Restructuring

In March 2015, the Company announced that it will consolidate all major business functions into its Irvine, California office. In connection with this consolidation, the Company will close its Memphis, Tennessee office in May of this year. The Company will not retain any of its Memphis-based employees. A total of seven employees will be impacted by the consolidation, including three current executive officers of the Company. In addition to the retention bonuses described in Note 9 that the Company will pay upon termination of the two applicable executive officers, the Company expects to incur approximately $450,000 of costs, consisting of severance and other related compensation, related payroll taxes, and certain office closure costs. Most of these costs are expected to be recorded to expense during the first quarter of 2015 and paid during the second quarter of 2015.

In connection with the consolidation, the Company entered into an employment agreement in March 2015 to hire a new chief financial officer. Under the terms of this employment agreement, the Company will grant an option to purchase 450,000 shares of the Company’s common stock on the date employment begins. In addition, upon each of the first and second anniversaries of the start date, the new chief financial officer will receive additional stock options to purchase 150,000 shares of the Company’s common stock. The exercise price of such options will be equal to the fair market value of the Company’s common stock on the date of grant. The stock options will vest and become exercisable in three equal annual installments, conditioned on continued employment.

Lease Extension

In March 2015, the Company’s lease agreement for its Irvine, California facility was amended to extend the term by three years. The term of the lease agreement was previously scheduled to end in September 2015. Lease payments for the term of the three year extension total approximately $275,000.