Velti plc Form 6-K Current Report Filed 2013-06-10pdf.secdatabase.com/25/0001490412-13-000035.pdfTable of Contents Veltiplc Condensed Consolidated Balance Sheets (in thousands, except

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SECURITIES AND EXCHANGE COMMISSION

FORM 6-KCurrent report of foreign issuer pursuant to Rules 13a-16 and 15d-16 Amendments

Filing Date: 2013-06-10 | Period of Report: 2013-03-31SEC Accession No. 0001490412-13-000035

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FILERVelti plcCIK:1490412| IRS No.: 203774475 | State of Incorp.:Y9 | Fiscal Year End: 1231Type: 6-K | Act: 34 | File No.: 001-35035 | Film No.: 13901980SIC: 7372 Prepackaged software

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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUERPURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF June 2013COMMISSION FILE NUMBER: 001-35035

Velti plc(Exact name of Registrant as specified in its charter)

Not Applicable(Translation of Registrant's name into English)

First Floor, 28-32 Pembroke Street UpperDublin 2, Republic of Ireland

Attn: Alex Moukas, Chief Executive Officer353 (0) 1234 2676

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.Form 20-F þ Form 40-F oIndicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(1):___Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(7):___

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishingthe information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):



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INFORMATION CONTAINED IN THIS FORM 6-K REPORT

This report contains Velti's Interim Report as of March 31, 2013 and for the three months ended March 31, 2013 and 2012

EXHIBITS

Exhibit Number Description

99.1 Velti's Interim Report as of March 31, 2013 and for the three months ended March 31, 2013 and2012

99.2 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200299.3 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200299.4 Certification of Chief Executive Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of

200299.5 Certification of Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 200299.6 Second Amendment to Credit Agreement dated April 24, 2013 among Velti Inc., Velti plc, Mobile

Interactive Group Limited and Velti Mobile Platforms Limited as Borrowers, HSBC Bank plc, HSBCBank USA, National Association and the lenders from time to time party thereto, and HSBC BankUSA, National Association, as Administrative Agent

99.7 Securities Purchase Agreement dated April 18, 2013 among Velti plc and the Purchasers thereto99.8 Consent and Limited Waiver dated April 18, 2013 to Credit Agreement dated August 10, 201299.9 Termination Agreement and General Release of Claims between Christos Kaskavelis and Velti plc

99.10 Wilson Cheung Retention Agreement and Severance Agreement between Wilson W. Cheung andVelti Inc.

99.11 Employment Offer Letter dated April 1, 2013 between Mari Baker and Velti Inc. for Interim ChiefOperating Position



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SIGNATURES

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

VELTI PLC(Registrant)

By: /s/ Jeffrey G. RossName: Jeffrey G. RossTitle: Chief Financial Officer

Date: June 7, 2013



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Velti plcInterim Report

As of March 31, 2013 and for the three months ended March 31, 2013 and 2012



Table of Contents

Velti plcInterim Report

TABLE OF CONTENTS

Page

Condensed Consolidated Balance Sheet 2Condensed Consolidated Statements of Comprehensive Loss 3Condensed Consolidated Statements of Cash Flows 4Notes to Condensed Consolidated Financial Statements 5Management's Discussion and Analysis of Financial Condition and Results of Operations 22Quantitative and Qualitative Disclosures About Market and Other Financial Risks 38Controls and Procedures 39

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Table of Contents

Velti plcCondensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)(unaudited)

March 31, December 31,

2013 2012

ASSETS

Current assets:Cash and cash equivalents (includes $2.1 million and $1.1 million from VIE as of March 31, 2013 and December 31,2012) $ 16,327 $ 36,571Trade receivables, net of allowance for doubtful accounts of $8.7 million and $7.0 million as of March 31, 2013 andDecember 31, 2012 (includes $12.0 million and $12.4 million from VIE as of March 31, 2013 and December 31, 2012) 146,827 150,074Accrued contract receivables, net of allowance for doubtful accounts of $1.4 million and $1.0 million as of March 31,2013 and December 31, 2012 (includes $8.5 million and $8.8 million from VIE as of March 31, 2013 and December 31,2012) 136,096 132,957

Prepayments 10,320 12,733Other receivables and current assets (includes $1.4 million and $1.3 million from VIE as of March 31, 2013 andDecember 31, 2012) 12,720 12,353

Total current assets 322,290 344,688

Property and equipment, net (includes $0.2 million from VIE as of March 31, 2013 and December 31, 2012) 12,004 13,073

Intangible assets, net (includes $2.8 million and $2.9 million from VIE as of March 31, 2013 and December 31, 2012) 23,097 93,982

Goodwill — 70,498

Other assets (includes $1.5 million from VIE as of March 31, 2013 and December 31, 2012) 16,487 14,782

Total assets $ 373,878 $ 537,023

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable (includes $0.7 million from VIE as of March 31, 2013 and December 31, 2012) $ 38,235 $ 37,786

Accrued liabilities (includes $0.5 million from VIE as of March 31, 2013 and December 31, 2012) 88,184 97,374Deferred revenue and current portion of deferred government grant (includes $0.7 million from VIE as of March 31,2013 and December 31, 2012) 9,028 12,626

Current portion of acquisition related liabilities 33,444 33,352

Current portion of long-term debt and short-term financings 47,810 851

Income tax liabilities (includes $0.9 million from VIE as of March 31, 2013 and December 31, 2012) 10,753 9,953

Total current liabilities 227,454 191,942

Long-term debt — 27,342

Deferred government grant - non-current — 1,297

Acquisition related liabilities - non-current 2,233 2,221Other non-current liabilities (includes $4.6 million and $4.8 million from VIE as of March 31, 2013 and December 31,2012) 14,651 21,703

Total liabilities 244,338 244,505

Commitments and contingencies (See Note 11)

Shareholders' equity:Share capital, nominal value £0.05, 100,000,000 ordinary shares authorized; 66,164,433 and 65,622,141 shares issuedand outstanding as of March 31, 2013 and December 31, 2012 5,501 5,462

Additional paid-in capital 399,492 399,127

Accumulated deficit (252,311) (95,953)

Accumulated other comprehensive loss (22,587) (16,242)

Total Velti shareholders' equity 130,095 292,394

Non-controlling interests (555) 124



Total equity 129,540 292,518

Total liabilities and shareholders' equity $ 373,878 $ 537,023

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

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Table of Contents

Velti plcCondensed Consolidated Statements of Comprehensive Loss

(in thousands, except per share amounts)(unaudited)

Three Months Ended March 31,

2013 2012

Revenue:

Software as a service (SaaS) revenue $ 32,390 $ 46,768

License and software revenue 2,159 1,505

Managed services revenue 6,458 3,520

Total revenue 41,007 51,793

Cost and expenses:

Third-party costs 23,365 16,862

Datacenter and direct project costs 5,552 7,892

General and administrative expenses 14,065 15,132

Sales and marketing expenses 12,591 12,753

Research and development expenses 4,497 4,684

Acquisition related and other charges — 2,197

Impairment of goodwill and intangible assets 133,129 —

Depreciation and amortization 8,620 7,269

Total cost and expenses 201,819 66,789

Loss from operations (160,812) (14,996)

Interest expense, net (438) (743)

Gain (loss) from foreign currency transactions (2,634) 1,375

Other income (expense) (6) 6,174

Loss before income taxes, equity method investments and non-controlling interest (163,890) (8,190)

Income tax (expense) benefit 6,853 (278)

Loss from equity method investments — (371)

Net loss (157,037) (8,839)

Net loss attributable to non-controlling interest (679) (21)

Net loss attributable to Velti $ (156,358) $ (8,818)

Comprehensive Loss:

Net loss $ (157,037) $ (8,839)

Foreign currency translation adjustments (6,343) 4,254

Comprehensive loss (163,380) (4,585)

Comprehensive loss attributable to non-controlling interests 679 18

Comprehensive loss attributable to Velti $ (162,701) $ (4,567)

Net loss per share attributable to Velti:

Basic $ (2.38) $ (0.14)

Diluted $ (2.38) $ (0.14)

Weighted average number of shares outstanding:



Basic 65,808 61,816

Diluted 65,808 61,816


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Table of Contents

Velti plcCondensed Consolidated Statements of Cash Flows

(in thousands)(unaudited)


2013 2012

Cash flows from operating activities:

Net loss $ (157,037) $ (8,839)

Non-cash items included in net loss:

Depreciation and amortization 8,620 7,269

Change in fair value of contingent consideration — 2,197

Non-cash interest expense 153 449

Share-based compensation 337 8,608

Deferred income taxes and other tax liabilities (7,936) —

Impairment of goodwill and intangible assets 133,129 —

Foreign currency transactions and other 2,634 (1,004)

Provision for doubtful accounts 2,257 330

Gain on previously held shares of CASEE — (6,028)

Change in operating assets and liabilities:

Trade and accrued contract receivables (11,266) (17,384)

Prepayments and other assets 1,445 (8,867)

Accounts payable and other accrued liabilities (4,192) 6,889

Deferred revenue and government grant income (638) 511

Net cash used in operating activities (32,494) (15,869)

Cash flow from investing activities:

Purchases of property and equipment (526) (5,728)

Investments in software development and purchased software (7,132) (9,276)

Cash paid for acquisitions and equity method investments, net of cash acquired — (6,944)

Net cash used in investing activities (7,658) (21,948)

Cash flow from financing activities:

Net proceeds from issuance of ordinary shares 67 705

Proceeds from borrowings and debt financing 19,976 2

Repayment of borrowings (4) (789)

Net cash generated from financing activities 20,039 (82)

Effect of changes in foreign exchange rates (131) 3,085

Net decrease in cash and cash equivalents (20,244) (34,814)

Cash and cash equivalents at beginning of period 36,571 75,765

Cash and cash equivalents at end of period $ 16,327 $ 40,951

Supplemental cash flow information:

Interest paid $ 240 $ 418

Income taxes paid $ 397 $ 707


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Velti plcNotes to Condensed Consolidated Financial Statements (unaudited)

1. Description of Business

Velti plc, (Velti or Company), is a leading global provider of mobile marketing and advertising technology and solutions that helpmarketers reach new customers, drive consideration with interactive mobile marketing strategies, accelerate consumer actions usingmeaningful data, and nurture relationships through data-driven marketing programs. We enable brands to communicate moremeaningfully, deliver greater customer value and inspire the behaviors and outcomes that matter for their business.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Balance Sheet as of December 31, 2012, which has been derived from audited financial statements, andthe unaudited interim condensed consolidated financial statements as of March 31, 2013, and for the three months ended March 31,2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.GAAP) for interim financial information along with Article 10 of Securities and Exchange Commission (SEC) Regulation S-X.Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (GAAP) forannual consolidated financial statements. Certain prior year balances have been reclassified to conform to the current year presentation.Such reclassifications did not affect total revenue, loss from operations or net loss. In management’s opinion, the financial statementsinclude all adjustments (consisting of normal, recurring and non-recurring adjustments) necessary for the fair presentation of thefinancial position and operating results of the Company. The results of operations for the three months ended March 31, 2013 are notnecessarily indicative of the results for the entire fiscal year ending December 31, 2013 or for any other period. These unauditedcondensed consolidated financial statements should be read in conjunction with Velti's Annual Report on Form 20-F for the fiscal yearended December 31, 2012 filed on April 11, 2013 with the SEC.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realizationof assets and the satisfaction of liabilities in the normal course of business.

As of March 31, 2013, the Company had cash and cash equivalents of $16.3 million and borrowings of $47.8 million under therevolving credit facility with HSBC. Net cash used in operating activities was $32.5 million for the three months ended March 31, 2013.During the year ended December 31, 2012, we generated $10.6 million in cash from operating activities and $17.5 million in cash fromfinancing activities, and we used $69.9 million of cash for investing activities.

The HSBC credit facility contains various loan covenants. We violated one of these covenants in the fourth quarter of 2012 andreceived a subsequent waiver from HSBC. In addition, we violated one of these covenants in the first quarter of 2013 and have notreceived a waiver from HSBC. We are in discussions with HSBC regarding the waiver and amendment of our 2013 covenants to levelsthat we believe we can satisfy for the remainder of 2013. At this point, we cannot predict when, or if, we will receive a waiver of thefirst quarter's violation or modification of the covenants. HSBC currently has the right to accelerate and cause our obligation under ourcredit facility to become immediately due and payable in full.

On April 24, 2013, we closed a private placement of our ordinary shares transaction under which we entered into a Securities PurchaseAgreement with certain institutional accredited investors. In connection with this transaction we issued an aggregate of 16,529,412ordinary shares at a price of $1.50 per share resulting in net proceeds to us of $23.1 million. A substantial portion of these proceedswere used to satisfy our obligations to former shareholders and key employees of MIG.

While we anticipate generating positive operating cash flow for the year, this positive cash flow is not expected until the third quarter of2013. As a result, we may need additional financing during the next three months to provide sufficient operational liquidity. Thisadditional financing may be facilitated through the issuance of equity or debt. If we need such additional financing, there can be noassurance that our efforts to find such financings will be successful, or on terms favorable to us.



Our ability to continue as a going concern is dependent upon (i) HSBC not exercising its right to accelerate our obligations under therevolving credit facility (ii) our ability to maintain sufficient liquidity to meet our obligations arising from normal business operationswhen they come due and (iii) our ability to generate profitable operations in the future.

Use of Estimates and Judgment

5



Velti, plcNotes to Condensed Consolidated Financial Statements (Continued)

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financialstatements. Management is also required to make certain judgments that affect the reported amounts of revenues and expenses duringthe period. We periodically evaluate our estimates, including revenue recognition, recognition of government grant income, incometaxes, the allowance for doubtful accounts, intangible assets, goodwill and long-lived assets, contingent payments related to our recentacquisitions and the assumptions used to determine share-based compensation expense. We base our estimates on historical experienceand various other assumptions that are believed to be reasonable on the specific circumstances. Actual results could differ materiallyfrom those estimates.

Accounts Receivable, Accrued Contract Receivables and Allowance for Doubtful Accounts

Accounts receivable consists primarily of amounts due to us from our normal business activities. Credit terms can vary betweencustomers and between regions, but we generally require payment under our commercial contracts within 30 to 90 days of invoice. Ouraccounts receivable are unsecured and not interest bearing. Fees that have not been invoiced as of the reporting date but for which allrevenue recognition criteria are met are reported as accrued contract receivables. We maintain allowances for doubtful accounts toreflect the expected non-collection of accounts receivable and accrued contract receivables based on past collection history and specificrisks identified in the portfolio. Additional allowances might be required if deteriorating economic conditions or other factors affect ourcustomers' ability to make timely payments. We write off accounts receivable when we consider them uncollectible. As of March 31,2013 and December 31, 2012, the allowance for doubtful accounts for trade receivables was $8.7 million and $7.0 million, respectively.The allowance for doubtful accounts for accrued contract receivables was $1.4 million and $1.0 million as of March 31, 2013 andDecember 31, 2012, respectively.

Goodwill

Goodwill is generated when the consideration paid for an acquisition exceeds the fair value of net assets acquired. Goodwill isrecognized as an asset and reviewed for impairment at least annually, or whenever events or circumstances indicate that the carryingamount of goodwill may not be recoverable. We have selected December 31 as the date to perform the annual impairment testing ofgoodwill.

We completed our annual impairment test for fiscal 2012 and determined that there was no impairment. Based on fourth-quarter 2012testing, our estimated fair value totaled approximately $324.8 million including a conservative control premium of approximately 10%based on a market value of approximately $295.3 million at December 31, 2012. The control premium is defined as the value that mayarise from an acquiring company's ability to take advantage of synergies and other benefits that flow from control over another entity.An acquiring entity is often willing to pay more for equity securities that give it a controlling interest than an investor would pay forequity securities representing less than a controlling interest. Based on these results, our fair value at December 31, 2012 was in excessof our book equity of approximately $292.4 million and no impairment was recorded.

During the three months ended March 31, 2013, our market capitalization declined significantly as a result of decreases in our shareprice as reported on NASDAQ Stock Market. In connection with the preparation of our financial statements for the first quarter of 2013,we concluded that the sustained decline in our share price and market capitalization were indicators of potential impairment requiring usto perform an impairment analysis. As part of this analysis we evaluated our operation which is considered to be one reporting segmentand effectively one reporting unit as the components of our business share similar economic characteristics with each other. Thegoodwill impairment analysis was performed in light of our being one reporting unit; as such, we evaluated the market value and theequity value or book value of the company. Based on this analysis, we determined that the fair value of our aggregate net assets wasbelow their carrying values, and a full impairment was recorded on our goodwill and a partial impairment was recorded against certainother intangible assets based on the purchase price allocation method prescribed by the accounting guidance. The decline in our fairvalue resulted directly from the overall decline in our market value during the first quarter of this year. See Note 7.

Impairment of Long-Lived Assets and Amortizable Intangible Assets

We evaluate long-lived assets such as property and equipment, and identifiable intangible assets that are subject to amortization forimpairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable includingan indication that our goodwill is impaired. We evaluated our long-lived assets and amortizable intangible assets for

6




impairment due to recent events, which included the decline of our market capitalization as a result of decreases in our share price asreported on NASDAQ Stock Market. These were deemed to be significant changes in circumstances that could indicate that theircarrying amounts of our long-lived and amortizable intangible assets may not be recoverable. An impairment loss is recognized whenestimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition is less than thecarrying amount. When undiscounted future cash flows are not expected to be sufficient to recover an asset's carrying amount, the assetis written down to its fair value. Where available, quoted market prices are used to determine fair value. When quoted market prices arenot available, various valuation techniques, including discounted value of estimated future cash flows are utilized.

During the three months ended March 31, 2013, the decline in our market capitalization served as an indicator of certain intangibleassets may not be recoverable. Based on an analysis of undiscounted future cash flows we determined that the carrying value of certainintangible assets was not recoverable and performed analysis to determine the fair value for each asset group. As a result of thisanalysis, impairment was recorded to various intangible assets, including assets recorded through business combinations, purchasedtechnology and internal software development costs. See Note 7.

Revenue Recognition

We derive our revenue from three sources:

▪ Software as a service (SaaS) revenue, which consists of subscription fees from customers who utilize our mobile marketing andadvertising platforms, generally referred to as “usage‑based” services, and fees from customers who utilize our software solutionsto manage and measure the progress of their transaction‑based mobile marketing and advertising campaigns, which we refer to as“performance‑based” services;

▪ License and software revenue, which consists of revenue from customers who license our mobile marketing and advertisingplatform and fees for customized software solutions delivered to and installed on the customers' server; and

▪ Managed services revenue, which consists of fees charged to customers for professional services related to the implementation,execution, and monitoring of customized mobile marketing and advertising solutions as well as other client driven projects.

We account for revenue for these services and licenses in accordance with Accounting Standards Codification (ASC) Topic 605 -Revenue Recognition and ASC Topic 985-605 - Certain Revenue Arrangements that Include Software Elements. We recognize revenuewhen all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service has been renderedor delivery has occurred; (iii) the fee to be paid by the customer is fixed or determinable; and (iv) collectibility of the fee is reasonablyassured.

SaaS revenue is generated from our “usage‑based” services, including subscription fees for use of individual software modules and ourautomated mobile marketing campaign creation templates, and fees charged for access to our technology platform. These fees arerecognized ratably over the contract term beginning on the commencement date of each contract as services are rendered.

SaaS revenue generated from our “performance‑based” services is generally based on specified metrics, typically relating to the numberof transactions performed during the campaign multiplied by the cost per transaction in accordance with the terms of the relatedcontracts. Transactions can include SMS messages sent by participants in customer campaigns or advertisement impressions placed onmobile applications, among other types of performance-based transactions. Certain of our performance‑based contracts includeperformance incentive provisions that link a portion of revenue that we may earn under the contract to the performance of the customer'scampaign relative to quantitative or other milestones, such as the growth in the consumer base, reduced consumer churn, or theeffectiveness of the end-user response. We consider the performance‑based fees to be contingent fees. We recognize this revenuemonthly based on actual performance, which is when the fees are earned and the amount of the fee can be reliably measured. Ourperformance‑based arrangements are typically invoiced monthly, which can occur in a period subsequent to revenue being recognized.

License and software revenue consists of license fees charged for our mobile marketing and advertising technology. We provide licenseson a perpetual or term basis. These types of arrangements do not, typically, include any ongoing support arrangements or rights toupgrades or enhancements and therefore revenue related to perpetual licensing arrangements is recognized upon the delivery of thelicense. Revenue from term based licenses is recognized over the related term of an arrangement. Fees charged

7




to customize our software solution are, generally, recognized using the completed contract or percentage-of-completion methodaccording to ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts, based on the ratio of costsincurred to the estimated total costs at completion.

Managed services revenue, when sold with software and support offerings, are accounted for separately when these services (i) havevalue to the customer on a standalone basis, (ii) are not essential to the functionality of the software and (iii) there is objective andreliable evidence of the selling price of each deliverable. When accounted for separately, revenue is recognized as the services areprovided for time and material contracts, and ratably over the term of the contract when accepted by the customer for fixed pricecontracts. For revenue arrangements with multiple deliverables, such as an arrangement that includes license, support and professionalservices, we allocate the total amount the customer will pay to the separate units of accounting based on their relative selling prices, asdetermined by the price of the undelivered items when sold separately.

The timing of revenue recognition in each case depends upon a number of factors, including the specific terms of each arrangement andthe nature of our deliverables and obligations, and the existence of evidence to support recognition of revenue as of the reporting date.For contracts with extended payment terms for which we have not established a successful pattern of collection history, we recognizerevenue when all other criteria are met and when the fees under the contract become due. Fees that have been invoiced are recorded intrade receivables and in revenue when all revenue recognition criteria have been met. When fees have been invoiced but not all revenuerecognition criteria have been met, the invoice is recorded in trade receivables and in deferred revenue. When all revenue recognitioncriteria are met, but fees have not been invoiced as of the reporting date, such fees are reported in accrued contract receivables and inrevenue.

Certain arrangements entered into by us are revenue sharing arrangements. As a result, we complete an analysis of the facts andcircumstances to determine whether revenue earned from these arrangements should be recorded gross with the company performing asa principle, or recorded net of third party costs with the company performing as an agent, as required by ASC 605-45, Principal AgentConsideration. When we are a principal in a transaction, we include all amounts paid on behalf of our customers in both revenue andcosts.

We present revenue net of value‑added tax, sales tax, excise tax and other similar assessments. Our revenue arrangements do not containgeneral rights of return.

Net Income (Loss) per Share Attributable to Velti

Basic net income (loss) per share attributable to Velti is computed by dividing net income (loss) attributable to Velti by the weighted-average number of common shares outstanding for the fiscal period. Diluted net income per share attributable to Velti is computedgiving effect to all potential weighted average dilutive common stock, including options and other equity awards. The dilutive effect ofoutstanding awards is reflected in diluted earnings per share by application of the treasury stock method. For the three months endedMarch 31, 2013 and 2012, all of the share awards outstanding are anti-dilutive. Had we incurred net profit during either of these threemonth periods, the shares, thousands, used to calculate the dilutive effect on such net income would be 66,103, and 64,051 for the threemonths ended March 31, 2013 and 2012, respectively.

Concentration of Credit Risk

One customer accounted for more than 12% of our revenues for the three months ended March 31, 2013 and no customer accounted formore than 10% of our revenues for the three months ended March 31, 2012. No customer accounted for more than 10% our totalreceivables as of March 31, 2013 or as of December 31, 2012.

Recently Adopted Accounting Pronouncements

In December 2011, an accounting standard update was issued requiring an entity to disclose information about offsetting and relatedarrangements for recognized financial and derivative instruments to enable a better understanding of the effect of those arrangements onits financial position. The amended guidance was effective for us on a retrospective basis commencing in the first quarter of 2013. Weadopted this guidance during the three months ended March 31, 2013. The adoption of this guidance did not have a material impact onour consolidated financial statements.

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In July 2012, an accounting standards update on testing indefinitely lived intangible assets for impairment was issued. The guidancesimplified how companies test indefinitely lived intangible assets for impairment by permitting an entity to first assess qualitativefactors to determine whether it is more likely than not that the fair value of the asset(s) is less than its carrying amount as a basis fordetermining whether it is necessary to perform the second step of the impairment test. We adopted this guidance during the three monthsended March 31, 2013. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In February 2013, amended guidance was issued requiring an entity to provide information about the amounts reclassified out ofaccumulated other comprehensive income by component, either on the face of the statement where net income is presented or in thenotes. The amended guidance was effective for us on a retrospective basis commencing in the first quarter of 2013. We adopted thisguidance during the three months ended March 31, 2013. The adoption of this guidance did not have a material impact on ourconsolidated financial statements.

3. Segment and Geographic Information

Our business is conducted in a single operating segment. Our chief operating decision maker (CODM), who is also our chief executiveofficer, reviews a single set of operating results and financial information of the entire organization, exclusive of Starcapital a divestedoperation discussed further below, in order to make decisions about allocating resources and assessing performance. Our CODMmanages our business based primarily on broad functional categories of sales, marketing, software and technology platformdevelopment and strategy.

On December 17, 2012, we sold certain non-strategic and legacy assets and liabilities, focused on geographies and certain customers inSoutheast and Eastern Europe, to Starcapital, a company incorporated in Cyprus and owned by certain former non-executivemanagement of Velti (Starcapital). Following completion of the sale of assets to Starcapital, we will continue to consolidate Starcapitalbecause it is considered a variable interest entity, or VIE, and we are considered the primary beneficiary (see Note 8). Notwithstandingthis characterization, Starcapital engages in a business activity separate from our business, and its operating and financial results arereviewed by Starcapital's chief executive officer and not by us. As a result, Starcapital is considered an operating segment, separate fromour operating segment.

Starcapital's and our operating segments have similar economic characteristics and are expected to exhibit similar long-term financialperformance. We are continuing to offer certain products and services that are substantially identical to products and services offered byStarcapital, a portion of our customer base overlaps with the Starcapital customer base, each company delivers its products and servicesto its customers in a similar manner, and each company is subject to similar regulatory requirements. As a result, our and Starcapital'soperating segments have been aggregated into one reportable segment.

We conduct our business in three geographical areas: Europe, Americas, and Asia/Africa. The following table provides revenue bygeographic area. Revenue from customers for whom we provide services in multiple locations is reported in the location of therespective customer's domicile; revenue from customers for whom we provide services in a single or very few related locations isreported in the location of the respective customer's place of operations.

Revenue Three Months Ended March 31,

2013 2012

(in thousands, except percentages)

Europe:

Western Europe $ 14,938 36.4% $ 18,310 35.4%

All other European countries 4,761 11.6% 12,967 25.0%

Total Europe 19,699 48.0% 31,277 60.4%

Americas 11,848 28.9% 13,321 25.7%

Asia/Africa 9,460 23.1% 7,195 13.9%

Total revenue $ 41,007 100.0% $ 51,793 100.0%



9




The vast majority of our long-lived assets are located in Europe, primarily the U.K. and Greece. Long-lived assets consist of propertyand equipment, net of related accumulated depreciation.

4. Balance Sheet Items

Details of our significant balance sheet line items consisted of the following:

Property and equipment March 31, December 31,

2013 2012

(in thousands)

Buildings and fixtures $ 9,258 $ 8,806

Computer and telecommunication hardware 9,754 9,457

Office equipment 4,131 2,554

Total cost 23,143 20,817

Less: accumulated depreciation (11,139) (7,744)Property and equipment, net $ 12,004 $ 13,073

Depreciation expense was $943,000 and $471,000 during the three months ended March 31, 2013 and 2012, respectively.

Accrued liabilities March 31, December 31,

2013 2012

(in thousands)

Professional fees $ 5,206 $ 5,764

Employee related accruals 19,013 23,963

Accrued third-party costs 56,540 58,264

Other 7,425 9,383

Total accrued liabilities $ 88,184 $ 97,374

5. Acquisitions

CASEE

On January 16, 2012, we completed the acquisition of the remaining equity interests in Ydon Holdings, Ltd., a holding company set upto own a mobile marketing and advertising exchange with operations based in Beijing (CASEE), by acquiring all of the outstandingshares of Ydon Holdings which we did not previously own. We acquired this interest for an initial cash payment of $8.4 million and upto $20.3 million in contingent consideration. The transaction was accounted for using the purchase method of accounting. Transactioncosts amounted to $0.9 million and were expensed as incurred.

Prior to the completion of the acquisition, we owned 33% of the outstanding shares and accounted for our investment in CASEE usingthe equity method. Upon completion of the acquisition, Ydon Holdings became our wholly-owned subsidiary. Immediately prior to theacquisition, we re-measured our interest in Ydon Holdings and recorded a gain of $6.0 million, which is included in other income(expense) in the consolidated statement of comprehensive loss. This fair value measurement was based on the per share considerationpaid in the transaction, including the fair value of the contingent consideration, applied to the number of shares held by us immediatelyprior to closing.

The contingent consideration to be paid is based on CASEE's achievement of revenue and gross profit performance during the twelvemonths ended March 31, 2012 and 2013, with a maximum of $20.3 million. It is payable in two tranches, as soon as reasonablypractical after the closing of the financial books for those periods, and may be paid in cash or up to 50% in our ordinary shares, at ourdiscretion. We recorded the acquisition-date estimated fair value of the contingent payment of $6.4 million as a component of the



consideration paid in exchange for the equity interests of Ydon Holdings. The acquisition-date fair value is measured at each quarter endbased on the probability-adjusted present value of the consideration expected to be

10




transferred. As of March 31, 2013 we have not paid any amount for contingent consideration as we are continuing to review whether allcriteria required by the purchase agreement have been met. See disclosure of Level 3 fair value measurements in Note 6 for changesduring the period.

We acquired CASEE to support the expansion of our business in China. The acquisition is expected to significantly enhance ourpresence in China and increase the overall value of our platform to current and future customers. These factors contributed toestablishing the purchase price, which resulted in the recognition of goodwill. The allocation of the total consideration of $22.8 millionwas as follows:

Fair Value

(in thousands)

Net assets acquired (liabilities assumed):

Cash and cash equivalents $ 1,456

Accounts receivable and other current assets 1,213

Property and equipment 97

Trade and other liabilities (2,170)

Net assets acquired 596

Intangible assets acquired - customer relationships 390

Intangible assets acquired - trademark & trade name 2,490

Intangible assets acquired - developed technology 3,020

Goodwill 17,741

Deferred tax liability (1,468)

Value of assets, net of deferred tax liabilities $ 22,769

Purchase price:

Cash $ 8,400

Contingent consideration (fair value) 6,360

Fair value of previously held interest 8,009

Total consideration $ 22,769

In conjunction with the impairment analysis discussed in Note 2, all of the goodwill and substantially all of the acquired intangibleassets were impaired in the three months ended March 31, 2013.

6. Fair Value Measurements

We consider fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or mostadvantageous market in which we would transact business in an orderly transaction on the measurement date. We consider assumptionsthat market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk ofnonperformance.

We use observable inputs whenever possible and minimize the use of unobservable inputs when measuring fair value. Observable inputsreflect readily obtainable data from independent sources, while unobservable inputs reflect the Company’s market assumptions. Theinputs are then classified into the following hierarchy: (1) Level 1 Inputs—quoted prices in active markets for identical assets andliabilities; (2) Level 2 Inputs—observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets orliabilities in active markets, quoted prices for similar or identical assets or liabilities in markets that are not active, or other inputs thatare observable or can be corroborated by observable market data; (3) Level 3 Inputs—unobservable inputs that are supported by little orno market activity such as certain pricing and discounted cash flow models.

Our financial assets and liabilities consist principally of cash and cash equivalents, accounts payable, accrued liabilities, current andnon-current notes payable. Cash and cash equivalents are stated at cost, which approximates fair value. As of March 31, 2013 and 2012,



we do not have readily marketable securities that are classified as cash equivalents. Accounts payable and accrued liabilities are carriedat cost that approximates fair value due to their expected short maturities. The carrying amount of

11




short and long-term debt approximates its fair value. As of March 31, 2013, we did not have any financial assets or liabilities for whichLevel 1 or Level 2 inputs were required to be disclosed.

Liabilities Measured at Fair Value on a Recurring Basis

The fair value of our contingent payments is associated with our acquisition of Casee and is determined based on an internal cash flowmodel using inputs based on estimates and assumptions developed by us and is remeasured on each reporting date. The rates used todiscount net cash flows to their present value were based on our weighted average cost of capital for similar transactions and anassessment of the relative risk inherent in the associated cash flows. The inputs were current as of the measurement date. These inputstend to be unobservable and, as such, are considered Level 3 in the fair value hierarchy. The contingent payment that may be due inconnection with our acquisition of CASEE is our only Level 3 fair value measurement as of March 31, 2013.

The following table provides a summary of changes in fair value of the contingent payments measured using significant unobservableinputs (Level 3):

Fair Value

(in thousands)

Balance as of December 31, 2012 $ 6,364Foreign exchange differences 35

Balance as of March 31, 2013 $ 6,399

Assets Measured at Fair on a Non-Recurring Basis

Certain intangible assets and goodwill are measured at fair value on a nonrecurring basis and are subject to fair value adjustments whenthere is evidence of impairment. Adjustments to the carrying value of these assets and the adjusted basis are detailed in Note 7.Unobservable inputs (Level 3) were included in the determination of the amount of the fair value adjustments and adjusted basis forthese assets.

7. Goodwill and Intangible Assets

Information regarding our intangible assets is a follows:

Intangible AssetsAverage

Useful lifeGross Carrying

ValueAccumulatedAmortization

Net CarryingAmount

(in years) (in thousands)

March 31, 2013

Internal software development costs 3.0 $ 5,010 $ 3,513 $ 1,497

Computer software 3.0 30,453 18,299 12,154

Licenses and intellectual property 4.3 4,286 3,270 1,016

Trademark, trade name and non-compete 1.4 1,046 518 528

Customer relationships 4.3 8,942 1,040 7,902

Developed technology 2.8 — — —

Intangible assets 3.3 $ 49,737 $ 26,640 $ 23,097

December 31, 2012




Trademark, trade name and non-compete 2.5 6,960 2,425 4,535


Developed technology 4.6 25,528 9,301 16,227




12




Amortization expense was $8.3 million, and $7.7 million during the three months ended March 31, 2013 and 2012, respectively.

During the three months ended March 31, 2013, our share price declined significantly causing a decline in our market capitalization.. Inconnection with the preparation of our financial statements for the first quarter of 2013, we concluded that the sustained decline in ourshare price and market capitalization were indicators of potential impairment requiring us to perform an impairment analysis. Based onthis analysis, we determined that the fair value of our aggregate net assets was below their carrying values, and a full impairment wasrecorded on our goodwill and a partial impairment against certain other intangible assets based on the purchase price allocation methodprescribed by the accounting guidance. The decline in our fair value resulted directly from the overall decline in our market valueduring the first quarter of this year.

As described in Note 2, we review goodwill for impairment annually in the fourth quarter, or whenever an indicator is identified whichsuggests that the carrying amount of goodwill may not be recoverable.

As a result, of this analysis we recorded an impairment charge of $133.1 million which represented a full impairment on our goodwilland a $67.5 million impairment charge related to certain other intangible assets, partially offset by $3.6 million of unrecognizedgovernment grants related to these assets.

The following table provides the net carrying value of intangible assets and goodwill immediately before and after the impairmentcharge, exclusive of Starcapital carrying values:

Net Carrying AmountPrior to

ImpairmentSubsequent toImpairment

ImpairmentAmount

(in thousands)

Trade name $ 2,540 $ 527 $ 2,013

Developed technology (1) 62,981 11,900 51,081

Customer relationships 17,094 7,900 9,194

Non-compete agreements 1,579 — 1,579

Total intangible assets 84,194 20,327 63,867

Goodwill 69,262 — 69,262

Total goodwill and intangible assets $ 153,456 $ 20,327 $ 133,129

(1) Developed technology includes internal software development costs, computer software, licenses and intellectual property,developed technology from acquisitions. It is reduced by the amount of unrecognized government grants related to these assets.

8. Variable Interest Entity

On December 17, 2012, we sold certain non-strategic and legacy assets and liabilities, focused on geographies and certain customers inSoutheast and Eastern Europe, to Starcapital, a Cyprus company owned by local, non-executive management of Velti. As a result of thedivestment, approximately 75 of our employees transferred to Starcapital or its subsidiaries. The divested assets are characterized bylong revenue collection cycles, are located in troubled economies, and have heavy capital expenditure requirements. We recorded a lossof $10.5 million on the sale of these assets. in the second half of 2012.

The consideration for the sale of assets was a $23.5 million non-interest bearing receivable (the Note), issued by Starcapital or itssubsidiaries payable in cash in three annual installments as follows: $3.0 million paid on December 31, 2012; $5.2 million to be paid onDecember 31, 2013, and $15.3 million to be paid on December 31, 2014. There is also potential upside in the event the financial resultsof the divested operations exceed 2014 expectations.



As part of the consideration for the divestment, we were also given 1) a call option to receive the shares in Starcapital sufficient to coverthe outstanding balance on the deferred purchase price consideration, exercisable only upon a payment default by Starcapital 2) a calloption to purchase up to 45% of the shares in Starcapital, exercisable in the event of a change of control of

13




Starcapital prior to the third anniversary of completion of the divestment, and 3) cross pledges and guarantees from the shareholders ofStarcapital and its subsidiaries for payment on the purchase price due to us. No value was attributed to the upside contingentconsideration, the call options, or the cross pledges and guarantees in determining the total consideration for accounting purposesbecause the likelihood of realizing the upside consideration was not viewed as likely.

At the time of completion of the divestment, Starcapital was thinly capitalized, with the transaction fully financed by the Note. As aresult, we determined that Starcapital is a variable interest entity (VIE) and that we hold a variable interest in Starcapital.

We further determined that while we have no ability to control the day-to-day operations of Starcapital, nor an obligation to absorboperating losses of Starcapital, we should be treated as the primary beneficiary of this VIE and are therefore required to consolidate itsoperations. This is based on a determination that Starcapital is thinly capitalized and has no equity at risk, leaving us as the primarybeneficiary of the VIE as the aggregate value of the remaining balance due on the Note and other receivables due to us from Starcapitalis $21.6 million. An infusion of sufficient equity by the owners of Starcapital, or a full repayment of the Note by Starcapital in somefuture period could result in a determination that we are no longer the primary beneficiary of Starcapital and therefore would not berequired to consolidate its operations.

As of March 31, 2013, the net amount of capital at risk is equal to Velti's receivable from Starcapital, which is currently at $21.6 million.

The assets of Starcapital that have been consolidated in our balance sheet can only be used to settle the obligations of the VIE, and wehave no control over the disposition of these assets. None of these assets are anticipated to become obligations of Velti. We are notobligated and do not intend to provide financial support to Starcapital.

The following are the assets and liabilities of Starcapital that have been consolidated in our balance sheet. A statement of operations isnot provided because the results are not significant.

14




As of March 31, 2013 As of December 31, 2012

Consolidated Starcapital Velti Consolidated Starcapital Velti

ASSETS

Current assets:

Cash and cash equivalents $ 16,327 $ 2,070 $ 14,257 $ 36,571 $ 1,146 $ 35,425

Trade receivables, net 146,827 12,024 134,803 150,074 12,399 137,675

Accrued contract receivables, net 136,096 8,514 127,582 132,957 8,780 124,177

Consideration receivable from StarCapital - current — — 4,166 — — 4,378

Prepayments 10,320 — 10,320 12,733 — 12,733

Other receivables and current assets 12,720 1,357 11,363 12,353 1,327 11,026

Total current assets 322,290 23,965 302,491 344,688 23,652 325,414

Property and equipment, net 12,004 204 11,800 13,073 210 12,863

Intangible assets, net 23,097 2,770 20,327 93,982 2,857 91,125

Consideration receivable from Starcapital - non current — — 17,425 — — 16,187

Goodwill — — — 70,498 — 70,498

Other assets 16,487 1,465 15,022 14,782 1,511 13,271

Total assets $ 373,878 $ 28,404 $ 367,065 $ 537,023 $ 28,230 $ 529,358

LIABILITIES AND SHAREHOLDERS' EQUITY


Accounts payable $ 38,235 $ 683 $ 37,552 $ 37,786 $ 704 $ 37,082

Accrued liabilities 88,184 484 87,700 97,374 452 96,922

Consideration payable to Velti - current — 4,166 — — 4,378 —Deferred revenue and current portion of deferredgovernment grant 9,028 705 8,323 12,626 727 11,899

Current portion of acquisition related liabilities 33,444 — 33,444 33,352 — 33,352Current portion of long-term debt and short-termfinancings 47,810 — 47,810 851 — 851

Income tax liabilities 10,753 856 9,897 9,953 883 9,070

Total current liabilities 227,454 6,894 224,726 191,942 7,144 189,176

Long-term debt — — — 27,342 — 27,342

Deferred government grant - non-current — — — 1,297 — 1,297

Acquisition related liabilities - non-current 2,233 — 2,233 2,221 — 2,221

Consideration payable to Velti - non-current — 17,425 — — 16,187 —

Other non-current liabilities 14,651 4,628 10,023 21,703 4,772 16,931

Total liabilities 244,338 28,947 236,982 244,505 28,103 236,967

Total Velti shareholders' equity 130,095 12 130,083 292,394 3 292,391

Non-controlling interests and variable interest entities (555) (555) — 124 124 —

Total equity 129,540 (543) 130,083 292,518 127 292,391

Total liabilities and shareholders' equity $ 373,878 $ 28,404 $ 367,065 $ 537,023 $ 28,230 $ 529,358

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9. Short-term financings and long-term debt

Details of our short-term financings and long-term debt by facility as of March 31, 2013 based on contractual maturity (are as follows inthousands):

LenderDescription /

TermTotal

Facility

Outstandingas of March 31,

2013

Outstandingas of December

31, 2012 Interest Rate Security

Short-term financings:

HSBC Bank Working capital $ 1,000 $ 966 839 ICICI Base + 4.0%

the Indian facility issupported by a $1.125letter of credit issuedunder the main creditfacility that we have withHSBC

Other 2 2 12

Long-term debt:

HSBC RevolvingCredit 49,000 46,822 27,328 LIBOR +2.25% to

2.75%Primarily all assets of theCompany

Other 20 20 14

Total debt: 50,022 $ 47,810 $ 28,193

Future principal repayments under all debt arrangements as of March 31, 2013 are as follows:

Amount

(in thousands)

2013 $ 9682014 —2015 46,842

Total $ 47,810

Secured Borrowings and Collateralized Receivables

As of March 31, 2013 substantially all our assets including our accounts receivable were pledged as security against borrowings fromHSBC. The weighted average effective interest rate for our outstanding debt was 4.1% as of March 31, 2013.

Revolving Credit Facility

In August 2012, we entered into a $50.0 million multi-currency senior revolving credit facility (the Facility) with HSBC, which expireson August 10, 2015. The face amount may be increased by an additional $50.0 million upon meeting certain requirements and obtainingadditional commitments from the existing or new lenders. At the current time, we do not believe that an increase of the credit facility islikely in the near term. Borrowings under the Facility will bear interest at the LIBOR rate plus a spread ranging from 2.25% to 2.75% oran adjusted base rate plus a spread ranging from 1.25% to 1.75%. The spread is dependent upon our leverage ratio, as calculatedaccording to the terms of the loan agreement. We are required to pay 0.50% per annum on the unused portion of the facility if utilizationof the facility is greater than 50%, and 0.75% per annum if utilization is less than 50%.

The Facility contains a number of customary negative and affirmative covenants, including covenants that limit our ability to place lienson our assets, incur additional debt, make investments, enter into acquisitions, merge or consolidate, dispose of assets, pay dividends ormake other restricted payments, all subject to certain exceptions. There are also several financial covenants that we are required tomaintain, which includes a minimum fixed charge coverage ratio of 1.50 to 1.00, a

16






maximum total leverage ratio of 2.50 to 1.00, a minimum liquidity ratio of 1.25 to 1.00, a minimum asset coverage ratio of 1.50 to 1.00,and a performance to plan test with respect to Consolidated Revenue and Consolidated Adjusted EBITDA. Our ability to use theFacility may be suspended and repayment of any outstanding balances may be required if we are unable to comply with theserequirement in the future, or are otherwise unable to obtain waivers of any breach of these covenants or amendments to any of thesecovenants to enable us to meet them.

The Bank approved the amendment of the Facility allowing us to complete the divestment of assets to Starcapital described in Note 8above, as well as to allow us to increase the permitted software capital expenditures during 2012. As of March 31, 2013, we did notmeet our covenant with respect to the total leverage ratio and to date have not received a waiver from HSBC of this violation. We are indiscussions with HSBC regarding the waiver and amendment of our 2013 covenants to levels that we believe we can satisfy for theremainder of 2013. At this point, we cannot predict when, or if, we will receive a waiver of the first quarter's violation or modificationof the covenants for the balance of the year. HSBC currently has the right to accelerate our obligations under the credit facility andcause them to become immediately due and payable. As a result of our inability to meet the covenants at March 31, 2013, we haveincluded the amount due to HSBC as current portion of long-term debt and short-term financing in the Condensed Consolidated BalanceSheets.

In connection with the execution of the Facility, we repaid the entire outstanding loan of €5.9 million (approximately $7.2 million) toBlack Sea Trade and Development Bank during the third quarter of 2012. The total payment of $7.3 million consisted of the outstandingprincipal balance, accrued interest and fees. We borrowed $7.3 million from the Facility to repay this loan.

10. Income Taxes

For the three months ended March 31, 2013 and 2012, we recorded an income tax provision (benefit) of approximately $(6.9) millionand $0.3 million for effective tax rates of (4.2)% and 3.4%, respectively.

The change in tax provision (benefit) and the effective tax rate in the three months ended March 31, 2013 compared to the same periodlast year was primarily due to a change in deferred taxes related to the write down of certain intangibles and a change in the Greeceincome tax rate. Specifically, we realized a tax benefit of $4.2 million from the decrease in deferred tax liabilities related to acquiredintangible assets that were impaired during the quarter. We also realized a tax benefit of $2.5 million related to an impairment ofsoftware development costs. The increase in the tax rate in Greece from 20% to 26% resulted in an income tax benefit for the quarter of$1.8 million.

As of March 31, 2013, the total unrecognized tax benefits of $17.1 million included approximately $6.9 million of unrecognized taxbenefits that have been netted against the related deferred tax assets, and $10.2 million of unrecognized tax benefits that are reflected inother long term liabilities.

Our continuing practice is to recognize interest and penalties related to income tax matters as a component of income tax expense. Wehave approximately $2.3 million and $2.1 million of accrued interest and penalties as of March 31, 2013 and December 31, 2012,respectively.

We file income tax returns in various tax jurisdictions around the world. While we are not currently under audit in the major taxingjurisdictions in which we are subject to tax, the tax years 2008 to 2012 generally remain open to examination. However, we do notbelieve that the total amount of unrecognized tax benefits will significantly change within the next 12 months.

11. Commitments and Contingencies

Operating Lease Commitments

The future aggregate minimum lease payments under non-cancellable operating leases as of March 31, 2013 are as follows:

Amount

(in thousands)

Remainder of 2013 $ 4,273



2014 $ 6,8132015 $ 5,6052016 $ 5,5252017 $ 5,214Thereafter $ 6,996

Rent expense was $1.5 million and $1.4 million during the three months ended March 31, 2013 and 2012, respectively.

Guarantees and Indemnifications

ASC 460, Guarantees, requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of theamount of obligations it assumes under that guarantee.

We periodically establish irrevocable bank guarantees in favor of a customer in connection with a campaign guaranteeing minimum netrevenue or covering costs of a campaign. As of March 31, 2013 and December 31, 2012, the aggregate amount of our outstandingcommitments under such letters of guarantee was $5.9 million and $6.8 million, respectively. We accrue for known obligations when aloss is probable and can be reasonably estimated. There were no accruals for expenses related to our performance guarantees for anyperiod presented.

As permitted under the laws of the Bailiwick of Jersey, and in accordance with our bylaws, we indemnify our officers and directors forcertain events or occurrences, subject to certain limits, while the officer or director is or was serving at our request in such capacity. Themaximum amount of potential future indemnification is unlimited; however, we maintain director and officer liability insurance thatlimits our exposure and may enable us to recover a portion of any future amounts paid. We believe the fair value for theseindemnification obligations is immaterial. Accordingly, we have not recognized any liabilities relating to these obligations as ofMarch 31, 2013 and December 31, 2012.

Pension and Other Post-Retirement Obligations

We are required under Greek law to make a payment to employees on unfair dismissal or on attaining normal retirement age. Theamount of the payment depends on the employees' monthly earnings (capped at €6,000 per month, or approximately $8,000) and amultiple which depends on length of service. As of March 31, 2013 and December 31, 2012, we have included $482,000 and $494,000,respectively in other non-current liabilities for this obligation. As of March 31, 2013, our retirement benefits obligations were unfunded.

Our U.K. entities participate in a defined contribution scheme where the total pension obligation is charged to the income statement as itis incurred with no future obligation or prepaid amount. The value is based on a percentage of participating employee salaries and Velti'scontribution totaled $15,000 during the three months ended March 31, 2013.

Legal Proceedings

From time to time, we and our subsidiaries are subject to legal, administrative and regulatory proceedings, claims, demands andinvestigations in the ordinary course of business, including claims with respect to intellectual property, contracts, employment and othermatters. In addition to the below mentioned legal proceedings, we do not believe that the ultimate resolution of other legal proceedingsinvolving our company, if any, will have a material adverse effect on our consolidated financial position, results of operations or cashflows.

Indemnification Claims

17




We recently received letters on behalf of several of our customers notifying us that the customers had received letters from a third partywhich alleged that certain of our customer's applications infringed the patent rights of the third party. In turn, our customers have allegedthat we are obligated to indemnify them relating to these matters as the claims allegedly relate to services that we provide to thecustomers. We are currently investigating the related issues.

Patent Litigation

On March 9, 2012, Augme Technologies, Inc. filed a complaint against Velti USA, Inc. in the United States District Court for theDistrict of Delaware (case no. 1:12cv294), alleging infringement of three patents held by Augme. On May 4, 2012, Velti responded tothe complaint by filing a motion to dismiss and motion to strike certain claims in the complaint. On May 18, 2012, in response to themotion, Augme filed an opposition and also filed a First Amended Complaint. The Company responded to the First AmendedComplaint (and asserted counterclaims of non-infringement and invalidity) on June 4, 2012. On March 22, 2013, Velti Limited and Veltientered into a settlement with Augme, pursuant to which Augme and Velti settled the two pending lawsuits as between each other.Pursuant to the settlement, (i) Augme has granted Velti a paid-up license in all patents owned by Augme with a priority date on orbefore March 22, 2013 for the life of those patents, (ii) Velti has granted Augme a paid-up license in all patents owned by Velti with apriority date on or before March 22, 2013, (iii) Augme and Velti have covenanted not to sue each other on such patents, (iv) Augme andVelti have dismissed the lawsuits as to each other with prejudice with each side to bear its own costs, (v) Augme and Velti have releasedeach other as to the subject matter of the lawsuits with neither party making any admission of liability, and (vi) Velti will pay Augme alump sum payment of $200,000 no later than 10 business days following the dismissal of the lawsuits. On March 29, 2013, the Courtgranted a joint motion to dismiss the case with prejudice, pursuant to the settlement agreement. The matter is now officially closed.

In re A2P SMS Antitrust Litigation

On June 14, 2012, Air2Web, Inc., was named as a defendant in a consolidated class action complaint filed in the United States DistrictCourt for the Southern District of New York on behalf of a purported class of lessees of common short codes used in application-to-person SMS messaging. In re A2P SMS Antitrust Litigation, Case No. 12-cv-2656 (AJN). The plaintiffs allege that the defendants,which include all major U.S. wireless carriers, CTIA - The Wireless Association®, WMC Global, Inc., and certain aggregators(including Air2Web) violated federal antitrust law by conspiring to reduce competition and fix prices in, and conspiring to monopolize,the market for application-to-person SMS transmission in the United States. The plaintiffs seek injunctive relief and treble damages, inan undisclosed amount, jointly and severally from all defendants for injuries allegedly sustained from April 5, 2008, until the present.On August 14, 2012, several groups of defendants, including Air2Web, filed motions to dismiss the complaint in its entirety, and anumber of defendants also filed motions to compel arbitration of this dispute and to stay these proceedings pending arbitration. Adecision on those motions is pending. Plaintiffs have not yet responded to those motions. Because this action is in its very early stages,and due to the inherent uncertainties surrounding the litigation process, we are unable to reasonably assess the likelihood of anyparticular outcome at this time.

12. Share-Based Compensation

Equity Incentive Plans

We grant deferred share awards to our employees as part of our compensation package. We also grant share options to some of ouremployees and consultants in addition to deferred share awards. Our deferred share awards typically vest over four years at the rate of25% per year on the anniversary of the date of grant; however, in the past our deferred share awards granted to our non-executivedirectors and a portion of the deferred share awards granted to our executive officers, vested over one year in equal monthly tranches. InMarch 2012, we issued fully vested deferred share awards to employees as discretionary bonuses in lieu of payment of cash bonuses,and in May 2013, we again issued fully vested deferred share awards to employees as discretionary bonuses in lieu of payment of cashbonuses. We also periodically award fully vested shares as a sign on bonus to newly hired employees. Shares are only issued to aparticipant when the deferred share award vests in accordance with any vesting schedule specified in the award agreement followingreceipt of payment of the aggregate nominal (par) value of £0.05 per ordinary share. The deferred share award recipient is responsiblefor all applicable taxes payable on the award.

All of our share options have an exercise price equal to the market price of our ordinary shares on the date of grant. Our optionstypically vest over a four-year period at the rate of 25% per year on the anniversary of the date of grant, although from time to



18




time we issue share options with shorter vesting terms. Beginning in 2013 we ceased regularly awarding share options to employees andinstead now typically only grant deferred share awards.

Deferred Share Awards

Details of our deferred share awards are as follows:

Number ofShares

Weighted AverageExercise Price Per

Share

Weighted AverageGrant Date

Fair Value Per Share

Weighted AverageRemaining Contractual

Life (in years)

AggregateIntrinsic

Value(in thousands)

Outstanding as of December 31, 2012 3,818,946 $ 0.08 1.7 $ 16,880

Share awards granted 339,073 $ 0.08 $3.63 $ 1,230

Forfeited (304,755) $ 0.08Vested deferred share awards (527,064) $ 0.08 $ 1,548

Outstanding as of March 31, 2013 3,326,200 $ 0.08 1.8 $ 6,386

For deferred share awards, the fair value on the date of grant approximates market value as the exercise price equals the nominal (par)value of £0.05 (remeasured into U.S. dollars on grant date) per ordinary share. The aggregate estimated grant date fair value thereforeapproximates the intrinsic value disclosed in the table above.

Share Options

Details of share option activity are as follows:

Number ofoptions

Weighted AverageExercise Price Per

Share

Weighted AverageGrant Date

Fair Value Per Share

Weighted AverageRemaining Contractual

Life (in years)

AggregateIntrinsic

Value(in thousands)

Outstanding as of December 31, 2012 4,893,791 $ 8.02 7.8 $ 265

Share options granted — $ — —

Forfeited share options (234,108) $ 9.83

Exercised options (13,500) $ 2.73 $ 34

Outstanding as of March 31, 2013 4,646,183 $ 7.95 6.2 $ —

During the three months ended March 31, 2013 no share options were granted to employees or non-employees of Velti. The fair value ofour share options granted in the three months ended March 31, 2012 was estimated at the date of grant using the Black-Scholes modelwith the following assumptions: Expected volatility was 60%, expected life of 6.30 years, risk free rate of 0.67% to 0.94% with noexpected dividends.

The following table summarizes information regarding our outstanding and exercisable options as of March 31, 2013:

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Outstanding Exercisable

Range of Exercise Prices

Number ofOptionShares

Weighted-Average ExercisePrice per Share

RemainingWeighted-Average

ContractualTerm (Years)


Weighted-AverageExercisePrice Per

ShareAggregate

Intrinsic Value

$2.57 - $2.73 127,869 $ 2.67 1.2 84,382 $ 2.70

$4.95 -$4.95 1,987,745 $ 4.95 6.2 1,114,545 $ 4.95

$6.26 - $9.45 883,786 $ 8.24 6.2 345,831 $ 8.64

$9.46 - $11.95 793,465 $ 10.72 6.7 217,914 $ 10.65

$12.10 - $15.46 780,240 $ 12.47 6.3 394,726 $ 12.30

$15.58 - $18.47 73,078 $ 17.26 6.2 22,010 $ 17.194,646,183 $ 7.95 6.2 2,179,408 $ 7.47 $ —

During three months ended March 31, 2013 and 2012 we recognized total share-based payment expense under equity incentive plans asfollows:


2013 2012

(in thousands)

Datacenter and direct project costs $ 48 $ 972

General and administrative expenses (36) 3,660

Sales and marketing expenses 174 2,392

Research and development expenses 151 1,584$ 337 $ 8,608

Share-based compensation declined significantly in the three months ended March 31, 2013 as compared to the same period in 2012 dueto an upward revision in the number of awards that are expected to be forfeited prior to vesting and as a substantial portion of theexpense recognized in the three months ended March 31, 2012 related to awards with short vesting periods. As of March 31, 2013, therewas $11.7 million of total unrecognized share-based compensation expense related to deferred share awards awarded under our shareincentive plans expected to be recognized over a weighted-average recognition period of 1.8 years. As of March 31, 2013, there was$4.1 million of total unrecognized share-based compensation expense related to share options expected to be recognized over aweighted-average recognition period of 1.2 years.

13. Related Party Transactions

Starcapital is an equity investor in several entities, each of which we divested and transferred to Starcapital or its subsidiaries in atransaction completed in December 2012. Previously, we have had sale and purchase transactions with these entities. The following is asummary of the transactions and balances:

Three Months Ended March 31,2013 2012

(in thousands)Sales and services rendered $ 1,264 $ 989Purchases $ 29 $ 156

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March 31, December 31,2013 2012

(in thousands)Trade receivables $ 5,536 $ 4,622Accrued and other receivables $ 3,954 $ 4,043Trade payables $ 150 $ 166

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion in our MD&A contains forward-looking statements that reflect our current expectations and views of future events.These forward-looking statements can be identified by words or phrases such as “shall,” “may,” “will,” “expect,” “should,” “anticipate,”“aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to” or other similar expressions. These forward-looking statements include,among other things, statements relating to our goals and strategies, our competitive strengths, our expectations and targets for our resultsof operations, our business prospects and our expansion strategy. We have based these forward-looking statements largely on currentexpectations and projections about future events and financial trends that we believe may affect our financial condition, results ofoperations, business strategy and financial needs. Although we believe that we have a reasonable basis for each forward-lookingstatement contained in this quarterly report, we caution shareholders that these statements are based on our projections of the future thatare subject to known and unknown risks and uncertainties and other factors that may cause our actual results, level of activity orperformance expressed or implied by these forward-looking statements, to differ.

The forward‑looking statements included in this current report are subject to risks, uncertainties and assumptions about our company.Our actual results of operations may differ materially from the forward‑looking statements as a result of risk factors described under“Risk Factors” in our previously filed Form 20-F for the year ended December 31, 2012, including, among other things, our ability to:

• continue as a going concern;• remediate our material weakness;• comply with financial and other covenants under our credit facility with HSBC and obtain a waiver of our past violations, such

that HSBC refrains from accelerating the entire obligation under the facility;• manage acquisitions or investments, which may be unsuccessful and may divert our management's attention and consume

significant resources, and achieve the anticipated benefits of our acquisitions;• manage our DSOs and cash from operations;• raise additional capital if needed to grow our business, on terms acceptable to us or at all;• properly safeguard confidential or personal information that we may use, transmit or store, which could cause us

significant reputational harm and monetary damages if handled improperly;• manage the global nature of our business, which subjects us to additional costs and risks that can adversely affect our operating

results;• defend ourselves against claims of infringement of the patent or other intellectual property rights of third parties and against

consumer privacy class action claims;• keep pace with technological developments and compete against potential new entrants, who may be much larger and better

funded;• continue our global business while expanding into new geographic regions;• benefit from expected growth in general in the market for mobile marketing and advertising services;• retain existing customers and attract new ones;• protect our intellectual property rights; and• comply with new and modified regulations in the jurisdictions in which we conduct business.

These risks are not exhaustive. Moreover, we operate in an evolving environment and new risk factors emerge from time to time. It isnot possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent towhich any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statement.

An investor in our ordinary shares should not rely upon forward‑looking statements as predictions of future events. Unless required bylaw, we undertake no obligation to update or revise any forward‑looking statements to reflect new information or future events orotherwise.

Overview

We are the leading global provider of mobile marketing and advertising technology and solutions that enables brands, advertisingagencies, mobile operators, and media to implement highly targeted, interactive, and measurable campaigns by communicating with andengaging consumers via their mobile devices. Our platform, called Velti mGage, allows our customers to use mobile and traditional



media (such as television, print, radio and outdoor advertising) to target, reach, and engage consumers through mobile internetapplications; convert consumers into their customers; and continue to actively manage the relationship through the mobile channel.

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Velti delivers mobile technology to transform communication, build connections and drive value for brands and consumers alike. Thealways-on mobile channel, combined with the power of today's data science, now makes it possible to unify advertising and marketingand deliver individualized brand relationships spanning the full customer lifecycle.

Our mobile marketing and advertising technology and solutions help marketers reach new customers, drive consideration withinteractive mobile marketing strategies, accelerate consumer actions using meaningful data, and nurture relationships through data-driven marketing programs. Powered by data, we enable brands to communicate more meaningfully, deliver greater customer value andinspire the behaviors and outcomes that matter to their business.

Our Velti mGage® platform allows marketers to execute highly personalized, enterprise mobile marketing programs across themarketing funnel including ad delivery and measurement, cross-channel messaging promotions, mobile site development, and cross-platform campaign data visualization. For businesses that want professional assistance in achieving mobile marketing and advertisingobjectives, our services organization offers expert assistance in developing strategies, programs, and hosting services. From accountmanagement to creative production to ad ops and technical resources, we support enterprise customers through a self-service ormanaged services model that augments customers' existing staff to support mobile initiatives.

Velti provides expertise to help brands connect with consumers around the world, anywhere, any time, using mobile technology todeliver better business results for brands and better experiences for consumers. Velti mGage is a software platform that enables brandsto find, engage and convert customers into brand advocates. Our data and analytics engine enables marketers to optimize their digitalspend with comprehensive insights that intelligently attributes media buys to actual conversions. We generate revenue from licensingour platform and by providing managed services to brands looking to mobilize their business.

With the huge number of mobile device types, platforms and screen resolutions, brands and agencies find it difficult to create andimplement a cohesive, cross-channel mobile marketing strategy. Velti simplifies the most complex aspects of mobile marketing andadvertising by providing a powerful, easy-to-use toolset for implementing cross-channel, personalized marketing campaigns. Whether itis ad delivery and measurement, cross-channel messaging campaigns, or simple mobile site development, our robust, secure andscalable platform enables brands and agencies to execute multi-channel campaigns across many device types and address every aspectof the mobile value chain.

Our business, as is typical of companies in our industry, is somewhat seasonal. This is primarily due to traditional marketing andadvertising spending being heaviest during the holiday season while brands and advertising agencies often close out annual budgetstowards the end of a given year. Seasonal trends have historically contributed to, and we anticipate will continue to contribute tofluctuations in our quarterly results, including fluctuations in sequential revenue growth rates.

On a trailing twelve month basis, total revenues have grown from $211.4 million for the twelve months ended March 31, 2012, to$259.6 million for the twelve months ended March 31, 2013. Our revenue for the three months ended March 31, 2013 was $41.0million, representing a (20.8)% decrease from the three months ended March 31, 2012.

SaaS revenue decreased both in absolute dollars and as a percentage of total revenue from the three months ended March 31, 2012. Forthe three months ended March 31, 2013, our SaaS revenue represented $32.4 million or 79.0% of our total revenue of $41.0 million.This is compared to $46.8 million or 90.3% of our total revenue of $51.8 million for the three months ended March 31, 2012.

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Components of Results of Operations

Revenue

We derive our revenue from customers who use our platform to create, execute and measure mobile marketing and advertisingcampaigns, from licensing rights to our mobile marketing and advertising platform, from services associated with the customization ofthese platforms and from fees charged to customers for implementing and monitoring their campaigns. Our platform is based upon amodular, distributed architecture, allowing our customers to use the whole or any part of the functionality of the platform, dependingupon the needs of each campaign. Our fees vary by contract, depending upon a number of factors, including the scope of the servicesthat we provide to the campaign, and the range of functionality deployed by the customer on our technology platform. For ourengagements with brands, our contracts may be directly with the brand, or with an advertising agency who manages the mobilemarketing or advertising campaign on a brand's behalf.

We generate revenue as follows:

▪ Software as a Service (SaaS) Revenue: Fees from customers who subscribe to our hosted mobile marketing and advertisingplatform, generally referred to as "usage-based" services, and fees from customers who utilize our software solutions to manage andmeasure the progress of their transaction-based mobile marketing and advertising campaigns, which we refer to as "performance-based" services;

▪ License and Software Revenue: Fees from customers who license our mobile marketing and advertising platform provided on aperpetual or term based license and fees for customized software solutions delivered to and installed on the customers' server,including fees to customize the platform for use with different media used by the customer in a campaign.

▪ Managed Services Revenue: which consists of fees charged to customers for professional services related to the implementation,execution, and monitoring of customized mobile marketing and advertising solutions as well as other client driven projects.


The fees associated with our managed services revenue are typically paid over a fixed period corresponding with the duration of thecampaign or the consumer acquisition and retention program. An initial, one-time setup fee may also be charged for the development ofmobile marketing and advertising campaigns. We may also charge fees to procure third-party mobile and integrated advertising services,such as content, media booking and direct booking across multiple mobile advertising networks on behalf of our customers.

Certain arrangements entered into by the company are revenue sharing arrangements. As a result, the company completes an analysis ofthe facts and circumstances to determine whether revenue earned from these arrangements should be recorded gross with the companyperforming as a principal, or recorded net of third party costs with the company performing as an agent, as required by ASC 605-45Principal Agent Consideration. When we are a principal in a transaction, we include all amounts paid on behalf of our customers in bothrevenue and costs.

Due to the nature of the services that we provide, our customer contracts may include service level requirements that may require us topay financial penalties if we fail to meet the required service levels. We recognize any such penalties, when incurred, as a reduction torevenue.

Costs and Expenses

We classify our costs and expenses into eight categories: third‑party, datacenter and direct project, general and administrative, sales andmarketing, research and development, acquisition related charges, impairment goodwill and intangible assets and depreciation andamortization. We charge share‑based compensation expense resulting from the amortization of the fair value of deferred share and shareoption grants to each employee's principal functional area. We allocate certain facility‑related and other common expenses such as rent,office and information technology to functional areas based on headcount.



Third Party Costs. Third party costs are paid to third parties to secure advertising space or content to obtain media inventory for theplacement of advertising and media messaging services and for creative development and other services in connection with

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the creation and execution of marketing and advertising campaigns. Third party costs also include the costs of certain content, media, oradvertising that we acquire for a campaign, and costs associated with incentives and promotional costs provided to consumers in orderto participate in the campaigns as well as certain computer hardware or software that we might acquire for a customer. Third party costsrelate primarily to SaaS revenue.

Datacenter and Direct Project Costs. Datacenter and direct project costs consist primarily of personnel and outsourcing costs foroperating third party datacenters that host our Velti mGage platform on behalf of our customers. Additional expenses include costsdirectly attributable to a specific campaign as well as allocated facility rents, power, bandwidth capacity, IT maintenance and support. Inaddition, direct project costs include personnel costs to customize our software solutions for specific customer contracts. These costsmay relate to SaaS, managed services and/or license and software revenue. To date, the vast majority of datacenter and direct projectcosts are related to SaaS revenue and the amount attributable to managed services and license and software revenue was immaterial. Weexpect these cost to be flat or down as a result of our recent restructuring initiatives.

General and Administrative Expenses. Our general and administrative expenses primarily consist of personnel costs for our executive,finance and accounting, legal, human resource and information technology personnel. Additional general and administrative expensesinclude consulting and professional fees and other corporate and travel expenses. We expect these cost to be flat or down as a result ofour recent restructuring initiatives along with our continued efforts to realign our costs.

Sales and Marketing Expenses. Our sales and marketing expenses primarily consist of salaries and related costs for personnel engagedin sales and sales support functions, customer services and support, as well as marketing and promotional expenditures. Marketing andpromotional expenditures include the direct costs attributable to our sales and marketing activities, such as conference and seminarhosting and attendance, travel, entertainment and advertising expenses. In order to continue to grow our business, we expect to continueto commit resources to our sales and marketing efforts, and accordingly, we expect that our selling expenses will flat to up in futureperiods as we continue to expand our sales force in order to add new customers, expand our relationship with existing customers andexpand our global operations.

Research and Development. Research and development expenses consist primarily of personnel-related expenses including payrollexpenses, share-based compensation and engineering costs related principally to the process of creating detailed program designs to beused for the development of our software platform, for other research activities, and for routine maintenance of our developed software.We expense research and development costs as incurred. We expect these cost to be flat or down as a result of our recent restructuringinitiatives along with our continued efforts to realign our costs.

Acquisition Related and Other Charges. Acquisition related and other charges consist primarily of changes in the fair value ofcontingent payments for acquisitions and other acquisition related charges.

Impairment of Goodwill and Intangible Assets. We review goodwill for impairment annually in the fourth quarter, or whenever anindicator is identified which suggests that the carrying amount of goodwill may not be recoverable. We evaluate long-lived assets suchas property and equipment, and identifiable intangible assets that are subject to amortization for impairment when events or changes incircumstances indicate that the carrying amount of the assets may not be recoverable.including an indication that our goodwill isimpaired. An impairment loss is recognized when the fair value of an intangible is more than its carrying value. A number of factors caninfluence the estimated fair value of an intangible asset including the overall fair value of the company, and the estimated futureundiscounted cash flows expected to result from the use of the asset and its eventual disposition. Where available, quoted market pricesare used to determine fair value. When quoted market prices are not available, various valuation techniques, including the discountedvalue of estimated future cash flows, are utilized.

Depreciation and Amortization. Depreciation and amortization expenses consist primarily of depreciation on computer hardware andleasehold improvements, amortization of purchased intangibles and capitalized software development costs, offset by allocation ofgovernment grant income.

Much of our depreciation and amortization expense relates to the amortization of software developed for sale or for use in deliveringmobile marketing and advertising campaigns for our customers, largely our mGage technology platform. We generate our revenue byproviding services and products using this technology. However, we do not segregate or track the development costs by revenue typeand are therefore unable to allocate these costs by revenue type.

Interest Expense



Interest expense, net includes interest we incur as a result of our borrowings. For a description of our borrowing obligations see Note 9to notes to the condensed consolidated financial statements.

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Gain (Loss) from Foreign Currency Transactions

Gain (Loss) from foreign currency transactions are a result of realized and unrealized gains and losses from transactions denominated incurrencies other than the functional currency of the respective subsidiary, as well as the gain or loss resulting from remeasuring assetsand liabilities denominated in a currency other than the functional currency into the functional currency on each balance sheet date.

Gain (Loss) from Equity Method Investments

Our equity method investments include all investments in entities over which we have significant influence, but not control, generallyincluding a beneficial interest of between 20% and 50% of the voting rights. Our share of our equity method investments' postacquisition profits or losses is recognized in the condensed consolidated statement of operations and comprehensive loss. As of March31, 2013.

Income Tax Expense

We are subject to tax in jurisdictions or countries in which we conduct business. Earnings are subject to local country income tax andmay be subject to current income tax in other jurisdictions.

Our deferred income tax assets represent temporary differences between the financial statement carrying amount and the tax basis ofexisting assets and liabilities that will result in deductible amounts in future years, including net operating loss carryforwards. Based onestimates, the carrying value of our net deferred tax assets assumes that it is more likely than not that we will be able to realize our netdeferred tax assets in the future. Our judgments regarding future profitability and therefore our ability to realize our net deferred taxassets in the future may change due to future market conditions, changes in tax laws and other factors.

Geographic Concentration

We conduct our business in three geographical areas: Europe, Americas, and Asia/Africa. The following table provides revenue bygeographic area. Revenue from customers for whom we provide services in multiple locations is reported in the location of therespective customer's domicile; revenue from customers for whom we provide services in a single or very few related locations isreported in the location of the respective customer's place of operations.


2013 2012


Europe:

Western Europe $ 14,938 36% $ 18,310 35%

All other European countries 4,761 12% 12,967 25%

Total Europe 19,699 48% 31,277 60%

Americas 11,848 29% 13,321 26%

Asia/Africa 9,460 23% 7,195 14%

Total revenue $ 41,007 100% $ 51,793 100%

We expect to increase the amount of revenue that we generate on an absolute and relative basis from customers located in WesternEurope and the Americas as we continue to focus the majority of our efforts on these markets as well as the BRIC (Brazil, Russia, Indiaand China) markets. We also anticipate that our geographic revenue concentration in all other European countries as a whole willcontinue to decrease as a percentage of our total revenue. See Note 3 to notes to the condensed consolidated financial statements for adiscussion of the geographic concentration of our revenue.

Customer Concentration

One customer accounted for more than 12% of our revenues for the three months ended March 31, 2013 and no customer accounted formore than 10% of our revenues for the three months ended March 31, 2012. No customer accounted for more than 10% our totalreceivables as of March 31, 2013 or as of December 31, 2012.



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Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the UnitedStates of America.. The preparation of our condensed consolidated financial statements requires us to make assumptions, judgments andestimates that have an impact on amounts reported in our condensed consolidated financial statements. We base our assumptions,judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances.Actual results could differ materially from these estimates under different assumptions or conditions. We continually evaluate theseestimates and assumptions based on the most recently available information, our own historical experience and various otherassumptions that we believe to be reasonable under the circumstances. Our significant accounting policies are described in Note 2 to thisinterim report, “Basis of Presentation and Summary of Significant Accounting Policies” and in the Notes to Consolidated FinancialStatements in our 2012 Form 20-F. In addition, we highlighted those policies that involve a higher degree of judgment and complexitywith further discussion of these judgmental areas in Item 5, “Operating and Financial Review and Prospects” in the 2012 Form 20-F. Webelieve these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.Updates on the relevant periodic financial disclosures related to these policies are provided below.

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Revenue Recognition


SaaS revenue is generated from our “usage‑based” services, including subscription fees for use of individual software modules and ourautomated mobile marketing campaign creation templates, and fees charged for access to our technology platform. These fees arerecognized ratably over the contract term beginning on the commencement date of each contract as services are rendered.

SaaS revenue generated from our “performance‑based” services is generally based on specified metrics, typically relating to the numberof transactions performed during the campaign multiplied by the cost per transaction in accordance with the terms of the relatedcontracts. Transactions can include SMS messages sent by participants in customer campaigns or advertisement impressions placed onmobile applications, among other types of performance-based transactions. Certain of our performance‑based contracts includeperformance incentive provisions that link a portion of revenue that we may earn under the contract to the performance of the customer'scampaign relative to quantitative or other milestones, such as the growth in the consumer base, reduced consumer churn, or theeffectiveness of the end-user response. We consider the performance‑based fees to be contingent fees. We recognize this revenuemonthly based on actual performance, which is when the fees are earned and the amount of the fee can be reliably measured. Ourperformance‑based arrangements are typically invoiced monthly, which can occur in a period subsequent to revenue being recognized.

License and software revenue consists of license fees charged for our mobile marketing and advertising technology. We provide licenseson a perpetual or term basis. These types of arrangements do not, typically, include any ongoing support arrangements or rights toupgrades or enhancements and therefore revenue related to perpetual licensing arrangements is recognized upon the delivery of thelicense. Revenue from term based licenses is recognized over the related term of an arrangement. Fees charged to customize oursoftware solution are, generally, recognized using the completed contract or percentage-of-completion method according to ASC605-35, Revenue Recognition - Construction-Type and Production-Type Contracts, based on the ratio of costs incurred to the estimatedtotal costs at completion.

Managed services revenue, when sold with software and support offerings, are accounted for separately when these services (i) havevalue to the customer on a standalone basis, (ii) are not essential to the functionality of the software and (iii) there is objective andreliable evidence of the selling price of each deliverable. When accounted for separately, revenue is recognized as the services areprovided for time and material contracts, and ratably over the term of the contract when accepted by the customer for fixed pricecontracts. For revenue arrangements with multiple deliverables, such as an arrangement that includes license, support and professionalservices, we allocate the total amount the customer will pay to the separate units of accounting based on their relative selling prices, asdetermined by the price of the undelivered items when sold separately.

The timing of revenue recognition in each case depends upon a number of factors, including the specific terms of each arrangement andthe nature of our deliverables and obligations, and the existence of evidence to support recognition of revenue as of the reporting date.For contracts with extended payment terms for which we have not established a successful pattern of collection history, we recognizerevenue when all other criteria are met and when the fees under the contract become due. Fees that have been invoiced are recorded intrade receivables and in revenue when all revenue recognition criteria have been met. When fees have been invoiced but not all revenuerecognition criteria have been met, the invoice is recorded in trade receivables and in deferred revenue. When all revenue recognitioncriteria are met, but fees have not been invoiced as of the reporting date, such fees are reported in accrued contract receivables and inrevenue.

Certain arrangements entered into by us are revenue sharing arrangements. As a result, we complete an analysis of the facts andcircumstances to determine whether revenue earned from these arrangements should be recorded gross with the company performing asa principle, or recorded net of third party costs with the company performing as an agent, as required by ASC 605-45 Principal AgentConsideration. When we are a principal in a transaction, we include all amounts paid on behalf of our customers in both revenue andcosts.

We present revenue net of value‑added tax, sales tax, excise tax and other similar assessments. Our revenue arrangements do not containgeneral rights of return.



Goodwill

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Goodwill is generated when the consideration paid for an acquisition exceeds the fair value of net assets acquired. Goodwill isrecognized as an asset and reviewed for impairment at least annually, or whenever events or circumstances indicate that the carryingamount of goodwill may not be recoverable. We have selected December 31 as the date to perform the annual impairment testing ofgoodwill.

During the three months ended March 31, 2013, our market capitalization declined significantly as a result of decreases in our shareprice. In connection with the preparation of our financial statements for the first quarter of 2013, we concluded the sustained decline inour share price and market capitalization were indicators of potential impairment requiring us to perform an impairment analysis. Basedon this analysis, we determined that the fair value of our aggregate net assets was below their carrying values, and a full impairment wasrecorded on our goodwill and a partial impairment against certain other intangible assets based on the purchase price allocation methodprescribed by the accounting guidance. The decline in our fair value resulted directly from the overall decline in our market valueduring the first quarter of this year. See Note 7

As a result, we recorded an impairment charge of $133.1 million which represented all of our goodwill and $67.5 million of ourintangible assets, partially offset by $3.6 million of unrecognized government grants related to these assets.

Valuation of Long-lived and Intangible Assets

We evaluate long-lived assets such as property and equipment, and identifiable intangible assets that are subject to amortization forimpairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable includingan indication that our goodwill is impaired. We evaluated our long-lived assets and amortizable intangible assets for impairment due torecent events including the decline of our market capitalization as a result of decreases in our share price as reported on NASDAQStock Market. These were deemed to be significant changes in circumstances that could indicate that their carrying amounts of our long-lived and amortizable intangible assets may not be recoverable. An impairment loss is recognized when estimated future undiscountedcash flows expected to result from the use of the asset and its eventual disposition is less than the carrying amount. When undiscountedfuture cash flows are not expected to be sufficient to recover an asset's carrying amount, the asset is written down to its fair value.Where available, quoted market prices are used to determine fair value. When quoted market prices are not available, various valuationtechniques, including discounted value of estimated future cash flows are utilized.

During the three months ended March 31, 2013, as a result of our goodwill impairment analysis, an impairment loss of $67.5 millionwas recorded against certain intangible assets based on the purchase price allocation method prescribed by the accounting guidance. SeeNote 7.

Fair Value Measurements

We report our financial and non-financial assets and liabilities that are re-measured and reported at fair value at each reporting period.We established a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1. Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.Level 2. Include other inputs that are directly or indirectly observable in the marketplace.Level 3. Unobservable inputs that are supported by little or no market activity.

Our financial assets and liabilities consist principally of cash and cash equivalents, accounts payable, accrued liabilities, current andnon-current notes payable. Cash and cash equivalents include time deposits and readily marketable securities with original maturities of90 days or less. Cash and cash equivalents are stated at cost, which approximates fair value. As of March 31, 2013 and 2012, we did nothave readily marketable securities that are classified as cash equivalents.

Accounts payable and accrued liabilities are carried at cost that approximates fair value due to their expected short maturities. Our long-term debt bears interest at rates which approximate the interest rates at which we believe we could refinance the debt. Accordingly, thecarrying amount of long-term debt as of March 31, 2013 and 2012 approximates its fair value. As of March 31, 2013, we did not haveany financial assets or liabilities for which Level 1 or Level 2 inputs were required to be disclosed. See Note 6 for our disclosure ofLevel 3 inputs used to revalue our contingent payments related to certain of our acquisitions.

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The following table provides a summary of changes in fair value of the contingent payments measured using significant unobservableinputs (Level 3):

Fair Value

(in thousands)



Other Financial Information

We present certain non-GAAP financial measures as a supplemental measure of our performance. These non-GAAP financial measuresare not a measure of financial performance or liquidity calculated in accordance with accounting principles generally accepted in theU.S., referred to herein as GAAP, and should be viewed as a supplement to, not a substitute for, our results of operations presented onthe basis of GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measuresare detailed in the table below.


2013 2012

Non-GAAP Measures: (in thousands except per share amounts)

Adjusted net loss $ (18,060) $ (1,137)

Adjusted EBITDA $ (18,311) $ 4,608

Adjusted net loss per share - basic $ (0.27) $ (0.02)

Adjusted net loss per share - diluted $ (0.27) $ (0.02)

Our non-GAAP measures should be read in conjunction with the corresponding GAAP measures. These non-GAAP financial measureshave limitations as an analytical tool and you should not consider them in isolation from, or as a substitute for, analysis of our results asreported in accordance with GAAP.

We define adjusted net income (loss) by excluding foreign exchange gains or losses, share-based compensation expense, non-recurringand acquisition related expenses, impairment charges, deferrals of net profits of our equity method investments related to transactionswith us, loss from disposal of assets and acquisition-related depreciation and amortization.

We define adjusted EBITDA by excluding from adjusted net income (loss), gains or losses from our equity method investments, theremaining depreciation and amortization, the provision for income taxes, net interest expense, and other income (expense).

Adjusted net income (loss) and adjusted EBITDA are not necessarily comparable to similarly-titled measures reported by othercompanies.

Basic and diluted adjusted income (loss) per share is adjusted net income (loss) divided by basic and diluted shares outstanding,respectively.

We believe these non-GAAP financial measures are useful to management, investors and other users of our financial statements inevaluating our operating performance because these financial measures are additional tools to compare business performance acrosscompanies and across periods. We believe that:

• these non-GAAP financial measures are often used by investors to measure a company's operating performance without regardto items such as interest expense, taxes, depreciation and amortization and foreign exchange gains and losses, which can varysubstantially from company to company depending upon accounting methods and book value of assets, capital structure andthe method by which assets were acquired; and



• investors commonly use these non-GAAP financial measures to eliminate the effect of restructuring and share-basedcompensation expenses, one-time non-recurring expenses, and acquisition-related expenses, which vary widely from companyto company and impair comparability.

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We use these non-GAAP financial measures:

• as a measure of operating performance to assist in comparing performance from period to period on a consistent basis;

• as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations;

• as a primary measure to review and assess the operating performance of our company and management team in connectionwith our executive compensation plan incentive payments; and

• in communications with our board of directors, stockholders, analysts and investors concerning our financial performance.

The following is an unaudited reconciliation of adjusted EBITDA to net loss before non-controlling interest, the most directlycomparable GAAP measure, for the periods presented:


2013 2012

Reconciliation to Adjusted EBITDA:Net loss $ (157,037) $ (8,839)

Adjustments:

Gain (loss) from foreign currency transactions 2,634 (1,375)

Non-cash share based compensation(1) 337 8,608

Non-recurring and acquisition-related expenses(2) 415 (2,301)

Impairment of goodwill and intangible assets 133,129

Loss from equity method investments — 133

Depreciation and amortization - acquisition related 2,462 2,637

Adjusted net loss $ (18,060) $ (1,137)

Loss from equity method investments - other — 238

Depreciation and amortization - other 6,158 4,632

Income tax (benefit) expense (6,853) 278

Interest expense, net 438 743

Other (income) expense 6 (146)

Adjusted EBITDA $ (18,311) $ 4,608

Adjusted net loss per share - basic $ (0.27) $ (0.02)

Adjusted net loss per share - diluted $ (0.27) $ (0.02)

Weighted average number of shares outstanding:

Basic shares 65,808 61,816

Diluted shares 65,808 61,816

(1) During the quarter ended March 31, 2012, certain share awards with vesting terms of one year or less were granted to employees and directors,resulting in additional compensation expense of approximately $4.0 million.

(2) Non-recurring and acquisition-related income in 2012 resulted from a gain on re-measurement of our pre-acquisition ownership interest in CASEEto fair value, which was partially offset by expense on re-measurement of contingent consideration for our Mobclix and Mobile Interactive Groupacquisitions and other expenses related to completed acquisitions.

Share based compensation expenses were included in the condensed consolidated statements of comprehensive loss as follows:

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2013 2012(in thousands)

Datacenter and direct project $ 48 $ 972

General and administrative (36) 3,660

Sales and marketing 174 2,392

Research and development 151 1,584$ 337 $ 8,608

Operating Results

Comparison of the three months ended March 31, 2013 and 2012

The following table sets forth our condensed consolidated results of operations for the three months ended March 31, 2013 and 2012:


2013 2012 $ Change % Change

(unaudited, in thousands, except percentages)

Revenue:

Software as a service (SaaS) revenue $ 32,390 $ 46,768 $ (14,378) (31)%

License and software revenue 2,159 1,505 654 43 %

Managed services revenue 6,458 3,520 2,938 83 %

Total revenue 41,007 51,793 (10,786) (21)%

Cost and expenses:

Third-party costs 23,365 16,862 6,503 39 %

Datacenter and direct project costs 5,552 7,892 (2,340) (30)%

General and administrative expenses 14,065 15,132 (1,067) (7)%

Sales and marketing expenses 12,591 12,753 (162) (1)%

Research and development expenses 4,497 4,684 (187) (4)%

Acquisition related and other charges — 2,197 (2,197) (100)%

Impairment of goodwill and intangible assets 133,129 — 133,129 N/M

Depreciation and amortization 8,620 7,269 1,351 19 %

Total cost and expenses 201,819 66,789 135,030 202 %

Loss from operations (160,812) (14,996) (145,816) 972 %

Interest expense, net (438) (743) 305 (41)%

Gain (loss) from foreign currency transactions (2,634) 1,375 (4,009) (292)%

Other income (expense) (6) 6,174 (6,180) (100)%Loss before income taxes, equity method investments and non-controlling interest (163,890) (8,190) (155,700) 1,901 %

Income tax (expense) benefit 6,853 (278) 7,131 (2,565)%

Loss from equity method investments — (371) 371 (100)%

Net loss (157,037) (8,839) (148,198) 1,677 %

Net loss attributable to non-controlling interest (679) (21) (658) 3,133 %

Net loss attributable to Velti $ (156,358) $ (8,818) $ (147,540) 1,673 %

*N/M= Not Meaningful



Revenue

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Three Months Ended March 31, Change

2013 2012 $ %


Software as a service (SaaS) revenue $ 32,390 $ 46,768 $ (14,378) (31)%

License and software revenue 2,159 1,505 654 43 %

Managed services revenue 6,458 3,520 2,938 83 %

Total revenue $ 41,007 $ 51,793 $ (10,786) (21)%

Total revenue decreased during the three months ended March 31, 2013 by $10.8 million, or 21%, compared to the same period in 2012.

The decrease was primarily the result of a decline in SaaS revenue of $14.4 million; as a result of reduction in revenues in South EastEurope of $14.5 million, Western Europe of $2.3 million and in North America of $0.9 million all as a result of fewer campaigns versusthe year ago period. These decreases were partially offset by an increase of $3.3 million in revenues from the Asia/Africa region.

License revenue increased by $0.7 million for the three months ended March 31, 2013 primarily as a result of a $1.7 million increase inlicense fees in Western Europe, which were partially offset by $1.0 million lower license fees in South East Europe.

Managed services revenue increased by $2.9 million compared to the same quarter a year ago. The increase was the result of increasesin sales of managed services to new and existing customers in South East Europe, Western Europe and North America of $2.6 million,$0.2 million and $0.1 million respectively.

Operating Costs and Expenses


2013 2012 $ %


Third-party costs $ 23,365 $ 16,862 $ 6,503 39 %

Datacenter and direct project costs 5,552 7,892 (2,340) (30)%

General and administrative expenses 14,065 15,132 (1,067) (7)%

Sales and marketing expenses 12,591 12,753 (162) (1)%

Research and development expenses 4,497 4,684 (187) (4)%

Acquisition related and other charges — 2,197 (2,197) (100)%

Impairment of goodwill and intangible assets 133,129 — 133,129 N/M

Depreciation and amortization 8,620 7,269 1,351 19 %

Total cost and expenses $ 201,819 $ 66,789 $ 135,030 202 %

*N/M= Not Meaningful

Third‑‑Party Costs

Third-party costs for the three months ended March 31, 2013 increased by $6.5 million, or 39%, compared to the same period in 2012.This increase was primarily due to expenses associated with certain region and vertical specific partner agreements costs which coverseveral periods being recognized on a straight-line basis over the campaign term along with $1.7 million in incremental MIG projectcontractor costs for customization work.

Datacenter and Direct Project Costs

Datacenter and direct project costs for the three months ended March 31, 2013 decreased by $2.3 million, or 30%, compared to the sameperiod in 2012. This decrease was primarily due to $1.7 million of costs associated with MIG contractor resources being recorded as



third party costs due to attribution to specific projects. An additional $0.9 million in decreased share-based compensation costs waspartially offset by a $0.3 million increase in cost from various other expenses.

General and Administrative Expenses

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General and administrative expenses for the three months ended March 31, 2013 decreased by $1.1 million, or 7%, compared to thesame period in 2012. This decrease was primarily due to $3.7 million in lower share-based compensation costs which was partiallyoffset by a $1.9 million increase in bad debt expense, $0.2 million of expense incurred in connection with settlement of a legal disputeand a $0.5 million in increased professional services fees associated with increased reliance on consultants in certain areas and otherprojects.

Sales and Marketing Expenses

Sales and marketing expenses for the three months ended March 31, 2013 remained relatively flat with a small decrease of $0.2 million,or 1%, compared to the same period in 2012. This decrease resulted from a reduction in share based compensation expense of $2.2million which was partially offset by a $1.7 million increase in personnel related expenses. The remaining $0.3 million increase relatedto a number of smaller items.

Research and Development Expenses

Research and development expenses for the three months ended March 31, 2013 decreased by $0.2 million, or 4%, compared to thesame period in 2012. This decrease was primarily due to a reduction in share based compensation expense of $1.4 million partiallyoffset by a $1.2 million increase in labor and overhead costs, which was associated with a increase in allocation of resources to projectsnot yet having reached technological feasibility, and thus not meeting the criteria for capitalization.

Acquisition‑‑Related Charges

There were no acquisition-related charges for the three months ended March 31, 2013. Acquisition related charges for the three monthsended March 31, 2012 were $2.2 million and were primarily related to changes in the fair value of contingent payments due to theformer shareholders of our acquired entities.

Impairment of Goodwill and Intangible Assets

Impairments of $133.1 million for the three months ended March 31, 2013 were the result of our market capitalization decliningsignificantly as a result of decreases in our share price over the period. We concluded that the sustained decline in the share price andmarket capitalization were indicators of impairment which required the performance of an impairment analysis, resulting in significantimpairment to goodwill, acquired intangible assets and developed technology platforms. No charges were recorded in the same period ayear ago.

Depreciation and Amortization

Depreciation and amortization expenses for the three months ended March 31, 2013 increased by $1.4 million, or 19%, as compared tothe same period in 2012. The incremental expense resulted from significant capital expenditures to purchase and develop technologyplatforms as well as additional leasehold improvements and equipment in the U.S. and the U.K.

Other Income and Expense


2013 2012 $ %


Interest expense, net $ (438) $ (743) $ 305 41 %

Gain (loss) from foreign currency transactions (2,634) 1,375 (4,009) 292 %

Other income (expense) (6) 6,174 (6,180) (100)%

Income tax (expense) benefit 6,853 (278) 7,131 2,565 %

Loss from equity method investments — (371) 371 (100)%

Interest Expense, net

Interest expense, net for the three months ended March 31, 2013 decreased by $0.3 million, or 41% compared to the same period in2012. The decrease was the result of our 2012 debt balances carrying higher average effective interest rates during the year ago quarteras compared to the current quarter and accretion of deferred consideration from one of our acquired entities in the prior year. The impact



of the decline in the average effective interest rates was partially offset by our carrying higher debt balances during the current quarterwhen compared to the quarter ended March 31, 2012.

Gain from Foreign Currency Transactions

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Gain from foreign currency transactions, a non-cash item, decreased for the three months ended March 31, 2013 by $4.0 million or292%,compared to the same period in 2012. The gain in 2012 was primarily due to MIG consideration re-measurement whereas the lossin 2013 resulted primarily from remeasurement of US Dollar denominated HSBC debt held in subsidiaries with Euro functionalcurrency and loss on remeasurement of purchase consideration as the dollar strengthened against the Pound.

Other Income (Expense)

Other income (expense) for the three months ended March 31, 2013 was immaterial. In the first quarter of 2012 we realized a $6.2million gain related to marking Velti's 33% investment in CASEE to fair value as we were required to re-measure this investment as aresult of our purchase of the remaining 67% of CASEE.

Income Tax Expense

We recorded income tax benefit of $6.9 million on a worldwide pre-tax loss of $163.9 million for the three months ended March 31,2013, due to a $1.8 million deferred tax benefit associated with the increase in the Greek tax rate from 20% to 26% and $6.7 million ofbenefit resulting from the impairment of intangible assets, which amounts were offset by profitability of certain subsidiaries. Thiscompared to income tax expense of $0.3 million on a worldwide pre-tax loss of $8.2 million for the same period in 2012.

Loss from Equity Method Investments

We did not record adjustments for the results of Starcapital's equity method investments during the three months ended March 31, 2013as they were not deemed material. The losses totaling $0.4 million recorded during the period ended March 31, 2012 were related toinvestments in entities which we have since sold to Starcapital in a transaction completed in December 2012.

Liquidity and Capital Resources

Since our inception we have financed our operations and acquisitions primarily through the public offerings, borrowings under our bankcredit facilities and cash generated from our operations. As of March 31, 2013, we had $16.3 million in cash and cash equivalents.

As of March 31, 2013, we had $47.8 million in outstanding debt. The effective interest rates to finance our borrowings as of March 31,2013 ranged from 2.4% to 13.8%.

In August 2012, we entered into a $50.0 million multi-currency senior revolving credit facility (the Facility) with HSBC, which expireson August 10, 2015. The face amount may be increased by an additional $50.0 million upon meeting certain requirements and obtainingadditional commitments from the existing or new lenders. At the current time, we do not believe that an increase of the credit facility islikely in the near term. Borrowings under the Facility will bear interest at the LIBOR rate plus a spread ranging from 2.25% to 2.75% oran adjusted base rate plus a spread ranging from 1.25% to 1.75%. The spread is dependent upon our leverage ratio, as calculatedaccording to the terms of the loan agreement. We are required to pay 0.50% per annum, on the unused portion of the facility, ifutilization of the facility is greater than 50%, and 0.75% per annum if utilization is less than 50%.

The Facility contains a number of customary negative and affirmative covenants, including covenants that limit our ability to place lienson our assets, incur additional debt, make investments, enter into acquisitions, merge or consolidate, dispose of assets, pay dividends ormake other restricted payments, all subject to certain exceptions. There are also several financial covenants that we are required tomaintain, which includes a minimum fixed charge coverage ratio of 1.50 to 1.00, a maximum total leverage ratio of 2.50 to 1.00, aminimum liquidity ratio of 1.25 to 1.00, a minimum asset coverage ratio of 1.50 to 1.00, and a performance to plan test with respect toConsolidated Revenue and Consolidated Adjusted EBITDA. Our ability to use the Facility may be suspended and repayment of anyoutstanding balances may be required if we are unable to comply with these requirement in the future, or otherwise unable to obtainwaivers or amendments.

As of December 31, 2012, we were not in compliance with all of the covenants. HSBC approved the amendment of the Facilityallowing us to complete the divestment of assets to Starcapital described in Note 8 above, as well as to allow us to increase thepermitted software capital expenditures during 2012. As of March 31, 2013, we did not meet our covenant with respect to the totalleverage ratio and to date we have not received a waiver from HSBC of our violation of this covenant. We are in discussions with HSBCregarding the waiver and regarding amendment of our 2013 covenants to levels that we believe we can satisfy for the remainder of2013. At this point, we cannot predict when, or if, we will receive a waiver of the first

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quarter's violation or agreement to modification of the covenants. HSBC currently has the right to accelerate our obligations under thecredit facility causing the entire amounts outstanding to become immediately due and payable. As a result of not meeting the covenantswe have included these amounts as current portion of long-term debt and short-term financing in the Condensed Consolidated BalanceSheets.In connection with the execution of the Facility, we repaid the entire outstanding loan of €5.9 million (approximately $7.2 million) toBlack Sea Trade and Development Bank during the third quarter of 2012. The total payment of $7.3 million consisted of the outstandingprincipal balance, accrued interest and fees. We borrowed $7.3 million from the Facility to repay this loan.

As of March 31, 2013 our current assets exceeded our current liabilities by $94.8 million. On April 24, 2013, we closed a privateplacement of our ordinary shares under which we entered into a Securities Purchase Agreement with certain institutional accreditedinvestors. In connection with this transaction, we issued an aggregate of 16,529,412 ordinary shares at a price of $1.50 per shareresulting in net proceeds to us of $23.1 million. A substantial portion of these proceeds were used to satisfy our obligations to formershareholders and key employees of MIG.

While we anticipate generating positive operating cash flow for the year, this positive cash flow is not expected until the third quarter of2013. As a result, we may need financing, in addition to the private placement recently completed, during the next three months toprovide sufficient operational liquidity. This additional financing may be facilitated through the issuance of equity or debt. If we needsuch additional financing, there can be no assurance that our efforts to find such financings will be successful, or on terms favorable tous.

There can be no assurance that our efforts to find such financings will be successful or on terms favorable to us. Our ability to continueas a going concern is dependent upon our ability to agree on amended 2013 covenants with HSBC, and obtain the necessary financing tomeet our obligations arising from normal business operations when they come due and to generate profitable operations in the future. Asa result, the report of our independent registered public accounting firm covering our financial results for the year ended December 31,2012 included a statement raising substantial doubt as to our ability to continue as a going concern, which may adversely affect ourability to conduct business with third parties, as well as our ability to attract new financing.

If our estimates of revenues, expenses or capital or liquidity requirements change or are inaccurate or if cash generated from operationsis insufficient to satisfy our liquidity requirements, we will seek to sell additional shares or arrange other debt financing.

Three Months Ended March31,

2013 2012

(in thousands)

Cash generated from (used in):

Operating activities $ (32,494) $ (15,869)

Investing activities (7,658) (21,948)

Financing activities 20,039 (82)

Effect of changes in foreign exchange rates (131) 3,085

Decrease in cash and cash equivalents $ (20,244) $ (34,814)

Operating Activities. Net cash used in operating activities during the three months ended March 31, 2013 was $32.5 million, comparedto net cash used in operating activities of $15.9 million during the three months ended March 31, 2012. Adjusting our net loss for non-cash items, resulted in $17.8 million use of cash and $3.0 million generation of cash in the first quarter of 2013 and 2012 respectively.Working capital fluctuations as a result of the timing of cash receipts and payments provided for use of cash of $14.7 million and $18.9million in the first quarter of 2013 and 2012 respectively. Our use of cash increased in the first quarter ended March 31, 2013 by $16.6million when compared to the same period a year ago for the reasons discussed above.

Comprehensive DSOs based on trailing 12 months' revenue were:

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Comprehensive DSO (1)

As of March 31, 2013 309

As of December 31, 2012 311

(1) Comprehensive DSO is calculated as follows: comprehensive receivables (consisting of trade receivables and accrued contract receivables, withreduction for agreements where we recognize revenue net of third party costs) divided by trailing twelve month revenue (which includesestimated revenue of acquired companies as though they had been consolidated for the entire twelve month period) multiplied by 360 days.

Investing Activities. During the three months ended March 31, 2013 and 2012 we used $7.7 million and $21.9 million for capitalexpenditures, software development and purchased software. The decrease in the quarter ended March 31, 2013 relates primarily tosmaller investment in purchased software when compared to the same quarter a year ago.

Financing Activities. During the three months ended March 31, 2013 and 2012 we generated $20.0 million in proceeds from borrowingactivities and $0.1 million from exercise of stock options, respectively.

Legal Proceedings

From time to time, we and our subsidiaries are subject to legal, administrative and regulatory proceedings, claims, demands andinvestigations in the ordinary course of business, including claims with respect to intellectual property, contracts, employment and othermatters. In addition to the below mentioned legal proceedings, we do not believe that the ultimate resolution of other legal proceedingsinvolving our company, if any, will have a material adverse effect on our consolidated financial position, results of operations or cashflows.


We recently received letters on behalf of several of our customers notifying us that the customers had received letters from a third partywhich alleged that certain of our customer's applications infringed the patent rights of the third party. In turn, our customers have allegedthat we are obligated to indemnify them relating to these matters as the claims allegedly relate to services that we provide to thecustomers. We are currently investigating the related issues.

Patent Litigation

On March 9, 2012, Augme Technologies, Inc. filed a complaint against Velti USA, Inc. in the United States District Court for theDistrict of Delaware (case no. 1:12cv294), alleging infringement of three patents held by Augme. On May 4, 2012, Velti responded tothe complaint by filing a motion to dismiss and motion to strike certain claims in the complaint. On May 18, 2012, in response to themotion, Augme filed an opposition and also filed a First Amended Complaint. The Company responded to the First AmendedComplaint (and asserted counterclaims of non-infringement and invalidity) on June 4, 2012. On March 22, 2013, Velti Limited and Veltientered into a settlement with Augme, pursuant to which Augme and Velti settled the two pending lawsuits as between each other.Pursuant to the settlement, (i) Augme has granted Velti a paid-up license in all patents owned by Augme with a priority date on orbefore March 22, 2013 for the life of those patents, (ii) Velti has granted Augme a paid-up license in all patents owned by Velti with apriority date on or before March 22, 2013, (iii) Augme and Velti have covenanted not to sue each other on such patents, (iv) Augme andVelti have dismissed the lawsuits as to each other with prejudice with each side to bear its own costs, (v) Augme and Velti have releasedeach other as to the subject matter of the lawsuits with neither party making any admission of liability, and (vi) Velti will pay Augme alump sum payment of $200,000 no later than 10 business days following the dismissal of the lawsuits. On March 29, 2013, the Courtgranted a joint motion to dismiss the case with prejudice, pursuant to the settlement agreement. The matter is now officially closed.


On June 14, 2012, Air2Web, Inc., was named as a defendant in a consolidated class action complaint filed in the United States DistrictCourt for the Southern District of New York on behalf of a purported class of lessees of common short codes used in application-to-person SMS messaging. In re A2P SMS Antitrust Litigation, Case No. 12-cv-2656 (AJN). The plaintiffs allege that the defendants,which include all major U.S. wireless carriers, CTIA - The Wireless Association®, WMC Global, Inc., and certain aggregators



(including Air2Web) violated federal antitrust law by conspiring to reduce competition and fix prices in, and conspiring to monopolize,the market for application-to-person SMS transmission in the United States. The plaintiffs seek

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injunctive relief and treble damages, in an undisclosed amount, jointly and severally from all defendants for injuries allegedly sustainedfrom April 5, 2008, until the present. On August 14, 2012, several groups of defendants, including Air2Web, filed motions to dismissthe complaint in its entirety, and a number of defendants also filed motions to compel arbitration of this dispute and to stay theseproceedings pending arbitration. A decision on those motions is pending. Plaintiffs have not yet responded to those motions. Becausethis action is in its very early stages, and due to the inherent uncertainties surrounding the litigation process, we are unable to reasonablyassess the likelihood of any particular outcome at this time.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to several financial risks, including, among others, market risk (change in exchange rates, changes in interest rates,market prices, etc.), credit risk and liquidity risk. Our principal liabilities mainly consist of bank loans and trade payables. The mainpurpose of these liabilities is to provide the necessary funding for our operations. We have various financial assets such as tradereceivables and cash and cash equivalents. Our cash and cash equivalent instruments are managed such that there is no significantconcentration of credit risk in any one bank or other financial institution. Management monitors closely the credit quality of thefinancial institutions with which we hold deposits.

Our financing facilities are monitored against working capital and capital expenditure requirements on a rolling 12-month basis andtimely action is taken to have the necessary level of available credit lines. Our policy is to diversify funding sources. Management aimsto maintain an appropriate capital structure that ensures liquidity and long-term solvency.

Foreign Currency Risk

We are exposed to several financial risks, including, among others, market risk (change in exchange rates, changes in interest rates,market prices, etc.), credit risk and liquidity risk. Our principal liabilities mainly consist of bank loans and trade payables. The mainpurpose of these liabilities is to provide the necessary funding for our operations. We have various financial assets such as tradereceivables and cash and cash equivalents. Our cash and cash equivalent instruments are managed such that there is no significantconcentration of credit risk in any one bank or other financial institution. Management monitors closely the credit quality of thefinancial institutions with which we hold deposits.

Our financing facilities are monitored against working capital and capital expenditure requirements on a rolling 12-month basis andtimely action is taken to have the necessary level of available credit lines. Our policy is to diversify funding sources. Management aimsto maintain an appropriate capital structure that ensures liquidity and long-term solvency.

Interest Rate Risk

As of March 31, 2013, we had cash and cash equivalents of $16.3 million. These amounts are held in cash. We do not enter intoinvestments for trading or speculative purposes. Due to the short-term nature and floating interest rates of these investments, we believethat we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.Due to the low margin earned on these funds we do not believe a 10% change in interest rates would have a significant impact on ouroperating results, future earnings, or liquidity.

We are exposed to interest rate risk related to our short term financing and long term debt, which are primarily denominated in U.S.dollars and Euros with floating interest rates that are linked to Libor rate plus a spread ranging from 2.25% to 2.75% or an adjusted baserate plus a spread ranging from 1.25% to 1.75%. The spread is dependent upon our leverage ratio, as calculated according to the termsof the loan agreement. For variable rate debt, interest rate changes generally do not affect the fair value of the debt instrument, but doimpact future earnings and cash flows, assuming other factors are held constant. A potential increase or decrease in Libor rates by 1%would result in a measurable but not materially impact to interest expense or cash paid for interest for the remainder of 2013 based onthe $47.8 million of variable rate debt outstanding as of March 31, 2013.

Credit Risk

We do not have significant concentrations of credit risk relating to our trade receivables. The majority of our credit risk as of March 31,2013 is attributable to trade receivables and accrued contract receivables amounting to $282.9 million in total. Trade receivables andaccrued contract receivables are typically unsecured and are derived from revenue earned from customers. Credit risk is managedthrough credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which thecompany grants credit terms in the normal course of business. It is our policy that all customers who wish to transact on credit terms aresubject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and historically our



exposure to bad debts has been minimal. Credit risk from cash balances is considered low. We restrict cash transactions to high creditquality financial institutions.

Liquidity Risk

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As of March 31, 2013, we had cash and cash equivalents of $16.3 million and working capital of approximately $94.8 million. Inconnection with the acquisition of MIG in November 2011, we are required to make cash payments of approximately $16.5 million tothe former shareholders of MIG by mid April 2013. This balance was paid in cash and notes payable. Although we obtained a $50.0million credit facility with HSBC in August 2012, as of March 31, 2013, the revolving credit facility was substantially utilized.Accordingly, we anticipate that we may need additional financing in the future to meet our ongoing capital commitments and to fundour operations.

In order to meet our ongoing capital commitments, we may need to seek additional capital, potentially through debt, or other equityfinancings. There can be no assurance that our efforts to find such financings will be successful or on terms favorable to us. Financings,if available, may be on terms that are dilutive to our shareholders, and the prices at which new investors would be willing to purchaseour securities may be lower than the current price of our ordinary shares. The holders of new securities may also receive rights,preferences or privileges that are senior to those of existing holders of our ordinary shares. If new sources of financing are insufficientor unavailable, we may have to reduce substantially or eliminate expenditures or significantly modify our operating plans. As a result,our independent registered public accounting firm has deemed that there is substantial doubt about our ability to continue as a goingconcern, which in turn would likely further adversely affect our ability to conduct business with third parties as well as attract newfinancing or secure waivers for potential violations of covenants in our existing credit facility. There can be no assurance that we will beable to raise additional capital if our current capital resources are exhausted. If the above strategies are not successful, we could beforced to restructure our obligations or seek protection under applicable bankruptcy laws.

Controls and Procedures

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financialofficer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, asdefined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the endof the period covered by this report (the “Evaluation Date”).

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls andprocedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired controlobjectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and thatmanagement is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Disclosure controls and procedures are designed to provide assurance at a reasonable level that the information we are required todisclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the timeperiods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicatedto our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisionsregarding required disclosures.

Based on management's evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls andprocedures are not effective as of December 31, 2012 due to the material weakness as described in our Form 20-F.

Notwithstanding the identified material weakness, management believes the condensed consolidated financial statements included inthis Interim Report fairly represent in all material respects our financial condition, results of operations and cash flows as of and for theperiods presented in accordance with U.S. GAAP.

Changes in Internal Controls

During the three months ended March 31, 2013, there were no significant changes to internal control over financial reporting thatmaterially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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EXHIBIT 99.2

CERTIFICATION PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alex Moukas, certify that:

1. I have reviewed the interim condensed consolidated financial statements and interim MD&A (together, the "interim report") ofVelti plc, for the three months ended March 31, 2013;

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

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the Company as of, and for, the periodspresented in this report;

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

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the Company, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered bythis report based on such evaluation; and

d. Disclosed in this report any change in the Company's internal control over financial reporting that occurred during theperiod covered by the annual report that has materially affected, or is reasonably likely to materially affect, theCompany's internal control over financial reporting; and

5. The Company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the Company's auditors and the Audit Committee of the Board of Directors (or persons performing theequivalents functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting, which are reasonably likely to adversely affect the Company's ability to record, process, summarize andreport financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in theCompany's internal control over financial reporting.

Date: June 7, 2013 By: /s/ Alex MoukasAlex MoukasChief Executive Officer





EXHIBIT 99.3

CERTIFICATION PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey G. Ross, certify that:

1. I have reviewed the interim condensed consolidated financial statements and interim MD&A (together, the "interim report") ofVelti plc, for the three months ended March 31, 2013;

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

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the Company as of, and for, the periodspresented in this report;

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

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the Company, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered bythis report based on such evaluation; and

d. Disclosed in this report any change in the Company's internal control over financial reporting that occurred during theperiod covered by the annual report that has materially affected, or is reasonably likely to materially affect, theCompany's internal control over financial reporting; and

5. The Company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the Company's auditors and the Audit Committee of the Board of Directors (or persons performing theequivalents functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting, which are reasonably likely to adversely affect the Company's ability to record, process, summarize andreport financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in theCompany's internal control over financial reporting.

Date: June 7, 2013 By: /s/ Jeffrey G. RossJeffrey G. RossChief Financial Officer





EXHIBIT 99.4

CERTIFICATION PURSUANT TO18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Interim Report of Velti plc on Form 6-K for the period ended March 31, 2013 as filed with the Securities andExchange Commission on the date hereof (the “Report”), Alex Moukas, Chief Executive Officer, hereby certify, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Date: June 7, 2013 By: /s/ Alex MoukasAlex MoukasChief Executive Officer

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retainedby the Company and furnished to the Securities and Exchange Commission or its staff upon request.



EXHIBIT 99.5

CERTIFICATION PURSUANT TO18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Interim Report of Velti plc on Form 6-K for the period ended March 31, 2013 as filed with the Securities andExchange Commission on the date hereof (the “Report”), Jeffrey G. Ross, Chief Financial Officer, hereby certify, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Date: June 7, 2013 By: /s/ Jeffrey G. RossJeffrey G. RossChief Financial Officer

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retainedby the Company and furnished to the Securities and Exchange Commission or its staff upon request.



VELTI INC.

SECOND AMENDMENTTO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated asof April 24, 2013 (the “Effective Date”) and entered into by and among Velti Inc., a Delaware corporation,Velti plc, a company formed under the laws of the Bailiwick of Jersey, Channel Islands, Mobile InteractiveGroup Limited, a company formed under the laws of England and Wales with registered number 04572067, andVelti Mobile Platforms Limited, a company formed under the laws of the British Virgin Islands (collectively,the “Borrowers” and each an individual “Borrower”), the financial institutions listed on the signature pageshereof (“Lenders”) and HSBC Bank USA, National Association, as Administrative Agent (the “AdministrativeAgent”), and is made with reference to that certain Credit Agreement dated as of August 10, 2012 (as amended,supplemented or restated through the date hereof, the “Credit Agreement”), by and among Borrowers, Lenders,and Administrative Agent. Capitalized terms used herein without definition shall have the same meanings hereinas set forth in the Credit Agreement.

RECITALS

WHEREAS, Borrowers and Lenders desire to amend the Credit Agreement with respect toreporting requirements, and to make certain other changes, in each case as set forth below;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions andcovenants herein contained, the parties hereto agree as follows:

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

1.1 Amendment to Section 6.01: Financial Statements. Section 6.01 of the Credit Agreement shall beamended and restated as follows:

A. Subsection (a) of Section 6.01 shall be amended and restated in its entirety to read as follows:

“(a) as soon as available, but in any event within 120 days after the end of each fiscal year of theParent, a consolidated and consolidating balance sheet of the Parent and its Subsidiaries as at the end ofsuch fiscal year, and the related consolidated and consolidating statements of income or operations,stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form thefigures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP orIFRS, as applicable; audited and accompanied by a report and opinion of a Registered Public AccountingFirm of nationally recognized standing, which report and opinion shall be prepared in accordance withgenerally accepted auditing standards and applicable Securities Laws and shall not be subject to any“going concern” or like qualification or

US_ACTIVE-111229593



exception or any qualification or exception as to the scope of such audit or with respect to the absence ofany material misstatement.”

B. Subsection (b) of Section 6.01 shall be amended and restated in its entirety to read as follows:

“(b) as soon as available, but in any event (i) within 45 days after the end of each of the first threefiscal quarters of each fiscal year of the Borrowers, a preliminary consolidated and consolidating balancesheet of the Parent and its Subsidiaries as at the end of such fiscal quarter, and the related consolidatedand consolidating statements of income or operations, stockholders’ equity and cash flows for such fiscalquarter and for the portion of the Parent’s fiscal year then ended, and (ii) within 60 days after the end ofeach of the first three fiscal quarters of each fiscal year of the Borrowers, a consolidated and consolidatingbalance sheet of the Parent and its Subsidiaries as at the end of such fiscal quarter, and the relatedconsolidated and consolidating statements of income or operations, stockholders’ equity and cash flowsfor such fiscal quarter and for the portion of the Parent’s fiscal year then ended; in each case setting forthin each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscalyear and the corresponding portion of the previous fiscal year, all in reasonable detail, certified by thechief executive officer, chief financial officer, treasurer, chief accounting officer or controller of theParent as fairly presenting in all material respects the financial condition, results of operations,stockholders’ equity and cash flows of the Parent and its Subsidiaries in accordance with GAAP or IFRS,as applicable, subject only to normal year-end audit adjustments and the absence of footnotes.”

2.1 Amendment to Section 6.02: Certificates; Other Information. Section 6.02 of the Credit Agreementshall be amended and restated as follows:

A. Subsection (b) of Section 6.02 shall be amended and restated in its entirety to read as follows:

“(b) within 30 days of the end of each fiscal quarter, accounts receivable and accounts payableaging reports, aged by invoice date, for each of the Loan Parties and each of their respective Subsidiaries,for such fiscal quarter, in form satisfactory to the Administrative Agent and Required Lenders;”

B. Subsection (e) of Section 6.02 shall be amended by deleting the word “and” at the end of the clausethereof.

C. A new Subsection 6.02(f) (Certificates; Other Information) shall be added to the Credit Agreement(and all subsequent subsections of that Section renumbered accordingly) as follows:

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“(f) on a weekly basis, a rolling cash forecast in form and substance reasonably acceptable to theAdministrative Agent; and”

Section 2. BORROWERS’ REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in themanner provided herein, each Borrower represents and warrants to each Lender that the following statements aretrue, correct and complete:

A. Existence, Qualification and Power. Each Borrower (a) is duly organized or formed, validly existingand in good standing under the Laws of the jurisdiction of its incorporation, organization or formation, (b) hasall requisite power and authority and all requisite governmental licenses, authorizations, consents and approvalsto execute, deliver and perform its obligations under this Amendment, and (c) is duly qualified and licensed and,as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation ofproperties or the conduct of its business so requires, except to the extent failure to do so could not reasonably beexpected to have a Material Adverse Effect.

B. Authorization; No Contravention. The execution, delivery and performance by each Borrower ofthis Amendment has been duly authorized by all necessary corporate or other organizational action, and does notand will not contravene (a) the terms of any of the Borrowers’ Organizational Documents or (b) any materialapplicable Law or any material contractual restriction binding on or affecting it.

C. Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, orother action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary orrequired in connection with the execution, delivery or performance by, or enforcement against, the Borrowersof this Amendment, other than (a) any reports required to be filed by the Parent with the SEC pursuant to theExchange Act, and (b) such other approvals, consents, authorizations or actions, notices or filings that have beenduly obtained, taken, given or made and are in full force and effect.

D. Binding Obligation. This Amendment has been duly authorized, executed and delivered by eachBorrower and this Amendment and the Credit Agreement, as amended hereby (the “Amended Agreement”) arethe legal, valid and binding obligations of each such Borrower enforceable against it in accordance with theirterms, subject to the effect of applicable bankruptcy, insolvency, arrangement, moratorium and other similar lawsaffecting creditors’ rights general and to the application of general principles of equity (regardless of whetherenforcement is sought in a proceeding in equity or at law).

E. Incorporation of Representations and Warranties From Credit Agreement. The representationsand warranties contained in Section 5 of the Credit Agreement are and will be true, correct and complete in allmaterial respects on and as of the Effective Date to the same extent as though made on and as of that date, exceptto the extent such representations and warranties specifically relate to an earlier date, in which case they were true,correct and complete in all material respects on and as of such earlier date; provided that, if a representation andwarranty, covenant or

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condition is qualified as to materiality, the applicable materiality qualifier set forth above shall be disregarded withrespect to such representation and warranty, covenant or condition for purposes of this condition.

F. Absence of Default. No event has occurred and is continuing or will result from the consummation ofthe transactions contemplated by this Amendment that would constitute a Default or an Event of Default.

Section 3. MISCELLANEOUS

A. Reference to and Effect on the Credit Agreement and the Other Loan Documents.

1. On and after the Effective Date, each reference in the Credit Agreement to “this Agreement”,“hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and eachreference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof’ or words of likeimport referring to the Credit Agreement shall mean and be a reference to the Amended Agreement.

2. Except as specifically amended by this Amendment, the Credit Agreement and the other LoanDocuments shall remain in full force and effect and are hereby ratified and confirmed.

3. The execution, delivery and performance of this Amendment shall not, except as expresslyprovided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power orremedy of Administrative Agent or any Lender under, the Credit Agreement or any of the other LoanDocuments.

B. Fees and Expenses. Each Borrower acknowledges that all costs, fees and expenses as described insubsection 10.04 of the Credit Agreement incurred by Administrative Agent and its counsel with respect to thisAmendment and the documents and transactions contemplated hereby and any other fees otherwise agreed to byeach Borrower shall be for the account of each such Borrower.

C. Headings. Section and subsection headings in this Amendment are included herein for convenience ofreference only and shall not constitute a part of this Amendment for any other purpose or be given any substantiveeffect.

D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THEPARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED INACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

E. Counterparts; Effectiveness. This Amendment may be executed in any number of counterparts andby different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemedan original, but all such counterparts together shall constitute

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but one and the same instrument; signature pages may be detached from multiple separate counterparts andattached to a single counterpart so that all signature pages are physically attached to the same document.This Amendment shall become effective upon the execution of a counterpart hereof by each of Borrowers,Administrative Agent, Required Lenders and each of the Loan Parties and receipt by Borrowers andAdministrative Agent of written or telephonic notification of such execution and authorization of delivery thereof.

Section 4. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS

Each guarantor listed on the signature pages hereof (“Guarantors”) hereby acknowledges that ithas read this Amendment and consents to the terms thereof, and hereby confirms and agrees that, notwithstandingthe effectiveness of this Amendment, the obligations of each Guarantor under the Guarantee and CollateralAgreement and the other Loan Documents to which it is a party shall not be impaired or affected and the Guaranteeand Collateral Agreement and the other Loan Documents to which it is a party are, and shall continue to be, in fullforce and effect and are hereby confirmed and ratified in all respects. Each Guarantor further agrees that nothingin the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent ofsuch Guarantor to any future amendment to the Credit Agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of thedate first above written.

VELTI INC., a Delaware corporation, as Borrower

By: /s/ Sally J. RauName: Sally J. RauTitle: President

VELTI PLC, a company formed under the laws of the Bailiwick ofJersey, Channel Islands, as Borrower

By: /s/ Alex MoukasName: Alex MoukasTitle: CEO

MOBILE INTERACTIVE GROUP LIMITED, a companyincorporated under the laws of England and Wales, as Borrower

By: /s/ Barry HoulihanName: Barry HoulihanTitle: GM Europe

VELTI MOBILE PLATFORMS LIMITED, a company incorporatedunder the laws of the British Virgin Islands, as Borrower

By: /s/ Shirleen WhiteName: Shirleen WhiteTitle: Director

Signature Page to Second Amendment to Credit Agreement



HSBC BANK USA, NATIONAL ASSOCIATION, asAdministrative Agent, Issuing Bank, Swingline Lender and Lender

By: /s/ Thomas L. NolanName: Thomas L. NolanTitle: Vice President




HSBC Bank plc,as Lender

By: /s/ Paul HaggerName: Paul HaggerTitle: Director




Solely as to Section 4 hereof:

GUARANTORS:

VELTI MOBILE VALUE ADDED SERVICESLIMITED, a company incorporated under the lawsof the British Virgin Islands, as Guarantor

By: /s/ Shirleen WhiteName: Shirleen WhiteTitle: Director

VELTI DR LIMITED, a company incorporatedunder the laws of England and Wales, as Guarantor

By: /s/ Menelaos ScouloudisName: Menelaos ScouloudisTitle: Director

VELTI LIMITED, a company incorporated underthe laws of England and Wales, as Guarantor

By: /s/ Menelaos ScouloudisName: Menelaos ScouloudisTitle: Director

VELTI SOFTWARE PRODUCTS ANDRELATED PRODUCTS AND SERVICES S.A., acompany formed under the laws of the HellenicRepublic, as Guarantor

By: /s/ Menelaos ScouloudisName: Menelaos ScouloudisTitle:_Chairman & CEO_____________

VELTI PLATFORMS AND SERVICESLIMITED, a company formed under the laws of theRepublic of Cyprus, as Guarantor

By:/s/ Soterakis KoupepidesName: Soterakis KoupepidesTitle: Director

MOBCLIX, INC., a Delaware corporation, asGuarantor

By:/s/ Sally J. RauName: Sally J. RauTitle: President




AIR2WEB, INC., a Delaware corporation, asGuarantor

By: s/ Sally J. RauName: Sally J. RauTitle: President

MOBILE INTERACTIVE GROUP HOLDINGSNETHERLANDS B.V., a company formed underthe laws of the Netherlands, as Guarantor

By: /s/ Barry HoulihanName: Barry HoulihanTitle: Authorized signatory on behalf of MOBILEINTERACTIVE GROUP HOLDINGSNETHERLANDS B.V.

VELTI NETHERLANDS B.V., a company formedunder the laws of the Netherlands, as Guarantor

By: /s/ Barry HoulihanName: Barry HoulihanTitle: Authorized signatory on behalf of VELTINETHERLANDS B.V.

VELTI US HOLDINGS, INC., a Delawarecorporation, as Guarantor

By: s/ Sally J. RauName: Sally J. RauTitle: President




SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of April 18, 2013, is made by and among VELTIPLC, a company organized under the laws of the Bailiwick of Jersey (the “Company”), and the Purchasers listed on Exhibit A hereto,together with their permitted transferees (each, a “Purchaser” and collectively, the “Purchasers”).

EXECUTION VERSION

RECITALS:

A. The Company and the Purchasers are executing and delivering this Agreement in reliance upon the exemption from securitiesregistration afforded by Section 4(2) of the Securities Act.

B. The Purchasers, severally and not jointly, desire to purchase and the Company desires to sell, upon the terms and conditionsstated in this Agreement, up to a maximum of $30,000,000 of Ordinary Shares.

C. The capitalized terms used herein and not otherwise defined have the meanings given them in Article 7.

AGREEMENT

In consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged, the Company and the Purchasers (severally and not jointly) hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF SECURITIES

1.1 Purchase and Sale of Securities. At the Closing, the Company will issue and sell to each Purchaser, and each Purchaserwill, severally and not jointly, purchase from the Company, the number of Ordinary Shares (the “Shares” or the “Securities”). Thepurchase price for each Share shall be $1.50 (the “Purchase Price”).

1.2 Payment. On or prior to the Closing Date, each Purchaser will pay the Purchase Price set forth opposite its name onExhibit A hereto by wire transfer of immediately available funds in accordance with wire instructions provided by the Company tothe Purchasers prior to the Closing. Subject to any other arrangement between the Company and a particular Purchaser, on the ClosingDate, the Company shall deliver to each Purchaser or in such nominee name(s) as designated by such Purchaser in writing one or morecertificates representing the number of Shares set forth opposite such Purchaser’s name on Exhibit A hereto.

1.3 Closing Date. The closing of the transaction contemplated by this Agreement will take place on or before April 24, 2013(the “Closing Date”) and the closing (the “Closing”) will be held at the offices of Velti Inc., Steuart Tower, 1 Market Street, Suite 600,San Francisco, CA 94105, or at such other time and place (including by electronic exchange or facsimile signature) as shall be agreedupon by the Company and the Purchasers hereunder of a majority in interest of the aggregate Shares.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the SEC Documents or in the Disclosure Schedule, which Disclosure Schedule shall be deemed a part hereofand shall qualify any representation or warranty otherwise made herein to the extent of the disclosure contained in the correspondingsection of the Disclosure Schedule, the Company hereby represents and warrants to the Purchasers and the Placement Agent that:

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2.1 Organization and Qualification. Each of the Company and its Subsidiaries has been duly incorporated or organized, asthe case may be, and is validly existing as a public limited company, corporation, partnership or limited liability company, as applicable,in good standing under the laws of the jurisdiction of its incorporation or organization and has the power and authority (corporate or other)to own, lease and operate its properties and to conduct its business as currently conducted. Each of the Company and each Subsidiaryis duly qualified as a foreign public limited company, corporation, partnership or limited liability company, as applicable, to transactbusiness and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership orleasing of property or the conduct of business, except where the absence of such qualification would not reasonably be expected to have aMaterial Adverse Effect. All of the issued and outstanding Ordinary Shares or other equity or ownership interests of each subsidiary havebeen duly authorized and validly issued, are fully paid and nonassessable. The Company does not own or control, directly or indirectly,any public limited company, corporation, association or other entity other than (i) the Subsidiaries listed in Exhibit 8.1 to the Company’sAnnual Report on Form 20-F for the fiscal year ended December 31, 2012 and (ii) such other entities omitted from Exhibit 8.1 which,when such omitted entities are considered in the aggregate as a single subsidiary, would not constitute a “significant subsidiary” withinthe meaning of Rule 1-02(w) of Regulation S-X.

2.2 Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to performits obligations under this Agreement, to consummate the transactions contemplated hereby and to issue the Securities in accordancewith the terms hereof. The execution, delivery and performance of this Agreement by the Company and the consummation by it ofthe transactions contemplated hereby (including the issuance of the Securities) have been duly authorized by the Company’s Board ofDirectors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required. This Agreementhas been duly executed by the Company and assuming due authorization, execution, and delivery of this Agreement by each other partyhereto, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms,except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws affectingcreditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity and exceptas rights to indemnity and contribution may be limited by state or federal securities laws or public policy underlying such laws.

2.3 Capitalization. The authorized Ordinary Shares of the Company, as of March 31, 2013, consisted of 100,000,000 OrdinaryShares, of which 66,164,433 Ordinary Shares were issued and outstanding. All of the issued and outstanding Ordinary Shares have beenduly authorized, validly issued, fully paid, and nonassessable. Options to purchase an aggregate of 4,646,183 Ordinary Shares wereoutstanding as of March 31, 2013 and deferred share awards subject to vesting restrictions covering an aggregate of 3,331,732 OrdinaryShares were outstanding as of March 31, 2013. Except as disclosed herein, the Company does not have outstanding any options topurchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or anycontracts or commitments to issue or sell, Ordinary Shares or any such options, rights, convertible securities or obligations other thanoptions granted under the Company’s share incentive plans. The issuance and sale of the Shares will not obligate the Company to issueOrdinary Shares or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Companysecurities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no shareholders agreements,voting agreements or other similar agreements with respect to the Company’s Ordinary Shares to which the Company is a party or,to the Company’s knowledge, between or among any of the Company’s shareholders. The Company’s Memorandum and Articles ofAssociation, as amended (the “Articles of Association”), as in effect on the date hereof is filed as an exhibit to the SEC Documents.

2.4 Issuance of Securities. The Shares are duly authorized and, upon issuance and payment in accordance with the terms ofthis Agreement, will be validly issued, fully paid and non-assessable and free and clear of all liens and other encumbrances, other thanrestrictions on transfer provided for in this Agreement or imposed by applicable securities laws, and will not be subject to preemptiverights or other similar rights of shareholders of the Company. Assuming the accuracy of the representations and warranties of eachPurchaser in this Agreement, the offer and issuance of the Securities by the Company is exempt from registration under the SecuritiesAct.

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2.5 No Conflicts; Government Consents and Permits.

(a) The execution, delivery and performance of this Agreement by the Company and the consummation by theCompany of the transactions contemplated hereby (including the issuance of the Securities) will not (i) conflict with or result in a violationof any provision of its Articles of Association or other applicable charter documents or, subject to the Required Approvals, require theapproval of the Company’s shareholders, (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default under,any agreement, indenture, or instrument to which the Company or any of its Subsidiaries is a party or (iii) result in a violation of anylaw, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and regulationsof any self-regulatory organizations to which the Company or its Subsidiary or the Company’s securities are subject) applicable to theCompany, except in the case of clauses (ii) and (iii) only, for such conflicts, breaches, defaults, and violations as would not reasonably beexpected to have a Material Adverse Effect.

(b) Neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of,or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for theCompany to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof, or to issue andsell the Securities in accordance with the terms hereof, other than: (i) such as have been made or obtained; (ii) the registration of theShares under the Securities Act pursuant to Section 6 hereof; (iii) any filings required to be made under federal or state securities laws;(iv) and any required filings or notifications regarding the issuance or listing of additional shares with Nasdaq (collectively, the “RequiredApprovals”).

(c) The Company and its Subsidiaries each have all franchises, permits, licenses, and any similar authority necessaryfor the conduct of their business as now being conducted by them, except for such franchise, permit, license or similar authority, the lackof which would not reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, neither the Company norany of its Subsidiaries have received any actual notice of any proceeding relating to revocation or modification of any such franchise,permit, license, or similar authority except where such revocation or modification would not reasonably be expected to have a MaterialAdverse Effect.

2.6 SEC Documents, Financial Statements. The Company has timely filed (or has received a valid extension of such timeof filing prior to the expiration of any such extension) all reports, schedules, forms, statements and other documents required to be filedby it with the SEC since December 31, 2011, pursuant to the reporting requirements of the Exchange Act (all of the foregoing filed priorto the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits)incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Each Purchaser has had access to, trueand complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects withthe requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgatedthereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, containedany untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make thestatements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the FinancialStatements and the related notes complied as to form in all material respects with applicable accounting requirements and the publishedrules and regulations of the SEC with respect thereto as in effect at the time of filing. The Financial Statements and the related notes havebeen prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), consistently applied,during the periods involved (except (i) as may be otherwise indicated in the Financial Statements or the notes thereto or (ii) in the caseof unaudited interim statements, to the extent they may not include footnotes, may be condensed or summary statements) and fairlypresent in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated resultsof its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments). All material agreements that were required to be filed as exhibits to the SEC Documents under the SEC’s rulesand instructions for Reports on Form 20-F (collectively, the “Material Agreements”) to which the Company or any Subsidiary of theCompany is a party, or the property or assets of the Company or any Subsidiary of the Company are



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subject, have been filed as exhibits to the SEC Documents. All Material Agreements are valid and enforceable against the Companyand its Subsidiaries in accordance with their respective terms, except (i) as enforceability may be limited by applicable bankruptcy,insolvency, reorganization, or moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and (ii) asenforceability may be subject to general principles of equity and except as rights to indemnity and contribution may be limited by state orfederal securities laws or public policy underlying such laws. Neither the Company nor its Subsidiaries are in breach of or default underany of the Material Agreements, and to the Company’s knowledge, no other party to a Material Agreement is in breach of or defaultunder such Material Agreement, except in each case, for such breaches or defaults as would not reasonably be expected to have a MaterialAdverse Effect.

2.7 Disclosure Controls and Procedures. The Company has established and maintains disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure that material informationrelating to the Company, including any consolidated Subsidiaries, is made known to the certifying officers by others within those entities.The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the endof the period covered by the most recently periodic report under the Exchange Act (such date, the “Evaluation Date”). The Companypresented in its most recently filed annual periodic report under the Exchange Act the conclusions of the certifying officers about theeffectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date,there have been no significant changes in the Company’s internal control over financial reporting (as such term is defined in Exchange ActRules 13a-15(f) and 15d-15(f)) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internalcontrol over financial reporting.

2.8 Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonableassurances that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions arerecorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP and to maintain accountability forassets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recordedaccountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to anydifferences.

2.9 Absence of Litigation. As of the date hereof, there is no action, suit, proceeding or investigation before or by any court,public board, government agency, self-regulatory organization or body pending or, to the Company’s knowledge, threatened against theCompany or its Subsidiaries that if determined adversely to the Company or its Subsidiaries would reasonably be expected to have aMaterial Adverse Effect or would reasonably be expected to impair the ability of the Company to perform its obligations under thisAgreement. To the Company’s knowledge, neither the Company, its Subsidiaries, nor any director or officer thereof, is or has been thesubject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciaryduty relating to the Company. There has not been, and to the knowledge of the Company, there is not pending or contemplated, anyinvestigation by the SEC of the Company or any current or former director or officer of the Company. There has not been, and to theknowledge of the Company, there is not pending or contemplated, any investigation by the SEC of the Company or any current or formerdirector or officer of the Company. The Company has not received any stop order or other order suspending the effectiveness of anyregistration statement filed by the Company under the Exchange Act or the Securities Act and, to the Company’s knowledge, the SEChas not issued any such order.

2.10 Intellectual Property Rights. The Company and its Subsidiaries own or possess sufficient trademarks, trade names,patent rights, copyrights, domain names, licenses, approvals, trade secrets and other similar rights (collectively, “Intellectual PropertyRights”) reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such IntellectualProperty Rights would not have a Material Adverse Effect. To the knowledge of the Company, neither the Company nor any of itsSubsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others. To the knowledgeof the Company, neither the Company nor any of its Subsidiaries is infringing or otherwise violating Intellectual Property Rights ofothers. As of the date hereof, the Company is not a party to or bound by any material options, licenses or agreements with respect to theIntellectual Property Rights of any other person or entity. None of the



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technology employed by the Company or any of its Subsidiaries has been obtained or is being used by the Company or any of itsSubsidiaries in violation of any contractual obligation binding on the Company or any of its Subsidiaries or, to the Company’s knowledge,any of its or its Subsidiaries’ officers, directors or employees or otherwise in violation of the rights of any persons, except such violationsas would not, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of the Company, there are no pendingor threatened legal or governmental proceedings relating to Intellectual Property Rights of the Company and its Subsidiaries and nosuch proceedings have been threatened or contemplated by the Company, on one hand, or have been threatened by third parties orany government entity, on the other hand. The Company and its contractors have not licensed or distributed to any third party anycombination of open source software or other publicly available software (the “Publicly Available Software”) with any software in whichthe Company claims ownership rights (the “Company Software”) in a manner that would (i) require or condition the use or distributionof any of the Company Software in source code form or (ii) otherwise impose any limitation, restriction or condition on the right orability of the Company to use or distribute any of its Company Software in any manner.

2.11 Placement Agent. Neither the Company, nor any of its affiliates, nor any Person acting on its behalf, has taken any actionthat would give rise to any claim by any Person for brokerage commissions, placement agent’s fees or similar payments relating to thisAgreement or the transactions contemplated hereby, except for dealings with the Placement Agent, whose commission and fees will bepaid by the Company.

2.12 Investment Company. The Company is not and, after giving effect to the offering and sale of the Securities, will notbe an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “Investment CompanyAct”). The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

2.13 No Material Adverse Change. Since December 31, 2012, and except for changes in the ordinary course of business,there has not been any change in the assets, business, properties, financial condition or results of operations of the Company or itsSubsidiaries that would reasonably be expected to have a Material Adverse Effect. Since December 31, 2012, (i) there has not been anydividend or distribution of any kind declared, set aside for payment, paid or made by the Company or its Subsidiaries on any class ofOrdinary Shares, (ii) the Company has not purchased, redeemed or made any agreements to purchase or redeem any Ordinary Shares(other than in connection with repurchases of unvested shares issued to employees of the Company), (iii) the Company has not issuedany equity securities to any officer, director or Affiliate, except issued pursuant to existing Company share incentive plans or executiveand director compensation arrangements disclosed in the SEC Documents, (iv) neither the Company nor its Subsidiaries have sustainedany material loss or interference with its respective business from fire, explosion, flood or other calamity, whether or not covered byinsurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatoryauthority, (v) neither the Company nor its Subsidiaries have incurred any material liabilities except in the ordinary course of businessand (vi) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books andrecords. Except for the issuance of the Shares contemplated by this Agreement, no event, liability or development that would reasonablybe expected to have a Material Adverse Effect has occurred or exists with respect to the Company, its Subsidiaries or their respectivebusiness, properties, operations or financial condition that would be required to be disclosed by the Company under applicable securitieslaws at the time this representation is made that has not been publicly disclosed at least one Business Day prior to the date that thisrepresentation is made.

2.14 The Nasdaq Global Select Market. The Ordinary Shares are listed on The Nasdaq Global Select Market, and to theCompany’s knowledge, there are no proceedings to revoke or suspend such listing or the listing of the Shares. The Company is incompliance with the requirements of Nasdaq for continued listing of the Ordinary Shares thereon and any other Nasdaq listing andmaintenance requirements.

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2.15 Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that eachof the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactionscontemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company(or in any similar capacity with respect to the Company) with respect to this Agreement and the transactions contemplated hereby andany advice given by any Purchaser or any of their respective representatives or agents to the Company in connection with this Agreementand the transactions contemplated hereby is merely incidental to such Purchaser’s purchase of the Securities. The Company furtherrepresents to each Purchaser that the Company’s decision to enter into this Agreement has been based on the independent evaluation ofthe transactions contemplated hereby by the Company and its representatives.

2.16 Accountants. To the knowledge and belief of the Company, Baker Tilly Virchow Krause, LLP, who will have expressedor will express, as the case may be, their opinion with respect to the audited financial statements and schedules to be included as a partof any Registration Statement prior to the filing of any such Registration Statement, are independent accountants as required by theSecurities Act.

2.17 Insurance. The Company and its Subsidiaries are insured by insurers of recognized financial responsibility against suchlosses and risks and in such amounts as the Company believes are prudent and customary for a company (i) in the businesses and locationin which the Company and its Subsidiaries are engaged, (ii) with the resources of the Company and its Subsidiaries and (iii) at a similarstage of development as the Company. The Company believes it and its Subsidiaries will be able to obtain similar coverage at reasonablecost from similar insurers as may be necessary to continue its business.

2.18 Foreign Corrupt Practices. Neither the Company nor its Subsidiaries, nor to the Company’s knowledge, any director,officer, agent, employee or other Person acting on behalf of the Company of its Subsidiaries has, in the course of its actions for, oron behalf of, the Company or its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or otherunlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic governmentofficial or employee from corporate funds, (iii) violated or is in violation of in any material respect any provision of the U.S. ForeignCorrupt Practices Act of 1977, as amended or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawfulpayment to any foreign or domestic government official or employee.

2.19 Private Placement. Neither the Company nor its Subsidiary or any affiliates, nor any Person acting on its or their behalf,has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under any circumstancesthat would (i) require registration of the Securities under the Securities Act or (ii) cause the offering of the Securities pursuant to thisAgreement to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or shareholder approvalprovisions. Assuming the accuracy of the representations and warranties of each Purchaser contained in Article 3 hereof, the issuance ofthe Securities are exempt from registration under the Securities Act.

2.20 No Registration Rights. Assuming the accuracy of the representations and warranties of each Purchaser containedin Article 3, and each Purchaser’s compliance with this Agreement, no Person has the right to require the Company to register anysecurities for sale under the Securities Act by reason of the filing of a Registration Statement. To the Company’s knowledge, no factsor circumstances exists that would inhibit or delay the preparation and filing of the Registration Statement with respect to the OrdinaryShares in accordance with Article 6.

2.21 Taxes. Each of the Company and its Subsidiaries has (i) accurately and timely filed (or has obtained an extension oftime within which to file) all necessary federal, state and foreign income and franchise tax returns, (ii) paid all taxes shown as dueon such tax returns and (iii) set aside on its books provision reasonably adequate for the payment of all material taxes for periodssubsequent to the periods to which such returns apply, except where the failure to so file, the failure to so pay or the failure to so set asidewould not reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, there are no unpaid taxes in anymaterial amount claimed by the taxing authority of any jurisdiction to be due by the Company or its Subsidiaries, and, to the Company’sknowledge, there is no basis for any such claim.



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2.22 Real and Personal Property. The Company and each of its Subsidiaries has good and marketable title to, or has validrights to lease or otherwise use, all items of real and personal property that are material to the business of the Company and its Subsidiariesfree and clear of all liens, encumbrances, claims and defects and imperfections of title except for Permitted Liens and those that (i) do notmaterially interfere with the use of such property by the Company or its Subsidiaries (ii) reflected in the Company Financial Statementsor (iii) would not reasonably be expected to have a Material Adverse Effect.

2.23 Application of Takeover Protections. The execution and delivery of this Agreement and the consummation of thetransactions contemplated hereby will not impose any restriction on any Purchaser, or create in any party (including any currentshareholder of the Company) any rights, under any share acquisition, business combination, poison pill (including any distributionunder a rights agreement), or other similar anti-takeover provisions under the Company’s charter documents or the laws of its state ofincorporation.

2.24 No Manipulation of Shares. The Company has not, and to its knowledge no one acting on its behalf has, taken, norwill it take, directly or indirectly any action designed to stabilize or manipulate the price of the Ordinary Shares or any security of theCompany to facilitate the sale or resale of any of the Shares.

2.25 Related Party Transactions. Except with respect to the transactions that are not required to be disclosed, to theCompany’s knowledge, all transactions that have occurred between or among the Company, on the one hand, and any of its officers ordirectors, or any affiliate or affiliates of any such officer or director, on the other hand, prior to the date hereof have been disclosed in theSEC Documents.

2.26 Use of Proceeds. The Company shall use the net proceeds of the sale of the Securities hereunder for research anddevelopment of the Company’s technology solutions, working capital and general corporate purposes.

2.27 Sarbanes-Oxley Act. The Company is in compliance in all material respects with any and all applicable requirements ofthe Sarbanes-Oxley Act of 2002 that are effective to the Company, as of the date hereof, and any and all applicable rules and regulationspromulgated by the SEC thereunder that are effective to the Company as of the date hereof and as of the Closing Date.

2.28 Money Laundering Laws. The operations of the Company and its Subsidiaries are, and have been conducted at all times,in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions ReportingAct of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and anyrelated or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively,the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or bodyor any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to theknowledge of the Company, threatened.

2.29 OFAC. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer,agent, employee, affiliate or Person acting on behalf of the Company or any of its Subsidiaries is currently subject to any U.S. sanctionsadministered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) and the Company will not directlyor indirectly use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, jointventure partner or other Person or entity, for the purpose of financing the activities of any Person currently subject to any U.S. sanctionsadministered by OFAC.

ARTICLE 3

PURCHASER’S REPRESENTATIONS AND WARRANTIES

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Each Purchaser represents and warrants to the Company and the Placement Agent, severally and not jointly, with respect to itselfand its purchase hereunder, that:

3.1 Investment Purpose. The Purchaser is purchasing the Securities for its own account and not with a present view towardthe public sale or distribution thereof and has no intention of selling or distributing any of such Securities or any arrangement orunderstanding with any other Persons regarding the sale or distribution of such Securities except in accordance with the provisions ofArticle 6 and except as would not result in a violation of the Securities Act or any applicable state securities laws. The Purchaser willnot, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquireor take a pledge of) any of the Securities except in accordance with the provisions of Article 6 or pursuant to and in accordance with theSecurities Act or any applicable state securities laws.

3.2 Information. The Purchaser has been furnished with all relevant materials relating to the business, finances and operationsof the Company necessary to make an investment decision, and materials relating to the offer and sale of the Securities, that havebeen requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions of the Company. The Purchaser hassought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to itsacquisition of the Purchased Shares.

3.3 Acknowledgement of Risk.

(a) The Purchaser acknowledges and understands that its investment in the Securities involves significant risks,including, without limitation, the following: (i) an investment in the Company is speculative, and only Purchasers who can afford the lossof their entire investment should consider investing in the Company and the Securities; (ii) the Purchaser may not be able to liquidate itsinvestment; (iii) transferability of the Securities is extremely limited; and (iv) in the event of a disposition of the Securities, the Purchasercould sustain the loss of its entire investment;

(b) The Purchaser is able to bear the economic risk of holding the Securities for an indefinite period, and hasknowledge and experience in financial and business matters such that it is capable of evaluating the risks of the investment in theSecurities; and

(c) The Purchaser has, in connection with the Purchaser’s decision to purchase Securities, not relied upon anyrepresentations or other information (whether oral or written) other than as set forth in the representations and warranties of the Companycontained herein and the information disclosed in the SEC Documents, including the Risk Factors in the SEC Documents, and thePurchaser has, with respect to all matters relating to this Agreement and the offer and sale of the Securities, relied solely upon the adviceof such Purchaser’s own counsel and has not relied upon or consulted any counsel to the Placement Agent or counsel to the Company.

3.4 Governmental Review. The Purchaser understands that no United States federal or state agency or any other governmentor governmental agency has passed upon or made any recommendation or endorsement of the Securities or an investment therein.

3.5 Transfer or Resale. The Purchaser understands that:

(a) the Securities have not been and are not being registered under the Securities Act (other than as contemplated inArticle 6) or any applicable state securities laws and, consequently, the Purchaser may have to bear the risk of owning the Securities foran indefinite period of time because the Securities may not be transferred unless (i) the resale of the Securities is registered pursuant toan effective registration statement under the Securities Act, as contemplated in Article 6, (ii) the Purchaser has delivered to the Companyan opinion of counsel (in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that theSecurities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, or (iii) the Securities aresold or transferred pursuant to Rule 144;

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(b) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule144 and, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whomthe sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with someother exemption under the Securities Act or the rules and regulations of the SEC thereunder; and

(c) except as set forth in Article 6 herein, neither the Company nor any other Person is under any obligation to registerthe resale of the Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemptionthereunder.

3.6 Legends.

(a) The Purchaser understands the certificates representing the Securities will bear a restrictive legend in substantiallythe following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIESMAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCEOF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, ORUNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTIONFROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO REQUIRE ANOPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THEEXTENT THAT SUCH OPINION IS REQUIRED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENTUNDER WHICH THE SECURITIES WERE ISSUED.

(b) To the extent the resale of the Shares is registered under the Securities Act pursuant to an effective RegistrationStatement, the Company agrees to promptly (i) authorize the removal of the legend set forth in Section 3.6(a) and any other legend notrequired by applicable law from such Shares and (ii) cause its transfer agent to issue such Shares without such legends to the holdersthereof by electronic delivery at the applicable balance account at the Depository Trust Company upon surrender of any share certificatesevidencing such Shares. With respect to any Shares for which restrictive legends are removed pursuant to this Section 3.6(b), the holderthereof agrees to only sell such Shares when and as permitted by the effective Registration Statement covering such resale and inaccordance with applicable securities laws and regulations. Any fees (with respect to the Company’s transfer agent, counsel or otherwise)associated with the removal of such legend(s) shall be borne by the Company.

(c) The Purchaser may request that the Company remove, and the Company agrees to authorize the removal of anylegend from the Shares (i) following any sale of such Shares pursuant to Rule 144, or (ii) if such Shares are eligible for sale under Rule144 following the expiration of the relevant holding requirement under subparagraphs (b) and (d) thereof. Following the time a legend isno longer required for the Shares under this Section 3.6(c), the Company will, no later than five Business Days following the delivery bya Purchaser to the Company or the Company’s transfer agent of a legended certificate representing such securities, deliver or cause to bedelivered to such Purchaser a certificate representing such securities that is free from all restrictive and other legends.

3.7 Authorization; Enforcement. The Purchaser has the requisite power and authority to enter into this Agreement andto consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. The Purchaser has takenall necessary action to authorize the execution, delivery and performance of this Agreement. Upon the execution and delivery of thisAgreement, this Agreement shall constitute a valid and binding obligation of the Purchaser enforceable in accordance with its terms,except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affectingcreditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity and exceptas rights to indemnity and contribution may be limited by state or federal securities laws or public policy underlying such laws.

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3.8 Residency. Unless the Purchaser has otherwise notified the Company in writing, the Purchaser is a resident of thejurisdiction set forth immediately below such Purchaser’s name on the signature pages hereto.

3.9 Acknowledgements Regarding Placement Agent.

(a) The Purchaser acknowledges that the Placement Agent is acting as placement agent on a “best efforts” basis forthe Securities being offered hereby and will be compensated by the Company for acting in such capacity. The Purchaser represents that(i) the Purchaser was contacted regarding the sale of the Securities by the Placement Agent or the Company (or an authorized agent orrepresentative thereof) with whom the Purchaser entered into a verbal or written confidentiality agreement and (ii) no Securities wereoffered or sold to it by means of any form of general solicitation or general advertising as such terms are used in Regulation D of theSecurities Act. Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosuremade to it in connection with this transaction (including the existence and terms of this Agreement).

(b) The Purchaser represents that it is making this investment based on the results of its own due diligenceinvestigation of the Company, and has not relied on any information or advice furnished by or on behalf of the Placement Agent inconnection with the transactions contemplated hereby. The Purchaser acknowledges that the Placement Agent has not made, and will notmake, any representations and warranties with respect to the Company or the transactions contemplated hereby, and the Purchaser willnot rely on any statements made by the Placement Agent, orally or in writing, to the contrary. Neither the Placement Agent nor any ofits representatives have any responsibility with respect to the completeness or accuracy of any information or materials furnished to suchPurchaser in connection with the transactions contemplated hereby.

(c) The parties agree and acknowledge that the Placement Agent may rely on the representations, warranties,agreements and covenants of the Company contained in this Agreement and may rely on the representations and warranties of therespective Purchasers contained in this Agreement as if such representations, warranties, agreements, and covenants, as applicable, weremade directly to the Placement Agent. The parties further agree that the Placement Agent may rely on or, if the Placement Agent sorequest, be specifically named as an addressee of, the legal opinions to be delivered pursuant to Section 5.2(d) of this Agreement.

3.10 Exculpation of Placement Agent. Each party hereto agrees for the express benefit of the Placement Agent, its respectiveaffiliates and its respective representatives that neither the Placement Agent nor any of its affiliates or any of its representatives (1) hasany duties or obligations other than those specifically set forth herein or in the engagement letter, dated as of April 5, 2013, amongthe Company and Jefferies LLC (the “Engagement Letter”); (2) shall be liable for any improper payment made in accordance withthe information provided by the Company; (3) makes any representation or warranty, or has any responsibilities as to the validity,accuracy, value or genuineness of any information, certificates or documentation delivered by or on behalf of the Company pursuantto this Agreement or any other agreements contemplated hereby; or (4) shall be liable (x) for any action taken, suffered or omitted byany of them in good faith and reasonably believed to be authorized or within the discretion or rights or powers conferred upon it bythis Agreement or any other agreements contemplated hereby or (y) for anything which any of them may do or refrain from doing inconnection with this Agreement or any other agreements contemplated hereby Document, except for such party’s own gross negligence,willful misconduct or bad faith. The Placement Agent, its respective affiliates and its respective representatives shall be entitled to (1) relyon, and shall be protected in acting upon, any certificate, instrument, opinion, notice, letter or any other document or security delivered toany of them by or on behalf of the Company, and (2) be indemnified by the Company for acting as Placement Agent hereunder pursuantthe indemnification provisions set forth in the Engagement Letter.

3.11 Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and itwill be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a“qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as abroker-dealer under Section 15 of the Exchange Act.

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3.12 Need for Additional Financing. Such Purchaser understands that the Company may need to obtain additional financingfollowing consummation of this Agreement in order to fully execute its current business plan and objectives. Such financing could be inthe form of a sale or sales of equity or debt or equipment lease financing or a combination of the foregoing. Such financing could lead tomaterial dilution to the Company’s then existing equity holders and could provide for terms that restrict the operations of the Company.There can be no assurance that any additional financing following the consummation of this Agreement will be available to the Companyon commercially reasonable terms or at all. In the event the Company is unable to obtain additional financing, it may not be able to fullyexecute its business plan and objectives and could be forced to curtail some or all of its operations.

3.13 Non-US Citizen. If such Purchaser is not a United States person, it has satisfied itself as to the full observance of thelaws of its jurisdiction in connection with any invitation to purchase the Securities or any use of this Agreement, including (i) the legalrequirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase,(iii) any governmental or other consents that may need to be obtained and (iv) the income tax and other tax consequences, if any, that maybe relevant to the purchase, holding, redemption, sale or transfer of the Securities. Such Purchaser’s payment for, and his or her continuedbeneficial ownership of the Securities, will not violate any applicable securities or other laws of the Purchaser’s jurisdiction.

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ARTICLE 4

COVENANTS

4.1 Reporting Status. The Company’s Ordinary Shares are registered under Section 12 of the Exchange Act. During theRegistration Period, the Company will timely file (or obtain extensions in respect thereof and file within applicable grace period) allreports required to be filed by the Company after the date hereof pursuant to the Exchange Act, with the SEC and the Company will notterminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulationsthereunder would permit such termination.

4.2 Expenses. The Company and each Purchaser is liable for, and will pay, its own fees and expenses incurred in connectionwith the negotiation, preparation, execution and delivery of this Agreement, including, without limitation, attorneys’ consultants’accountants’ and other advisers’ fees and expenses.

4.3 Financial Information. The financial statements of the Company to be included in any documents filed with the SEC willbe prepared in accordance with U.S. GAAP, consistently applied (except (i) as may be otherwise indicated in such financial statementsor the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes, may be condensed orsummary statements), and will fairly present in all material respects the consolidated financial position of the Company and consolidatedresults of its operations and cash flows as of, and for the periods covered by, such financial statements (subject, in the case of unauditedstatements, to normal and recurring year-end audit adjustments).

4.4 Securities Laws Disclosure; Publicity. On or before 9:00 a.m., New York local time, on the trading day immediatelyfollowing the date hereof, the Company shall issue a press release or file a Report of Foreign Private Issuer on Form 6-K announcingthe signing of this Agreement and describing the terms of the transactions contemplated by this Agreement. Promptly after suchannouncement, the Company shall file a Report of Foreign Private Issuer on Form 6-K with the SEC describing the terms of thetransactions contemplated by this Agreement and including as an exhibit to such Current Report on Form 6-K this Agreement, in theform required by the Exchange Act. From and after the issuance of the press release or Form 6-K filed on or before 9:00 a.m., NewYork local time on the trading day immediately following the date hereof, no Purchaser shall be in possession of any material, non-publicinformation received from the Company or any of its officers, directors, employees or agents, that is not disclosed in the press release orForm 6-K. The Company shall not otherwise publicly disclose the name of any Purchaser, or include the name of any Purchaser in anyfiling with the SEC (other than in a Registration Statement and any exhibits to filings made in respect of this transaction in accordancewith periodic filing requirements under the Exchange Act) or any regulatory agency, without the prior written consent of such Purchaser,except to the extent such disclosure is required by law or regulations, in which case the Company shall provide the Purchasers with priornotice of such disclosure.

4.5 Sales by Purchasers. Each Purchaser will sell any Securities held by it in compliance with applicable prospectus deliveryrequirements, if any, or otherwise in compliance with the requirements for an exemption from registration under the Securities Act and therules and regulations promulgated thereunder. No Purchaser will make any sale, transfer or other disposition of the Securities in violationof federal or state securities laws.

4.6 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required underRegulation D of the Securities Act and to provide a copy thereof, promptly upon the written request of any Purchaser. The Company, onor before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemptionfrom, or to qualify the Securities for, sale to the Purchasers at the Closing pursuant to this Agreement under applicable securities or“Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon the written request of anyPurchaser.



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ARTICLE 5

CONDITIONS TO CLOSING

5.1 Conditions to Obligations of the Company. The Company’s obligation to complete the purchase and sale of theSecurities and deliver such share certificate(s) to each Purchaser is subject to the waiver by the Company or fulfillment as of the ClosingDate of the following conditions:

(a) Receipt of Funds. The Company shall have received by wire transfer to the account as specified in writing by theCompany immediately available funds in the full amount of the Purchase Price for the Securities being purchased hereunder as set forthopposite such Purchaser’s name on Exhibit A hereto.

(b) Representations and Warranties. The representations and warranties made by each Purchaser in Article 3 shall betrue and correct in all material respects as of the Closing Date (unless as of a specific date therein) (except for those representations andwarranties which are qualified as to materiality, in which case such representations and warranties shall be true in correct in all respects).

(c) Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by thePurchasers on or prior to the Closing Date shall have been performed or complied with in all material respects.

(d) Blue Sky. The Company shall have obtained all necessary blue sky law permits and qualifications, or securedexemptions therefrom, required by any or foreign or other jurisdiction state for the offer and sale of the Securities.

(e) Nasdaq Qualification. The Shares to be issued shall be duly authorized for listing by Nasdaq, subject to officialnotice of issuance, to the extent required by the rules of Nasdaq.

(f) Absence of Litigation. No proceeding challenging this Agreement or the transactions contemplated hereby, orseeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted or be pending before any court, arbitrator,governmental body, agency or official.

(g) No Governmental Prohibition. The sale of the Securities by the Company shall not be prohibited by any law orgovernmental order or regulation.

(h) Agreement Execution. A duly executed copy of its signature page to this Agreement duly executed by suchPurchaser.

5.2 Conditions to Purchasers’ Obligations at the Closing. Each Purchaser’s obligation to complete the purchase and sale ofthe Securities is subject to the waiver by such Purchaser or fulfillment as of the Closing Date of the following conditions:

(a) Representations and Warranties. The representations and warranties made by the Company in Article 2 shall betrue and correct in all material respects as of the Closing Date (unless as of a specific date therein) (except for those representations andwarranties which are qualified as to materiality, in which case such representations and warranties shall be true in correct in all respects).

(b) Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by theCompany on or prior to the Closing Date shall have been performed or complied with in all material respects.

(c) Blue Sky. The Company shall have obtained all necessary blue sky law permits and qualifications, or securedexemptions therefrom, required by any state or foreign or other jurisdiction for the offer and sale of the Securities.

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(d) Legal Opinion. The Company shall have delivered to such Purchaser an opinion, dated as of the Closing Date,from each of DLA Piper LLP (US) and Mourant Ozannes, counsels to the Company, in substantially the forms attached hereto as ExhibitB and Exhibit C.

(e) Share Certificate. Receipt by the Purchaser or its custodian of one or more physical certificates representing thenumber of Shares set forth opposite such Purchaser’s name on Exhibit A hereto.

(f) Nasdaq Qualification. The Shares shall be duly authorized for listing by Nasdaq, subject to official notice ofissuance, to the extent required by the rules of Nasdaq.

(g) Absence of Litigation. No proceeding challenging this Agreement or the transactions contemplated hereby, orseeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted or be pending before any court, arbitrator,governmental body, agency or official.

(h) No Governmental Prohibition. The sale of the Securities by the Company shall not be prohibited by any law orgovernmental order or regulation.

(i) Minimum Aggregate Investment. The Company shall have received at the Closing at least $10 million of aggregategross proceeds from the sale of Securities hereunder.

(j) Agreement Execution. A duly executed copy of its signature page to this Agreement duly executed by theCompany.

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ARTICLE 6

REGISTRATION RIGHTS

6.1 As soon as reasonably practicable, but in no event later than 10 days after the Closing Date (the “Filing Date”), theCompany shall file a registration statement covering the resale of the Registrable Securities with the SEC for an offering to be made ona continuous basis pursuant to Rule 415. The Registration Statement shall be on Form F-3 (except if the Company is not then eligibleto register for resale the Registrable Securities on Form F-3 in which case such registration shall be on another appropriate form forsuch purpose) and shall contain (except if otherwise required pursuant to written comments received from the SEC upon a review ofsuch Registration Statement) a “Plan of Distribution” substantially in the form agreed by the parties to this Agreement (the “InitialRegistration Statement”). The Company shall use commercially reasonable efforts to cause the Initial Registration Statement to bedeclared effective under the Securities Act as soon as practicable but, in any event, no later than the Initial Effectiveness Deadline,and shall use commercially reasonable efforts to keep the Initial Registration Statement (or a Subsequent Form F-3, as defined below)continuously effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such InitialRegistration Statement have been sold or (ii) the date when all Registrable Securities covered by the Initial Registration Statement ceaseto be Registrable Securities as determined by the counsel to the Company. Notwithstanding the foregoing, the Company shall only berequired to initially register the number of Registrable Securities the SEC allows to be registered on the Initial Registration Statement.For purposes of clarification, any failure by the Company to file the Initial Registration Statement by the Filing Date or to effect suchRegistration Statement within the Initial Effectiveness Deadline shall not otherwise relieve the Company of its obligations to file oreffect the Initial Registration Statement as set forth above in this Section 6.1. In the event the SEC informs the Company that all ofthe Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a singleregistration statement, the Company agrees to promptly (i) inform each of the Holders thereof, (ii) use its commercially reasonable effortsto file amendments to the Initial Registration Statement as required by the SEC and/or (iii) withdraw the Initial Registration Statementand file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of RegistrableSecurities permitted to be registered by the SEC, on Form F-3 or, if the Company is ineligible to register for resale the RegistrableSecurities on Form F-3, such other form available to register for resale the Registrable Securities as a secondary offering; provided,however, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commerciallyreasonable efforts to advocate with the SEC for the registration of all of the Registrable Securities. In the event the Company amends theInitial Registration Statement or files a New Registration Statement, as the case may be, under clauses (ii) or (iii) above, the Companywill use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC, one or more registration statementson Form F-3 or, if the Company is ineligible to register for resale the Registrable Securities on Form F-3, such other form available toregister for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or theNew Registration Statement (the “Remainder Registration Statements”). Notwithstanding any other provision of this Agreement andsubject to the payment of damages in Section 6.3, if the SEC limits the number of Registrable Securities permitted to be registered on aparticular Registration Statement (and notwithstanding that the Company used commercially diligent efforts to advocate with the SEC forthe registration of all or a greater number of Registrable Securities), any required cutback of Registrable Securities shall be applied to thePurchasers pro rata in accordance with the number of such Registrable Securities sought to be included in such Registration Statement byreference to the amount of Registrable Securities set forth opposite such Purchaser’s name on Exhibit A (and in the case of a subsequenttransfer, the initial Purchaser’s transferee) relative to the aggregate amount of all Registrable Securities.

6.2 All reasonable Registration Expenses incurred in connection with any registration, qualification, exemption or compliancepursuant to Section 6.1 shall be borne by the Company. All Selling Expenses relating to the sale of securities registered by or on behalfof Holders shall be borne by such Holders pro rata on the basis of the number of securities so registered.

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6.3 The Company further agrees that, in the event that (i) the Initial Registration Statement has not been filed with the SECwithin the Filing Date, (ii) the Initial Registration Statement or the New Registration Statement, as applicable, has not been declaredeffective by the SEC within the Initial Effectiveness Deadline or (iii) after such Registration Statement is declared effective by the SEC,is suspended by the Company or ceases to remain continuously effective as to all Registrable Securities for which it is required to beeffective, other than, in each case, within the time period(s) permitted by Section 6.7(b) (each such event referred to in clauses (i), (ii)and (iii), (a “Registration Default”)), for all or part of any thirty-day period (a “Penalty Period”) during which the Registration Defaultremains uncured (which initial thirty-day period shall commence on the fifth Business Day after the date of such Registration Default ifsuch Registration Default has not been cured by such date), the Company shall pay to each Purchaser 1.5% of such Purchaser’s PurchasePrice of his or her Securities for each Penalty Period during which the Registration Default remains uncured; provided, however, thatif a Purchaser fails to provide the Company with any information that is required to be provided in such Registration Statement withrespect to such Purchaser as set forth herein, then the commencement of the Penalty Period described above shall be extended until twoBusiness Days following the date of receipt by the Company of such required information; and provided, further, that in no event shallthe Company be required hereunder to pay to any Purchaser pursuant to this Agreement more than 1.5% of such Purchaser’s PurchasePrice of his or her securities in any Penalty Period and in no event shall the Company be required hereunder to pay to any Purchaserpursuant to this Agreement an aggregate amount that exceeds 10.0% of the Purchase Price paid by such Purchaser for such Purchaser’sSecurities. The Company shall deliver said cash payment to the Purchaser by the fifth Business Day after the end of such Penalty Period.If the Company fails to pay said cash payment to the Purchasers in full by the fifth Business Day after the end of such Penalty Period, theCompany will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicablelaw) to the Purchasers, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon,are paid in full. Notwithstanding the foregoing, in the event a Registration Default occurs pursuant to clause (iii) hereof, the 1.5% ofliquidated damages referred to above for any Penalty Period shall be reduced to equal the percentage determined by multiplying 1.5% bya fraction, the numerator of which shall be the number of Registrable Securities covered by the Registration Statement that is suspendedby the Company or ceases to remain continuously effective as to all Registrable Securities for which it is required to be effective whichare still Registrable Securities at such time and for which there is not otherwise an effective Registration Statement at such time and thedenominator of which shall be the number of Registrable Securities at such time.

6.4 In the case of the registration effected by the Company pursuant to this Agreement, the Company shall, upon reasonablerequest, inform each Holder as to the status of such registration. At its expense the Company shall:

(a) except for such times as the Company is permitted hereunder to suspend the use of the prospectus forming part ofa Registration Statement, use its commercially reasonable efforts to keep such registration continuously effective with respect to a Holder,and to keep the applicable Registration Statement free of any material misstatements or omissions, until the date all Shares held by suchHolder may be sold under Rule 144 without being subject to any volume, manner of sale or publicly available information requirements.The period of time during which the Company is required hereunder to keep a Registration Statement effective is referred to herein as the“Registration Period.”

(b) advise the Holders within five Business Days:

(i) when a Registration Statement or any amendment thereto has been filed with the SEC and when suchRegistration Statement or any post-effective amendment thereto has become effective;

(ii) of any request by the SEC for amendments or supplements to any Registration Statement or theprospectus included therein or for additional information;

(iii) of the issuance by the SEC of any stop order suspending the effectiveness of any Registration Statementor the initiation of any proceedings for such purpose;

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(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification ofthe Registrable Securities included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;and

(v) of the occurrence of any event that requires the making of any changes in any Registration Statement orprospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be statedtherein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they weremade) not misleading;

(c) use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of anyRegistration Statement as soon as reasonably practicable;

(d) if a Holder so requests in writing, promptly furnish to each such Holder without charge at least one copy ofeach Registration Statement and each post-effective amendment thereto, including financial statements and schedules (excluding thosepreviously furnished or incorporated by reference), except if such documents are available on EDGAR;

(e) during the Registration Period, promptly deliver to each such Holder, without charge, an electronic copy of eachprospectus included in a Registration Statement and any amendment or supplement thereto as such Holder may reasonably request inwriting, except if such documents are available on EDGAR; and the Company consents to the use, consistent with the provisions hereof,of the prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with theoffering and sale of the Registrable Securities covered by a prospectus or any amendment or supplement thereto

(f) during the Registration Period, if a Holder so requests in writing, deliver to each Holder, without charge, (i) oneelectronic copy of the following documents, other than those documents available via EDGAR: (A) its annual report to its shareholders,if any (which annual report shall contain financial statements audited in accordance with U.S. GAAP in the United States of America bya firm of certified public accountants of recognized standing) and (B) if not included in substance in its annual report to shareholders, itsannual report on Form 20-F (or similar form);

(g) prior to any public offering of Registrable Securities pursuant to any Registration Statement, promptly take suchcommercially reasonable actions to register for offer and sale under the securities or blue sky laws of such United States jurisdictionsas any such Holders reasonably request in writing, provided that the Company shall not for any such purpose be required to qualifygenerally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service ofprocess in any such jurisdiction, and do any and all other acts or things reasonably necessary or advisable to enable the offer and salein such jurisdictions of the Registrable Securities covered by any such Registration Statement. For the avoidance of doubt, if, at anytime during the Registration Period, there is not an effective Registration Statement covering all of the Registrable Securities and theCompany determines to prepare and file with the SEC a registration statement relating to an offering for its own account or the accountof others under the Securities Act of any of its equity securities, as described in Section 6.10 herein, the Company shall not include insuch registration statement all or any part of such Registrable Securities.

(h) upon the occurrence of any event contemplated by Section 6.4(b)(v) above, except for such times as the Companyis permitted hereunder to suspend the use of a prospectus forming part of a Registration Statement, the Company shall use itscommercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statementor a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of theRegistrable Securities included therein, such prospectus will not include any untrue statement of a material fact or omit to state anymaterial fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

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(i) otherwise use its commercially reasonable efforts to comply in all material respects with all applicable rules andregulations of the SEC which could affect the sale of the Registrable Securities;

(j) use its commercially reasonable efforts to cause all Registrable Securities to be listed on each securities exchangeor market, if any, on which equity securities issued by the Company have been listed;

(k) use its commercially reasonable efforts to take all other steps necessary to effect the registration of the RegistrableSecurities contemplated hereby and to enable the Holders to sell Registrable Securities under Rule 144;

(l) provide to each Purchaser and its representatives, if requested, the opportunity to conduct a reasonable inquiry ofthe Company’s financial and other records during normal business hours and make available its officers, directors and employees forquestions regarding information which such Purchaser may reasonably request in order to fulfill any due diligence obligation on its part;and

(m) permit a single counsel for the Purchasers to review any Registration Statement and all amendments andsupplements thereto within two Business Days prior to the filing thereof with the SEC;

provided that, in the case of clauses (l) and (m) above, the Company shall not be required (A) to delay the filing of any RegistrationStatement or any amendment or supplement thereto as a result of any ongoing diligence inquiry by or on behalf of a Holder or toincorporate any comments to any Registration Statement or any amendment or supplement thereto by or on behalf of a Holder if suchinquiry or comments would require a delay in the filing of such Registration Statement, amendment or supplement, as the case may be,or (B) to provide, and shall not provide, any Purchaser or its representatives with material, non-public information unless such Purchaseragrees to receive such information and enters into a written confidentiality agreement with the Company in a form reasonably acceptableto the Company.

6.5 The Holders shall have no right to take any action to restrain, enjoin or otherwise delay any registration pursuant to Section6.1 hereof as a result of any controversy that may arise with respect to the interpretation or implementation of this Agreement.

6.6 (a) To the extent permitted by law, the Company shall indemnify each Holder and each Person controlling such Holderwithin the meaning of Section 15 of the Securities Act, with respect to which any registration that has been effected pursuant to thisAgreement, against all claims, losses, damages and liabilities (or action in respect thereof), including any of the foregoing incurredin settlement of any litigation, commenced or threatened (subject to Section 6.6(c) below), arising out of or based on: (i) any untruestatement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus, any amendment orsupplement thereof, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein ornecessary to make the statements therein not misleading, in light of the circumstances in which they were made, or (ii) any violationby the Company of any rule or regulation promulgated by the Securities Act applicable to the Company and relating to any action orinaction required of the Company in connection with any such registration and will reimburse each Holder and each Person controllingsuch Holder, for reasonable legal and other out-of-pocket expenses reasonably incurred in connection with investigating or defendingany such claim, loss, damage, liability or action as incurred; provided that the Company will not be liable in any such case to the extentthat (x) any untrue statement or omission or allegation thereof is made in reliance upon and in conformity with written informationfurnished to the Company by or on behalf of such Holder for use in preparation of any Registration Statement, prospectus, amendment orsupplement, or (y) the use by a Purchaser of an outdated or defective prospectus after the Company has notified such Purchaser in writingthat the prospectus is outdated or defective; provided further, that the Company will not be liable in any such case where the claim, loss,damage or liability arises out of or is related to the failure of such Holder to comply with the covenants and agreements contained in thisAgreement respecting sales of Registrable Securities, and except that the foregoing indemnity agreement is subject to the condition that,insofar as it relates to any such untrue statement or alleged untrue statement or omission or alleged omission made in any preliminaryprospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time any Registration Statement becomeseffective or in an amended prospectus filed with the SEC pursuant to Rule 424(b) which meets the

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requirements of Section 10(a) of the Securities Act (each, a “Final Prospectus”), such indemnity shall not inure to the benefit of anysuch Holder or any such controlling Person, if a copy of a Final Prospectus furnished by the Company to the Holder for delivery was notfurnished to the Person asserting the loss, liability, claim or damage at or prior to the time such furnishing is required by the SecuritiesAct and a Final Prospectus would have cured the defect giving rise to such loss, liability, claim or damage. The indemnity agreementcontained in this Section 6.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if suchsettlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

(b) Each Holder will severally, and not jointly, indemnify the Company, each of its directors and officers, and eachPerson who controls the Company within the meaning of Section 15 of the Securities Act, against all claims, losses, damages andliabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened(subject to Section 6.6(c) below), arising out of or based on any: (i) untrue statement (or alleged untrue statement) of a material factcontained in any Registration Statement, prospectus, or any amendment or supplement thereof, incident to any such registration, or basedon any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statementstherein not misleading, in light of the circumstances in which they were made in each case to the extent, but only to the extent, that suchuntrue statement or omission or allegation thereof is made in reliance upon and in conformity with written information furnished to theCompany by or on behalf of the Holder for use in preparation of any Registration Statement, prospectus, amendment or supplement; or(ii) any violation by a Holder of any rule or regulation promulgated by the Securities Act applicable to such Holder and relating to anyaction or inaction required of such Holder in connection with any such registration, and will reimburse the Company, such directors andofficers, and each Person controlling the Company for reasonable legal and any other expenses reasonably incurred in connection withinvestigating or defending any such claim, loss, damage, liability or action as incurred; provided that the indemnity shall not apply to theextent that such claim, loss, damage or liability results from the fact that a current copy of a prospectus was not made available to thePerson asserting the loss, liability, claim or damage at or prior to the time such furnishing is required by the Securities Act and a FinalProspectus would have cured the defect giving rise to such loss, claim, damage or liability. Notwithstanding the foregoing, a Holder’saggregate liability pursuant to this subsection (b) and subsection (d) shall be limited to the net amount received by the Holder from thesale of the Registrable Securities.

(c) Each party entitled to indemnification under this Section 6.6 (the “Indemnified Party”) shall give notice to theparty required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge ofany claim as to which indemnity may be sought, and shall permit the Indemnifying Party (at its expense) to assume the defense of anysuch claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of suchclaim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the IndemnifiedParty may participate in such defense at such Indemnified Party’s expense, and provided further that the failure of any Indemnified Partyto give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement, unless such failureis materially prejudicial to the Indemnifying Party in defending such claim or litigation, and provided further, that the IndemnifyingParty shall not assume the defense for matters as to which there is a conflict of interest or there are separate and different defenses. AnIndemnifying Party shall not be liable for any settlement of an action or claim effected without its written consent (which consent willnot be unreasonably withheld). No Indemnifying Party, in its defense of any such claim or litigation, shall, except with the consent ofeach Indemnified Party (which consent will not be unreasonably withheld), consent to entry of any judgment or enter into any settlementwhich does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a releasefrom all liability in respect to such claim or litigation.

(d) If the indemnification provided for in this Section 6.6 is held by a court of competent jurisdiction to be unavailableto an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to therein, then the Indemnifying Party, inlieu of indemnifying such Indemnified Party thereunder, shall, to the exetent permitted by applicable law, contribute to the amount paidor payable by such Indemnified Party as a result of such loss, liability, claim, damage or

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expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the IndemnifiedParty on the other in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense aswell as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall bedetermined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or theomission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

6.7 (a) Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event requiringthe preparation of a supplement or amendment to a prospectus relating to Registrable Securities so that, as thereafter delivered to theHolders, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be statedtherein or necessary to make the statements therein not misleading, each Holder will forthwith discontinue disposition of RegistrableSecurities pursuant to a Registration Statement and prospectus contemplated by Section 6.1 until its receipt of copies of the supplementedor amended prospectus from the Company and, if so directed by the Company, each Holder shall deliver to the Company all copies, otherthan permanent file copies then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time ofreceipt of such notice.

(b) Each Holder shall suspend, upon request of the Company, any disposition of Registrable Securities pursuant toany Registration Statement and prospectus contemplated by Section 6.1 not to exceed an aggregate of 45 days in any 90-day period, andnot to exceed an aggregate of 90 days in any 360-day period (each such period, a “Suspension Period”) to the extent that the Boardof Directors of the Company determines in good faith that the sale of Registrable Securities under any such Registration Statementwould be reasonably likely to cause a violation of the Securities Act or Exchange Act. Notwithstanding the foregoing, in the eventthe disclosure relates to a previously undisclosed proposed or pending material business transaction, the disclosure of which wouldimpede the Company’s ability to consummate such transaction, the period during which the effectiveness of the Registration Statementis suspended shall not be included in the calculation of any Suspension Period.

(c) Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreementas Annex A or in a form mutually agreeable to the parties (a “Selling Holder Questionnaire”). The Company shall not be requiredto include the Registrable Securities of a Holder in a Registration Statement and shall not be required to pay any additional penaltypayment amounts under Section 6.3 or other damages to any Holder who fails to furnish to the Company a fully completed Selling HolderQuestionnaire at least ten Business Days prior to the applicable Filing Deadline.

(d) Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from theCompany of the occurrence of any event of the kind described in Section 6.7(b), such Holder will forthwith discontinue disposition ofsuch Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectusand/or amended Registration Statement or until it is advised in writing by the Company that the use of the applicable Prospectus maybe resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to beincorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforcethe provisions of this paragraph.

(e) Notwithstanding Section 6.1, with respect to Registrable Securities not already covered by a RegistrationStatement, the Company shall not be obligated to file: (i) more than one pre-effective amendment or supplement to a RegistrationStatement for all Holders during any fiscal quarter; and (ii) more than one post-effective amendment to a Registration Statement forall Holders during any semi-annual period, and provided further, in all such cases involving supplements or amendments (whether pre-effective or post-effective), the Company shall only be obligated to make a filing when the aggregate principal amount of the RegistrableSecurities to be included in such amendment or supplement is more than $10 million.

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(f) Each Holder hereby covenants with the Company (i) not to make any sale of the Registrable Securities withouteffectively causing the prospectus delivery requirements under the Securities Act to be satisfied, and (ii) if such Registrable Securities areto be sold by any method or in any transaction other than on a national securities exchange or in the over-the-counter market, in privatelynegotiated transactions, or in a combination of such methods, to notify the Company at least five Business Days prior to the date on whichthe Holder first offers to sell any such Registrable Securities.

(g) At the end of the Registration Period the Holders shall discontinue sales of shares pursuant to any RegistrationStatement upon receipt of notice from the Company of its intention to remove from registration the shares covered by any suchRegistration Statement which remain unsold, and such Holders shall notify the Company of the number of shares registered which remainunsold immediately upon receipt of such notice from the Company.

6.8 With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which at any timepermit the sale of the Registrable Securities to the public without registration, so long as the Holders still own Registrable Securities, theCompany shall use its commercially reasonable efforts to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144 under theSecurities Act, at all times;

(b) file with the SEC in a timely manner all reports and other documents required of the Company under Rule 144(c)of the Exchange Act; and

(c) so long as a Holder owns any Registrable Securities, furnish to such Holder, upon any reasonable request, a writtenstatement by the Company as to its compliance with Rule 144 under the Securities Act, and of the Exchange Act and such other reportsand documents of the Company as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing aHolder to sell any such securities without registration.

6.9 The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under Section6.1 may be assigned by a Holder in connection with a transfer by such Holder of all or a portion of its Registrable Securities, provided,however, that such transfer must be made at least ten days prior to the Filing Date and that (i) such transfer may otherwise be effectedin accordance with applicable securities laws, (ii) such Holder gives prior written notice to the Company at least ten days prior to theFiling Date and (iii) such transferee agrees to comply with the terms and provisions of this Agreement, and such transfer is otherwise incompliance with this Agreement. Except as specifically permitted by this Section 6.9, the rights of a Holder with respect to RegistrableSecurities as set out herein shall not be transferable to any other Person, and any attempted transfer shall cause all rights of such Holdertherein to be forfeited.

6.10 Prior to the time that Registration Statement(s) covering the resale of all Registrable Securities have been declaredeffective by the SEC, the Company shall not file with the SEC a registration statement under the Securities Act of any of its equitysecurities other than a registration statement required to be filed pursuant to this Agreement, a registration statement on Form F-3 (orsimilar form) and all amendments and supplements thereto, covering the resale of the MIG Shares, a registration statement on Form S-8(or similar form) or, in connection with an acquisition, a registration statement on Form S-4 (or similar form); provided, however, that theforegoing restrictions in this Section 6.10 shall terminate upon such time as all of the Registrable Securities (i) have been publicly soldby the Holders or (ii) may be sold under Rule 144 during any 90-day period.

6.11 The rights of any Holder under any provision of this Article 6 may be waived (either generally or in a particular instance,either retroactively or prospectively and either for a specified period of time or indefinitely) or amended by an instrument in writingsigned by such Holder.

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ARTICLE 7

DEFINITIONS

7.1 “Agreement” has the meaning set forth in the preamble.

7.2 “Affiliate” means, with respect to any Person (as defined below), any other Person controlling, controlled by or underdirect or indirect common control with such Person (for the purposes of this definition “control,” when used with respect to any specifiedPerson, shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through ownershipof voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to theforegoing).

7.3 “Articles of Association” has the meaning set forth in Section 2.3.

7.4 “Business Day” means a day Monday through Friday on which banks are generally open for business in New York City.

7.5 “Closing” has the meaning set forth in Section 1.3.

7.6 “Closing Date” has the meaning set forth in Section 1.3.

7.7 “Company” means Velti Plc.

7.8 “Credit Facility” means that certain credit agreement, dated as of August 10, 2012, as amended from time to time, by andamong Velti Inc., Velti plc, Mobile Interactive Group Limited and Velti Mobile Platforms Limited, as the Borrowers, HSBC Bank USA,National Association, as Administrative Agent and Syndication Agent, and the other parties thereto.

7.9 “Evaluation Date” has the meaning set forth in Section 2.7.

7.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

7.11 “Filing Date” has the meaning set forth in Section 6.1.

7.12 “Final Prospectus” has the meaning set forth in Section 6.6(a).

7.13 “Financial Statements” means the financial statements of the Company included in the SEC Documents.

7.14 “Holders” means any Person holding Registrable Securities or any Person to whom the rights under Article 6 have beentransferred in accordance with Section 6.9 hereof.

7.15 “Indemnified Party” has the meaning set forth in Section 6.6(c).

7.16 “Indemnifying Party” has the meaning set forth in Section 6.6(c).

7.17 “Initial Effectiveness Deadline” means, with respect to the Registration Statement filed pursuant to Section 6.1, the datethat is: (a) in the event that the Registration Statement is not subject to a full review by the SEC, 90 days after the Closing Date underthe Securities Purchase Agreement; or (b) in the event that the Registration Statement is subject to review by the SEC, 120 days after theClosing Date under the Agreement.

7.18 “Initial Registration Statement” has the meaning set forth in Section 6.1.

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7.19 “Intellectual Property” has the meaning set forth in Section 2.10.

7.20 “Investment Company Act” has the meaning set forth in Section 2.12.

7.21 “JFSC” means the Jersey Financial Services Commission.

7.22 “Material Adverse Effect” means a material adverse effect on (a) the business, operations, assets or condition (financialor otherwise) of the Company, taken as a whole, or (b) the ability of the Company to perform its obligations pursuant to the transactionscontemplated by this Agreement; provided, that none of the following shall be taken into account when determining whether there hasbeen a Material Adverse Effect: any adverse change, effect, event, occurrence, state of facts or development attributable to: (i) economicconditions generally in the United States, or conditions in general in the industry and markets in which the Company and its Subsidiariesconduct their businesses; (ii) any change in the laws or regulations generally applicable to the industry or markets in which the Companyand its Subsidiaries operate; (iii) any decrease in the market price or trading volume of the Ordinary Shares (provided that the underlyingcauses of such decrease (subject to the other provisions of this paragraph) shall not be excluded), (iv) any failure to meet internalprojections or forecasts or published revenue or earnings predictions for any period (provided that the underlying causes of such failures(subject to the other provisions of this paragraph) shall not be excluded), (v) any adverse change, effect, event, occurrence, state of factsor development resulting from the announcement or pendency of the transactions contemplated by this Agreement or (vi) any adversechange, effect, occurrence, state of facts or development resulting from compliance with the terms and conditions of this Agreement.

7.23 “Material Agreements” has the meaning set forth in Section 2.6.

7.24 “MIG Shares” means the Company Ordinary Shares to be registered with the SEC under a registration statement on FormF-3 (or similar form), and all amendments and supplements thereto, according to that certain share purchase agreement, dated November14, 2011, by and among Barry Houlihan, the Company and others.

7.25 “Nasdaq” means The Nasdaq Stock Market LLC.

7.26 “New Registration Statement” has the meaning set forth in Section 6.1.

7.27 “Offering” means the private placement of the Company’s Securities contemplated by this Agreement.

7.28 “Ordinary Share” mean ordinary shares, £0.05 nominal value per share, of the Company.

7.29 “Penalty Period” has the meaning set forth in Section 6.3.

7.30 “Person” means any person, individual, corporation, limited liability company, partnership, trust or othernongovernmental entity or any governmental agency, court, authority or other body (whether foreign, federal, state, local or otherwise).

7.31 “Permitted Liens” means (i) any liens arising under the Credit Facility, (ii) liens for unpaid taxes, assessments, or othergovernmental charges or levies that are not yet delinquent, so long as in each case the underlying taxes, assessments, charges or leviesare being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, (iii) liens securing judgmentsfor the payment of money, (iv) the interests of lessors under operating leases and licensors under license agreements in each case enteredinto in the ordinary course of business, (v) liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics,materialmen, laborers or suppliers, in each case, incurred in the ordinary course of business and not in connection with the borrowing ofmoney and either (A) for amounts that are not yet delinquent or (B) for amounts that are no more than 30 days overdue that are beingcontested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserves or appropriateprovisions, if any, as shall be required by U.S. GAAP shall have been made for any such contested amounts, (vi) liens incurred in theordinary course of business in connection with

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workers’ compensation and other unemployment insurance, or to secure the performance of tenders, surety and appeal bonds, bids, leases,government contracts, trade contracts and other similar obligations (exclusive of obligations for the payment of borrowed money), and(vii) rights of setoff or bankers’ liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurredin connection with the maintenance of such deposit accounts in the ordinary course of business.

7.32 “Placement Agent” means Jefferies LLC.

7.33 “Purchase Price” has the meaning set forth in Section 1.1.

7.34 “Purchasers” mean the Purchasers whose names are set forth on the signature pages of this Agreement, and theirpermitted transferees.

7.35 The terms “register,” “registered” and “registration” refer to the registration effected by preparing and filing aregistration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registrationstatement.

7.36 “Registrable Securities” means the Shares; provided, however, that securities shall only be treated as RegistrableSecurities if and only for so long as they (A) have not been disposed of pursuant to a registration statement declared effective by the SEC,(B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so thatall transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale or (C) are held by aHolder or a permitted transferee pursuant to Section 6.9.

7.37 “Registration Default” has the meaning set forth in Section 6.3.

7.38 “Registration Expenses” means all expenses incurred by the Company in complying with Section 6.1 hereof, including,without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and expenses of counsel for theCompany, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excludingthe fees of legal counsel for any Holder).

7.39 “Registration Period” has the meaning set forth in Section 6.4(a).

7.40 “Registration Statement” means any one or more registration statements of the Company filed under the Securities Actthat covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitationthe Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements) and amendments andsupplements to such Registration Statements, including post-effective amendments.

7.41 “Remainder Registration Statement” has the meaning set forth in Section 6.1.

7.42 “Required Approvals” has the meaning set forth in Section 2.5(b)

7.43 “Rule 144” means Rule 144 promulgated under the Securities Act, or any successor rule.

7.44 “Rule 415” means Rule 415 promulgated under the Securities Act, or any successor rule.

7.45 “SEC” means the United States Securities and Exchange Commission.

7.46 “SEC Documents” has the meaning set forth in Section 2.6.

7.47 “Securities” has the meaning set forth in Section 1.1.

7.48 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similarsuccessor statute.



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7.49 “Selling Expenses” means all selling commissions applicable to the sale of Registrable Securities and all fees andexpenses of legal counsel for any Holder.

7.50 “Shares” has the meaning set forth in Section 1.1.

7.51 “Subsidiary” of any Person shall mean any corporation, partnership, limited liability company, joint venture or otherlegal entity of which such Person (either above or through or together with any other subsidiary) owns, directly or indirectly, more than50% of the shares or other equity interests the holders of which are generally entitled to vote for the election of the board of directors orother governing body of such corporation or other legal entity.

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ARTICLE 8

JERSEY LAW CONSIDERATIONS

8.1 A copy of this Agreement has been delivered to the registrar of companies in accordance with Article 5 of the Companies(General Provisions) (Jersey) Order 2002, and the registrar has given, and has not withdrawn, consent to its circulation.

8.2 The JFSC has given, and has not withdrawn, its consent under Article 2 of the Control of Borrowing (Jersey) Order 1958to the issue of securities in the Company. The JFSC is protected by the Control of Borrowing (Jersey) Law 1947, as amended, againstliability arising from the discharge of its functions under such law.

8.3 The parties to this Agreement distinctly understand that, in giving these consents, neither the registrar of companies northe JFSC takes any responsibility for the financial soundness of the Company or for the correctness of any statements made, or opinionsexpressed, with regard to it.

8.4 If any Purchaser is in any doubt about the contents of this Agreement, such Purchaser should consult its stockbroker, bankmanager, solicitor, accountant or other financial adviser.

8.5 The directors of the Company have taken all reasonable care to ensure that the representations and warranties of theCompany in this Agreement are true and accurate in all material respects, and that there are no other facts the omission of which wouldmake misleading any statement in this Agreement, whether of facts or of opinion. All the directors accept responsibility accordingly.

8.6 Each Purchaser understands that the price of the Company’s securities and any income generated from such securities canfluctuate down or up without the Company’s control.

ARTICLE 9

GOVERNING LAW; MISCELLANEOUS

9.1 Governing Law; Jurisdiction. This Agreement will be governed by and interpreted in accordance with the laws of theState of New York without regard to the principles of conflict of laws.

9.2 Counterparts; Signatures by Facsimile. This Agreement may be executed in two or more counterparts, all of which areconsidered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to theother parties. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile or e-mail transmissionof a copy of this Agreement bearing the signature of the party so delivering this Agreement.

9.3 Headings. The headings of this Agreement are for convenience of reference only, are not part of this Agreement and donot affect its interpretation.

9.4 Severability. If any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law,then such provision will be deemed modified in order to conform with such statute or rule of law. Any provision hereof that may proveinvalid or unenforceable under any law will not affect the validity or enforceability of any other provision hereof.

9.5 Entire Agreement; Amendments. This Agreement (including all schedules and exhibits hereto) constitutes the entireagreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warrantiesor undertakings, other than those set forth or referred to herein or therein. This Agreement supersedes all

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prior agreements and understandings among the parties hereto with respect to the subject matter hereof. No provision of this Agreementmay be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement. Any amendmentor waiver by a party effected in accordance with this Section 9.5 shall be binding upon such party, including with respect to any Securitiespurchased under this Agreement at the time outstanding and held by such party (including securities into which such Securities areconvertible and for which such Securities are exercisable) and each future holder of all such securities.

9.6 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) uponpersonal delivery to the party to be notified, (b) when sent by confirmed email, telex or facsimile if sent during normal business hoursof the recipient, if not, then on the next Business Day, (c) five days after having been sent by registered or certified mail, return receiptrequested, postage prepaid or (d) one Business Day after deposit with a nationally recognized overnight courier, specifying next daydelivery, with written verification of receipt. The addresses for such communications are:

If to the Company: Velti plcFirst Floor, 28-32 Pembroke Street UpperDublin 2, Republic of IrelandFacsimile: (415) 559-6733Attention: Alexandros Moukas, Chief Executive Officer

With copies to: Velti Inc.Steuart Tower1 Market Street, Suite 600San Francisco, California 94105Facsimile: (415) 449-6733Attention: Sally J. Rau, Chief Administrative Officer, General Counsel& Corporate Secretary

DLA Piper LLP (US)2000 University AvenueEast Palo Alto, California 94303Facsimile: (650) 687-1106Attention: Ed Batts, Esq.

If to a Purchaser: To the address set forth immediately below such Purchaser’s name on the signature pages hereto. Each party willprovide ten days’ advance written notice to the other parties of any change in its address.

9.7 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the parties and their successors andassigns. The Company will not assign this Agreement or any rights or obligations hereunder without the prior written consent of thePurchasers, and no Purchaser may assign this Agreement or any rights or obligations hereunder without the prior written consent of theCompany, except as permitted in accordance with Section 6.9 hereof.

9.8 Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto, their respective permittedsuccessors and assigns and the Placement Agent, and is not for the benefit of, nor may any provision hereof be enforced by, any otherPerson.

9.9 Further Assurances. Each party will do and perform, or cause to be done and performed, all such further acts and things,and will execute and deliver all other agreements, certificates, instruments and documents, as another party may reasonably request inorder to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplatedhereby.

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9.10 No Strict Construction. The language used in this Agreement is deemed to be the language chosen by the parties toexpress their mutual intent, and no rules of strict construction will be applied against any party.

9.11 Equitable Relief. The Company recognizes that, if it fails to perform or discharge any of its obligations under thisAgreement, any remedy at law may prove to be inadequate relief to the Purchasers. The Company therefore agrees that the Purchasersare entitled to seek temporary and permanent injunctive relief in any such case. Each Purchaser also recognizes that, if it fails to performor discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Company. EachPurchaser therefore agrees that the Company is entitled to seek temporary and permanent injunctive relief in any such case.

9.12 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreementare several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performanceof the obligations of any other Purchaser under this Agreement. Nothing contained herein and no action taken by any Purchaser pursuantthereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or createa presumption that the Purchasers are in any way acting in concert or as a group, or are deemed affiliates with respect to such obligationsor the transactions contemplated by this Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights,including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined asan additional party in any proceeding for such purpose.

9.13 Waiver of Jury Trial. In any action, suit, or proceeding in any jurisdiction brought by any party against any otherparty, the parties each knowingly and intentionally, to the greatest extent permitted by applicable law, hereby absolutely, unconditionally,irrevocably and expressly waives forever trial by jury.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement to be duly executed as of the datefirst above written.

Velti plc

By: /s/ Alex MoukasName: Alex MoukasTitle: Chief Executive Officer

[Signature Page to Securities Purchase Agreement]

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IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement to be duly executed as of the date firstabove written.

PURCHASER: PARK WEST PARTNERS INTERNATIONAL, LIMITEDBy: Park West Asset Management LLCIts: Investment Manager

By: /s/ James J. WatsonNames: James J. WatsonTitle: Chief Executive OfficerAddress: 900 Larkspur Landing Circle

Suite 165Larkspur, CA 94939

Facsimile 415-524-2942


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PURCHASER:PARK WEST INVESTORS MASTER FUND, LIMITED

By: Park West Asset Management LLCIts: Investment Manager

By: /s/ James J. WatsonNames: James J. WatsonTitle: Chief Executive OfficerAddress: 900 Larkspur Landing Circle

Suite 165Larkspur, CA 94939



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PURCHASER:HARVEST SMALL CAP PARTNERS, L.P.

By: /s/ Jeffrey OsherNames: Jeffrey OsherTitle: Portfolio ManagerAddress: 600 Montgomery Street,

Suite 1700San Francisco, CA 94111



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PURCHASER:HARVEST SMALL CAP PARTNERS MASTERS, Ltd.

By: /s/ Jeffrey OsherNames: Jeffrey OsherTitle: Portfolio ManagerMailing Address: 600 Montgomery Street,

Suite 1700San Francisco, CA 94111

Registered Address: P.O. Box 31106, 89 Nexus Way, Camana BayGrand Cayman, Cayman Islands KY1-1205



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PURCHASER:Variable Insurance Products Fund III: Balanced Portfolio

By: /s/ Kenneth B. RobinsNames: Kenneth B. RobinsTitle: TreasurerMailing Address:

Facsimile


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PURCHASER:Fidelity Advisor Series I: Fidelity Advisor Dividend Growth Fund


Facsimile


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PURCHASER:Fidelity Securities Fund: Fidelity Dividend Growth Fund


Facsimile


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PURCHASER: Fidelity Advisor Series I: Fidelity Advisor Stock Selector Mid Cap Fund


Facsimile


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PURCHASER: Fidelity Rutland Square Trust II: Strategic Advisers Core Multi-ManagerFund

By, Pyramis Global Advisors LLC as Investment Manager

By: /s/ Susanne RicheNames: Susanne RicheTitle: DirectorMailing Address:

Facsimile


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PURCHASER: Fidelity Rutland Square Trust II: Strategic Advisers Core Fund

By, Pyramis Global Advisors LLC as Investment Manager

By: /s/ Susanne RicheNames: Susanne RicheTitle: DirectorMailing Address:

Facsimile


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PURCHASER:Alyesha Master Fund, L.P.

By: /s/ Jason A. BraggNames: Jason A. BraggTitle: CFO of Alyesha Investment Group L.P.Mailing Address: c/o Maples Corporate Services Limited

P.O. Box 309, Ugland House, South Church StreetGeorge Town, Grand Cayman, KY1-1104



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PURCHASER:AYM AGGRESSIVE VALUE FUND, LP

By: /s/ Abraham MullerNames: ABRAHAM MULLERTitle: MANAGING MEMBERMailing Address: 39 BROADWAY

FLOOR 18NY, NY 10006



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PURCHASER:PINE RIVER MASTER FUND LTD.

By: /s/ Jeff StoltNames: Jeff StoltTitle: CFO, Pine River Capital Management L.P.

Its: Investment ManagerLegal Address: Maples Corporate Services Ltd.

Ugland House, South Church StreetPO Box 309GTGeorge Town, Grand CaymanCayman Islands, KY1-1104

Mailing Address: c/o Pine River Capital Management L.P.601 Carlson Parkway, Suite 330Minnetonka, MN 55305



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PURCHASER:NISSWA ACQUISITION MASTER FUND LTD.

By: /s/ Jeff StoltNames: Jeff StoltTitle: CFO, Pine River Capital Management L.P.

Its: Investment ManagerLegal Address: Maples Corporate Services Ltd.

Ugland House, South Church StreetPO Box 309GTGeorge Town, Grand CaymanCayman Islands, KY1-1104

Mailing Address: c/o Pine River Capital Management L.P.601 Carlson Parkway, Suite 330Minnetonka, MN 55305



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PURCHASER:Deutsche Bank Securities, Inc.

By: /s/ Satish RamakrishnaNames: Satish RamakrishnaTitle: Managing DirectorAddress: 60 Wall St.

New YorkNY 10005

Facsimile


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DISCLOSURE SCHEDULE

delivered pursuant to theSECURITIES PURCHASE AGREEMENT

dated as of April 18, 2013among

VELTI PLC,and

the purchasers listed therein

Reference is made to the Securities Purchase Agreement, dated as of April 18, 2013, by and among Velti plc (the “Company”)and the Purchasers listed therein (the “Agreement”). The representations and warranties of the Company in Article 2 of the Agreementare made subject to the exceptions and qualifications set forth herein. The schedules are qualified in their entirety by reference to specificprovisions of the Agreement and are not intended to constitute, and shall not be construed as constituting, separate representations orwarranties of the Company.

The section numbers used herein refer to the Sections in the Agreement. Headings and subheadings have been inserted hereinfor convenience of reference only and shall not have the effect of amending or changing the express description hereof as set forth inthe Agreement. Notwithstanding any heading contained herein, each of the matters set forth on this Disclosure Schedule shall be deemedincluded as a scheduled item with respect to any other provision of the Agreement applicable, regardless of whether specific referencethereto is made herein.

The inclusion of any information (including dollar amounts) in any section of this Disclosure Schedule shall not be deemed to bean admission or acknowledgment by the Company that such information is required to be listed in such section or is material to or outsidethe ordinary course of the business of the Company, nor shall such information be deemed to establish a standard of materiality (andthe actual standard of materiality may be higher or lower than the matters disclosed by such information). In addition, matters reflectedin this Disclosure Schedule are not necessarily limited to matters required by the Agreement to be reflected in Disclosure Schedule.Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature.The information contained in this Disclosure Schedule is disclosed solely for purposes of the Agreement, and no information containedherein or therein shall be deemed to be an admission by any party hereto to any third party of any matter whatsoever (including, withoutlimitation, any violation of applicable law or breach of contract).

The information provided in this Disclosure Schedule is being provided solely for the purpose of making the disclosures to thePurchasers under the Agreement. The Company does not assume any responsibility to any person that is not a party to the Agreement forthe accuracy of any information herein. The information was not prepared or disclosed with a view to its potential disclosure to others.Subject to applicable law, this information is disclosed in confidence for the purposes contemplated in the Agreement and is subject tothe confidentiality provisions of any other agreements entered into by the parties. In disclosing this information, the Company expresslydoes not waive any attorney-client privilege associated with such information or any protection afforded by the work-product doctrinewith respect to any of the matters disclosed or discussed herein.

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Schedule 2.3 – Capitalization

On November 14, 2011, the Company completed the acquisition of Mobile Interactive Group Limited (“MIG”), by acquiring all of theoutstanding shares of MIG such that MIG became the Company’s wholly-owned subsidiary following the acquisition. In connection withthe acquisition, the Company agreed to pay (i) deferred consideration and (ii) contingent consideration based upon MIG achieving certainEBITDA targets during the period. In August 2012, the Company reached an agreement with MIG to set the amount of the contingentconsideration at $26.0 million, payable $14.5 million in cash and $11.5 million in the Company’s ordinary shares. The Company will alsopay $2.5 million in deferred consideration, payable in the Company’s ordinary shares. The Company expects to pay in April 2013.

On January 16, 2012, the Company completed the acquisition of the remaining equity interests in Ydon Holdings, Ltd. (“CASEE”), byacquiring all of the outstanding shares of CASEE which the Company did not previously own. The Company acquired this interest foran initial cash payment of $8.4 million and up to $20.3 million in contingent consideration. Upon completion of the acquisition, CASEEbecame the Company’s wholly-owned subsidiary. The contingent consideration to be paid is based on CASEE’s achievement of revenueand gross profit performance during the twelve months ended March 31, 2012 and 2013, with a maximum of $20.3 million. It is payablein two tranches, as soon as reasonably practical after the closing of the financial books for those periods, and may be paid in cash orup to 50% in the Company’s ordinary shares, at the Company’s discretion. The Company is currently negotiating with the shareholderrepresentative of the former shareholders of CASEE concerning the achievement of revenue and gross profit performance and the amountdue under the acquisition agreement.

Schedule 2.5 – No Conflicts; Government Consents and Permits

(a)(ii)

On August 2012, the Company entered into a $50.0 million credit facility with HSBC Bank USA, N.A. (“HSBC”), as amended to date(the “Credit Facility”). Under the Credit Facility, the Company is required to obtain HSBC’s approval prior to the execution of theAgreement.

(b)

The Company is required to obtain a consent from the Jersey Financial Services Commission in order to issue the Shares under theAgreement

Schedule 2.9 – Absence of Litigation

Reference is made to Schedule 2.10 below and hereby incorporated by reference.

Schedule 2.10 – Intellectual Property Rights

The Company has received letters on behalf of certain customers notifying the Company that such customers had received third partycommunications alleging that certain applications of such customers infringed the patent rights of the third parties, and in turn, allegingthat the Company is obligated to indemnify the customers relating to these matter as the claims allegedly relate to services that theCompany provide to such customers.

Schedule 2.20 – No Registration Rights

The Company granted registration rights to MIG under that certain share purchase agreement, dated November 14, 2011, by and amongBarry Houlihan, the Company and others, as amended by the deed of variation dated August 9, 2012 (the “MIG Purchase Agreement”).



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Schedule 2.26 – Use of Proceeds

The Company shall use net proceeds of the sale of the ordinary shares for cash payments to the former shareholders and certain keyemployees of MIG, as contemplated in the MIG Purchase Agreement.

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EXHIBIT A

SCHEDULE OF PURCHASERS

Purchaser Shares Purchase PricePark West Partners International,Limited and Park West Investors Master Fund Limited*

6,666,667 $10,000,000.50

Harvest Small Cap Partners, L.P. 1,613,333 $2,419,999.50Harvest Small Cap Partners Master , Ltd. 2,053,334 $3,080,001.00Variable Insurance Products Fund III:Balanced Portfolio 284,296 $426,444.00Fidelity Advisor Series I: FidelityAdvisor Dividend Growth Fund

192,692 $289,038.00

Fidelity Securities Fund: FidelityDividend Growth Fund

1,639,166 $2,458,749.00

Fidelity Advisor Series I: FidelityAdvisor Stock Selector Mid Cap Fund

215,084 $322,626.00

Fidelity Rutland Square Trust II:Strategic Advisers Core Multi-Manager Fund

976 $1,464.00

Fidelity Rutland Square Trust II:Strategic Advisers Core Fund

147,198 $220,797.00

Alyeska Master Fund L.P. 784,313 $1,176,469.50Deutsche Bank Securities, Inc. 549.020 $823,530.00AYM Aggressive Value fund, LP 1,333,333 $1,999,999.50Pine River Master Fund LTD. 1,000,000 $1,500,000.00NISSWA Acquisition Master Fund LTD. 50,000 $75,000.00Total 16,529,412 $24,794,118.00

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* The Breakdown on the number of shares to be subscribed by Park West Partners International, Limited and Park West InvestorsMaster Fund, Limited to come.

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EXHIBIT B

DLA PIPER LEGAL OPINION

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EXHIBIT C

MOURANT LEGAL OPINION

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ANNEX A

SELLING HOLDER QUESTIONNAIRE

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April 18, 2013

Velti, Inc.Steuart Tower1 Market StreetSuite 600San Francisco, California 94105

Re: Consent and Limited Waiver– Credit Agreement dated as of August 10, 2012

Ladies and Gentleman:

Reference is hereby made to the Credit Agreement (as amended to the date hereof, the “CreditAgreement”) dated as of August 10, 2012, between Velti Inc., a Delaware corporation, (“BorrowerRepresentative”), Velti plc, a company formed under the laws of the Bailiwick of Jersey, Channel Islands, MobileInteractive Group Limited, a company formed under the laws of England and Wales with registered number04572067, and Velti Mobile Platforms Limited, a company formed under the laws of the British Virgin Islands(collectively, the “Borrowers”), each lender from time to time a party thereto, and HSBC Bank USA, NationalAssociation, a national banking association, (the “Administrative Agent”). Capitalized terms used in this consentand limited waiver letter (this “Consent Letter”) shall have the meanings ascribed thereto in the CreditAgreement.

Borrowers have informed the Administrative Agent that the Borrowers intend to effect an Asset Saleinvolving the Equity Interests of the Parent up to Thirty Million Dollars ($30,000,000.00), by Wednesday, April24, 2013 (the “Equity Offering”). Administrative Agent desires to permit the Equity Offering to occur. SuchEquity Offering is not permitted under Section 7.06 of the Credit Agreement. Therefore, Administrative Agentand Lenders hereby consent to the Equity Offering, and hereby waive any Event of Default that may arise underSection 7.06 as a result of the Equity Offering; provided, however, that such waiver is expressly conditioned onthe satisfaction of all of the following conditions:

(a) On or before April 18, 2013, the Administrative Agent shall have received, in form and substancesatisfactory to the Administrative Agent, each of the following, duly executed:

(i) This Consent Letter; and

(ii) Such other documents as the Administrative Agent may require in connection with thisConsent Letter.

(b) On or before April 24, 2013, the Administrative Agent shall have received, in form and substancesatisfactory to the Administrative Agent, a duly executed Second Amendment to CreditAgreement, amending the Credit Agreement with respect to reporting requirements to provide for(i) financial statements providing year-end consolidating results of the Parent and its Subsidiaries,(ii) quarterly

US_ACTIVE-111190377



consolidating financial statements of the Parent and its Subsidiaries, (iii) quarterly financialstatements to be delivered 45 days after quarter end, (iv) quarterly financial statements to bedelivered 60 days after quarter end, and (v) a rolling weekly cash forecast, each to be in form andsubstance reasonably acceptable to Administrative Agent.

(c) Borrowers shall permit Administrative Agent to conduct, and shall cooperate in, an independentbusiness review of Parent and its Subsidiaries, such review to be conducted by a firm selected byAdministrative Agent, and to include (but not be limited to) a complete review of (1) books andrecords, wherever located or maintained, (2) collateral, (3) non-collateral assets, (4) operations, (5)cash flow forecasts, (6) liquidity levels, (7) credit limit policies, (8) collection policies, and (9)provision levels. Such business review shall commence immediately upon the execution of thisConsent Letter.

The consent and waiver set forth in this Consent Letter shall (i) be limited precisely as written, (ii) shallnot be deemed to be an amendment, consent or waiver of any other terms or conditions of the Credit Agreementor any Loan Document, (iii) except as expressly stated herein, not extend nor be deemed to extend to any Defaultor Event of Default that may now exist or hereafter arise under the Credit Agreement, whether similar ordissimilar to the Equity Offering, (iv) except as expressly stated herein, not impair, restrict or limit any right orremedy of the Administrative Agent with respect to any Default or Event of Default that may now exist orhereafter arise under the Credit Agreement, and (v) not constitute any course of dealing or other basis for alteringany obligation of the Borrowers or any right, privilege or remedy of the Administrative Agent under the CreditAgreement or any Loan Document. Except as expressly stated herein, Administrative Agent reserves all rights,privileges and remedies under the Credit Agreement and all other Loan Documents. Except as expressly set forthin this Consent Letter, the Credit Agreement and the other Loan Documents shall continue in full force andeffect.

After giving effect to this Consent Letter, Borrowers hereby remake all representations and warrantiescontained in the Credit Agreement and reaffirm all covenants set forth therein. Borrowers agree to pay ondemand all costs and expenses of, or incurred by, the Administrative Agent in connection with the preparation,execution and delivery of this Consent Letter, including, without limitation, the fees and expenses of counsel tothe Administrative Agent.

This Consent Letter may be executed in any number of counterparts, each of which shall be an originalbut all of which together shall constitute one instrument. Each counterpart may consist of a number of copieshereof, each signed by less than all, but together signed by all, of the parties hereto. Any signature delivered by aparty by facsimile transmission shall be deemed to be an original signature hereto. This Consent Letter shallconstitute a Loan Document.

[Signature pages follow.]

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Please acknowledge Borrowers’ acceptance of the terms and conditions contained herein by dating and signingone copy below and returning it to the Administrative Agent on or before April 18, 2013.

Very truly yours,

HSBC BANK USA, NATIONAL ASSOCIATION, as

Administrative Agent

By: /s/ Christopher MooreName: Christopher MooreTitle: Vice President

US_ACTIVE-111190377



Acknowledged and Agreed as of the date first written above:

VELTI INC., as Borrower Representative

by: /s/ Sally J. RauName: Sally J. RauTitle: Chief Administrative Officer and General

Counsel and Corporate Secretary

US_ACTIVE-111190377



Acknowledged and Agreed as of the date first written above:

HSBC Bank plc, as Lender

by /s/ Paul HaggerName: Paul HaggerTitle: Director

US_ACTIVE-111190377



CONFIDENTIAL TERMINATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

1. Factual Background. Christos Kaskavelis (“Employee”) was employed by Velti plc, a companyorganized under the laws of the Bailiwick of Jersey (the “Company”) as its Chief Operating Officer and is amember of its board of directors.

As part of a reorganization and restructuring of its business, the board of directors of the Company hasdecided to terminate Employee’s employment with the Company. In connection with that decision, it is theCompany’s desire to provide Employee with certain separation benefits and to resolve any claims that Employeehas or may have against the Company and its affiliated persons and entities. Accordingly, Employee and theCompany agree as set forth below. This Agreement will become effective upon its execution by Employee.

2. Wages and Salary. Employee acknowledges that he will have been paid all wages (including, but notlimited to, base salary, bonuses, commissions, overtime pay, incentive payments, and accrued, unused paid timeoff/vacation) and benefits that Employee earned during his employment with the Company. Employee understandsand acknowledges that he shall not be entitled to any additional payments or benefits from the Company other thanthose expressly set forth in this Agreement. The Company shall reimburse Employee for all reasonable businessexpenses incurred in the performance of his services hereunder, upon receipt of supporting material for suchexpenses, including the cost of networking forums attended by Employee on behalf of the Company that have beenpre-approved by the Company’s Chief Executive Officer.

3. Termination Date. Employee and the Company agree that the Company terminated Employee’semployment with the Company as of March 28, 2013 (the “Termination Date”).

4. Termination Benefits. Subject to Employee’s compliance with this Agreement, the Company shallprovide Employee with the following:

(a) Health and Other Insurance. Subject to the rules of any applicable scheme, the Company shallcontinue to cover the costs of membership of the Employee and his dependants of a private medical insurancescheme with BUPA or such other reputable medical expenses insurance scheme as the Company shall decidefrom time to time through December 31, 2013. The level of insurance cover to be provided shall be the same asthe level of insurance cover provided by the Company immediately prior to the Termination Date. In addition,the Company will continue to meet the Executive’s compulsory annual contribution to TEBE or any equivalentstate insurance or pension fund at the same level as provided immediately prior to the Termination Date, throughDecember 31, 2013. The Company shall continue to provide the Employee with protection against loss of life andagainst personal accident under a policy of insurance, with sums insured at the same level as was provided by theCompany immediately prior to the Termination Date.

(b) Directors and Officers Insurance. The Company shall continue to cover Employee under apolicy of directors’ and officers’ insurance, to the same extent as coverage is provided to all other Companydirectors, for a period of six years following the Termination Date

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(unless such policy is no longer available for any Company directors). In addition, the Company will continueto abide by the terms of the Indemnity Agreement between the Company and Employee, the terms of which arehereby incorporated by reference in their entirety.

(c) Company Equipment. Employee shall be entitled to retain the Company-provided laptop andcell phone in his possession, and the Company shall continue to pay the service charges on the cell phone at the ratepreviously paid by the Company on behalf of Employee through December 31, 2013. Employee shall be entitledto continue use of the Company cars provided to him, through termination of the leases on such cars or August30th 2013, whichever comes first

(d) Equity Rights. As of the Termination Date, Employee had become vested in 298,160 ordinaryshares of the Company that are subject to share options awarded to Employee by the Company but not yetexercised by Employee (the “Vested Share Options”). Employee and the Company hereby agree that all suchVested Share Options shall terminate and be forfeited by Employee if not exercised by May 10, 2013. Inaddition, Employee had been awarded 269,488 ordinary shares of the Company subject to share options awardedto Employee but that had not yet become vested as of the Termination Date (the “Unvested Share Options”).Employee shall cease vesting in all of such Unvested Share Options as of the Termination Date, and such UnvestedShare Options shall expire. As of the Termination Date, Employee has also been awarded 101,594 deferred shareunits that are not vested as of the Termination Date (the “Unvested RSUs”). The Company and Employee herebyagree that the vesting of each such outstanding Unvested RSUs shall accelerate such that 67% of such UnvestedRSUs, being 68,068 deferred share units, shall become vested and fully released to Employee.

5. Continued Advisory Role. Company hereby retains Employee as an Advisor to the Company, andEmployee hereby agrees to provide advisory and consulting services to the Company on such matters as theCompany and Employee may reasonably agree (the “Consulting Services”) for a term of six months. Employeeshall report directly to Alex Moukas, Chief Executive Officer of the Company. The Employee will be engaged bythe Company as an advisor for the exchange of strategic and business development ideas.

(a) Independent Contractor Relationship. Employee’s relationship with the Company shall be thatof an independent contractor and not that of an employee. Accordingly, Employee will not be eligible for anyemployee benefits, nor will the Company make deductions from payments made to Employee for taxes, whichshall be solely Employee’s responsibility. Employee shall have no authority to enter into contracts which bind theCompany or create obligations on the part of the Company.

(b) Compensation for Advisory Role. Subject to the approval of the Board of Directors, ascompensation for the services rendered hereunder, the Company shall award to Employee 115,000 deferred shareunits (the “Advisory Shares”) vesting in full on the date that is six months’ following the grant date. The termsof such award shall be governed by the Company’s Share Incentive Plan and the form of agreement thereundertypically used by the Company in connection with equity awards made to other consultants to the Company. If theBoard of Directors should fail to approve this grant of the Advisory Shares, then this agreement shall be null andvoid. Should the Company be subject to a Change in Control (as defined below), vesting of all unvested

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Advisory Shares as of the date of completion of such Change in Control shall be fully accelerated such that suchshares shall be full vested as of the date immediately prior to the effective date of such Change in Control. Forpurposes hereof, “Change in Control” means the occurrence of any of the following: (i) any “person” (as suchterm is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit planof the Company, acquires (or has acquired during the 12-month period ending on the date of the most recentacquisition by such person) “beneficial ownership” (as defined in Rule 13d 3 promulgated under the ExchangeAct), directly or indirectly, of ordinary shares of the Company representing more than fifty percent (50%) ofthe total combined voting power of the Company’s then outstanding ordinary shares entitled to vote generallyin the election of directors; (ii) the Company is party to a merger or consolidation which results in the holdersof the ordinary shares of the Company outstanding immediately prior thereto failing to retain immediately aftersuch merger or consolidation direct or indirect beneficial ownership of more than sixty percent (60%) of the totalcombined voting power of the shares entitled to vote generally in the election of directors of the Company or thesurviving entity outstanding immediately after such merger or consolidation; (iii) the sale or disposition of all orsubstantially all of the Company’s assets or consummation of any transaction having similar effect (other than asale or disposition to one or more subsidiaries of the Company); or (iv) the shareholders of the Company or theBoard approve a plan of complete liquidation or dissolution of the Company.

(c) Confidentiality of Proprietary Information and Assignment of Proprietary Rights. Employeeagrees that, in the performance of his advisory services hereunder, Employee shall continue to be bound by allconfidentiality and nondisclosure agreements to which Employee was subject while employed by the Company,and Employee acknowledges that all inventions, original works of authorship, developments, concepts, know-how,improvements or trade secrets which are made by Employee (solely or jointly with others) within the scope of andas part of Employee’s consultancy with the Company (collectively referred to herein as “Inventions”) are “worksmade for hire” (to the greatest extent permitted by applicable law) and are compensated by such amounts paid toEmployee under this Agreement, unless regulated otherwise by the mandatory law of the state of California. To theextent that Employee owns or controls intellectual property rights of any kind in any pre-existing works which aresubsequently incorporated by Employee in any Inventions without the express written permission of the Company,Employee hereby grants the Company a royalty-free, irrevocable, world-wide, perpetual, non-exclusive license(with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell, license,disclose, publish, or otherwise disseminate or transfer such subject matter. Employee also agrees and warrantsthat Employee will not use or incorporate third party proprietary materials into Inventions or disclose third partyproprietary information to Company.

6. Release of Claims. Each of the parties hereto and his or its successors release the other party and,in the case of the Company, its parent, divisions, subsidiaries, and affiliated entities, and each of those entities’respective current and former shareholders, investors, directors, officers, employees, agents, attorneys, insurers,legal successors and assigns of and from any and all claims, actions and causes of action, whether now known orunknown, which such party now has, or at any other time had, or shall or may have against those released partiesbased upon or arising out of any matter, cause, fact, thing, act or omission whatsoever occurring or existing at anytime up to and

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including the date on which such party signs this Agreement, including, but not limited to, any claims ofbreach of express or implied contract, wrongful termination, constructive discharge, retaliation, fraud, defamation,infliction of emotional distress or national origin, race, age, sex, sexual orientation, disability or other applicablediscrimination or harassment law or fair labor standards law, or any other applicable law. This release of claimswill not apply to any rights or claims that cannot be released as a matter of law, including any statutory indemnityrights.

7. Directorships. Employee shall submit his resignation from any positions that he holds as an officeror director of the Company and any direct or indirect subsidiary of the Company. Employee agrees to sign allnecessary documentation and to take any and all other necessary measures to effectuate any such resignationrequested by the Company.

8. Restrictive Covenants. Employee shall, through December 31, 2013, comply with the RestrictiveCovenants set forth in the form of Service Agreement between Velti plc and each of Alex Moukas, ChrisKaskavelis and Menelaos Scouloudis filed as Exhibit 10.15 to the Registration Statement (File No. 333-166793)filed with the Securities and Exchange Commission on May 13, 2010 (the “Service Agreement”).

9. Continuing Obligations and Return of Company Property. Employee acknowledges and agrees thathe shall continue to be bound by and comply with the terms of any proprietary rights, non-solicitation, non-competition, assignment of inventions, and/or confidentiality agreements between the Company and Employee,including those set forth in the Service Agreement. To the extent that he has not done so already, promptlyfollowing his execution of this Agreement, Employee will return to the Company, in good working condition, allCompany property and equipment that is in Employee’s possession or control, including, but not limited to, anyfiles, records, credit cards, keys, programs, manuals, business plans, financial records, and all documents (whetherin paper, electronic, or other format, and any copies thereof) that Employee prepared or received in the course ofhis employment with the Company (other than the laptop and cell phone agreed in Section 4(b) above).

10. Confidentiality. Employee agrees that he shall not directly or indirectly disclose any of the terms ofthis Agreement to anyone other than his immediate family or counsel, except as such disclosure may be requiredfor accounting or tax reporting purposes or as otherwise may be required by law.

11. Agreement Not To Assist With Other Claims. Employee agrees that he shall not, at any time in thefuture, encourage any current or former Company employee, or any other person or entity, to file any legal oradministrative claim of any type or nature against the Company or any of its officers or employees. Employeefurther agrees that he shall not, at any time in the future, assist in any manner any current or former Companyemployee, or any other person or entity, in the pursuit or prosecution of any legal or administrative claim of anytype or nature against the Company or any of its officers or employees, unless pursuant to a duly-issued subpoenaor other compulsory legal process.

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12. Attorneys’ Fees. In the event of any legal action relating to or arising out of this Agreement, theprevailing party shall be entitled to recover from the losing party its attorneys’ fees and costs incurred in thataction.

13. Governing Law. This Agreement shall be interpreted in accordance with and governed by the laws ofJersey, the Channel Islands.

14. Severability. If any provision of this Agreement is deemed invalid, illegal, or unenforceable, thatprovision will be modified so as to make it valid, legal, and enforceable, or if it cannot be so modified, it will bestricken from this Agreement, and the validity, legality, and enforceability of the remainder of the Agreement shallnot in any way be affected.

15. Integration and Modification. This Agreement constitutes the entire agreement with respect to thesubject matter hereof and supersedes all prior negotiations and agreements between the parties, whether writtenor oral, with the exception of any stock option or stock award agreements between the parties (subject to themodifications of the Option described in Paragraph 6) and any agreements described in Paragraph 7, all of whichagreements shall remain in full force and effect. The parties agree that the Employment Agreement is herebyterminated and of no further legal force or effect. This Agreement may not be modified or amended except by adocument signed by an authorized officer of the Company and Employee.

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EMPLOYEE UNDERSTANDS THAT HE IS ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TOSIGNING THIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINSTTHE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGESTHAT HE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY INEXCHANGE FOR THE TERMINATION BENEFITS DESCRIBED ABOVE, WHICH BENEFITS EMPLOYEEWOULD NOT BE ENTITLED TO RECEIVE BUT FOR HIS EXECUTION OF THIS AGREEMENT.

Dated: May 30, 2013/s/ Chris KaskavelisChristos Kaskavelis

Dated: May 23, 2013

Velti plc

By: /s/ Alex MoukasAlex Moukas, Chief Executive Officer

By: /s/ Sally RauSally Rau, Chief Administrative Officer

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RETENTION AGREEMENT AND SEVERANCE AGREEMENT

This Retention Agreement (the “Agreement”) is dated of as of February 7, 2013 by and between Wilson W. Cheung(“Employee”), and Velti Inc., a Delaware corporation (the “Company”).

RECITALS

A. Employee presently serves as Chief Financial Officer of Velti plc and its subsidiaries (collectively “Velti”) andperforms significant strategic and management responsibilities necessary to the continued conduct of Velti’s businessand operations.

B. Velti has appointed a new Chief Financial Officer (the “Successor”) effective as of January 7, 2013, and Employeehas agreed to transition to a new role as Chief Compliance Officer, Asia Pacific.

C. The Board of Directors of Velti (the “Board”) has determined that it is in the best interests of Velti and itsshareholders to ensure that Velti will have the continued dedication and objectivity of Employee in connection withthe completion of the financial results of Velti for the year ended December 31, 2012, the preparation and filing ofthe annual report covering such period, and the transition of responsibilities to the Successor.

D. The Board believes that it is therefore in the best interests of Velti and its shareholders to provide Employee withcertain retention incentives and severance benefits under the circumstances described herein in order to provideEmployee with enhanced financial security and sufficient incentive and encouragement to Employee to remain withVelti for the period of transition.

AGREEMENT

In consideration of the mutual covenants herein contained, and as an additional inducement to Employee to continue hisemployment with Velti, the parties agree as follows:

1. Effective Date and Minimum Employment: This Agreement will become effective on the eighth day after it is signedby Employee, but only if Employee has not revoked this Agreement (by email notice to [email protected] prior to thatdate (the "Effective Date"). The Company seeks to provide an incentive for Employee to remain in Velti’s employ,at a minimum, from the Effective Date through the earlier of (i) the date that Velti files its annual report on Form20-F (the “Annual Report”) with the Securities and Exchange Commission, and (ii) April 30, 2013 (the “RetentionPeriod”). Employee or Velti may terminate their employment relationship at any time, for any reason or no reason,and the date of such termination shall be referred to hereafter as the “Termination Date”. Employee will providethe Company with prompt email notice, addressed to [email protected] and [email protected], if he accepts other full-time employment or otherwise elects to terminate his employment with Velti, and Velti will provide Employee withwritten or email notice of the Termination Date in the event that it elects to terminate the parties’ employmentrelationship.

2. Terms of Employment:

a. Annual Report: Following the Effective Date, Employee agrees to continue to perform such duties that areassigned to him by the Board of Directors or Chief Executive Officer of Velti through the Retention Period.Employee agrees to devote his full time, attention and skill to his duties hereunder throughout the RetentionPeriod and to be in a position, if required by Velti, to sign the Annual Report and the certifications requiredto be filed therewith. In

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connection herewith, Velti agrees to ensure that Employee continues to have access to all information ofVelti required to enable him to be in a position to sign such certifications.

b. Transition to New Duties: During the Retention Period, Employee shall begin transitioning to his new dutiesas Chief Compliance Officer, Asia Pacific, reporting to the Chief Administrative Officer with dotted linereporting to the Chief Executive Officer, during those periods that he is not working on the smooth transitionof his former duties to the Successor, or working on the matters described in Section 2(a). Following theRetention Period, Employee shall transition to full time employment in his new role as Chief ComplianceOfficer, Asia Pacific. At all times during the Retention Period and for so long as he remains employedby Velti thereafter, Employee will perform all of his duties and responsibilities for Velti in a competent,professional, and satisfactory manner as determined by Velti in its sole discretion.

c. During the remainder of his employment with Velti, the Company will continue to pay Employee his currentbase salary, and Employee will continue to receive his current employee benefits, including vesting of anyunvested Velti share options or deferred share awards. Subject to the terms and conditions of such plans,Employee will also be eligible to continue to participate in any Velti bonus or other incentive or equity-basedbenefit plans that are offered to other C-level non-Executive Committee employees based in the U.S.

d. Directorships: Employee shall, at any time required by Velti, submit his resignation from any positions thathe holds as an officer or director of any Velti entities. Employee agrees to sign all necessary documentationand to take any and all other necessary measures to effectuate any such resignation, if required.

e. At Will Employment. Velti and Employee agree that Employee’s employment is at will, and that theiremployment relationship may be terminated by either party at any time, with or without cause, subject to theterms of this Agreement.

3. Severance Benefits.

a. Subject to Employee’s compliance with this Agreement, including, without limitation, fulfillment ofEmployee’s obligations under Sections 2(a) and (b) above, and Employee’s timely execution and delivery ofthe Waiver and Release described in Section 6, upon the termination of Employee’s employment with Velti,the Company shall provide Employee with the following:

I. If the Termination Date occurs prior to the end of the Retention Period pursuant toEmployee’s voluntary termination of his employment relationship, a severance paymentof $150,000 (being six months’ base salary at Employee’s current base salary rate), lessapplicable withholding;

II. If the Termination Date occurs following the end of the Retention Period pursuant toEmployee’s voluntary termination of his employment relationship or if Employee’semployment is terminated at any time for any reason by Velti (other than as a result ofEmployee’s breach of any of his obligations hereunder), a severance payment of $225,000(being nine months’ base salary at Employee’s current base salary rate), less applicablewithholding;

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III. such severance payment will be paid to Employee in a single lump sum no later than 30 daysfollowing the Termination Date; and

IV. Velti shall reimburse Employee for any COBRA premiums paid by Employee for continuedgroup health insurance coverage for himself and his dependents (so long as such dependentswere covered by such medical benefits immediately prior to the Termination Date) until theearlier of (i) the date that is nine months after the Termination Date, or (ii) any earlier date onwhich Employee commences employment with a new employer.

4. Equity. Employee shall continue to vest in all equity awards previously awarded to him by Velti according to theirterms through the Termination Date. If the Termination Date occurs before May 31, 2013, to the extent Employeeholds, as of the Termination Date, any unvested options to purchase ordinary shares of Velti or unvested deferredshare awards, the vesting of each outstanding equity award (including share options and deferred share awards) shallaccelerate such that Employee shall be fully vested in all such equity awards that would have vested as of May 31,2013. In addition, the exercisability of all outstanding vested share options held by Employee as of the TerminationDate shall be extended such that Employee shall have a period of one year following the Termination Date in whichto exercise his right to purchase any such vested share options.

5. Death/Breach of Agreement. If Employee’s employment terminates at any time due to the death of Employee,or Velti terminates Employee’s employment as a result of his breach of this Agreement, then Velti shall have noobligation to provide for the continuation of any health and medical benefit or life insurance plans existing on thedate of such termination except as otherwise required by applicable law.

6. Release of Claims. In exchange for his continued employment through the Termination Date, Employee and hissuccessors release Velti and its parents, divisions, subsidiaries, and affiliated entities, and each of their respectivecurrent and former shareholders, investors, directors, officers, members, employees, agents, attorneys, insurers, legalsuccessors, assigns, and affiliates of and from any and all claims, actions and causes of action, whether now knownor unknown, which Employee now has, or at any other time had, or shall or may have against those released partiesbased upon or arising out of any matter, cause, fact, thing, act or omission whatsoever occurring or existing at anytime up to and including the date on which Employee signs this Agreement, including, but not limited to, any claimsof breach of express or implied contract, wrongful termination, constructive discharge, retaliation, fraud, defamation,infliction of emotional distress or national origin, race, age, sex, sexual orientation, disability or other discriminationor harassment under the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans withDisabilities Act, or the California Fair Employment and Housing Act, and any claims under the California LaborCode, the Fair Labor Standards Act, the Fair Credit Reporting Act or any other applicable law (all listed statutesin this Paragraph as they have been, or are in the future, amended). This release of claims will not apply to anyrights or claims that cannot be released as a matter of law, including any statutory indemnity rights. As furtherconsideration for his continued employment through the Termination Date, Employee agrees to extend this releaseof claims through and including the Termination Date by re-executing this Agreement, without revocation, on thespace provided at the end of this Agreement on or within ten (10) days following the Termination Date.

7. Section 1542 Waiver. Employee acknowledges that he has read section 1542 of the Civil Code of the State ofCalifornia, which states in full:

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A general release does not extend to claims which the creditor does not know or suspect to exist in his or herfavor at the time of executing the release, which if known by him or her must have materially affected his orher settlement with the debtor.

Employee waives any rights that he has or may have under section 1542 (or any similar provision of the laws ofany other jurisdiction) to the full extent that he may lawfully waive such rights pertaining to this general release ofclaims, and affirms that he is releasing all known and unknown claims that he has or may have against the partieslisted above.

8. Continuing Obligations and Return of Velti Property. Employee acknowledges and agrees that he shall continueto be bound by and comply with the terms of any confidentiality, proprietary rights, or assignment of inventionsagreements between Employee and the Velti at all times during the remainder of his employment and following theTermination Date. On or before the Termination Date, Employee will return to Velti, in good working condition,all Velti property and equipment that is in Employee's possession or control, including, but not limited to, anyfiles, records, computers, computer equipment, cell phones, credit cards, keys, programs, manuals, business plans,financial records, customer information, and all documents (whether in paper, electronic, or other format, and anycopies thereof) that Employee prepared or received in the course of his employment with Velti.

9. Confidentiality. Employee agrees that he shall not directly or indirectly disclose any of the terms of this Agreementto anyone other than his immediate family or counsel, except as such disclosure may be required for accounting ortax reporting purposes or as otherwise may be required by law. Employee further agrees that he will not, at any timein the future, make any critical or disparaging statements about Velti, or any of its products, services, or employees,unless such statements are made truthfully in response to a subpoena or other legal process.

10. Non-Solicitation of Co-Workers. Employee agrees that for a period of one year following the Termination Date, hewill not, on behalf of himself or any other person or entity, directly or indirectly solicit any employee of Velti toterminate his/her employment with Velti.

11. Agreement Not To Assist With Other Claims. Employee agrees that he shall not, at any time in the future, encourageany current or former Velti employee, or any other person or entity, to file any legal or administrative claim of anytype or nature against Velti or any of its officers or employees. Employee further agrees that he shall not, at anytime in the future, assist in any manner any current or former Velti employee, or any other person or entity, in thepursuit or prosecution of any legal or administrative claim of any type or nature against Velti or any of its officers oremployees, unless pursuant to a duly-issued subpoena or other compulsory legal process.

12. Attorneys' Fees. In the event of any legal action relating to or arising out of this Agreement, the prevailing party shallbe entitled to recover from the losing party its attorneys' fees and costs incurred in that action.

13. Governing Law. This Agreement shall be interpreted in accordance with and governed by the laws of the State ofCalifornia.

14. Section 409A Compliance. The Company intends that income provided to Employee pursuant to this Agreement willnot be subject to taxation under Section 409A of the Internal Revenue Code of 1986, as amended, and the guidancepromulgated thereunder (“Section 409A”). The provisions of this Agreement shall be interpreted and construed infavor of satisfying any applicable requirements of Section 409A. However, the Company does not guarantee anyparticular tax effect for income

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provided to the Employee pursuant to this Agreement. In any event, except for the Company’s responsibilityto withhold applicable income and employment taxes from compensation paid or provided to the Employee,the Company shall not be responsible for the payment of any applicable taxes incurred by the Employee oncompensation paid or provided to the Employee pursuant to this Agreement. In the event that any compensation tobe paid or provided to Employee pursuant to this Agreement is subject to the restrictions on payments to “specifiedemployees” (as defined in Section 409A), then the Company may delay such payment for the minimum periodrequired in order to comply with such provisions and avoid the imposition of any additional taxes or interest underSection 409A.

15. Severability. If any provision of this Agreement is deemed invalid, illegal, or unenforceable, that provision will bemodified so as to make it valid, legal, and enforceable, or if it cannot be so modified, it will be stricken from thisAgreement, and the validity, legality, and enforceability of the remainder of the Agreement shall not in any way beaffected.

16. Integration and Modification. This Agreement, along with any agreements referenced in herein, constitute the entireagreement between the parties with respect to the termination of their employment relationship and the other matterscovered herein, and they supersede all prior negotiations and agreements between the parties regarding those matters,whether written or oral. This Agreement may not be modified or amended except by a document signed by the ChiefExecutive Officer of Velti and Employee.

EMPLOYEE UNDERSTANDS THAT HE IS ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNINGTHIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINST THE PARTIESRELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT HE MAYHAVE UP TO 21 DAYS TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY TIME DURINGTHE 7 DAYS AFTER HE SIGNS IT (BY EMAIL NOTICE AS DESCRIBED IN SECTION 1), AND THAT IT SHALLNOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. EMPLOYEE ACKNOWLEDGES THATHE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THEPAYMENTS AND BENEFITS DESCRIBED ABOVE, WHICH PAYMENTS AND BENEFITS EMPLOYEE WOULDNOT BE ENTITLED TO RECEIVE BUT FOR HIS EXECUTION OF THIS AGREEMENT.

Dated: February 7, 2013/s/ Wilson CheungWilson Cheung

Dated: February 7, 2013

Velti Inc.

By: /s/ Alex MoukasAlex Moukas, Chief Executive Officer

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March 30, 2013

PERSONAL AND CONFIDENTIAL

Mari Baker

Re: Temporary Employment Agreement

Dear Mari:

We are very pleased to offer you a temporary position with Velti Inc. (the “Company”) as Interim ChiefOperating Officer, COO, at our offices in San Francisco, starting on April 1, 2013.

Please find below a brief description of the compensation and benefits that will be provided to you inconjunction with your employment, as well as the terms and conditions that govern our employmentrelationship. Please note that the Company may, in its discretion, change its benefit plans from time to time.

Base Pay: You will be paid a monthly base salary of $40,000 which is equivalent to $480,000 on anannualized basis. As an exempt employee, you will not be eligible to receive any overtime pay. You will bepaid in accordance with the Company’s regular payroll schedule on the 15th and last day of the month, andyour base pay will be subject to applicable tax and other withholdings. In the event your contract is extendedbeyond 6 months, your base pay will be $29,166 per month or $350,000 on an annualized basis.

Duration and renewal of Employment: The initial duration of your employment will be three monthsending June 30, 2013. This agreement is subject to automatic quarterly renewal and can be terminated byeither party at the conclusion of a quarter upon notice to the other party no later than 30 days prior to theending of such fiscal quarter.

Performance Bonus: In the event your contract is extended beyond 6 months, you will be eligible toearn an annual discretionary performance bonus (calendar year) of up to $200,000, based upon yourachievement of performance targets determined by the Company at the time of such extension, and theCompany’s achievement of its financial and other goals for the fiscal year for which such performance bonuswould be payable. Notwithstanding the foregoing, for the calendar year ending December 31, 2013, you willnot be entitled to a performance bonus unless your employment is extended beyond October 1, 2013, andpayment of such performance bonus will be prorated for the period October 1, 2013 through December 31,2013. The determination of whether you earn an annual bonus as well as the amount and composition (cashor immediately vesting shares) of any bonus will be determined by the Company in its sole discretion. Youmust be employed by the Company on December 31 of the applicable year in order to be eligible to earn anybonus. If you resign from your employment prior to the bonus payment date, you will not earn or receiveany bonus for the prior year.

Sign-on Equity Award: Subject to the approval of the Board, you will be awarded an initial equity awardof 90,000 Company restricted shares. The award will be made in accordance with the Company’s 2009 USEmployee Share Incentive Plan (as amended and restated through



the date of grant) (the “Plan”). As a condition of your grant, you will be required to sign the Company’sstandard form of deferred share unit agreement, and the award will be subject to the terms and conditions ofthe Plan and the Applicable agreement. Provided you remain employed by the Company through each awardvesting date, the award will vest over a one-year period, with 25% vesting in equal tranches per quarter.

Paid Time Off: You will be subject to the Company’s vacation and time off policy as applied to all otheremployees of the Company at the same grade level within the Company as you. Currently, under such policy,although Velti believes that taking time off for relaxation, vacation and other personal needs is essentialto the health and productivity of every employee, Velti no longer has a vacation policy for its exempt USemployees at your grade level and above. As a result, you will not earn vacation or have a vacation accrualbalance. You will be paid your regular base salary at all times while you are actively employed by Velti(including while on Velti holidays). If you wish to take time off from work for purposes of relaxation, vacation,or other personal reasons, you may do so with the prior approval of your supervisor, and you will continueto be paid your base salary during the approved time of period.

As an exempt U.S. employee, you will earn 10 days of paid sick time off per calendar year (.833 days permonth from the start of employment) up to a maximum accrual of 10 days. Sick leave is subject to the termsand conditions of the Company’s Sick Time Off Policy.

Healthcare Plan: The Company will provide you with the opportunity to participate in its group healthinsurance plan currently available to other similarly situated employees, subject to any eligibilityrequirements imposed by such plan(s).

Phone, Computer, Internet, and Travel Expenses: Documented and reasonable business expenses willbe reimbursed on a monthly basis in accordance with Company policy as established and/or modified fromtime to time. The Company shall reimburse you for documented and reasonable legal fees pertaining to thereview of this agreement.

Proof of Right to Work: For purposes of federal immigration law and as a condition of your employment,you will be required to complete a Form I-9 and provide the Company with sufficient documentationestablishing your identity and eligibility to work in the United States within three (3) business days of yourdate of hire, or our employment relationship with you may be terminated.

Non-Disclosure Agreement: As a condition of your employment, on or before your start date, youmust sign and return to the Company a copy of its Employee Non-Disclosure and Invention AssignmentAgreement (the “ENIAA” or the “Restrictive Covenant Agreement”) prior to your employment start date,which provides for standard confidentiality, non-solicitation and assignment of inventions obligations in favorof the Company. In addition, for purposes of federal immigration law, on or before your start date, youmust provide to the Company documentary evidence of your identity and eligibility for employment in theUnited States. Your failure to timely execute such Restrictive Covenant Agreement and/or provide adequatedocumentation will result in your immediate termination for Cause.

Board Membership: For the duration of this agreement you will a/retain your current Board membership,b/forego all Board related cash and equity compensations and c/resign from all Board Committeememberships effective immediately..

General Obligations: As an employee, you will be expected to adhere to all of the Company’s policies, andto conduct yourself in accordance with the Company’s standards of professionalism,



loyalty, integrity, honesty, reliability and respect for all. The Company does not permit, and will not tolerate,the unlawful discrimination or harassment of any of its employees or contractors on the basis of sex, race,color, religion, age, national origin or ancestry, marital status, veteran status, mental or physical disability,medical condition, sexual orientation, pregnancy, childbirth or related medical condition, or any other statusprotected by applicable law.

You agree that you will at all times, to the best of your ability and experience, loyally and conscientiouslyperform all of the duties and obligations required of and from you pursuant to the express and implicit termshereof to the reasonable satisfaction of the Company. During the term of your employment, you agree that(i) you will devote all of your business time and attention to the business of the Company, (ii) the Companywill be entitled to all of the benefits and profits arising from or incident to all such efforts by you, (iii) youwill not render commercial or professional services of any nature to any person or organization, whether ornot for compensation, without the prior written consent of the Company’s Chief Executive Officer or SeniorVice President of Human Resources, and (iv) you will not directly or indirectly engage or participate in anybusiness that is competitive in any manner with the business of the Company.

Entire Agreement and Modification: You acknowledge that this letter agreement, along with the otheragreements referenced above, constitutes the entire agreement between you and the Company concerningour employment relationship. Unless they are expressly included in this letter agreement, no verbal, written,or implied agreements, promises or representations are or will be effective or binding upon the Company.This letter agreement may not be modified or amended except by a subsequent written agreement betweenthe parties signed by you and an authorized officer of the Company. Notwithstanding the previous sentence,the Company may change your position, duties, compensation, or benefits from time-to-time as it deemsnecessary or appropriate.

Duties to Third Parties: The Company is an ethical competitor, and will not tolerate any unlawful activitiesby its employees in connection with the performance of their duties for the Company. By accepting thisoffer, you represent and warrant that you are able to perform your duties for the Company withoutbreaching any legal obligations that you have to any third party, including any obligations to your currentor former employers. You agree that you will not, in the course of your employment with the Company,use any proprietary information of any third party, including your current or former employers. This offer ofemployment will remain open until the close of business on April 24, 2013. If this offer is not accepted ator before that time, it will expire and be of no further force or effect.We are delighted to be able to extend you this offer of employment and look forward to welcoming youaboard. To accept this offer, please sign and date the enclosed copy of this letter where indicated below andreturn it to me.



Your immediate supervisors will be David Mann, Chairman of the Board and Alex Moukas, Chief ExecutiveOfficer.

Yours sincerely,

David Mann /s/ David MannChairman of the Board

Alex Moukas /s/ Alex MoukasCEO

Accept Job Offer

I agree to and accept employment with Velti USA on the terms and conditions set forth in this agreement. Iunderstand and agree that my employment with the Company is at-will.

Signature: /s/ Mari Baker Date: 4/24/13



3 Months EndedShare-Based Compensation Mar. 31, 2013Disclosure of CompensationRelated Costs, Share-basedPayments [Abstract]Share-Based Compensation Share-Based Compensation

Equity Incentive Plans

We grant deferred share awards to our employees as part of our compensation package. We alsogrant share options to some of our employees and consultants in addition to deferred shareawards. Our deferred share awards typically vest over four years at the rate of 25% per year onthe anniversary of the date of grant; however, in the past our deferred share awards granted to ournon-executive directors and a portion of the deferred share awards granted to our executiveofficers, vested over one year in equal monthly tranches. In March 2012, we issued fully vesteddeferred share awards to employees as discretionary bonuses in lieu of payment of cash bonuses,and in May 2013, we again issued fully vested deferred share awards to employees asdiscretionary bonuses in lieu of payment of cash bonuses. We also periodically award fully vestedshares as a sign on bonus to newly hired employees. Shares are only issued to a participant whenthe deferred share award vests in accordance with any vesting schedule specified in the awardagreement following receipt of payment of the aggregate nominal (par) value of £0.05 perordinary share. The deferred share award recipient is responsible for all applicable taxes payableon the award.

All of our share options have an exercise price equal to the market price of our ordinary shares onthe date of grant. Our options typically vest over a four-year period at the rate of 25% per year onthe anniversary of the date of grant, although from time to time we issue share options withshorter vesting terms. Beginning in 2013 we ceased regularly awarding share options toemployees and instead now typically only grant deferred share awards.

Deferred Share Awards


Number ofShares

WeightedAverageExercisePrice Per

Share

WeightedAverage

Grant DateFair Value Per

Share

WeightedAverage

RemainingContractual

Life (in years)

AggregateIntrinsic

Value(in

thousands)

Outstanding as of December 31,2012 3,818,946 $ 0.08 1.7 $ 16,880


Forfeited (304,755) $ 0.08Vested deferred shareawards (527,064) $ 0.08 $ 1,548

Outstanding as of March 31,2013 3,326,200 $ 0.08 1.8 $ 6,386

For deferred share awards, the fair value on the date of grant approximates market value as theexercise price equals the nominal (par) value of £0.05 (remeasured into U.S. dollars on grantdate) per ordinary share. The aggregate estimated grant date fair value therefore approximates theintrinsic value disclosed in the table above.



Share Options


Number ofoptions


Share

WeightedAverage

Grant DateFair Value Per

Share

WeightedAverage


Life (in years)

AggregateIntrinsic

Value(in

thousands)

Outstanding as ofDecember 31, 2012 4,893,791 $ 8.02 7.8 $ 265



Exercised options (13,500) $ 2.73 $ 34Outstanding as of March 31,2013 4,646,183 $ 7.95 6.2 $ —

During the three months ended March 31, 2013 no share options were granted to employees ornon-employees of Velti. The fair value of our share options granted in the three months endedMarch 31, 2012 was estimated at the date of grant using the Black-Scholes model with thefollowing assumptions: Expected volatility was 60%, expected life of 6.30 years, risk free rate of0.67% to 0.94% with no expected dividends.

The following table summarizes information regarding our outstanding and exercisable options asof March 31, 2013:




Weighted-AverageExercisePrice per

Share


ContractualTerm

(Years)



Share

AggregateIntrinsic

Value

$2.57 - $2.73 127,869 $ 2.67 1.2 84,382 $ 2.70

$4.95 -$4.95 1,987,745 $ 4.95 6.2 1,114,545 $ 4.95

$6.26 - $9.45 883,786 $ 8.24 6.2 345,831 $ 8.64

$9.46 - $11.95 793,465 $ 10.72 6.7 217,914 $ 10.65

$12.10 - $15.46 780,240 $ 12.47 6.3 394,726 $ 12.30

$15.58 - $18.47 73,078 $ 17.26 6.2 22,010 $ 17.194,646,183 $ 7.95 6.2 2,179,408 $ 7.47 $ —

During three months ended March 31, 2013 and 2012 we recognized total share-based paymentexpense under equity incentive plans as follows:


2013 2012

(in thousands)







Share-based compensation declined significantly in the three months ended March 31, 2013 ascompared to the same period in 2012 due to an upward revision in the number of awards that areexpected to be forfeited prior to vesting and as a substantial portion of the expense recognized inthe three months ended March 31, 2012 related to awards with short vesting periods. As ofMarch 31, 2013, there was $11.7 million of total unrecognized share-based compensationexpense related to deferred share awards awarded under our share incentive plans expected to berecognized over a weighted-average recognition period of 1.8 years. As of March 31, 2013, therewas $4.1 million of total unrecognized share-based compensation expense related to share optionsexpected to be recognized over a weighted-average recognition period of 1.2 years.



3 Months EndedShare-Based Compensation -Assumptions Used to

Estimate Fair Value of StockOptions (Details)

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]Expected volatility 60.00%Expected life 6 years 3 months 18 daysRisk free rate, minimum 0.67%Risk free rate, maximum 0.94%Expected dividends 0.00%



3 Months EndedConsolidated Statements ofOperations (USD $)

In Thousands, except PerShare data, unless otherwise

specified

Mar. 31,2013

Mar. 31,2012

Revenue:Software as a service (SaaS) revenue $ 32,390 $ 46,768License and software revenue 2,159 1,505Managed services revenue 6,458 3,520Total revenue 41,007 51,793Cost and expenses:Third-party costs 23,365 16,862Datacenter and direct project costs 5,552 7,892General and administrative expenses 14,065 15,132Sales and marketing expenses 12,591 12,753Research and development expenses 4,497 4,684Acquisition related and other charges 0 2,197Impairment of goodwill and intangible assets 133,129 0Depreciation and amortization 8,620 7,269Total cost and expenses 201,819 66,789Loss from operations (160,812) (14,996)Interest expense, net (438) (743)Gain (loss) from foreign currency transactions (2,634) 1,375Other income (expense) (6) 6,174Loss before income taxes, equity method investments and non-controlling interest (163,890) (8,190)Income tax (expense) benefit 6,853 (278)Loss from equity method investments 0 (371)Net loss (157,037) (8,839)Net loss attributable to non-controlling interest (679) (21)Net loss attributable to Velti (156,358) (8,818)Foreign currency translation adjustments (6,343) 4,254Comprehensive loss (163,380) (4,585)Comprehensive loss attributable to non-controlling interests 679 18Comprehensive loss attributable to Velti $ (162,701) $ (4,567)Basic (in dollars per share) $ (2.38) $ (0.14)Diluted (in dollars per share) $ (2.38) $ (0.14)Weighted average number of shares outstanding for use in computing per shareamounts:Basic (in shares) 65,808 61,816Diluted (in shares) 65,808 61,816



3 Months EndedAcquisitions Mar. 31, 2013Business Combinations[Abstract]Acquisitions Acquisitions

CASEE

On January 16, 2012, we completed the acquisition of the remaining equity interests in YdonHoldings, Ltd., a holding company set up to own a mobile marketing and advertising exchangewith operations based in Beijing (CASEE), by acquiring all of the outstanding shares of YdonHoldings which we did not previously own. We acquired this interest for an initial cash paymentof $8.4 million and up to $20.3 million in contingent consideration. The transaction wasaccounted for using the purchase method of accounting. Transaction costs amounted to $0.9million and were expensed as incurred.

Prior to the completion of the acquisition, we owned 33% of the outstanding shares andaccounted for our investment in CASEE using the equity method. Upon completion of theacquisition, Ydon Holdings became our wholly-owned subsidiary. Immediately prior to theacquisition, we re-measured our interest in Ydon Holdings and recorded a gain of $6.0 million,which is included in other income (expense) in the consolidated statement of comprehensive loss.This fair value measurement was based on the per share consideration paid in the transaction,including the fair value of the contingent consideration, applied to the number of shares held byus immediately prior to closing.

The contingent consideration to be paid is based on CASEE's achievement of revenue and grossprofit performance during the twelve months ended March 31, 2012 and 2013, with a maximumof $20.3 million. It is payable in two tranches, as soon as reasonably practical after the closing ofthe financial books for those periods, and may be paid in cash or up to 50% in our ordinaryshares, at our discretion. We recorded the acquisition-date estimated fair value of the contingentpayment of $6.4 million as a component of the consideration paid in exchange for the equityinterests of Ydon Holdings. The acquisition-date fair value is measured at each quarter end basedon the probability-adjusted present value of the consideration expected to be transferred. As ofMarch 31, 2013 we have not paid any amount for contingent consideration as we are continuingto review whether all criteria required by the purchase agreement have been met. See disclosureof Level 3 fair value measurements in Note 6 for changes during the period.

We acquired CASEE to support the expansion of our business in China. The acquisition isexpected to significantly enhance our presence in China and increase the overall value of ourplatform to current and future customers. These factors contributed to establishing the purchaseprice, which resulted in the recognition of goodwill. The allocation of the total consideration of$22.8 million was as follows:

Fair Value

(in thousands)












Goodwill 17,741



Purchase price:

Cash $ 8,400




In conjunction with the impairment analysis discussed in Note 2, all of the goodwill andsubstantially all of the acquired intangible assets were impaired in the three months ended March31, 2013.



3 Months EndedGoodwill and IntangibleAssets (Tables) Mar. 31, 2013

Goodwill and Intangible AssetsDisclosure [Abstract]Schedule of Definite-LivedIntangible Assets


Intangible Assets

AverageUseful

lifeGross Carrying


NetCarryingAmount

(inyears) (in thousands)

March 31, 2013



Licenses and intellectual property 4.3 4,286 3,270 1,016Trademark, trade name and non-compete 1.4 1,046 518 528




December 31, 2012



Licenses and intellectual property 5.0 24,491 19,233 5,258Trademark, trade name and non-compete 2.5 6,960 2,425 4,535


Developed technology 4.6 25,528 9,301 16,227Intangible assets 4.2 $ 171,596 $ 77,614 $ 93,982

Schedule of Impairment ofIntangibles, Including Net CarryingAmount Before and AfterImpairment

The following table provides the net carrying value of intangible assets and goodwillimmediately before and after the impairment charge, exclusive of Starcapital carryingvalues:

Net Carrying Amount

Prior toImpairment

Subsequentto

ImpairmentImpairment

Amount

(in thousands)

Trade name $ 2,540 $ 527 $ 2,013





Goodwill 69,262 — 69,262




(1) Developed technology includes internal software development costs, computersoftware, licenses and intellectual property, developed technology from acquisitions.It is reduced by the amount of unrecognized government grants related to theseassets.



3 Months EndedRelated Party Transactions Mar. 31, 2013Related Party Transactions[Abstract]Related Party Transactions Related Party Transactions

Starcapital is an equity investor in several entities, each of which we divested and transferred toStarcapital or its subsidiaries in a transaction completed in December 2012. Previously, we havehad sale and purchase transactions with these entities. The following is a summary of thetransactions and balances:

Three Months EndedMarch 31,


Sales and services rendered $ 1,264 $ 989Purchases $ 29 $ 156

March 31,December

31,2013 2012

(in thousands)Trade receivables $ 5,536 $ 4,622Accrued and other receivables $ 3,954 $ 4,043Trade payables $ 150 $ 166



3 MonthsEnded

Commitments andContingencies - Patent

Litigation (Details) (VeltiUSA, Inc. v.s. Augme

Technologies, Inc. [Member],USD $)

In Thousands, unlessotherwise specified

Mar. 31,2013

Mar. 09, 2012Pending

Litigation[Member]

infringement

Mar. 22, 2013Subsequent Event

[Member]lawsuits

Loss Contingencies [Line Items]Number of alleged patent infringements 3Number of lawsuits settled 2Settlement agreement consideration (in US dollars) $ 200Maximum number of business days that the settlementpayment is due after litigation is dismissed 10 days



3 Months Ended 12 MonthsEnded

Goodwill and IntangibleAssets Goodwill andIntangible Assets -

Impairment Loss (Details)(USD $)

Mar. 31, 2013 Mar. 31,2012 Dec. 31, 2012

Finite-Lived Intangible Assets [Line Items]Impairment of intangible including unrecognized governmentgrants

$67,500,000

Unrecognized government grants (3,600,000)Intangible assets, net 23,097,000 93,982,000Impairment of intangible assets 63,867,000Goodwill 0 70,498,000Goodwill impairment 69,262,000 0Impairment of goodwill and intangible assets 133,129,000 0Trademark and trade name [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 528,000 4,535,000Impairment of intangible assets 2,013,000Internal software development costs [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 1,497,000 15,436,000Developed Technology Rights [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 0 16,227,000Impairment of intangible assets 51,081,000 [1]

Customer Relationships [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 7,902,000 18,808,000Impairment of intangible assets 9,194,000Noncompete Agreements [Member]Finite-Lived Intangible Assets [Line Items]Impairment of intangible assets 1,579,000Prior to Impairment [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 84,194,000Goodwill 69,262,000Total goodwill and intangible assets, net carrying value 153,456,000Prior to Impairment [Member] | Trademark and trade name[Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 2,540,000Prior to Impairment [Member] | Developed Technology Rights[Member]Finite-Lived Intangible Assets [Line Items]



Intangible assets, net 62,981,000 [1]

Prior to Impairment [Member] | Customer Relationships [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 17,094,000Prior to Impairment [Member] | Noncompete Agreements[Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 1,579,000Subsquent to Impairment [Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 20,327,000Goodwill 0Total goodwill and intangible assets, net carrying value 20,327,000Subsquent to Impairment [Member] | Trademark and trade name[Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 527,000Subsquent to Impairment [Member] | Developed Technology Rights[Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 11,900,000 [1]

Subsquent to Impairment [Member] | Customer Relationships[Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net 7,900,000Subsquent to Impairment [Member] | Noncompete Agreements[Member]Finite-Lived Intangible Assets [Line Items]Intangible assets, net $ 0[1] Developed technology includes internal software development costs, computer software, licenses and

intellectual property, developed technology from acquisitions. It is reduced by the amount of unrecognizedgovernment grants related to these assets.



3 Months EndedCommitments andContingencies (Tables) Mar. 31, 2013

Commitments and ContingenciesDisclosure [Abstract]Schedule of Future Minimum RentalPayments for Operating Leases

The future aggregate minimum lease payments under non-cancellable operatingleases as of March 31, 2013 are as follows:

Amount

(in thousands)

Remainder of 2013 $ 4,2732014 $ 6,8132015 $ 5,6052016 $ 5,5252017 $ 5,214Thereafter $ 6,996



3 Months EndedShort-term financings andlong-term debt (Tables) Mar. 31, 2013

Debt Disclosure [Abstract]Schedule of Short and Long-termFacilities

Details of our short-term financings and long-term debt by facility as of March 31, 2013based on contractual maturity (are as follows in thousands):

LenderDescription

/ TermTotal

Facility

Outstandingas of March

31, 2013

Outstandingas of

December31, 2012

InterestRate Security


HSBC Bank Workingcapital $ 1,000 $ 966 839 ICICI Base

+ 4.0%

the Indianfacility issupported by a$1.125 letter ofcredit issuedunder the maincredit facilitythat we havewith HSBC

Other 2 2 12

Long-term debt:

HSBC RevolvingCredit 49,000 46,822 27,328

LIBOR+2.25% to

2.75%

Primarily allassets of theCompany

Other 20 20 14

Total debt: 50,022 $ 47,810 $ 28,193

Schedule of Future PrincipalRepayments on Short and Long-term Facilities


Amount

(in thousands)

2013 $ 9682014 —2015 46,842

Total $ 47,810



Commitments andContingencies - Guarantees

(Details) (Guarantee ofBusiness Revenue [Member],

USD $)In Millions, unless otherwise

specified

Mar. 31, 2013Dec. 31, 2012

Guarantee of Business Revenue [Member]Guarantor Obligations [Line Items]Guarantees, Fair Value Disclosure $ 5.9 $ 6.8



0 Months Ended

Acquisitions - Narrative(Details) (USD $)

Jan. 16, 2012Ydon Holdings, Ltd.(CASEE) [Member]

tranche

Jan. 16, 2012Maximum [Member]Ydon Holdings, Ltd.(CASEE) [Member]

Jan. 14, 2012Ydon Holdings, Ltd.(CASEE) [Member]

Business Acquisition [LineItems]Cash $ 8,400,000Contingent consideration 20,300,000Transaction costs 900,000Equity method investment,ownership percentage 33.00%

Equity interest in acquiree,remeasurement gain 6,000,000

Number of tranches associatedwith contingent consideration 2

Contingent payment, percentagepaid in stock 50.00%

Estimated fair value of contingentconsideration 6,400,000

Total consideration $ 22,769,000



Variable Interest Entity -Balance Sheet Disclosures

(Details) (USD $)In Thousands, unlessotherwise specified

Mar. 31,2013

Dec. 31,2012

Mar. 31,2012

Dec. 31,2011

Current assets:Cash and cash equivalents $ 16,327 $ 36,571 $ 40,951 $ 75,765Trade receivables 146,827 150,074Accrued contract receivables 136,096 132,957Consideration receivable from Starcapital - current 0 0Prepayments 10,320 12,733Other receivables and current assets 12,720 12,353Total current assets 322,290 344,688Property and equipment, net 12,004 13,073Intangible assets, net 23,097 93,982Intercompany Receivable, Non-Current 0 0Goodwill 0 70,498Other assets 16,487 14,782Total assets 373,878 537,023Current liabilities:Accounts payable 38,235 37,786Accrued liabilities 88,184 97,374Consideration payable to Velti - current 0 0Deferred revenue and current portion of deferredgovernment grant 9,028 12,626

Current portion of acquisition related liabilities 33,444 33,352Current portion of long-term debt and short-term financings 47,810 851Income tax liabilities 10,753 9,953Total current liabilities 227,454 191,942Long-term debt 0 27,342Deferred government grant - non-current 0 1,297Acquisition related liabilities - non-current 2,233 2,221Consideration payable to Velti - non-current 0 0Other non-current liabilities 14,651 21,703Total liabilities 244,338 244,505Total Velti shareholders' equity 130,095 292,394Non-controlling interests and variable interest entities (555) 124Total equity 129,540 292,518Total liabilities and shareholders' equity 373,878 537,023Starcapital [Member]Current assets:Cash and cash equivalents 2,070 1,146Trade receivables 12,024 12,399Accrued contract receivables 8,514 8,780



Consideration receivable from Starcapital - current 0 0Prepayments 0 0Other receivables and current assets 1,357 1,327Total current assets 23,965 23,652Property and equipment, net 204 210Intangible assets, net 2,770 2,857Intercompany Receivable, Non-Current 0 0Goodwill 0 0Other assets 1,465 1,511Total assets 28,404 28,230Current liabilities:Accounts payable 683 704Accrued liabilities 484 452Consideration payable to Velti - current 4,166 4,378Deferred revenue and current portion of deferredgovernment grant 705 727

Current portion of acquisition related liabilities 0 0Current portion of long-term debt and short-term financings 0 0Income tax liabilities 856 883Total current liabilities 6,894 7,144Long-term debt 0 0Deferred government grant - non-current 0 0Acquisition related liabilities - non-current 0 0Consideration payable to Velti - non-current 17,425 16,187Other non-current liabilities 4,628 4,772Total liabilities 28,947 28,103Total Velti shareholders' equity 12 3Non-controlling interests and variable interest entities (555) 124Total equity (543) 127Total liabilities and shareholders' equity 28,404 28,230Velti [Member]Current assets:Cash and cash equivalents 14,257 35,425Trade receivables 134,803 137,675Accrued contract receivables 127,582 124,177Consideration receivable from Starcapital - current 4,166 4,378Prepayments 10,320 12,733Other receivables and current assets 11,363 11,026Total current assets 302,491 325,414Property and equipment, net 11,800 12,863Intangible assets, net 20,327 91,125Intercompany Receivable, Non-Current 17,425 16,187Goodwill 0 70,498Other assets 15,022 13,271



Total assets 367,065 529,358Current liabilities:Accounts payable 37,552 37,082Accrued liabilities 87,700 96,922Consideration payable to Velti - current 0 0Deferred revenue and current portion of deferredgovernment grant 8,323 11,899

Current portion of acquisition related liabilities 33,444 33,352Current portion of long-term debt and short-term financings 47,810 851Income tax liabilities 9,897 9,070Total current liabilities 224,726 189,176Long-term debt 0 27,342Deferred government grant - non-current 0 1,297Acquisition related liabilities - non-current 2,233 2,221Consideration payable to Velti - non-current 0 0Other non-current liabilities 10,023 16,931Total liabilities 236,982 236,967Total Velti shareholders' equity 130,083 292,391Non-controlling interests and variable interest entities 0 0Total equity 130,083 292,391Total liabilities and shareholders' equity $ 367,065 $ 529,358



3 Months EndedShare-Based Compensation -

Narrative (Details)In Millions, except Per Share

data, unless otherwisespecified

Mar.31,

2013GBP(£)

Dec.31,

2012GBP(£)

Mar. 31,2013

DeferredShares

[Member]USD ($)

Mar. 31,2013

DeferredShares

[Member]GBP (£)

Mar. 31,2013Share

Options[Member]USD ($)

Mar. 31, 2013Non-Executive

Directors and ExecutiveOfficers [Member]

Deferred Shares[Member]

Share-based CompensationArrangement by Share-basedPayment Award [Line Items]Award vesting period 4 years 4 years 4 years 1 yearVesting percentage per year 25.00% 25.00% 25.00%Ordinary shares, par value (in poundsper share)

£0.05

£0.05 £ 0.05

Weighted-average recognition period 1 year 9months 18days

1 year 9months 18days

1 year 2months 12days

Unrecognized share-basedcompensation expense $ 11.7 $ 4.1



3 Months EndedSegment and GeographicInformation (Details) (USD

$)In Thousands, unlessotherwise specified

Mar. 31, 2013segment Mar. 31, 2012

Revenues from External Customers and Long-Lived Assets [Line Items]Number of reportable segments 1Revenues $ 41,007 $ 51,793Percentage of revenue by geographic segment 100.00% 100.00%Western EuropeRevenues from External Customers and Long-Lived Assets [Line Items]Revenues 14,938 18,310Percentage of revenue by geographic segment 36.40% 35.40%All other European countriesRevenues from External Customers and Long-Lived Assets [Line Items]Revenues 4,761 12,967Percentage of revenue by geographic segment 11.60% 25.00%Total EuropeRevenues from External Customers and Long-Lived Assets [Line Items]Revenues 19,699 31,277Percentage of revenue by geographic segment 48.00% 60.40%AmericasRevenues from External Customers and Long-Lived Assets [Line Items]Revenues 11,848 13,321Percentage of revenue by geographic segment 28.90% 25.70%Asia/AfricaRevenues from External Customers and Long-Lived Assets [Line Items]Revenues $ 9,460 $ 7,195Percentage of revenue by geographic segment 23.10% 13.90%



3 Months Ended 3 Months Ended 3 MonthsEnded 3 Months Ended

Short-term financings andlong-term debt - Narrative

(Details)Mar. 31,

2013USD ($)

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]USD ($)

Sep. 30,2012

Multi-currency

seniorrevolving

creditfacility

[Member]USD ($)

Aug. 31,2012

Multi-currency

seniorrevolving

creditfacility

[Member]USD ($)

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]Minimum[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]Maximum[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]LIBOR

[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]LIBOR

[Member]Minimum[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]LIBOR

[Member]Maximum[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]Adjustablebase rate[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]Adjustablebase rate[Member]Minimum[Member]

Mar. 31,2013

Multi-currency

seniorrevolving

creditfacility

[Member]Adjustablebase rate[Member]Maximum[Member]

Mar. 31,2013

HSBCBank

[Member]Multi-

currencysenior

revolvingcreditfacility

[Member]USD ($)

Sep. 30, 2012Black SeaTrade and

DevelopmentBank

[Member]USD ($)

Sep. 30, 2012Black SeaTrade and

DevelopmentBank

[Member]EUR (€)

Debt Instrument [LineItems]Weighted average effectiveinterest rate 4.10%

Total Facility $50,022,000

$50,000,000.0

$49,000,000

Amount by which therevolving credit facility maybe increased upon meetingcertain requirements

50,000,000.0

Variable interest rate basis LIBOR adjustedbase rate

Spread on variable interest rate 2.25% 2.75% 1.25% 1.75%Per annum interest on any un-used portion of the Facility 0.50% 0.75%

Line of Credit Facility,Commitment Fee Percentage 50.00% 50.00%

Minimum fixed chargecoverage ratio 1.50

Maximum total leverage ratio 2.50Minimum liquidity ratio 1.25Minimum asset coverage ratio 1.50Repayment of outstandingloan in connection withexecution of the Facility

7,200,000 5,900,000

Repayment of outstandingprincipal balance, accruedinterest and fees

7,300,000

Borrowing on the Facility torepay loan

$7,300,000



3 Months EndedVariable Interest Entity(Tables) Mar. 31, 2013

Variable Interest Entity[Abstract]Schedule of Variable InterestEntity

The following are the assets and liabilities of Starcapital that have been consolidated in ourbalance sheet. A statement of operations is not provided because the results are not significant.



ASSETS

Current assets:


Trade receivables, net 146,827 12,024 134,803 150,074 12,399 137,675Accrued contract receivables,net 136,096 8,514 127,582 132,957 8,780 124,177Consideration receivable fromStarCapital - current — — 4,166 — — 4,378

Prepayments 10,320 — 10,320 12,733 — 12,733Other receivables and currentassets 12,720 1,357 11,363 12,353 1,327 11,026



Intangible assets, net 23,097 2,770 20,327 93,982 2,857 91,125Consideration receivable fromStarcapital - non current — — 17,425 — — 16,187

Goodwill — — — 70,498 — 70,498

Other assets 16,487 1,465 15,022 14,782 1,511 13,271

Total assets $ 373,878 $ 28,404 $367,065 $ 537,023 $ 28,230 $529,358

LIABILITIES ANDSHAREHOLDERS' EQUITY



Accrued liabilities 88,184 484 87,700 97,374 452 96,922Consideration payable to Velti -current — 4,166 — — 4,378 —Deferred revenue and currentportion of deferred governmentgrant 9,028 705 8,323 12,626 727 11,899Current portion of acquisitionrelated liabilities 33,444 — 33,444 33,352 — 33,352Current portion of long-termdebt and short-term financings 47,810 — 47,810 851 — 851



Long-term debt — — — 27,342 — 27,342Deferred government grant -non-current — — — 1,297 — 1,297Acquisition related liabilities -non-current 2,233 — 2,233 2,221 — 2,221Consideration payable to Velti -non-current — 17,425 — — 16,187 —





Total Velti shareholders' equity 130,095 12 130,083 292,394 3 292,391Non-controlling interests andvariable interest entities (555) (555) — 124 124 —

Total equity 129,540 (543) 130,083 292,518 127 292,391Total liabilities andshareholders' equity $ 373,878 $ 28,404 $367,065 $ 537,023 $ 28,230 $529,358



3 Months EndedDescription of Business Mar. 31, 2013Organization, Consolidationand Presentation ofFinancial Statements[Abstract]Description of Business Description of Business

Velti plc, (Velti or Company), is a leading global provider of mobile marketing and advertisingtechnology and solutions that help marketers reach new customers, drive consideration withinteractive mobile marketing strategies, accelerate consumer actions using meaningful data, andnurture relationships through data-driven marketing programs. We enable brands to communicatemore meaningfully, deliver greater customer value and inspire the behaviors and outcomes thatmatter for their business.



3 Months EndedSegment and GeographicInformation Mar. 31, 2013

Segment Reporting[Abstract]Segment and GeographicInformation

Segment and Geographic Information

Our business is conducted in a single operating segment. Our chief operating decision maker(CODM), who is also our chief executive officer, reviews a single set of operating results andfinancial information of the entire organization, exclusive of Starcapital a divested operationdiscussed further below, in order to make decisions about allocating resources and assessingperformance. Our CODM manages our business based primarily on broad functional categoriesof sales, marketing, software and technology platform development and strategy.

On December 17, 2012, we sold certain non-strategic and legacy assets and liabilities, focused ongeographies and certain customers in Southeast and Eastern Europe, to Starcapital, a companyincorporated in Cyprus and owned by certain former non-executive management of Velti(Starcapital). Following completion of the sale of assets to Starcapital, we will continue toconsolidate Starcapital because it is considered a variable interest entity, or VIE, and we areconsidered the primary beneficiary (see Note 8). Notwithstanding this characterization,Starcapital engages in a business activity separate from our business, and its operating andfinancial results are reviewed by Starcapital's chief executive officer and not by us. As a result,Starcapital is considered an operating segment, separate from our operating segment.

Starcapital's and our operating segments have similar economic characteristics and are expectedto exhibit similar long-term financial performance. We are continuing to offer certain productsand services that are substantially identical to products and services offered by Starcapital, aportion of our customer base overlaps with the Starcapital customer base, each company deliversits products and services to its customers in a similar manner, and each company is subject tosimilar regulatory requirements. As a result, our and Starcapital's operating segments have beenaggregated into one reportable segment.

We conduct our business in three geographical areas: Europe, Americas, and Asia/Africa. Thefollowing table provides revenue by geographic area. Revenue from customers for whom weprovide services in multiple locations is reported in the location of the respective customer'sdomicile; revenue from customers for whom we provide services in a single or very few relatedlocations is reported in the location of the respective customer's place of operations.


2013 2012


Europe:

Western Europe $ 14,938 36.4% $ 18,310 35.4%

All other European countries 4,761 11.6% 12,967 25.0%

Total Europe 19,699 48.0% 31,277 60.4%

Americas 11,848 28.9% 13,321 25.7%

Asia/Africa 9,460 23.1% 7,195 13.9%

Total revenue $ 41,007 100.0% $ 51,793 100.0%

The vast majority of our long-lived assets are located in Europe, primarily the U.K. and Greece.Long-lived assets consist of property and equipment, net of related accumulated depreciation.



3 Months EndedFair Value Measurements Mar. 31, 2013Fair Value Disclosures[Abstract]Fair Value Measurements Fair Value Measurements

We consider fair value as the exchange price that would be received for an asset or paid totransfer a liability in the principal or most advantageous market in which we would transactbusiness in an orderly transaction on the measurement date. We consider assumptions that marketparticipants would use when pricing the asset or liability, such as inherent risk, transferrestrictions, and risk of nonperformance.

We use observable inputs whenever possible and minimize the use of unobservable inputs whenmeasuring fair value. Observable inputs reflect readily obtainable data from independent sources,while unobservable inputs reflect the Company’s market assumptions. The inputs are thenclassified into the following hierarchy: (1) Level 1 Inputs—quoted prices in active markets foridentical assets and liabilities; (2) Level 2 Inputs—observable market-based inputs other thanLevel 1 inputs, such as quoted prices for similar assets or liabilities in active markets, quotedprices for similar or identical assets or liabilities in markets that are not active, or other inputs thatare observable or can be corroborated by observable market data; (3) Level 3Inputs—unobservable inputs that are supported by little or no market activity such as certainpricing and discounted cash flow models.

Our financial assets and liabilities consist principally of cash and cash equivalents, accountspayable, accrued liabilities, current and non-current notes payable. Cash and cash equivalents arestated at cost, which approximates fair value. As of March 31, 2013 and 2012, we do not havereadily marketable securities that are classified as cash equivalents. Accounts payable andaccrued liabilities are carried at cost that approximates fair value due to their expected shortmaturities. The carrying amount of short and long-term debt approximates its fair value. As ofMarch 31, 2013, we did not have any financial assets or liabilities for which Level 1 or Level 2inputs were required to be disclosed.

Liabilities Measured at Fair Value on a Recurring Basis

The fair value of our contingent payments is associated with our acquisition of Casee and isdetermined based on an internal cash flow model using inputs based on estimates andassumptions developed by us and is remeasured on each reporting date. The rates used todiscount net cash flows to their present value were based on our weighted average cost of capitalfor similar transactions and an assessment of the relative risk inherent in the associated cashflows. The inputs were current as of the measurement date. These inputs tend to be unobservableand, as such, are considered Level 3 in the fair value hierarchy. The contingent payment that maybe due in connection with our acquisition of CASEE is our only Level 3 fair value measurementas of March 31, 2013.

The following table provides a summary of changes in fair value of the contingent paymentsmeasured using significant unobservable inputs (Level 3):

Fair Value

(in thousands)





Assets Measured at Fair on a Non-Recurring Basis

Certain intangible assets and goodwill are measured at fair value on a nonrecurring basis and aresubject to fair value adjustments when there is evidence of impairment. Adjustments to thecarrying value of these assets and the adjusted basis are detailed in Note 7. Unobservable inputs(Level 3) were included in the determination of the amount of the fair value adjustments andadjusted basis for these assets.



3 Months EndedBalance Sheet Items Mar. 31, 2013Organization, Consolidation and Presentation ofFinancial Statements [Abstract]Balance Sheet Items Balance Sheet Items

Details of our significant balance sheet line items consisted of thefollowing:

Property and equipment March 31,December

31,

2013 2012

(in thousands)

Buildings and fixtures $ 9,258 $ 8,806

Computer and telecommunication hardware 9,754 9,457


Total cost 23,143 20,817


Depreciation expense was $943,000 and $471,000 during the threemonths ended March 31, 2013 and 2012, respectively.

Accrued liabilities March 31,December

31,

2013 2012

(in thousands)




Other 7,425 9,383

Total accrued liabilities $ 88,184 $ 97,374



3 MonthsEnded

3 MonthsEnded

Short-term financings andlong-term debt - Schedule of

Debt Facilities (Details)(USD $)

Mar. 31,2013

Dec. 31,2012

Aug. 31,2012

RevolvingCreditFacility

[Member]

Mar. 31,2013

HSBC Bank[Member]WorkingCapital

[Member]

Dec. 31,2012

HSBCBank

[Member]WorkingCapital

[Member]

Mar. 31,2013

HSBCBank

[Member]Revolving

CreditFacility

[Member]

Dec. 31,2012

HSBCBank

[Member]Revolving

CreditFacility

[Member]

Mar. 31,2013

OtherLender

[Member]OtherShort-term

Facility[Member]

Dec. 31,2012

OtherLender

[Member]OtherShort-term

Facility[Member]

Mar. 31,2013

OtherLender

[Member]OtherLong-term

Facility[Member]

Dec. 31,2012

OtherLender

[Member]OtherLong-term

Facility[Member]

Line of Credit Facility [LineItems]Total Facility $

50,022,000$50,000,000.0$ 1,000,000 $

49,000,000 $ 20,000

Facility Outstanding 47,810,00028,193,000 966,000 839,000 46,822,00027,328,0002,000 12,000 20,000 14,000Interest Rate - Fixed Basis 13.25%Interest Rate - Fixed Margin 4.00%Security the Indian

facility issupported bya $1.125 letterof creditissued underthe maincredit facilitythat we havewith HSBC

Primarilyall assetsof theCompany

Letter of Credit Outstanding $1,125,000.000



3 Months EndedShare-Based Compensation(Tables) Mar. 31, 2013

Disclosure of CompensationRelated Costs, Share-basedPayments [Abstract]Schedule of Details of DeferredShare Awards


Number ofShares


Share

WeightedAverage

Grant DateFair ValuePer Share

WeightedAverage


Life (in years)

AggregateIntrinsic

Value(in

thousands)

Outstanding as ofDecember 31, 2012 3,818,946 $ 0.08 1.7 $ 16,880


Forfeited (304,755) $ 0.08Vested deferred shareawards (527,064) $ 0.08 $ 1,548

Outstanding as of March 31,2013 3,326,200 $ 0.08 1.8 $ 6,386

Schedule of Details of ShareOption Activity


Number ofoptions


Share

WeightedAverage

Grant DateFair ValuePer Share

WeightedAverage


Life (in years)

AggregateIntrinsic

Value(in

thousands)

Outstanding as ofDecember 31, 2012 4,893,791 $ 8.02 7.8 $ 265



Exercised options (13,500) $ 2.73 $ 34Outstanding as of March 31,2013 4,646,183 $ 7.95 6.2 $ —

Schedule of Outstanding andExercisable Options

The following table summarizes information regarding our outstanding and exercisableoptions as of March 31, 2013:




Weighted-AverageExercisePrice per

Share


ContractualTerm

(Years)



Share

AggregateIntrinsic

Value

$2.57 - $2.73 127,869 $ 2.67 1.2 84,382 $ 2.70

$4.95 -$4.95 1,987,745 $ 4.95 6.2 1,114,545 $ 4.95

$6.26 - $9.45 883,786 $ 8.24 6.2 345,831 $ 8.64

$9.46 - $11.95 793,465 $ 10.72 6.7 217,914 $ 10.65

$12.10 - $15.46 780,240 $ 12.47 6.3 394,726 $ 12.30

$15.58 - $18.47 73,078 $ 17.26 6.2 22,010 $ 17.19



4,646,183 $ 7.95 6.2 2,179,408 $ 7.47 $ —

Schedule of Assumptions Used toEstimate Fair Value of ShareOptionsSchedule of Share-Based PaymentExpense

During three months ended March 31, 2013 and 2012 we recognized total share-basedpayment expense under equity incentive plans as follows:


2013 2012

(in thousands)







3 Months EndedBalance Sheet Items -Property, Plant and

Equipment (Details) (USD $)In Thousands, unlessotherwise specified

Mar. 31, 2013Mar. 31, 2012Dec. 31, 2012

Property, Plant and Equipment [Line Items]Property, Plant and Equipment, Gross $ 23,143 $ 20,817Less: accumulated depreciation (11,139) (7,744)Property and equipment, net 12,004 13,073Depreciation 943 471Buildings and Fixtures [Member]Property, Plant and Equipment [Line Items]Property, Plant and Equipment, Gross 9,258 8,806Computer Equipment [Member]Property, Plant and Equipment [Line Items]Property, Plant and Equipment, Gross 9,754 9,457Office Equipment [Member]Property, Plant and Equipment [Line Items]Property, Plant and Equipment, Gross $ 4,131 $ 2,554



3 Months EndedGoodwill and IntangibleAssets - Intangible Assets

(Details) (USD $) Mar. 31, 2013 Mar. 31, 2012Dec. 31, 2012

Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 3 years 4 yearsAccumulated Amortization $ 26,640,000 $ 77,614,000Gross Carrying Value 49,737,000 171,596,000Net Carrying Amount 23,097,000 93,982,000Amortization expense 8,300,000 7,700,000Internal software development costs [Member]Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 3 years 3 yearsAccumulated Amortization 3,513,000 22,329,000Gross Carrying Value 5,010,000 37,765,000Net Carrying Amount 1,497,000 15,436,000Computer software [Member]Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 3 years 3 yearsAccumulated Amortization 18,299,000 17,774,000Gross Carrying Value 30,453,000 51,492,000Net Carrying Amount 12,154,000 33,718,000Licenses and Intellectual Property [Member]Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 4 years 3 months 18 days 5 yearsAccumulated Amortization 3,270,000 19,233,000Gross Carrying Value 4,286,000 24,491,000Net Carrying Amount 1,016,000 5,258,000Trademark, trade name and non-compete [Member]Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 1 year 3 yearsAccumulated Amortization 518,000 2,425,000Gross Carrying Value 1,046,000 6,960,000Net Carrying Amount 528,000 4,535,000Customer Relationships [Member]Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 4 years 6 yearsAccumulated Amortization 1,040,000 6,552,000Gross Carrying Value 8,942,000 25,360,000Net Carrying Amount 7,902,000 18,808,000Developed Technology [Member]Finite-Lived Intangible Assets, Net [Abstract]Average Useful life 3 years 5 yearsAccumulated Amortization 0 9,301,000



Gross Carrying Value 0 25,528,000Net Carrying Amount $ 0 $ 16,227,000



3 Months EndedRelated Party Transactions(Details) (Affiliated Entity

[Member], USD $)In Thousands, unlessotherwise specified

Mar. 31, 2013Mar. 31, 2012

Affiliated Entity [Member]Related Party Transaction [Line Items]Sales and services rendered $ 1,264 $ 989Purchases 29 156Trade receivables 5,536 4,622Accrued and other receivables 3,954 4,043Trade payables $ 150 $ 166



3 Months EndedShare-Based Compensation -Deferred Share Awards

(Details) (Deferred Shares[Member], USD $)

In Thousands, except PerShare data, unless otherwise

specified

Mar. 31, 2013 Mar. 31, 2012

Deferred Shares [Member]Number of SharesOutstanding (in shares) 3,818,946Share awards granted (in shares) 339,073Forfeited or failed to vest (in shares) 304,755Vested deferred share awards (in shares) 527,064Outstanding (in shares) 3,326,200Weighted Average Exercise Price Per ShareOutstanding (in dollars per share) $ 0.08Share awards granted (in dollars per share) $ 0.08Forfeited or failed to vest (in dollars per share) $ 0.08Vested deferred share awards (in dollars per share) $ 0.08Outstanding (in dollars per share) $ 0.08Weighted Average Grant Date Fair Value Per Share $ 3.63Weighted Average Remaining Contractual Life 1 year 9 months 18 days 1 year 8 months 12 daysAggregate Intrinsic ValueOutstanding $ 16,880Share awards granted 1,230Vested deferred share awards 1,548Outstanding $ 6,386



3 Months EndedCommitments andContingencies - OperatingLeases (Details) (USD $) Mar. 31, 2013Mar. 31, 2012

Leases [Abstract]2013 $ 4,273,0002014 6,813,0002015 5,605,0002016 5,525,0002017 5,214,000Thereafter 6,996,000Operating Leases, Rent Expense $ 1,500,000 $ 1,400,000



Consolidated Balance Sheets(Parenthetical)

In Thousands, except Sharedata, unless otherwise

specified

Mar. 31,2013

USD ($)

Mar. 31,2013

GBP (£)

Dec. 31,2012

USD ($)

Dec. 31,2012

GBP (£)

Mar. 31,2013

VariableInterestEntity,

PrimaryBeneficiary[Member]USD ($)

Dec. 31,2012

VariableInterestEntity,

PrimaryBeneficiary[Member]USD ($)

Cash and cash equivalents (includes$2.1 million and $1.1 million fromVIE as of March 31, 2013 andDecember 31, 2012)

$ 16,327 $ 36,571 $ 2,100 $ 1,100

Trade receivables, net of allowancefor doubtful accounts of $8.7 millionand $7.0 million as of March 31,2013 and December 31, 2012(includes $12.0 million and $12.4million from VIE as of March 31,2013 and December 31, 2012)

146,827 150,074 12,000 12,400

Accrued contract receivables, net ofallowance for doubtful accounts of$1.4 million and $1.0 million as ofMarch 31, 2013 and December 31,2012 (includes $8.5 million and $8.8million from VIE as of March 31,2013 and December 31, 2012)

136,096 132,957 8,500 8,800

Other receivables and current assets(includes $1.4 million and $1.3million from VIE as of March 31,2013 and December 31, 2012)

12,720 12,353 1,400 1,300

Property and equipment, net(includes $0.2 million from VIE asof March 31, 2013 and December31, 2012)

12,004 13,073 200 200

Intangible assets, net (includes $2.8million and $2.9 million from VIEas of March 31, 2013 and December31, 2012)

23,097 93,982 2,800 2,900

Other assets (includes $1.5 millionfrom VIE as of March 31, 2013 andDecember 31, 2012)

16,487 14,782 1,500 1,500

Accounts payable (includes $0.7million from VIE as of March 31,2013 and December 31, 2012)

38,235 37,786 700 700



Accrued liabilities (includes $0.5million from VIE as of March 31,2013 and December 31, 2012)

88,184 97,374 500 500

Deferred revenue and currentportion of deferred governmentgrant (includes $0.7 million fromVIE as of March 31, 2013 andDecember 31, 2012)

9,028 12,626 700 700

Income tax liabilities (includes $0.9million from VIE as of March 31,2013 and December 31, 2012)

10,753 9,953 900 900

Other non-current liabilities(includes $4.8 million from VIE asof December 31, 2012)

$ 14,651 $ 21,703 $ 4,600 $ 4,800

Ordinary shares, par value (inpounds per share) £ 0.05 £ 0.05

Ordinary shares, authorized 100,000,000100,000,000100,000,000100,000,000Ordinary shares, issued 66,164,433 66,164,433 65,622,141 65,622,141Ordinary shares, outstanding 66,164,433 66,164,433 65,622,141 65,622,141



3 Months EndedShort-term financings andlong-term debt Mar. 31, 2013

Debt Disclosure [Abstract]Short-term financings andlong-term debt

Short-term financings and long-term debt

Details of our short-term financings and long-term debt by facility as of March 31, 2013 based oncontractual maturity (are as follows in thousands):

LenderDescription

/ TermTotal

Facility

Outstandingas of March

31, 2013

Outstandingas of

December31, 2012

InterestRate Security


HSBC Bank Workingcapital $ 1,000 $ 966 839 ICICI Base

+ 4.0%

the Indianfacility issupported by a$1.125 letter ofcredit issuedunder the maincredit facilitythat we havewith HSBC

Other 2 2 12

Long-term debt:

HSBC RevolvingCredit 49,000 46,822 27,328

LIBOR+2.25% to

2.75%

Primarily allassets of theCompany

Other 20 20 14

Total debt: 50,022 $ 47,810 $ 28,193


Amount

(in thousands)

2013 $ 9682014 —2015 46,842

Total $ 47,810

Secured Borrowings and Collateralized Receivables

As of March 31, 2013 substantially all our assets including our accounts receivable were pledgedas security against borrowings from HSBC. The weighted average effective interest rate for ouroutstanding debt was 4.1% as of March 31, 2013.

Revolving Credit Facility

In August 2012, we entered into a $50.0 million multi-currency senior revolving credit facility(the Facility) with HSBC, which expires on August 10, 2015. The face amount may be increasedby an additional $50.0 million upon meeting certain requirements and obtaining additionalcommitments from the existing or new lenders. At the current time, we do not believe that an



increase of the credit facility is likely in the near term. Borrowings under the Facility will bearinterest at the LIBOR rate plus a spread ranging from 2.25% to 2.75% or an adjusted base rateplus a spread ranging from 1.25% to 1.75%. The spread is dependent upon our leverage ratio, ascalculated according to the terms of the loan agreement. We are required to pay 0.50% per annumon the unused portion of the facility if utilization of the facility is greater than 50%, and 0.75%per annum if utilization is less than 50%.

The Facility contains a number of customary negative and affirmative covenants, includingcovenants that limit our ability to place liens on our assets, incur additional debt, makeinvestments, enter into acquisitions, merge or consolidate, dispose of assets, pay dividends ormake other restricted payments, all subject to certain exceptions. There are also several financialcovenants that we are required to maintain, which includes a minimum fixed charge coverageratio of 1.50 to 1.00, a maximum total leverage ratio of 2.50 to 1.00, a minimum liquidity ratio of1.25 to 1.00, a minimum asset coverage ratio of 1.50 to 1.00, and a performance to plan test withrespect to Consolidated Revenue and Consolidated Adjusted EBITDA. Our ability to use theFacility may be suspended and repayment of any outstanding balances may be required if we areunable to comply with these requirement in the future, or are otherwise unable to obtain waiversof any breach of these covenants or amendments to any of these covenants to enable us to meetthem.

The Bank approved the amendment of the Facility allowing us to complete the divestment ofassets to Starcapital described in Note 8 above, as well as to allow us to increase the permittedsoftware capital expenditures during 2012. As of March 31, 2013, we did not meet our covenantwith respect to the total leverage ratio and to date have not received a waiver from HSBC of thisviolation. We are in discussions with HSBC regarding the waiver and amendment of our 2013covenants to levels that we believe we can satisfy for the remainder of 2013. At this point, wecannot predict when, or if, we will receive a waiver of the first quarter's violation or modificationof the covenants for the balance of the year. HSBC currently has the right to accelerate ourobligations under the credit facility and cause them to become immediately due and payable. As aresult of our inability to meet the covenants at March 31, 2013, we have included the amount dueto HSBC as current portion of long-term debt and short-term financing in the CondensedConsolidated Balance Sheets.

In connection with the execution of the Facility, we repaid the entire outstanding loan of €5.9million (approximately $7.2 million) to Black Sea Trade and Development Bank during the thirdquarter of 2012. The total payment of $7.3 million consisted of the outstanding principal balance,accrued interest and fees. We borrowed $7.3 million from the Facility to repay this loan.



3 Months EndedConsolidated Statements ofCash Flows (USD $)In Thousands, unlessotherwise specified

Mar. 31, 2013Mar. 31, 2012

Cash flows from operating activities:Net loss $ (157,037) $ (8,839)Non-cash items included in net loss:Depreciation and amortization 8,620 7,269Change in fair value of contingent consideration 0 2,197Non-cash interest expense 153 449Share-based compensation 337 8,608Deferred income taxes and other tax liabilities (7,936) 0Impairment of goodwill and intangible assets 133,129 0Foreign currency transactions and other 2,634 (1,004)Provision for doubtful accounts 2,257 330Gain on previously held shares of CASEE 0 (6,028)Change in operating assets and liabilities:Trade and accrued contract receivables (11,266) (17,384)Prepayments and other assets 1,445 (8,867)Accounts payable and other accrued liabilities (4,192) 6,889Deferred revenue and government grant income (638) 511Net cash used in operating activities (32,494) (15,869)Cash flow from investing activities:Purchases of property and equipment (526) (5,728)Investments in software development and purchased software (7,132) (9,276)Cash paid for acquisitions and equity method investments, net of cash acquired 0 (6,944)Net cash used in investing activities (7,658) (21,948)Cash flow from financing activities:Net proceeds from issuance of ordinary shares 67 705Proceeds from borrowings and debt financing 19,976 2Repayment of borrowings (4) (789)Net cash generated from financing activities 20,039 (82)Effect of changes in foreign exchange rates (131) 3,085Net decrease in cash and cash equivalents (20,244) (34,814)Cash and cash equivalents at beginning of period 36,571 75,765Cash and cash equivalents at end of period 16,327 40,951Supplemental cash flow information:Interest paid 240 418Income taxes paid $ 397 $ 707



Consolidated Balance Sheets(USD $)


Mar. 31,2013

Dec. 31,2012

Current assets:Cash and cash equivalents (includes $2.1 million and $1.1 million from VIE as of March 31,2013 and December 31, 2012) $ 16,327 $

36,571Trade receivables, net of allowance for doubtful accounts of $8.7 million and $7.0 million asof March 31, 2013 and December 31, 2012 (includes $12.0 million and $12.4 million fromVIE as of March 31, 2013 and December 31, 2012)

146,827 150,074

Accrued contract receivables, net of allowance for doubtful accounts of $1.4 million and $1.0million as of March 31, 2013 and December 31, 2012 (includes $8.5 million and $8.8 millionfrom VIE as of March 31, 2013 and December 31, 2012)

136,096 132,957

Prepayments 10,320 12,733Other receivables and current assets (includes $1.4 million and $1.3 million from VIE as ofMarch 31, 2013 and December 31, 2012) 12,720 12,353

Total current assets 322,290 344,688Property and equipment, net (includes $0.2 million from VIE as of March 31, 2013 andDecember 31, 2012) 12,004 13,073

Intangible assets, net (includes $2.8 million and $2.9 million from VIE as of March 31, 2013and December 31, 2012) 23,097 93,982

Goodwill 0 70,498Other assets (includes $1.5 million from VIE as of March 31, 2013 and December 31, 2012) 16,487 14,782Total assets 373,878 537,023Current liabilities:Accounts payable (includes $0.7 million from VIE as of March 31, 2013 and December 31,2012) 38,235 37,786

Accrued liabilities (includes $0.5 million from VIE as of March 31, 2013 and December 31,2012) 88,184 97,374

Deferred revenue and current portion of deferred government grant (includes $0.7 millionfrom VIE as of March 31, 2013 and December 31, 2012) 9,028 12,626

Current portion of acquisition related liabilities 33,444 33,352Current portion of long-term debt and short-term financings 47,810 851Income tax liabilities (includes $0.9 million from VIE as of March 31, 2013 and December31, 2012) 10,753 9,953

Total current liabilities 227,454 191,942Long-term debt 0 27,342Deferred government grant - non-current 0 1,297Acquisition related liabilities - non-current 2,233 2,221Other non-current liabilities (includes $4.8 million from VIE as of December 31, 2012) 14,651 21,703Total liabilities 244,338 244,505Commitments and contingencies (See Note 11)Shareholders' equity:Share capital, nominal value £0.05, 100,000,000 ordinary shares authorized; 66,164,433 and65,622,141 shares issued and outstanding as of March 31, 2013 and December 31, 2012 5,501 5,462



Additional paid-in capital 399,492 399,127Accumulated deficit (252,311) (95,953)Accumulated other comprehensive loss (22,587) (16,242)Total Velti shareholders' equity 130,095 292,394Non-controlling interests (555) 124Total equity 129,540 292,518Total liabilities and shareholders' equity $

373,878$537,023



3 Months EndedShare-Based Compensation -Share Option Activity

(Details) (Share Options[Member], USD $)


specified

Mar. 31, 2013 Mar. 31, 2012

Share Options [Member]Number of optionsOutstanding (in shares) 4,893,791Share options granted (in shares) 0Forfeited share options (in shares) 234,108Exercised options (in shares) 13,500Outstanding (in shares) 4,646,183Weighted Average Exercise PriceOutstanding (in dollars per share) $ 10Share options granted (in dollars per share) $ 0Forfeited share options (in dollars per share) $ 10Exercised options (in dollars per share) $ 0Outstanding (in dollars per share) $ 10Weighted Average Grant Date Fair Value Per Share $ 0Weighted Average Remaining Contractual Life 6 years 2 months 12 days 7 years 9 months 18 daysAggregate Intrinsic ValueOutstanding $ 265Exercised options 34Outstanding $ 0



3 Months EndedRelated Party Transactions(Tables) Mar. 31, 2013

Related Party Transactions [Abstract]Schedule of Related Party Transactions

Three MonthsEnded March 31,


Sales and services rendered $ 1,264 $ 989Purchases $ 29 $ 156

March31,

December31,


Trade receivables $ 5,536 $ 4,622Accrued and other receivables $ 3,954 $ 4,043Trade payables $ 150 $ 166



3 Months EndedFair Value Measurements(Tables) Mar. 31, 2013

Fair Value Disclosures [Abstract]Fair Value, Liabilities Measured on RecurringBasis, Unobservable Input Reconciliation

The following table provides a summary of changes in fair value of thecontingent payments measured using significant unobservable inputs (Level 3):

Fair Value

(inthousands)





3 Months Ended 3 MonthsEnded

12 MonthsEndedIncome Taxes (Details) (USD

$) Mar. 31,2013

Mar. 31,2012

Dec. 31,2012

Mar. 31,2013

Greece

Dec. 31,2012

GreeceOperating Loss Carryforwards [Line Items]Income tax provision (benefit) $

(6,853,000) $ 278,000

Effective income tax rate (4.20%) 3.40%Tax benefit realized due to decrease in deferred taxliabilities 4,200,000

Tax benefit realized due to impairment of softwaredevelopment costs 2,500,000

Tax at country of domicile statutory rate 26.00% 20.00%Rate changes 1,800,000Unrecognized tax benefits 17,100,000Unrecognized tax benefits netted against relateddeferred tax assets 6,900,000

Unrecognized tax benefits included in long termliabilities 10,200,000

Accrued interest and penalties related tounrecognized tax benefits

$2,300,000

$2,100,000



3 Months EndedShare-Based Compensation -Share-based Payment

Expense (Details) (USD $)In Thousands, unlessotherwise specified

Mar. 31,2013

Mar. 31,2012

Share-based Compensation Arrangement by Share-based Payment Award [LineItems]Share-based payment expense $ 337 $ 8,608Datacenter and direct project costsShare-based Compensation Arrangement by Share-based Payment Award [LineItems]Share-based payment expense 48 972General and administrative expensesShare-based Compensation Arrangement by Share-based Payment Award [LineItems]Share-based payment expense (36) 3,660Sales and marketing expensesShare-based Compensation Arrangement by Share-based Payment Award [LineItems]Share-based payment expense 174 2,392Research and development expensesShare-based Compensation Arrangement by Share-based Payment Award [LineItems]Share-based payment expense $ 151 $ 1,584



3 MonthsEndedVariable Interest Entity -

Narrative (Details) (USD $) Mar. 31,2013

Dec. 17,2012

intallmentVariable Interest Entity [Line Items]Non-cash loss from disposal of assets $

10,532,000Starcapital [Member]Variable Interest Entity [Line Items]Number of employees 75Value attributed to upside contingent consideration, call options, or cross pledges andguarantees in determining total consideration 0

Starcapital [Member] | Call Option [Member]Variable Interest Entity [Line Items]Call Option, percentage of shares authorized to be purchased 45.00%Starcapital [Member] | The Note [Member]Variable Interest Entity [Line Items]Consideration from sale of assets, note receivable 21,600,000 23,500,000.0Note Receivable, number of annual installments 3Note receivable payment 3,000,000Starcapital [Member] | The Note [Member] | Note Receivable, Payment DateDecember 31, 2014 Months [Member]Variable Interest Entity [Line Items]Note receivable payment 5,200,000Starcapital [Member] | The Note [Member] | Note Receivable, Payment DateDecember 31, 2013 [Member]Variable Interest Entity [Line Items]Note receivable payment $

15,300,000



0 MonthsEnded

Acquisitions - Allocation ofTotal Consideration (Details)

(USD $)In Thousands, unlessotherwise specified

Mar.31,

2013

Dec.31,

2012

Jan. 16, 2012Ydon Holdings,Ltd. (CASEE)

[Member]

Jan. 16, 2012Customer

Relationships[Member]

Ydon Holdings,Ltd. (CASEE)

[Member]

Jan. 16, 2012Trademark and

trade name[Member]


[Member]

Jan. 16, 2012DevelopedTechnology[Member]


[Member]Net assets acquired(liabilities assumed):Cash and cash equivalents $ 1,456Accounts receivable and othercurrent assets 1,213

Property and equipment 97Trade and other liabilities (2,170)Net assets acquired 596Intangible assets acquired 390 2,490 3,020Goodwill 0 70,49817,741Deferred tax liability (1,468)Value of assets, net of deferredtax liabilities 22,769

Purchase price:Cash 8,400Contingent consideration 6,360Fair value of previously heldinterest 8,009




3 MonthsEnded

Fair Value Measurements(Details) (Mobile Interactive

Group, Ltd. (MIG)[Member], Business

acquisition contingentconsideration [Member],

USD $)In Thousands, unlessotherwise specified

Mar. 31,2013

Mobile Interactive Group, Ltd. (MIG) [Member] | Business acquisition contingent consideration[Member]Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation,Calculation [Roll Forward]Balance at beginning of period $ 6,364Foreign exchange differences 35Balance at end of period $ 6,399



3 Months EndedVariable Interest Entity Mar. 31, 2013Variable Interest Entity[Abstract]Variable Interest Entity Variable Interest Entity

On December 17, 2012, we sold certain non-strategic and legacy assets and liabilities, focused ongeographies and certain customers in Southeast and Eastern Europe, to Starcapital, a Cypruscompany owned by local, non-executive management of Velti. As a result of the divestment,approximately 75 of our employees transferred to Starcapital or its subsidiaries. The divestedassets are characterized by long revenue collection cycles, are located in troubled economies, andhave heavy capital expenditure requirements. We recorded a loss of $10.5 million on the sale ofthese assets. in the second half of 2012.

The consideration for the sale of assets was a $23.5 million non-interest bearing receivable (theNote), issued by Starcapital or its subsidiaries payable in cash in three annual installments asfollows: $3.0 million paid on December 31, 2012; $5.2 million to be paid on December 31, 2013,and $15.3 million to be paid on December 31, 2014. There is also potential upside in the event thefinancial results of the divested operations exceed 2014 expectations.

As part of the consideration for the divestment, we were also given 1) a call option to receive theshares in Starcapital sufficient to cover the outstanding balance on the deferred purchase priceconsideration, exercisable only upon a payment default by Starcapital 2) a call option to purchaseup to 45% of the shares in Starcapital, exercisable in the event of a change of control ofStarcapital prior to the third anniversary of completion of the divestment, and 3) cross pledgesand guarantees from the shareholders of Starcapital and its subsidiaries for payment on thepurchase price due to us. No value was attributed to the upside contingent consideration, the calloptions, or the cross pledges and guarantees in determining the total consideration for accountingpurposes because the likelihood of realizing the upside consideration was not viewed as likely.

At the time of completion of the divestment, Starcapital was thinly capitalized, with thetransaction fully financed by the Note. As a result, we determined that Starcapital is a variableinterest entity (VIE) and that we hold a variable interest in Starcapital.

We further determined that while we have no ability to control the day-to-day operations ofStarcapital, nor an obligation to absorb operating losses of Starcapital, we should be treated as theprimary beneficiary of this VIE and are therefore required to consolidate its operations. This isbased on a determination that Starcapital is thinly capitalized and has no equity at risk, leaving usas the primary beneficiary of the VIE as the aggregate value of the remaining balance due on theNote and other receivables due to us from Starcapital is $21.6 million. An infusion of sufficientequity by the owners of Starcapital, or a full repayment of the Note by Starcapital in some futureperiod could result in a determination that we are no longer the primary beneficiary of Starcapitaland therefore would not be required to consolidate its operations.

As of March 31, 2013, the net amount of capital at risk is equal to Velti's receivable fromStarcapital, which is currently at $21.6 million.

The assets of Starcapital that have been consolidated in our balance sheet can only be used tosettle the obligations of the VIE, and we have no control over the disposition of these assets.None of these assets are anticipated to become obligations of Velti. We are not obligated and donot intend to provide financial support to Starcapital.

The following are the assets and liabilities of Starcapital that have been consolidated in ourbalance sheet. A statement of operations is not provided because the results are not significant.





ASSETS

Current assets:


Trade receivables, net 146,827 12,024 134,803 150,074 12,399 137,675Accrued contract receivables,net 136,096 8,514 127,582 132,957 8,780 124,177Consideration receivable fromStarCapital - current — — 4,166 — — 4,378

Prepayments 10,320 — 10,320 12,733 — 12,733Other receivables and currentassets 12,720 1,357 11,363 12,353 1,327 11,026



Intangible assets, net 23,097 2,770 20,327 93,982 2,857 91,125Consideration receivable fromStarcapital - non current — — 17,425 — — 16,187

Goodwill — — — 70,498 — 70,498

Other assets 16,487 1,465 15,022 14,782 1,511 13,271

Total assets $ 373,878 $ 28,404 $367,065 $ 537,023 $ 28,230 $529,358

LIABILITIES ANDSHAREHOLDERS' EQUITY



Accrued liabilities 88,184 484 87,700 97,374 452 96,922Consideration payable to Velti -current — 4,166 — — 4,378 —Deferred revenue and currentportion of deferred governmentgrant 9,028 705 8,323 12,626 727 11,899Current portion of acquisitionrelated liabilities 33,444 — 33,444 33,352 — 33,352Current portion of long-termdebt and short-term financings 47,810 — 47,810 851 — 851



Long-term debt — — — 27,342 — 27,342Deferred government grant -non-current — — — 1,297 — 1,297Acquisition related liabilities -non-current 2,233 — 2,233 2,221 — 2,221Consideration payable to Velti -non-current — 17,425 — — 16,187 —



Total Velti shareholders' equity 130,095 12 130,083 292,394 3 292,391Non-controlling interests andvariable interest entities (555) (555) — 124 124 —

Total equity 129,540 (543) 130,083 292,518 127 292,391Total liabilities andshareholders' equity $ 373,878 $ 28,404 $367,065 $ 537,023 $ 28,230 $529,358



3 Months Ended 12 MonthsEnded 3 Months Ended 3 Months Ended 1 Months

Ended

Basis of Presentation andSummary of Significant

Accounting Policies (Details)(USD $)

Mar. 31,2013

segment

Mar. 31,2012

Dec. 31,2012

Dec. 31,2011

Mar. 31,2013

TradeAccounts

Receivable[Member]

Dec. 31,2012

TradeAccounts

Receivable[Member]

Mar. 31,2013

AccruedIncome

Receivable[Member]

Dec. 31,2012

AccruedIncome

Receivable[Member]

Mar. 31,2013

CustomerRelationships

[Member]

Mar. 31,2012

CustomerRelationships

[Member]

Mar. 31,2013

DevelopedTechnology

Rights[Member]

Mar. 31,2012

DevelopedTechnology

Rights[Member]

Mar. 31,2013

Trademarkand trade

name[Member]

Mar. 31,2012

Trademarkand trade

name[Member]

Mar. 31,2013

Licensesand

IntellectualProperty

[Member]

Mar. 31,2012

Licensesand

IntellectualProperty

[Member]

Mar. 31,2013


[Member]covenant

Aug. 31,2012


[Member]

Mar. 31,2013

GoingConcern

[Member]

Mar. 31,2013Velti

[Member]

Mar. 31,2012Velti

[Member]

Apr. 24,2013

Issuance ofEquity

[Member]Subsequent

Event[Member]

Statement [Line Items]Number of reportablesegments 1

Concentration of Credit Risk Concentrationof Credit Risk

One customeraccounted formore than 12%of ourrevenues forthe threemonths endedMarch 31,2013 and nocustomeraccounted formore than 10%of ourrevenues forthe threemonths endedMarch 31,2012. Nocustomeraccounted formore than 10%our totalreceivables asof March 31,2013 or as ofDecember 31,2012.

Control premium percentage 10.00%Goodwill, Fair ValueDisclosure

$295,300,000

Net Cash Provided by (Usedin) Operating Activities,Continuing Operations

(32,494,000) (15,869,000) 10,600,000

Net Cash Provided by (Usedin) Financing Activities,Continuing Operations

20,039,000 (82,000) 17,500,000

Net Cash Provided by (Usedin) Investing Activities,Continuing Operations

(7,658,000) (21,948,000) 69,900,000

Cash and cash equivalents 16,327,000 40,951,000 36,571,000 75,765,000Debt, Current 47,810,000 851,000Line of Credit Facility,Maximum BorrowingCapacity

50,022,000 50,000,000.0

Goodwill impairment 69,262,000 0Goodwill estimated fair valuedislcosure 324,800,000

Allowance for doubtfulaccounts receivable 8,700,000 7,000,000 1,400,000 1,000,000

Average useful life3 years 4 years 4 years 6 years 3 years 5 years 1 year 3 years

4 years 3months 18days

5 years

Entity-Wide Revenue, MajorCustomer, Percentage 12.00%

Weighted Average NumberDiluted Shares OutstandingAdjustment

65,808,000 61,816,000 66,103,00064,051,000

Goodwill market value inexcess of book equity 292,400,000

Number of violated covenants 1Issuance of share capital (inshares) 16,529,412

Issuance of share capital, pershare $ 1.50

Issuance of share $23,100,000

Additional financing needed,period 3 months



Short-term financings andlong-term debt - Schedule of

Principal Repayments(Details) (USD $)


Mar. 31, 2013

Long-term and Short-term Debt, Fiscal Year Maturity [Abstract]2013 $ 9682014 02015 46,842Total $ 47,810



3 Months EndedCommitments andContingencies Mar. 31, 2013

Commitments andContingencies Disclosure[Abstract]Commitments andContingencies

Commitments and Contingencies

Operating Lease Commitments

The future aggregate minimum lease payments under non-cancellable operating leases as ofMarch 31, 2013 are as follows:

Amount

(in thousands)

Remainder of 2013 $ 4,2732014 $ 6,8132015 $ 5,6052016 $ 5,5252017 $ 5,214Thereafter $ 6,996

Rent expense was $1.5 million and $1.4 million during the three months ended March 31, 2013and 2012, respectively.

Guarantees and Indemnifications

ASC 460, Guarantees, requires that upon issuance of a guarantee, the guarantor must recognize aliability for the fair value of the amount of obligations it assumes under that guarantee.

We periodically establish irrevocable bank guarantees in favor of a customer in connection with acampaign guaranteeing minimum net revenue or covering costs of a campaign. As of March 31,2013 and December 31, 2012, the aggregate amount of our outstanding commitments under suchletters of guarantee was $5.9 million and $6.8 million, respectively. We accrue for knownobligations when a loss is probable and can be reasonably estimated. There were no accruals forexpenses related to our performance guarantees for any period presented.

As permitted under the laws of the Bailiwick of Jersey, and in accordance with our bylaws, weindemnify our officers and directors for certain events or occurrences, subject to certain limits,while the officer or director is or was serving at our request in such capacity. The maximumamount of potential future indemnification is unlimited; however, we maintain director andofficer liability insurance that limits our exposure and may enable us to recover a portion of anyfuture amounts paid. We believe the fair value for these indemnification obligations is immaterial.Accordingly, we have not recognized any liabilities relating to these obligations as of March 31,2013 and December 31, 2012.

Pension and Other Post-Retirement Obligations



We are required under Greek law to make a payment to employees on unfair dismissal or onattaining normal retirement age. The amount of the payment depends on the employees' monthlyearnings (capped at €6,000 per month, or approximately $8,000) and a multiple which depends onlength of service. As of March 31, 2013 and December 31, 2012, we have included $482,000 and$494,000, respectively in other non-current liabilities for this obligation. As of March 31, 2013,our retirement benefits obligations were unfunded.

Our U.K. entities participate in a defined contribution scheme where the total pension obligationis charged to the income statement as it is incurred with no future obligation or prepaid amount.The value is based on a percentage of participating employee salaries and Velti's contributiontotaled $15,000 during the three months ended March 31, 2013.

Legal Proceedings

From time to time, we and our subsidiaries are subject to legal, administrative and regulatoryproceedings, claims, demands and investigations in the ordinary course of business, includingclaims with respect to intellectual property, contracts, employment and other matters. In additionto the below mentioned legal proceedings, we do not believe that the ultimate resolution of otherlegal proceedings involving our company, if any, will have a material adverse effect on ourconsolidated financial position, results of operations or cash flows.


We recently received letters on behalf of several of our customers notifying us that the customershad received letters from a third party which alleged that certain of our customer's applicationsinfringed the patent rights of the third party. In turn, our customers have alleged that we areobligated to indemnify them relating to these matters as the claims allegedly relate to services thatwe provide to the customers. We are currently investigating the related issues.

Patent Litigation

On March 9, 2012, Augme Technologies, Inc. filed a complaint against Velti USA, Inc. in theUnited States District Court for the District of Delaware (case no. 1:12cv294), alleginginfringement of three patents held by Augme. On May 4, 2012, Velti responded to the complaintby filing a motion to dismiss and motion to strike certain claims in the complaint. On May 18,2012, in response to the motion, Augme filed an opposition and also filed a First AmendedComplaint. The Company responded to the First Amended Complaint (and assertedcounterclaims of non-infringement and invalidity) on June 4, 2012. On March 22, 2013, VeltiLimited and Velti entered into a settlement with Augme, pursuant to which Augme and Veltisettled the two pending lawsuits as between each other. Pursuant to the settlement, (i) Augme hasgranted Velti a paid-up license in all patents owned by Augme with a priority date on or beforeMarch 22, 2013 for the life of those patents, (ii) Velti has granted Augme a paid-up license in allpatents owned by Velti with a priority date on or before March 22, 2013, (iii) Augme and Veltihave covenanted not to sue each other on such patents, (iv) Augme and Velti have dismissed thelawsuits as to each other with prejudice with each side to bear its own costs, (v) Augme and Veltihave released each other as to the subject matter of the lawsuits with neither party making anyadmission of liability, and (vi) Velti will pay Augme a lump sum payment of $200,000 no laterthan 10 business days following the dismissal of the lawsuits. On March 29, 2013, the Courtgranted a joint motion to dismiss the case with prejudice, pursuant to the settlementagreement. The matter is now officially closed.


On June 14, 2012, Air2Web, Inc., was named as a defendant in a consolidated class actioncomplaint filed in the United States District Court for the Southern District of New York onbehalf of a purported class of lessees of common short codes used in application-to-person SMSmessaging. In re A2P SMS Antitrust Litigation, Case No. 12-cv-2656 (AJN). The plaintiffs allege



that the defendants, which include all major U.S. wireless carriers, CTIA - The WirelessAssociation®, WMC Global, Inc., and certain aggregators (including Air2Web) violated federalantitrust law by conspiring to reduce competition and fix prices in, and conspiring to monopolize,the market for application-to-person SMS transmission in the United States. The plaintiffs seekinjunctive relief and treble damages, in an undisclosed amount, jointly and severally from alldefendants for injuries allegedly sustained from April 5, 2008, until the present. On August 14,2012, several groups of defendants, including Air2Web, filed motions to dismiss the complaint inits entirety, and a number of defendants also filed motions to compel arbitration of this disputeand to stay these proceedings pending arbitration. A decision on those motions is pending.Plaintiffs have not yet responded to those motions. Because this action is in its very early stages,and due to the inherent uncertainties surrounding the litigation process, we are unable toreasonably assess the likelihood of any particular outcome at this time.



3 Months EndedGoodwill and IntangibleAssets Mar. 31, 2013

Goodwill and IntangibleAssets Disclosure [Abstract]Goodwill and IntangibleAssets

Goodwill and Intangible Assets


Intangible Assets

AverageUseful

lifeGross Carrying


Net CarryingAmount

(inyears) (in thousands)

March 31, 2013




Trademark, trade name and non-compete 1.4 1,046 518 528




December 31, 2012




Trademark, trade name and non-compete 2.5 6,960 2,425 4,535


Developed technology 4.6 25,528 9,301 16,227Intangible assets 4.2 $ 171,596 $ 77,614 $ 93,982

Amortization expense was $8.3 million, and $7.7 million during the three months endedMarch 31, 2013 and 2012, respectively.

During the three months ended March 31, 2013, our share price declined significantly causing adecline in our market capitalization.. In connection with the preparation of our financialstatements for the first quarter of 2013, we concluded that the sustained decline in our share priceand market capitalization were indicators of potential impairment requiring us to perform animpairment analysis. Based on this analysis, we determined that the fair value of our aggregatenet assets was below their carrying values, and a full impairment was recorded on our goodwilland a partial impairment against certain other intangible assets based on the purchase priceallocation method prescribed by the accounting guidance. The decline in our fair value resulteddirectly from the overall decline in our market value during the first quarter of this year.

As described in Note 2, we review goodwill for impairment annually in the fourth quarter, orwhenever an indicator is identified which suggests that the carrying amount of goodwill may notbe recoverable.

As a result, of this analysis we recorded an impairment charge of $133.1 million whichrepresented a full impairment on our goodwill and a $67.5 million impairment charge related to



certain other intangible assets, partially offset by $3.6 million of unrecognized government grantsrelated to these assets.

The following table provides the net carrying value of intangible assets and goodwill immediatelybefore and after the impairment charge, exclusive of Starcapital carrying values:

Net Carrying Amount

Prior toImpairment

Subsequentto

ImpairmentImpairment

Amount

(in thousands)

Trade name $ 2,540 $ 527 $ 2,013





Goodwill 69,262 — 69,262


(1) Developed technology includes internal software development costs, computer software,licenses and intellectual property, developed technology from acquisitions. It is reduced bythe amount of unrecognized government grants related to these assets.



3 Months EndedBasis of Presentation andSummary of Significant

Accounting Policies Mar. 31, 2013

Accounting Policies[Abstract]Basis of Presentation andSummary of SignificantAccounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Balance Sheet as of December 31, 2012, which has been derivedfrom audited financial statements, and the unaudited interim condensed consolidated financialstatements as of March 31, 2013, and for the three months ended March 31, 2013 and 2012 havebeen prepared in accordance with accounting principles generally accepted in the United States ofAmerica (U.S. GAAP) for interim financial information along with Article 10 of Securities andExchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of theinformation and footnotes required by generally accepted accounting principles (GAAP) forannual consolidated financial statements. Certain prior year balances have been reclassified toconform to the current year presentation. Such reclassifications did not affect total revenue, lossfrom operations or net loss. In management’s opinion, the financial statements include alladjustments (consisting of normal, recurring and non-recurring adjustments) necessary for the fairpresentation of the financial position and operating results of the Company. The results ofoperations for the three months ended March 31, 2013 are not necessarily indicative of the resultsfor the entire fiscal year ending December 31, 2013 or for any other period. These unauditedcondensed consolidated financial statements should be read in conjunction with Velti's AnnualReport on Form 20-F for the fiscal year ended December 31, 2012 filed on April 11, 2013 withthe SEC.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concernbasis, which contemplates the realization of assets and the satisfaction of liabilities in the normalcourse of business.

As of March 31, 2013, the Company had cash and cash equivalents of $16.3 million andborrowings of $47.8 million under the revolving credit facility with HSBC. Net cash used inoperating activities was $32.5 million for the three months ended March 31, 2013. During theyear ended December 31, 2012, we generated $10.6 million in cash from operating activities and$17.5 million in cash from financing activities, and we used $69.9 million of cash for investingactivities.

The HSBC credit facility contains various loan covenants. We violated one of these covenants inthe fourth quarter of 2012 and received a subsequent waiver from HSBC. In addition, we violatedone of these covenants in the first quarter of 2013 and have not received a waiver from HSBC.We are in discussions with HSBC regarding the waiver and amendment of our 2013 covenants tolevels that we believe we can satisfy for the remainder of 2013. At this point, we cannot predictwhen, or if, we will receive a waiver of the first quarter's violation or modification of thecovenants. HSBC currently has the right to accelerate and cause our obligation under our creditfacility to become immediately due and payable in full.

On April 24, 2013, we closed a private placement of our ordinary shares transaction under whichwe entered into a Securities Purchase Agreement with certain institutional accredited investors. Inconnection with this transaction we issued an aggregate of 16,529,412 ordinary shares at a priceof $1.50 per share resulting in net proceeds to us of $23.1 million. A substantial portion of theseproceeds were used to satisfy our obligations to former shareholders and key employees of MIG.



While we anticipate generating positive operating cash flow for the year, this positive cash flow isnot expected until the third quarter of 2013. As a result, we may need additional financing duringthe next three months to provide sufficient operational liquidity. This additional financing may befacilitated through the issuance of equity or debt. If we need such additional financing, there canbe no assurance that our efforts to find such financings will be successful, or on terms favorableto us.

Our ability to continue as a going concern is dependent upon (i) HSBC not exercising its right toaccelerate our obligations under the revolving credit facility (ii) our ability to maintain sufficientliquidity to meet our obligations arising from normal business operations when they come dueand (iii) our ability to generate profitable operations in the future.


The preparation of financial statements in conformity with U.S. GAAP requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities and thedisclosure of contingent assets and liabilities at the date of the financial statements. Managementis also required to make certain judgments that affect the reported amounts of revenues andexpenses during the period. We periodically evaluate our estimates, including revenuerecognition, recognition of government grant income, income taxes, the allowance for doubtfulaccounts, intangible assets, goodwill and long-lived assets, contingent payments related to ourrecent acquisitions and the assumptions used to determine share-based compensation expense. Webase our estimates on historical experience and various other assumptions that are believed to bereasonable on the specific circumstances. Actual results could differ materially from thoseestimates.


Accounts receivable consists primarily of amounts due to us from our normal business activities.Credit terms can vary between customers and between regions, but we generally require paymentunder our commercial contracts within 30 to 90 days of invoice. Our accounts receivable areunsecured and not interest bearing. Fees that have not been invoiced as of the reporting date butfor which all revenue recognition criteria are met are reported as accrued contract receivables. Wemaintain allowances for doubtful accounts to reflect the expected non-collection of accountsreceivable and accrued contract receivables based on past collection history and specific risksidentified in the portfolio. Additional allowances might be required if deteriorating economicconditions or other factors affect our customers' ability to make timely payments. We write offaccounts receivable when we consider them uncollectible. As of March 31, 2013 andDecember 31, 2012, the allowance for doubtful accounts for trade receivables was $8.7 millionand $7.0 million, respectively. The allowance for doubtful accounts for accrued contractreceivables was $1.4 million and $1.0 million as of March 31, 2013 and December 31, 2012,respectively.

Goodwill

Goodwill is generated when the consideration paid for an acquisition exceeds the fair value of netassets acquired. Goodwill is recognized as an asset and reviewed for impairment at least annually,or whenever events or circumstances indicate that the carrying amount of goodwill may not berecoverable. We have selected December 31 as the date to perform the annual impairment testingof goodwill.

We completed our annual impairment test for fiscal 2012 and determined that there was noimpairment. Based on fourth-quarter 2012 testing, our estimated fair value totaled approximately$324.8 million including a conservative control premium of approximately 10% based on amarket value of approximately $295.3 million at December 31, 2012. The control premium isdefined as the value that may arise from an acquiring company's ability to take advantage ofsynergies and other benefits that flow from control over another entity. An acquiring entity isoften willing to pay more for equity securities that give it a controlling interest than an investor



would pay for equity securities representing less than a controlling interest. Based on theseresults, our fair value at December 31, 2012 was in excess of our book equity of approximately$292.4 million and no impairment was recorded.

During the three months ended March 31, 2013, our market capitalization declined significantlyas a result of decreases in our share price as reported on NASDAQ Stock Market. In connectionwith the preparation of our financial statements for the first quarter of 2013, we concluded thatthe sustained decline in our share price and market capitalization were indicators of potentialimpairment requiring us to perform an impairment analysis. As part of this analysis we evaluatedour operation which is considered to be one reporting segment and effectively one reporting unitas the components of our business share similar economic characteristics with each other. Thegoodwill impairment analysis was performed in light of our being one reporting unit; as such, weevaluated the market value and the equity value or book value of the company. Based on thisanalysis, we determined that the fair value of our aggregate net assets was below their carryingvalues, and a full impairment was recorded on our goodwill and a partial impairment wasrecorded against certain other intangible assets based on the purchase price allocation methodprescribed by the accounting guidance. The decline in our fair value resulted directly from theoverall decline in our market value during the first quarter of this year. See Note 7.


We evaluate long-lived assets such as property and equipment, and identifiable intangible assetsthat are subject to amortization for impairment when events or changes in circumstances indicatethat the carrying amount of the assets may not be recoverable including an indication that ourgoodwill is impaired. We evaluated our long-lived assets and amortizable intangible assets forimpairment due to recent events, which included the decline of our market capitalization as aresult of decreases in our share price as reported on NASDAQ Stock Market. These were deemedto be significant changes in circumstances that could indicate that their carrying amounts of ourlong-lived and amortizable intangible assets may not be recoverable. An impairment loss isrecognized when estimated future undiscounted cash flows expected to result from the use of theasset and its eventual disposition is less than the carrying amount. When undiscounted future cashflows are not expected to be sufficient to recover an asset's carrying amount, the asset is writtendown to its fair value. Where available, quoted market prices are used to determine fair value.When quoted market prices are not available, various valuation techniques, including discountedvalue of estimated future cash flows are utilized.

During the three months ended March 31, 2013, the decline in our market capitalization served asan indicator of certain intangible assets may not be recoverable. Based on an analysis ofundiscounted future cash flows we determined that the carrying value of certain intangible assetswas not recoverable and performed analysis to determine the fair value for each asset group. As aresult of this analysis, impairment was recorded to various intangible assets, including assetsrecorded through business combinations, purchased technology and internal softwaredevelopment costs. See Note 7.

Revenue Recognition


▪ Software as a service (SaaS) revenue, which consists of subscription fees from customerswho utilize our mobile marketing and advertising platforms, generally referred to as“usage‑based” services, and fees from customers who utilize our software solutions tomanage and measure the progress of their transaction‑based mobile marketing andadvertising campaigns, which we refer to as “performance‑based” services;

▪ License and software revenue, which consists of revenue from customers who license ourmobile marketing and advertising platform and fees for customized software solutionsdelivered to and installed on the customers' server; and



▪ Managed services revenue, which consists of fees charged to customers for professionalservices related to the implementation, execution, and monitoring of customized mobilemarketing and advertising solutions as well as other client driven projects.

We account for revenue for these services and licenses in accordance with Accounting StandardsCodification (ASC) Topic 605 - Revenue Recognition and ASC Topic 985-605 - Certain RevenueArrangements that Include Software Elements. We recognize revenue when all of the followingconditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service hasbeen rendered or delivery has occurred; (iii) the fee to be paid by the customer is fixed ordeterminable; and (iv) collectibility of the fee is reasonably assured.

SaaS revenue is generated from our “usage‑based” services, including subscription fees for use ofindividual software modules and our automated mobile marketing campaign creation templates,and fees charged for access to our technology platform. These fees are recognized ratably overthe contract term beginning on the commencement date of each contract as services are rendered.

SaaS revenue generated from our “performance‑based” services is generally based on specifiedmetrics, typically relating to the number of transactions performed during the campaignmultiplied by the cost per transaction in accordance with the terms of the related contracts.Transactions can include SMS messages sent by participants in customer campaigns oradvertisement impressions placed on mobile applications, among other types of performance-based transactions. Certain of our performance‑based contracts include performance incentiveprovisions that link a portion of revenue that we may earn under the contract to the performanceof the customer's campaign relative to quantitative or other milestones, such as the growth in theconsumer base, reduced consumer churn, or the effectiveness of the end-user response. Weconsider the performance‑based fees to be contingent fees. We recognize this revenue monthlybased on actual performance, which is when the fees are earned and the amount of the fee can bereliably measured. Our performance‑based arrangements are typically invoiced monthly, whichcan occur in a period subsequent to revenue being recognized.

License and software revenue consists of license fees charged for our mobile marketing andadvertising technology. We provide licenses on a perpetual or term basis. These types ofarrangements do not, typically, include any ongoing support arrangements or rights to upgrades orenhancements and therefore revenue related to perpetual licensing arrangements is recognizedupon the delivery of the license. Revenue from term based licenses is recognized over the relatedterm of an arrangement. Fees charged to customize our software solution are, generally,recognized using the completed contract or percentage-of-completion method according to ASC605-35, Revenue Recognition - Construction-Type and Production-Type Contracts, based on theratio of costs incurred to the estimated total costs at completion.

Managed services revenue, when sold with software and support offerings, are accounted forseparately when these services (i) have value to the customer on a standalone basis, (ii) are notessential to the functionality of the software and (iii) there is objective and reliable evidence ofthe selling price of each deliverable. When accounted for separately, revenue is recognized as theservices are provided for time and material contracts, and ratably over the term of the contractwhen accepted by the customer for fixed price contracts. For revenue arrangements with multipledeliverables, such as an arrangement that includes license, support and professional services, weallocate the total amount the customer will pay to the separate units of accounting based on theirrelative selling prices, as determined by the price of the undelivered items when sold separately.

The timing of revenue recognition in each case depends upon a number of factors, including thespecific terms of each arrangement and the nature of our deliverables and obligations, and theexistence of evidence to support recognition of revenue as of the reporting date. For contractswith extended payment terms for which we have not established a successful pattern of collectionhistory, we recognize revenue when all other criteria are met and when the fees under the contractbecome due. Fees that have been invoiced are recorded in trade receivables and in revenue whenall revenue recognition criteria have been met. When fees have been invoiced but not all revenue



recognition criteria have been met, the invoice is recorded in trade receivables and in deferredrevenue. When all revenue recognition criteria are met, but fees have not been invoiced as of thereporting date, such fees are reported in accrued contract receivables and in revenue.

Certain arrangements entered into by us are revenue sharing arrangements. As a result, wecomplete an analysis of the facts and circumstances to determine whether revenue earned fromthese arrangements should be recorded gross with the company performing as a principle, orrecorded net of third party costs with the company performing as an agent, as required by ASC605-45, Principal Agent Consideration. When we are a principal in a transaction, we include allamounts paid on behalf of our customers in both revenue and costs.

We present revenue net of value‑added tax, sales tax, excise tax and other similar assessments.Our revenue arrangements do not contain general rights of return.

Net Income (Loss) per Share Attributable to Velti

Basic net income (loss) per share attributable to Velti is computed by dividing net income (loss)attributable to Velti by the weighted-average number of common shares outstanding for the fiscalperiod. Diluted net income per share attributable to Velti is computed giving effect to all potentialweighted average dilutive common stock, including options and other equity awards. The dilutiveeffect of outstanding awards is reflected in diluted earnings per share by application of thetreasury stock method. For the three months ended March 31, 2013 and 2012, all of the shareawards outstanding are anti-dilutive. Had we incurred net profit during either of these threemonth periods, the shares, thousands, used to calculate the dilutive effect on such net incomewould be 66,103, and 64,051 for the three months ended March 31, 2013 and 2012, respectively.

Concentration of Credit Risk

One customer accounted for more than 12% of our revenues for the three months endedMarch 31, 2013 and no customer accounted for more than 10% of our revenues for the threemonths ended March 31, 2012. No customer accounted for more than 10% our total receivablesas of March 31, 2013 or as of December 31, 2012.


In December 2011, an accounting standard update was issued requiring an entity to discloseinformation about offsetting and related arrangements for recognized financial and derivativeinstruments to enable a better understanding of the effect of those arrangements on its financialposition. The amended guidance was effective for us on a retrospective basis commencing in thefirst quarter of 2013. We adopted this guidance during the three months ended March 31, 2013.The adoption of this guidance did not have a material impact on our consolidated financialstatements.

In July 2012, an accounting standards update on testing indefinitely lived intangible assets forimpairment was issued. The guidance simplified how companies test indefinitely lived intangibleassets for impairment by permitting an entity to first assess qualitative factors to determinewhether it is more likely than not that the fair value of the asset(s) is less than its carrying amountas a basis for determining whether it is necessary to perform the second step of the impairmenttest. We adopted this guidance during the three months ended March 31, 2013. The adoption ofthis guidance did not have a material impact on our consolidated financial statements.

In February 2013, amended guidance was issued requiring an entity to provide information aboutthe amounts reclassified out of accumulated other comprehensive income by component, eitheron the face of the statement where net income is presented or in the notes. The amended guidancewas effective for us on a retrospective basis commencing in the first quarter of 2013. We adoptedthis guidance during the three months ended March 31, 2013. The adoption of this guidance didnot have a material impact on our consolidated financial statements.



3 Months EndedShare-Based Compensation -Outstanding and Exercisable

Options, by Exercise PriceRanges (Details) (USD $)


specified

Mar. 31, 2013

Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Number of Option Shares, Outstanding Options (in shares) 4,646,183Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 7.95Remaining Weighted-Average Contractual Term (Years), Outstanding Options 6 years 2 months 12

daysNumber of Option Shares, Exercisable Options (in shares) 2,179,408Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 7.47Aggregate Intrinsic Value, Outstanding Options $ 0$2.57 - $2.73Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Weighted average exercise price, lower range limit (in dollars per share) $ 2.57Weighted average exercise price, upper range limit (in dollars per share) $ 2.73Number of Option Shares, Outstanding Options (in shares) 127,869Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 2.67Remaining Weighted-Average Contractual Term (Years), Outstanding Options 1 year 2 months 12

daysNumber of Option Shares, Exercisable Options (in shares) 84,382Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 2.70$4.95 -$4.95Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Weighted average exercise price, lower range limit (in dollars per share) $ 4.95Weighted average exercise price, upper range limit (in dollars per share) $ 4.95Number of Option Shares, Outstanding Options (in shares) 1,987,745Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 4.95Remaining Weighted-Average Contractual Term (Years), Outstanding Options 6 years 2 months 12

daysNumber of Option Shares, Exercisable Options (in shares) 1,114,545Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 4.95$6.26 - $9.45Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Weighted average exercise price, lower range limit (in dollars per share) $ 6.26Weighted average exercise price, upper range limit (in dollars per share) $ 9.45Number of Option Shares, Outstanding Options (in shares) 883,786Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 8.24



Remaining Weighted-Average Contractual Term (Years), Outstanding Options 6 years 2 months 12days

Number of Option Shares, Exercisable Options (in shares) 345,831Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 8.64$9.46 - $11.95Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Weighted average exercise price, lower range limit (in dollars per share) $ 9.46Weighted average exercise price, upper range limit (in dollars per share) $ 11.95Number of Option Shares, Outstanding Options (in shares) 793,465Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 10.72Remaining Weighted-Average Contractual Term (Years), Outstanding Options 6 years 8 months 12

daysNumber of Option Shares, Exercisable Options (in shares) 217,914Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 10.65$12.10 - $15.46Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Weighted average exercise price, lower range limit (in dollars per share) $ 12.10Weighted average exercise price, upper range limit (in dollars per share) $ 15.46Number of Option Shares, Outstanding Options (in shares) 780,240Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 12.47Remaining Weighted-Average Contractual Term (Years), Outstanding Options 6 years 3 months 18

daysNumber of Option Shares, Exercisable Options (in shares) 394,726Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 12.30$15.58 - $18.47Share-based Compensation, Shares Authorized under Stock Option Plans, ExercisePrice Range [Line Items]Weighted average exercise price, lower range limit (in dollars per share) $ 15.58Weighted average exercise price, upper range limit (in dollars per share) $ 18.47Number of Option Shares, Outstanding Options (in shares) 73,078Weighted-Average Exercise Price per Share, Outstanding Options (in dollars per share) $ 17.26Remaining Weighted-Average Contractual Term (Years), Outstanding Options 6 years 2 months 12

daysNumber of Option Shares, Exercisable Options (in shares) 22,010Weighted-Average Exercise Price Per Share, Exercisable Options (in dollars per share) $ 17.19



3 Months EndedCommitments andContingencies - Pension and

Other Post-Retiremnt(Details)

Mar. 31, 2013USD ($)

Mar. 31, 2013EUR (€)

Dec. 31, 2012USD ($)

Commitments and Contingencies Disclosure [Abstract]Maximum Monthly Salary Amount Relating To Unfair Dismissal $ 8,000 € 6,000Retirement benefits, noncurrent 482,000 494,000Defined Benefit Plan, Contributions by Employer $ 15,000



Balance Sheet Items -Accrued Liabilities (Details)

(USD $)In Thousands, unlessotherwise specified

Mar. 31,2013

Dec. 31,2012

Organization, Consolidation and Presentation of Financial Statements[Abstract]Professional fees $ 5,206 $ 5,764Employee related accruals 19,013 23,963Accrued third-party costs 56,540 58,264Other 7,425 9,383Total accrued liabilities $ 88,184 $ 97,374



3 Months EndedBasis of Presentation andSummary of Significant

Accounting Policies Policies(Policies)

Mar. 31, 2013

Accounting Policies[Abstract]Basis of Presentation Basis of Presentation

The Condensed Consolidated Balance Sheet as of December 31, 2012, which has been derivedfrom audited financial statements, and the unaudited interim condensed consolidated financialstatements as of March 31, 2013, and for the three months ended March 31, 2013 and 2012 havebeen prepared in accordance with accounting principles generally accepted in the United States ofAmerica (U.S. GAAP) for interim financial information along with Article 10 of Securities andExchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of theinformation and footnotes required by generally accepted accounting principles (GAAP) forannual consolidated financial statements. Certain prior year balances have been reclassified toconform to the current year presentation. Such reclassifications did not affect total revenue, lossfrom operations or net loss. In management’s opinion, the financial statements include alladjustments (consisting of normal, recurring and non-recurring adjustments) necessary for the fairpresentation of the financial position and operating results of the Company. The results ofoperations for the three months ended March 31, 2013 are not necessarily indicative of the resultsfor the entire fiscal year ending December 31, 2013 or for any other period. These unauditedcondensed consolidated financial statements should be read in conjunction with Velti's AnnualReport on Form 20-F for the fiscal year ended December 31, 2012 filed on April 11, 2013 withthe SEC.

Going Concern Going Concern

The accompanying consolidated financial statements have been prepared on a going concernbasis, which contemplates the realization of assets and the satisfaction of liabilities in the normalcourse of business.

As of March 31, 2013, the Company had cash and cash equivalents of $16.3 million andborrowings of $47.8 million under the revolving credit facility with HSBC. Net cash used inoperating activities was $32.5 million for the three months ended March 31, 2013. During theyear ended December 31, 2012, we generated $10.6 million in cash from operating activities and$17.5 million in cash from financing activities, and we used $69.9 million of cash for investingactivities.

The HSBC credit facility contains various loan covenants. We violated one of these covenants inthe fourth quarter of 2012 and received a subsequent waiver from HSBC. In addition, we violatedone of these covenants in the first quarter of 2013 and have not received a waiver from HSBC.We are in discussions with HSBC regarding the waiver and amendment of our 2013 covenants tolevels that we believe we can satisfy for the remainder of 2013. At this point, we cannot predictwhen, or if, we will receive a waiver of the first quarter's violation or modification of thecovenants. HSBC currently has the right to accelerate and cause our obligation under our creditfacility to become immediately due and payable in full.

On April 24, 2013, we closed a private placement of our ordinary shares transaction under whichwe entered into a Securities Purchase Agreement with certain institutional accredited investors. Inconnection with this transaction we issued an aggregate of 16,529,412 ordinary shares at a priceof $1.50 per share resulting in net proceeds to us of $23.1 million. A substantial portion of theseproceeds were used to satisfy our obligations to former shareholders and key employees of MIG.



While we anticipate generating positive operating cash flow for the year, this positive cash flow isnot expected until the third quarter of 2013. As a result, we may need additional financing duringthe next three months to provide sufficient operational liquidity. This additional financing may befacilitated through the issuance of equity or debt. If we need such additional financing, there canbe no assurance that our efforts to find such financings will be successful, or on terms favorableto us.

Our ability to continue as a going concern is dependent upon (i) HSBC not exercising its right toaccelerate our obligations under the revolving credit facility (ii) our ability to maintain sufficientliquidity to meet our obligations arising from normal business operations when they come dueand (iii) our ability to generate profitable operations in the future.

Use of Estimates andJudgement


The preparation of financial statements in conformity with U.S. GAAP requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities and thedisclosure of contingent assets and liabilities at the date of the financial statements. Managementis also required to make certain judgments that affect the reported amounts of revenues andexpenses during the period. We periodically evaluate our estimates, including revenuerecognition, recognition of government grant income, income taxes, the allowance for doubtfulaccounts, intangible assets, goodwill and long-lived assets, contingent payments related to ourrecent acquisitions and the assumptions used to determine share-based compensation expense. Webase our estimates on historical experience and various other assumptions that are believed to bereasonable on the specific circumstances. Actual results could differ materially from thoseestimates.

Accounts Receivables,Accrued Contract Receivablesand Allowance for DoubtfulAccounts


Accounts receivable consists primarily of amounts due to us from our normal business activities.Credit terms can vary between customers and between regions, but we generally require paymentunder our commercial contracts within 30 to 90 days of invoice. Our accounts receivable areunsecured and not interest bearing. Fees that have not been invoiced as of the reporting date butfor which all revenue recognition criteria are met are reported as accrued contract receivables. Wemaintain allowances for doubtful accounts to reflect the expected non-collection of accountsreceivable and accrued contract receivables based on past collection history and specific risksidentified in the portfolio. Additional allowances might be required if deteriorating economicconditions or other factors affect our customers' ability to make timely payments. We write offaccounts receivable when we consider them uncollectible.

Goodwill Goodwill

Goodwill is generated when the consideration paid for an acquisition exceeds the fair value of netassets acquired. Goodwill is recognized as an asset and reviewed for impairment at least annually,or whenever events or circumstances indicate that the carrying amount of goodwill may not berecoverable. We have selected December 31 as the date to perform the annual impairment testingof goodwill.

We completed our annual impairment test for fiscal 2012 and determined that there was noimpairment. Based on fourth-quarter 2012 testing, our estimated fair value totaled approximately$324.8 million including a conservative control premium of approximately 10% based on amarket value of approximately $295.3 million at December 31, 2012. The control premium isdefined as the value that may arise from an acquiring company's ability to take advantage ofsynergies and other benefits that flow from control over another entity. An acquiring entity isoften willing to pay more for equity securities that give it a controlling interest than an investorwould pay for equity securities representing less than a controlling interest. Based on theseresults, our fair value at December 31, 2012 was in excess of our book equity of approximately$292.4 million and no impairment was recorded.



During the three months ended March 31, 2013, our market capitalization declined significantlyas a result of decreases in our share price as reported on NASDAQ Stock Market. In connectionwith the preparation of our financial statements for the first quarter of 2013, we concluded thatthe sustained decline in our share price and market capitalization were indicators of potentialimpairment requiring us to perform an impairment analysis. As part of this analysis we evaluatedour operation which is considered to be one reporting segment and effectively one reporting unitas the components of our business share similar economic characteristics with each other. Thegoodwill impairment analysis was performed in light of our being one reporting unit; as such, weevaluated the market value and the equity value or book value of the company. Based on thisanalysis, we determined that the fair value of our aggregate net assets was below their carryingvalues, and a full impairment was recorded on our goodwill and a partial impairment wasrecorded against certain other intangible assets based on the purchase price allocation methodprescribed by the accounting guidance. The decline in our fair value resulted directly from theoverall decline in our market value during the first quarter of this year. See Note 7.

Impairment of Long-LivedAssets and AmortizableIntangible Assets


We evaluate long-lived assets such as property and equipment, and identifiable intangible assetsthat are subject to amortization for impairment when events or changes in circumstances indicatethat the carrying amount of the assets may not be recoverable including an indication that ourgoodwill is impaired. We evaluated our long-lived assets and amortizable intangible assets forimpairment due to recent events, which included the decline of our market capitalization as aresult of decreases in our share price as reported on NASDAQ Stock Market. These were deemedto be significant changes in circumstances that could indicate that their carrying amounts of ourlong-lived and amortizable intangible assets may not be recoverable. An impairment loss isrecognized when estimated future undiscounted cash flows expected to result from the use of theasset and its eventual disposition is less than the carrying amount. When undiscounted future cashflows are not expected to be sufficient to recover an asset's carrying amount, the asset is writtendown to its fair value. Where available, quoted market prices are used to determine fair value.When quoted market prices are not available, various valuation techniques, including discountedvalue of estimated future cash flows are utilized.

During the three months ended March 31, 2013, the decline in our market capitalization served asan indicator of certain intangible assets may not be recoverable. Based on an analysis ofundiscounted future cash flows we determined that the carrying value of certain intangible assetswas not recoverable and performed analysis to determine the fair value for each asset group. As aresult of this analysis, impairment was recorded to various intangible assets, including assetsrecorded through business combinations, purchased technology and internal softwaredevelopment costs. See Note 7.

Revenue Recognition Revenue Recognition


▪ Software as a service (SaaS) revenue, which consists of subscription fees from customerswho utilize our mobile marketing and advertising platforms, generally referred to as“usage‑based” services, and fees from customers who utilize our software solutions tomanage and measure the progress of their transaction‑based mobile marketing andadvertising campaigns, which we refer to as “performance‑based” services;

▪ License and software revenue, which consists of revenue from customers who license ourmobile marketing and advertising platform and fees for customized software solutionsdelivered to and installed on the customers' server; and

▪ Managed services revenue, which consists of fees charged to customers for professionalservices related to the implementation, execution, and monitoring of customized mobilemarketing and advertising solutions as well as other client driven projects.



We account for revenue for these services and licenses in accordance with Accounting StandardsCodification (ASC) Topic 605 - Revenue Recognition and ASC Topic 985-605 - Certain RevenueArrangements that Include Software Elements. We recognize revenue when all of the followingconditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service hasbeen rendered or delivery has occurred; (iii) the fee to be paid by the customer is fixed ordeterminable; and (iv) collectibility of the fee is reasonably assured.

SaaS revenue is generated from our “usage‑based” services, including subscription fees for use ofindividual software modules and our automated mobile marketing campaign creation templates,and fees charged for access to our technology platform. These fees are recognized ratably overthe contract term beginning on the commencement date of each contract as services are rendered.

SaaS revenue generated from our “performance‑based” services is generally based on specifiedmetrics, typically relating to the number of transactions performed during the campaignmultiplied by the cost per transaction in accordance with the terms of the related contracts.Transactions can include SMS messages sent by participants in customer campaigns oradvertisement impressions placed on mobile applications, among other types of performance-based transactions. Certain of our performance‑based contracts include performance incentiveprovisions that link a portion of revenue that we may earn under the contract to the performanceof the customer's campaign relative to quantitative or other milestones, such as the growth in theconsumer base, reduced consumer churn, or the effectiveness of the end-user response. Weconsider the performance‑based fees to be contingent fees. We recognize this revenue monthlybased on actual performance, which is when the fees are earned and the amount of the fee can bereliably measured. Our performance‑based arrangements are typically invoiced monthly, whichcan occur in a period subsequent to revenue being recognized.

License and software revenue consists of license fees charged for our mobile marketing andadvertising technology. We provide licenses on a perpetual or term basis. These types ofarrangements do not, typically, include any ongoing support arrangements or rights to upgrades orenhancements and therefore revenue related to perpetual licensing arrangements is recognizedupon the delivery of the license. Revenue from term based licenses is recognized over the relatedterm of an arrangement. Fees charged to customize our software solution are, generally,recognized using the completed contract or percentage-of-completion method according to ASC605-35, Revenue Recognition - Construction-Type and Production-Type Contracts, based on theratio of costs incurred to the estimated total costs at completion.

Managed services revenue, when sold with software and support offerings, are accounted forseparately when these services (i) have value to the customer on a standalone basis, (ii) are notessential to the functionality of the software and (iii) there is objective and reliable evidence ofthe selling price of each deliverable. When accounted for separately, revenue is recognized as theservices are provided for time and material contracts, and ratably over the term of the contractwhen accepted by the customer for fixed price contracts. For revenue arrangements with multipledeliverables, such as an arrangement that includes license, support and professional services, weallocate the total amount the customer will pay to the separate units of accounting based on theirrelative selling prices, as determined by the price of the undelivered items when sold separately.

The timing of revenue recognition in each case depends upon a number of factors, including thespecific terms of each arrangement and the nature of our deliverables and obligations, and theexistence of evidence to support recognition of revenue as of the reporting date. For contractswith extended payment terms for which we have not established a successful pattern of collectionhistory, we recognize revenue when all other criteria are met and when the fees under the contractbecome due. Fees that have been invoiced are recorded in trade receivables and in revenue whenall revenue recognition criteria have been met. When fees have been invoiced but not all revenuerecognition criteria have been met, the invoice is recorded in trade receivables and in deferredrevenue. When all revenue recognition criteria are met, but fees have not been invoiced as of thereporting date, such fees are reported in accrued contract receivables and in revenue.



Certain arrangements entered into by us are revenue sharing arrangements. As a result, wecomplete an analysis of the facts and circumstances to determine whether revenue earned fromthese arrangements should be recorded gross with the company performing as a principle, orrecorded net of third party costs with the company performing as an agent, as required by ASC605-45, Principal Agent Consideration. When we are a principal in a transaction, we include allamounts paid on behalf of our customers in both revenue and costs.

We present revenue net of value‑added tax, sales tax, excise tax and other similar assessments.Our revenue arrangements do not contain general rights of return.

Concentration of Credit Risk Concentration of Credit Risk

One customer accounted for more than 12% of our revenues for the three months endedMarch 31, 2013 and no customer accounted for more than 10% of our revenues for the threemonths ended March 31, 2012. No customer accounted for more than 10% our total receivablesas of March 31, 2013 or as of December 31, 2012.

Fair Value Measurements The fair value of our contingent payments is associated with our acquisition of Casee and isdetermined based on an internal cash flow model using inputs based on estimates andassumptions developed by us and is remeasured on each reporting date. The rates used todiscount net cash flows to their present value were based on our weighted average cost of capitalfor similar transactions and an assessment of the relative risk inherent in the associated cashflows. The inputs were current as of the measurement date. These inputs tend to be unobservableand, as such, are considered Level 3 in the fair value hierarchy.

Recently Adopted AccountingPronouncements


In December 2011, an accounting standard update was issued requiring an entity to discloseinformation about offsetting and related arrangements for recognized financial and derivativeinstruments to enable a better understanding of the effect of those arrangements on its financialposition. The amended guidance was effective for us on a retrospective basis commencing in thefirst quarter of 2013. We adopted this guidance during the three months ended March 31, 2013.The adoption of this guidance did not have a material impact on our consolidated financialstatements.

In July 2012, an accounting standards update on testing indefinitely lived intangible assets forimpairment was issued. The guidance simplified how companies test indefinitely lived intangibleassets for impairment by permitting an entity to first assess qualitative factors to determinewhether it is more likely than not that the fair value of the asset(s) is less than its carrying amountas a basis for determining whether it is necessary to perform the second step of the impairmenttest. We adopted this guidance during the three months ended March 31, 2013. The adoption ofthis guidance did not have a material impact on our consolidated financial statements.

In February 2013, amended guidance was issued requiring an entity to provide information aboutthe amounts reclassified out of accumulated other comprehensive income by component, eitheron the face of the statement where net income is presented or in the notes. The amended guidancewas effective for us on a retrospective basis commencing in the first quarter of 2013. We adoptedthis guidance during the three months ended March 31, 2013. The adoption of this guidance didnot have a material impact on our consolidated financial statements.



3 Months EndedIncome Taxes Mar. 31, 2013Income Tax Disclosure[Abstract]Income Taxes Income Taxes

For the three months ended March 31, 2013 and 2012, we recorded an income tax provision(benefit) of approximately $(6.9) million and $0.3 million for effective tax rates of (4.2)% and3.4%, respectively.

The change in tax provision (benefit) and the effective tax rate in the three months ended March31, 2013 compared to the same period last year was primarily due to a change in deferred taxesrelated to the write down of certain intangibles and a change in the Greece income tax rate.Specifically, we realized a tax benefit of $4.2 million from the decrease in deferred tax liabilitiesrelated to acquired intangible assets that were impaired during the quarter. We also realized a taxbenefit of $2.5 million related to an impairment of software development costs. The increase inthe tax rate in Greece from 20% to 26% resulted in an income tax benefit for the quarter of $1.8million.

As of March 31, 2013, the total unrecognized tax benefits of $17.1 million includedapproximately $6.9 million of unrecognized tax benefits that have been netted against the relateddeferred tax assets, and $10.2 million of unrecognized tax benefits that are reflected in other longterm liabilities.

Our continuing practice is to recognize interest and penalties related to income tax matters as acomponent of income tax expense. We have approximately $2.3 million and $2.1 million ofaccrued interest and penalties as of March 31, 2013 and December 31, 2012, respectively.

We file income tax returns in various tax jurisdictions around the world. While we are notcurrently under audit in the major taxing jurisdictions in which we are subject to tax, the tax years2008 to 2012 generally remain open to examination. However, we do not believe that the totalamount of unrecognized tax benefits will significantly change within the next 12 months.



3 Months EndedAcquisitions (Tables) (YdonHoldings, Ltd. (CASEE)

[Member]) Mar. 31, 2013

Ydon Holdings, Ltd. (CASEE) [Member]Business Acquisition [Line Items]Schedule of Purchase Price Allocation and TotalConsideration

The allocation of the total consideration of $22.8 million was asfollows:

Fair Value

(inthousands)










Goodwill 17,741



Purchase price:

Cash $ 8,400






3 Months EndedSegment and GeographicInformation (Tables) Mar. 31, 2013

Segment Reporting [Abstract]Schedule of Revenue from External Customers Attributed to ForeignCountries by Geographic Area Revenue Three Months Ended March 31,

2013 2012


Europe:WesternEurope $14,938 36.4% $18,310 35.4%All otherEuropeancountries 4,761 11.6% 12,967 25.0%

TotalEurope 19,699 48.0% 31,277 60.4%

Americas 11,848 28.9% 13,321 25.7%

Asia/Africa 9,460 23.1% 7,195 13.9%Totalrevenue $41,007 100.0% $51,793 100.0%



3 Months EndedDocument and EntityInformation Mar. 31, 2013

Document and Entity InformationEntity Registrant Name Velti plcEntity Central Index Key 0001490412Current Fiscal Year End Date --12-31Entity Filer Category Accelerated FilerDocument Type 6-KDocument Period End Date Mar. 31, 2013Document Fiscal Year Focus 2013Document Fiscal Period Focus Q1Amendment Flag falseEntity Common Stock, Shares Outstanding 66,164,433Entity Well-known Seasoned Issuer NoEntity Voluntary Filers NoEntity Current Reporting Status Yes



3 Months EndedBalance Sheet Items (Tables) Mar. 31, 2013Organization, Consolidation and Presentation of FinancialStatements [Abstract]Schedule of Property, Plant and Equipment Details of our significant balance sheet line items

consisted of the following:

Property and equipmentMarch

31,December

31,

2013 2012

(in thousands)

Buildings and fixtures $ 9,258 $ 8,806Computer and telecommunicationhardware 9,754 9,457


Total cost 23,143 20,817


Schedule of Accrued LiabilitiesAccrued liabilities

March31,

December31,

2013 2012

(in thousands)




Other 7,425 9,383

Total accrued liabilities $88,184 $ 97,374

