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Note 1—General   Vringo, Inc., together with its consolidated subsidiaries (the “Company”), is engaged in the innovation, development and monetization of mobile technologies and intellectual property. Vringo's intellectual property portfolio consists of over 500 patents and patent applications covering telecom infrastructure, internet search, and mobile technologies. The patents and patent applications have been developed internally and acquired from third parties. Vringo also operates a global platform for the distribution of mobile social applications and services.   On July 19, 2012, Vringo, Inc., a Delaware corporation (“Vringo” or “Legal Parent”), closed a merger transaction (the “Merger”) with Innovate/Protect, Inc., a privately held Delaware corporation (“I/P”), pursuant to an Agreement and Plan of Merger, dated as of March 13, 2012 (the “Merger Agreement”), by and among Vringo, I/P and VIP Merger Sub, Inc., a wholly owned subsidiary of Vringo (“Merger Sub”). Pursuant to the Merger Agreement, I/P became a wholly-owned subsidiary of Vringo through a merger of I/P with and into Merger Sub, and the former stockholders of I/P received shares of Vringo that constituted a majority of the outstanding shares of Vringo.   Because former I/P stockholders owned, immediately following the Merger, approximately 67.61% of the combined company on a fully diluted basis and as a result of certain other factors, I/P was deemed to be the acquiring company for accounting purposes and the transaction was accounted for as a reverse acquisition in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Accordingly, the Company’s financial statements for periods prior to the Merger reflect the historical results of I/P, and not Vringo’s historical results prior to the Merger, and the Company’s financial statements for all periods from July 19, 2012 reflect the results of the combined company.   Unless specifically noted otherwise, as used throughout these consolidated financial statements, the term “Company” refers to the combined company after the Merger and the business of I/P before the Merger. The terms I/P and Vringo refer to such entities’ standalone businesses prior to the Merger.   I/P (a Development Stage Company) was incorporated on June 8, 2011 under the laws of Delaware as Labrador Search Corporation.   The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a “going concern”, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. There is no certainty, however, in its ability to successfully monetize its intellectual property assets through licensing or litigation. In addition, there is no certainty in its ability to successfully develop and/or market its products. The Company has incurred significant losses since its inception, and it might continue to operate at a net loss in the foreseeable future. For the three and nine month periods ended September 30, 2012, and for the cumulative period from inception of I/P (June 8, 2011) until September 30, 2012, the Company incurred net losses of $3,124, $6,836 and $9,590, respectively. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.   Based on current operating plans, the current resources of the Company, after taking into account the net funds received in a subsequent to balance sheet date private registered direct offering, in the total amount of approximately $44,900, as well as $8,332 received, subsequent to balance sheet date, from the exercise of the Company’s convertible equity instruments, are expected to be sufficient for at least the next twelve months. The Company may choose to raise additional funds in connection with any future acquisition of additional intellectual property assets, operating businesses or other assets that it may choose to pursue. There can be no assurance, however, that any such opportunities will materialize. Moreover, any potential financing would likely be dilutive to the Company’s stockholders.   As of September 30, 2012, approximately $609 of the Company's net assets were located outside of the United States. In addition, the Company owns patents issued outside of the United States.

Note 2—Significant Accounting and Reporting Policies   (a) Basis of presentation   The accompanying consolidated financial statements include the accounts of I/P, Legal Parent and their wholly-owned subsidiaries, and are presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements include the results of operations of I/P and subsidiaries for all periods presented, with the results of operations of the Legal Parent and its subsidiaries for the period from July 19, 2012 (the effective date of the Merger) through September 30, 2012. Moreover, common stock amounts presented for comparative periods differ from those previously presented by I/P, due to application of accounting requirements applicable to a reverse acquisition.   The accompanying unaudited consolidated financial statements were prepared in accordance with U.S. GAAP and instructions to Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. These financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2011 contained in the Company’s definitive proxy statement/prospectus filed with the Securities and Exchange Commission (“SEC”) on June 21, 2012. The results of operations for the three and nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.   (b) Development stage enterprise   The Company’s principal activities to date have been focused on enforcement and development of its intellectual property, as well as on the research and development of its products. To date, the Company has not generated any significant revenues from its planned principal operations. Accordingly, the Company’s financial statements are presented as those of a development stage enterprise.   (c) Translation into U.S. dollars   The currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar (“dollar” or “U.S. $”). Therefore, the dollar has been determined to be the Company’s functional currency. Transactions in foreign currencies (primarily in New Israeli Shekels or “NIS”) are recorded at the exchange rate as of the transaction date. All exchange gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected as finance expense in the statement of operations, as they arise.   (d) Use of estimates   The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results may differ from such estimates. Significant items subject to such estimates and assumptions include valuation of assets assumed and liabilities incurred as part of the Merger, useful lives of the Company’s tangible and intangible assets, valuation of its derivative warrants, valuation of its share-based compensation, deferred tax assets and liabilities, income tax uncertainties and other contingencies.   (e) Intangible assets   Intangible assets include technology (see Note 4) recorded at fair value, and patents purchased, recorded based on the cost to acquire them. These assets are amortized over their remaining estimated useful lives. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.    (f) Goodwill   Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually, and when triggering events occur, in accordance with the provisions of FASB ASC Topic 350, Intangibles - Goodwill and Other. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to an acquisition price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.   (g) Legal costs   Legal costs incurred in connection with ongoing litigation are expensed as occurred.   (h) Net loss per share data   Basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted-average number of shares of common stock plus dilutive potential common stock considered outstanding during the period. Such dilutive shares consist of incremental shares that would be issued upon exercise of the Company’s derivative warrants (see also Note 3). The table below presents the computation of basic and diluted net losses per common share:    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 0.12in; text-indent: -0.12in;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">Period from</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">Cumulative from</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 0.12in; text-indent: -0.12in;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="6" nowrap="nowrap">Three months ended</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">Nine months ended</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">June 8, 2011 (inception),</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">June 8, 2011 (inception) to</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 0.12in; text-indent: -0.12in;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="6" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">to September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center;" colspan="2" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 0.12in; text-indent: -0.12in;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-left: 0.12in; text-indent: -0.12in;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; text-align: center; border-bottom: black 1pt solid;" colspan="18">(in thousands, except share and per share data)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 0.12in; text-indent: -0.12in;">Basic Numerator:</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="width: 35%; font-size: 10pt; text-align: left; padding-left: 0.12in; text-indent: -0.12in;">Net loss attributable to shares of common stock</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; font-weight: bold; text-align: right;">(3,124</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">(874</td> <td style="width: 1%; font-size: 10pt; text-align: left;">)</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; font-weight: bold; text-align: right;">(6,836</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">(1,327</td> <td style="width: 1%; font-size: 10pt; text-align: left;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">(9,590</td> <td style="width: 1%; font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 0.12in; text-indent: -0.12in;">Basic Denominator:</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-left: 0.12in; text-indent: -0.12in;">Weighted average number of shares of common stock outstanding during the period</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">48,437,587</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5,365,225</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">25,493,415</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5,221,328</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">18,386,492</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; padding-bottom: 1pt; padding-left: 0.12in; text-indent: -0.12in;">Weighted average number of penny stock options</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">353,232</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">117,744</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">68,979</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 0.12in; text-indent: -0.12in;">Basic common stock share outstanding</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">48,790,819</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">5,365,225</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">25,611,159</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">5,221,328</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">18,445,471</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 0.12in; text-indent: -0.12in;">Basic net loss per common stock share</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">(0.06</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(0.16</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">(0.27</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(0.25</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(0.52</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 0.12in; text-indent: -0.12in;">Diluted Numerator:</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left; padding-left: 0.12in; text-indent: -0.12in;">Net loss attributable to shares of common stock</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">(10,364</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(874</td> <td style="font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">(14,076</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(1,327</td> <td style="font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(16,830</td> <td style="font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 0.12in; text-indent: -0.12in;">Diluted Denominator:</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; padding-left: 0.12in; text-indent: -0.12in;">Weighted average number of shares of common stock outstanding during the period</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">57,873,868</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5,365,225</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">34,929,696</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5,221,328</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">27,822,773</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-bottom: 1pt; padding-left: 0.12in; text-indent: -0.12in;">Weighted average number of penny stock options</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">353,232</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">117,744</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">68,979</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 0.12in; text-indent: -0.12in;">Diluted common stock share outstanding</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">58,227,100</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">5,365,225</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">35,047,440</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">5,221,328</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">27,891,752</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 0.12in; text-indent: -0.12in;">Diluted net loss per common stock share</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">(0.18</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(0. 16)</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">(0.40</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(0.25</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(0.60</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> </tr> </table>     At September 30, 2012, the Company excluded from the calculation of its diluted net loss the following potentially dilutive securities: (i) 21,026,636 shares of common stock underlying shares of Series A Convertible Preferred stock prior to their conversion in full into shares of common stock during the period; (ii) 7,317,817 Series 2 Warrants to purchase 7,317,817 shares of common stock of the Company; (iii) 712,716 non-Preferential Reload Warrants to purchase 712,716 shares of common stock of the Company; (iv) 4,784,000 IPO Warrants to purchase 4,784,000 shares of common stock of the Company; (v) 9,160,429 of both vested and unvested options at $0.96-$5.50 exercise price, to purchase 9,160,429 shares of common stock of the Company; (vi) 3,126,667 unvested Restricted Stock Units (“RSU”) to purchase 3,126,667 shares of common stock of the Company and (vii) 30,250 unvested $0.01 options at to purchase 30,250 shares of common stock of the Company; (viii) 108,625 shares granted, but not vested. Also, the Company excluded from the calculation of its diluted net loss the following potentially dilutive securities outstanding as of September 30, 2011: (i) 21,026,636 shares of common stock underlying shares of Series A Convertible Preferred stock prior to their conversion in full into shares of common stock during the period; (ii) 250,000 Warrants to purchase 754,400 shares of common stock of the Company; (iii) 41,178 options to purchase 41,178 shares of common stock of the Company; and (iv) 4,455,154 shares of common stock granted, but not yet vested.   (i) Impact of recently issued accounting standards   In July 2012, the FASB issued ASU 2012-02, Balance Sheet (Topic 350), Intangibles-Goodwill and Other, which allows an organization to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets. An organization that elects to perform a qualitative assessment is required to perform the quantitative impairment test for an indefinite-lived intangible asset if it is more likely than not that the asset is impaired. This is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption of ASU 2012-02 to have a material impact on its financial position, results of operations, or cash flows.   (j) Reclassification   Certain comparative figures were reclassified to conform to the Company’s post-Merger presentation.

Note 3—Fair Value Measurements   The Company measures fair value in accordance with ASC 820-10, “Fair Value Measurements and Disclosures” (formerly SFAS 157, “Fair Value Measurements”). ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received by selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:   Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.   Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.   Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.   The Company measures its derivative liabilities at fair value. The Special Bridge Warrants, Conversion Warrants, Preferential Reload Warrants and Series 1 Warrants (as they are defined in Note 8) are classified within Level 3 because they are valued using the Black-Scholes-Merton and the Monte-Carlo models (as all of these warrants include down-round protection clauses), which utilize significant inputs that are unobservable in the market such as the expected stock price volatility and the dividend yield, and the remaining period of time the warrants will be outstanding before they expire.     The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2012, aggregated by the level in the fair-value hierarchy within which those measurements fall:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="10">Fair value measurement at reporting date using</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="text-align: center; vertical-align: bottom;"> <td style="font-size: 10pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">September 30, 2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">Quoted prices in active markets for identical assets (Level 1)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">Significant other observable inputs (Level 2)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; border-bottom: black 1pt solid;" colspan="2" nowrap="nowrap">Significant unobservable inputs (Level 3)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; border-bottom: black 1pt solid;">Description</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="14">U.S.$ thousands</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 10pt;">Liabilities</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="width: 44%; font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 10pt;">Derivative liabilities on account of warrants</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="width: 1%; border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="width: 11%; border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">17,280</td> <td style="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="width: 1%; border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="width: 1%; border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="width: 1%; border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">17,280</td> <td style="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 10pt;">Total liabilities</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">17,280</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">17,280</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>   The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2011, aggregated by the level in the fair-value hierarchy within which those measurements fall:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="background-color: white;"> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: right;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center;" colspan="10">Fair value measurement at reporting date using</td> <td style="padding-bottom: 1pt; text-align: left;"> </td> </tr> <tr style="background-color: white; text-align: center; vertical-align: bottom;"> <td style="font-size: 10pt; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">December 31, 2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">Quoted prices in active markets for identical assets (Level 1)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">Significant other observable inputs (Level 2)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">Significant unobservable inputs (Level 3)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="background-color: white;"> <td style="font-size: 10pt; font-weight: bold; border-bottom: black 1pt solid;">Description</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center;" colspan="13">U.S.$ thousands</td> <td style="padding-bottom: 1pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 44%; font-size: 10pt; font-weight: bold; padding-left: 10pt;">Liabilities</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt;">Derivative liabilities on account of warrants</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 10pt;">Total liabilities</td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>     In addition to the above, the Company’s financial instruments at September 30, 2012 and December 31, 2011 consisted of cash and accounts payable, as well as accounts receivable and long term deposits, at September 30, 2012 only. The carrying amounts of all the aforementioned financial instruments approximate fair value. The following table summarizes the changes in the Company’s liabilities measured at fair value using significant unobservable inputs (Level 3) during the three and nine month periods ended September 30, 2012 (as there was no such activity in 2011):    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="6">Level 3</td> <td style="padding-bottom: 1pt;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: center;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; text-align: center;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: center;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; text-align: center;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;">Balance at January 1,</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;">Balance at July 1,</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 72%; font-size: 10pt; text-align: left;">Derivative warrants recorded in connection with the Merger, July 19, 2012</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; font-weight: bold; text-align: right;">25,116</td> <td style="width: 1%; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;">—</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Fair value adjustment prior to exercise of warrants, included in statement of operations</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">(386</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">—</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt;">Exercise of derivative warrants</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">(596</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">—</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt;">Fair value adjustment at end of period, included in statement of operations</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">(6,854</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Balance at September 30,</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">17,280</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>   Valuation processes for Level 3 Fair Value Measurements   Fair value measurement of the derivative liability on account of Special Bridge Warrants, Conversion Warrants, Preferential Reload Warrants and Series 1 Warrants (as defined in Note 8) fall within Level 3 of the fair value hierarchy. The fair value measurements are evaluated by management to ensure that changes are consistent with expectations of management based upon the sensitivity and nature of the inputs.   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 36%;"> </td> <td style="width: 1%; font-weight: bold; text-align: center;"> </td> <td style="width: 20%; font-weight: bold; text-align: center;">Valuation</td> <td style="width: 1%; font-weight: bold; text-align: center;"> </td> <td style="width: 25%; font-weight: bold; text-align: center;">Unobservable</td> <td style="width: 1%;"> </td> <td style="width: 15%;"> </td> <td style="width: 1%;"> </td> </tr> <tr style="vertical-align: top;"> <td style="border-bottom: black 1pt solid; font-weight: bold; text-align: center;">Description</td> <td style="padding-bottom: 1pt; font-weight: bold; text-align: center;"> </td> <td style="border-bottom: black 1pt solid; font-weight: bold; text-align: center;">Technique</td> <td style="padding-bottom: 1pt; font-weight: bold; text-align: center;"> </td> <td style="border-bottom: black 1pt solid; font-weight: bold; text-align: center;">Inputs</td> <td style="padding-bottom: 1pt; font-weight: bold; text-align: center;"> </td> <td style="border-bottom: black 1pt solid; font-weight: bold; text-align: center;">Range</td> <td style="padding-bottom: 1pt; font-weight: bold; text-align: center;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;"> </td> <td style="text-align: right;"> </td> <td style="text-align: right;"> </td> </tr> <tr> <td rowspan="5">Special Bridge Warrants, Conversion Warrants, Preferential Reload Warrants and the Series 1 Warrants</td> <td style="vertical-align: top;"> </td> <td rowspan="5">Black-Scholes-Merton and the Monte-Carlo models</td> <td style="vertical-align: top;"> </td> <td style="vertical-align: top; background-color: #ccffcc;">Volatility</td> <td style="vertical-align: top; background-color: #ccffcc; text-align: right;"> </td> <td style="vertical-align: top; background-color: #ccffcc; text-align: right;">63.75% – 67.43%</td> <td style="vertical-align: top; background-color: #ccffcc; text-align: right;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td>Risk free interest rate</td> <td style="text-align: right;"> </td> <td style="text-align: right;">0.27% – 0.63%</td> <td style="text-align: right;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td style="background-color: #ccffcc;">Expected term, in years</td> <td style="background-color: #ccffcc; text-align: right;"> </td> <td style="background-color: #ccffcc; text-align: right;">2.25 – 4.80</td> <td style="background-color: #ccffcc; text-align: right;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td>Dividend yield</td> <td style="text-align: right;"> </td> <td style="text-align: right;">0%</td> <td style="text-align: right;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td style="background-color: #ccffcc;">Probability and timing of down-round triggering event</td> <td style="background-color: #ccffcc; text-align: right;"> </td> <td style="background-color: #ccffcc; text-align: right;">15% occurrence in December 2012</td> <td style="background-color: #ccffcc; text-align: right;"> </td> </tr> </table>   Sensitivity of Level 3 measurements to changes in significant unobservable inputs   The inputs to estimate the fair value of the Company’s derivative warrant liability are the current market price of the Company’s common stock, the exercise price of the warrant, its remaining expected term, the volatility of the Company’s common stock market price, the Company’s estimations regarding the probability and timing of a down-round protection triggering event and the risk-free interest rate. Significant changes in any of those inputs in the isolation can result in a significant change in the fair value measurement. Generally, a positive change in the market price of the Company’s common stock, and an increase in the volatility of the Company’s shares of common stock, or an increase in the remaining term of the warrant, or an increase of a probability of a down-round triggering event would each result in a directionally similar change in the estimated fair value of the Company’s warrants and thus an increase in the associated liability and vice-versa. An increase in the risk-free interest rate or a decrease in the positive differential between the warrant’s exercise price and the market price of the Company’s shares of common stock would result in a decrease in the estimated fair value measurement of the warrants and thus a decrease in the associated liability. The Company has not, nor plans to, declare dividends on its common stock, and thus, there is no change in the estimated fair value of the warrants due to the dividend assumption.

Note 4 – Business Combination   On July 19, 2012, I/P consummated the Merger with the Legal Parent, as also described in Note 1. The consideration consisted in full of various equity instruments, such as: shares of common stock, options, preferred stock and warrants. The purpose of the Merger was to increase the combined company's intellectual property portfolio and array of products, as well as to gain access to capital markets. Upon completion of the Merger, (i) all then outstanding 6,169,661 shares common stock of I/P, par value $0.0001 per share, were exchanged for 18,617,569, shares of the Company’s common stock, par value $0.01 per share, and (ii) all outstanding shares of Series A Convertible Preferred Stock of I/P, par value $0.0001 per share, were exchanged for 6,673 shares of the Legal Parent’s Series A Convertible Preferred Stock, which shares were convertible into 20,136,445 shares of common stock of the Legal Parent. In addition, the Legal Parent issued to the holders of I/P capital stock an aggregate of 15,959,838 warrants to purchase an aggregate of 15,959,838 shares of the Company’s common stock with an exercise price of $1.76 per share. In addition, all outstanding and unexercised options to purchase I/P common stock, whether vested or unvested, were converted into 41,178 options to purchase the Company’s common stock. Immediately following the completion of the Merger, the former stockholders of I/P owned approximately 55.04% of the outstanding common stock of the combined company (or 67.61% of the outstanding shares of the Company’s common stock, calculated on a fully diluted basis), and the Legal Parent’s stockholders prior to the Merger owned approximately 44.96% of the outstanding common stock of the combined company (or 32.39% of the outstanding shares of our common stock calculated on a fully diluted basis). For accounting purposes, I/P was identified as the accounting “acquirer”, as it is defined in FASB Topic ASC 805. The total purchase price of $75,654 was allocated to the assets acquired and liabilities assumed of the Legal Parent. Registration and issuance cost, in the total amount of $463 was recorded against the additional paid-in capital. <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Allocation of Purchase Price</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 86%; font-size: 10pt; text-align: left; padding-left: 10pt;">Current assets, net of current liabilities</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;">2,587</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-left: 10pt;">Long-term deposit</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">8</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt;">Property and equipment</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">124</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-left: 10pt;">Technology</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">10,133</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; padding-bottom: 1pt; padding-left: 10pt;">Goodwill</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">69,511</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 10pt;">Total assets acquired</td> <td style="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: right;">82,363</td> <td style="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; padding-left: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt;">Fair value of outstanding warrants granted by Legal Parent prior to the Merger, classified as a long-term derivative liability</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(3,162</td> <td style="font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt;">Deferred tax liability, in respect of the acquired technology</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(3,547</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 10pt;">Total liabilities assumed</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">(6,709</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt; padding-left: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: right;">75,654</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-left: 10pt;">Measurement of consideration:</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt;">Fair value of vested stock options granted to employees, management and consultants, classified as equity</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">7,364</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt;">Fair value of outstanding warrants granted by the Legal Parent prior to the Merger, classified as equity</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">10,079</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt;">Fair value of Vringo shares of common stock and vested $0.01 options granted to employees, management and consultants</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">58,211</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 10pt;">Total estimated purchase price</td> <td style="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: right;">75,654</td> <td style="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left;"> </td> </tr> </table>     The fair values of the identified intangible assets were estimated using an income approach. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return. The goodwill recognized as a result of the acquisition is primarily attributable to the value of the workforce and other intangible asset arising as a result of name, reputation, customer loyalty, location, products, and similar factors which could not be separately identified. The useful life of the intangible assets for amortization purposes was determined considering the period of expected cash flows used to measure the fair value of the intangible assets adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive economic or other factors that may limit the useful life of intangible assets. Goodwill recognized is expected not to be deductible for income tax purposes. The Company is currently evaluating the impact of the Merger on its tax assets.   The Company’s consolidated statements of operations include revenues attributable to the Legal Parent in the total amount of $166 and a net loss of $371, for the three and nine months ended September 30, 2012. Had the acquisition taken place on June 8, 2011, the revenue in the consolidated statement of operations and the consolidated net loss would have been as follows:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="6">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="6">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Revenue</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Net Loss</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Revenue</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Net Loss</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 48%; font-size: 10pt;">Three month period</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">281</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">(6,632</td> <td style="width: 1%; font-size: 10pt; text-align: left;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">182</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">(3,194</td> <td style="width: 1%; font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt;">Nine month period (in 2011, from inception through September 30, 2011)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">487</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(17,997</td> <td style="font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">280</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(4,100</td> <td style="font-size: 10pt; text-align: left;">)</td> </tr> </table>   Pro forma adjustments consist of amortization of acquired technology asset, net of changes in respective deferred tax liability. The above pro forma disclosure excludes the possible impact of valuation of equity and derivative instruments valued in connection with the Merger. The amortization, net, for the three and nine month periods ended September 30, 2012 was $827 and $270, respectively. The amortization, net, for the three month period and for the period from inception of I/P through September 30, 2011 was $270 and $338, respectively.

Note 5 – Note Payable – Related Party   On June 22, 2011, I/P issued a senior secured note payable, in the total amount of $3,200, to one of its principal stockholders, Hudson Bay Master Fund Ltd. (“Hudson Bay”) (the “Note”). The Note accrued interest at 0.46% per annum. After the Merger was consummated, on July 19, 2012, the Note was amended and restated and the holder was able to exercise any and all rights and remedies pursuant to such amended and restated Note, including with respect to any optional redemption provisions contained therein. The amended and restated Note was to mature on June 22, 2013 and I/P had granted Hudson Bay a security interest in all of its tangible and intangible assets, in order to secure I/P’s obligations under the senior secured note. After the consummation of the Merger, the Note became an obligation of the Company, as it is to guarantee I/P’s obligations. On August 15, 2012, the Company repaid in full the outstanding balance, as well as the then accrued and unpaid interest of $2.

Note 6 – Acquired Intangible Assets, Net   As of September 30, 2012, intangible assets, net consisted of the following:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Amount</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;">Weighted Average Life - Years</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;">U.S.$</td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 70%; font-size: 10pt; text-align: justify;">Acquired technology (see a below)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 12%; font-size: 10pt; text-align: right;">9,795</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 14%; font-size: 10pt; text-align: right;">6 years</td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt;">Patents (see b below)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">24,764</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; text-align: right; padding-bottom: 1pt;">4.8-9.93 years</td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">34,559</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="font-size: 10pt; text-align: right; padding-bottom: 2.5pt;"> </td> </tr> </table>   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 35.45pt;"></td> <td style="width: 18.05pt;">a.</td> <td style="text-align: justify;">Acquired technology:</td> </tr> </table>   Fair value of $10,133 allocated to technology, as also described in Note 4, is amortized over its estimated useful life of 6 years. During the three and nine month periods, total amortization expense of $338 was recorded by the Company.   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 35.45pt;"></td> <td style="width: 18.05pt;">b.</td> <td style="text-align: justify;">Patents:</td> </tr> </table>   In August 2012, the Company purchased from Nokia a portfolio consisting of various patents and patent applications worldwide. The portfolio encompasses a broad range of technologies relating to telecom infrastructure, including communication management, data and signal transmission, mobility management, radio resources management and services. The total consideration paid for the portfolio was $22,000. In addition, the Company capitalized certain costs related to the acquisition of patents in the total amount of $578. Under the terms of the purchase agreement, to the extent that the gross revenue generated by such portfolio exceeds $22,000, the Company is obligated to pay a royalty of 35% of such excess. The Company has not recorded any amounts in respect of this contingent consideration, for which appropriate estimations are not yet available.   In addition, the Company’s patent portfolio includes patents purchased in June 2011 from Lycos. The gross carrying amount of those patents is comprised of the original purchase price of $3,200 and $195 of associated patent acquisition costs.   During the three and nine month periods ended September 30, 2012, the Company recorded an amortization expense of $542 and $852, respectively. During the three month period ended September 30, 2011 and the period from June 8, 2011 (inception of I/P) through September 30, 2011, the Company recorded an amortization expense of $14 and $157, respectively. For subsequent events, see Note 11.   Estimated amortization expense for each of the five succeeding years, based upon intangible assets owned at September 30, 2012 is as follows:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; text-align: justify;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: justify;">Period ending December 31,</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="width: 85%; font-size: 10pt; text-align: justify;">2012 (three months ending December 31, 2012)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 12%; font-size: 10pt; text-align: right;">1,244</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: justify;">2013</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">4,960</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: justify;">2014</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">4,960</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: justify;">2015</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">4,960</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt;">2016 and thereafter</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">18,435</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; padding-bottom: 2.5pt; text-align: justify;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">34,559</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"></td> </tr> </table>

Note 7 – Series A Convertible Preferred Stock   Prior to the Merger, I/P was authorized to issue up to 10,000,000 shares of preferred stock, par value $0.0001, of which 6,968 shares of preferred stock were designated as Series A Convertible Preferred Stock with such rights and preferences designated in the relevant Certificate of Designations (the “Series A Preferred Stock”). In June 2011, I/P issued 6,968 shares of Series A Preferred Stock to Hudson Bay for $1,800. The Series A Preferred Stock had a liquidation preference of $1,250 per share and was otherwise convertible, at the option of the holder, into 6,968,000 shares of I/P’s common stock at a conversion price of $1 per common share received, subject to adjustment for anti-dilution and other corporate events. In 2012, prior to the Merger, 295 shares of Series A Convertible Preferred Stock were converted to 295,000 shares of common stock of I/P.   Prior to the Merger, the Series A Convertible Preferred Stock was classified as mezzanine equity, because certain cash redemption triggering events were outside the control of the Company. Upon the Merger, the remaining 6,673 Series A Preferred stock shares were exchanged for 6,673 shares of equity-classified new Series A Convertible Preferred Stock, $0.01 par value (“New Series A Convertible Preferred Stock”), issued by Legal Parent to former stockholders of I/P, as part of the Merger. The shares of New Series A Convertible Preferred Stock were convertible into 20,136,445 shares of the Legal Parent’s shares of common stock and were classified as equity, as a cash based redemption event is only triggered by events which are fully in the control of the Company. In July and August 2012, following the consummation of the Merger, all outstanding shares of New Series A Convertible Preferred Stock were converted.

Note 8—Stockholders’ Equity   Shares   The following table summarizes information about the Company's issued and outstanding common stock from inception of I/P through September 30, 2012. Pre-Merger common stock share amounts and balance sheet disclosures were retrospectively restated to reflect Vringo’s equity instruments after the Merger:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Shares of common stock</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold;">Balance as of June 8, 2011 (Inception)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">—</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="width: 85%; font-size: 10pt; padding-bottom: 1pt;">Issuance of shares of common stock</td> <td style="width: 1%; font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="width: 1%; border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="width: 12%; border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">16,972,977</td> <td style="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold;">Balance as of December 31, 2011</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: right;">16,972,977</td> <td style="font-size: 10pt; font-weight: bold; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Conversion of Series A Preferred Convertible Preferred stock, classified as mezzanine equity</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">890,192</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left;">Grant of shares to consultants, compensation expense of $704 was recorded</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">265,000</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Legal Parent’s shares of common stock, recorded upon Merger</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">15,206,118</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left;">Exercise of 250,000 warrants, issued and exercised prior to the Merger</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">754,400</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt;">Post-Merger exercise of warrants</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">816,005</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left;">Exercise of stock options and RSUs</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">168,557</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Conversion of Series A Preferred Convertible Preferred stock, classified as equity</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">20,136,445</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt;">Issuance of shares of common stock in connection with $31,200 received in a private financing round, net of issuance cost of $52</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">9,600,000</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Balance as of September 30, 2012</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">64,809,694</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> </tr> </table>   Following the Merger with the Legal Parent, the vesting of shares of common stock with repurchase rights, granted in 2011, to I/P’s management and directors was fully accelerated. As a result, an additional 2,702,037 shares previously issued became vested and an additional compensation expense of $294 was recorded. See also Note 4.   New Equity Incentive Plan   On July 19, 2012, following the Merger with the Legal Parent, the Company’s stockholders approved the 2012 Employee, Director and Consultant Equity Incentive Plan (“2012 Plan”), replacing the existing 2006 Stock Option Plan of the Legal Parent, and the remaining 9,100,000 authorized shares thereunder were cancelled. The 2012 Plan was approved in order to ensure full compliance with legal and tax requirements under U.S. law. The number of shares subject to the 2012 Plan is the sum of: (i) 15,600,000 shares of common stock, which constitutes 6,500,000 new shares and 9,100,000 previously authorized but unissued shares under the 2006 Stock Option Plan and (ii) any shares of common stock that are represented by awards granted under the Legal Parent’s 2006 Stock Option Plan that are forfeited, expire or are cancelled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company, or the equivalent of such number of shares after the administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with the 2012 Plan; provided, however, that no more than 3,200,000 shares shall be added to the 2012 Plan.   Stock options and RSUs   Following the Merger, the Board approved the acceleration of vesting of certain options granted to certain officers and directors of the Legal Parent. As a result, an additional 908,854 options have vested.    On July 26, 2012, the Board approved the granting of 4,975,000 options to management, directors and employees of the Company at an exercise price of $3.72 per share. These options will vest quarterly over a three year period. In addition, the Board also approved the granting of 15,000 options at an exercise price of $3.72 per share to one of the Company’s consultants. These options will vest over a one year period. In addition, certain options granted to officers, directors and certain key employees are subject to acceleration of vesting of 75% - 100% (according to the agreement signed with each grantee), upon a subsequent change of control.   In addition, on July 26, 2012, the Board approved the granting of 3,105,000 RSUs to management, directors and key employees of the Company. These RSUs will vest quarterly over three year and one year periods (dependent upon the agreement made with each grantee). The Board also approved the granting of 25,000 RSUs to certain of the Company’s consultants. These RSUs will vest over a 6-12 month period (according to the agreement signed with each grantee).   In addition, on August 8, 2012, the Board approved the granting of 500,000 options to a member of its management, at an exercise price of $3.44 per share. These options will vest quarterly over a three year period.   During the period from inception through September 30, 2011, no RSUs were granted. The following table summarizes information about RSU activity for the nine month period ended September 30, 2012:     <table style="width: 80%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">No. of RSUs</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt;">Outstanding at January 1, 2012</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">—</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Assumed at the Merger</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">—</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 85%; font-size: 10pt; text-align: left;">Granted following the Merger</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 12%; font-size: 10pt; text-align: right;">3,130,000</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt;">Exercised</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(3,333</td> <td style="font-size: 10pt; text-align: left;">)</td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt;">Expired</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">—</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-bottom: 1pt;">Forfeited</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Outstanding at September 30, 2012</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">3,126,667</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Exercisable at September 30, 2012</td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">—</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>     The following table summarizes information about option activity for the nine month period ended September 30, 2012:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">No. of options</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Weighted average exercise price</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Exercise price range</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Weighted average grant date fair value</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 48%; font-size: 10pt;">Outstanding at January 1, 2012</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">41,178</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">3.00</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">3.00</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">1.83</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Assumed at the Merger</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">4,391,170</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">2.43</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">0.01 – 5.50</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">2.61</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: left;">Grants after the Merger</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5,490,000</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">3.69</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">3.44 – 3.72</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">2.63</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt;">Exercised</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(165,334</td> <td style="font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">1.03</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">0.01 – 1.65</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">3.13</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt;">Expired</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">(12,000</td> <td style="font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5.50</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">5.50</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">0.99</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-bottom: 1pt;">Forfeited</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(53,000</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right;">0.01</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right;">0.01</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right;">3.69</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Outstanding at September 30, 2012</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">9,692,014</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right;">3.18</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right;">0.01 – 5.50</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right;">2.60</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;">Exercisable at September 30, 2012</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; font-weight: bold; text-align: right;">3,980,826</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: right;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>    For the three month periods ended September 30, 2012 and 2011, the Company recorded a total stock compensation expense of $5,363 and $50, respectively. For the nine month period ended September 30, 2012 and for the period from June 8, 2011 through September 30, 2011, the Company recorded stock compensation expense of $5,532 and $373, respectively. Cumulative from inception through September 30, 2012, the Company has recorded stock compensation expense of $6,006, in respect of stock options granted.   As of September 30, 2012, there was approximately $24,248 of total unrecognized share-based payment cost related to non-vested options, shares and RSUs, granted under the incentive stock option plans. Overall, the cost is expected to be recognized on a straight line basis, over an estimated 4 year period. As of September 30, 2012, there were approximately 7,045,000 shares of common stock available for grant under the 2012 Plan. For subsequent events, see also Note 11.   Warrants   The following table summarizes information about warrant activity for the nine month period ended September 30, 2012:    <table align="center" style="width: 90%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">No. of warrants</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Weighted average exercise price</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">Exercise price range</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="width: 61%; font-size: 10pt;">Outstanding at January 1, 2012</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;">(*)</td> <td style="width: 10%; font-size: 10pt; text-align: right;">250,000</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">1.00</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 10%; font-size: 10pt; text-align: right;">1.00</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: left;">Recorded pursuant to the Merger</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">22,695,411</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">2.45</td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">0.94 - 5.06</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; padding-bottom: 1pt;">Exercised</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">(1,066,005</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;">)</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">1.76</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">1.76</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-bottom: 2.5pt;">Outstanding at September 30, 2012</td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">21,879,406</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">1.25</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">0.94 – 5.06</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>    (*) Represents warrants issued and exercised prior to the Merger. 754,400 shares of the Legal Parent’s common stock issued upon Merger.   The Company’s outstanding warrants, after the Merger, consist of the following:   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 0.25in;"></td> <td style="width: 0.25in;">(a)</td> <td>Series 1 and Series 2 Warrants</td> </tr> </table>   As part of the Merger, on July 19, 2012, the Legal Parent issued to I/P’s stockholders 8,299,116 warrants at an exercise price of $1.76 per share and contractual term of 5 years (“Series 1 Warrant”). These warrants bear down-round protection clauses and as a result, they were classified as a long-term derivative liability and recorded at fair value. In addition, I/P’s stockholders received another 7,660,722 warrants at an exercise price of $1.76 per share and contractual term of 5 years (“Series 2 Warrant”). As the Series 2 Warrants do not have down-round protection clauses, they were classified as equity. Following the Merger and through September 30, 2012, 371,440 Series 1 Warrants and 342,873 Series 2 Warrants were exercised.   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 0.25in;"></td> <td style="width: 0.25in;">(b)</td> <td>Conversion Warrants, Special Bridge Warrants and Reload Warrants</td> </tr> </table>   On July 19, 2012, the date of the Merger, Legal Parent’s outstanding warrants included: (i) 148,390 Special Bridge Warrants, at an exercise price of $0.94 per share, with a remaining contractual term of 2.44 years; (ii) 101,445 Conversion Warrants, at an exercise price of $0.94 per share, with a remaining contractual term of 2.44 years; (iii) 887,330 Preferential Reload Warrants, at an exercise price of $1.76 per share, with a remaining contractual term of 4.55 years; and (iv) 814,408 non-Preferential Reload Warrants, at an exercise price of $1.76 per share, with a remaining contractual term of 4.55 years. Following the Merger and through September 30, 2012, 101,692 non-Preferential Reload Warrants were exercised.    <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 0.25in;"></td> <td style="width: 0.25in;">(c)</td> <td>IPO Warrants</td> </tr> </table>   Upon completion of its initial public offering, the Legal Parent issued 4,784,000 warrants at an exercise price of $5.06 per share. These warrants are publicly traded and are exercisable until June 21, 2015, at an exercise price of $5.06 per share. As of September 30, 2012, all of these warrants were outstanding.

Note 9—Commitments and Contingencies   The Company retains the services of law firms that specialize in intellectual property licensing, enforcement and patent law. These law firms may be retained on an hourly fee, contingent fee, or blended fee basis.  In a contingency fee arrangement, law firms are paid a scaled percentage of any negotiated fees, settlements or judgments awarded, based on how and when the fees, settlements or judgments are obtained. For subsequent events, see also Note 11.   In July 2012, the Company signed a rental agreement for its new headquarters in New York. According to the new agreement, the Company shall pay an annual fee of approximately $137 (subject to certain adjustments). The term of the lease agreement is 3 years and 1 month.   Future minimum lease payments under non-cancelable operating leases for office space and automobiles, as of September 30, 2012, are as follows:    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; text-align: justify;"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt;"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1pt solid;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; font-weight: bold; text-align: justify;">Year ending December 31,</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="width: 86%; font-size: 10pt; text-align: justify;">2012 (three months ending December 31, 2012)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> <td style="width: 11%; font-size: 10pt; text-align: right;">61</td> <td style="width: 1%; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: justify;">2013</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">200</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; text-align: justify;">2014</td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt; text-align: left;"> </td> <td style="font-size: 10pt; text-align: right;">146</td> <td style="font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: #ccffcc;"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt;">2015</td> <td style="font-size: 10pt; padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; text-align: right;">104</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left;"> </td> </tr> <tr style="vertical-align: bottom; background-color: white;"> <td style="font-size: 10pt; padding-bottom: 2.5pt; text-align: justify;"> </td> <td style="font-size: 10pt; padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; font-size: 10pt; text-align: right;">511</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left;"> </td> </tr> </table>   Rental expense for operating leases for both office space and automobiles for the nine months ended September 30, 2012 and for the period since inception through September 30, 2011 was $69 and $4, respectively. Rental expense for operating leases for both office space and automobiles for the three months ended September 30, 2012 and 2011 was $48 and $4, respectively.

Note 10—Risks and Uncertainties   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 3%; text-align: justify;"> </td> <td style="width: 3%; text-align: justify;">(a)</td> <td style="width: 94%; text-align: justify; text-indent: 0.5in;">Failure to maintain or protect the Company’s patents assets or other intellectual property may significantly impair its return on investment from such assets and harm its brand, business and results.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(b)</td> <td style="text-align: justify; text-indent: 0.5in;">The Company’s commenced legal proceedings are expected to be time consuming and costly, which may adversely affect its financial condition and its ability to operate its business.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(c)</td> <td style="text-align: justify; text-indent: 0.5in;">A significant portion of the Company’s current business operations are reliant on the patents acquired from Lycos and Nokia. Its failure to successfully monetize these patents through litigation or via licensing may have a significant adverse effect on its financial condition.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(d)</td> <td style="text-align: justify; text-indent: 0.5in;">New legislation, regulations or rulings that impact the patent enforcement process or the rights of patent holders, could negatively affect the Company’s current business model. For example, limitations on the ability to bring patent enforcement claims, limitations on potential liability for patent infringement, lower evidentiary standards for invalidating patents, increases in the cost to resolve patent disputes and other similar developments could negatively affect the Company’s ability to assert its patent or other intellectual property rights.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(e)</td> <td style="text-align: justify; text-indent: 0.5in;">The Company’s products are subject to regulation in the markets in which the service operates. Regulatory changes can adversely affect the Company’s ability to generate revenue from its products in that market.</td> </tr> </table>    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 3%; text-align: justify;"> </td> <td style="width: 3%; text-align: justify;">(f)</td> <td style="width: 94%; text-align: justify; text-indent: 0.5in;">The wireless industry in which the Company conducts its business is characterized by rapid technological changes, frequent new product innovations, changes in customer requirements and expectations and evolving industry standards.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(g)</td> <td style="text-align: justify; text-indent: 0.5in;">The Company may be held liable to cover a significant portion of the legal costs incurred by its defendants in European legal proceedings, should the outcome of the respective proceeding be unfavorable for the Company.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(h)</td> <td style="text-align: justify; text-indent: 0.5in;">Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with various major financial institutions. These major financial institutions are located in the United States and Israel, and the Company’s policy is designed to limit exposure to any one institution. With respect to accounts receivable, the Company is subject to a concentration of credit risk, as a majority of its outstanding trade receivables relate to sales to a limited number of customers.  </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(i)</td> <td style="text-align: justify; text-indent: 0.5in;">A portion of the Company’s expenses are denominated in NIS. The Company expects this level of NIS expenses to continue for the foreseeable future. If the value of the U.S. dollar weakens against the value of NIS, there will be a negative impact on the Company’s operating costs. In addition, to the extent the Company holds monetary assets and liabilities that are denominated in currencies other than the U.S. dollar, the Company will be subject to the risk of exchange rate fluctuations.</td> </tr> </table>

Note 11—Subsequent Events   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 3%;"> </td> <td style="width: 3%; text-align: justify;">(a)</td> <td style="width: 94%; text-align: justify; text-indent: 0.5in;">On October 4, 2012, the Company entered into subscription agreements with several investors with respect to the registered direct offering and sale by the Company of an aggregate of 10,344,998 shares of the Company’s common stock, par value $0.01 per share, at a purchase price of $4.35 per share in a privately negotiated transaction in which no party acted as an underwriter or placement agent. The net proceeds to the Company were approximately $44,900 after deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from this offering for general corporate working capital purposes.</td> </tr> <tr style="vertical-align: top;"> <td> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(b)</td> <td style="text-align: justify; text-indent: 0.5in;">On October 8, 2012, the Company’s subsidiary filed a patent infringement lawsuit against a subsidiary of ZTE Corporation in the United Kingdom.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(c)</td> <td style="text-align: justify; text-indent: 0.5in;">On October 10, 2012, the Company’s subsidiary in the United States entered into a patent purchase agreement, according to which the Company will issue to seller 160,600 unregistered shares of its common stock, as well as 20% from collected future revenue.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(d)</td> <td style="text-align: justify; text-indent: 0.5in;">On October 12, 2012, the Company entered into an agreement with certain of its warrant holders, pursuant to which such warrant holders exercised in cash 3,721,062 of their outstanding warrants, with an exercise price of $1.76 per share, and the Company granted such warrant holders unregistered warrants of the Company to purchase an aggregate of 3,000,000 shares of the Company’s common stock, par value $0.01 per share, at an exercise price of $5.06 per share. The newly issued warrants do not bear down round protection clauses. The Company is still evaluating the accounting impact of this transaction; nevertheless, it expects the impact on its financial statements to be material.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(e)</td> <td style="text-align: justify; text-indent: 0.5in;">In addition, in October and November 2012, warrants to purchase an aggregate of 790,903 shares of the Company’s common stock, at an exercise price of $1.76 per share, were exercised in cash by the Company’s warrant holders, pursuant to which the Company received an additional $1,391.</td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;">(f)</td> <td style="text-align: justify; text-indent: 0.5in;">As of November 6, 2012, the vesting of all of the Legal Parents’ pre-Merger granted options outstanding (except for separation grants) was accelerated by 50%, as the Company’s market capitalization reached $250,000 for twenty of thirty consecutive trading days. The Company expects total, non-cash share based compensation expense of $328 to be recorded, due to the impact of acceleration of vesting of these options.  </td> </tr> <tr style="vertical-align: top;"> <td style="text-align: justify;"> </td> <td style="text-align: justify;"> </td> <td style="text-align: justify; text-indent: 0.5in;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 3%; font-size: 10pt; text-align: justify;"> </td> <td style="width: 3%; font-size: 10pt; text-align: justify;">(g)</td> <td style="width: 94%; font-size: 10pt; text-align: justify; text-indent: 0.5in;">On November 6, 2012, the Company received a verdict in its case against AOL, Inc., Google, Inc., IAC Search & Media, Inc., Gannett Company, Inc. and Target Corporation (collectively, "Defendants") with respect to the Defendants' infringement of the asserted claims of U.S. Patent Nos. 6,314,420 and 6,775,664 (collectively, the "Patents"). After finding that the asserted claims of the Patents were both valid and infringed by Google, the jury found that reasonable royalty damages should be based on a "running royalty", and that the running royalty rate should be 3.5%. After finding that the asserted claims of the Patents were both valid and infringed by the Defendants, the jury found that the following sums of money, if paid now in cash, would reasonably compensate I/P Engine for the Defendants past infringement as follows: Google: $15,800, AOL: $7,943, IAC: $6,650, Gannett: $4, Target: $99. I/P Engine and Defendants are allowed to file post-trial motions with the Court, the schedule for which has yet been determined. According to certain scaled fee agreements, I/P Engine will pay between 15% and 20% of any recovery to professional service providers.  See also Note 9 above.</td> </tr> </table>

(a) Basis of presentation   The accompanying consolidated financial statements include the accounts of I/P, Legal Parent and their wholly-owned subsidiaries, and are presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements include the results of operations of I/P and subsidiaries for all periods presented, with the results of operations of the Legal Parent and its subsidiaries for the period from July 19, 2012 (the effective date of the Merger) through September 30, 2012. Moreover, common stock amounts presented for comparative periods differ from those previously presented by I/P, due to application of accounting requirements applicable to a reverse acquisition.   The accompanying unaudited consolidated financial statements were prepared in accordance with U.S. GAAP and instructions to Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. These financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2011 contained in the Company’s definitive proxy statement/prospectus filed with the Securities and Exchange Commission (“SEC”) on June 21, 2012. The results of operations for the three and nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.

(b) Development stage enterprise   The Company’s principal activities to date have been focused on enforcement and development of its intellectual property, as well as on the research and development of its products. To date, the Company has not generated any significant revenues from its planned principal operations. Accordingly, the Company’s financial statements are presented as those of a development stage enterprise.

(c) Translation into U.S. dollars   The currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar (“dollar” or “U.S. $”). Therefore, the dollar has been determined to be the Company’s functional currency. Transactions in foreign currencies (primarily in New Israeli Shekels or “NIS”) are recorded at the exchange rate as of the transaction date. All exchange gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected as finance expense in the statement of operations, as they arise.

(d) Use of estimates   The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results may differ from such estimates. Significant items subject to such estimates and assumptions include valuation of assets assumed and liabilities incurred as part of the Merger, useful lives of the Company’s tangible and intangible assets, valuation of its derivative warrants, valuation of its share-based compensation, deferred tax assets and liabilities, income tax uncertainties and other contingencies.

(e) Intangible assets   Intangible assets include technology (see Note 4) recorded at fair value, and patents purchased, recorded based on the cost to acquire them. These assets are amortized over their remaining estimated useful lives. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.

(f) Goodwill   Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually, and when triggering events occur, in accordance with the provisions of FASB ASC Topic 350, Intangibles - Goodwill and Other. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to an acquisition price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

(j) Reclassification   Certain comparative figures were reclassified to conform to the Company’s post-Merger presentation.

(h) Net loss per share data   Basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted-average number of shares of common stock plus dilutive potential common stock considered outstanding during the period. Such dilutive shares consist of incremental shares that would be issued upon exercise of the Company’s derivative warrants (see also Note 3). The table below presents the computation of basic and diluted net losses per common share:    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Period from</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Cumulative from</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="6" nowrap="nowrap">Three months ended</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Nine months ended</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">June 8, 2011 (inception),</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">June 8, 2011 (inception) to</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="6" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">to September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: center; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt;" colspan="18">(in thousands, except share and per share data)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic Numerator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; width: 35%; font-size: 10pt;">Net loss attributable to shares of common stock</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt; font-weight: bold;">(3,124</td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(874</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt; font-weight: bold;">(6,836</td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(1,327</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(9,590</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic Denominator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of shares of common stock outstanding during the period</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">48,437,587</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">25,493,415</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">18,386,492</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of penny stock options</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">353,232</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">117,744</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">68,979</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic common stock share outstanding</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">48,790,819</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">25,611,159</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">18,445,471</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic net loss per common stock share</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.06</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.16</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.27</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.25</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.52</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted Numerator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Net loss attributable to shares of common stock</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">(10,364</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(874</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">(14,076</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(1,327</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(16,830</td> <td style="text-align: left; font-size: 10pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted Denominator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of shares of common stock outstanding during the period</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">57,873,868</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">34,929,696</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">27,822,773</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of penny stock options</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">353,232</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">117,744</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">68,979</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted common stock share outstanding</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">58,227,100</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">35,047,440</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">27,891,752</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted net loss per common stock share</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.18</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0. 16)</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.40</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.25</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.60</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> </tr> </table>    At September 30, 2012, the Company excluded from the calculation of its diluted net loss the following potentially dilutive securities: (i) 21,026,636 shares of common stock underlying shares of Series A Convertible Preferred stock prior to their conversion in full into shares of common stock during the period; (ii) 7,317,817 Series 2 Warrants to purchase 7,317,817 shares of common stock of the Company; (iii) 712,716 non-Preferential Reload Warrants to purchase 712,716 shares of common stock of the Company; (iv) 4,784,000 IPO Warrants to purchase 4,784,000 shares of common stock of the Company; (v) 9,160,429 of both vested and unvested options at $0.96-$5.50 exercise price, to purchase 9,160,429 shares of common stock of the Company; (vi) 3,126,667 unvested Restricted Stock Units (“RSU”) to purchase 3,126,667 shares of common stock of the Company and (vii) 30,250 unvested $0.01 options at to purchase 30,250 shares of common stock of the Company; (viii) 108,625 shares granted, but not vested. Also, the Company excluded from the calculation of its diluted net loss the following potentially dilutive securities outstanding as of September 30, 2011: (i) 21,026,636 shares of common stock underlying shares of Series A Convertible Preferred stock prior to their conversion in full into shares of common stock during the period; (ii) 250,000 Warrants to purchase 754,400 shares of common stock of the Company; (iii) 41,178 options to purchase 41,178 shares of common stock of the Company; and (iv) 4,455,154 shares of common stock granted, but not yet vested.

(i) Impact of recently issued accounting standards   In July 2012, the FASB issued ASU 2012-02, Balance Sheet (Topic 350), Intangibles-Goodwill and Other, which allows an organization to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets. An organization that elects to perform a qualitative assessment is required to perform the quantitative impairment test for an indefinite-lived intangible asset if it is more likely than not that the asset is impaired. This is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption of ASU 2012-02 to have a material impact on its financial position, results of operations, or cash flows.

The table below presents the computation of basic and diluted net losses per common share:    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Period from</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Cumulative from</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="6" nowrap="nowrap">Three months ended</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Nine months ended</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">June 8, 2011 (inception),</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">June 8, 2011 (inception) to</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="6" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">to September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">September 30,</td> <td style="font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: center; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt;" colspan="18">(in thousands, except share and per share data)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic Numerator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; width: 35%; font-size: 10pt;">Net loss attributable to shares of common stock</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt; font-weight: bold;">(3,124</td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(874</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt; font-weight: bold;">(6,836</td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(1,327</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(9,590</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic Denominator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of shares of common stock outstanding during the period</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">48,437,587</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">25,493,415</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">18,386,492</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of penny stock options</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">353,232</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">117,744</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">68,979</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic common stock share outstanding</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">48,790,819</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">25,611,159</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">18,445,471</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Basic net loss per common stock share</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.06</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.16</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.27</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.25</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.52</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted Numerator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Net loss attributable to shares of common stock</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">(10,364</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(874</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">(14,076</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(1,327</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(16,830</td> <td style="text-align: left; font-size: 10pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted Denominator:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of shares of common stock outstanding during the period</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">57,873,868</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">34,929,696</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">27,822,773</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt;">Weighted average number of penny stock options</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">353,232</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">117,744</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">68,979</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted common stock share outstanding</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">58,227,100</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,365,225</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">35,047,440</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">5,221,328</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">27,891,752</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.12in; padding-left: 0.12in; font-size: 10pt; font-weight: bold;">Diluted net loss per common stock share</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.18</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0. 16)</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(0.40</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.25</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(0.60</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> </tr> </table>

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2012, aggregated by the level in the fair-value hierarchy within which those measurements fall:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="10">Fair value measurement at reporting date using</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="text-align: center; vertical-align: bottom;"> <td style="font-size: 10pt;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">September 30, 2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Quoted prices in active markets for identical assets (Level 1)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Significant other observable inputs (Level 2)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" colspan="2" nowrap="nowrap">Significant unobservable inputs (Level 3)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;">Description</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="14">U.S.$ thousands</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 10pt; font-size: 10pt; font-weight: bold;">Liabilities</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt; width: 44%; font-size: 10pt;">Derivative liabilities on account of warrants</td> <td style="padding-bottom: 2.5pt; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; width: 11%; font-size: 10pt; font-weight: bold;">17,280</td> <td style="text-align: left; padding-bottom: 2.5pt; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 2.5pt; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; width: 11%; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; width: 1%; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; width: 11%; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; width: 1%; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; width: 11%; font-size: 10pt;">17,280</td> <td style="text-align: left; padding-bottom: 2.5pt; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt; font-size: 10pt; font-weight: bold;">Total liabilities</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">17,280</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">17,280</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>   The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2011, aggregated by the level in the fair-value hierarchy within which those measurements fall:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="background-color: white;"> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="10">Fair value measurement at reporting date using</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="text-align: center; background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">December 31, 2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">Quoted prices in active markets for identical assets (Level 1)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">Significant other observable inputs (Level 2)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;" nowrap="nowrap">Significant unobservable inputs (Level 3)</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;" nowrap="nowrap"> </td> </tr> <tr style="background-color: white;"> <td style="border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold;">Description</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="13">U.S.$ thousands</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 10pt; width: 44%; font-size: 10pt; font-weight: bold;">Liabilities</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt;">Derivative liabilities on account of warrants</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt; font-size: 10pt; font-weight: bold;">Total liabilities</td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>

The following table summarizes the changes in the Company’s liabilities measured at fair value using significant unobservable inputs (Level 3) during the three and nine month periods ended September 30, 2012 (as there was no such activity in 2011):    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="6">Level 3</td> <td style="padding-bottom: 1pt;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">2012</td> <td style="text-align: center; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: center; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="text-align: center; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: center; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">Balance at January 1,</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">Balance at July 1,</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; width: 72%; font-size: 10pt;">Derivative warrants recorded in connection with the Merger, July 19, 2012</td> <td style="width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt; font-weight: bold;">25,116</td> <td style="text-align: left; width: 1%; font-size: 10pt; font-weight: bold;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;">—</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Fair value adjustment prior to exercise of warrants, included in statement of operations</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">(386</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="font-size: 10pt;">Exercise of derivative warrants</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">(596</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">Fair value adjustment at end of period, included in statement of operations</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(6,854</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Balance at September 30,</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">17,280</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>

The fair value measurements are evaluated by management to ensure that changes are consistent with expectations of management based upon the sensitivity and nature of the inputs.   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 36%;"> </td> <td style="text-align: center; width: 1%; font-weight: bold;"> </td> <td style="text-align: center; width: 20%; font-weight: bold;">Valuation</td> <td style="text-align: center; width: 1%; font-weight: bold;"> </td> <td style="text-align: center; width: 25%; font-weight: bold;">Unobservable</td> <td style="width: 1%;"> </td> <td style="width: 15%;"> </td> <td style="width: 1%;"> </td> </tr> <tr style="vertical-align: top;"> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;">Description</td> <td style="text-align: center; padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;">Technique</td> <td style="text-align: center; padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;">Inputs</td> <td style="text-align: center; padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;">Range</td> <td style="text-align: center; padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;"> </td> <td style="text-align: right;"> </td> <td style="text-align: right;"> </td> </tr> <tr> <td rowspan="5">Special Bridge Warrants, Conversion Warrants, Preferential Reload Warrants and the Series 1 Warrants</td> <td style="vertical-align: top;"> </td> <td rowspan="5">Black-Scholes-Merton and the Monte-Carlo models</td> <td style="vertical-align: top;"> </td> <td style="background-color: #ccffcc; vertical-align: top;">Volatility</td> <td style="text-align: right; background-color: #ccffcc; vertical-align: top;"> </td> <td style="text-align: right; background-color: #ccffcc; vertical-align: top;">63.75% – 67.43%</td> <td style="text-align: right; background-color: #ccffcc; vertical-align: top;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td>Risk free interest rate</td> <td style="text-align: right;"> </td> <td style="text-align: right;">0.27% – 0.63%</td> <td style="text-align: right;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td style="background-color: #ccffcc;">Expected term, in years</td> <td style="text-align: right; background-color: #ccffcc;"> </td> <td style="text-align: right; background-color: #ccffcc;">2.25 – 4.80</td> <td style="text-align: right; background-color: #ccffcc;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td>Dividend yield</td> <td style="text-align: right;"> </td> <td style="text-align: right;">0%</td> <td style="text-align: right;"> </td> </tr> <tr style="vertical-align: top;"> <td> </td> <td> </td> <td style="background-color: #ccffcc;">Probability and timing of down-round triggering event</td> <td style="text-align: right; background-color: #ccffcc;"> </td> <td style="text-align: right; background-color: #ccffcc;">15% occurrence in December 2012</td> <td style="text-align: right; background-color: #ccffcc;"></td> </tr> </table>

The total purchase price of $75,654 was allocated to the assets acquired and liabilities assumed of the Legal Parent. Registration and issuance cost, in the total amount of $463 was recorded against the additional paid-in capital. <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Allocation of Purchase Price</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-left: 10pt; width: 86%; font-size: 10pt;">Current assets, net of current liabilities</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;">2,587</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-left: 10pt; font-size: 10pt;">Long-term deposit</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">8</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-left: 10pt; font-size: 10pt;">Property and equipment</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">124</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-left: 10pt; font-size: 10pt;">Technology</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">10,133</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt;">Goodwill</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">69,511</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt; font-weight: bold;">Total assets acquired</td> <td style="padding-bottom: 1pt; color: black; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; color: black; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; color: black; font-size: 10pt; font-weight: bold;">82,363</td> <td style="text-align: left; padding-bottom: 1pt; color: black; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 10pt; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-left: 10pt; font-size: 10pt;">Fair value of outstanding warrants granted by Legal Parent prior to the Merger, classified as a long-term derivative liability</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(3,162</td> <td style="text-align: left; font-size: 10pt;">)</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt;">Deferred tax liability, in respect of the acquired technology</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(3,547</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt; font-weight: bold;">Total liabilities assumed</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">(6,709</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;">)</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 10pt; font-size: 10pt; font-weight: bold;"> </td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; font-weight: bold;">75,654</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 10pt; font-size: 10pt; font-weight: bold;">Measurement of consideration:</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-left: 10pt; font-size: 10pt;">Fair value of vested stock options granted to employees, management and consultants, classified as equity</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">7,364</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-left: 10pt; font-size: 10pt;">Fair value of outstanding warrants granted by the Legal Parent prior to the Merger, classified as equity</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">10,079</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt;">Fair value of Vringo shares of common stock and vested $0.01 options granted to employees, management and consultants</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">58,211</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt; font-size: 10pt; font-weight: bold;">Total estimated purchase price</td> <td style="padding-bottom: 1pt; color: black; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; color: black; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; color: black; font-size: 10pt; font-weight: bold;">75,654</td> <td style="text-align: left; padding-bottom: 1pt; color: black; font-size: 10pt; font-weight: bold;"></td> </tr> </table>

The Company’s consolidated statements of operations include revenues attributable to the Legal Parent in the total amount of $166 and a net loss of $371, for the three and nine months ended September 30, 2012. Had the acquisition taken place on June 8, 2011, the revenue in the consolidated statement of operations and the consolidated net loss would have been as follows:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="6">2012</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="6">2011</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Revenue</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Net Loss</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Revenue</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Net Loss</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="width: 48%; font-size: 10pt;">Three month period</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">281</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(6,632</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">182</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">(3,194</td> <td style="text-align: left; width: 1%; font-size: 10pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="font-size: 10pt;">Nine month period (in 2011, from inception through September 30, 2011)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">487</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(17,997</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">280</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(4,100</td> <td style="text-align: left; font-size: 10pt;">)</td> </tr> </table>

As of September 30, 2012, intangible assets, net consisted of the following:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Amount</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;">Weighted Average Life - Years</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;">U.S.$</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; width: 70%; font-size: 10pt;">Acquired technology (see a below)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 12%; font-size: 10pt;">9,795</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 14%; font-size: 10pt;">6 years</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">Patents (see b below)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">24,764</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 1pt; font-size: 10pt;">4.8-9.93 years</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Total</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">34,559</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>

Estimated amortization expense for each of the five succeeding years, based upon intangible assets owned at September 30, 2012 is as follows:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt; font-weight: bold;">Period ending December 31,</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: justify; width: 85%; font-size: 10pt;">2012 (three months ending December 31, 2012)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 12%; font-size: 10pt;">1,244</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;">2013</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">4,960</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;">2014</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">4,960</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;">2015</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">4,960</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: justify; padding-bottom: 1pt; font-size: 10pt;">2016 and thereafter</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">18,435</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">34,559</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> </tr> </table>

The following table summarizes information about the Company's issued and outstanding common stock from inception of I/P through September 30, 2012. Pre-Merger common stock share amounts and balance sheet disclosures were retrospectively restated to reflect Vringo’s equity instruments after the Merger:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Shares of common stock</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;">Balance as of June 8, 2011 (Inception)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; width: 85%; font-size: 10pt;">Issuance of shares of common stock</td> <td style="padding-bottom: 1pt; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; width: 12%; font-size: 10pt;">16,972,977</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="font-size: 10pt; font-weight: bold;">Balance as of December 31, 2011</td> <td style="font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="text-align: right; font-size: 10pt; font-weight: bold;">16,972,977</td> <td style="text-align: left; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Conversion of Series A Preferred Convertible Preferred stock, classified as mezzanine equity</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">890,192</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Grant of shares to consultants, compensation expense of $704 was recorded</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">265,000</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Legal Parent’s shares of common stock, recorded upon Merger</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">15,206,118</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Exercise of 250,000 warrants, issued and exercised prior to the Merger</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">754,400</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="font-size: 10pt;">Post-Merger exercise of warrants</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">816,005</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Exercise of stock options and RSUs</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">168,557</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Conversion of Series A Preferred Convertible Preferred stock, classified as equity</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">20,136,445</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">Issuance of shares of common stock in connection with $31,200 received in a private financing round, net of issuance cost of $52</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">9,600,000</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Balance as of September 30, 2012</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">64,809,694</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> </tr> </table>

During the period from inception through September 30, 2011, no RSUs were granted. The following table summarizes information about RSU activity for the nine month period ended September 30, 2012:     <table style="width: 80%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">No. of RSUs</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="font-size: 10pt;">Outstanding at January 1, 2012</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Assumed at the Merger</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; width: 85%; font-size: 10pt;">Granted following the Merger</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 12%; font-size: 10pt;">3,130,000</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="font-size: 10pt;">Exercised</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(3,333</td> <td style="text-align: left; font-size: 10pt;">)</td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="font-size: 10pt;">Expired</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt;">Forfeited</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Outstanding at September 30, 2012</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">3,126,667</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Exercisable at September 30, 2012</td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">—</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>

The following table summarizes information about option activity for the nine month period ended September 30, 2012:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">No. of options</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Weighted average exercise price</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Exercise price range</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Weighted average grant date fair value</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="width: 48%; font-size: 10pt;">Outstanding at January 1, 2012</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">41,178</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">3.00</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">3.00</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">1.83</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Assumed at the Merger</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">4,391,170</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">2.43</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">0.01 – 5.50</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">2.61</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Grants after the Merger</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5,490,000</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">3.69</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">3.44 – 3.72</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">2.63</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="font-size: 10pt;">Exercised</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(165,334</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">1.03</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">0.01 – 1.65</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">3.13</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="font-size: 10pt;">Expired</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">(12,000</td> <td style="text-align: left; font-size: 10pt;">)</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5.50</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">5.50</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">0.99</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt;">Forfeited</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(53,000</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 1pt; font-size: 10pt;">0.01</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 1pt; font-size: 10pt;">0.01</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 1pt; font-size: 10pt;">3.69</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Outstanding at September 30, 2012</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">9,692,014</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;">3.18</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;">0.01 – 5.50</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;">2.60</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;">Exercisable at September 30, 2012</td> <td style="padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt; font-weight: bold;">3,980,826</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"></td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>

The following table summarizes information about warrant activity for the nine month period ended September 30, 2012:    <table align="center" style="width: 90%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">No. of warrants</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Weighted average exercise price</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">Exercise price range</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="font-size: 10pt;" colspan="2"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="width: 61%; font-size: 10pt;">Outstanding at January 1, 2012</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;">(*)</td> <td style="text-align: right; width: 10%; font-size: 10pt;">250,000</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">1.00</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 10%; font-size: 10pt;">1.00</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; font-size: 10pt;">Recorded pursuant to the Merger</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">22,695,411</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">2.45</td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">0.94 - 5.06</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 1pt; font-size: 10pt;">Exercised</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">(1,066,005</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;">)</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">1.76</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">1.76</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 2.5pt; font-size: 10pt;">Outstanding at September 30, 2012</td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">21,879,406</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">1.25</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">0.94 – 5.06</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"></td> </tr> </table>

Future minimum lease payments under non-cancelable operating leases for office space and automobiles, as of September 30, 2012, are as follows:    <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; font-weight: bold;" colspan="2">U.S.$</td> <td style="padding-bottom: 1pt; font-size: 10pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt; font-weight: bold;">Year ending December 31,</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: justify; width: 86%; font-size: 10pt;">2012 (three months ending December 31, 2012)</td> <td style="width: 1%; font-size: 10pt;"> </td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> <td style="text-align: right; width: 11%; font-size: 10pt;">61</td> <td style="text-align: left; width: 1%; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;">2013</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">200</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: justify; font-size: 10pt;">2014</td> <td style="font-size: 10pt;"> </td> <td style="text-align: left; font-size: 10pt;"> </td> <td style="text-align: right; font-size: 10pt;">146</td> <td style="text-align: left; font-size: 10pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: justify; padding-bottom: 1pt; font-size: 10pt;">2015</td> <td style="padding-bottom: 1pt; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt;">104</td> <td style="text-align: left; padding-bottom: 1pt; font-size: 10pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: justify; padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="padding-bottom: 2.5pt; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt;">511</td> <td style="text-align: left; padding-bottom: 2.5pt; font-size: 10pt;"> </td> </tr> </table>

8332000

31200000

44900000

44900

500000

609000

0.6761 2011-06-08

41178

4455154

21026636

250000

754400

41178

9160429

4784000

712716

30250

21026636

108625

9160429

3126667

7317817

712716

5.50 0.96

5365225

5221328

48437587

25493415

18386492

353232

117744

68979

-874000

-1327000

-10364000

-14076000

-16830000

5365225 5221328 57873868 34929696 27822773

17280000

1062

1836

17280000

0 0 25116000 25116000

-386000

0 0 -596000 -596000 0 -6854000 -6854000

0.6375

0.6743

0.0027

0.0063

P2Y3M

P4Y9M18D

0.00

0.15 2012-12

182000

280000

281000

487000

-3194000

-4100000

-6632000

-17997000

6169661

6673

295

6673

18617569

20136445

295000

6673

15959838 3000000

15959838

1.00

5.06

0.94

1.00

1.76

0.94

1.76

5.06

0.94

1.25

5.06

1.76

5.06

41178

25000

15000

4975000

3105000

500000

265000

3130000

0.5504 0.4496

75654000

270000

14000

827000

542000

338000

270000

852000

338000

157000

3200000

0.0046

2000

22000000

3200000

34559000

24764000

9795000

P6Y

P9Y11M4D

P4Y9M18D

1244000

4960000

18435000

34559000

10133000

0.35 195000 578000 2587000 8000

124000

69511000

82363000

-3162000

-3547000

-6709000

75654000

7364000

10079000

58211000

1250

convertible, at the option of the holder, into 6,968,000 shares of I/P''''''''s common stock at a conversion price of $1 per common share

$0.01

9100000

-53000

6500000

4784000

9100000

5145000

8299116000

7660722000

9600000000

3.25

31200000

2826374

3980826

12000

6000

908854000

3.72

3.44

3.72

3.69

P3Y

P4Y

1.00 0.75

24248000

P4Y

7045000 P2Y5M8D P2Y5M8D P4Y6M18D P4Y6M18D P5Y

371440

342873

168557

-3333

101692

250000

148390

101445

887330

814408

21879406

3721062

2015-06-21

754400

890192

15206118 816005

20136445

41178

9692014

3126667

4391170 0

-12000

5490000

3.00

5.50

0.01

3.00

5.50

0.01

3.18

0.01 5.50 2.43

0.01

1.65

1.03

0.01

5.50

-165334

1.83

2.60

2.63

3.69

2.61 3.13 0.99 22695411 -1066005 0.94 5.06 2.45 1.76 1.76

61000

200000

146000

104000

511000

4000

48000

69000

137000 3 years and 1 month 10344998 0

4.35

790903 1391000

160600

0.20 0.50 250000000 30000000

the running royalty rate should be 3.5%

0.20 0.15

(g) Legal costs   Legal costs incurred in connection with ongoing litigation are expensed as occurred.

Includes stock based compensation expense Represents amounts less than $1. b.Patents:In August 2012, the Company purchased from Nokia a portfolio consisting of various patents and patent applications worldwide. The portfolio encompasses a broad range of technologies relating to telecom infrastructure, including communication management, data and signal transmission, mobility management, radio resources management and services. The total consideration paid for the portfolio was $22,000. In addition, the Company capitalized certain costs related to the acquisition of patents in the total amount of $578. Under the terms of the purchase agreement, to the extent that the gross revenue generated by such portfolio exceeds $22,000, the Company is obligated to pay a royalty of 35% of such excess. The Company has not recorded any amounts in respect of this contingent consideration, for which appropriate estimations are not yet available.In addition, the Company's patent portfolio includes patents purchased in June 2011 from Lycos. The gross carrying amount of those patents is comprised of the original purchase price of $3,200 and $195 of associated patent acquisition costs.During the three and nine month periods ended September 30, 2012, the Company recorded an amortization expense of $542 and $852, respectively. During the three month periods ended September 30, 2011 and the period from June 8, 2011 (inception of I/P) through September 30, 2012, the Company recorded an amortization expense of $14 and $157, respectively. For subsequent events, see Note 11. a. Acquired technology: Fair value of $10,133 allocated to technology, as also described in Note 4, is amortized over its estimated useful life of 6 years. During the three and nine month periods, total amortization expense of $338 was recorded by the Company. Represents warrants issued and exercised prior to the Merger. 754,400 shares of the Legal Parent's common stock issued upon Merger.

328000

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15800000

7943000

6650000

4000

99000