Group under any Contracts of any member of the Company Group relating to such Company Indebtedness, as supplemented and amended, as of the Closing Date. Each payoff letter shall set forth the outstanding principal amount of the item of Company Indebtedness that is the subject of the letter, any prepayment premiums or fees or termination fees with respect thereto, any accrued interest thereon and any expense reimbursement or other amounts due in respect thereof as of the Closing Date, shall state, if applicable, the per diem amount of interest and other expense thereunder, shall provide wire transfer instructions and shall provide for the release of, or authorize the relevant member of the Company Group and/or its agents to release, or evidence the release of, all Encumbrances associated with such Company Indebtedness and the termination of all other obligations (other than contingent obligations that customarily survive debt repayment obligations) associated therewith upon the payment of such outstanding amounts. As promptly as practicable (but in any event within three Business Days after the Closing Date), Purchaser shall cause the Company to pay to each holder of Company Indebtedness identified on the Pre-Closing Statement the amount due and payable to such holder that is set forth on the Pre-Closing Statement.

4.2 Tax Matters.

(a) Cooperation. Without limiting any of the other provisions of this Section 4.2, after the Closing, Purchaser shall and shall cause each member of the Company Group to, and Seller shall, as to each such Person using commercially reasonable efforts, cooperate fully, as and to the extent reasonably requested by any of them, in connection with the filing of Tax Returns pursuant to this Agreement and any audit or Action with respect to Taxes. After the Closing, Purchaser shall retain all books and records with respect to Tax matters of the Company Group which are or may be pertinent to any Tax period beginning before the Closing Date until the expiration of the applicable statute of limitations and shall make them available to Seller in connection with any audit of the Company Group which could give rise to an indemnification obligation of any of the Indemnitors.

(b) Tax Returns. Purchaser shall prepare all Tax Returns of or relating to the Company Group for the Straddle Period and for any Tax period ending on or before the Closing Date that are due after the Closing Date, which shall, except as otherwise required by applicable Law, be prepared consistently with past practice and shall provide a copy of each such income or other material Tax Return to Seller at least 20 Business Days before the due date for filing such Tax Return for Seller’s review. With respect to income and other material Tax Returns relating to any Tax period ending on or before the Closing Date or relating to any Straddle Period, Purchaser shall reflect in such Tax Returns all reasonable written comments made by Seller with respect to such Tax Returns received by Purchaser at least 10 Business Days prior to the due date for filing. Except as required by Law or as required by the final resolution of a Tax proceeding governed by Section 6.9 (which shall govern in case of any conflict with this Section 4.2(b)), Purchaser shall not amend any Tax Return of or relating to the Company Group for any Tax period ending on or before the Closing Date without the written consent of Seller (which shall not be unreasonably withheld or delayed).

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4.3 Certain Taxes and Fees. All Transfer Taxes and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the consummation of the Transactions, payable by Seller or the Company (pursuant to Contract or otherwise) will be paid and borne by Seller when due, and Seller will, at Seller’s expense, file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, fees and charges.

4.4 Release of Claims. Upon and subject to the Closing and by accepting the consideration contemplated by Section 1.1(a), Seller undertakes as follows:

(a) Seller, on behalf of itself and its successors, assigns, heirs, executors, legatees, administrators, beneficiaries, representatives, agents and any Seller Affiliates (the “Releasing Parties”), fully, finally and irrevocably releases, acquits and forever discharges each member of the Company Group and Purchaser, each of their respective officers, directors, predecessors, Controlled Affiliates, successors and assigns, and the beneficiaries, heirs, executors, personal or legal representatives, insurers and attorneys of any of them (collectively, the “Released Parties”), from any and all commitments, actions, charges, complaints, promises, agreements, controversies, debts, claims, counterclaims, suits, causes of action, damages, demands, Liabilities, obligations, costs and expenses of every kind and nature whatsoever, whether arising from any express, implied, oral, or written contract or agreement or otherwise, known or unknown, past, present or future, at law or in equity, contingent or otherwise (collectively, a “Potential Claim”), that such Releasing Parties, or any of them, had, has or may have had at any time in the past until and including the Closing, against the Released Parties, or any of them, for or by reason of any matter, cause or thing whatsoever occurring at any time at or prior to the Closing with respect to any member of the Company Group (the “Released Matters”), except that the Released Matters do not include, and nothing in this Agreement shall affect or be construed as a waiver or release by the Releasing Parties of, any Potential Claim by such Releasing Parties arising from or relating to (1) fees, salary, reimbursement for expenses, bonuses, change of control payments, compensation from Seller’s Phantom Stock Plan, or other compensation or employment benefits earned or accrued by or for the benefit of such Releasing Parties prior to the Closing in respect of services performed by such Seller as an employee or director of any member of the Company Group (provided that the foregoing exception in this clause (1) shall not include any Potential Claim relating to the right to acquire any Equity Participations of the Company or of Purchaser, (2) any rights or benefits available to any Releasing Party or its agents under this Agreement (including the right to receive Parent Company Stock or payment of the consideration for the Company Capital Stock and disclosed in the Spreadsheet, in each case on and subject to the terms and conditions set forth in this Agreement) or any agreement entered into by such Releasing Party in connection with the Transactions, (3) any amounts payable to such Releasing Party to the extent included in the Company Indebtedness or constituting Change of Control Payments, (4) claims that cannot be released as a matter of Law, and (5) any rights in any Releasing Party’s capacity as an officer or director of any member of the Company Group under any indemnification agreement between the Releasing Party and the Company that has been Made Available to Purchaser and listed on Schedule_4.5 (a)_of the Disclosure Schedule, under the certificate of incorporation or bylaws (or other organizational instruments) of any member of the Company Group that has been Made Available or under applicable Law. As used in this Schedule 4.4, the term “Seller Affiliates” includes such Seller’s directors, officers, controlling Persons, employees, counsel, advisors and affiliated investment funds, if any, and, for the avoidance of doubt, shall not include any of such Seller’s or Seller Affiliates’ portfolio companies or limited partners.

(b) No Transfer of Potential Claims. Such Seller represents and warrants to the Released Parties that such Seller has made no assignment or transfer of any of the Potential Claims for any Released Matter.

(c) Waiver of Unknown Claims. With respect to any and all Potential Claims for any Released Matter, such Seller expressly waives and relinquishes, and the other Releasing Parties shall be deemed to have expressly waived and relinquished, any and all provisions, rights and benefits conferred by any Law of any jurisdiction or principle of common law that provides that a general release does not extend to

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claims that are unknown or unsuspected to the releasor at the time the releaser executes the release, even if knowledge of such claims by the releaser would have materially affected his or her settlement with the debtor. Such Seller acknowledges that the inclusion of such unknown Potential Claims herein was separately bargained for and was a key element of this Section 4.4. Such Seller acknowledges, and the other Releasing Parties shall be deemed to have acknowledged, that they may hereafter discover facts which are different from or in addition to those that they may now know or believe to be true with respect to any and all Potential Claims herein released and agree that all such unknown Potential Claims are nonetheless released and that this Section 4.4 shall be and remain effective in all respects even if such different or additional facts are subsequently discovered. Furthermore, Seller, by signing this Agreement, hereby agrees to waive any and all rights of pre-emption or first refusal or other rights of or restrictions on the transfer of any of the Company Capital Stock conferred by the Charter Documents or any Contract with respect to the transfers of Company Capital Stock provided for in this Agreement.

(d) Covenant Not to Sue. Seller hereby irrevocably covenants to refrain from and, if Seller Controls any Releasing Parties, to cause such Releasing Parties to refrain from, asserting any Potential Claim, or commencing, instituting or causing to be commenced, any action, proceeding, charge, complaint, or investigation of any kind against any of the Released Parties, in any forum whatsoever (including, without limitation, any administrative agency), that arises out of, relates in any way to, or is based upon, any of the Released Matters.

(e) Sufficiency of Consideration. Such Seller acknowledges and agrees that the Cash Consideration and the right to receive any Future Payment to the extent the same becomes paid in respect of Company Capital Stock, owned beneficially or of record by such Seller and payable to such Seller pursuant hereto and the covenants of Purchaser contained herein provide good and sufficient consideration for every promise, duty, release, obligation, agreement and right contained in this Section 4.4.

(f) Basis of Defense; Attorneys’ Fees. This Section 4.4 may be pleaded by the Released Parties as a full and complete defense and may be used as the basis for an injunction against any action at law or equity instituted or maintained against them in violation of this Section 4.4. In the event any Potential Claim is brought or maintained by Seller or any Releasing Party against the Released Parties in violation of this Section 4.4, such Seller shall be responsible for all costs and expenses, including reasonable attorneys’ fees, incurred by the Released Parties in defending same.

(g) California Civil Code Section 1542. EACH SELLER ACKNOWLEDGES THAT HE, SHE OR IT IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

EACH SELLER, BEING AWARE OF SAID CALIFORNIA CIVIL CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE, SHE OR IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

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4.5 Section 280G. The Company shall promptly submit to the shareholders of the Company for approval (in a manner satisfactory to Purchaser), by such number of shareholders of the Company as is required by the terms of Section 280G(b)(5)(B) of the Code, any payments and/or benefits that may separately or in the aggregate, constitute “parachute payments” pursuant to Section 280G of the Code (“Section 280G Payments”) (which determination shall be made by the Company and shall be subject to review and approval by Purchaser), such that such payments and benefits shall not be deemed to be Section 280G Payments, and prior to the Closing the Company shall deliver to Purchaser evidence satisfactory to Purchaser that (A) a vote of the shareholders of the Company was solicited in conformance with Section 280G and the regulations promulgated thereunder and the requisite shareholder approval was obtained with respect to any payments and/or benefits that were subject to the shareholder vote (the “280G Shareholder Approval”), or (B) that the 280G Shareholder Approval was not obtained and as a consequence, that such payments and/or benefits shall not be made or provided to the extent they would cause any amounts to constitute Section 280G Payments, pursuant to the waivers of those payments and/or benefits, which were executed by the affected individuals prior to the shareholder vote.

ARTICLE 5

CLOSING CONDITIONS

5.1 Conditions to Obligations of Each Party. The respective obligations of each Party to consummate the Transactions will be subject to the satisfaction or waiver at or before the Closing of each of the following conditions:

(a) Requisite Shareholder Approval and Waiver. The Company shall have obtained such shareholder approval as required by the Company’s articles of association as well as the waiver of any preemptive rights and put or call rights created by Law, the Charter Documents or any Contract or other rights with respect to the Company Capital Stock.

(b) Regulatory Approvals. All approvals of Governmental Entities required to be obtained in connection with Transactions contemplated hereby, if any, shall have been obtained.

(c) No Injunctions or Restraints; Illegality. The consummation of the Transactions shall not then be restrained, enjoined or prohibited by any Order, judgment, decree, injunction or ruling (whether temporary, preliminary or permanent) of a court of competent jurisdiction or any Governmental Authority with oversight of Antitrust Laws in connection with the Transactions contemplated by this Agreement.

5.2 Additional Conditions to Obligations of the Company, Seller and the Founders. The obligations of the Company, Seller and the Founders to consummate the Transactions will be subject to the satisfaction, or written waiver by Seller, at or before the Closing of each of the following conditions:

(a) Representations, Warranties and Covenants of Purchaser. Each of the representations and warranties made by Purchaser in this Agreement shall be true and correct at and as of the Closing Date as if made on that date (except in any case that representations and warranties that expressly speak as of a specified date or time need only be true and correct or true and correct as of such specified date or time), except where the failure of the representations and warranties made by Purchaser in this Agreement to be true and correct would not reasonably be expected to have a material adverse effect on the ability of Purchaser to consummate the Transactions. Purchaser will have performed and complied in all material respects with all of its covenants, obligations and conditions in this Agreement that are required to be performed and complied with by it at or before the Closing.

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(b) Payment and Exchange. Purchaser shall fund the Escrow Amount pursuant to Section 1.4, the amounts payable pursuant to Sections 1.1, 1.5, 1.6 and the amounts payable pursuant to Section 4.1, and perform its obligations with respect to the share exchange contemplated by Section 1.5.

(c) Receipt of Closing Deliveries. The Seller will have received a duly executed copy of the Escrow Agreement.

5.3 Additional Conditions to the Obligations of Purchaser. The obligations of Purchaser to consummate the Transactions will be subject to the satisfaction, or written waiver by Purchaser, at or before the Closing of each of the following conditions:

(a) Representations, Warranties and Covenants of the Company, Seller and the Founders. The (1) representations and warranties in Fundamental Representations shall be true and correct in all respects as of the Closing Date as though made on and as of the Closing Date (except that any Fundamental Representations that expressly speak as of a specified date or time need only be true and correct as of such specified date or time) and (2) representations and warranties of the Company, Seller and the Founders in this Agreement (other than the Fundamental Representations) shall be true and correct in all respects as of the Closing Date as though made on and as of the Closing Date (except that any such representations and warranties that expressly speak as of a specified date or time need only be true and correct in all respects as of such specified date or time), except for breaches of or inaccuracies in such representations and warranties that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company, Seller and the Founders will have performed and complied in all material respects with all of their covenants, obligations and conditions in this Agreement that are required to be performed and complied with by them at or before the Closing.

(b) Receipt of Closing Deliveries. Anytime on or prior to the Closing (unless a specific time is otherwise specified below) the Company shall have delivered, or caused to be delivered, to Purchaser the following:

(1) Third Party Consents. Written evidence reasonably satisfactory to Purchaser that each party to the Contracts listed on Schedule 5.3(b)(1) has consented to the consummation of the transactions contemplated hereby and affirmed the continuing effectiveness of the applicable Contract following the consummation of the transactions contemplated hereby on the same terms and conditions in effect immediately prior to the consummation of the transactions contemplated hereby.

(2) Termination of Existing Agreements. Each of the agreements set forth in Schedule 5.3(b)(2) shall have been terminated effective as of the Agreement Date and the Company shall have been released of any liability arising in respect thereof.

(3) Founder Non-Competition Agreements. Founder Non-Competition Agreements executed and delivered concurrently with the execution of this Agreement shall be in full force and effect (subject to applicable Law and other than any failure to be in full force and effect resulting from any termination by Purchaser or the death or disability of the other party thereto) at the Closing.

(4) Pre-Closing Statement and Closing Balance Sheet. Between 10 Business Days and three Business Days before the Closing Date, the Company shall deliver the Company Group’s good faith estimate of the Pre-Closing Statement and Closing Balance Sheet.

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(5) Officers’ Certificate. A certificate, dated as of the Closing Date, executed by the Chief Executive Officer and Chief Financial Officer of the Company to the effect that each of the conditions set forth in clauses (a) and (b) of Section 5.3 has been satisfied and certifying certifying that attached are correct and complete copies of the Charter Documents, stock ledger and board of directors actions and stockholders’ actions in connection with the Transactions.

(6) Resignation of Officers and Directors. Written resignations from each of the officers and directors of the Company and its Subsidiaries from their positions as directors and officers of the Company and its Subsidiaries, respectively, effective as of the Agreement Date in a form reasonably acceptable to Purchaser.

(7) Spreadsheet. The Spreadsheet certified as complete and correct executed by the Chief Executive Officer and Chief Financial Officer of the Company as of the Closing Date.

(8) Legal Opinion. A legal opinion from legal counsel to the Company, substantially in the form attached hereto as Exhibit C.

(9) Share Register. A copy of the Share Register of the Company in which Purchaser has been registered as the sole holder of all Company Capital Shares.

(c) Retention of Key Employees. Each of the Key Employees will be employed by the Company Group immediately before the Closing Date. Nothing in this Agreement shall be deemed to amend the terms of employment of the non-Key Employees. As of the Closing and except as required by Law in each jurisdiction in which a Company Group employee is located, all employees will be at-will employees of a member of the Company Group and will not be guaranteed employment by the Company Group, Purchaser or any of its Affiliates for any fixed term, except as a result of any agreements or arrangements implemented by Purchaser prior to the Closing.

(d) Section 280G Payments. With respect to any payments or benefits that Purchaser determines may constitute a Section 280G Payment, the shareholders of the Company shall have approved, pursuant to the method provided for in the regulations promulgated under Section 280G of the Code any such Section 280G Payments or shall have disapproved such payments and/or benefits, and, as a consequence, no Section 280G Payments shall be paid or provided for in any manner and Purchaser and its subsidiaries shall not have any liabilities with respect to any Section 280G Payments.

(e) No Material Adverse Effect. No event or condition of any character that has had or is reasonably likely to have a Material Adverse Effect on the Company Group shall have occurred since the Agreement Date.

ARTICLE 6

SURVIVAL, ESCROW FUND AND INDEMNIFICATION

6.1 Survival. The representations and warranties of the Company, Seller and the Founders contained in or made pursuant to this Agreement or in any certificate delivered pursuant to this Agreement will survive in full force and effect until, and terminate on July 31, 2014 except that (a) the Fundamental Representations will survive until, and terminate upon, the expiration of the applicable statute of limitations and (b) that in the event of fraud with respect to a representation or warranty, such representation or warranty shall survive the Closing and shall remain in full force and effect until the expiration of the statute of limitations provided that if a Claims Notice is submitted in accordance with Section 6.6 prior to the applicable

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termination date for a representation or warranty, in which case the survival period for such representation or warranty solely as to the Liability Claim that is the subject of such Claims Notice will survive until such specific Liability Claim has been finally resolved. Except as otherwise expressly provided in this Agreement, each covenant hereunder will survive the Closing in accordance with its terms. Notwithstanding anything to the contrary in this Agreement, it is the intention of the Parties that the survival periods described in this Section 6.1 supersede any applicable statute of limitations with respect to the applicable representations, warranties, covenants and agreements.

6.2 Escrow Fund. From and after the Closing, for the period described in this Article 6, the Escrow Fund will be available to compensate Purchaser (on behalf of itself or any other Indemnified Person) for Losses upon the terms and subject to the conditions and other limitations contained in this Article 6. Except as provided in Section 6.4(c), the Escrow Fund shall not be available to compensate any Indemnified Person for Losses described in Section 6.3(b).

6.3 Indemnification.

(a) From and after the Closing, subject to this Article 6, Seller and the Founders; however, with respect to the Founders strictly limited to any claim directly related to, or in connection with, the Fundamental Representations (in their capacity as such, the “Indemnitor”) will, except as stipulated in Section 6.4 be strictly limited to the Escrow Amount deposited into the Escrow Fund, indemnify and hold harmless Purchaser and its Affiliates (including, after the Closing, any member of the Company Group) and their respective officers, directors, agents, attorneys and employees, and each Person who Controls or may Control Purchaser or any member of the Company Group (each of the foregoing, an “Indemnified Person”) from and against any and all losses, Liabilities, damages, costs and expenses, including costs of investigation and reasonable defense, legal and consulting fees, arbitration and court costs, deficiencies, dues, Taxes, and any interest costs or penalties (collectively, “Losses”), suffered or incurred by an Indemnified Person to the extent directly arising out of, related to, or resulting from the following:

(1) any failure of any representation, warranty or certification made by the Company, or Seller in Article 2 or any certificate relating to Article 2 that is required to be delivered to Purchaser in accordance with this Agreement to be true and correct on the Agreement Date, unless expressly stipulated otherwise and except that those representations and warranties that address matters only as of a particular date need be true and correct only as of such date; provided that that the determination of the amount of Losses arising out of or resulting from such failure shall be made as if “material,” “in all material respects,” “Material Adverse Effect” or similar qualifiers and all dollar thresholds were not included therein; provided further that for the avoidance of doubt, when determining whether any such representation, warranty or certificate that is qualified by “material,” “in all material respects,” “Material Adverse Effect” or similar qualifiers or Euro thresholds is so true and correct, such qualifiers and Euro thresholds shall not be disregarded;

(2) any breach of or default in connection with any of the covenants or agreements made by the Company or Seller in this Agreement, other than the covenants and agreements referred to in Section 6.3(b);

(3) any claims or Actions by or purportedly by or on behalf of any holder or former holder of Company Capital Stock or Equity Participations of the Company that relate or purport to relate to the Transactions that, if meritorious, would constitute or give rise to an inaccuracy in or breach of any representation or warranty made by the Company or Seller in this Agreement;

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(4) any Taxes attributable to any period or portion thereof ending on or before the Closing Date to the extent not included in Working Capital or Company Indebtedness, including, for the avoidance of doubt, any Losses arising from or related to (i) the preparation of any amended Tax Returns (including obtaining any necessary valuations) as a result of the conversion of the Company from a KG into an AG, and (ii) Taxes (determined after the application of any applicable net operating losses of the Company existing as of the Closing Date) resulting from the cancellation or waiver of any loans between the Company and any of its shareholders (the “Pre-Closing Tax Liabilities”)

(5) all Change of Control Payments; or

(6) the amount of any Company Indebtedness arising out of circumstances or events that are not known to Purchaser prior to the determination of the Final Cash Consideration to the extent such Company Indebtedness was not included in the determination of the Final Cash Consideration.

(b) Indemnitor will indemnify and hold the Indemnified Persons harmless from and against all Losses suffered or incurred by an Indemnified Person to the extent arising out of, related to or resulting from any breach of or default in connection with any of the covenants or agreements contained in Section 4.4 (Release of Claims).

(c) In the case of any Taxable period that includes but does not end on the Closing Date (a “Straddle Period”), the amount of Pre-Closing Tax Liabilities based on or measured by income or receipts or relating to any value added tax or sales or use Tax will be determined based on an interim closing of the books as of the close of business on the Closing Date, and the amount of any Pre-Closing Tax Liabilities not based on or measured by income or receipts or relating to any sales or use Tax for a Straddle Period will be deemed to be the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the portion of the Straddle Period ending at the end of the day that is the Closing Date and the denominator of which is the number of days in such Straddle Period, provided that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions), other than with respect to property placed in service after the Closing, shall be allocated between the portion of a Straddle Period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each period, provided, further, that notwithstanding any other provision of this Agreement, any Change of Control Tax Amount shall be considered to be a Pre-Closing Tax Liability.

6.4 Limitations on Indemnification.

(a) The Indemnified Persons may not recover Losses from the Escrow Fund or the Indemnitors in respect of any claim for indemnification under Section 6.3(a)(1) unless and until the total amount of all Losses arising out of or resulting from the matters described in Section 6.3(a)(1) that have been incurred or paid by the Indemnified Persons exceeds €100,000 (the “Indemnification Threshold”), it being understood that if the total amount of such Losses exceeds the Indemnification Threshold, then the Indemnified Persons shall be entitled to be indemnified for the entire amount of such Losses; provided that the Indemnified Persons will be entitled to recover for, and the Indemnification Threshold will not apply to, any Losses with respect to any breach of or inaccuracy in any representation or warranty made in the Fundamental Representations or pursuant to fraud by the Company in connection with this Agreement.

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(b) Recovery by Indemnified Persons of their Losses will be subject to the following limitations:

(1) Except as otherwise set forth in this Section 6.4 and with respect to Losses claimed under Section 6.3(a)(1) an Indemnified Person may recover its Losses only and exclusively from the Escrow Fund (it being understood and agreed that the amount then available in the Escrow Fund shall be the sole and exclusive source of recovery with respect to such Losses).

(2) With respect to Losses in connection with fraud by the Company in this Agreement, any other Transaction Document or any certificates or other instruments delivered by or on behalf of the Company pursuant to this Agreement or claimed under Section 6.3(a)(1) as a result of breaches of or inaccuracies directly related to, and in connection with, the Fundamental Representations or claimed under Section Error! Reference source not found., an Indemnified Person may recover its Losses (A) from the Escrow Fund and (B) to the extent such Losses exceed the amount recovered from the Escrow Fund, directly from the Indemnitors.

(c) An Indemnified Person may recover all of its Losses suffered or incurred by such Indemnified Person to the extent arising out of, related to or resulting from any of the matters described in Section 6.3(b) only from the Indemnitor making the applicable representation, warranty, covenant or agreement, or from the Escrow Payment that is to be otherwise released to Indemnitor at the time such release would otherwise be made (and Indemnitor and Seller shall cooperate in facilitating the payment of such amounts to Purchaser).

(d) Except as otherwise required by applicable Law, the Parties shall treat any indemnification payments made under this Agreement as an adjustment to the purchase price paid under this Agreement for accounting and Tax purposes.

(e) Indemnitor will not have any right of contribution, right of indemnity or other right or remedy against Purchaser, any member of the Company Group or any other Indemnified Person for any indemnification payments made by Indemnitor (whether directly or out of the Escrow Fund) pursuant to this Article 6, except and to the extent that any of the Indemnified Persons has also caused such Losses by any contributory act or omission.

(f) .

(g) No Indemnified Person’s rights under this Article 6 will be adversely affected by any investigation conducted, or any knowledge acquired or capable of being acquired, by such Indemnified Person at any time, whether before or after the Agreement Date, or by the waiver of any condition to Closing. No Indemnified Person shall be required to show reliance on any representation, warranty, certificate or other agreement in order for such Indemnified Person to be entitled to indemnification hereunder.

(h) No Indemnified Person shall be entitled to indemnification pursuant to this Article 6 for any express component of the Cash Consideration or any item expressly included in the determination of the Final Cash Consideration (it being understood that Indemnitor shall not be obligated to indemnify, defend or hold harmless any Indemnified Person from and against any Losses to the extent an item was resolved in connection with the final determination of the Final Cash Consideration).

(i) All Losses for which any Indemnified Person would otherwise be entitled to indemnification under this Article 6 shall be reduced by the amount of any insurance proceeds, or other third-party indemnification, contribution or reimbursement payments that are actually received by such Person in connection with such Losses or the circumstances giving rise thereto; provided that the Indemnified Persons shall have no obligation to seek recovery pursuant to any insurance policy or from any such third-party. In the event that any such insurance proceeds, or other third-party indemnification, contribution or

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reimbursement payments are realized by an Indemnified Person subsequent to receipt by such Indemnified Person of any indemnification payment under this Agreement in respect of the claims to which such insurance proceeds, or other third-party indemnification, contribution or reimbursement payments relate, appropriate refunds shall be made promptly by the relevant Indemnified Person of all or the relevant portion of such insurance proceeds, or other third-party indemnification, contribution or reimbursement payments.

(j) From and after the Closing, the remedies contained in this Article 6 and in Section 1.3 are intended to provide the sole and exclusive remedy of each Indemnified Person for matters arising out of this Agreement; provided, however, that nothing in this Article 6 or elsewhere in this Agreement shall affect the Parties’ rights to specific performance, injunction or other equitable remedies to enforce the Parties’ obligations under this Agreement), or limit recovery against an Indemnitor for such Indemnitor’s fraud or such Indemnitor’s willful breach of any of the covenants or agreements contained Section 4.4 (Release of Claims).

6.5 Escrow Claim Period. The period during which claims for indemnification from the Escrow Fund may be initiated (the “Claim Period”) will commence at the Closing Date and terminate at 11:59 p.m. Pacific time on July 31, 2014 (the “Claim Period Expiration Date”). Notwithstanding anything contained in this Agreement or the Escrow Agreement to the contrary, on the Claim Period Expiration Date and thereafter, such portion of the Escrow Fund equal to the amount of Losses that are reasonably expected to be paid, suffered or sustained by the Indemnified Persons arising out of or resulting from any unresolved or unsatisfied Liability Claims specified in any Claims Notice delivered to the Escrow Agent on or before the Claim Period Expiration Date will remain in the Escrow Fund until such Liability Claims have been resolved or satisfied or are no longer reasonably expected to be paid, suffered or sustained.

6.6 Claims for Indemnification. At any time that an Indemnified Person desires to claim a Loss (a “Liability Claim”) that it reasonably believes is indemnifiable under Section 6.3, Purchaser will deliver a notice of such Liability Claim (a “Claims Notice”) to Seller. With respect to a Liability Claim under Section 6.3(a) with respect to which Purchaser seeks recovery from the Escrow Fund, at the same time Purchaser delivers a Claims Notice to Seller, Purchaser will deliver a Claims Notice to the Escrow Agent. A Claims Notice will describe the Liability Claim in reasonable detail and indicate the amount (estimated, if necessary and to the extent feasible) of the Loss that has been or is reasonably expected to be paid, suffered or sustained by the Indemnified Persons. To the extent that the amount of a Loss is not determinable as of the date of delivery of a Claims Notice, Purchaser may deliver a Claims Notice stating the maximum amount of Loss that Purchaser in good faith estimates or anticipates that an Indemnified Person is reasonably likely to pay or suffer, except that Purchaser’s provision of an estimated or anticipated amount of Loss will not limit the Loss recoverable or recovered by an Indemnified Person, except as provided in Section 6.5. No delay in or failure to give a Claims Notice by Purchaser to Seller (or in the case of a Liability Claim seeking recovery from the Escrow Fund, the Escrow Agent, or the applicable Indemnitor) pursuant to this Section 6.6 will adversely affect any of the other rights or remedies that Purchaser has under this Agreement or alter or relieve the Indemnitors of their obligations to indemnify the Indemnified Persons pursuant to this Article 6, except and to the extent (and only to the extent) that such delay or failure has prejudiced the Indemnitors.

6.7 Objections to and Payment of Claims.

(a) The Seller (or the applicable Indemnitor) may object to any Liability Claim set forth in such Claims Notice by delivering written notice to Purchaser (with a copy to the Escrow Agent if a Claims Notice was delivered to the Escrow Agent) of Seller’s objection (an “Objection Notice”). Such Objection Notice must describe the grounds for such objection in reasonable detail.

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(b) If an Objection Notice is not delivered by Seller to Purchaser (with a copy of the Escrow Agent if a Claims Notice was delivered to the Escrow Agent) within 30 Business Days after delivery by Purchaser of the Claims Notice, such failure to so object will be an irrevocable acknowledgment by each Party (including Seller) that the Indemnified Persons are entitled to indemnification under Section 6.3 for the Losses set forth in such Claims Notice in accordance with this Article 6.

(c) If the Claims Notice was delivered to the Escrow Agent and Seller and no Objection Notice was delivered to the Escrow Agent within 30 Business Days of the delivery of the Claims Notice, or an Objection Notice was delivered to Purchaser and the Escrow Agent within 30 Business Days of the delivery of the Claims Notice, but such Objection Notice states that it was, or admits liability, only with respect to a portion of the Losses claimed in the Claims Notice, the Escrow Agent will deliver to Purchaser as soon as practicable cash from the Escrow Fund having a value equal to (1) the amount of the Losses set forth in such Claims Notice, if no Objection Notice was delivered to the Escrow Agent, or (2) the amount of the portion of the Losses set forth in such Claims Notice to which no objection was made, if an Objection Notice was delivered to Purchaser and the Escrow Agent, provided that, to the extent that the amount of the Losses set forth in the Claims Notice (or portion thereof) is an estimate, Purchaser (on behalf of itself or any other Indemnified Person) will not be so entitled to receive, and the Escrow Agent will not deliver, funds in respect of such portions of such estimated Losses unless and until the amount of such estimated Losses is finally determined; and provided further that, with respect to Liability Claims recoverable from the Escrow Fund, if the entire amount then in the Escrow Fund is insufficient to cover such Losses, and recovery directly from the Indemnitors is permitted hereunder, Indemnitor shall within 10 Business Days of the determination of such Losses wire transfer to Purchaser (on behalf of itself and any other Indemnified Persons) Escrow Funding of any such shortfall.

(d) From the time that an Indemnified Person delivers a Claims Notice to Seller (or the applicable Indemnitor) pursuant to Section 6.6 until the time that the dispute, claim or controversy underlying such Claims Notice has been resolved pursuant to Section 6.8, if reasonably requested by Seller, Purchaser will afford Seller and its accountants, counsel and other representatives reasonable access during normal business hours and at the applicable normal work location to (i) all of the properties, books, Contracts, commitments and records of the Company Group that are materially related to the Liability Claim (other than with respect to Taxes), and (ii) any Continuing Employees who would reasonably be expected to have knowledge of the subject matter of the Liability Claim, in each case, as Seller may reasonably request; provided, however, that Seller shall be responsible for paying its own costs and expenses incurred in connection with its and its accountants’, counsels’ and representatives’ review of and access to such matters and people and Purchaser may restrict or otherwise prohibit access to any such properties, books, Contracts, commitments, records, information or Continuing Employees and officers to the extent that (A) any applicable Law requires Purchaser or any of its Affiliates to restrict or otherwise prohibit access thereto, (B) access thereto would result in the waiver or other loss of any attorney-client privilege of Purchaser or any of its Affiliates or any member of the Company Group applicable to such documents or information or disclosure to Seller of attorney work product prepared by or for counsel for Purchaser or any of its Affiliates or any member of the Company Group, or (C) access to a Contract of Purchaser or any of its Affiliates or any member of the Company Group would violate or cause a default under, or give a third party the right terminate or accelerate the rights under, such Contract.

6.8 Resolution of Objections to Claims.

(a) If Seller objects in writing to any Liability Claim made in any Claims Notice within 30 Business Days after delivery of such Claims Notice, Seller and Purchaser will negotiate in good faith with respect to each such Liability Claim. If Seller and Purchaser should so agree, a memorandum setting forth such agreement will be prepared and would need to be signed by both Parties to be enforceable. To the

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extent that a Liability Claim is recoverable from the Escrow Fund under Section 6.4, a copy of the memorandum setting forth the agreement will be delivered to the Escrow Agent. The Escrow Agent will be entitled to rely on any such memorandum and will distribute cash to Purchaser as soon as practicable from the Escrow Fund. To the extent a Liability Claim is recoverable directly from the Indemnitor under Section 6.4, Indemnitor will promptly, and in no event later than 10 Business Days after Seller and Purchaser enter into such memorandum, wire transfer to Purchaser immediately available funds equal to the amount of cash agreed to be delivered to Purchaser in the memorandum or, in the case of a Loss recoverable under Section 6.4(c), instruct the Escrow Agent to pay to Purchaser the relevant amount otherwise releasable from the Escrow Fund to such Indemnitor.

(b) If no such agreement can be reached after good-faith negotiation and after 30 Business Days after delivery of an Objection Notice, either Purchaser or Seller (on behalf of the Indemnitors) (or the applicable Indemnitor) may bring an Action against the other to resolve the dispute. To the extent a Liability Claim is recoverable directly from any Indemnitors under Section 6.4, each such Indemnitor will promptly, and in no event later than 30 Business Days after such Indemnitor is notified of the final resolution of any dispute in accordance with this Section 6.8(b), wire transfer to Purchaser immediately available funds equal to the amount of Losses determined in accordance with this Section 6.8(b), except that if the final resolution provides for the payment of the Losses in another manner, the Indemnitors will make payment of the Losses according to the final resolution. If the amount of the Losses so determined is an estimate, then the Indemnitors will be required to make such payment within 10 Business Days of the date that the amount of the Loss is finally determined.

6.9 Third-Party Claims. If Purchaser receives written notice of a third-party claim that Purchaser reasonably believes may result in a Liability Claim by or on behalf of an Indemnified Person, Purchaser shall notify Seller and the Founders (or the applicable Indemnitor) of such third-party claim promptly upon Purchaser’s receipt of such third-party notice, and provide Seller and Founders (or the applicable Indemnitor) the opportunity to participate at his own cost in, and except for any claim connected to an alleged breach of any Fundamental Representations and/or Tax Liability, Seller and Founders may not control or conduct, any defense of such claim. Except for any claim connected to an alleged breach of any German Pre-Closing Tax Liability, the Seller’s and/or the Founders’ participation will be subject to Purchaser’s right to control such defense. Purchaser will have the right to settle any such claim, but if Seller of the Founders do not consent in writing to the settlement, the settlement will not be determinative of the amount of Losses relating to such matter or whether such Losses are indemnifiable Losses under this Article 6. For purposes of clarification, in case of any claim related to, or in connection with, an alleged breach of any German Pre-Closing Tax Liability, Seller and Founders shall be entitled to solely direct and control or conduct any defense of such claim, and Purchaser agrees to reasonably assist and cooperate with Seller and Founders in such case, on behalf of and in the interest of Company (“Prozesstandschaft”) Seller and/or Founders shall receive any and all proxy statements required therefore. If Seller consents in writing to the settlement, which consent shall be deemed to have been given unless Seller shall have objected within 30 Business Days after receipt of a written request for such consent from Purchaser, neither Seller nor any Indemnitor will have any power or authority to object to the amount or validity of any claim by or on behalf of any Indemnified Person for indemnity with respect to such settlement.

ARTICLE 7

GENERAL PROVISIONS

7.1 Certain Interpretations. When a reference is made in this Agreement to an Appendix, Exhibit or Schedule, such reference shall be to an Appendix, Schedule or Exhibit to this Agreement unless otherwise indicated. When a reference is made in this Agreement to an Article or a Section, such reference shall be to an

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Article or a Section of this Agreement unless otherwise indicated. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” All references in this Agreement to “$”, “USD” or dollars shall mean U.S. denominated dollars. All references in this Agreement to “€”, “EUR” or euros shall mean European Union denominated currency. The table of contents and headings set forth in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefor, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document. Unless stipulated otherwise herein, any EURO amounts or thresholds set forth herein shall not be used as a determinative benchmark for establishing what is or is not “material” or a “Company Material Adverse Effect” under this Agreement.

7.2 Assignment. Neither this Agreement nor any right, interest or obligation under this Agreement may be assigned or delegated by any Party to this Agreement by operation of Law or otherwise without the prior written consent of the other Parties and any attempt to do so will be void.

7.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with acknowledgment of complete transmission) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice or, if specifically provided for elsewhere in this Agreement, by email); provided, however, that notices sent by mail will not be deemed given until received:

(a) if to Purchaser to:

E2open, Inc.

4100 East Third Avenue, Suite 400

Foster City, California 94404

Attention: Peter J. Maloney

Facsimile No.: (650) 645-6554

with a copy (which shall not constitute notice) to:

E2open, Inc.

4100 East Third Avenue, Suite 400

Foster City, California 94404

Attention: Scott Miller

Facsimile No.: (650) 645-6554

and

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Attention: Aaron Alter

Facsimile No.: (650) 493-6811

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(b) if to Company (prior to the Closing), to:

ICON-SCM AG

An der Raumfabrik 31 a

Karlsruhe, Germany

with a copy (which shall not constitute notice) to:

Fisher Broyles LLP

4470 Cox Road, Suite 250

Glen Allen, Virginia 23060

Attention: Michael Kuhn

Facsimile No.: [•]

(c) if to Seller, to:

ICON Gesellschaft für Supply Chain Management mbH

An der Raumfabrik 31a

76227 Karlsruhe, Germany

Attention: Dr. Kurt Mannchen & Dr. Michael Keppler

Facsimile No.: [•]

(d) if to the Founders, to:

c/o ICON Gesellschaft für Supply Chain Management mbH

An der Raumfabrik 31a,

76227 Karlsruhe, Germany

Attention: Dr. Kurt Mannchen & Dr. Michael Keppler

Facsimile No.: [•]

7.4 Confidentiality. Each of the Parties hereto hereby agrees that the information obtained pursuant to the negotiation and execution of this Agreement or the effectuation of the transactions contemplated hereby, shall be governed by the terms of the Confidentiality Agreement dated as of March 13, 2013 (the “Confidentiality Agreement”), between the Company and Purchaser. In this regard, the Company acknowledges that the Purchaser Common Stock is publicly traded and that any information obtained during the course of its due diligence could be considered to be material non-public information within the meaning of federal and state securities laws. Accordingly, the Company acknowledges and agrees not to engage in any discussions, correspondence or transactions in the Purchaser Common Stock in violation of applicable securities laws.

7.5 Public Disclosure. Except as required by Law, neither the Company nor any of its representatives shall issue any statement or communication to any third party (other than its agents that are bound by confidentiality restrictions) regarding the subject matter of this Agreement or the transactions contemplated hereby, including, if applicable, the termination of this Agreement and the reasons therefor, without the consent of Purchaser. Prior to its release, Purchaser shall consult with the Company and provide the Company the opportunity to review the initial press release regarding the announcement of this Agreement or the consummation of the transactions contemplated hereby.

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7.6 Entire Agreement. This Agreement, the Confidentiality Agreement, the other Transaction Documents and the documents, instruments and other agreements specifically referred to herein or therein or delivered pursuant hereto or thereto, including all appendices, exhibits and schedules hereto and thereto, constitute the entire agreement of the Parties with respect to the subject matter of this Agreement and supersede all prior agreements, term sheets, letters of interest, correspondence (including e-mail) and undertakings, both written and oral, between Purchaser, on the one hand, and the Company, Seller and the Founders, on the other hand, with respect to the subject matter of this Agreement, except for the Confidentiality Agreement, which will continue in full force and effect, and will survive any termination of this Agreement, in accordance with its terms.

7.7 No Third Party Beneficiaries. Except as provided in Article 6 and Section Error! Reference source not found., this Agreement is for the sole benefit of the Parties and their permitted assigns and nothing in this Agreement, express or implied, is intended to or will confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

7.8 Specific Performance and Other Remedies. The rights and remedies of the Parties shall be cumulative (and not alternative). The Parties agree that, in the event of any breach or threatened breach by any Party of any covenant, obligation or other provision set forth in this Agreement for the benefit of another Party: (a) such other Party shall be entitled, without proof of actual damages (and in addition to any other remedy that may be available to it) to: (1) an Order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (2) an injunction restraining such breach or threatened breach; and (b) such other Party shall not be required to provide any bond or other security in connection with any such Order or injunction or in connection with any related Action. Any and all remedies herein expressly conferred herein upon a Party hereto shall be deemed to be cumulative with, and not exclusive of, any other remedy conferred hereby, or by law or in equity upon such Party, and the exercise by a Party hereto of any one remedy will not preclude the exercise of any other remedy.

7.9 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties hereto. The Parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

7.10 Governing Law. Subject to Section 7.11 below, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

7.11 Dispute Resolution/Mediation/Jurisdiction. The Parties agree that they will, prior to commencing any litigation, attempt in good faith, to resolve any dispute or conflict by mediation as set forth in this Section 7.11.

(a) If a dispute or controversy should arise that the parties cannot resolve informally, the aggrieved party shall notify the other party in writing of the nature of the dispute with as much detail as is practicable. Both parties shall prepare and exchange written position statements setting forth the issues in dispute and their positions, summarizing the negotiations which have taken place, and attaching relevant documentation. Within thirty (30) days after delivery of such written notification, one or more senior executives in equal number who shall have authority to settle the dispute on behalf the parties (hereinafter, the “Senior Executives”) shall meet and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. All reasonable requests for information made by one party to the other will be honored.

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(b) If the Senior Executives cannot resolve the dispute or agree upon a written plan of corrective action to do so within forty-five (45) days after the exchange of the parties’ written position statements, or if the parties fail to meet within such time period, or if the agreed upon completion dates in the written plan of corrective action are exceeded, either party may submit the dispute for resolution by mediation. The mediation proceeding shall be subject to, and governed by the laws of the Federal Republic of Germany, without any regard such country’s or other jurisdiction’s conflicts of law principles. The mediation shall be conducted in English and in accordance with the rules and regulations of the “Schlichtungs- und Mediationsordnung der Schlichtungsstelle für kaufmännische Streitigkeiten” of the Frankfurt Chamber of Industry and Commerce (Industrie- und Handelskammer Frankfurt am Main) located in Frankfurt am Main, Germany, or at another location agreed to by both parties. Mediation will continue for at least fifteen (15) business days unless the mediator or panel of mediators chooses to withdraw sooner. At the request of either party, the mediator or panel of mediators will be asked to provide an evaluation of the dispute and the parties’ relative positions. Each party shall bear its own costs of mediation effort. If the dispute cannot be resolved through mediation, either party may abandon this dispute resolution process and pursue its legal remedies as set forth in Section 7.11 (c). Except as otherwise specifically provided, neither party shall be able to terminate this Agreement for breach or initiate legal process unless and until the dispute resolution procedure set forth in Section 7.11 (b) above have been employed or waived.

(c) Subject to the alternate dispute resolution proceedings set forth in Section 7.11 (a) and (b), each of the Parties hereto irrevocably consents to the exclusive jurisdiction and venue of the Delaware Court of Chancery in connection with any matter based upon or arising out of this Agreement and the other Transactions contemplated by this Agreement or any other matters contemplated herein (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware). Each Party agrees not to commence any legal proceedings related hereto except in such Courts of the State of Delaware (or, only if the Courts of the State of Delaware declines to accept jurisdiction over a particular matter, in any federal court within the State of Delaware). By execution and delivery of this Agreement, each Party hereto irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and to the appellate courts therefrom solely for the purposes of disputes arising under the this Agreement and not as a general submission to such jurisdiction or with respect to any other dispute, matter or claim whatsoever. The Parties irrevocably consent to the service of process out of any of the aforementioned courts in any such action or proceeding by the delivery of copies thereof by overnight courier to the address for such Party to which notices are deliverable hereunder. Any such service of process shall be effective upon delivery. Nothing herein shall affect the right to serve process in any other manner permitted by applicable law. The Parties hereto hereby waive any right to stay or dismiss any action or proceeding under or in connection with this Agreement brought before the foregoing courts on the basis of (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, or that it or any of its property is immune from the above-described legal process, (ii) that such action or proceeding is brought in an inconvenient forum, that venue for the action or proceeding is improper or that this Agreement may not be enforced in or by such courts, or (iii) any other defense that would hinder or delay the levy, execution or collection of any amount to which any Party hereto is entitled pursuant to any final judgment of any court having jurisdiction.

7.12 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

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7.13 USA Patriot Act. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For non-individual persons such as a business entity, a charity, a trust or other legal entity the Escrow Agent will ask for documentation to verify its formation and existence as a legal entity. The Escrow Agent may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. Seller agrees to provide all such information and documentation as to themselves as requested by Escrow Agent to ensure compliance with federal law.

7.14 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the Parties to the terms and conditions of this Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, Purchaser, the Company, Seller and the Founders have caused this Agreement to be executed as of the date first written above by them or their respective officers or trustees thereunto duly authorized.

PURCHASER: E2OPEN, INC.
By:	/s/ Mark E. Woodward
Name:	Mark E. Woodward
Title:	President, Chief Executive Officer and Director
COMPANY: ICON-SCM AG
By:	/s/ Dr. Kurt Mannchen
Name:	Dr. Kurt Mannchen
Title:	Managing Director
By:	/s/ Dr. Michael Keppler
Name:	Dr. Michael Keppler
Title:	Managing Director

[Signature Page to Share Purchase Agreement]

IN WITNESS WHEREOF, Purchaser, the Company, Seller and the Founders have caused this Agreement to be executed as of the date first written above by them or their respective officers or trustees thereunto duly authorized.

SELLER: ICON GESELLSCHAFT FÜR SUPPLY CHAIN MANAGEMENT MBH
By:	/s/ Dr. Kurt Mannchen
Name:	Dr. Kurt Mannchen
Title:	Managing Director
By:	/s/ Dr. Michael Keppler
Name:	Dr. Michael Keppler
Title:	Managing Director
FOUNDERS: DR. MICHAEL KEPPLER
DR. KURT MANNCHEN

[Signature Page to Share Purchase Agreement]

Annex A

Definitions

Act	Shall have the meaning set forth in Section 2.25.
Action	Shall mean any criminal, judicial, administrative or arbitral action, investigation of which a Party has knowledge, audit, charge, claim, complaint, demand, litigation, mediation, proceeding or suit, whether civil, criminal, administrative or judicial commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority.
Agreement	Shall have the meaning set forth in the Preamble.
Agreement Date	Shall have the meaning set forth in the Preamble.
Affiliate or Affiliates	Shall mean when used with reference to any Person, means another Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with such first Person.
AktG	Shall mean the German Stock Corporation Act.
Anti-bribery Laws	Shall have the meaning set forth in Section 2.19(b).
Antitrust Laws	Shall mean all federal, state or regional statutes, rules, regulations, orders, decrees, administrative and judicial doctrines and other Laws of any country or jurisdiction, including antitrust, competition or trade regulation Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessoning competition through merger or acquisition.
Assets and/or Properties	Shall mean with respect to any Person, means all assets of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned, licensed or leased by such Person, including cash, cash equivalents, investment assets, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods, and Intellectual Property.
BGB	Shall mean the German civil code.
Business Days	Shall mean any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Karlsruhe, Germany.
Cash and Cash Equivalents	Shall mean the Company Group’s consolidated cash and cash equivalents, determined in accordance with German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP as of immediately prior to the Closing, excluding the net cash proceeds paid to the Company Group in connection with the sale or disposition of capital assets after the date of the Interim Balance Sheet.

Change of Control Payments	Shall mean the aggregate gross amount of all change of control, bonus, termination, retention, severance, forgiveness of Indebtedness, increase in benefits, Tax gross-up or other similar payments, and bonuses in respect of foregone equity, (a) that are accrued, incurred or payable by the Company Group prior to, at or after the Closing pursuant to any Employee Benefit Plan or Contract of the Company Group in effect at or prior to the Closing, or (b) that are otherwise obligations of the Company Group that are accrued or incurred prior to, at or after the Closing, whether payable prior to, at or after Closing that are based on arrangements entered into by a member of the Company Group prior to the Closing, in the case of each of clauses (a) and (b), to any Person as a result of the consummation of the Transactions (but excluding (1) those amounts that are payable contingent upon both (A) the completion of the Transaction and (B) the occurrence of any other event after the Closing, (2) those amounts that are included in Company Indebtedness and (3) those amounts contemplated by Section 1.1.
Change of Control Tax Amount	Shall mean the aggregate amount of any Liability of Purchaser or the Company Group that has not been paid prior to the Closing for any Taxes (including payroll or similar Taxes and withholding Taxes) payable as a result of or in connection with the Transactions.
Charter Documents	Shall have the meaning set forth in Section 2.2.
Claims Notice	Shall have the meaning set forth in Section 6.6.
Claim Period	Shall have the meaning set forth in Section 6.5
Claim Period Expiration Date	Shall have the meaning set forth in Section 6.5
Closing	Shall have the meaning set forth in Section 1.2.
Closing Balance Sheet	Shall mean an unaudited consolidated balance sheet of the Company Group as of the Closing, prepared in accordance with in with German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP using the same methods and procedures used to prepare the Interim Balance Sheet.
Closing Date	Shall have the meaning set forth in Section 1.2.
Code	Shall mean the U.S. Internal Revenue Code of 1986, as amended.
Company	Shall have the meaning set forth in the Preamble.
Company Capital Stock	Shall have the meaning set forth in Section 2.3(a).
Company D&O Tail Policy	Shall have the meaning set forth in Section Error! Reference source not found..
Company Group	Shall mean the Company, its Subsidiaries and Controlled Affiliates.
Company Material Contract	Shall have the meaning set forth in Section 2.22.

A-2

Company Indebtedness	Shall mean the aggregate of the following (but excluding amounts owed by the Company to a wholly-owned Subsidiary of the Company or by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company), without duplication: (a) any Liability of any member of the Company Group (1) for borrowed money (including the current portion thereof), (2) under any reimbursement obligation relating to a letter of credit, bankers’ acceptance or note purchase facility, (3) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation), (4) with respect to leases required to be accounted for as capital leases under German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP or (5) incurred, issued or assumed as the deferred purchase price of property (excluding, in each case, accounts payable and trade payables, in each case incurred in the ordinary course of business); (b) any Liability of other Persons described in clause (a) that any member of the Company Group has guaranteed, that is recourse to any member of the Company Group or any of their Assets and Properties or that is otherwise the legal Liability of any member of the Company Group; and (c) any and all accrued interest, success fees, prepayment premiums, make whole premiums or penalties and fees or expenses actually incurred (including attorneys’ fees) associated with the prepayment of any amounts of the nature described in clauses (a)(1), (2) or (3).
Company Intellectual Property	Shall have the meaning set forth in Section 2.8(a).
Company Products	Shall have the meaning set forth in Section 2.8(b).
Company Registered Intellectual Property	Shall have the meaning set forth in Section 2.8(c).
Company Sites	Shall have the meaning set forth in Section 2.8(l).
Company Source Code	Shall have the meaning set forth in Section 2.8(a).
Company Stock Certificates	Shall have the meaning set forth in Section 1.5.
Confidentiality Agreement	Shall have the meaning set forth in Section 7.4.
Continuing Employees	Shall mean employees of the Company Group who continue to be employed by the Company Group as of the Closing.
Contract	Shall mean with respect to any Person, any agreement, contract, note, bond, deed, mortgage, lease, sublease, license, sublicense, instrument, commitment, promise, undertaking or other binding arrangement, whether written or oral: (a) to which such Person is a party; or (b) by which such Person or any of its assets is bound or under which such Person has any obligation.
Control	Shall mean, as to any Person, the possession of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The verb “Control” and the term “Controlled” have the correlative meanings.

A-3

Customer License Agreements	Shall mean non-exclusive end user licenses to the object code form, or service or access agreements (including SaaS agreements), for the Company Products granted in the ordinary course and that are in form or substance substantially the same as Company Group’s standard agreements, copies such standard agreements which have been Made Available to Purchaser.
D&O Indemnitees	Shall have the meaning set forth in Section Error! Reference source not found..
Employee(s)	Shall mean any current or former or retired employee, consultant or director of any member of the Company Group or any ERISA Affiliate.
Employee Agreement	Shall mean each management, employment, severance, consulting, relocation, repatriation, expatriation, via, work permit or other agreement, contract or understanding between any member of the Company Group and any Employee.
Employee Benefit Plan(s)	Shall have the meaning set forth in Section 2.16(a).
Encumbrance	Shall mean any mortgage, pledge, hypothecation, security interest, encumbrance, title defect, lien or charge, other than any restriction or limitation imposed by this Agreement.
Equity Participations	Shall mean, with respect to a Person, any (a) share, quota, security, participation right and any other present or future right entitling the holder, absolutely or contingently (through the exercise of any subscription, conversion, exchange, option or similar right), to participate in the revenues, dividends or equity appreciation of such Person, including capital stock, membership interests, units, performance units, options, warrants, company appreciation rights, interests in “phantom” stock plans, restricted or contingent stock or profits interests, voting securities, stock appreciation rights or equivalents, stock loan purchase plans, convertible debentures or stock bonus plans and (b) commitments of such Person to issue any of the foregoing.
ERISA	Shall mean the Employee Retirement Income Security Act of 1974.
ERISA Affiliate	Shall mean any person or entity under common control with the Company or any of its subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder
Escrow Agent	Shall have the meaning set forth in the Recitals.
Escrow Agreement	Shall have the meaning set forth in the Recitals.
Escrow Amount	Shall mean 4,000,000 EU as may be increased or decreased from time to time pursuant to the Escrow Agreement.
Escrow Fund	Shall mean the escrow account established by Purchaser with the Escrow Agent to administer the Escrow Amount pursuant to the Escrow Agreement.
Escrow Payment	Shall mean any portion of the Escrow Amount (as may be reduced in accordance with Article 6), that is released from the Escrow Fund and becomes payable in cash to the Indemnitors in accordance with the Escrow Agreement and the provisions of this Agreement.

A-4

Exchange Documents	Shall have the meaning set forth in Section 1.5.
Export Approvals	Shall have the meaning set forth in Section 2.19(d).
Cash Consideration	Shall have the meaning set forth in Section 1.1(a).
Financial Controls	Shall have the meaning set forth in Section 2.14(c).
Financial Statements	Shall have the meaning set forth in Section 2.14(a).
Founders	Shall have the meaning set forth in the Preamble.
Founder Non-Competition Agreement	Shall have the meaning set forth in the Recitals.
Fundamental Representations	Shall mean the representations and warranties set forth in Section 2.8 (Intellectual Property) and Section 2.11 (Taxes).
Future Payment	Shall mean each of (a) any Escrow Payment and (b) the Adjustment Excess Payment, if any, in each case, to the extent required to be made to Seller pursuant to the provisions of this Agreement or the Escrow Agreement.
Future Payment Spreadsheet	Shall mean a spreadsheet, prepared and executed by Seller and dated as of a date no later than three Business Days prior to the date of payment of the Future Payment to which such spreadsheet relates, setting forth, for Seller (or successor thereto): (a) the name, mailing address, and, where available, tax domicile (if different from the mailing address) and taxpayer identification numbers for Seller; (b) (1) the Future Payment payable to Seller and (2) whether any Taxes are required to be withheld by Purchaser from such amounts; and (c) wire transfer instructions for such wire transfer.
German GAAP	Shall mean accounting practice generally accepted in Germany.
Governmental Authority	Shall mean any court, tribunal, governmental authority, governmental body or other regulatory or administrative authority, agency or commission of any government of any country or any private or governmental arbitration or conciliation authority or similar body, and any body exercising, or entitled to exercise, any administrative, executive, judicial or legislative authority or power of any nature.
Indemnitors	Shall have the meaning set forth in Section 6.3(a).
Indemnified Person	Shall have the meaning set forth in Section 6.3(a).
Intellectual Property	Shall have the meaning set forth in Section 2.8(a).
Interim Balance Sheet	Shall mean the Company’s unaudited consolidated balance sheet as of July 31, 2013.
Interim Balance Sheet Date	Shall mean April 30, 2013.

A-5

International Employee Plan	Shall mean each Employee Benefit Plan that has been adopted or maintained by any member of the Company Group or any ERISA Affiliate, whether informally or formally, or with respect to which any member of the Company Group or any ERISA Affiliate will or may have any liability, for the benefit of Employees who perform services outside the United States
IRS	Shall mean the Internal Revenue Service.
Key Customers	Shall have the meaning set forth in Section 2.21.
Key Employee(s)	Shall mean Stephan Hoffman, Chris Schulz, David Vallejo, Thorsten Bachmann, Ingo Kopido, Falco Feldchen and Markus Kowaleski.
Law	Shall mean the law of any jurisdiction, whether international, multilateral, multinational, national, federal, state, provincial, local or common law, an Order or act, statute, ordinance, regulation, rule, collective bargaining agreement, extension order or code promulgated by a Governmental Authority.
Liability	Shall mean any and all liabilities, debts, commitments and obligations of any kind, whether accrued or fixed, absolute or contingent, matured or non-matured, determined or undeterminable, on- or off-balance sheet or required to be recorded on a balance sheet prepared in accordance with German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP, including those arising under any Law, Action or Order and those arising under any Contract or otherwise.
Liability Claim	Shall have the meaning set forth in Section 6.6.
Liens	Shall mean any mortgage, easement, attachment, pledge, hypothecation, right of any Person, adverse claim, security interest, encumbrance, title defect, title retention agreement, voting trust agreement, third party right or other right or interest, option, lien, charge, any hire purchase, lease or installment purchase agreement, right of first refusal, right of preemption or right to acquire, or other restriction or limitation, including any restriction on the right to vote, sell or otherwise dispose of the subject property, other than any restriction or limitation imposed by this Agreement.
Losses	Shall have the meaning set forth in Section 6.3(a).
Made Available	Shall mean the documents or other information and materials that have been posted in the electronically accessible data room at least three Business Days prior to the Agreement Date.
Material Adverse Effect	Shall have the meaning set forth in Section 2.2.
Objection Notice	Shall have the meaning set forth in Section 6.7(a).
Open Source Software	Shall have the meaning set forth in Section 2.8(k).
Order	Shall mean any order, decision, ruling, charge, writ, judgment, injunction, decree, stipulation, determination, award, assessment or binding agreement issued, promulgated or entered by or with any Governmental Authority.
Party	Shall mean any of Purchaser, the Company, Seller or the Founders.

A-6

Permit	Shall mean any approval, authorization, consent, franchise, license, permit or certificate issued by any Governmental Authority.
Permitted Encumbrances	Shall have the meaning set forth in Section 2.23(b).
Person	Shall mean any individual, corporation, partnership, joint venture, estate, trust, unincorporated organization, Governmental Authority or any other entity.
Personally Identifiable Information	Shall have the meaning set forth in Section 2.8(l).
Potential Claim	Shall have the meaning set forth in Section 4.4(a).
Pre-Closing Statement	Shall mean a written statement setting forth the Company Group’s good faith estimate of (A) the Working Capital, including the components thereof and the amount of any working capital deficiency based on the estimated closing date working capital and (B) all Company Indebtedness outstanding as of immediately prior to the Closing, reasonably detailed and separated by lender or other Person to which such amounts are payable, and (3) such work papers used to prepare such estimates as Purchaser may reasonably request.
Purchaser	Shall have the meaning set forth in the Preamble.
Purchaser Common Stock	Shall mean shares of the common stock, par value $0.001 per share, of Purchaser.
Registered Intellectual Property	Shall have the meaning set forth in Section 2.8(a).
Purchaser 10-Day Closing Average Trading Price	Shall mean the volume weighted average closing sale price of one share of Purchaser Common Stock as reported on the NASDAQ Global Market for the 10 consecutive trading days ending on the trading day immediately prior to the Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
Related Agreements	Shall mean the Escrow Agreement and the Founder Noncompetition Agreements.
Related Party	Shall have the meaning set forth in Section 2.10(b).
Released Matters	Shall have the meaning set forth in Section 4.4(a).
Released Parties	Shall have the meaning set forth in Section 4.4(a).
Releasing Parties	Shall have the meaning set forth in Section 4.4(a).
Seller	Shall have the meaning set forth in the Preamble.
Seller Affiliates	Shall have the meaning set forth in Section 4.4(a).
Seller Phantom Stock Plan	Shall have the meaning set forth in Section 2.3(c).
Shares	Shall have the meaning set forth in Section 1.1(a).
Software	Shall have the meaning set forth in Section 2.8(a).

A-7

Software Escrow Agreement	Shall have the meaning set forth in Section 2.22(e).
Spreadsheet	Shall mean a spreadsheet, dated and setting forth as of the Closing the following information: (a) the name, mailing address, and, where available, tax domicile (if different from the mailing address) and taxpayer identification numbers for Seller; (b) the number of shares and class of Company Capital Shares held by Seller; (c) (1) the Estimated Purchase Price payable to Seller pursuant to this Agreement and (2) whether any Taxes are required to be withheld by any member of the Company Group or Purchaser from such amounts; and (d) the Escrow Fund amount.
Standard Form Agreements	Shall have the meaning set forth in Section 2.8(f).
Stock Consideration	Shall mean the number of shares of Purchaser Common Stock equal to the quotient obtained by dividing (x) product obtained by multiplying (i)  1/3 by (ii) the Total Consideration by (y) the Purchaser 10-Day Closing Average Trading Price, rounded to the nearest 0.00001 (with amounts 0.000005 and above rounded up).
Straddle Period	Shall have the meaning set forth in Section 6.3(c).
Subsidiary/Subsidiaries	Shall have the meaning set forth in Section 2.3(c).
Tax	Shall mean (a) any net income, corporate, personal income, net wealth (capital taxes), capital gains, capital acquisitions, inheritance, deposit interest retention, gift, relevant contracts, alternative minimum, add-on minimum, gross income, gross receipts, sales, use, goods and services, harmonized sales, value added, ad valorem, transfer, franchise, profits, license, withholding (including on dividends and deemed dividends), estimated, payroll, employment, social security contributions, governmentally mandated pension plan contributions, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom duty, import and export taxes, or other tax, or similar governmental assessment or charge, together with any interest or any penalty, addition to tax or additional amount imposed by any Tax Authority, (b) any Liability for the payment of any amounts of the type described in clause (a) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group for any taxable period, and (c) any Liability for the payment of any amounts of the type described in clause (a) or (b) of this sentence as a result of being a transferee of or successor to any Person or as a result of any obligation to indemnify any other Person.
Tax Authority	Shall mean a Governmental Authority responsible for the imposition of any Tax (whether domestic or foreign).
Tax Return	Shall mean any return, estimate, form, information statement or report, including amendments thereof and attachments and schedules thereto required to be filed with respect to Taxes.
Total Consideration	Shall mean an amount equal to €20,000,000 net.

A-8

Trade Secrets	Shall have the meaning set forth in Section 2.8(a).
Transactions	Shall mean the transactions to be effected pursuant to the Transaction Documents.
Transaction Documents	Shall mean the Agreement, Escrow Agreement and Founder Non-Competition Agreements.
Transfer Taxes	Shall mean all sales, use, transfer, real property transfer, mortgage recording, stamp duty, value-added or similar Taxes that may be imposed in connection with the Transactions.
US GAAP	Shall mean the accounting practice generally accepted in the United States of America.
WARN Act	Shall have the meaning set forth in Section 2.17(i).
Working Capital	Shall mean an amount (expressed in USD) equal to: (a) the amount that would be set forth on the “Total Current Assets” line item of a consolidated balance sheet of the Company as of the Closing (excluding any deferred tax assets and Cash and Cash Equivalents), with all such amounts determined using the same accounting methods, standards, policies, practices and estimation methodologies used to prepare the Interim Balance Sheet; provided however, that if in connection with such calculations there is a conflict between German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP and the accounting methods, standards, policies, practices and estimation methodologies used to prepare the Interim Balance Sheet, German GAAP or US GAAP will govern, respectively; minus (b) the amount that would be set forth on the “Total Current Liabilities” line item of a consolidated balance sheet of the Company as of the Closing, including (1) all accounts payable, employee-related Liabilities (including sales commissions), short-term deferred revenues, accrued Taxes (including all Pre-Closing Tax Liabilities) and other accrued Liabilities, in each case calculated after giving effect to the consummation of the Transactions, (2) all long-term deferred revenues with all amounts as determined using the same accounting methods, standards, policies, practices and estimation methodologies used to prepare the Interim Balance Sheet and (3) all legal, accounting, financial advisory, consulting, finders and all other fees and expenses of third parties incurred by the Company Group on behalf of Seller in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the Transactions to the extent the same remain unpaid as of the Closing; provided however, that if in connection with such calculations there is a conflict between German GAAP, or, in case of Icon Industry Consulting, Inc., US GAAP and the accounting methods, standards, policies, practices and estimation methodologies used to prepare the Interim Balance Sheet, German GAAP or US GAAP will govern, respectively.

A-9

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the

Securities Exchange Act of 1934, as amended.

I, Mark E. Woodward, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of E2open, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 10, 2013

/s/ Mark E. Woodward

Mark E. Woodward

President, Chief Executive Officer and Director

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the

Securities Exchange Act of 1934, as amended.

I, Peter J. Maloney, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of E2open, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 10, 2013

/s/ Peter J. Maloney

Peter J. Maloney

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark E. Woodward, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of E2open, Inc. on Form 10-Q for the fiscal quarter ended August 31, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of E2open, Inc.

Date: October 10, 2013

By:	/s/ Mark E. Woodward
Name:	Mark E. Woodward
Title:	President, Chief Executive Officer and Director (Principal Executive Officer)

I, Peter J. Maloney, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of E2open, Inc. on Form 10-Q for the fiscal quarter ended August 31, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of E2open, Inc.

Date: October 10, 2013

By:	/s/ Peter J. Maloney
Name:	Peter J. Maloney
Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Net Income (Loss) Per Share

6 Months Ended

Aug. 31, 2013

Net Income (Loss) Per Share

(12) Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income by the weighted-average number of common shares outstanding, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, restricted stock units and warrants using the treasury stock method. For periods in which the Company has generated a net loss, the Company does not include stock options, warrants, and unvested restricted stock units in its computation of diluted net income (loss) per share, as the impact of these awards is anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

	Three Months Ended August 31,					Six Months Ended August 31,
	2013			2012		2013			2012
Net income (loss)	$	(5,923	)	$	4,566	$	(11,317	)	$	2,188
Basic shares:
Weighted average common shares outstanding		26,018			13,875		25,822			10,606
Diluted shares:
Weighted average common shares outstanding		—			13,875		—			10,606
Weighted average effect of dilutive stock options		—			1,671		—			1,640
Weighted average effect of convertible preferred stock		—			8,875		—			11,860
		26,018			24,421		25,822			24,106
Net income (loss) per share:
Basic	$	(0.23	)	$	0.33	$	(0.44	)	$	0.21
Diluted	$	(0.23	)	$	0.19	$	(0.44	)	$	0.09

The following outstanding shares, options, restricted stock units and warrants were excluded from the computation of diluted net income per share in the periods presented because including them would have had an anti-dilutive effect (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Options to purchase common stock		1,275		27		1,375		13
Restricted stock units		235		—		185		—

XML

Functional Classification of Stock-Based Compensation Expense (Detail) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	$ 1,718,000	$ 482,000	$ 2,563,000	$ 961,000
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	497,000	142,000	729,000	263,000
Research And Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	148,000	25,000	216,000	78,000
Sales and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	617,000	137,000	907,000	282,000
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Shares Based Compensation	$ 456,000	$ 178,000	$ 711,000	$ 338,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Revenue
Total revenue	$ 18,012	$ 22,891	$ 33,611	$ 38,364
Cost of revenue
Amortization of acquired intangibles	58		58
Total cost of revenue	7,189	5,662	13,774	11,354
Gross profit
Total gross profit	10,823	17,229	19,837	27,010
Operating expenses:
Research and development	4,533	3,557	8,606	7,649
Sales and marketing	8,752	6,628	16,651	12,775
General and administrative	2,641	2,277	5,089	4,059
Acquisition related expenses	791		791
Amortization of acquired intangibles	25		25
Total operating expenses	16,742	12,462	31,162	24,483
Income (loss) from operations	(5,919)	4,767	(11,325)	2,527
Interest and other income (expense), net	31	(169)	82	(264)
Income (loss) before income taxes	(5,888)	4,598	(11,243)	2,263
Provision for income taxes	(35)	(32)	(74)	(75)
Net income (loss)	(5,923)	4,566	(11,317)	2,188
Net income (loss) per share:
Basic	$ (0.23)	$ 0.33	$ (0.44)	$ 0.21
Diluted	$ (0.23)	$ 0.19	$ (0.44)	$ 0.09
Weighted average shares used to compute net income (loss) per share:
Basic	26,018	13,875	25,822	10,606
Diluted	26,018	24,421	25,822	24,106
Other comprehensive loss, net:
Net unrealized losses on investments	(8)	(1)	(20)	(1)
Net foreign currency translation losses	(9)	(7)	(6)	(24)
Total other comprehensive loss	(17)	(8)	(26)	(25)
Total comprehensive income (loss)	(5,940)	4,558	(11,343)	2,163
Subscriptions and support
Revenue
Revenue	13,433	11,131	25,725	20,945
Cost of revenue
Cost of revenue	2,645	1,998	5,173	4,037
Gross profit
Total gross profit	10,730	9,133	20,494	16,908
Professional services and other
Revenue
Revenue	4,579	11,760	7,886	17,419
Cost of revenue
Cost of revenue	4,486	3,664	8,543	7,317
Gross profit
Total gross profit	$ 93	$ 8,096	$ (657)	$ 10,102

XML

Consolidated Balance Sheet Components

6 Months Ended

Aug. 31, 2013

Consolidated Balance Sheet Components

(5) Consolidated Balance Sheet Components

Consolidated balance sheet components as of the dates presented comprised the following (in thousands):

	August 31, 2013		February 28, 2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$	1,562	$	1,109
Other prepaid expenses and other current assets		1,572		1,103
	$	3,134	$	2,212

Software licenses, maintenance, services and insurance premiums financed through capital leases and notes payable included above aggregated $3,462,000 and $1,615,000 as of August 31, 2013 and February 28, 2013. Accumulated amortization on software licenses aggregated $792,000 and $344,000 as of August 31, 2013 and February 28, 2013. Amortization of software licenses held under capital leases and notes payable is included in software license expense. Prepaid maintenance and insurance are expensed over the term of the agreements.

	August 31, 2013			February 28, 2013
Property and equipment, net:
Software	$	8,870		$	8,543
Computer equipment		8,943			7,718
Leasehold improvements		485			484
Furniture and fixtures		149			119
		18,447			16,864
Less: accumulated depreciation and amortization		(15,219	)		(14,426	)
	$	3,228		$	2,438

Property and equipment financed through capital leases and notes payable included above aggregated $2,338,000 and $662,000 as of August 31, 2013 and February 28, 2013. Accumulated depreciation and amortization on these assets aggregated $422,000 and $100,000 as of August 31, 2013 and February 28, 2013.

	August 31, 2013		February 28, 2013
Accounts payable and accrued liabilities:
Accrued compensation costs	$	6,762	$	7,701
Trade accounts payable		3,405		1,582
Accrued taxes and other		2,433		1,486
	$	12,600	$	10,769

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Consolidated Balance Sheet Components (Tables)

6 Months Ended

Aug. 31, 2013

Components of Consolidated Balance Sheet

Consolidated balance sheet components as of the dates presented comprised the following (in thousands):

	August 31, 2013		February 28, 2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$	1,562	$	1,109
Other prepaid expenses and other current assets		1,572		1,103
	$	3,134	$	2,212

	August 31, 2013			February 28, 2013
Property and equipment, net:
Software	$	8,870		$	8,543
Computer equipment		8,943			7,718
Leasehold improvements		485			484
Furniture and fixtures		149			119
		18,447			16,864
Less: accumulated depreciation and amortization		(15,219	)		(14,426	)
	$	3,228		$	2,438

	August 31, 2013		February 28, 2013
Accounts payable and accrued liabilities:
Accrued compensation costs	$	6,762	$	7,701
Trade accounts payable		3,405		1,582
Accrued taxes and other		2,433		1,486
	$	12,600	$	10,769

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Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Feb. 28, 2013
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	$ 15,646	$ 45,827
Fair value liabilities	(170)	(158)
Cash equivalents | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	4,929	2,501
Cash equivalents | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	2,095	3,879
Cash equivalents | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		12,446
Short-term investments | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		12,323
Short-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,593	2,375
Short-term investments | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,286
Short-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	506	591
Short-term investments | Municipal Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	350
Other current assets | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		4
Long-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	2,091	5,990
Long-term investments | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	928	3,046
Long-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	443	1,805
Long-term investments | Municipal Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,285	851
Long-term investments | Common Trust Fund
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	109
Long-term investments | Insurance Company Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	15
Other noncurrent assets | Certificate of deposit
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	16	16
Other current liabilities | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value liabilities	(170)	(158)
Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	7,040	6,396
Level 1 | Cash equivalents | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	4,929	2,501
Level 1 | Cash equivalents | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	2,095	3,879
Level 1 | Other noncurrent assets | Certificate of deposit
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	16	16
Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	8,606	39,431
Fair value liabilities	(170)	(158)
Level 2 | Cash equivalents | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		12,446
Level 2 | Short-term investments | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		12,323
Level 2 | Short-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,593	2,375
Level 2 | Short-term investments | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,286
Level 2 | Short-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	506	591
Level 2 | Short-term investments | Municipal Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	350
Level 2 | Other current assets | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets		4
Level 2 | Long-term investments | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	2,091	5,990
Level 2 | Long-term investments | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	928	3,046
Level 2 | Long-term investments | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	443	1,805
Level 2 | Long-term investments | Municipal Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	1,285	851
Level 2 | Long-term investments | Common Trust Fund
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	109
Level 2 | Long-term investments | Insurance Company Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value assets	15
Level 2 | Other current liabilities | Foreign currency forward contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value liabilities	$ (170)	$ (158)

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Fair Value Measurements

6 Months Ended

Aug. 31, 2013

Fair Value Measurements

(13) Fair Value Measurements

The Company’s financial instruments include cash and cash equivalents, investments, accounts receivable, net, accounts payable, payable to ICON shareholders, capital lease obligations and notes payable. Accounts receivable, net, accounts payable and payable to ICON shareholders are stated at their carrying value, which approximates fair value, due to their short maturity. The Company measures its cash equivalents, investments and foreign currency forward contracts at fair value based on an exchange or exit price as defined by the authoritative guidance on fair value measurements which represents the amount that would be received for an asset sale or an exit price, or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. The Company estimates the fair value for capital lease obligations and notes payable by discounting the future cash flows of the lease and note payments.

As a basis for considering such assumptions, accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1	—	Observable inputs such as quoted prices in an active market;
Level 2	—	Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and
Level 3	—	Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of August 31, 2013 and February 28, 2013, are summarized as follows (in thousands):

	August 31, 2013										February 28, 2013
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	4,929	$	—		$	—	$	4,929		$	2,501	$	—		$	—	$	2,501
Money market funds		2,095		—			—		2,095			3,879		—			—		3,879
Commercial paper		—		—			—		—			—		12,446			—		12,446
Short-term investments:
Commercial paper		—		—			—		—			—		12,323			—		12,323
Corporate debt securities		—		1,593			—		1,593			—		2,375			—		2,375
Asset backed securities		—		1,286			—		1,286			—		—			—		—
Mortgage backed securities		—		506			—		506			—		591			—		591
Municipal bonds		—		350					350			—		—			—		—
Other current assets:
Foreign currency forward contracts		—		—			—		—			—		4			—		4
Long-term investments:
Corporate debt securities		—		2,091			—		2,091			—		5,990			—		5,990
Asset backed securities		—		928			—		928			—		3,046			—		3,046
Mortgage backed securities		—		443			—		443			—		1,805			—		1,805
Municipal bonds		—		1,285			—		1,285			—		851			—		851
Common trust fund		—		109			—		109			—		—			—		—
Insurance Company Contract		—		15			—		15			—		—			—		—
Other noncurrent assets:
Certificate of deposit		16		—			—		16			16		—			—		16
Total assets	$	7,040	$	8,606		$	—	$	15,646		$	6,396	$	39,431		$	—	$	45,827
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(170	)		—		(170	)		—		(158	)		—		(158	)
Total liabilities	$	—	$	(170	)	$	—	$	(170	)	$	—	$	(158	)	$	—	$	(158	)

The fair value of the Company’s Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair value of the Company’s Level 2 financial instruments are based on quoted market prices for comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. The Company’s foreign currency forward contracts are valued using pricing models that use observable market inputs and, therefore, are classified as Level 2.

In fiscal 2013 and the six months ended August 31, 2013, the Company sought to hedge the risks associated with exchange rate fluctuations through entry into forward exchange contracts. The contracts are classified as Level 2. The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of contracts outstanding as of August 31, 2013 and February 28, 2013 (in USD thousands, except average contract rate):

	August 31, 2013								February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value
Foreign currency forward exchange contracts:
Euro	$	5,935			1.3	$	(63	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(5,706	)		3.1		(50	)		(2,255	)		3.1		(8	)
British Pound		(973	)		1.5		(57	)		—			—		—
Total	$	(744	)			$	(170	)		5,067				$	(154	)

The Company entered into the foreign exchange contracts with two counterparties. The Company has the right of offset for gains earned and losses incurred under contracts with the same counterparty, and therefore has recorded contracts with the same counterparty on a net basis in the balance sheet.

The Company does not use derivatives for speculative or trading purposes.

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended			6 Months Ended				12 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Feb. 28, 2013	Aug. 31, 2013 U.S. Federal And State Jurisdictions Minimum	Aug. 31, 2013 U.S. Federal And State Jurisdictions Maximum	Aug. 31, 2013 Foreign Jurisdictions Minimum	Aug. 31, 2013 Foreign Jurisdictions Maximum	Feb. 28, 2013 Federal	Feb. 28, 2013 State
Income Tax Contingency [Line Items]
Income tax provision (benefit)	$ 35,000	$ 32,000	$ 74,000	$ 75,000
Net operating loss carryforwards										318,323,000	100,320,000
Defered tax asset , net operating loss carryforwards					93,992,000
Net operating loss carryforwards, expiration year										2023	2014
Deferred tax assets net of valuation allowance					0
Noncurrent deferred tax liability	3,689,000		3,689,000
Purchased intangible assets, tax basis	0		0
German marginal tax rate			29.00%
Undistributed earnings of Company's foreign subsidiaries	813,000		813,000
Gross unrecognized tax benefits					4,500,000
Gross unrecognized tax benefits that would impact effective tax rate					300,000
Gross interest and penalties accrued					$ 68,000
Open tax years subject to examination						2000	2013	2007	2013
Statutes of limitations in foreign jurisdictions								4 years	7 years

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Summary of Foreign Exchange Contracts Details (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Feb. 28, 2013
Derivative [Line Items]
Notional Sell (Buy)	$ (744)	$ 5,067
Estimated Fair Value	(170)	(154)
Sell | Euro
Derivative [Line Items]
Notional Sell (Buy)	5,935	7,322
Average Contract Rate	1.3	1.3
Estimated Fair Value	(63)	(146)
Buy | Malaysian Ringgit
Derivative [Line Items]
Notional Sell (Buy)	(5,706)	(2,255)
Average Contract Rate	3.1	3.1
Estimated Fair Value	(50)	(8)
Buy | British Pounds
Derivative [Line Items]
Notional Sell (Buy)	(973)
Average Contract Rate	1.5
Estimated Fair Value	$ (57)

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Schedule of Cash, Cash Equivalents and Available-For-Sale Investments (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Feb. 28, 2013	Aug. 31, 2012	Feb. 29, 2012
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	$ 8,612
Amortized Cost	12,949	20,262	29,479	10,219
Estimated Fair Market Value	8,606
Cash
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	5,925	1,436
Estimated Fair Market Value	5,925	1,436
Cash equivalents
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	2,095
Estimated Fair Market Value	2,095
Cash equivalents | Commercial paper
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost		12,445
Gross Unrealized Gains		1
Estimated Fair Market Value		12,446
Cash equivalents | Money markets accounts
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	4,929	2,501
Estimated Fair Market Value	4,929	2,501
Cash equivalents | Money market funds
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost		3,879
Estimated Fair Market Value		3,879
Total cash and cash equivalents
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	12,949	20,261
Gross Unrealized Gains		1
Estimated Fair Market Value	12,949	20,262
Short-term investments
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	3,738	15,289
Gross Unrealized Gains	1	3
Gross Unrealized Losses	(4)	(3)
Estimated Fair Market Value	3,735	15,289
Short-term investments | Corporate debt securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	1,592	2,373
Gross Unrealized Gains	1	2
Estimated Fair Market Value	1,593	2,375
Short-term investments | Mortgage-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	508	594
Gross Unrealized Losses	(2)	(3)
Estimated Fair Market Value	506	591
Short-term investments | Municipal Debt Securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	350
Estimated Fair Market Value	350
Short-term investments | Asset-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	1,288
Gross Unrealized Losses	(2)
Estimated Fair Market Value	1,286
Short-term investments | Commercial paper
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost		12,322
Gross Unrealized Gains		1
Estimated Fair Market Value		12,323
Long-term investments
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	4,874	11,679
Gross Unrealized Gains	4	17
Gross Unrealized Losses	(7)	(4)
Estimated Fair Market Value	4,871	11,692
Long-term investments | Corporate debt securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	2,092	5,981
Gross Unrealized Gains	2	10
Gross Unrealized Losses	(3)	(1)
Estimated Fair Market Value	2,091	5,990
Long-term investments | Mortgage-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	442	1,803
Gross Unrealized Gains	2	5
Gross Unrealized Losses	(1)	(3)
Estimated Fair Market Value	443	1,805
Long-term investments | Municipal Debt Securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	1,287	851
Gross Unrealized Losses	(2)
Estimated Fair Market Value	1,285	851
Long-term investments | Asset-backed securities
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	929	3,044
Gross Unrealized Gains		2
Gross Unrealized Losses	(1)
Estimated Fair Market Value	928	3,046
Long-term investments | Common trust fund
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	109
Estimated Fair Market Value	109
Long-term investments | Insurance company contract
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	15
Estimated Fair Market Value	15
Total cash, cash equivalents, and investments
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	21,561	47,229
Gross Unrealized Gains	5	21
Gross Unrealized Losses	(11)	(7)
Estimated Fair Market Value	$ 21,555	$ 47,243

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Interest and other income (expense), net (Tables)

6 Months Ended

Aug. 31, 2013

Interest and Income (Expense), Net

Interest and other income (expense), net for the periods presented consisted of the following (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Interest income	$	33		$	7		$	81		$	7
Interest expense		(46	)		(106	)		(68	)		(179	)
Bank financing fees		(1	)		(52	)		(1	)		(116	)
Foreign exchange gains (losses)—realized and unrealized, net		10			(33	)		(43	)		192
Gains (losses) from foreign currency contracts—realized and unrealized, net		26			16			103			(172	)
Other, net		9			(1	)		10			4
	$	31		$	(169	)	$	82		$	(264	)

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Commitments and Contingencies (Tables)

6 Months Ended

Aug. 31, 2013

Future Minimum Lease Payments Under Noncancelable Operating Leases

Future minimum lease payments under noncancelable operating leases as of August 31, 2013 are as follows (in thousands):

Fiscal year ending:
2014 (remaining 6 months)	$	1,246
2015		2,172
2016		1,678
2017		1,564
2018		1,449
Thereafter		540
Total minimum lease payments	$	8,649

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Future Minimum Lease Payments Under Noncancelable Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013
Operating Leased Assets [Line Items]
2014 (remaining 6 months)	$ 1,246
2015	2,172
2016	1,678
2017	1,564
2018	1,449
Thereafter	540
Total minimum lease payments	$ 8,649

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Components of Purchase Consideration (Detail) (USD $) In Thousands, unless otherwise specified	1 Months Ended	6 Months Ended
	Jul. 30, 2013	Aug. 31, 2013
Business Acquisition [Line Items]
Cash payment	$ 12,412
Acquisition costs payable to seller, to be placed in escrow	5,309
Shares of the Company's common stock	8,849	8,849
Total	$ 26,570

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Components of Consolidated Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Feb. 28, 2013
Prepaid expenses and other current assets:
Prepaid software license fees, hardware and software maintenance	$ 1,562	$ 1,109
Other prepaid expenses and other current assets	1,572	1,103
Prepaid expenses and other current assets	3,134	2,212
Property and equipment, net:
Property and equipment	18,447	16,864
Less: accumulated depreciation and amortization	(15,219)	(14,426)
Property and equipment net	3,228	2,438
Accounts payable and accrued liabilities:
Accrued compensation costs	6,762	7,701
Trade accounts payable	3,405	1,582
Accrued taxes and other	2,433	1,486
Total accounts payable and accrued liabilities	12,600	10,769
Software
Property and equipment, net:
Property and equipment	8,870	8,543
Computer Equipment
Property and equipment, net:
Property and equipment	8,943	7,718
Leasehold Improvements
Property and equipment, net:
Property and equipment	485	484
Furniture and Fixtures
Property and equipment, net:
Property and equipment	$ 149	$ 119

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Stock-Based Compensation - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended	1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 01, 2011	Aug. 31, 2013	Aug. 31, 2012	May 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Feb. 28, 2013	Aug. 31, 2013 Employee Stock Option	Aug. 31, 2013 Restricted Stock Units	Aug. 31, 2012 Restricted Stock Units	Aug. 31, 2013 Restricted Stock Units	Aug. 31, 2012 Restricted Stock Units	Feb. 28, 2013 Restricted Stock Units	Jul. 30, 2013 Restricted Stock Units Employees	Aug. 31, 2013 Restricted Stock Units Employees	Aug. 31, 2013 Restricted Stock Units Employees	Aug. 31, 2013 Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for issuance		5,819,041			5,819,041		5,112,830
Share-based Compensation granted for period					10 years
Estimated fair value of common stock shares, percentage								100.00%									110.00%
Exercise price of ISO granted		10.00%			10.00%
Percentage of options vest on one-year anniversary					25.00%
Exercisable for period					10 years
Anniversary of option grant date, additional years					3 years
Options granted to date generally vest					4 years		3 years
Share-based compensation shares exercised repurchase							18,761
Aggregate exercise price of options repurchase							$ 6,566
Expected dividend yield					0.00%
Stock options granted during period of share-based compensation	749,464				623,575
Recognized compensation cost related to stock option awards				149,000
Stock options, unrecognized compensation expense		1,368,000			1,368,000
Restricted stock units awarded											172,714			125,250
Compensation cost related to restricted stock units awards		1,718,000	482,000		2,563,000	961,000			260,000	0	390,000	0			116,000	116,000
Unrecognized compensation cost related to restricted stock units awards															1,419,000	1,419,000
Unrecognized compensation cost related to restricted stock units awards, recognition period											2 years 5 months 16 days		3 years 7 months 13 days			2 years
Unrecognized compensation cost related to awards, vesting term starting date																Sep. 01, 2013
Weighted average grant date fair value for granted stock options		$ 18.63	$ 16.00		$ 18.35	$ 10.04
Intrinsic value of outstanding RSU		4,455,000	1,356,000		8,770,000	1,957,000					5,568,000		2,342,000
Aggregate intrinsic value for fully vested options		11,743,000			11,743,000		17,168,000
Number of unvested stock options		1,634,093			1,634,093		1,669,131		275,214		275,214		118,500
Unrecognized compensation cost excluding forfeitures and unvested stock option award		7,173,000			7,173,000		5,370,000		3,151,000		3,151,000		1,162,000
Employee service share based compensation unrecognized compensation costs on non vested award weighted average period of recognition		2 years 7 months 21 days			2 years 7 months 21 days		2 years 3 months 11 days
Weighted average grant date fair value for granted RSUs									$ 19.26	$ 0.00	$ 17.86	$ 0.00
Compensation cost capitalized		$ 0	$ 0		$ 0	$ 0

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Significant Customer Information (Tables)

6 Months Ended

Aug. 31, 2013

Summary of Customers Accounting 10% or More of Revenue or Accounts Receivable

Customers accounting for 10% or more of revenue or accounts receivable were as follows:

Three months ended August 31, 2013

Three months ended August 31, 2012

Six months ended August 31, 2013

Six months ended August 31, 2012

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Customer A

*

*

13

%

13

%

*

*

12

%

13

%

Customer B

*

*

28

*

*

*

22

*

Customer C

*

*

*

15

*

*

*

15

Customer D

*

17

%

*

14

*

17

%

*

14

Customer E

*

20

*

*

*

20

*

*

* Indicates less than 10%

Summary of Revenue by Country Wise

Revenue by geographic region, based on the billing address of the customer, was as follows (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Revenue by geographic region:
Americas	$	15,058	$	18,774	$	27,557	$	31,259
Europe		2,766		4,000		5,670		6,898
Asia		188		117		384		207
Total	$	18,012	$	22,891	$	33,611	$	38,364

Country Specific

Summary of Revenue by Country Wise

Countries accounting for 10% or more of revenue were as follows:

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Revenue by country:
United States		79.2	%		52.1	%		77.2	%		57.4	%
Canada		*			29.9			*			24.1
United Kingdom		*			*			*			*

* Indicates less than 10%

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Schedule of Principal Payments on Notes Payable and Capital Lease Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013
Debt Instrument [Line Items]
Total	$ 4,404
Less: amount representing interest	(335)
Present value of minimum lease payments	4,069
Less: current portion	(2,180)
Total, net of current portion	1,889
2014 (remaining 6 months)
Debt Instrument [Line Items]
Total	1,250
2015
Debt Instrument [Line Items]
Total	1,997
2016
Debt Instrument [Line Items]
Total	$ 1,157

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Notes Payable and Capital Lease Obligations (Tables)

6 Months Ended

Aug. 31, 2013

Schedule of Principal Payments on Notes Payable and Capital Lease Obligations

The total principal payments remaining under the notes payable and capital lease obligations of $4,069,000 as of August 31, 2013 as follows (in thousands):

Fiscal year ending:
2014 (remaining 6 months)	$	1,250
2015		1,997
2016		1,157
Total minimum lease payments		4,404
Less: amount representing interest		(335	)
Present value of minimum lease payments		4,069
Less: current portion		(2,180	)
Total, net of current portion	$	1,889

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Organization and Business Description

6 Months Ended

Aug. 31, 2013

Organization and Business Description

(1) Organization and Business Description

E2open, Inc. and subsidiaries (the Company), a Delaware corporation, was incorporated in September 2003. The Company provides cloud-based, on-demand software solutions delivered on an integrated platform that enables companies to collaborate with their trading partners to procure, manufacture, sell and distribute products more efficiently. The Company’s customers depend on outsourced manufacturing strategies and complex trading networks to compete in today’s global economy. They use the Company’s solutions to gain visibility into and control over their trading networks. The Company’s solutions enable its customers and their trading partners to overcome problems arising from communications across disparate systems by offering a reliable source of data, processes and analytics, which its customers rely on as the single version of the truth. The Company’s solutions empower its customers to manage demand they cannot predict and supply they do not control.

The Company acquired ICON-SCM AG (ICON) on July 30, 2013 (see note 3 to the condensed consolidated financial statements).

The Company’s corporate headquarters are located in Foster City, California, with additional offices in San Jose, California, Austin and Dallas, Texas, China, France, Germany, Malaysia, Finland, Taiwan and the United Kingdom.

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Acquisition

6 Months Ended

Aug. 31, 2013

Acquisition

(3) Acquisition

On July 30, 2013, the Company acquired all of the outstanding shares of ICON, a market leader in supply chain planning and collaboration, for approximately $26.6 million. The total initial purchase consideration comprised the following (in thousands):

Cash payment	$	12,412
Acquisition costs payable to seller, to be placed in escrow		5,309
451,593 shares of the Company’s common stock		8,849
Total	$	26,570

Transaction costs of $0.8 million associated with the acquisition of ICON were expensed as incurred and presented as Acquisition-related expenses as a part of operating expenses on our condensed consolidated statements of operations for the three and six months ended August 31, 2013.

Allocation of Consideration Transferred

The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values. The excess of the fair value of consideration transferred over estimated fair value of the net tangible assets and intangible assets was recorded as goodwill.

The Company is accounting for the ICON acquisition under the purchase method of accounting as a business combination. The following table summarizes the preliminary estimates of fair values of the assets and liabilities assumed at the acquisition date based on the preliminary purchase price allocation. The Company is in the process of validating and refining the assumptions and estimates required in establishing the fair values of the identifiable assets and liabilities, including identifiable intangible assets. The final purchase price allocation may differ from the preliminary amounts disclosed below (in thousands):

Cash and cash equivalents	$	923
Accounts receivable		1,274
Prepaid expenses and other current assets		219
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		15,958
Accounts payable and accrued liabilities		(3,080	)
Deferred revenue		(1,154	)
Convertible bond and long-term debt		(7,126	)
Deferred tax liability		(3,689	)
Other noncurrent liabilities		(47	)
Total liabilities assumed		(15,096	)
Net identifiable assets acquired		862
Goodwill		25,708
Total consideration	$	26,570

The key factor attributable to the creation of goodwill by the transaction is that, by combining ICON’s integrated planning and analytics capabilities with the Company’s Business Network, the Company expands its market opportunity and solution portfolio, accelerates its product roadmap, and extends its position as the leader in the collaborative planning and execution space.

As of the date of acquisition, the identifiable intangibles are comprised of developed technology of approximately $7.0 million and a customer relationship intangible of approximately $5.9 million. The Company is currently evaluating the expected useful life of these identifiable intangible assets and they may range up to 20 years. The amortization for the post acquisition period of approximately one month was not material to consolidated financial statements.

ICON’s results of operations have been included in our condensed consolidated financial statements subsequent to the date of acquisition. Revenue earned by ICON was $1,062,000 for the period from the acquisition date of July 30, 2013 to August 31, 2013. Immediately following the acquisition, ICON’s operations in the United States were merged into the Company’s operations, as such, the standalone ICON net income (loss) post-acquisition is not readily determinable. The unaudited pro forma Revenue and Net Loss for six months ended August 31, 2013 presented below combine the consolidated results of the Company and ICON giving effect to the acquisition of ICON as if it had been completed on March 1, 2012, the beginning of the annual reporting period prior to the year of acquisition. The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition. This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of March 1, 2012. The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of ICON’s amortizable assets acquired in the transaction, adjustments to net interest expense based upon settlement of debt assumed upon acquisition, and adjustments to net income to reflect the decrease of interest income arising from the reduction of investments in available-for-sale securities. The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

(in thousands, except per share data)	Six Months Ended August 31, 2013			Six Months Ended August 31, 2012
Pro forma revenue	$	37,442		$	44,321
Pro forma net loss		(13,213	)		(1,700	)
Pro forma net loss per share:
Basic		(0.50	)		(0.15	)
Diluted		(0.50	)		(0.15	)

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Notes Payable and Capital Lease Obligations

6 Months Ended

Aug. 31, 2013

Notes Payable and Capital Lease Obligations

(6) Notes Payable and Capital Lease Obligations

The Company financed the purchase of certain equipment, software and related support and maintenance with notes payable and capital leases. The terms of the notes payable are from nine months to three years, and the notes bear interest at rates ranging from 3.03% to 13.13% per annum. The total principal payments remaining under the notes payable and capital lease obligations of $4,069,000 as of August 31, 2013 as follows (in thousands):

Fiscal year ending:
2014 (remaining 6 months)	$	1,250
2015		1,997
2016		1,157
Total minimum lease payments		4,404
Less: amount representing interest		(335	)
Present value of minimum lease payments		4,069
Less: current portion		(2,180	)
Total, net of current portion	$	1,889

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Cash and investments

6 Months Ended

Aug. 31, 2013

Cash and investments

(4) Cash and investments

The following table presents cash, cash equivalents and available-for-sale securities for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of August 31, 2013:
Cash	$	5,925	$	—	$	—		$	5,925
Cash equivalents:
Money market accounts		4,929		—		—			4,929
Money market funds		2,095		—		—			2,095
Total cash and cash equivalents	$	12,949	$	—	$	—		$	12,949
Short-term investments:
Corporate debt securities		1,592		1		—			1,593
Mortgage-backed securities		508		—		(2	)		506
Municipal debt securities		350		—		—			350
Asset-backed securities		1,288		—		(2	)		1,286
Total short-term investments	$	3,738	$	1	$	(4	)	$	3,735
Long-term investments:
Corporate debt securities		2,092		2		(3	)		2,091
Asset-backed securities		929		—		(1	)		928
Mortgage-backed securities		442		2		(1	)		443
Municipal debt securities		1,287		—		(2	)		1,285
Common trust fund		109		—		—			109
Insurance company contract		15		—		—			15
Total long-term investments	$	4,874	$	4	$	(7	)	$	4,871
Total	$	21,561	$	5	$	(11	)	$	21,555
As of February 28, 2013:
Cash	$	1,436	$	—	$	—		$	1,436
Cash equivalents:
Money market accounts		2,501		—		—			2,501
Money market funds		3,879		—		—			3,879
Commercial paper		12,445		1		—			12,446
Total cash and cash equivalents	$	20,261	$	1	$	—		$	20,262
Short-term investments:
Commercial paper		12,322		1		—			12,323
Corporate debt securities		2,373		2		—			2,375
Mortgage-backed securities		594		—		(3	)		591
Total short-term investments	$	15,289	$	3	$	(3	)	$	15,289
Long-term investments:
Corporate debt securities		5,981		10		(1	)		5,990
Asset-backed securities		3,044		2		—			3,046
Mortgage-backed securities		1,803		5		(3	)		1,805
Municipal debt securities		851		—		—			851
Total long-term investments	$	11,679	$	17	$	(4	)	$	11,692
Total	$	47,229	$	21	$	(7	)	$	47,243

The available-for-sale securities that the Company intends to hold for less than one year are classified as short-term investments, and the securities that the Company intends to hold for more than one year are classified as long-term investments.

The following table presents available-for-sale securities, recorded in short-term and long-term investments, by contractual maturity date as of August 31, 2013 (in thousands):

	Amortized Cost		Estimated Fair Market Value
Due in one year or less	$	3,738	$	3,735
Due after one year through two years		4,874		4,871
Total	$	8,612	$	8,606

For the three and six months ended August 31, 2013, the realized gains and losses, and unrealized losses on these available-for-sale securities were not material. Additionally, none of these securities were in a continuous unrealized loss position for more than 12 months. As of August 31, 2013, the Company did not consider any of its available-for-sale securities to be other-than-temporarily impaired.

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Consolidated Balance Sheet Components - Additional Information (Detail) (USD $)	Aug. 31, 2013	Feb. 28, 2013
Software
Balance Sheet Components [Line Items]
Capital leased assets	$ 3,462,000	$ 1,615,000
Accumulated amortization	792,000	344,000
Property and equipment financed through capital leases and notes payable
Balance Sheet Components [Line Items]
Capital leased assets	2,338,000	662,000
Less accumulated depreciation and amortization	$ 422,000	$ 100,000

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Stock-based Compensation (Tables)

6 Months Ended

Aug. 31, 2013

Schedule of Estimated Grant Date Fair Values Employee Stock Options Assumptions

The estimated grant date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Three Months Ended August 31,		Six Months Ended August 31,
	2013	2012	2013	2012
Expected term (in years)	6.04	6.08	5.91	5.96
Expected stock price volatility	50.96%	50.0%	50.96% - 51.76%	50.0% - 55.0%
Risk-free interest rate	1.63% - 1.81%	0.9%	0.73% - 1.81%	0.9% - 1.3%
Expected dividend yield	—	—	—	—

Stock Options Activity Under Twenty Twelve Plan

Stock option activity under the Company’s 2012 Plan for the years presented is as follows:

	Number of shares			Weighted average exercise price		Weighted average remaining term
Balance of options outstanding, February 28, 2013		2,674,335		$	4.59		8.00 years
Options granted		623,575			18.35
Options exercised		(565,808	)		2.08
Options canceled and forfeited		(331,386	)		4.68
Balance of options outstanding, August 31, 2013		2,400,716			8.75		8.25 years
Balance of options expected to vest as of February 28, 2013		2,485,050			4.41		7.94 years
Balance of options exercisable as of February 28, 2013		1,005,204			2.68		7.03 years
Balance of options expected to vest as of August 31, 2013		2,315,813			8.60		8.23 years
Balance of options exercisable as of August 31, 2013		766,623			4.91		7.36 years

Restricted Stock Units Activity Under Twenty Twelve Plan

The RSU activity under the Company’s 2012 Plan for the years presented is as follows:

	Number of shares			Weighted average grant date fair value per share		Weighted average remaining term
Balance of awards outstanding, February 28 2013		118,500		$	14.42		3.62 years
Awards granted		172,714			17.86
Awards released		—			—
Awards canceled and forfeited		(16,000	)		16.61
Balance of awards outstanding, August 31, 2013		275,214		$	16.45		2.46 years
Balance of awards expected to vest, February 28, 2013		92,136		$	14.42		3.62 years
Balance of awards vested, February 28, 2013		—		$	—		—
Balance of awards expected to vest, August 31, 2013		254,192		$	16.45		2.46 years
Balance of awards vested, August 31, 2013		—		$	—		—

Functional Classification of Stock-Based Compensation Expense

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Cost of revenue	$	497	$	142	$	729	$	263
Research and development		148		25		216		78
Sales and marketing		617		137		907		282
General and administrative		456		178		711		338
	$	1,718	$	482	$	2,563	$	961

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Summary of Significant Accounting Policies - Additional Information (Detail) (Maximum)	1 Months Ended	6 Months Ended
	Jul. 30, 2013	Aug. 31, 2013
Maximum
Significant Of Accounting Policies [Line Items]
Intangible assets estimated useful lives	20 years	20 years

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Adjusted Unaudited Pro Forma Financial Results (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Pro forma revenue	$ 37,442	$ 44,321
Pro forma net loss	$ (13,213)	$ (1,700)
Basic	$ (0.50)	$ (0.15)
Diluted	$ (0.50)	$ (0.15)

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Outstanding Shares, Options and Warrants Excluded from Computation of Diluted Net Income (Loss) Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Option to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities	1,275	27	1,375	13
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Earnings per share excluding anti-dilutive securities	235		185

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Schedule of Estimated Grant Date Fair Values Employee Stock Options Assumptions (Detail)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
Expected term (in years)	6 years 15 days	6 years 29 days	5 years 10 months 28 days	5 years 11 months 16 days
Expected stock price volatility	50.96%	50.00%
Expected stock price volatility, minimum			50.96%	50.00%
Expected stock price volatility, maximum			51.76%	55.00%
Risk-free interest rate		0.90%
Risk-free interest rate, minimum	1.63%		0.73%	0.90%
Risk-free interest rate, maximum	1.81%		1.81%	1.30%
Expected dividend yield			0.00%

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Commitments and Contingencies - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013 Operating Lease	Feb. 28, 2013 Operating Lease
Commitment And Contingencies [Line Items]
Acquisition payable to seller	$ 5,309,000		$ 5,309,000
Rent expense	632,000	459,000	1,228,000	885,000
Noncancelable operating leases expiration date			July 2018
Security deposits					$ 420,000	$ 335,000

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Aug. 31, 2013	Feb. 28, 2013
Accounts receivable, allowance	$ 53	$ 55
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, shares issued	26,460,524	25,424,361
Common stock, shares outstanding	26,460,524	25,424,361

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Interest and other income (expense), net

6 Months Ended

Aug. 31, 2013

Interest and other income (expense), net

(9) Interest and other income (expense), net

Interest and other income (expense), net for the periods presented consisted of the following (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Interest income	$	33		$	7		$	81		$	7
Interest expense		(46	)		(106	)		(68	)		(179	)
Bank financing fees		(1	)		(52	)		(1	)		(116	)
Foreign exchange gains (losses)—realized and unrealized, net		10			(33	)		(43	)		192
Gains (losses) from foreign currency contracts—realized and unrealized, net		26			16			103			(172	)
Other, net		9			(1	)		10			4
	$	31		$	(169	)	$	82		$	(264	)

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Cash flows from operating activities:
Net income (loss)	$ (11,317)	$ 2,188
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation	2,563	961
Depreciation and amortization	983	795
Other	176	68
Changes in operating assets and liabilities:
Accounts receivable, net	10,599	312
Prepaid expenses and other current assets	(739)	(549)
Accounts payable and accrued liabilities	878	(547)
Deferred revenue	(11,032)	(9,614)
Other noncurrent liabilities	506	(21)
Net cash used in operating activities	(7,383)	(6,407)
Cash flows from investing activities:
Capital expenditures	(97)	(1,047)
Purchase of marketable securities	(10,357)	(14,336)
Proceeds from sale and maturities of marketable securities	28,908
Payment for acquisition, net of cash acquired	(11,489)
Other assets	73	28
Net cash provided by (used in) investing activities	7,038	(15,355)
Cash flows from financing activities:
Proceeds from bank credit facilities	536	30,300
Repayments of bank credit facilities	(653)	(39,950)
Repayments of notes payable and capital lease obligations	(894)	(1,745)
Repayment of debt assumed from acquired company	(7,126)
Proceeds from initial public offering, net of underwriting discounts and commissions		52,313
Payments of deferred initial public offering costs		(729)
Proceeds from exercise of common share options	1,178	160
Proceeds from exercise of warrants		700
Repurchase of fractional shares from reverse stock split		(3)
Net cash provided by (used in) financing activities	(6,959)	41,046
Effect of exchange rate changes on cash and cash equivalents	(9)	(24)
Net increase (decrease) in cash and cash equivalents	(7,313)	19,260
Cash and cash equivalents at beginning of period	20,262	10,219
Cash and cash equivalents at end of period	12,949	29,479
Cash paid during the period:
Interest	76	179
Income taxes	77	62
Noncash financing and investing activities:
Property, software and equipment acquired under notes payable and capital leases	1,677	41
Prepaid software, maintenance and services acquired under notes payable and capital leases	2,072	920
Automatic conversion of preferred stock to common stock in connection with IPO		84,191
Issuance of common stock in connection with a business acquisition	$ 8,849

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Summary of Customers Accounting 10% or More of Revenue or Accounts Receivable (Detail)	3 Months Ended			6 Months Ended
	Aug. 31, 2013		Aug. 31, 2012	Aug. 31, 2013		Aug. 31, 2012
Customer A
Segment Reporting Information [Line Items]
Percentage of total revenue		[1]	13.00%		[1]	12.00%
Percentage of accounts receivable			13.00%			13.00%
Customer B
Segment Reporting Information [Line Items]
Percentage of total revenue		[1]	28.00%		[1]	22.00%
Customer C
Segment Reporting Information [Line Items]
Percentage of total revenue		[1]			[1]
Percentage of accounts receivable			15.00%			15.00%
Customer D
Segment Reporting Information [Line Items]
Percentage of total revenue		[1]			[1]
Percentage of accounts receivable	17.00%		14.00%	17.00%		14.00%
Customer E
Segment Reporting Information [Line Items]
Percentage of total revenue		[1]			[1]
Percentage of accounts receivable	20.00%			20.00%

[1] Indicates less than 10%

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Feb. 28, 2013
Current assets:
Cash and cash equivalents	$ 12,949	$ 20,262
Short-term investments	3,735	15,289
Accounts receivable, net of allowance of $53 and $55	11,345	20,670
Prepaid expenses and other current assets	3,134	2,212
Total current assets	31,163	58,433
Long-term investments	4,871	11,692
Goodwill	25,708
Intangibles	12,817
Property and equipment, net	3,228	2,438
Other assets	1,089	905
Total Assets	78,876	73,468
Current liabilities:
Accounts payable and accrued liabilities	12,600	10,769
Deferred revenue	29,879	39,789
Acquisition payable to seller	5,309
Current portion of notes payable and capital lease obligations	2,180	849
Total current liabilities	49,968	51,407
Deferred revenue	1,930	1,898
Notes payable and capital lease obligations, net of current portion	1,889	562
Deferred tax liability	3,689
Other noncurrent liabilities	1,052	508
Total liabilities	58,528	54,375
Commitments and contingencies (note 8)
Stockholders' equity:
Preferred stock, $0.001 par value. 10,000,000 authorized shares, no shares issued and outstanding
Common stock, $0.001 par value. 100,000,000 authorized shares, 26,460,524 and 25,424,361 shares issued and outstanding as of August 31, 2013 and February 28, 2013	26	25
Additional paid-in capital	372,876	360,280
Accumulated other comprehensive loss	(42)	(17)
Accumulated deficit	(352,512)	(341,195)
Total stockholders' equity	20,348	19,093
Total liabilities and stockholders' equity	$ 78,876	$ 73,468

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Stock Options Activity Under Twenty Twelve Plan (Detail) (USD $)	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 01, 2011	Aug. 31, 2013	Feb. 28, 2013
Number of shares
Balance of options outstanding, beginning balance		2,674,335
Options granted	749,464	623,575
Options exercised		(565,808)
Options canceled and forfeited		(331,386)
Balance of options outstanding, ending balance		2,400,716	2,674,335
Balance of options expected to vest		2,315,813	2,485,050
Balance of options exercisable		766,623	1,005,204
Weighted average exercise price
Balance of options outstanding, beginning balance		$ 4.59
Options granted		$ 18.35
Options exercised		$ 2.08
Options canceled and forfeited		$ 4.68
Balance of options outstanding, ending balance		$ 8.75	$ 4.59
Balance of options expected to vest		$ 8.60	$ 4.41
Balance of options exercisable		$ 4.91	$ 2.68
Weighted average remaining term
Balance of options outstanding, beginning balance		8 years 3 months	8 years
Balance of options expected to vest		8 years 2 months 23 days	7 years 11 months 9 days
Balance of options exercisable		7 years 4 months 10 days	7 years 11 days

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Aug. 31, 2013

Computation of Basic and Diluted Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

	Three Months Ended August 31,					Six Months Ended August 31,
	2013			2012		2013			2012
Net income (loss)	$	(5,923	)	$	4,566	$	(11,317	)	$	2,188
Basic shares:
Weighted average common shares outstanding		26,018			13,875		25,822			10,606
Diluted shares:
Weighted average common shares outstanding		—			13,875		—			10,606
Weighted average effect of dilutive stock options		—			1,671		—			1,640
Weighted average effect of convertible preferred stock		—			8,875		—			11,860
		26,018			24,421		25,822			24,106
Net income (loss) per share:
Basic	$	(0.23	)	$	0.33	$	(0.44	)	$	0.21
Diluted	$	(0.23	)	$	0.19	$	(0.44	)	$	0.09

Computation of Diluted Net Income (Loss) Per Share Excluding Shares Options and Warrants

The following outstanding shares, options, restricted stock units and warrants were excluded from the computation of diluted net income per share in the periods presented because including them would have had an anti-dilutive effect (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Options to purchase common stock		1,275		27		1,375		13
Restricted stock units		235		—		185		—

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Cash and investments (Tables)

6 Months Ended

Aug. 31, 2013

Schedule of Cash, Cash Equivalents and Available-For-Sale Investments

The following table presents cash, cash equivalents and available-for-sale securities for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
As of August 31, 2013:
Cash	$	5,925	$	—	$	—		$	5,925
Cash equivalents:
Money market accounts		4,929		—		—			4,929
Money market funds		2,095		—		—			2,095
Total cash and cash equivalents	$	12,949	$	—	$	—		$	12,949
Short-term investments:
Corporate debt securities		1,592		1		—			1,593
Mortgage-backed securities		508		—		(2	)		506
Municipal debt securities		350		—		—			350
Asset-backed securities		1,288		—		(2	)		1,286
Total short-term investments	$	3,738	$	1	$	(4	)	$	3,735
Long-term investments:
Corporate debt securities		2,092		2		(3	)		2,091
Asset-backed securities		929		—		(1	)		928
Mortgage-backed securities		442		2		(1	)		443
Municipal debt securities		1,287		—		(2	)		1,285
Common trust fund		109		—		—			109
Insurance company contract		15		—		—			15
Total long-term investments	$	4,874	$	4	$	(7	)	$	4,871
Total	$	21,561	$	5	$	(11	)	$	21,555
As of February 28, 2013:
Cash	$	1,436	$	—	$	—		$	1,436
Cash equivalents:
Money market accounts		2,501		—		—			2,501
Money market funds		3,879		—		—			3,879
Commercial paper		12,445		1		—			12,446
Total cash and cash equivalents	$	20,261	$	1	$	—		$	20,262
Short-term investments:
Commercial paper		12,322		1		—			12,323
Corporate debt securities		2,373		2		—			2,375
Mortgage-backed securities		594		—		(3	)		591
Total short-term investments	$	15,289	$	3	$	(3	)	$	15,289
Long-term investments:
Corporate debt securities		5,981		10		(1	)		5,990
Asset-backed securities		3,044		2		—			3,046
Mortgage-backed securities		1,803		5		(3	)		1,805
Municipal debt securities		851		—		—			851
Total long-term investments	$	11,679	$	17	$	(4	)	$	11,692
Total	$	47,229	$	21	$	(7	)	$	47,243

Schedule of Available-For-Sale Investments by Contractual Maturity Date

The following table presents available-for-sale securities, recorded in short-term and long-term investments, by contractual maturity date as of August 31, 2013 (in thousands):

	Amortized Cost		Estimated Fair Market Value
Due in one year or less	$	3,738	$	3,735
Due after one year through two years		4,874		4,871
Total	$	8,612	$	8,606

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Related Party Transactions - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013 Seagate LLC Customer	Feb. 28, 2013 Seagate LLC
Related Party Transaction [Line Items]
Related party transactions payments received	$ 242,000	$ 484,000	$ 1,275,000	$ 905,000
Number of customer payment received					1
Outstanding receivable					$ 1,550,000	$ 1,031,000

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Computation of Basic and Diluted Net Loss Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Net income (loss)	$ (5,923)	$ 4,566	$ (11,317)	$ 2,188
Basic shares:
Weighted average common shares outstanding	26,018	13,875	25,822	10,606
Diluted shares:
Weighted average common shares outstanding	26,018	13,875	25,822	10,606
Weighted average effect of dilutive stock options		1,671		1,640
Weighted average effect of convertible preferred stock		8,875		11,860
Weighted average common shares outstanding, diluted	26,018	24,421	25,822	24,106
Net income (loss) per share:
Basic	$ (0.23)	$ 0.33	$ (0.44)	$ 0.21
Diluted	$ (0.23)	$ 0.19	$ (0.44)	$ 0.09

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Schedule of Available-For-Sale Investments by Contractual Maturity Date (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	$ 8,612
Estimated Fair Market Value	8,606
Due In One Year Or Less
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	3,738
Estimated Fair Market Value	3,735
Due After One Year Through Two Years
Cash Cash Equivalents And Available For Sale Investments [Line Items]
Amortized Cost	4,874
Estimated Fair Market Value	$ 4,871

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Components of Purchase Consideration (Parenthetical) (Detail)	1 Months Ended
	Jul. 30, 2013
Business Acquisition [Line Items]
Common stock issued, shares	451,593

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Summary of Estimated Fair Values of Assets and Liabilities Assumed at Date of Acquisition Based on Preliminary Purchase Price Allocation (Detail) (USD $) In Thousands, unless otherwise specified	Aug. 31, 2013	Jul. 30, 2013
Business Acquisition [Line Items]
Cash and cash equivalents		$ 923
Accounts receivable		1,274
Prepaid expenses and other current assets		219
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		15,958
Accounts payable and accrued liabilities		(3,080)
Deferred revenue		(1,154)
Convertible bond and long-term debt		(7,126)
Deferred tax liability		(3,689)
Other noncurrent liabilities		(47)
Total liabilities assumed		(15,096)
Net identifiable assets acquired		862
Goodwill	25,708	25,708
Total consideration		$ 26,570

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Commitments and Contingencies

6 Months Ended

Aug. 31, 2013

Commitments and Contingencies

(8) Commitments and Contingencies

Acquisition cost payable to seller, to be placed in an escrow

In accordance with the share purchase agreement for the acquisition of ICON, the Company will place in escrow $5,309,000 payable to ICON’s former shareholders. The amount in escrow will be released to ICON’s former shareholders on July 31, 2014, the escrow expiration date, net of claims arising during the escrow period. The Company and the former shareholders have not selected the escrow agent as of August 31, 2013.

Leases

The Company leases its primary office space under noncancelable operating leases with various expiration dates through July 2018. Rent expense was $632,000 and $459,000 for the three months ended August 31, 2013 and 2012, and $1,228,000 and $885,000 for the six months ended August 31, 2013 and 2012. Future minimum lease payments under noncancelable operating leases as of August 31, 2013 are as follows (in thousands):

Fiscal year ending:
2014 (remaining 6 months)	$	1,246
2015		2,172
2016		1,678
2017		1,564
2018		1,449
Thereafter		540
Total minimum lease payments	$	8,649

Several of the operating lease agreements require the Company to provide security deposits. As of August 31, 2013 and February 28, 2013, lease deposits totaled $420,000 and $335,000. The deposits are generally refundable at the expiration of the lease, assuming all of the Company’s obligations under the lease agreement have been met, and are included in other assets in the condensed consolidated balance sheets.

Contingencies

From time to time, the Company is subject to contingencies that arise in the ordinary course of business. The Company records an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not currently believe the resolution of any such contingencies will have a material effect upon the Company’s financial position, results of operations or cash flows.

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Fair Value Measurements (Tables)

6 Months Ended

Aug. 31, 2013

Assets and Liabilities Measured at Fair Value on Recurring Basis

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of August 31, 2013 and February 28, 2013, are summarized as follows (in thousands):

	August 31, 2013										February 28, 2013
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	4,929	$	—		$	—	$	4,929		$	2,501	$	—		$	—	$	2,501
Money market funds		2,095		—			—		2,095			3,879		—			—		3,879
Commercial paper		—		—			—		—			—		12,446			—		12,446
Short-term investments:
Commercial paper		—		—			—		—			—		12,323			—		12,323
Corporate debt securities		—		1,593			—		1,593			—		2,375			—		2,375
Asset backed securities		—		1,286			—		1,286			—		—			—		—
Mortgage backed securities		—		506			—		506			—		591			—		591
Municipal bonds		—		350					350			—		—			—		—
Other current assets:
Foreign currency forward contracts		—		—			—		—			—		4			—		4
Long-term investments:
Corporate debt securities		—		2,091			—		2,091			—		5,990			—		5,990
Asset backed securities		—		928			—		928			—		3,046			—		3,046
Mortgage backed securities		—		443			—		443			—		1,805			—		1,805
Municipal bonds		—		1,285			—		1,285			—		851			—		851
Common trust fund		—		109			—		109			—		—			—		—
Insurance Company Contract		—		15			—		15			—		—			—		—
Other noncurrent assets:
Certificate of deposit		16		—			—		16			16		—			—		16
Total assets	$	7,040	$	8,606		$	—	$	15,646		$	6,396	$	39,431		$	—	$	45,827
Liabilities:
Other current liabilities:
Foreign currency forward contracts		—		(170	)		—		(170	)		—		(158	)		—		(158	)
Total liabilities	$	—	$	(170	)	$	—	$	(170	)	$	—	$	(158	)	$	—	$	(158	)

Summary of Foreign Exchange Contracts Details

The tables below present the notional amounts (at the contract exchange rates), the weighted-average contractual foreign currency exchange rates, and the estimated fair value of contracts outstanding as of August 31, 2013 and February 28, 2013 (in USD thousands, except average contract rate):

	August 31, 2013								February 28, 2013
	Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value			Notional Sell (Buy)			Average Contract Rate		Estimated Fair Value
Foreign currency forward exchange contracts:
Euro	$	5,935			1.3	$	(63	)	$	7,322			1.3	$	(146	)
Malaysian Ringgit		(5,706	)		3.1		(50	)		(2,255	)		3.1		(8	)
British Pound		(973	)		1.5		(57	)		—			—		—
Total	$	(744	)			$	(170	)		5,067				$	(154	)

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Notes Payable and Capital Lease Obligations - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 31, 2013
Lease Commitments And Notes Payable [Line Items]
Minimum interest rates	3.03%
Maximum interest rates	13.13%
Present value of minimum lease payments	$ 4,069
Minimum
Lease Commitments And Notes Payable [Line Items]
Term of notes	Nine months
Maximum
Lease Commitments And Notes Payable [Line Items]
Term of notes	Three years

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Stock-based Compensation

6 Months Ended

Aug. 31, 2013

Stock-based Compensation

(11) Stock-based Compensation

Options and Awards Granted to Employees

In June 2012, the Board adopted the 2012 Stock Plan (2012 Plan), which was subsequently approved by the Company’s stockholders. Upon the completion of the IPO, all shares that were reserved under the 2003 Stock Plan but not issued were assumed by the 2012 Plan. No additional shares will be issued under the 2003 Plan. Under the 2012 Plan, the Company has the ability to issue incentive stock options (ISOs), nonstatutory stock options (NSOs), stock appreciation rights, restricted stock, restricted stock units (RSUs), performance units and performance shares. No awards under the 2012 Plan were granted prior to the Company’s IPO. As of August 31, 2013 and February 28, 2013, there were 5,819,041 and 5,112,830 shares of common stock reserved for issuance under the 2012 Plan.

Options under the 2012 Plan may be granted for periods of up to 10 years; provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares of common stock on the date of grant, and (ii) the exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the underlying shares on the date of grant. Options generally vest 25% on the one-year anniversary of the option grant date, and then monthly for three additional years, or monthly for a period of four years, and are exercisable for a period of 10 years after the date of grant. RSUs generally vest 25% on the first annual anniversary of the award grant date, and 25% each year thereafter on the annual anniversary of the award grant date for three additional years.

Some options granted are immediately exercisable and any unvested portion of the shares acquired upon early exercise is subject to a right of repurchase by the Company upon the employee’s termination at the original purchase price. The right of repurchase lapses as the options vest, which is generally over the four-year vesting period of the related options. As of February 28, 2013, there were 18,761 shares exercised that were subject to repurchase. The $6,566 aggregate exercise price of the options subject to repurchase as of February 28, 2013 is recorded in other noncurrent liabilities and is amortized to equity as the options vest. As of August 31, 2013, all of the early-exercised options have vested.

The determination of the fair value of stock-based payment awards on the date of grant using a pricing model is affected by the Company’s stock price as well as by certain assumptions including the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behavior, risk-free interest rates, and expected dividends. The estimated grant date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Three Months Ended August 31,		Six Months Ended August 31,
	2013	2012	2013	2012
Expected term (in years)	6.04	6.08	5.91	5.96
Expected stock price volatility	50.96%	50.0%	50.96% - 51.76%	50.0% - 55.0%
Risk-free interest rate	1.63% - 1.81%	0.9%	0.73% - 1.81%	0.9% - 1.3%
Expected dividend yield	—	—	—	—

The expected term represents the period that stock-based awards are expected to be outstanding, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior as influenced by changes to the terms of the Company’s stock-based awards. The Company estimated the expected term, using the simplified method due to limited exercise data, to be the period of time between the date of grant and the midpoint between option vesting and expiration. The Company estimated the expected volatility of its common stock based on the average of historical and implied volatility of comparable companies from a representative peer group based on industry and market capitalization data. The risk-free interest rate represents the yield on a constant maturity U.S. Treasury security with a term equal to the expected term of the options. Expected dividend yield is set at 0% because the Company does not expect to pay dividends during the term of the option, and historically has not paid any dividends to its stockholders. Management made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest.

In July 2011, the Company awarded 749,464 stock options that were subject to certain financial performance requirements to be achieved by February 28, 2013, before vesting could occur. The vesting of these stock options was also dependent upon the employees’ continued employment after February 28, 2013. In March 2012, the Board of Directors approved a modification of the financial performance requirements. At the date of the modification, the Company determined that the achievement of the modified performance requirements was probable and, accordingly, compensation cost related to the modified awards of $149,000 was recorded in the condensed consolidated statement of operations for the three months ended May 31, 2012. Prior to this date, the Company had not recognized compensation expense associated with these grants because the Company believed that, based on the then-current and expected operational results, it was not probable that the associated financial performance requirements would be achieved. The financial performance requirements were achieved by February 28, 2013. The unrecognized compensation cost related to these options is $1,368,000 as of August 31, 2013, and is being recognized over the remaining vesting term of three years from February 28, 2013.

In July 2013, the Company awarded 125,250 restricted stock units that are subject to certain financial performance requirements to be achieved by February 28, 2014, before vesting can occur. The vesting of these stock options is also dependent upon the employees’ continued employment after February 28, 2014. The Company determined that, based on current and expected achievement of the performance requirements, certain of these awards are probable of vesting. Accordingly, compensation cost related to the awards deemed probable of vesting amounting to $116,000 was recorded in the condensed consolidated statement of operations for the three and six months ended August 31, 2013. The unrecognized compensation cost related to the awards is $1,419,000 as of August 31, 2013, and is being recognized over the remaining vesting term of two years from September 1, 2013.

Stock Options:

Stock option activity under the Company’s 2012 Plan for the years presented is as follows:

	Number of shares			Weighted average exercise price		Weighted average remaining term
Balance of options outstanding, February 28, 2013		2,674,335		$	4.59		8.00 years
Options granted		623,575			18.35
Options exercised		(565,808	)		2.08
Options canceled and forfeited		(331,386	)		4.68
Balance of options outstanding, August 31, 2013		2,400,716			8.75		8.25 years
Balance of options expected to vest as of February 28, 2013		2,485,050			4.41		7.94 years
Balance of options exercisable as of February 28, 2013		1,005,204			2.68		7.03 years
Balance of options expected to vest as of August 31, 2013		2,315,813			8.60		8.23 years
Balance of options exercisable as of August 31, 2013		766,623			4.91		7.36 years

The weighted average grant date fair value of the employee stock options granted during the three months ended August 31, 2013 and August 31, 2012 was $18.63 and $16, and for the six months ended August 31, 2013 and August 31, 2012 was $18.35 and $10.04.

The intrinsic values of employee stock options exercised during the three months ended August 31, 2013 and August 31, 2012 was $4,455,000 and $1,356,000, and for the six months ended August 31, 2013 and August 31, 2012 was $8,770,000 and $1,957,000. The intrinsic values of vested shares as of August 31, 2013 and February 28, 2013 were $11,743,000 and $17,168,000.

As of August 31, 2013, and February 28, 2013 the number of unvested options was 1,634,093 and 1,669,131.

As of August 31, 2013 and February 28, 2013, the Company had $7,173,000 and $5,370,000 of unrecognized compensation cost excluding estimated forfeitures, related to unvested stock option awards, which is expected to be recognized over a weighted average period of 2.64 years and 2.28 years.

Restricted Stock Units:

The RSU activity under the Company’s 2012 Plan for the years presented is as follows:

	Number of shares			Weighted average grant date fair value per share		Weighted average remaining term
Balance of awards outstanding, February 28 2013		118,500		$	14.42		3.62 years
Awards granted		172,714			17.86
Awards released		—			—
Awards canceled and forfeited		(16,000	)		16.61
Balance of awards outstanding, August 31, 2013		275,214		$	16.45		2.46 years
Balance of awards expected to vest, February 28, 2013		92,136		$	14.42		3.62 years
Balance of awards vested, February 28, 2013		—		$	—		—
Balance of awards expected to vest, August 31, 2013		254,192		$	16.45		2.46 years
Balance of awards vested, August 31, 2013		—		$	—		—

The weighted average grant date fair value per share of the RSUs granted during the three months ended August 31, 2013 and August 31, 2012 was $19.26 and $0, and for the six months ended August 31, 2013 and August 31, 2012 was $17.86 and $0.

The intrinsic value of outstanding RSUs as of August 31, 2013 and February 28, 2013 was $5,568,000 and $2,342,000.

Total compensation expense for these awards recorded in the condensed consolidated statement of operations for the three months ended August 31, 2013 and August 31, 2012 was $260,000 and $0, and for the six months ended August 31, 2013 and August 31, 2012 was $390,000 and $0. As of August 31, 2013, none of the awards were vested or released. As of August 31, 2013 and February 28, 2013, the Company had $3,151,000 and $1,162,000 of unrecognized compensation expense related to these RSUs, which is expected to be recognized over a weighted average period of 2.46 years and 3.62 years.

Total share-based compensation:

Total compensation expense recorded for share-based payments for the three months ended August 31, 2013 and August 31, 2012 was $1,718,000 and $482,000, and for the six months ended August 31, 2013 and August 31, 2012 was $2,563,000 and $961,000. No compensation cost was capitalized during the three and six months ended August 31, 2013 and August 31, 2012.

The table below sets forth the functional classification of stock-based compensation expense for the periods presented (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Cost of revenue	$	497	$	142	$	729	$	263
Research and development		148		25		216		78
Sales and marketing		617		137		907		282
General and administrative		456		178		711		338
	$	1,718	$	482	$	2,563	$	961

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Related Party Transactions

6 Months Ended

Aug. 31, 2013

Related Party Transactions

(7) Related Party Transactions

One of the Company’s directors, Patrick J. O’Malley, III, is the Chief Financial Officer of Seagate Technology Public Limited Company, or Seagate PLC. Seagate LLC, a wholly owned subsidiary of Seagate PLC (Seagate), is one of the Company’s customers and the Company received payments from Seagate of $242,000 and $484,000 for the three months ended August 31, 2013 and 2012, and $1,275,000 and $905,000 for the six months ended August 31, 2013 and 2012. The Company has outstanding receivable from Seagate of $1,550,000 and $1,031,000 as of August 31, 2013 and February 28, 2013.

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Summary of Significant Accounting Policies

6 Months Ended

Aug. 31, 2013

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (SEC).

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of August 31, 2013, the interim condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended August 31, 2013 and 2012, and the interim condensed consolidated statements of cash flows for the six months ended August 31, 2013 and 2012 and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position and operating results for the periods presented. The results for the three and six months ended August 31, 2013 are not necessarily indicative of the results expected for the full fiscal year or any other period.

Accounting Policies

The accompanying unaudited interim condensed consolidated financial statements and accompanying related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2013. There have been no changes in the Company’s significant accounting policies during the six months ended August 31, 2013 compared to such policies described in the audited consolidated financial statements included in Company’s Annual Report on Form 10-K for year ended February 28, 2013 except for the adoption of the following policies in connection with the acquisition of ICON:

Acquisition Related Expenses—Acquisition related expenses consist of third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of a business or an asset group.

Goodwill—Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and intangible assets of acquired entities. The Company performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse change in customer demand or business climate, obsolescence of acquired technology and related competitive considerations.

The Company performs a goodwill impairment test in accordance with Account Standards Update (“ASU”) 2011-08, “Intangibles – Goodwill and Other: Testing Goodwill for Impairment,” which allows the Company to make a qualitative assessment to determine whether it is more likely than not that goodwill is impaired before applying the two-step goodwill impairment test. If the conclusion is that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company then performs a two-step goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value, and, if an indication of goodwill impairment exists for the reporting unit, the Company must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill as determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company did not record any charges related to goodwill impairment for the three and six months ended August 31, 2013.

Intangible assets—Intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, ranging up to 20 years. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Accounting Updates

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to the Company’s condensed consolidated results of operations or financial position.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported results of operations during the reporting period. Such estimates include the allowance for doubtful accounts receivable, deferred tax asset valuation allowance, unrecognized tax benefits, fair value of acquired net assets including intangibles, accrued liabilities, and stock-based compensation. Actual results could differ from those estimates.

Revenue Recognition

The Company generates revenue from the sale of subscriptions and support and professional services.

Subscriptions and Support. The Company offers on-demand software solutions, which enable its customers to have constant access to its solutions without the need to manage and support the software and associated hardware themselves. The Company houses the hardware and software in third-party facilities, and provides its customers with access to the software solutions, along with data security and storage, backup and recovery services and solution support. The Company’s customer contracts typically have a term of three to five years. The Company invoices its customers for subscriptions and support in advance for annual use of the software solutions. The Company’s payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services. Professional services revenue is derived primarily from fees for enabling services, including solution consulting and solution deployment. These services are sold in conjunction with the sale of the Company’s on-demand software solutions. The Company provides professional services, both on a fixed fee and a time and materials basis, and invoices customers either in advance, monthly, or upon reaching project milestones.

The Company enters into arrangements with multiple elements, comprised of subscriptions and support and professional services. Arrangements with customers typically do not provide the customer with the right to take possession of the software supporting the on-demand solutions. The Company commences revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company’s price to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

The Company evaluates each of these criteria as follows:

Evidence of an Arrangement . The Company considers a binding agreement signed by it and the customer to be evidence of an arrangement.

Delivery . The Company typically considers delivery to have occurred when the on-demand software solutions are made available to the customer or services have been rendered. In arrangements where an existing customer purchases additional solutions, delivery occurs upon commencement of the contractual term.

Fixed or Determinable Fee . The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within its standard payment terms. If the fee is not fixed or determinable, the Company recognizes the revenue as amounts become due and payable.

Collectability of the Fees is Reasonably Assured . Collectability of the fees is reasonably assured if the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not reasonably assured, the Company defers the recognition of revenue until cash collection.

The Company accounts for subscriptions and support and professional services revenue as separate units of accounting and allocates revenue to each deliverable in an arrangement based on a selling price hierarchy. As the Company has been unable to establish vendor specific objective evidence (VSOE) or third party evidence (TPE) for the elements of its arrangements, the Company determines the estimated selling price (ESP) for each element primarily by considering prices the Company charges for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time and material basis is recognized as services are delivered.

The Company acquired ICON on July 30, 2013. Historically, ICON sold perpetual or term licenses and related post-contract support (PCS) and professional services. During the post-acquisition period of approximately one month, all revenue recognized from legacy ICON revenue arrangements represented primarily post-contract support or professional services.

Accounting for the Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, which consist principally of property and equipment and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset is not recoverable, an impairment loss is recorded for the amount by which the carrying amount of the asset exceeds its fair value. The Company did not incur any long-lived asset impairment charges during the three and six month ended August 31, 2013 and 2012.

XML

Restricted Stock Units Activity Under Twenty Twelve Plan (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012	Feb. 28, 2013
Number of shares
Balance of awards outstanding, ending balance	1,634,093		1,634,093		1,669,131
Restricted Stock Units
Number of shares
Balance of awards outstanding, beginning balance			118,500
Awards granted			172,714
Awards released
Awards canceled and forfeited			(16,000)
Balance of awards outstanding, ending balance	275,214		275,214		118,500
Balance of awards expected to vest	254,192		254,192		92,136
Balance of awards vested
Weighted average grant date fair value
Balance of awards outstanding, beginning balance			$ 14.42
Awards granted	$ 19.26	$ 0.00	$ 17.86	$ 0.00
Awards released
Awards canceled and forfeited			$ 16.61
Balance of awards outstanding, May 31, 2013	$ 16.45		$ 16.45		$ 14.42
Balance of awards expected to vest	$ 16.45		$ 16.45		$ 14.42
Balance of awards vested
Weighted average remaining term
Balance of awards outstanding,beginning balance			3 years 7 months 13 days
Balance of awards outstanding, ending balance	2 years 5 months 16 days		2 years 5 months 16 days		3 years 7 months 13 days
Balance of awards expected to vest			2 years 5 months 16 days		3 years 7 months 13 days
Balance of awards vested

XML

Interest and Other Income (Expense), Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Interest Expense [Line Items]
Interest income	$ 33	$ 7	$ 81	$ 7
Interest expense	(46)	(106)	(68)	(179)
Bank financing fees	(1)	(52)	(1)	(116)
Foreign exchange gains (losses)-realized and unrealized, net	10	(33)	(43)	192
Gains (losses) from foreign currency contracts-realized and unrealized, net	26	16	103	(172)
Other, net	9	(1)	10	4
Interest and other income (expense), net	$ 31	$ (169)	$ 82	$ (264)

XML

Acquisition - Additional information (Detail) (USD $)	1 Months Ended		3 Months Ended	6 Months Ended
	Aug. 31, 2013	Jul. 30, 2013	Aug. 31, 2013	Aug. 31, 2013
Business Acquisition [Line Items]
Initial purchase consideration for icon-scm		$ 26,570,000
Acquisition expenses			791,000	791,000
Identifiable intangibles		12,900,000
Revenues earned since acquisition date	1,062,000
Maximum
Business Acquisition [Line Items]
Useful life of identifiable intangible assets		20 years		20 years
Developed technology
Business Acquisition [Line Items]
Identifiable intangibles		7,000,000
Customer relationship
Business Acquisition [Line Items]
Identifiable intangibles		$ 5,900,000

XML

Summary of Revenue by Geographic Region (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total	$ 18,012	$ 22,891	$ 33,611	$ 38,364
Americas
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total	15,058	18,774	27,557	31,259
Europe
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total	2,766	4,000	5,670	6,898
Asia
Revenue From External Customers Attributed To Foreign Countries By Geographic Area [Line Items]
Total	$ 188	$ 117	$ 384	$ 207

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Significant Customer Information

6 Months Ended

Aug. 31, 2013

Significant Customer Information

(14) Significant Customer Information

Customers accounting for 10% or more of revenue or accounts receivable were as follows:

Three months ended August 31, 2013

Three months ended August 31, 2012

Six months ended August 31, 2013

Six months ended August 31, 2012

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Percentage of total revenue

Percentage of accounts receivable

Customer A

*

*

13

%

13

%

*

*

12

%

13

%

Customer B

*

*

28

*

*

*

22

*

Customer C

*

*

*

15

*

*

*

15

Customer D

*

17

%

*

14

*

17

%

*

14

Customer E

*

20

*

*

*

20

*

*

* Indicates less than 10%

Revenue by geographic region, based on the billing address of the customer, was as follows (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2013		2012		2013		2012
Revenue by geographic region:
Americas	$	15,058	$	18,774	$	27,557	$	31,259
Europe		2,766		4,000		5,670		6,898
Asia		188		117		384		207
Total	$	18,012	$	22,891	$	33,611	$	38,364

Countries accounting for 10% or more of revenue were as follows:

	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Revenue by country:
United States		79.2	%		52.1	%		77.2	%		57.4	%
Canada		*			29.9			*			24.1
United Kingdom		*			*			*			*

* Indicates less than 10%

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Income Taxes

6 Months Ended

Aug. 31, 2013

Income Taxes

(10) Income Taxes

The Company records its interim provision for income taxes based on its estimated annual effective tax rate for the year. The income tax provision for the three months ended August 31, 2013 and 2012 was $35,000 and $32,000, and for the six months ended August 31, 2013 and 2012 was $74,000 and $75,000. The Company has incurred operating losses for most years since inception. As of February 28, 2013, it had net operating loss, or NOL, carryforwards for federal income tax purposes of $318,323,000, which begin to expire in fiscal 2023, and had NOL carryforwards for state income tax purposes of $100,320,000, which begin to expire in fiscal 2014. In order to utilize the NOLs, the Company must generate consolidated taxable income which can offset such carryforwards. The deferred tax asset associated with the NOLs is $93,992,000. As a result of those continuing losses, management has determined that insufficient evidence exists to support that it is more likely than not that the Company will realize the benefits of its U.S. net deferred tax assets and therefore has recorded a valuation allowance to reduce the net carrying value of these deferred tax assets to zero. Accordingly, the Company has not recorded a provision for income taxes for any of the periods presented other than provisions for estimated federal alternative minimum taxes, state and foreign taxes, as well as income taxes in foreign jurisdictions. The Company’s effective tax rate differs from the statutory rate due primarily to valuation allowances on deferred taxes, state taxes, foreign taxes, and tax contingencies.

As of August 31, 2013, the Company has recorded a $3,689,000 noncurrent deferred tax liability in connection with the acquisition of ICON. The deferred tax liability represents primarily the tax effect of the difference between the estimated fair value of the acquired intangible assets and the tax basis ($0) of such assets. The estimated amount is determined by multiplying the difference by the German marginal tax rate of 29%.

The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income taxes. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are expected to be reinvested indefinitely. There is $813,000 of undistributed earnings of the Company’s foreign subsidiaries as of August 31, 2013. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be repatriated.

As of February 28, 2013, the total amount of gross unrecognized tax benefits was $4,500,000, of which $300,000, if recognized, would affect the Company’s effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. The total amount of gross interest and penalties accrued was $68,000 as of February 28, 2013, and was classified as other noncurrent liabilities in the consolidated balance sheets. The Company believes that it has adequately provided for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. The Company is not currently under examination or audit by any taxing authorities. For the six months ended August 31, 2013, there has been no material change in the total amount or composition of the Company’s unrecognized tax benefits. The Company is subject to taxation in the U.S., various states and foreign jurisdictions. The 2000 to 2013 tax years’ statutes of limitations generally remain open and are subject to U.S. federal and state tax examinations. The statutes of limitations in foreign jurisdictions range from four to seven years, and the open tax years subject to examination are from 2007 to 2013.

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Acquisition (Tables)

6 Months Ended

Aug. 31, 2013

Components of Purchase Consideration

The total initial purchase consideration comprised the following (in thousands):

Cash payment	$	12,412
Acquisition costs payable to seller, to be placed in escrow		5,309
451,593 shares of the Company’s common stock		8,849
Total	$	26,570

Summary of Estimated Fair Values of Assets and Liabilities Assumed at Date of Acquisition Based on Preliminary Purchase Price Allocation

The following table summarizes the preliminary estimates of fair values of the assets and liabilities assumed at the acquisition date based on the preliminary purchase price allocation. (in thousands):

Cash and cash equivalents	$	923
Accounts receivable		1,274
Prepaid expenses and other current assets		219
Long-term investments		354
Property and equipment		61
Identifiable intangible assets		12,900
Other assets		227
Total identifiable assets acquired		15,958
Accounts payable and accrued liabilities		(3,080	)
Deferred revenue		(1,154	)
Convertible bond and long-term debt		(7,126	)
Deferred tax liability		(3,689	)
Other noncurrent liabilities		(47	)
Total liabilities assumed		(15,096	)
Net identifiable assets acquired		862
Goodwill		25,708
Total consideration	$	26,570

Adjusted Unaudited Pro Forma Financial Results

The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

(in thousands, except per share data)	Six Months Ended August 31, 2013			Six Months Ended August 31, 2012
Pro forma revenue	$	37,442		$	44,321
Pro forma net loss		(13,213	)		(1,700	)
Pro forma net loss per share:
Basic		(0.50	)		(0.15	)
Diluted		(0.50	)		(0.15	)

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Credit Facility

6 Months Ended

Aug. 31, 2013

Credit Facility

(15) Credit Facility

On October 7, 2013, the Company entered into a Business Financing Agreement for a revolving loan facility with a borrowing capacity of up to $20,000,000, with availability to be subject to a borrowing formula, and secured by the Company’s accounts receivable and contracted backlog. The revolving loan facility bears interest at a per annum rate equal to the Wall Street Journal prime rate minus 0.25%, with a floor for the prime rate of 3.25%. The revolving loan facility is a general obligation of the Company secured by the Company’s tangible and intangible assets, as well as a negative pledge whereby the Company agrees not to give any creditor a security interest on the Company’s intellectual property.

XML

Document and Entity Information	6 Months Ended
	Aug. 31, 2013	Sep. 30, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 31, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	EOPN
Entity Registrant Name	E2OPEN INC
Entity Central Index Key	0001540400
Current Fiscal Year End Date	--02-28
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		26,507,320

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Aug. 31, 2013

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (SEC).

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of August 31, 2013, the interim condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended August 31, 2013 and 2012, and the interim condensed consolidated statements of cash flows for the six months ended August 31, 2013 and 2012 and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position and operating results for the periods presented. The results for the three and six months ended August 31, 2013 are not necessarily indicative of the results expected for the full fiscal year or any other period.

Accounting Policies

Accounting Policies

The accompanying unaudited interim condensed consolidated financial statements and accompanying related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2013. There have been no changes in the Company’s significant accounting policies during the six months ended August 31, 2013 compared to such policies described in the audited consolidated financial statements included in Company’s Annual Report on Form 10-K for year ended February 28, 2013 except for the adoption of the following policies in connection with the acquisition of ICON:

Acquisition Related Expenses—Acquisition related expenses consist of third-party accounting and legal service fees, personnel-related expenses, travel expenses and other expenses incurred solely to prepare for and execute the acquisition of a business or an asset group.

Goodwill—Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and intangible assets of acquired entities. The Company performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include but are not limited to significant adverse change in customer demand or business climate, obsolescence of acquired technology and related competitive considerations.

The Company performs a goodwill impairment test in accordance with Account Standards Update (“ASU”) 2011-08, “Intangibles – Goodwill and Other: Testing Goodwill for Impairment,” which allows the Company to make a qualitative assessment to determine whether it is more likely than not that goodwill is impaired before applying the two-step goodwill impairment test. If the conclusion is that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company then performs a two-step goodwill impairment test. Under the first step, the fair value of the reporting unit is compared with its carrying value, and, if an indication of goodwill impairment exists for the reporting unit, the Company must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill as determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company did not record any charges related to goodwill impairment for the three and six months ended August 31, 2013.

Intangible assets—Intangible assets are carried at cost less accumulated amortization, and are amortized using the straight-line method over their estimated useful lives, ranging up to 20 years. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. Critical estimates in valuing the intangible assets include, but are not limited to, forecasts of the expected future cash flows attributable to the respective assets, anticipated growth in revenue from the acquired customer and product base, and the expected use of the acquired assets.

Accounting Updates

Accounting Updates

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). FASB issued ASU 2013-02 to improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of accumulated other comprehensive income (“AOCI”) in financial statements. ASU 2013-02 requires an entity to provide information about amounts reclassified out of AOCI by component. In addition, an entity must present either on the face of the income statement or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income. The reclassifications out of AOCI, and related tax impact, are not material to the Company’s condensed consolidated results of operations or financial position.

Use of Estimates

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported results of operations during the reporting period. Such estimates include the allowance for doubtful accounts receivable, deferred tax asset valuation allowance, unrecognized tax benefits, fair value of acquired net assets including intangibles, accrued liabilities, and stock-based compensation. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition

The Company generates revenue from the sale of subscriptions and support and professional services.

Subscriptions and Support. The Company offers on-demand software solutions, which enable its customers to have constant access to its solutions without the need to manage and support the software and associated hardware themselves. The Company houses the hardware and software in third-party facilities, and provides its customers with access to the software solutions, along with data security and storage, backup and recovery services and solution support. The Company’s customer contracts typically have a term of three to five years. The Company invoices its customers for subscriptions and support in advance for annual use of the software solutions. The Company’s payment terms typically require customers to pay within 30 to 90 days from the invoice date.

Professional Services. Professional services revenue is derived primarily from fees for enabling services, including solution consulting and solution deployment. These services are sold in conjunction with the sale of the Company’s on-demand software solutions. The Company provides professional services, both on a fixed fee and a time and materials basis, and invoices customers either in advance, monthly, or upon reaching project milestones.

The Company enters into arrangements with multiple elements, comprised of subscriptions and support and professional services. Arrangements with customers typically do not provide the customer with the right to take possession of the software supporting the on-demand solutions. The Company commences revenue recognition when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company’s price to the customer is fixed or determinable, and collectability of the fees is reasonably assured.

The Company evaluates each of these criteria as follows:

Evidence of an Arrangement . The Company considers a binding agreement signed by it and the customer to be evidence of an arrangement.

Delivery . The Company typically considers delivery to have occurred when the on-demand software solutions are made available to the customer or services have been rendered. In arrangements where an existing customer purchases additional solutions, delivery occurs upon commencement of the contractual term.

Fixed or Determinable Fee . The Company considers the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within its standard payment terms. If the fee is not fixed or determinable, the Company recognizes the revenue as amounts become due and payable.

Collectability of the Fees is Reasonably Assured . Collectability of the fees is reasonably assured if the Company expects that the customer will be able to pay amounts under the arrangement as payments become due. If the Company determines that collection is not reasonably assured, the Company defers the recognition of revenue until cash collection.

The Company accounts for subscriptions and support and professional services revenue as separate units of accounting and allocates revenue to each deliverable in an arrangement based on a selling price hierarchy. As the Company has been unable to establish vendor specific objective evidence (VSOE) or third party evidence (TPE) for the elements of its arrangements, the Company determines the estimated selling price (ESP) for each element primarily by considering prices the Company charges for similar offerings, size of the order and historical pricing practices. Revenue allocated to subscriptions and support is recognized over the contractual term. Professional services revenue sold on a fixed fee basis is recognized either under the proportional performance method of accounting using estimated labor hours, or upon acceptance of the services. Revenue from professional services sold on a time and material basis is recognized as services are delivered.

The Company acquired ICON on July 30, 2013. Historically, ICON sold perpetual or term licenses and related post-contract support (PCS) and professional services. During the post-acquisition period of approximately one month, all revenue recognized from legacy ICON revenue arrangements represented primarily post-contract support or professional services.

Accounting for the Impairment of Long-Lived Assets

Accounting for the Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, which consist principally of property and equipment and acquired intangible assets with finite lives, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparing the carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. If that review indicates that the carrying amount of the long-lived asset is not recoverable, an impairment loss is recorded for the amount by which the carrying amount of the asset exceeds its fair value. The Company did not incur any long-lived asset impairment charges during the three and six month ended August 31, 2013 and 2012.

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Credit Facility - Additional Information (Detail) (Subsequent Event, Revolving Line of Credit, USD $)	1 Months Ended
	Oct. 07, 2013
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 20,000,000
Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.25%
Interest floor rate	3.25%

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Summary of Revenue by Country Wise (Detail)	3 Months Ended				6 Months Ended
	Aug. 31, 2013		Aug. 31, 2012		Aug. 31, 2013		Aug. 31, 2012
United States
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
Revenue percentage	79.20%		52.10%		77.20%		57.40%
Canada
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
Revenue percentage		[1]	29.90%			[1]	24.10%
United Kingdom
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items]
Revenue percentage		[1]		[1]		[1]		[1]

[1] Indicates less than 10%