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 June 30, 2013

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

For the transition period from                      to                     

000-50327

(Commission File Number)

iPass Inc.

(Exact name of Registrant as specified in its charter)

Delaware	93-1214598
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3800 Bridge Parkway

Redwood Shores, California 94065

(Address of principal executive offices, including zip code)

(650) 232-4100

(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 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	x
Non-accelerated filer	¨  (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

The number of shares outstanding of the Registrant’s Common Stock, $0.001 par value, as of July 31, 2013 was 63,932,549.

IPASS INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2013

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements	3
a) Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012 (Unaudited)	3
b) Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June  30, 2013 and 2012 (Unaudited)	4
c) Condensed Consolidated Statements of Cash Flows for the six months ended June  30, 2013 and 2012 (Unaudited)	5
d) Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 4. Controls and Procedures	22
PART II. OTHER INFORMATION:
Item 1A. Risk Factors	24
Item 6. Exhibits	24
SIGNATURE	25
INDEX TO EXHIBITS	26

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IPASS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

	June 30, 2013			December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	25,016		$	26,822
Accounts receivable, net of allowance for doubtful accounts of $1,196 and $1,173, respectively		18,062			17,260
Prepaid expenses and other current assets		5,833			5,058
Total current assets		48,911			49,140
Property and equipment, net		6,243			6,549
Other assets		3,222			4,435
Total assets	$	58,376		$	60,124
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,513		$	7,496
Accrued liabilities		9,063			8,631
Deferred revenue, short-term		3,685			3,787
Total current liabilities		21,261			19,914
Deferred revenue, long-term		2,313			2,834
Other long-term liabilities		364			475
Total liabilities		23,938			23,223
Stockholders’ equity:
Common stock		64			61
Additional paid-in capital		215,949			213,454
Accumulated deficit		(181,575	)		(176,614	)
Total stockholders’ equity		34,438			36,901
Total liabilities and stockholders’ equity	$	58,376		$	60,124

See Accompanying Notes to Condensed Consolidated Financial Statements

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IPASS INC.

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except shares and per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Revenue	$	28,665		$	32,244		$	58,294		$	65,538
Cost of revenues and operating expenses:
Network access costs		12,384			13,835			25,141			28,475
Network operations		4,726			5,407			9,567			10,806
Research and development		3,414			3,445			7,028			7,147
Sales and marketing		4,373			5,084			9,290			10,434
General and administrative		5,258			5,244			11,437			10,502
Restructuring charges and related adjustments		26			9			626			5
Amortization of intangible assets		—			60			—			120
Total cost of revenue and operating expenses		30,181			33,084			63,089			67,489
Operating loss		(1,516	)		(840	)		(4,795	)		(1,951	)
Interest income		3			3			7			6
Foreign exchange losses, net		(114	)		(34	)		(187	)		(63	)
Loss before income taxes		(1,627	)		(871	)		(4,975	)		(2,008	)
Provision for (benefit from) income taxes		(41	)		10			(14	)		147
Net loss	$	(1,586	)	$	(881	)	$	(4,961	)	$	(2,155	)
Comprehensive loss	$	(1,586	)	$	(881	)	$	(4,961	)	$	(2,155	)
Basic and diluted net loss per share	$	(0.03	)	$	(0.01	)	$	(0.08	)	$	(0.04	)
Number of shares used in per share calculations:
Basic and diluted		63,381,344			60,747,796			62,639,498			60,252,836

See Accompanying Notes to the Condensed Consolidated Financial Statements

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IPASS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net loss	$	(4,961	)	$	(2,155	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation		1,586			1,144
Amortization of intangible assets		—			120
Depreciation and amortization		1,255			1,155
Loss on disposal of property and equipment		2			3
Provision for (recovery of) doubtful accounts		34			(283	)
Changes in operating assets and liabilities:
Accounts receivable		(835	)		2,942
Prepaid expenses and other current assets		(56	)		165
Other assets		494			351
Accounts payable		1,312			(1,647	)
Accrued liabilities		432			(30	)
Deferred revenue		(624	)		(6	)
Other liabilities		(111	)		118
Net cash provided by (used in) operating activities		(1,472	)		1,877
Cash flows from investing activities:
Purchases of property and equipment		(1,246	)		(3,271	)
Change in restricted cash pledged for letter of credit		—			471
Net cash used in investing activities		(1,246	)		(2,800	)
Cash flows from financing activities:
Proceeds from issuance of common stock		912			741
Net cash provided by financing activities		912			741
Net decrease in cash and cash equivalents		(1,806	)		(182	)
Cash and cash equivalents at beginning of period		26,822			25,439
Cash and cash equivalents at end of period	$	25,016		$	25,257
Supplemental disclosures of cash flow information:
Net cash paid for taxes	$	121		$	242
Accrued amounts for acquisition of property and equipment	$	26		$	376
Leasehold improvements paid by landlord	$	—		$	251

See Accompanying Notes to Condensed Consolidated Financial Statements

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IPASS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The condensed consolidated financial statements include the accounts of iPass Inc. (the “Company”) and its wholly owned subsidiaries. The condensed consolidated financial statements that accompany these notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The Condensed Consolidated Financial Statements for December 31, 2012, were derived from audited financial statements but do not include all disclosures required by GAAP. The interim financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair presentation for the interim periods presented. This interim financial information should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The results of operations for the three and six months ended June 30, 2013, are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results that the Company experiences may differ materially from those estimates. Estimates are used for, but not limited to the valuation of accounts receivables, other long-lived assets, network access costs, stock-based compensation, legal contingencies, and income taxes.

The Company reports comprehensive loss in a single continuous financial statement within the Condensed Consolidated Statements of Comprehensive Loss. The Company’s comprehensive loss is equivalent to its net loss because the Company does not have any transactions that are recorded through other comprehensive income (loss).

Note 2. Fair Value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction in the principal or most advantageous market between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The three levels of inputs that may be used to measure fair value are as follows:

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

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

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

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The recurring fair value measurements of these financial assets (excluding cash) and financial liabilities were determined using the following inputs at June 30, 2013, and December 31, 2012, respectively:

	As of June 30, 2013								As of December 31, 2012
	Fair Value Measured Using								Fair Value Measured Using
	Level 1		Level 2		Level 3		Total Balance		Level 1		Level 2		Level 3		Total Balance
	(In thousands)
Financial assets
Money market funds(1)	$	18,303	$	—	$	—	$	18,303	$	18,298	$	—	$	—	$	18,298
Total financial assets	$	18,303	$	—	$	—	$	18,303	$	18,298	$	—	$	—	$	18,298
Financial liabilities
Lease liabilities incurred in connection with the restructuring plan(2)	$	—	$	—	$	395	$	395	$	—	$	—	$	483	$	483
Total financial liabilities	$	—	$	—	$	395	$	395	$	—	$	—	$	483	$	483

(1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets.

(2) Lease liabilities are recorded at fair value and are included as liabilities in the Company’s condensed consolidated balance sheets. The lease liabilities were recorded in connection with lease abandonment plans implemented in 2009. Management made assumptions in determining the fair value of the lease liabilities. The discounted cash flow valuation technique used to determine fair value included inputs, such as the future rent payment schedule, the discount rate and sublease income based on the executed sublease agreement through the end of the lease terms.

There were no transfers between Levels 1, 2, and 3 from December 31, 2012, through June 30, 2013.

As of June 30, 2013, and December 31, 2012, the carrying amounts of accounts receivable, accounts payable and accrued liabilities, approximated fair value due to their short maturities.

Note 3. Property and Equipment, net

Property and equipment, net, consisted of the following:

	June 30, 2013			December 31, 2012
	(In thousands)
Equipment	$	14,823		$	14,292
Furniture and fixtures		2,217			2,214
Computer software		10,248			6,891
Capital work-in-progress		123			3,356
Leasehold improvements		1,365			1,578
		28,776			28,331
Less: Accumulated depreciation and amortization		(22,533	)		(21,782	)
Property and equipment, net	$	6,243		$	6,549

Depreciation expense was approximately $0.6 million and $1.3 million for the three and six months ended June 30, 2013, respectively, and $0.5 million and $1.2 million for the three and six months ended June 30, 2012, respectively. During the three and six months ended June 30, 2013, the Company retired approximately $0.1 million and $0.3 million, respectively, of gross property and equipment, nearly all of which were fully depreciated. The Company retired approximately $0.4 million and $2.7 million of gross property and equipment, during the three and six months ended June 30, 2012, respectively, nearly all of which were fully depreciated.

During January 2013, the Company went “live” with a new enterprise resource planning (ERP) system. Accordingly, approximately $3.4 million of capitalized costs related to the ERP implementation was reclassified from capital work-in-progress to computer software.

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Note 4. Other Assets

Other assets consisted of the following:

	June 30,     2013		December 31, 2012
	(In thousands)
Prepaid lease obligations	$	138	$	236
Deferred installation costs		1,809		2,180
Deposits		830		854
Long-term deferred tax assets, net		195		195
Restricted cash		250		970
	$	3,222	$	4,435

Note 5. Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,     2013		December 31, 2012
	(In thousands)
Accrued sales tax liabilities	$	1,078	$	1,080
Accrued restructuring liabilities – current(1)		257		203
Accrued bonus, commissions and other employee benefits		3,075		2,550
Amounts due to customers		1,137		1,061
Other accrued liabilities		3,516		3,737
	$	9,063	$	8,631

(1) See Note 6. Accrued Restructuring.

Note 6. Accrued Restructuring

During the year ended December 31, 2009, the Company announced restructuring plans (the “2009 Plans”) to reduce operating costs and focus resources on key strategic priorities, which resulted in a workforce reduction of 146 positions across all functional areas and abandonment of certain facilities and termination of a contract obligation. The 2009 Plans were completed during 2010.

In the first quarter of 2013, the Company announced a restructuring plan (the “Q1 2013 Plan”) to re-align its cost structure to focus investments, resources and operating expenses on the Company’s growing Open Mobile business, which resulted in a workforce reduction of 16 positions across all functional areas and termination of a lease contract. The Company recorded a restructuring charge of approximately $0.6 million during the first quarter of 2013, which included severance, facility exit costs and other associated costs. The Company has paid approximately $0.2 million during the first quarter of 2013 and $0.3 million during the second quarter of 2013. As of June 30, 2013, the Company had the remaining cash payments of less than $0.1 million.

The following is a rollforward of restructuring liability for the Q1 2013 and 2009 Plans:

	Three Months Ended June 30,
	2013			2012
	(In thousands)
Beginning balance	$	817		$	678
Restructuring charges and related adjustments		26			9
Payments		(395	)		(54	)
Ending balance	$	448		$	633

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	Six Months Ended June 30,
	2013			2012
	(In thousands)
Beginning balance	$	483		$	736
Restructuring charges and related adjustments		626			5
Payments		(661	)		(108	)
Ending balance	$	448		$	633

As of June 30, 2013, approximately $0.3 million of the restructuring liability is included in accrued liabilities, and the remaining restructuring liability of approximately $0.2 million is included in other long-term liabilities.

Note 7. Commitments and Contingencies

Lease and Purchase Commitments

The Company leases facilities under operating leases that expire at various dates through June 2017. Future minimum lease payments under these operating leases, including approximately $0.4 million of future payments on leases accounted for under the Company’s restructuring plans, as of June 30, 2013, are as follows:

Year	Operating Leases
	(In thousands)
Remaining 2013	$	1,569
2014		2,972
2015		1,276
2016		525
2017		260
	$	6,602

The Company has contracts with certain network service providers, mobile data providers and other vendors which have minimum purchase commitments that expire on various dates through April 2016. Future minimum purchase commitments under all agreements are as follows:

Year	Minimum Purchase Commitments
	(In thousands)
Remaining 2013	$	1,673
2014		830
2015		120
2016		26
	$	2,649

Legal Proceedings

The Company is involved in legal proceedings and claims arising in the ordinary course of business. While there can be no assurances as to the ultimate outcome of any litigation involving the Company, management does not believe any such pending legal proceeding or claim will result in a judgment or settlement that would have a material adverse effect on the Company’s financial position, results of operations or cash flows.

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. Certain indemnification agreements may not be subject to maximum loss clauses. If the potential loss from any indemnification claim is considered probable and the amount or the range of the loss can be estimated, the Company accrues a liability for the estimated loss. To date, claims under such indemnification provisions have not been significant.

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Note 8. Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding plus dilutive potential common shares as determined using the treasury stock method for outstanding stock options, restricted stock-based awards and shares issuable under the employee stock purchase plan, unless the result of adding such shares would be anti-dilutive. Unvested participating securities are included in the weighted daily average number of shares outstanding used in the calculation of diluted net income per common share, but are excluded from the calculation of diluted net loss per share. In a net loss position, basic and diluted net loss per common share are equal, since the weighted average number of shares used to compute diluted net loss per common share excludes anti-dilutive securities, including participating securities. As a result of the Company’s net loss for the three and six months ended June 30, 2013, and for the three and six months ended June 30, 2012, the Company has excluded all potential shares of common stock from the diluted net loss per share calculation as their inclusion would have had an anti-dilutive effect.

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands, except share and per share amounts)
Numerator:
Net loss	$	(1,586	)	$	(881	)	$	(4,961	)	$	(2,155	)
Denominator:
Basic and diluted net loss per common share – Weighted average shares outstanding		63,381,344			60,747,796			62,639,498			60,252,836
Basic and diluted net loss per common share	$	(0.03	)	$	(0.01	)	$	(0.08	)	$	(0.04	)

The following weighted average potential shares of common stock have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Options to purchase common stock		3,582,062		1,554,891		3,099,021		2,217,570
Restricted stock awards, including participating securities		2,746,970		1,997,468		2,287,382		1,713,725
Total		6,329,032		3,552,359		5,386,403		3,931,295

Note 9. Segment and Geographical Information

The Company’s two reportable operating segments are: Mobility Services and iPass Unity Network Services (“iPass Unity”; formerly known as Managed Network Services). The Mobility Services segment includes services that help enterprises manage the networks, connections and devices used by their mobile workforce. The iPass Unity segment provides customers with Wi-Fi and Wide Area Network solutions. The Company’s Chief Operating Decision Maker (the “CODM”) is the Company’s President and Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment, using information about its revenue, segment income or loss from operations before income taxes, excluding amortization of intangibles, and restructuring.

The accounting policies of the reportable operating segments are substantially the same as those the Company uses for its condensed consolidated financial statements. All direct costs are allocated to the respective operating segments. In addition to direct costs, certain indirect costs are allocated to each operating segment including costs relating to shared services in management, finance, legal, human resources, facilities, and information technology. Indirect costs are allocated based on headcount, salaries and operating

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segment revenue. The total pool of operating costs and network access costs allocated to the reportable operating segments were $30.2 million and $33.0 million for the three months ended June 30, 2013 and 2012, respectively, and $62.5 million and $67.4 million for the six months ended June 30, 2013 and 2012, respectively. Costs related to amortization of intangibles, and restructuring activities are not allocated to operating segments. By definition, operating segment operating income (loss) also excludes interest income, foreign exchange gains and losses, and income taxes.

Revenue and operating loss for each reportable operating segment for the three and six months ended June 30, 2013 and 2012, were as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	Net Revenue		Total Segment Operating Income (Loss)			Net Revenue		Total Segment Operating Income (Loss)
	(In thousands)
2013
Mobility Services	$	20,318	$	(1,793	)	$	41,269	$	(4,327	)
iPass Unity		8,347		303			17,025		148
Total Segment	$	28,665	$	(1,490	)	$	58,294	$	(4,179	)
2012
Mobility Services	$	23,942	$	(568	)	$	49,107	$	(1,518	)
iPass Unity		8,302		(168	)		16,431		(307	)
Total Segment	$	32,244	$	(736	)	$	65,538	$	(1,825	)

Substantially all of the Company’s long-lived assets are located in the United States. The CODM does not evaluate operating segments using discrete asset information. Accordingly, no segment assets have been reported.

There were no material intersegment sales or transfers for the three and six months ended June 30, 2013 and 2012, to arrive at net segment revenue.

Reconciliations of total segment operating loss to total operating loss and total loss before income taxes for the three and six months ended June 30, 2013 and 2012, are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Total segment operating loss	$	(1,490	)	$	(736	)	$	(4,179	)	$	(1,825	)
Amortization of intangibles		—			(60	)		—			(120	)
Restructuring charges and related adjustments		(26	)		(9	)		(626	)		(5	)
Certain state sales tax and federal tax items		0			(35	)		10			(1	)
Total operating loss		(1,516	)		(840	)		(4,795	)		(1,951	)
Interest income		3			3			7			6
Foreign exchange losses, net		(114	)		(34	)		(187	)		(63	)
Total loss before income taxes	$	(1,627	)	$	(871	)	$	(4,975	)	$	(2,008	)

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The following table summarizes total Company revenue by country or by geographical region for the periods presented:

	Three Months Ended June  30,						Six Months Ended June  30,
	2013			2012			2013			2012
United States		56	%		58	%		56	%		58	%
EMEA		33	%		32	%		33	%		32	%
Asia Pacific		10	%		10	%		10	%		10	%
Rest of the World		1	%		—			1	%		—

No individual country, except for the United States and United Kingdom, represented 10% or more of total revenue for the three and six months ended June 30, 2013 and 2012. No individual customer represented 10% or more of total revenue for the three and six months ended June 30, 2013 and 2012.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations (or “MD&A”) is provided in addition to the condensed consolidated financial statements and notes, included elsewhere in this report, to assist readers in understanding our results of operations, financial condition, and cash flows. The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and with the MD&A in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2012.

This MD&A is organized as follows:

Overview	Discussion of our business
Significant Trends and Events	Operating, financial and other material trends and events that affect our company and may reflect our performance
Key Operating Metrics	Discussion of key metrics and measures that we use to evaluate our operating performance
Critical Accounting Policies and Estimates	Accounting policies and estimates that we believe are most important to understanding the assumptions and judgments incorporated in our reported financial results
Results of Operations	An analysis of our financial results comparing the three and six months ended June 30, 2013, and June 30, 2012
Liquidity and Capital Resources	An analysis of changes in our balance sheet and cash flows, and discussion of our financial condition and potential sources of liquidity

The various sections of this MD&A contain forward-looking statements regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “will,” “anticipates,” “projects,” “intends,” “believes,” “estimates,” “potential,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements which refer to projections of our future financial performance, our anticipated growth and trends in our business, and other characterizations of future events or circumstances, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Readers are directed to risks and uncertainties identified in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, for factors that may cause actual results to be different from those expressed in these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Investors and others should note that we announce material financial information to our investors using our investor relations website, SEC filings, press releases, public conference calls and webcasts. We also use social media to communicate with our customers and the public about our company, our products and services and other matters relating to our business and market. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the U.S. social media channels including the iPass Twitter Feed, the iPass LinkedIn Feed, the iPass Google+ Feed, the iPass Facebook Page, the iPass Blog and Evan Kaplan’s Twitter Feed. These social media channels may be updated from time to time.

Overview

iPass is a global Wi-Fi roaming leader for enterprises and telecom service providers and their consumer subscribers. We knit the world’s commercial Wi-Fi networks together to create a single global Wi-Fi network. With the acceleration of the broader Wi-Fi industry, where every mobile phone, tablet and laptop is Wi-Fi enabled, and where Wi-Fi has become the preferred connectivity option for billions of devices, we believe that we are uniquely positioned to take advantage of expanding global demand for Wi-Fi. iPass was incorporated in California in July 1996 and reincorporated in Delaware in June 2000. Our corporate headquarters are located in Redwood Shores, California. We are publicly traded on NASDAQ under symbol IPAS.

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We provide global enterprises and telecommunications carriers with cloud-based mobility management and Wi-Fi connectivity services. Through our proprietary technology platform and global Wi-Fi network, we offer enterprises cross-device, cross-network seamless Wi-Fi connectivity services along with cost control, reporting and policy compliance management tools. We also offer global telecommunications carriers Wi-Fi enablement services that allow them to monetize their Wi-Fi networks and enable data roaming solutions for their subscribers. In addition, we design, deliver and manage tailored Wi-Fi and Wide Area Network solutions to customers in the retail, finance, healthcare, and carrier operator space throughout North America.

Strategic Mobility Assets

We believe iPass has a unique set of mobility assets that provides us with competitive advantages. We see our three core assets as follows:

Advanced Open Mobile Platform: Our Open Mobile (OM) platform is a cloud-based mobility management platform that securely manages network connectivity and subscribers across a wide variety of computing and mobile devices and provider networks. We believe this scalable subscriber management, billing and reporting platform is unique in the industry and would be time consuming and expensive to replicate.

Integrated Authentication Fabric: We have a global authentication fabric of integrated servers and software that is interconnected with approximately 140 global Wi-Fi network service providers. This infrastructure allows us to provide secure, highly-available and seamless four party global authentications, clearing and settlement of Wi-Fi users for our partners and customers.

Global Wi-Fi Footprint: We have a Wi-Fi network footprint and supply chain that consists of more than 1.2 million commercial Wi-Fi hotspots in over 124 countries globally and across leading Wi-Fi venues, including major airports, convention centers, airplanes, hotels, restaurants, retail and small business locations. Our technology integration across multiple global network providers forms the basis of our network services and we believe creates a unique cost advantage for our customers.

Business Portfolio and Our Strategy

Our business consists of two operating segments: (i) Mobility Services and (ii) iPass Unity Network Services (“iPass Unity”; formerly known as Managed Network Services). Our Mobility Services segment comprises two service offerings: (1) our Open Mobile Enterprise Services, and (2) our Open Mobile Exchange.

Mobility Services

Open Mobile Enterprise Services (“iPass OME” or “OME”): iPass OME delivers enhanced network mobility services, addressing large enterprises’ needs to manage their mobility economics, high speed network connectivity requirements and proliferation of mobile devices, including the “bring-your-own-device” trend. Our growth strategy for OME consists of focusing on accelerating smartphone and tablet user adoption of Open Mobile, completing the migration of our legacy-customer installed base to the OM platform, improving the end user experience on our OM platform, and enhancing our sales efforts to large multi-national customers.

Open Mobile Exchange (“iPass OMX” or “OMX”): iPass OMX service offerings extend and enhance core mobility and internet offerings by integrating our Open Mobile Platform technology and our worldwide Wi-Fi Network, to allow global telecommunications carriers and service providers to connect their customers and subscribers seamlessly to preferred global

Wi-Fi networks. While our OMX revenue is still not yet significant to our mobility service revenue, we continue to focus on adding new carrier and service provider partners as customers to further grow our OMX services.

iPass Unity

iPass Unity provides customers with accelerated Wi-Fi and Wide Area Network solutions in the retail, finance, healthcare, and carrier operator space throughout North America. Based on expected demand for our managed Wi-Fi service offerings, we are focused on growing iPass Unity Network Services by offering our customers additional services that leverage synergies with our Wi-Fi mobility expertise.

For a detailed discussion regarding our business, including our strategy and our service offerings, see “Item 1. Business” included in our Annual Report on Form 10-K for the year ended December 31, 2012.

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Significant Trends and Events

The following describes significant trends and events of our business during the second quarter of 2013:

Continued Focus on our Open Mobile Enterprise Business

We continued to show solid progress against three key metrics for our OME business: (i) increasing the number of Open Mobile Wi-Fi Network users; (ii) growing Open Mobile revenue; and (iii) increasing the number of active Open Mobile Platform users. We grew our percentage of Open Mobile Wi-Fi Network users as a percentage of total Wi-Fi network users from 22% in the second quarter of 2012 to 64% in the second quarter of 2013. In addition, our total Open Mobile Enterprise revenue grew from $10.1 million for the six months ending June 30, 2012, to $21.5 million for the six months ending June 30, 2013. We also increased our percentage of Open Mobile Platform users as a percentage of total platform users from 32% in the second quarter of 2012 to 72% in the second quarter of 2013. We believe the key to our future revenue growth is based on our ability to grow Open Mobile platform and Wi-Fi network users, primarily through the continued focus on the deployment of our Open Mobile platform on smartphone and tablet devices, growth of Open Mobile usage within customers, and new customer acquisition. See “Key Operating Metrics” below for a full discussion of our user metrics.

Adding Partners for our Open Mobile Exchange Business

We continue to develop our OMX business. During the second quarter of 2013, we signed four strategic telecommunication carrier partners across the globe. We are continuing to focus on expanding the number of carrier partners and the total number of potential end user customers for our Wi-Fi roaming and exchange services. For the six months ended June 30, 2013, OMX network revenue grew 130% as partner deployments began to ramp.

Continued Decline in our Legacy Revenues

Our legacy revenue includes Dial-up and 3G network revenue, and iPC related network and platform revenue. With our announcement to fully end-of-life the iPC platform effective July 1, 2012, we continue to experience anticipated revenue declines in our legacy revenue streams. Legacy revenues declined from $38.7 million for the six months ending June 30, 2012, to $18.8 million for the six months ending June 30, 2013. We expect our legacy revenue streams to represent a smaller percentage of our total revenue during the remainder of 2013 as customers migrate or terminate iPC contracts.

Key Operating Metrics

Described below are key metrics that we use to evaluate our operating performance and our success in transforming our business and driving future growth.

OM Wi-Fi Network Users

OM Wi-Fi Network Users is the number of our OM platform users each month in a given quarter that paid for Wi-Fi network services from iPass.

OM Platform Active Users

OM Platform Active Users is the number of users who were billed Open Mobile platform fees and who have used or deployed Open Mobile.

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The following table summarizes our key operating metrics in relation to the Average Monthly Monetized Users⁽¹⁾ (in thousands):

	For the Quarter Ended
	June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012
Open Mobile Users:
Wi-Fi Network Users(2)		56			46			35			27			22
Platform Users:
Active		517			444			355			270			176
Gross(3)		1,019			955			822			689			437
Legacy Users:
Wi-Fi Network Users(2)		31			40			46			54			76
Other Network Users(4)		23			26			28			31			33
Platform Users(5)		201			246			286			320			369
Total Users:
Total Network Users		110			112			109			112			131
Open Mobile as a Percentage of Total Wi-Fi Network Users		64	%		53	%		43	%		33	%		22	%
Open Mobile as Percentage of Total Network Users		51	%		41	%		32	%		24	%		17	%
Total Platform Users		718			690			641			590			545
Open Mobile as Percentage of Total Platform Users		72	%		64	%		55	%		46	%		32	%

⁽¹⁾  We have presented Average Monthly Monetized Users (referred to as “AMMU”) as a metric that we use to track and evaluate the operating performance of our overall Mobility business. The AMMU metric is based on the number of active users of our network and platform services across both our Open Mobile Enterprise offering and legacy iPC offerings. Network users are billed for their use of our Wi-Fi, Dial-up or 3G network services. Platform users are billed for their use of our legacy iPC client or our Open Mobile client. AMMU is defined as the average number of users per month, during a given quarter, for which a fee was billed by us to a customer for such users.

⁽²⁾  Wi-Fi Network Users represent unique users of Wi-Fi network. Starting from the first quarter of 2013, OM Wi-Fi Network Users include In-Flight Wi-Fi users.

⁽³⁾  Open Mobile Platform Gross Users is the total number of unique Active and Paying-Undeployed monetized users on the OM platform.

⁽⁴⁾  Other Network Users represents unique users of Dial-up and 3G network.

⁽⁵⁾  Legacy Platform Users represents unique users of the legacy iPC platform.

Smartphone and Tablet Users

Smartphone and Tablet Users mean users who have deployed Open Mobile on their smartphone or tablet devices and used those devices to access Wi-Fi network services from iPass. Our focus is to increase the adoption of OM on smartphones and tablets to drive additional Wi-Fi network users and network usage.

As we continue to focus on accelerating the adoption of Smartphone and Tablet Users on our Open Mobile platform, we expect users of these devices to become a significant percentage of our network users. Open Mobile Smartphone and Tablet Wi-Fi Network Users grew as a percentage of total OM Wi-Fi Network Users from 17% in the second quarter of 2012 to 28% in the second quarter of 2013.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)

Adjusted EBITDA is used by our management as a measure of operating efficiency, financial performance and as a benchmark against our peers and competitors. In addition, we also use this metric to determine a portion of our incentive compensation payouts. Management also believes that Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to understand our performance excluding the impact of items which may obscure trends in our core operating performance. Furthermore, the use of Adjusted EBITDA facilitates comparisons with other companies in our industry which may use similar financial measures to supplement their GAAP results. We define Adjusted EBITDA as net loss adjusted for: interest income, income taxes, depreciation and amortization, stock-based compensation, restructuring charges, and certain state sales and federal tax charges. We adjust for these excluded items because we believe that, in general, these items possess one or more of the

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following characteristics: their magnitude and timing is largely outside of our control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual or infrequent and we do not expect them to occur in the ordinary course of business; or non-cash expenses involving stock option grants. Adjusted EBITDA is not a measure determined in accordance with GAAP and should not be considered in isolation or as a substitute for operating income (loss), net income (loss) or any other measure determined in accordance with GAAP.

The following table reconciles Adjusted EBITDA to GAAP net loss:

	Three Months Ended June  30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Adjusted EBITDA	$	(136	)	$	377		$	(1,525	)	$	411
Interest income		3			3			7			6
Income tax (benefit) expense		41			(10	)		14			(147	)
Depreciation of property and equipment		(632	)		(532	)		(1,255	)		(1,155	)
Amortization of intangible assets		—			(60	)		—			(120	)
Stock-based compensation		(836	)		(615	)		(1,586	)		(1,144	)
Restructuring charges and related adjustments		(26	)		(9	)		(626	)		(5	)
Certain state sales and federal tax items		—			(35	)		10			(1	)
GAAP Net loss	$	(1,586	)	$	(881	)	$	(4,961	)	$	(2,155	)

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements which have been prepared in accordance with the accounting principles generally accepted in the United States (“GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates and judgments on our historical experience, knowledge of current conditions and our belief of what could occur in the future considering available information, including assumptions that we believe to be reasonable under the circumstances. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these policies. On an ongoing basis, we evaluate our estimates and judgments.

There have been no significant changes in our critical accounting policies and estimates during the three and six months ended June 30, 2013, as compared to the critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Results of Operations

Sources of Revenues

From a broad perspective, we report and analyze revenue under two primary offerings reflecting our operating segments: Mobility Services and iPass Unity. Within Mobility Services, we differentiate and analyze our Open Mobile and legacy generated revenues separately.

Open Mobile generated revenues include:

• Network—Wi-Fi and minimum customer commitments based on the number of network users sourced from the Open Mobile platform.

• Platform—Fees based on the number of Active Open Mobile monetized platform users and fees for fully dedicated Open Mobile carrier arrangements.

• Other Fees and Revenue—Fees specific to providing additional value add services to Open Mobile customers.

• Open Mobile Exchange—Revenues generated from our OMX customers.

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Legacy generated revenues include:

• Network—Wi-Fi and minimum customer commitments based on the number of network users sourced from the legacy iPC platform. In addition, network revenues derived from our 3G and Dial-up products are categorized as legacy network revenues.

• Platform—Fees based on the number of legacy iPC monetized platform users and fees related to legacy add-on platform products and related services.

• Other Fees and Revenue—Fees specific to providing additional value add service to legacy iPC customers.

	Three Months Ended June 30, (in thousands)						Six Months Ended June 30, (in thousands)
	2013			2012			2013			2012
Mobility Services	$	20,318		$	23,942		$	41,269		$	49,107
Segment Operating Loss		(1,793	)		(568	)		(4,327	)		(1,518	)
Open Mobile Enterprise		11,339			6,058			21,493			10,128
Network		7,381			3,103			13,534			4,801
Platform		3,746			2,743			7,522			4,903
Other Fees		212			212			437			424
Open Mobile Exchange		631			166			982			302
Legacy iPC		8,348			17,718			18,794			38,677
Network		6,129			14,801			13,963			32,132
Platform		1,094			2,638			2,527			5,866
Other Fees		1,125			279			2,304			679
iPass Unity Network Services		8,347			8,302			17,025			16,431
Segment Operating Income (Loss)		303			(168	)		148			(307	)
Total Revenue		28,665			32,244			58,294			65,538
Service Offering Revenue as a Percentage of Total Revenue:
Mobility Services		71	%		74	%		71	%		75	%
Open Mobile Enterprise		40	%		18	%		37	%		15	%
Open Mobile Exchange		2	%		1	%		2	%		1	%
Legacy iPC		29	%		55	%		32	%		59	%
iPass Unity Network Services		29	%		26	%		29	%		25	%
Total Revenue		100	%		100	%		100	%		100	%

Mobility Services Revenue

For the three months ended June 30, 2013, Mobility Services revenue decreased $3.6 million or 15% over the same period in 2012. Open Mobile revenue grew $5.7 million or 92% while legacy iPC revenue declined $9.4 million or 53%. Growth in Open Mobile revenue was primarily driven by customer migrations from our legacy iPC product combined with new customer additions and new users at existing customers as a result of smartphone and tablet user adoption. Declines in legacy iPC revenue were driven by customer migrations to Open Mobile, anticipated usage erosion in our 3G and Dial-up services, and customer terminations after our July 1, 2012 end-of-life announcement.

For the six months ended June 30, 2013, Mobility Services revenue decreased $7.8 million or 16% over the same period in 2012. Open Mobile revenue grew $12.0 million or 115% while legacy iPC revenue declined $19.9 million or 51%. Drivers of the year over year change for the six months were materially consistent with the drivers for the year over year change for the three months noted above.

Mobility Services Operating Loss

For the three months and six months ended June 30, 2013, Mobility Services operating loss increased by $1.2 million and $2.8 million, respectively, compared to the same period in 2012, primarily due to lower gross profit of approximately $2.4 million and $4.5 million, respectively, driven by adverse impacts from higher usage by customers on a flat rate price plan. These lower gross profits were partially offset by a decrease in operating expense after adjusting restructuring activities that are not allocated to operating segments of approximately $1.2 million and $1.8 million, respectively, due to ongoing cost management efforts.

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iPass Unity Network Services Revenue

iPass Unity revenue was flat for the three months ended June 30, 2013 compared to the same period in 2012. For the six months ended June 30, 2013, compared to the same period in 2012, iPass Unity revenue increased by approximately $0.6 million or 4% mainly due to the increase in revenue per end point of approximately 6%, partially offset by a decrease in the number of installed customer endpoints.

iPass Unity Network Services Operating Income and Loss

The iPass Unity operating income for the three and six months ended June 30, 2013, were $0.5 million favorable compared to the same periods in 2012 mainly due to ongoing cost reduction initiatives and uplift in services to existing customers.

Network Gross Margin

We use network gross margin as a metric to assist us in assessing the profitability of our various network services. Our overall network gross margin is defined as (Mobility Services Network revenue plus iPass Unity revenue less network access costs divided by Mobility Services Network revenue plus iPass Unity revenue).

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Network Gross Margin (%)		44.4	%		47.5	%		44.3	%		47.0	%

For the three and six months ending June 30, 2013 compared to the same period in 2012, network gross margin decreased by 3.1% and 2.7%, respectively, primarily due to decreases in higher margin revenue streams such as monthly minimum commitment revenue and Dial-up and ongoing customer pricing dynamics as we accelerate smartphone and tablet user adoption.

Operating Expenses

Network Access Costs (NAC)

NAC consist of charges for network access which we pay to our network service providers and other direct cost of sales.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except percentages)						(in thousands, except percentages)
Network access costs	$	12,384		$	13,835		$	25,141		$	28,475
As a percentage of total revenue		43.2	%		42.9	%		43.1	%		43.4	%

For the three and six months ended June 30, 2013, compared to the same period in 2012, network access costs decreased approximately $1.5 million or 10% and $3.3 million or 12%, respectively, primarily due a combination of lower Wi-Fi and 3G network usage that decreased Mobility Service NAC by $1.2 million and $3.3 million for each period, respectively. Lower usage was primarily driven by legacy customer terminations.

Network Operations

Network operations expenses consist of compensation and benefits for our network engineering, customer support and network access quality personnel, outside consultants, transaction center fees, network equipment depreciation, costs of 3G data cards and allocated overhead costs.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except percentages)						(in thousands, except percentages)
Network operations expense	$	4,726		$	5,407		$	9,567		$	10,806
As a percentage of total revenue		16.5	%		16.8	%		16.4	%		16.5	%

Network operations expense for the three months ended June 30, 2013, decreased by approximately $0.7 million or 13% compared to the same period in 2012, primarily due to lower headcount and consulting related costs of $0.4 million, and a decrease in legacy 3G mobile data cards subsidized expense of $0.2 million.

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Network operations expense for the six months ended June 30, 2013, decreased by approximately $1.2 million or 11% compared to the same period in 2012, primarily due to lower headcount and consulting related costs of $0.6 million and a decrease in legacy 3G mobile data cards subsidized expense of $0.4 million.

Research and Development

Research and development expenses consist of compensation and benefits for our research and development personnel, consulting, and allocated overhead costs.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except percentages)						(in thousands, except percentages)
Research and development expenses	$	3,414		$	3,445		$	7,028		$	7,147
As a percentage of total revenue		11.9	%		10.7	%		12.1	%		10.9	%

Research and development expenses were relatively consistent for the three and six months ended June 30, 2013, compared to the same period in 2012 and grew as a percentage of revenue as we continue to invest in our OM product development.

Sales and Marketing

Sales and marketing expenses consist of compensation, benefits, advertising and promotion costs, and allocated overhead costs.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except percentages)						(in thousands, except percentages)
Sales and marketing expenses	$	4,373		$	5,084		$	9,290		$	10,434
As a percentage of total revenue		15.3	%		15.8	%		15.9	%		15.9	%

Sales and marketing expenses for the three months ended June 30, 2013, decreased by approximately $0.7 million or 14% compared to the same period in 2012, primarily due to a lower headcount related cost of $0.7 million, including severance related expense of $0.2 million that occurred in the second quarter of 2012.

Sales and marketing expenses for the six months ended June 30, 2013, decreased by approximately $1.1 million or 11% compared to the same period in 2012, primarily due to lower headcount and consulting related costs of $1.1 million.

General and Administrative

General and administrative expenses consist primarily of compensation and benefits for general and administrative personnel, legal and accounting expenses.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands, except percentages)						(In thousands, except percentages)
General and administrative expenses	$	5,258		$	5,244		$	11,437		$	10,502
As a percent of total revenue		18.3	%		16.3	%		19.6	%		16.0	%

General and administrative expenses were relatively consistent for the three months ended June 30, 2013, compared to the same period in 2012 and grew as a percentage of revenue on the year over year revenue decline.

The increase in general and administrative expenses of approximately $0.9 million or 9% for the six months ended June 30, 2013, compared to the same period in 2012 was mainly due to an increase in expenses related to our going “live” with our new ERP system in January 2013 of $0.6 million including non-recurring post go-live support of $0.3 million and increased depreciation expense of $0.3 million, and an increase of approximately $0.6 million related to employee turnover expenses, including executive recruiting search of $0.2 million and temporary backfill expense of $0.4 million, partially offset by lower rent.

Restructuring Charges

During the first quarter of 2013, we announced a restructuring plan to reduce 16 positions in order to re-align our resources and operating expenses with the company’s Open Mobile initiatives and recorded approximately $0.6 million of restructuring charges, which included severance, facility exit cost and other associated costs. We made cash payments of approximately $0.3 million and $0.5 million for the three and six months ended June 30, 2013, and had less than $0.1 million of future payment remaining as of June 30, 2013. For further information, see Note 6, “Accrued Restructuring”, in the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.

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Other Income and Expenses

Foreign Exchange Gains and Losses

Foreign exchange gains and losses primarily include realized and unrealized gains and losses on foreign currency transactions. Foreign currency exchange rate fluctuations impact the re-measurement of certain assets and liabilities denominated in currencies other than the U.S. Dollar and generate unrealized foreign exchange gains or losses. In addition, some of our network access costs are invoiced in currencies other than the U.S. Dollar. The transactional settlement of these outstanding invoices and other cross-currency transactions generate realized foreign exchange gains or losses depending on the fluctuation of exchange rates between the date of invoicing and the date of payment.

For the three and six months ended June 30, 2013 and 2012, we did not enter into any hedging contracts. Foreign exchange losses for the three and six months ended June 30, 2013 were approximately $0.1 million and $0.2 million respectively. Foreign exchange losses for the three and six months ended June 30, 2012 were less than $0.1 million.

Liquidity and Capital Resources

We had cash and cash equivalents of $25.0 million at June 30, 2013, compared to $26.8 million at December 31, 2012.

	Six months ended June 30,
	2013			2012
	(In thousands)
Cash Flows
Net cash provided by (used in) operating activities	$	(1,472	)	$	1,877
Net cash used in investing activities		(1,246	)		(2,800	)
Net cash provided by financing activities		912			741
Net decrease in cash and cash equivalents	$	(1,806	)	$	(182	)

Operating Activities

Net cash used in operating activities was $1.5 million for the six months ended June 30, 2013, compared to net cash provided by operating activities of $1.9 million for the same period in 2012 mainly due to an increase in net loss.

Investing Activities

Net cash used in investing activities was $1.2 million for the six months ended June 30, 2013, compared to net cash used in investing activities of $2.8 million for the same period in 2012 mainly due to investment in our new ERP system in 2012 that went “live” in January 2013.

Financing Activities

During the six months ended June 30, 2013 and 2012, net cash provided by financing activities was $0.9 million and $0.7 million, respectively, due to proceeds from the exercise of stock options and purchases of stock under our employee stock purchase plan.

Sources of Cash and Future Cash Requirements

We have historically relied on existing cash and cash equivalents and cash flow from operations for our liquidity needs. We use a professional investment management firm to manage a large portion of our cash which is invested primarily in money market accounts. We believe that based on our current business plan and revenue prospects and our anticipated cash flows from operations, our existing cash balances will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next twelve months.

The amount of cash and cash equivalents held by our foreign subsidiaries as of June 30, 2013, and December 31, 2012, was $1.1 million and $1.4 million, respectively. We currently do not intend to distribute any of our cumulative earnings by our foreign subsidiaries to the parent company in the U.S.

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Primary Uses of Cash

Our principal use of cash for the first half of 2013, was for network access costs, payroll related expenses and general operating expenses including marketing, office rent, capital expenditures, and settlement of remaining restructuring obligations.

Contractual Commitments

The following are our contractual commitments as of June 30, 2013:

	Total		Less Than 1 Year		1-3 Years
	(In thousands)
Operating Lease Obligations	$	6,602	$	3,069	$	3,533
Network Service Commitments(1)		2,649		2,395		254
Total Contractual Obligations	$	9,251	$	5,464	$	3,787

⁽¹⁾  In the normal course of our business, we have signed contracts with certain network service providers under which we have minimum purchase commitments. These commitments expire on various dates through April 2016.

For information on our contractual commitments at December 31, 2012, see “Commitments” in Part 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2012. Contractual commitments at December 31, 2012, were $11.5 million.

Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate material 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 for other contractually narrow or limited purposes. We did not have any off-balance sheet arrangements at June 30, 2013, and December 31, 2012, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Exchange Rate Risk

We are exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies, of which the most significant to our operations for the three and six months ended June 30, 2013, were the Euro, the British Pound, and the Indian Rupee. We are primarily exposed to foreign currency fluctuations related to network access costs and other operating expenses denominated in currencies other than the U.S. Dollar. As such, we benefit from a stronger U.S. Dollar and may be adversely affected by a weaker U.S. Dollar relative to each foreign currency. Currently, we do not enter into currency forward exchange or option contracts to hedge foreign currency exposures. The impact of foreign currency fluctuations is also discussed in “Foreign Exchange Gains and Losses” under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Interest Rate Risk

As of June 30, 2013, we had cash and cash equivalents of $25.0 million, restricted cash of $1.0 million and no short-term investments. As of December 31, 2012, we had cash and cash equivalents of $26.8 million, restricted cash of $1.0 million and no short-term investments. Our cash balances are held primarily in bank deposits and money market accounts with a remaining maturity of three months or less at the time of purchase. As a result, we do not believe we are exposed to material interest rate risk.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, management of iPass conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level, as of the end of the period covered by this report, to ensure that information required to be disclosed was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2013, there have been no changes in our internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Control and Procedures and Internal Control over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, 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 designed 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, within iPass have been detected.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors

The risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the SEC on March 15, 2013, have not substantively changed.

Item 6. Exhibits

See the Exhibit Index which follows the signature page of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

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SIGNATURE

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.

	iPass Inc.
Date: August 8, 2013	/s/ DARIN R. VICKERY
	Darin R. Vickery Vice President and Corporate Controller (Duly Authorized Officer and Principal Accounting Officer)

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INDEX TO EXHIBITS

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation (1)
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation (2)
3.3	Certificate of Change to Amended and Restated Certificate of Incorporation (3)
3.4	Amended and Restated Bylaws (4)
4.1	Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4
4.2	Specimen stock certificate (5)
10.1	Offer Letter with Karen Willem dated June 7, 2013
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief 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 Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

(1) Filed as Exhibit 3.1 to our Form 10-Q, filed November 13, 2003 (Registration No. 000-50327), and incorporated herein by reference.

(2) Filed as Exhibit 3.2 to our Form 10-Q, filed August 7, 2009 (Registration No. 000-50327), and incorporated herein by reference.

(3) Filed as Exhibit 3.1 to our Form 8-K, filed February 3, 2010 (Registration No. 000-50327), and incorporated herein by reference.

(4) Filed as an exhibit to our Form 8-K, filed October 29, 2010 (Registration No. 000-50327), and incorporated herein by reference.

(5) Filed as an exhibit to our Form S-1/A, filed July 1, 2003 (No. 333-102715), and incorporated herein by reference.

* XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or Prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934.

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EX-10.1

Exhibit 10.1

June 6, 2013

Karen Willem

Dear Karen:

I am pleased to offer you employment in the position of Senior Vice President and Chief Financial Officer at iPass Inc. (“iPass” or the “Company”), reporting to me, under the terms set forth in this letter. Your first date of employment will be July 1, 2013. Your initial base salary will be $12,500.00, paid semi-monthly, plus benefits, including the option of participating in our 401(k) Plan. If annualized, this base salary amount equals $300,000.00. As an exempt employee, you will not be eligible for overtime compensation.

In addition, you will be eligible to earn a target annual bonus of $150,000.00 paid on a quarterly basis consistent with the management bonus plan. Bonuses are only considered earned if the participant is an employee of iPass in good standing on the last day of the fiscal quarter and has successfully completed the quarterly objectives. If you leave the Company for any reason during the quarter, no pro-rata bonus shall be earned. The Company shall have the sole discretion to determine if you have met all of the requirements for earning a bonus (including completion of the applicable objectives) and, if so, the amount of the bonus payment. If earned, the bonus payments generally will be paid within forty-five (45) days following the end of the Company’s fiscal quarter to allow the Company time to determine bonus calculations. Assuming your employment with iPass starts on July 1, 2013, for the quarters ending September 30, 2013 and December 31, 2013, respectively, you will be paid the greater of: (i) 100% of your quarterly bonus opportunity; or (ii) the actual amount which would be earned under the 2013 Executive Management Bonus Plan ( the “2013 EMBP”) pursuant to the terms of the 2013 EMBP. Any bonus provided to you will be subject to standard deductions and withholdings.

Further, subject to the approval of the Board of Directors of iPass (the “Board”), you will be granted an option to purchase 375,000 shares of iPass’ common stock, subject to a four-year vesting schedule, at a purchase price equal to the fair market value of the stock as of the date of grant (as determined by the Board) under the iPass 2003 Equity Incentive Plan (the “Plan”). The option will be governed by the terms of the Plan and your stock option agreement. The Company will also issue to you a Restricted Stock Award (“RSA”) consisting of 100,000 shares of restricted stock in the Company which will vest as set forth in the governing RSA Agreement.

In addition, should you remain continuously employed into January 2014, subject to Board approval, you will be granted an option to purchase 150,000 shares of iPass’ common stock, subject to a four-year vesting schedule, at a purchase price equal to the fair market value of the stock as of the date of grant (as determined by the Board) under the iPass 2003 Equity Incentive Plan (the “Plan”). The option will be governed by the terms of the Plan and your stock option agreement.

iPass offers its employees health, dental, vision, life, AD&D, and short term and long term disability insurance, and you will be eligible to participate in these benefit plans in accordance with the terms and conditions of the applicable plan documents. The health and dental plans provide you with several options regarding your care. Please read the enclosed information about the health and dental plan options available to you. You may call Mike Badgis with any questions about health insurance or any other iPass benefits at (650) 232-4130. iPass may modify your position, duties, reporting relationship, office location, and compensation and benefits from time to time in its discretion.

In addition, in the position of Senior Vice President and Chief Financial Officer, you will be eligible to become a “Tier 1 Participant” under the Company’s Executive Corporate Transaction and Severance Benefit Plan (the “Executive Severance Plan”), which provides specified severance benefits to certain eligible executive employees of the Company in the event of qualifying employment terminations, pursuant to the terms and conditions of the Executive Severance Plan. The Executive Severance Plan material will be provided to you separately.

This offer is contingent upon the successful results of background and reference checks, your execution of and compliance with the Company’s Employee Confidentiality and Inventions Assignment Agreement (attached hereto as Exhibit A) and satisfactory proof of your right to work in the United States. You agree to assist as needed and to complete any documentation at the Company’s request to meet these conditions. In addition, as a condition of your employment, you will be required to abide by the Company’s policies and procedures, including but not limited to the policies set forth in the Company’s Employee Handbook, as may be in effect from time to time. Employment with iPass is at the will of each party, is not for a specific term and can be terminated by you or by the Company at any time, with or without cause and with or without advance notice.

This letter, along with your Employee Confidentiality and Inventions Assignment Agreement, is the entire agreement between you and iPass concerning your employment terms, and it supersedes any other agreements or promises made to you by anyone, whether written or oral. The terms of this letter cannot be changed (except with respect to those changes expressly reserved to the Company’s discretion herein) unless such changes are in writing and signed by an authorized representative of iPass. This offer is valid until Friday, June 7, 2013 at 5:00 pm, at which time it will expire if you have not returned this fully signed letter to the Company.

Please signify your acceptance of employment with the Company under the terms provided in this letter by signing and dating below and returning this offer letter to Mike Badgis at fax number (650) 232-0232 or by email at mbadgis@ipass.com.

Karen, your acceptance of our offer represents a unique opportunity for us both to grow and succeed. We all want to thank you in advance for your faith in us, and for the commitment you have made to our common vision.

Finally, we all look forward to working and building iPass with you!

Welcome aboard,	Understood And Accepted
/S/ Evan L. Kaplan	/S/ Karen Willem
Evan L. Kaplan	Karen Willem
President & CEO
	6/7/2013
	Date

Exhibit A - Employee Confidentiality and Inventions Assignment Agreement

EMPLOYEE CONFIDENTIALITY AND INVENTIONS ASSIGNMENT AGREEMENT

In consideration of my employment or continued employment by IPASS, INC. (“Company”), and the compensation now and hereafter paid to me, I hereby agree as follows:

1. CONFIDENTIALITY.

1.1 Nondisclosure; Recognition of Company’s Rights. At all times during my employment and thereafter, I will hold in confidence and will not disclose, use, lecture upon, or publish any of Company’s Confidential Information (defined below), except as such use is required in connection with my work for Company, or unless the Chief Executive Officer (the “CEO”) of Company expressly authorizes in writing such disclosure or publication. I will obtain the CEO’s written approval before publishing or submitting for publication any material (written, oral, or otherwise) that relates to my work at Company and/or incorporates any Confidential Information. I hereby assign to Company any rights I have or acquire in any and all Confidential Information and recognize that all Confidential Information shall be the sole and exclusive property of Company and its assigns.

1.2 Confidential Information. The term “Confidential Information” shall mean any and all confidential knowledge, data or information related to Company’s business or its actual or demonstrably anticipated research or development, including without limitation: (a) trade secrets, inventions, ideas, processes, computer source and object code, data, formulae, programs, other works of authorship, know-how, improvements, discoveries, developments, designs, and techniques; (b) information regarding products, plans for research and development, marketing and business plans, budgets, financial statements, contracts, prices, suppliers, and customers; (c) information regarding the skills and compensation of Company’s employees, contractors, and any other service providers of Company; and (d) the existence of any business discussions, negotiations, or agreements between Company and any third party.

1.3 Third Party Information. I understand, in addition, that Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment and thereafter, I will hold Third Party Information in strict confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for Company) or use, except in connection with my work for Company, Third Party Information, unless expressly authorized by an officer of Company in writing.

1.4 No Improper Use of Information of Prior Employers and Others. I represent that my employment by Company does not and will not breach any agreement with any former employer, including any noncompete agreement or any agreement to keep in confidence information acquired by me in confidence or trust prior to my employment by Company. I further represent that I have not entered into, and will not enter into, any agreement, either written or oral, in conflict herewith. During my employment by Company, I will not improperly use or disclose any confidential information or trade secrets of any former employer or other third party to whom I have an obligation of confidentiality, and I will not bring onto the premises of Company or use any unpublished documents or any property belonging to any former employer or other third party to whom I have an obligation of confidentiality, unless consented to in writing by that former employer or person. I will use in the performance of my duties only information that is generally known and used by persons with training and experience comparable to my own, is common knowledge in the industry or otherwise legally in the public domain, or is otherwise provided or developed by Company.

2. INVENTIONS.

2.1 Inventions and Intellectual Property Rights. As used in this Agreement, the term “Invention” means any ideas, concepts, information, materials, processes, data, programs, know-how, improvements, discoveries, developments, designs, artwork, formulae, other copyrightable works, and techniques and all Intellectual Property Rights therein. The term “Intellectual Property Rights” means all trade secrets, copyrights, trademarks, mask work rights, patents and other intellectual property rights recognized by the laws of any jurisdiction or country.

2.2 Prior Inventions. I agree that I will not incorporate, or permit to be incorporated, Prior Inventions (defined below) in any Company Inventions (defined below) without Company’s prior written consent. In addition, I agree that I will not incorporate into any Company software or otherwise deliver to Company any software code licensed under the GNU GPL or LGPL or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by Company. I have disclosed on Exhibit A a complete list of all Inventions that I have, or I have caused to be, alone or jointly with others, conceived, developed, or reduced to practice prior to the commencement of my employment by Company, in which I have an ownership interest or which I have a license to use, and that I wish to

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have excluded from the scope of this Agreement (collectively referred to as “Prior Inventions”). If no Prior Inventions are listed in Exhibit A, I warrant that there are no Prior Inventions. If, in the course of my employment with Company, I incorporate a Prior Invention into a Company process, machine or other work, I hereby grant Company a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Prior Invention.

2.3 Assignment of Company Inventions. Subject to the section titled “Government or Third Party” and except for Inventions that I can prove qualify fully under the provisions of California Labor Code section 2870 and I have set forth in Exhibit A, I hereby assign and agree to assign in the future (when any such Inventions or Intellectual Property Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to Company all my right, title, and interest in and to any and all Inventions (and all Intellectual Property Rights with respect thereto) made, conceived, reduced to practice, or learned by me, either alone or with others, during the period of my employment by Company. Inventions assigned to Company or to a third party as directed by Company pursuant to the section titled “Government or Third Party” are referred to in this Agreement as “Company Inventions.”

2.4 Obligation to Keep Company Informed. During the period of my employment and for one (1) year thereafter, I will promptly and fully disclose to Company in writing (a) all Inventions authored, conceived, or reduced to practice by me, either alone or with others, including any that might be covered under California Labor Code section 2870, and (b) all patent applications filed by me or in which I am named as an inventor or co-inventor.

2.5 Government or Third Party. I also agree to assign all my right, title, and interest in and to any particular Company Invention to a third party, including without limitation the United States, as directed by Company.

2.6 Enforcement of Intellectual Property Rights and Assistance. During the period of my employment and thereafter, I will assist Company in every proper way to obtain and enforce United States and foreign Intellectual Property Rights relating to Company Inventions in all countries. In the event Company is unable to secure my signature on any document needed in connection with such purposes, I hereby irrevocably designate and appoint Company and its duly authorized officers and agents as my agent and attorney in fact, which

appointment is coupled with an interest, to act on my behalf to execute and file any such documents and to do all other lawfully permitted acts to further such purposes with the same legal force and effect as if executed by me.

3. RECORDS. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that is required by Company) of all Inventions made by me during the period of my employment by Company, which records shall be available to, and remain the sole property of, Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that (a) during the term of my employment by Company, I will not, without Company’s express written consent, engage in any employment or business activity that is competitive with, or would otherwise conflict with my employment by, Company, and (b) for the period of my employment by Company and for one (l) year thereafter, I will not, either directly or indirectly, solicit or attempt to solicit any employee, independent contractor, or consultant of Company to terminate his, her or its relationship with Company in order to become an employee, consultant, or independent contractor to or for any other person or entity.

5. RETURN OF COMPANY PROPERTY. Upon termination of my employment or upon Company’s request at any other time, I will deliver to Company all of Company’s property, equipment, and documents, together with all copies thereof, and any other material containing or disclosing any Inventions, Third Party Information or Confidential Information of Company and certify in writing that I have fully complied with the foregoing obligation. I agree that I will not copy, delete, or alter any information contained upon my Company computer before I return it to Company. I further agree that any property situated on Company’s premises and owned by Company is subject to inspection by Company personnel at any time with or without notice. Prior to leaving, I will cooperate with Company in attending an exit interview and completing and signing Company’s termination statement.

6. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of Company, I hereby consent to the notification of my new employer of my rights and obligations under this Agreement, by Company’s providing a copy of this Agreement or otherwise.

7. GENERAL PROVISIONS.

7.1 Governing Law and Venue. This Agreement and any action related thereto will be governed, controlled, interpreted, and defined by and under the laws of the State of California, without giving effect to any conflicts of laws principles that require the application of the law of a different state. I hereby expressly consent to the personal jurisdiction and venue in the state and federal

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courts for the county in which Company’s principal place of business is located for any lawsuit filed there against me by Company arising from or related to this Agreement.

7.2 Severability. If any provision of this Agreement is, for any reason, held to be invalid or unenforceable, the other provisions of this Agreement will be unimpaired and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law.

7.3 Survival. This Agreement shall survive the termination of my employment and the assignment of this Agreement by Company to any successor-in-interest or other assignee and be binding upon my heirs and legal representatives.

7.4 At-Will Employment. I agree and understand that nothing in this Agreement shall confer any right with respect to continuation of employment by Company, nor shall it interfere in any way with my right or Company’s right to terminate my employment at any time, with or without cause and with or without advance notice.

7.5 Notices. Each party must deliver all notices or other communications required or permitted under this Agreement in writing to the other party at the address listed on the signature page, by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized express mail service. Notice will be effective upon receipt or refusal of delivery. If delivered by certified or registered mail, any such notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark. If delivered by courier or express mail service, any such notice shall be considered to have been given on the delivery date reflected by the courier or express mail service receipt. Each party may change its address for receipt of notice by giving notice of such change to the other party.

7.6 Injunctive Relief. I acknowledge that, because my services are personal and unique and because I will have access to the Confidential Information of Company, any breach of this Agreement by me would cause irreparable injury to Company for which monetary damages would not be an adequate remedy and, therefore, will entitle Company to injunctive relief (including specific performance). The rights and remedies provided to each party in this Agreement are cumulative and in addition to any other rights and remedies available to such party at law or in equity.

7.7 Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.

7.8 Export. I agree not to export, directly or indirectly, any U.S. technical data acquired from Company or any products utilizing such data, to countries outside the United States, because such export could be in violation of the United States export laws or regulations.

7.9 Entire Agreement. The obligations pursuant to sections of this Agreement titled “Confidentiality” and “Inventions” shall apply to any time during which I was previously employed, or am in the future employed, by Company as an independent contractor if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matters hereof and supersedes and merges all prior communications between us with respect to such matters. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing and signed by me and the CEO of Company. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

This Agreement shall be effective as of the first day of my employment with Company.

EMPLOYEE:	COMPANY:
I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND THIS AGREEMENT AND HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS IT WITH INDEPENDENT LEGAL COUNSEL.	ACCEPTED AND AGREED:
/s/ Karen Willem (Signature) By: Karen Willem Title: CFO Date: July 1, 2013 Address:	/s/ J. Michael Badgis (Signature) By: J. Michael Badgis Title: Vice President, HR Date: July 1, 2013 Address: 3800 Bridge Parkway Redwood Shores, CA 94065

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EXHIBIT A

INVENTIONS

1. Prior Inventions Disclosure. The following is a complete list of all Prior Inventions:

x None

¨ See immediately below:

2. Limited Exclusion Notification.

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and Company does not require you to assign or offer to assign to Company any Invention that you develop entirely on your own time without using Company’s equipment, supplies, facilities or trade secret information, except for those Inventions that either:

a. Relate at the time of conception or reduction to practice to Company’s business, or actual or demonstrably anticipated research or development; or

b. Result from any work performed by you for Company.

To the extent a provision in the foregoing Agreement purports to require you to assign an Invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.

This limited exclusion does not apply to any patent or Invention covered by a contract between Company and the United States or any of its agencies requiring full title to such patent or Invention to be in the United States.

A-1

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Evan L. Kaplan, certify that:

1. I have reviewed this Form 10-Q of iPass 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 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 purposes 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 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: August 8, 2013	By:	/S/    EVAN L. KAPLAN
		Evan L. Kaplan President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Karen Willem, certify that:

1. I have reviewed this Form 10-Q of iPass 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 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 purposes 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 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: August 8, 2013	By:	/S/    KAREN WILLEM
		Karen Willem Senior Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002, 18 U.S.C SECTION 1350

In connection with the Quarterly Report of iPass Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Evan L. Kaplan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2013	By:	/S/    EVAN L. KAPLAN
		Evan L. Kaplan President and Chief Executive Officer (Principal Executive Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of iPass Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002, 18 U.S.C SECTION 1350

In connection with the Quarterly Report of iPass Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Karen Willem, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2013	By:	/S/    KAREN WILLEM
		Karen Willem Senior Vice President and Chief Financial Officer (Principal Financial Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of iPass Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2013

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Components of Other Assets

Other assets consisted of the following:

	June 30, 2013		December 31, 2012
	(In thousands)
Prepaid lease obligations	$	138	$	236
Deferred installation costs		1,809		2,180
Deposits		830		854
Long-term deferred tax assets, net		195		195
Restricted cash		250		970
	$	3,222	$	4,435

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Condensed Consolidated Statements of Comprehensive Loss (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Revenue	$ 28,665	$ 32,244	$ 58,294	$ 65,538
Cost of revenues and operating expenses:
Network access costs	12,384	13,835	25,141	28,475
Network operations	4,726	5,407	9,567	10,806
Research and development	3,414	3,445	7,028	7,147
Sales and marketing	4,373	5,084	9,290	10,434
General and administrative	5,258	5,244	11,437	10,502
Restructuring charges and related adjustments	26	9	626	5
Amortization of intangible assets		60		120
Total cost of revenue and operating expenses	30,181	33,084	63,089	67,489
Operating loss	(1,516)	(840)	(4,795)	(1,951)
Interest income	3	3	7	6
Foreign exchange losses, net	(114)	(34)	(187)	(63)
Loss before income taxes	(1,627)	(871)	(4,975)	(2,008)
Provision for (benefit from) income taxes	(41)	10	(14)	147
Net loss	(1,586)	(881)	(4,961)	(2,155)
Comprehensive loss	$ (1,586)	$ (881)	$ (4,961)	$ (2,155)
Basic and diluted net loss per share	$ (0.03)	$ (0.01)	$ (0.08)	$ (0.04)
Number of shares used in per share calculations:
Basic and diluted	63,381,344	60,747,796	62,639,498	60,252,836

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Accrued Liabilities

6 Months Ended

Jun. 30, 2013

Payables And Accruals [Abstract]

Accrued Liabilities

Note 5. Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30, 2013		December 31, 2012
	(In thousands)
Accrued sales tax liabilities	$	1,078	$	1,080
Accrued restructuring liabilities – current(1)		257		203
Accrued bonus, commissions and other employee benefits		3,075		2,550
Amounts due to customers		1,137		1,061
Other accrued liabilities		3,516		3,737
	$	9,063	$	8,631

(1) See Note 6. Accrued Restructuring.

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Fair Value - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Fair Value Disclosures [Abstract]
Transfers between Levels 1, 2, and 3	$ 0

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Payables And Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30, 2013		December 31, 2012
	(In thousands)
Accrued sales tax liabilities	$	1,078	$	1,080
Accrued restructuring liabilities – current(1)		257		203
Accrued bonus, commissions and other employee benefits		3,075		2,550
Amounts due to customers		1,137		1,061
Other accrued liabilities		3,516		3,737
	$	9,063	$	8,631

(1) See Note 6. Accrued Restructuring.

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Segment and Geographical Information - Reconciliations of Total Segment Operating Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Amortization of intangibles		$ (60)		$ (120)
Restructuring charges and related adjustments	(26)	(9)	(626)	(5)
Total operating loss	(1,516)	(840)	(4,795)	(1,951)
Interest income	3	3	7	6
Foreign exchange losses, net	(114)	(34)	(187)	(63)
Loss before income taxes	(1,627)	(871)	(4,975)	(2,008)
Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating loss	(1,490)	(736)	(4,179)	(1,825)
Segment Reconciling Items [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Amortization of intangibles		(60)		(120)
Restructuring charges and related adjustments	(26)	(9)	(626)	(5)
Certain state sales tax and federal tax items	$ 0	$ (35)	$ 10	$ (1)

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Other Assets - Components of Other Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Other Assets [Abstract]
Prepaid lease obligations	$ 138	$ 236
Deferred installation costs	1,809	2,180
Deposits	830	854
Long-term deferred tax assets, net	195	195
Restricted cash	250	970
Other Assets	$ 3,222	$ 4,435

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Property and Equipment, Net - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Property Plant And Equipment [Abstract]
Depreciation expense	$ 0.6	$ 0.5	$ 1.3	$ 1.2
Property and equipment, wrote-off	0.1	0.4	0.3	2.7
Capitalized cost related to the ERP			$ 3.4

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Net Loss Per Common Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Numerator:
Net loss	$ (1,586)	$ (881)	$ (4,961)	$ (2,155)
Denominator:
Basic and diluted net loss per common share - Weighted average shares outstanding	63,381,344	60,747,796	62,639,498	60,252,836
Basic and diluted net loss per common share	$ (0.03)	$ (0.01)	$ (0.08)	$ (0.04)

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Commitments And Contingencies Disclosure [Abstract]
Lease expiration date	Jun. 30, 2017
Facility lease obligations	$ 0.4
Purchase commitments expiration period	2016-04

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Property and Equipment, Net - Components of Property and Equipment, Net (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Property Plant And Equipment [Abstract]
Equipment	$ 14,823	$ 14,292
Furniture and fixtures	2,217	2,214
Computer software	10,248	6,891
Capital work-in-progress	123	3,356
Leasehold improvements	1,365	1,578
Property plant and equipment, gross	28,776	28,331
Less: Accumulated depreciation and amortization	(22,533)	(21,782)
Property and equipment, net	$ 6,243	$ 6,549

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

The condensed consolidated financial statements include the accounts of iPass Inc. (the “Company”) and its wholly owned subsidiaries. The condensed consolidated financial statements that accompany these notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The Condensed Consolidated Financial Statements for December 31, 2012, were derived from audited financial statements but do not include all disclosures required by GAAP. The interim financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair presentation for the interim periods presented. This interim financial information should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The results of operations for the three and six months ended June 30, 2013, are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results that the Company experiences may differ materially from those estimates. Estimates are used for, but not limited to the valuation of accounts receivables, other long-lived assets, network access costs, stock-based compensation, legal contingencies, and income taxes.

The Company reports comprehensive loss in a single continuous financial statement within the Condensed Consolidated Statements of Comprehensive Loss. The Company’s comprehensive loss is equivalent to its net loss because the Company does not have any transactions that are recorded through other comprehensive income (loss).

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Property and Equipment, Net

Note 3. Property and Equipment, net

Property and equipment, net, consisted of the following:

	June 30, 2013			December 31, 2012
	(In thousands)
Equipment	$	14,823		$	14,292
Furniture and fixtures		2,217			2,214
Computer software		10,248			6,891
Capital work-in-progress		123			3,356
Leasehold improvements		1,365			1,578
		28,776			28,331
Less: Accumulated depreciation and amortization		(22,533	)		(21,782	)
Property and equipment, net	$	6,243		$	6,549

Depreciation expense was approximately $0.6 million and $1.3 million for the three and six months ended June 30, 2013, respectively, and $0.5 million and $1.2 million for the three and six months ended June 30, 2012, respectively. During the three and six months ended June 30, 2013, the Company retired approximately $0.1 million and $0.3 million, respectively, of gross property and equipment, nearly all of which were fully depreciated. The Company retired approximately $0.4 million and $2.7 million of gross property and equipment, during the three and six months ended June 30, 2012, respectively, nearly all of which were fully depreciated.

During January 2013, the Company went “live” with a new enterprise resource planning (ERP) system. Accordingly, approximately $3.4 million of capitalized costs related to the ERP implementation was reclassified from capital work-in-progress to computer software.

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Accrued Restructuring

6 Months Ended

Jun. 30, 2013

Restructuring And Related Activities [Abstract]

Accrued Restructuring

Note 6. Accrued Restructuring

During the year ended December 31, 2009, the Company announced restructuring plans (the “2009 Plans”) to reduce operating costs and focus resources on key strategic priorities, which resulted in a workforce reduction of 146 positions across all functional areas and abandonment of certain facilities and termination of a contract obligation. The 2009 Plans were completed during 2010.

In the first quarter of 2013, the Company announced a restructuring plan (the “Q1 2013 Plan”) to re-align its cost structure to focus investments, resources and operating expenses on the Company’s growing Open Mobile business, which resulted in a workforce reduction of 16 positions across all functional areas and termination of a lease contract. The Company recorded a restructuring charge of approximately $0.6 million during the first quarter of 2013, which included severance, facility exit costs and other associated costs. The Company has paid approximately $0.2 million during the first quarter of 2013 and $0.3 million during the second quarter of 2013. As of June 30, 2013, the Company had the remaining cash payments of less than $0.1 million.

The following is a rollforward of restructuring liability for the Q1 2013 and 2009 Plans:

	Three Months Ended June 30,
	2013			2012
	(In thousands)
Beginning balance	$	817		$	678
Restructuring charges and related adjustments		26			9
Payments		(395	)		(54	)
Ending balance	$	448		$	633

	Six Months Ended June 30,
	2013			2012
	(In thousands)
Beginning balance	$	483		$	736
Restructuring charges and related adjustments		626			5
Payments		(661	)		(108	)
Ending balance	$	448		$	633

As of June 30, 2013, approximately $0.3 million of the restructuring liability is included in accrued liabilities, and the remaining restructuring liability of approximately $0.2 million is included in other long-term liabilities.

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Other Assets

6 Months Ended

Jun. 30, 2013

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Other Assets

Note 4. Other Assets

Other assets consisted of the following:

	June 30, 2013		December 31, 2012
	(In thousands)
Prepaid lease obligations	$	138	$	236
Deferred installation costs		1,809		2,180
Deposits		830		854
Long-term deferred tax assets, net		195		195
Restricted cash		250		970
	$	3,222	$	4,435

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Accrued Liabilities - Schedule of Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Payables And Accruals [Abstract]
Accrued sales tax liabilities	$ 1,078	$ 1,080
Accrued restructuring liabilities - current	257	203
Accrued bonus, commissions and other employee benefits	3,075	2,550
Amounts due to customers	1,137	1,061
Other accrued liabilities	3,516	3,737
Accrued liabilities	$ 9,063	$ 8,631

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Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Commitments And Contingencies Disclosure [Abstract]
Remaining 2013	$ 1,569
2014	2,972
2015	1,276
2016	525
2017	260
Operating leases, future minimum payments	$ 6,602

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Segment and Geographical Information - Revenue and Operating Loss for Each Reportable Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenue from External Customer [Line Items]
Net Revenue	$ 28,665	$ 32,244	$ 58,294	$ 65,538
Total Segment Operating Income (Loss)	(1,516)	(840)	(4,795)	(1,951)
Operating Segments [Member]
Revenue from External Customer [Line Items]
Net Revenue	28,665	32,244	58,294	65,538
Total Segment Operating Income (Loss)	(1,490)	(736)	(4,179)	(1,825)
Operating Segments [Member] | Mobility Services [Member]
Revenue from External Customer [Line Items]
Net Revenue	20,318	23,942	41,269	49,107
Total Segment Operating Income (Loss)	(1,793)	(568)	(4,327)	(1,518)
Operating Segments [Member] | iPass Unity [Member]
Revenue from External Customer [Line Items]
Net Revenue	8,347	8,302	17,025	16,431
Total Segment Operating Income (Loss)	$ 303	$ (168)	$ 148	$ (307)

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,196	$ 1,173

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Segment and Geographical Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment and Geographical Information

Note 9. Segment and Geographical Information

The Company’s two reportable operating segments are: Mobility Services and iPass Unity Network Services (“iPass Unity”; formerly known as Managed Network Services). The Mobility Services segment includes services that help enterprises manage the networks, connections and devices used by their mobile workforce. The iPass Unity segment provides customers with Wi-Fi and Wide Area Network solutions. The Company’s Chief Operating Decision Maker (the “CODM”) is the Company’s President and Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment, using information about its revenue, segment income or loss from operations before income taxes, excluding amortization of intangibles, and restructuring.

The accounting policies of the reportable operating segments are substantially the same as those the Company uses for its condensed consolidated financial statements. All direct costs are allocated to the respective operating segments. In addition to direct costs, certain indirect costs are allocated to each operating segment including costs relating to shared services in management, finance, legal, human resources, facilities, and information technology. Indirect costs are allocated based on headcount, salaries and operating segment revenue. The total pool of operating costs and network access costs allocated to the reportable operating segments were $30.2 million and $33.0 million for the three months ended June 30, 2013 and 2012, respectively, and $62.5 million and $67.4 million for the six months ended June 30, 2013 and 2012, respectively. Costs related to amortization of intangibles, and restructuring activities are not allocated to operating segments. By definition, operating segment operating income (loss) also excludes interest income, foreign exchange gains and losses, and income taxes.

Revenue and operating loss for each reportable operating segment for the three and six months ended June 30, 2013 and 2012, were as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	Net Revenue		Total Segment Operating Income (Loss)			Net Revenue		Total Segment Operating Income (Loss)
	(In thousands)
2013
Mobility Services	$	20,318	$	(1,793	)	$	41,269	$	(4,327	)
iPass Unity		8,347		303			17,025		148
Total Segment	$	28,665	$	(1,490	)	$	58,294	$	(4,179	)
2012
Mobility Services	$	23,942	$	(568	)	$	49,107	$	(1,518	)
iPass Unity		8,302		(168	)		16,431		(307	)
Total Segment	$	32,244	$	(736	)	$	65,538	$	(1,825	)

Substantially all of the Company’s long-lived assets are located in the United States. The CODM does not evaluate operating segments using discrete asset information. Accordingly, no segment assets have been reported.

There were no material intersegment sales or transfers for the three and six months ended June 30, 2013 and 2012, to arrive at net segment revenue.

Reconciliations of total segment operating loss to total operating loss and total loss before income taxes for the three and six months ended June 30, 2013 and 2012, are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Total segment operating loss	$	(1,490	)	$	(736	)	$	(4,179	)	$	(1,825	)
Amortization of intangibles		—			(60	)		—			(120	)
Restructuring charges and related adjustments		(26	)		(9	)		(626	)		(5	)
Certain state sales tax and federal tax items		0			(35	)		10			(1	)
Total operating loss		(1,516	)		(840	)		(4,795	)		(1,951	)
Interest income		3			3			7			6
Foreign exchange losses, net		(114	)		(34	)		(187	)		(63	)
Total loss before income taxes	$	(1,627	)	$	(871	)	$	(4,975	)	$	(2,008	)

The following table summarizes total Company revenue by country or by geographical region for the periods presented:

	Three Months Ended June  30,						Six Months Ended June  30,
	2013			2012			2013			2012
United States		56	%		58	%		56	%		58	%
EMEA		33	%		32	%		33	%		32	%
Asia Pacific		10	%		10	%		10	%		10	%
Rest of the World		1	%		—			1	%		—

No individual country, except for the United States and United Kingdom, represented 10% or more of total revenue for the three and six months ended June 30, 2013 and 2012. No individual customer represented 10% or more of total revenue for the three and six months ended June 30, 2013 and 2012.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net loss	$ (4,961)	$ (2,155)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation	1,586	1,144
Amortization of intangible assets		120
Depreciation and amortization	1,255	1,155
Loss on disposal of property and equipment	2	3
Provision for (recovery of) doubtful accounts	34	(283)
Changes in operating assets and liabilities:
Accounts receivable	(835)	2,942
Prepaid expenses and other current assets	(56)	165
Other assets	494	351
Accounts payable	1,312	(1,647)
Accrued liabilities	432	(30)
Deferred revenue	(624)	(6)
Other liabilities	(111)	118
Net cash provided by (used in) operating activities	(1,472)	1,877
Cash flows from investing activities:
Purchases of property and equipment	(1,246)	(3,271)
Change in restricted cash pledged for letter of credit		471
Net cash used in investing activities	(1,246)	(2,800)
Cash flows from financing activities:
Proceeds from issuance of common stock	912	741
Net cash provided by financing activities	912	741
Net decrease in cash and cash equivalents	(1,806)	(182)
Cash and cash equivalents at beginning of period	26,822	25,439
Cash and cash equivalents at end of period	25,016	25,257
Supplemental disclosures of cash flow information:
Net cash paid for taxes	121	242
Accrued amounts for acquisition of property and equipment	26	376
Leasehold improvements paid by landlord		$ 251

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 25,016	$ 26,822
Accounts receivable, net of allowance for doubtful accounts of $1,196 and $1,173, respectively	18,062	17,260
Prepaid expenses and other current assets	5,833	5,058
Total current assets	48,911	49,140
Property and equipment, net	6,243	6,549
Other assets	3,222	4,435
Total assets	58,376	60,124
Current liabilities:
Accounts payable	8,513	7,496
Accrued liabilities	9,063	8,631
Deferred revenue, short-term	3,685	3,787
Total current liabilities	21,261	19,914
Deferred revenue, long-term	2,313	2,834
Other long-term liabilities	364	475
Total liabilities	23,938	23,223
Stockholders' equity:
Common stock	64	61
Additional paid-in capital	215,949	213,454
Accumulated deficit	(181,575)	(176,614)
Total stockholders' equity	34,438	36,901
Total liabilities and stockholders' equity	$ 58,376	$ 60,124

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Accrued Restructuring - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2009 Employees	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring plan, number of positions					146
Restructuring charges	$ 26,000	$ 9,000	$ 626,000	$ 5,000
Cash payment of restructuring charges	395,000	54,000	661,000	108,000
Remaining restructuring charges	448,000	633,000	448,000	633,000		817,000	483,000	678,000	736,000
Accrued restructuring liabilities - current	257,000		257,000				203,000
Q1 2013 Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring plan, number of positions			16
Restructuring charges			600,000
Cash payment of restructuring charges	200,000		300,000
Maximum [Member] | Q1 2013 Plan [Member]
Restructuring Cost and Reserve [Line Items]
Remaining restructuring charges	100,000		100,000
Accrued Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring liabilities - current	300,000		300,000
Other Noncurrent Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring liabilities- Noncurrent	$ 200,000		$ 200,000

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Fair Value - Fair Value of Financial Assets (Excluding Cash) and Financial Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	$ 18,303	$ 18,298
Total financial liabilities	395	483
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	18,303	18,298
Lease Liabilities Incurred in Connection with the Restructuring Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities	395	483
Fair Value Measured Using Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	18,303	18,298
Total financial liabilities
Fair Value Measured Using Level 1 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	18,303	18,298
Fair Value Measured Using Level 1 [Member] | Lease Liabilities Incurred in Connection with the Restructuring Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities
Fair Value Measured Using Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets
Total financial liabilities
Fair Value Measured Using Level 2 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets
Fair Value Measured Using Level 2 [Member] | Lease Liabilities Incurred in Connection with the Restructuring Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities
Fair Value Measured Using Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets
Total financial liabilities	395	483
Fair Value Measured Using Level 3 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets
Fair Value Measured Using Level 3 [Member] | Lease Liabilities Incurred in Connection with the Restructuring Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial liabilities	$ 395	$ 483

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Segment and Geographical Information - Summary of Revenue by Geographical Region (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	56.00%	58.00%	56.00%	58.00%
EMEA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	33.00%	32.00%	33.00%	32.00%
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	10.00%	10.00%	10.00%	10.00%
Rest of the World [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	1.00%		1.00%

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Net Loss Per Common Share - Schedule of Anti-Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	6,329,032	3,552,359	5,386,403	3,931,295
Options to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,582,062	1,554,891	3,099,021	2,217,570
Restricted Stock Awards, Including Participating Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	2,746,970	1,997,468	2,287,382	1,713,725

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Segment and Geographical Information - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013 Country Customer	Jun. 30, 2012 Country Customer	Jun. 30, 2013 Segment Customer Country	Jun. 30, 2012 Country Customer
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable operating segments			2
Operating costs allocated to reportable segments	$ 30,200,000	$ 33,000,000	$ 62,500,000	$ 67,400,000
Inter-segment sale or transfer	28,665,000	32,244,000	58,294,000	65,538,000
Number of individual country customer	0	0	0	0
Number of individual customer	0	0	0	0
Revenue [Member] | Customer Concentration Risk [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage	10.00%	10.00%	10.00%	10.00%
United States and United Kingdom [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage	10.00%	10.00%	10.00%	10.00%
Intersegment Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Inter-segment sale or transfer	$ 0	$ 0	$ 0	$ 0

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Net Loss Per Common Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Net Loss Per Common Share

Note 8. Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding plus dilutive potential common shares as determined using the treasury stock method for outstanding stock options, restricted stock-based awards and shares issuable under the employee stock purchase plan, unless the result of adding such shares would be anti-dilutive. Unvested participating securities are included in the weighted daily average number of shares outstanding used in the calculation of diluted net income per common share, but are excluded from the calculation of diluted net loss per share. In a net loss position, basic and diluted net loss per common share are equal, since the weighted average number of shares used to compute diluted net loss per common share excludes anti-dilutive securities, including participating securities. As a result of the Company’s net loss for the three and six months ended June 30, 2013, and for the three and six months ended June 30, 2012, the Company has excluded all potential shares of common stock from the diluted net loss per share calculation as their inclusion would have had an anti-dilutive effect.

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands, except share and per share amounts)
Numerator:
Net loss	$	(1,586	)	$	(881	)	$	(4,961	)	$	(2,155	)
Denominator:
Basic and diluted net loss per common share – Weighted average shares outstanding		63,381,344			60,747,796			62,639,498			60,252,836
Basic and diluted net loss per common share	$	(0.03	)	$	(0.01	)	$	(0.08	)	$	(0.04	)

The following weighted average potential shares of common stock have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Options to purchase common stock		3,582,062		1,554,891		3,099,021		2,217,570
Restricted stock awards, including participating securities		2,746,970		1,997,468		2,287,382		1,713,725
Total		6,329,032		3,552,359		5,386,403		3,931,295

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Accrued Restructuring - Summary of Accrued Restructuring (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Restructuring And Related Activities [Abstract]
Beginning balance	$ 817	$ 678	$ 483	$ 736
Restructuring charges and related adjustments	26	9	626	5
Payments	(395)	(54)	(661)	(108)
Ending balance	$ 448	$ 633	$ 448	$ 633

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Components of Property and Equipment, Net

Property and equipment, net, consisted of the following:

	June 30, 2013			December 31, 2012
	(In thousands)
Equipment	$	14,823		$	14,292
Furniture and fixtures		2,217			2,214
Computer software		10,248			6,891
Capital work-in-progress		123			3,356
Leasehold improvements		1,365			1,578
		28,776			28,331
Less: Accumulated depreciation and amortization		(22,533	)		(21,782	)
Property and equipment, net	$	6,243		$	6,549

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 7. Commitments and Contingencies

Lease and Purchase Commitments

The Company leases facilities under operating leases that expire at various dates through June 2017. Future minimum lease payments under these operating leases, including approximately $0.4 million of future payments on leases accounted for under the Company’s restructuring plans, as of June 30, 2013, are as follows:

Year	Operating Leases
	(In thousands)
Remaining 2013	$	1,569
2014		2,972
2015		1,276
2016		525
2017		260
	$	6,602

The Company has contracts with certain network service providers, mobile data providers and other vendors which have minimum purchase commitments that expire on various dates through April 2016. Future minimum purchase commitments under all agreements are as follows:

Year	Minimum Purchase Commitments
	(In thousands)
Remaining 2013	$	1,673
2014		830
2015		120
2016		26
	$	2,649

Legal Proceedings

The Company is involved in legal proceedings and claims arising in the ordinary course of business. While there can be no assurances as to the ultimate outcome of any litigation involving the Company, management does not believe any such pending legal proceeding or claim will result in a judgment or settlement that would have a material adverse effect on the Company’s financial position, results of operations or cash flows.

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. Certain indemnification agreements may not be subject to maximum loss clauses. If the potential loss from any indemnification claim is considered probable and the amount or the range of the loss can be estimated, the Company accrues a liability for the estimated loss. To date, claims under such indemnification provisions have not been significant.

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Fair Value

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value

Note 2. Fair Value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction in the principal or most advantageous market between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The three levels of inputs that may be used to measure fair value are as follows:

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

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

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

The recurring fair value measurements of these financial assets (excluding cash) and financial liabilities were determined using the following inputs at June 30, 2013, and December 31, 2012, respectively:

	As of June 30, 2013								As of December 31, 2012
	Fair Value Measured Using								Fair Value Measured Using
	Level 1		Level 2		Level 3		Total Balance		Level 1		Level 2		Level 3		Total Balance
	(In thousands)
Financial assets
Money market funds(1)	$	18,303	$	—	$	—	$	18,303	$	18,298	$	—	$	—	$	18,298
Total financial assets	$	18,303	$	—	$	—	$	18,303	$	18,298	$	—	$	—	$	18,298
Financial liabilities
Lease liabilities incurred in connection with the restructuring plan(2)	$	—	$	—	$	395	$	395	$	—	$	—	$	483	$	483
Total financial liabilities	$	—	$	—	$	395	$	395	$	—	$	—	$	483	$	483

(1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets.

(2) Lease liabilities are recorded at fair value and are included as liabilities in the Company’s condensed consolidated balance sheets. The lease liabilities were recorded in connection with lease abandonment plans implemented in 2009. Management made assumptions in determining the fair value of the lease liabilities. The discounted cash flow valuation technique used to determine fair value included inputs, such as the future rent payment schedule, the discount rate and sublease income based on the executed sublease agreement through the end of the lease terms.

There were no transfers between Levels 1, 2, and 3 from December 31, 2012, through June 30, 2013.

As of June 30, 2013, and December 31, 2012, the carrying amounts of accounts receivable, accounts payable and accrued liabilities, approximated fair value due to their short maturities.

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Commitments and Contingencies - Schedule of Future Minimum Purchase Commitments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Commitments And Contingencies Disclosure [Abstract]
Remaining 2013	$ 1,673
2014	830
2015	120
2016	26
Future minimum purchase commitments	$ 2,649

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Accrued Restructuring (Tables)

6 Months Ended

Jun. 30, 2013

Restructuring And Related Activities [Abstract]

Summary of Accrued Restructuring

The following is a rollforward of restructuring liability for the Q1 2013 and 2009 Plans:

	Three Months Ended June 30,
	2013			2012
	(In thousands)
Beginning balance	$	817		$	678
Restructuring charges and related adjustments		26			9
Payments		(395	)		(54	)
Ending balance	$	448		$	633

	Six Months Ended June 30,
	2013			2012
	(In thousands)
Beginning balance	$	483		$	736
Restructuring charges and related adjustments		626			5
Payments		(661	)		(108	)
Ending balance	$	448		$	633

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets (Excluding Cash) and Financial Liabilities

The recurring fair value measurements of these financial assets (excluding cash) and financial liabilities were determined using the following inputs at June 30, 2013, and December 31, 2012, respectively:

	As of June 30, 2013								As of December 31, 2012
	Fair Value Measured Using								Fair Value Measured Using
	Level 1		Level 2		Level 3		Total Balance		Level 1		Level 2		Level 3		Total Balance
	(In thousands)
Financial assets
Money market funds(1)	$	18,303	$	—	$	—	$	18,303	$	18,298	$	—	$	—	$	18,298
Total financial assets	$	18,303	$	—	$	—	$	18,303	$	18,298	$	—	$	—	$	18,298
Financial liabilities
Lease liabilities incurred in connection with the restructuring plan(2)	$	—	$	—	$	395	$	395	$	—	$	—	$	483	$	483
Total financial liabilities	$	—	$	—	$	395	$	395	$	—	$	—	$	483	$	483

(1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets.

(2) Lease liabilities are recorded at fair value and are included as liabilities in the Company’s condensed consolidated balance sheets. The lease liabilities were recorded in connection with lease abandonment plans implemented in 2009. Management made assumptions in determining the fair value of the lease liabilities. The discounted cash flow valuation technique used to determine fair value included inputs, such as the future rent payment schedule, the discount rate and sublease income based on the executed sublease agreement through the end of the lease terms.

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Segment and Geographical Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Revenue and Operating Loss for Each Reportable Segment

Revenue and operating loss for each reportable operating segment for the three and six months ended June 30, 2013 and 2012, were as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	Net Revenue		Total Segment Operating Income (Loss)			Net Revenue		Total Segment Operating Income (Loss)
	(In thousands)
2013
Mobility Services	$	20,318	$	(1,793	)	$	41,269	$	(4,327	)
iPass Unity		8,347		303			17,025		148
Total Segment	$	28,665	$	(1,490	)	$	58,294	$	(4,179	)
2012
Mobility Services	$	23,942	$	(568	)	$	49,107	$	(1,518	)
iPass Unity		8,302		(168	)		16,431		(307	)
Total Segment	$	32,244	$	(736	)	$	65,538	$	(1,825	)

Reconciliations of Total Segment Operating Loss

Reconciliations of total segment operating loss to total operating loss and total loss before income taxes for the three and six months ended June 30, 2013 and 2012, are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Total segment operating loss	$	(1,490	)	$	(736	)	$	(4,179	)	$	(1,825	)
Amortization of intangibles		—			(60	)		—			(120	)
Restructuring charges and related adjustments		(26	)		(9	)		(626	)		(5	)
Certain state sales tax and federal tax items		0			(35	)		10			(1	)
Total operating loss		(1,516	)		(840	)		(4,795	)		(1,951	)
Interest income		3			3			7			6
Foreign exchange losses, net		(114	)		(34	)		(187	)		(63	)
Total loss before income taxes	$	(1,627	)	$	(871	)	$	(4,975	)	$	(2,008	)

Summary of Revenue by Geographical Region

The following table summarizes total Company revenue by country or by geographical region for the periods presented:

	Three Months Ended June  30,						Six Months Ended June  30,
	2013			2012			2013			2012
United States		56	%		58	%		56	%		58	%
EMEA		33	%		32	%		33	%		32	%
Asia Pacific		10	%		10	%		10	%		10	%
Rest of the World		1	%		—			1	%		—

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments

The Company leases facilities under operating leases that expire at various dates through June 2017. Future minimum lease payments under these operating leases, including approximately $0.4 million of future payments on leases accounted for under the Company’s restructuring plans, as of June 30, 2013, are as follows:

Year	Operating Leases
	(In thousands)
Remaining 2013	$	1,569
2014		2,972
2015		1,276
2016		525
2017		260
	$	6,602

Schedule of Future Minimum Purchase Commitments

Future minimum purchase commitments under all agreements are as follows:

Year	Minimum Purchase Commitments
	(In thousands)
Remaining 2013	$	1,673
2014		830
2015		120
2016		26
	$	2,649

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	IPASS INC
Entity Central Index Key	0001053374
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		63,932,549

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Net Loss Per Common Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands, except share and per share amounts)
Numerator:
Net loss	$	(1,586	)	$	(881	)	$	(4,961	)	$	(2,155	)
Denominator:
Basic and diluted net loss per common share – Weighted average shares outstanding		63,381,344			60,747,796			62,639,498			60,252,836
Basic and diluted net loss per common share	$	(0.03	)	$	(0.01	)	$	(0.08	)	$	(0.04	)

Schedule of Anti-dilutive Shares Excluded from Computation of Diluted Net Loss Per Share

The following weighted average potential shares of common stock have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Options to purchase common stock		3,582,062		1,554,891		3,099,021		2,217,570
Restricted stock awards, including participating securities		2,746,970		1,997,468		2,287,382		1,713,725
Total		6,329,032		3,552,359		5,386,403		3,931,295