EFTA01070254

JAWBONE PROPRIETARY + CONFIDENTIAL EFTA01070254 Q2 RESULTS EFTA01070255 HIGHLIGHTS NEW PRODUCTS DRIVE REVENUE • Gross sales was $57.6M, compared to Plan of $54.8M - BIG generated $23.4M or nearly half of Q2's gross revenue • With the launch of BIG Jambox in May, Q2 net revenue nearly doubled Q1's level $49.1M in Q2, compared with $28.6M in O1 (and Q2 Plan of $48.5M) • Q2 gross margin came in at 16.0%, compared with Plan of 22.2% - Variance to the Plan was due primarily to the higher initial COGS on BIG and Jambox, and higher level of airfreighting to meet customer demand - We secured 18% reduction on Jambox COGS starting w Q3 and are driving reductions on BIG to bring GM back to 22-23% range EFTA01070256 HIGHLIGHTS NEW PRODUCTS DRIVE REVENUE • Operating expense was 5% lower (favorable) than Plan • Due to the gross margin variance, operating loss was 1O% larger (unfavorable) than Plan • Cash outflow was $27.7M, which was $9.9M more (unfavorable) than Plan of $17.9M for Q2 - Timing difference as working capital (inventory) built up earlier than the Plan assumed. EFTA01070257 INCOME STATEMENT Forecasted Pos (Neg) Qtr Ended Qtr Ended Forecast Percent Amounts in 000's $ 6/30/2012 6/30/2012 Variance Variance Gross revenue $ 57,598 $ 54,760 $ 2,838 5% Sales adjustments (8,493) (6,292) (2,201) -35% Net revenue 49,105 48,468 637 1% Total cost of goods sold 41,225 37,703 3,522 -9% Gross profit 7,880 10,765 (2,885) -27% Gross margin (%) 16.0% 22.2% -6.2% Operating expenses Selling and marketing 7,852 10,680 (2,828) 26% General and administrative 3,796 5,022 (1,226) 24% Research and development 12,116 10,138 1,978 -20% Depreciation and amortization 771 771 NA Total operating expenses 24,535 25,840 (1,305) 5% Operating income (loss) (16,655) (15,075) (1,580) -10% *PRELIMINARY AND UNAUDITED FINANCIALS. FORECASTED IS THE ORIGINAL PLAN SHOWN TO THE BOARD IN JANUARY 2O12. THE FINANCIALS INCLUDE GAAP TREATMENT FOR ITEMS SUCH AS REVENUE RECOGNITION UNDER EITF O8-O1 AND CAPITALIZATION OF OVERHEAD AND FREIGHT INTO INVENTORY. EXCLUDED FROM THESE FIGURES IS SFAS 123R STOCK-BASED COMPENSATION EXPENSE. Tuesday, September 18, 12 EFTA01070258 BALANCE SHEET ($s in 000s) Preliminary and Unaudited 6/30/12 3/31/12 12/31/11 ASSETS Current assets: Cash & equivalents $ 35,178 $ 52,899 $ 77,066 Accounts receivable and other receivables, net 29,797 3,623 18,688 Inventory 22,039 17,386 14,175 Prepaids and other current assets 4,217 4,351 2,341 Total current assets 91,231 78,259 112,270 Property and equipment, net 6,024 5,977 5,538 Other assets 3,811 4,514 7,399 TOTAL ASSETS $ 101,066 $ 88,750 $ 125,207 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 25,640 17,448 29,862 Accrued expenses 30,123 19,721 25,329 Deferred revenue 3,239 3,060 3,109 Other current liabilities 13,007 12,910 15,127 Total current liabilities 72,009 53,139 73,427 TOTAL LIABILITIES 72,009 53,139 73,427 Stockholders' equity: Common stock, preferred stock, & add'l paid in capital 176,050 165,715 165,321 Retained earnings (retained loss) (146,998) (130,110) (113,550) Accumulated other comprehensive income (loss) 5 6 9 TOTAL EQUITY 29,057 35,611 51,780 TOTAL LIABILITIES AND EQUITY $ 101,066 $ 88,750 $ 125,207 *PRELIMINARY AND UNAUDITED FINANCIALS. FORECASTED IS THE ORIGINAL PLAN SHOWN TO THE BOARD IN JANUARY 2012. THE FINANCIALS INCLUDE GAAP TREATMENT FOR ITEMS SUCH AS REVENUE RECOGNITION UNDER EITF 08-01 AND CAPITALIZATION OF OVERHEAD AND FREIGHT INTO INVENTORY. EXCLUDED FROM THESE FIGURES IS SFAS 123R STOCK-BASED COMPENSATION EXPENSE. Tuesday, September 18, 12 EFTA01070259 STATEMENT OF CASH FLOW Quarter Ended Amounts in 000's $ 6/30/2012 Cash flow from operating activities Net loss $ (16,888) Depreciation & amortization 1,079 Stock-based compensation expense 266 Effects of exchange rate changes on monetary assets and liabilities (1) Changes in operating assets and liabilities: Accounts receivable (26,174) Inventory (4,653) Other current assets and non-current assets 438 Accounts payable 8,192 Deferred revenue 179 Other current and non-current liabilities 11,268 Net cash used in operating activities (26,294) Cash flow from investing activities Capital expenditures (1,500) Net cash used in investing activities (1,500) Cash flow from financing activities Proceeds from option and warrant exercises 73 Proceeds from issuance of common stock 5,000 Proceeds from issuance of preferred stock 5,000 Net cash provided by financing activities 10,073 Net increase (decrease) in cash and cash equivalents (17,721) Cash and cash equivalents at beginning of period 52,899 Cash and cash equivalents at end of period $ 35,178 *PRELIMINARY AND UNAUDITED FINANCIALS. FORECASTED IS THE ORIGINAL PLAN SHOWN TO THE BOARD IN JANUARY 2O12. THE FINANCIALS INCLUDE GAAP TREATMENT FOR ITEMS SUCH AS REVENUE RECOGNITION UNDER EITF O8-O1 AND CAPITALIZATION OF OVERHEAD AND FREIGHT INTO INVENTORY. EXCLUDED FROM THESE FIGURES IS SFAS 123R STOCK-BASED COMPENSATION EXPENSE. Tuesday, September 18, 12 EFTA01070260 NEW PRODUCTS FUEL OUR REVENUE GROWTH Revenue by Region Revenue by Product 70,000,000 70,000,000 60,000,000 60,000,000 50,000,000 50,000,000 ■ BIG r2 40,000,000 ■ North America 40,000,000 ■ Jambox (1) 73 EMEA ■ ERA ■ AsiaPac 30,000,000 ■ Icon 30,000,000 39% • LATAM ■ Other Headset 37% ■ Other 20,000,000 20,000,000 10,000,000 10,000,000 Q2 2011 Q2 2012 Q2 2011 Q2 2012 Tuesday, September 18, 12 EFTA01070261 Q212 REVENUE* • Our existing products exceeded the Q2 forecast Speakers are the primary contributor with BIG driving 41% of the gross revenue while Jambox is at 37% International (outside North America) sales remained flat as a % of total gross sales year over year due to Q2 BIG rollout was focused on the US region See next chart on revenue by region by product EFTA01070262 Q212 REVENUE* • While the original Plan included gross sales of $9.2M of UP, we still beat the Plan of $48.5M with net revenue of $49.1M - Strong initial customer demand for BIG was a key factor - Jambox continues to show strong demand —BIG is complimenting Jambox, not cannibalizing it • Solid management of pricing - Contra-revenue came in 2 points higher than forecast as a % of gross revenue, But, that was due mainly to one-time event around launch of BIG. Expect Contra- revenue to return to long term trend of 12-13% of gross revenue EFTA01070263 CORE PRODUCTS CONTINUED STRONG SHIPMENT ACTIVITY INTO O2'12* Q2 2012 Gross Revenue by Product Family (Globally) Q2 2012 Gross Revenue by Region by Productline Units Gross ASP Units Gross ASP Product Class Gross Sales Shipped per Unit Region Gross Sales Shipped per Unit BIG $ 23,443,022 117,637 $ 199.28 North America 47,146,050 408,702 115 Jambox $ 21,394,426 165,972 $ 128.90 BIG 18,317,985 90,682 202 ERA $ 7,429,686 107,763 $ 68.94 Jambox 18,062,344 138,966 130 ICON-HD $ 2,809,735 56,018 $ 50.16 Headset 10,655,707 172,256 62 ICON-COSTCO $ 1,026,360 18,003 $ 57.01 Other 110,014 6,798 16 ICON HD+NERD $ 694,727 9,366 $ 74.18 EMEA 7,285,481 52,252 139 Icon $ 688,597 13,213 $ 52.12 BIG 4,426,273 23,272 190 Nerd $ 10,630 242 $ 43.93 Jambox 2,195,236 17,669 124 JB2X $ 10,348 736 $ 14.06 Headset 662,219 10,662 62 Other $ 111,768 8,522 $ 13.12 Other 1,753 649 3 Grand Total $ 57,619,299 497,472 $ 115.82 AsiaPac 3,084,578 35,510 87 BIG 698,764 3,683 190 Jambox 1,052,355 8,617 122 Headset 1,333,459 22,135 60 Other 1,075 LATAM 103,190 1,008 102 Jambox 84,492 720 117 'DIFFERENCES TO FINANCIALS ARE DUE Headset 18,698 288 65 TO DEFERRED REVENUE ADJUSTMENTS Grand Total $ 57,619,299 497,472 $ 115.82 Tuesday, September 18, 12 EFTA01070264 02'12 GROSS MARGIN* • Q2 Gross margin came in at 16.0% versus Plan of 22.2% Sales adjustments were higher than Plan, driving 2 points of the variance Remainder of the variance was due to the standard COGS of BIG and Jambox running higher than Plan. Additionally, we air freighted nearly 100% of BIG orders to meet customer launch dates We have already secured a 18% reduction in the cost of Jambox, starting with Q3. We are negotiating COGS reductions on BIG We are already ocean freighting a significant portion of July/August demand EFTA01070265 02'12 GROSS MARGIN* • Continuing focus on Ex-factory COGS reductions, which is the largest opportunity for improving gross margin over the next 12 months - Goal is to drive > 3O% gross margin within the next 12 months EFTA01070266 02'12 OPEX* • Q2 opex came in at $24.5M, favorable to Plan of $25.8M • Breakdown of Q2 actual opex: Compensation expense (salaries, bonus, benefits, employer taxes) = $8.4M Travel and entertainment = $1.3M Proto/soft tools/test and certs = $1.6M Channel marketing, PR, Corp Marketing = $7.1M (fixed PR/Marketing contracts include West Studios, etc.) Litigation fees, Patent/TM filings = $1.3M Outside services - Contractors and Consultants = $3.3M (majority is for ) Facilities, Insurance, Supplies, Telco, etc. = $1.5M • Current monthly opex run rate is at $8.5lvl EFTA01070267 O2'12 WORKING CAPITAL + CASH FLOW* • A/R DSO were excellent, below our usual 30-35 day range - June DSO came in at 29 days • Inventory Days were at 49 across Q2, reflecting the Build-To-Stock model that we adopted in the past year to be more responsive to customer demand • Cash conversion cycle came in at 17 days for Q2 - Sales were heavily back-end loaded in the quarter, which caused the gross AR balance to increase to $31M at 6/30/12. The cash benefit of the initial BIG launch wil l be realized in early Q3 EFTA01070268 AIR CONTINUES AS OUR BEST MANAGED ASSET* Customer iv Current 5/31/2012 - 6/29/2012 (30) 5/1/2012 - 5/30/2012 (60) 4/1/2012 - 4/30/2012 (90) Before 3/31/2012 (>90) Total Open Balance Open Balance Open Balance Open Balance Open Balance Open Balance Superior Communications $11,436,733 $0 $0 $0 $0 $11,436,733 Costco Wholesale $3,985,609 $615,816 $0 $11,033 $0 $4,612,458 Amazon $3,182,756 $0 $67,383 $3,846 $0 $3,253,985 TESSCO $2,413,800 $0 $0 $0 $0 $2,413,800 Micro Peripherals Ltd $1,933,124 $0 $0 $0 $0 $1,933,124 Powerdata S.A. $1,701,423 $0 $0 $0 $0 $1,701,423 Brightstar US $369,367 $585,694 $0 $0 $0 $955,060 631 Digital River $748,531 $0 $0 $0 $0 $748,531 Beijing Lava Technology Develop Co., Ltd $544,744 ($3,857) $0 $0 $0 $540,887 Luzern Solutions LTD $440,832 $0 $38,511 $0 $0 $479,343 Avoca $449,060 $0 $0 $0 $0 $449,060 Almo Distributing Pennsylvania, Inc $392,508 $0 $0 $0 $0 $392,508 EET Group $358,275 $0 $0 $0 $0 $358,275 Alpha Tech $263,477 $0 $0 $0 $0 $263,477 Force $224,651 $0 $0 $0 $0 $224,651 ABM Wireless Inc. $305,691 ($87,309) $0 $0 $0 $218,382 Dugo Tech Co. , Ltd $200,389 $0 $0 $0 $0 $200,389 Autra - Norway $144,706 $0 $0 ($124) $0 $144,581 Thinking Group Limited $148,910 ($4,384) $0 $0 $0 $144,526 Other 21 Customers $508,360 ($20,582) $113,021 ($2,650) ($38,489) $559,660 GRAND TOTAL $29,752,945 $1,085,378 $218,915 S12,105 ($38,489) $31,030,854 Aging Category as % of Total A/R 96% 3% 1% 0% 0% 100% NOTE: Credit balances are for customer returns that occur after the original shipping invoice has already been paid. Hence a credit balance appears as there is no outstanding invoice to offset that amount. These credit memo's are covered by our various Contra Revenue accruals which are liability accounts The credit memo stays on the AIR ledger because the customer has not elected to use that credit to offset another AIR invoice or ask us for a cash refund The difference between the AR aging and the AR balance represented on the balance sheet is due to the AR reserve relating to the UP Guarantee Tuesday, September 18, 12 EFTA01070269 GLOBAL HEADCOUNT BY FUNCTION AND LOCATION FOCUS CONTINUES TO BE HEADCOUNT* year/year By Primary Function 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 % increase 46 52 50 50 66 43% HW, Systems Engr & Prog Mgmt 19 20 21 30 37 95% G&A 19 22 25 28 29 53% Product Management 26 30 33 32 36 38% Sales, Mktg, Customer Care 32 35 38 33 39 22% Supply Chain 56 66 75 71 79 41% Grand Total 198 225 242 244 286 44% year/year By Location 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 % increase CHINA 18 26 31 32 37 106% EUROPE - Remote 11 10 13 11 12 9% US - Remote (mainly sales) 15 16 16 15 23 53% SAN FRANCISCO, CA 75 86 91 94 114 52% SEATTLE, WA 3 3 4 4 3 0% SUNNYVALE, CA 49 56 58 64 73 49% TIJUANA BAJA MEXICO 27 28 29 24 24 -11% Grand Total 198 225 242 244 286 44% Tuesday, September 18, 12 EFTA01070270 GLOBAL HEADCOUNT BY FUNCTION* IS OUR LARGEST GROUP Headcount by Function Supply Chain Sales, Mktg, Customer Care Product Management HW, Systems Engr & Prog Mgmt Grand Total Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Tuesday, September 18,12 EFTA01070271 GLOBAL HEADCOUNT BY LOCATION* SF/SUNNYVALE HOUSES 2/3RD OF OUR STAFF Headcount by Location 286 242 241 243 244 I. TIJUANA BAJA MEXICO lb—SUNNYVALE, CA Mot SEATTLE, WA ISAN FRANCISCO, CA 4 4 4 4 4 US - Remote (mainly sales) 4 3 3 3 EUROPE - Remote 3 9 105 CHINA 100 91 90 2 94 • i I im oGrand Total i & ITT 75 I 25 50 16 15 is is Ill 0 15 aria iiiii 15 al . • . . . . i tia al. a 11. ■ Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Tuesday, September 18, 12 EFTA01070272 CHANGING OUR BUSINESS MODEL EFTA01070273 CHANGING OUR BUSINESS MODEL FOR THE BETTER • Our inventory model has been a "bootstrap" one, whereby we take limited cash risk by making purchase commitments as late as possible and within a short time frame - Basically a Build-To-Order (BTO) model with limited commitment to the supply chain and factory • This model worked well when we were a sub-$100N1 revenue headset company - Demand for headsets (a business-class product) was even throughout the year (no seasonal fluctuation) - So our factory and supply chain ran at a fairly even pace - The BTO model optimized the financial aspects EFTA01070274 CHANGING OUR BUSINESS MODEL FOR THE BETTER • We recognized several quarters back that our shift into high-tech consumer electronics requires a different business model - CE products such as our Wireless Speakers have highly seasonal demand - The addressable TAM's are multiple times larger than the headset market - These products are distributed in a wider variety of channels (branching beyond our Carrier stores and into Mass Merchant Retail, CE Superstores, Discount Merchants and other channels on an international dimension EFTA01070275 CHANGING OUR BUSINESS MODEL FOR THE BETTER • The BTO model doesn't optimize the financial metrics of Jawbone, mainly the key elements of the income statement: Limits our ability to capture any demand upside (we left > $15M revenue on-the- table in O4'2011—just factoring in Headsets and Speakers) Providing such short leadtimes on commitments to the factory and material suppliers results in lower priority and higher costs for our products Limiting the production scheduling time horizon for our factory results in unplanned overtime, inefficiencies and puts strain on product quality processes Creates a mindset where we chase demand, rather than shape it and optimize it EFTA01070276 CHANGING OUR BUSINESS MODEL FOR THE BETTER • We have been revamping the staffing, systems, processes to changeover the company to a Build-to-Stock (BTS) model We are forecasting demand at a detailed level for a 6-9 month horizon, versus our prior 3 month detailed (product SKU, customer, weekly) focus We are planning the factory and supply chain to this longer time horizon We are upgrading the quality, reliability, test, and manufacturing operations processes to drive high gross margin at high volume ramp • The benefit of this changeover in 2nd Half of 2012 for the Jambox product line is NPV of + $12.6M for the Company - Applying this across all product lines going forward will add significant value to Jawbone EFTA01070277 FACTORY VARIABILITY Shipments Per Week (Units) 160000 140000 120000 I 100000 80000 —*—Actual 60000 ---Planned 40000 20000 0 4,;1, t• c) ,b, ,,c) ,a 1, 4. .,,c) ,c‘ poi „,,N (0 y1 ,(0 ,,>. 150 ,,1 ,,(0 1:6'. Tuesday, September 18, 12 EFTA01070278 FACTORY VARIABILITY Historical Q2CY12 WoW Volatility Performance Performance Target - # of Weeks % of Total # of Weeks % of Total # of Weeks % of Total less than 30% 27 34% 7 58% 9 90% between 30% - 50% 9 11% 3 25% 1 10% between 50% to 100% 22 28% 1 8% 0 0% between 100% to 150% 13 16% 0 0% 0 0% over 150% 8 10% 1 8% 0 0% Historical Performance Q2CY12 Performance Target WoW Volatility # of Weeks % of Total # of Weeks % of Total % of Total less than 30% 27 34% 7 59% 90% between 30% - 50% between 50% to 100% 9 22 11% 28% L 3 1 25% 8% 10% 0% between 100% to 150% 13 16% 0% 0% over 150% 8 10% 1 8% 0% Tuesday, September 18, 12 EFTA01070279 2ND HALF 2012 FOCUS IS ON DRIVING PROFITABILITY • We piloted this BTS approach with our ODM factory (Foxlink) and key materials suppliers to see what Product COGS and Overhead reductions we can drive In exchange for providing 6 month visibility on our material/production needs and making commitments to purchase this inventory, we were able to secure significant savings on the JamBox speaker product The new Product COGS for July onwards is now $57.48 (blended), a $12.68 drop or 18% decrease from the Q1'12 cost In addition, with our longer range demand /supply plan and factory load- balancing, we plan to ocean freight most of these JamBoxes to the North American market. Compared to our standard mode of airfreighting, this will generate another $3.00 to 4.00 per unit savings in logistics costs EFTA01070280 2ND HALF 2012 FOCUS IS ON DRIVING PROFITABILITY This combined Product and Logistics cost savings totals 21% This improves Jambox gross margins by 16 points at our current MSRP of $199 Or we can drop MSRP to $159-169 range and still generate the same gross margin percent and drive significant revenue volume and market share increase • The trade-off of this build-ahead plan is the initial increase of the inventory in mid-Q3 through early Q4 - Cash Conversion Cycle goes from today's +8 days range to +50 to +70 days - Next slide that shows the cash flow impact of the BTO model that Jawbone operated on prior to 2012 and the BTS model that we wil l run on in 2nd Half of 2012 EFTA01070281 THE OLD BUILD-TO-ORDER INVENTORY MODEL (PRE-2012) $3 00 $2.50 vill 1 . 1 111"I lligli liallill6 We collect the Customer A/R BEFORE we payour Suppliers $2.00 for the Inventory Benefits: •Limit our supply chain exposure $1.50 •Drive a negative cash conversion 2 cycle $1.00 The Cost of this BTO model: $0.50 •Higher Product Costs (15-20%) •Limited production upside •Higher overhead costs of running $- I I I I I I I I T T T I T I I T I T 1 1 1 , I T T I T I I ' , T i l l , ' , T I T , I I I I T T I I I I the factory and Jawbone e-i In Lin N. Crl e-I In L(1 Is-, O1 e-I 1, 1 In Is. O1 g-I 11,1 LI1 r- O1 e-I MI In r•-• O1 .-I r-I r-4 '~N N N N N m m m In m v ..d. , d. .d. mt. tn operations '" '-4 ."' -. -• -• .• •Short leadtimes result in Weeks significant airfreighting and logistics costs •Short planning window puts Disbursementsfor Inventory A/R Cash Collections product quality at higher risk Tuesday, September 18, 12 EFTA01070282 THE BUILD-TO-STOCK MODEL 2ND HALF'12 $7.00 $6.00 NET CASHFLOW OUT -: $5.00 To load balance the factory and supply chain over a longer time 4. $4.00 frame. So purchase inventory in July-Nov, to be sold to retailers in O4. Hence the A/P-Inventory During the less $3.00 disbursements exceed the A/R seasonal part of cash collections in mid 03 thru the year, our CCC late 04 is closer to NET CASHFLOW IN-: - - , slow down, while the shipments to 7-1 `41 ry ,a-1 m m `A' .r;? L4 (-A the retailers reach their max level. A/R cash collections exceed the Weeks A/P-Inventory disbursements Disbursements for Inventory ,A/R Cash Collections EXCLUDES CASHFLOW IMPACT OF OCOGS, OPEX AND CAPEX ITEMS Tuesday, September 18, 12 EFTA01070283 2ND HALF 2012 WORKING CAPITAL PLAN • The increase in working capital requirement (cash outflow) during the Q3 thru early Q4 timeframe is $12M (for Jambox build ahead of inventory) - However, the COGS/freight savings/extra margin for running this BTS model exceeds $13M - ROI from implementing this BTS model for Jambox is NPV of +$12.6M • Intend to fund most of this working capital build up with an Asset-Based Loan - Basically a revolver, secured by all tangible assets of the Company - Loan balance is dependent on the eligible Inventory and A/R - So the loan balance will fluctuate with the seasonal changes in the business EFTA01070284 2ND HALF 2012 WORKING CAPITAL PLAN • We had several commercial lenders provide proposals Wells Fargo presented the best terms and after further negotiations, we signed a non-binding term sheet $25M facility, with accordion feature to allow it to flex up to $35M 3 year term, with options to terminate at end of each year anniversary Good advance rates of up to 85% on A/R and 6O% on Finished Goods Inventory Interest rate of LIBOR + 2OO basis points (at today's rate that's about 2.5% annual rate) Unused line fee of O.25% Legal, setup and maintenance fees are reasonable (adds about 1.5% to annual rate) Excludes IP and other intangibles from the assets that Wells has a lien on Only significant covenant is min Liquidity threshold of $15M EFTA01070285 2ND HALF 2012 WORKING CAPITAL PLAN • Wells Fargo started their due diligence - Field audit week of July 16 to verify Jawbone's processes and controls over A/R and Inventory - Review of historic financials, company history, etc • Draft loan documents within 30-45 days • Expect to have the facility in place during September • This facility provides a low cost liquidity vehicle for the Company EFTA01070286 RISK MANAGEMENT MULTIPLE STRATEGIES TO HANDLE EUROPE CRASH OR SLOW HOLIDAY SALES GROUPON my its Or ol arbor, our COSTCO Deal Or the Day Motorola XOOM 10.1-Inds 32. nadroid Tablet with i-Fi (Factory Refurbish.) MORE THAN 13 --' • ,7, ..; '"'.. Speoel ouest deal Dammed by our colleague, et woot.com: -Why ese Motorola scoosa we weld say ounetheos Taday'a dot Got • 330B IPad for 449 (Wort $1,800 1 .., up to 11220) wtso you sign a 24 month Data Goritnet WIT-Mobile ((27 per month) oe aleo. its fast, moscular 1 Gardual-a•re rm: enxessee. we hiensodis about 44U,_ ,:= Ile Android 3.1 S. WasGoo,* Talk video P OS A else, List Nice: DDT 00 Arow. 44,10 Today's Discount • 51ST 01 t7.7.,, 1: • •M,.I)ile• Gold Bon Priers 5339.99 13296 or, anacti900 • All of our holiday deals have the ability to sweeten as the Holiday season progresses through in-store promotions (we have a history of success there) • We can be even more aggressive with our Black Friday promotion to aggressively sell inventory • Product is not seasonal and January is a strong consumer electronics month; we have the ability to leverage existing partners' rapid sales tools (Amazon Gold Box, Costco MVMs, etc) • New players with significant reach have been courting our products (Groupon, FAB, etc) Tuesday, September 18, 12 EFTA01070287 GO TO MARKET EFTA01070288 NOTES FROM THE BATTLEFIELD • Our Q2 2012 revenue was larger than Q4 2011 and was the company's second largest ever • Our speaker business is building significant momentum in the channel and with the launch of BIG we are positioned to win • We are setting up the business to dominate in Q4 2012 by capturing all of the available consumer demand • The market is primed for the return of UP and raises the importance of capitalizing on our partner and customer opportunities • Our success is making our competitors defensive and we are seeing aggressive media and channel plays in response to our rise • While the uncertainty in Europe has challenged our global business, we continue to grow and outpace our competitors Investing in Brazil presents a significant long-term opportunity EFTA01070289 Q2 2012 WE BEAT OUR STRETCH PLAN! • Net revenue 71% higher in Q2 2012 compared to Q1 2012 • Highest revenue quarter since 2008 and the introduction of CA hands -free regulation • Strong demand across all of our products contributed to beating plan without UP - Mono at 141% of plan - Jambox at 116% of plan - BIG at 130% of plan EFTA01070290 SHIFT TO SPEAKERS MAKES US MORE VALUABLE TO OUR CHANNEL PARTNERS • High revenue product Quarterly Sell Through mix has led to dramatic revenue share growth 600 Icon Launch <--- Jambe', Launch ---> VOW A, BIG Launch ' $50 "' 2 over the last 6 quarters 500 icon nr A 6 $40 4 00 • Sel l through dollars 300 200 n in increased 24% from Q1 2012 to Q2 2012 MI II I $20 100 M■■■ ■ ■ $10 • Average sell through of 01'10 QX10 12310 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Qr12 32K units / week Sell Through Units , ,Sell Through $ Tuesday, September 18, 12 EFTA01070291 STRONG SPEAKER DEMAND IN CHANNEL • Jambox Sell through doubled in Q2 compared to previous year's quarter Product continues to gain momentum worldwide; Q2 was best quarter for Jambox outside of Q4 and continues to be the best selling speaker in North America and the UK 2,, 320 280 • BIG § 240 TE 200 160 120 Initial channel fil l of BIG was greater 80 40 than the first 2 quarters of Jambox combined Tuesday, September 18, 12 EFTA01070292 CUSTOMER MIX CONTINUES TO DIVERSIFY IN O2 2O12 • Speaker business is making Best Buy more relevant and we expect that trend to continue • Carrier channels are still extremely strong and we are building the music category with them • International diversification continues Q2 2012 - Americas - EMEA / APAC 18% of global sales, AT&T ■ Best Buy more than 2X from Q2 2011 ■ Verdon - Amazon - APAC is 32% of international sales Apple • lawbone.corn Costar Sprint Other Tuesday, September 18, 12 EFTA01070293 KEY AREAS OF FOCUS FOR 03 • Own al l of the key holiday deals and vehicles with our key customers - Costco holiday MVM - Key circulars and in-store positions/presence - Smart Black Friday plays - In-store promotions - Online merchandising • Continue to own and become the music leader (start taking share) - Leverage our Jambox family to blank our competition and send the market a message • Start engaging our customers in the UP launch to make it impactful • Continue our intense focus on our global business, hire top talent and expand - Asia/China GM, and a LatAm Sales Director are most critical - Hired top talent for our EMEA Sales Director EFTA01070294 MARKETING PLAN EFTA01070295 PLAY TO WIN • It's time for a new model • We're at an inflection point in the market, and need to strike now • Scaling a CE business takes investment - we aren't going to win on organic growth • There are no rain-checks for Xmas • Play to win - starting now and sustained over time EFTA01070296 76% OF THE US CUSTOMERS HAVE NEVER HEARD OF JAWBONE "WHICH OF THESE BEST DESCRIBES YOUR LEVEL OF FAMILIARITY WITH EACH OF THE FOLLOWING COMPANIES / BRANDS?" BOSE BEATS BY • . )•L. DR. DRE 4 PLANTRONICS 0 12% 11% 6% JAWBONE 0 JABRA O SONOS BLUE ANT • BOWERS & WILKINS ' 0 ■ ■ NOT FAMILIAR WITH THEM AT ALL I KNOW WHAT THEY DO / MAKE I'VE HEARD THEIR NAME OR SEEN THEIR LOGO ■ I OWN AND USE THEIR PRODUCT RESULTS FROM MARCH 2O12 NATIONAL SURVEY. Tuesday, September 18, 12 EFTA01070297 NO ONE KNOWS ABOUT JAMBOX EITHER "WHICH OF THESE BEST DESCRIBES YOUR LEVEL OF FAMILIARITY WITH EACH OF THE FOLLOWING PRODUCTS?" BOSE SOUNDLINK SONOS PLAY:3 80% 11% 6% 3 OR PLAY:5 JAMBOX BY JAWBONE BIG JAMBOX BY JAWBONE NOT FAMILIAR WITH THEM AT ALL I KNOW WHAT THEY DO / MAKE I'VE HEARD THEIR NAME OR SEEN THEIR LOGO I OWN AND USE THEIR PRODUCT RESULTS FROM MARCH 2O12 NATIONAL SURVEY. Tuesday, September 18, 12 EFTA01070298 DESPITE THIS, WE SELL OK BU I rHE COMPETITION is HEATING UP Sales in Sales in Brand Model Ma 2012 June 2012 Bose SoundLink Mobile Wireless Mobile Speaker 15,892 26,672 Jawbone JAMBOX 14,828 22,440 Jawbone BIG JAMBOX 2,972 9,441 Logitech 984-000181 Bluetooth Wireless Boombox 3,929 8,332 Logitech 984-000204 Bluetooth Mini Boombox Speaker 2,451 5,148 Monster MBL CLY MBT 100 ClarityHD Precision Micro Bluetooth Speaker 3,762 4,571 Sony RDP-XF300IP Portable Bluetooth Speaker w/Dock 2,912 4,439 Bose SoundLink Mobile LX Wireless Mobile Speaker 2,230 3,215 iHome IDM12B Portable Bluetooth Speaker System 2,156 2,487 Sony RDP-X200iP Bluetooth Speaker w/Dock 1,994 2,374 iHome iDM9G Cupholder Portable Bluetooth Speaker 209 1,654 Homedics HX-P230BL Jam Portable Wireless Bluetooth Speaker 0 1,389 DATA FROM WIRELESS CARRIERS NOT INCLUDED; SEE LIST OF NPD CHANNEL PARTNERS Tuesday, September 18, 12 EFTA01070299 BT SPEAKER MARKET IS GROWING JAWBONE MARKET SHARE IS DECLINING ■ Total BT Sales 60, 300,000 225,000 150,000 75,000 EFTA01070300 DOCKS ARE ERODING IN SOME SEGMENTS RAPIDLY Jawbone • Other BT Speakers Other Wireless • Docks 100% L 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% N N N N N N N N N N N N N N N N N N N N N < Gc 4' pew C; lac *' V' t§' •;V ez,'V N ° ,0 < C,‘: 04' e,C; V e§. `N. Cn° O \-\° <ez' . V- . ,c,- S° O 0 <ez' . I . 'z' Tuesday, September 18, 12 EFTA01070301 MARKET FORCES EXPANDING TOTAL ADDRESSABLE MARKET • Increase in # of attachable products - Smartphones, tablets, laptops • Growth in mobile media consumption Spotify - Portability, digital files, streaming music & video • Overall Market Driving Awareness - Competition and attachable products driving attention • Anticipated iOS connector change - Physical connector type change, push for wireless EFTA01070302 69 M Tuesday, September 18, 12 EFTA01070303 BOSE PAID MEDIA SPEND Hew iletinalnk • Commeraal • Bose is by far the largest spending brand in the category across all products I SouaR.D.Li $127MM total spend between Sept '11 - April '12 • - 56% of spend against Wave and Acoustic Wave; Small soze >8.2% of spend against SoundLink and SoundDock • SoundLink and SoundDock concentrate spend on 14..ic tan take you... , === sports and younger skewing digital and print media - SoundLink ran a very targeted blitz OOH campaign in SF ($397K) and NYC ($486K) in J J October '11 • Majority of media spend targets older, affluent men, via magazines and primetime sporting events on TV • Creative is conservative ALL SPEND FIGURES INCLUSIVE OF PAID MEDIA ONLY: DO NOT TOTAL MARKETING SPEND. Tuesday, September 18, 12 EFTA01070304 BOSE SEASONALITY OF MEDIA SPEND IS CONSISTENT OVER 3 YEARS Bose Spending: 2009-2011 ($000) $40,000 $35,000 $30,000 $25,000 $20,000 All Bose Bose Sounddock $15,000 Bose Soundlink $10,000 $5,000 c9r, c9r, 0 c, 0 c, c0: 0 al Cl Cl Cl Cl O OO OO OO OO OO O -I -I -I -I -I -I -I -I -I -I a) O O O O O -I -I -I -I -I I t-1 L-1 L-1 L-1 t-1 l o c JD > C 00 O- 1O 1O d). L eL 0 on O. t::, m co o_ C 7 > (.4 f 0/ CL (0 7 7 4) O O LT. 7 7 0) O - 1 U. 2 a 2 — tLt lf) Zn 2 a 2 - ii") z g a t < zuLU Tuesday, September 18, 12 EFTA01070305 BEATS BY DRE PARTNER + CELEBRITY FUELED pub HP Envy 4 Ultrabook Beats Audio 2012 [HQ] • Beats by Dre brand significantly relies on support by channel partners (ATT, AT&T introduces Cearbox • Portable Authentk =And that s to yo, C One 411 Verizon, HP, & Best Buy), product placements, and celebrity endorsements • Reported spending was very minimal and is exclusively for headset products HTC Roiouncint, thefts! phone with Beak Audio'. bull in. ($984K), focused in Dec - Jan => 0 AT&T Commercial - HOC Vivi, a Boalbox Portable featuring Jordln • Spend is focused on magazines (77%) Jyat and newspapers (17%), with minimal digital (6%) I-rrc v..m 0001 1 "; • Targets young, urban, pop driven consumers (based on creative) ALL SPEND FIGURES INCLUSIVE OF PAID MEDIA ONLY: DO NOT TOTAL MARKETING SPEND. Tuesday, September 18, 12 EFTA01070306 SONOS INVES-i 1NG IN BRAND STREAM • Reported minimal media spend between ALL THE MUSIC ON 112 O Sept '11- Apr '12 ($2.4MM) EARTH 'Tunes A, 6/1221 ••11 :f•FAIr • Historical spend indicates primary 3 investment in magazines (87%), with 1 minimal digital and OOH activity • • However, spend is anticipated to SONGSSTUDIO increase for 2012 holiday season, based PARTY DI QUESTLOVE 8 KEE); on reported annual budget of $20MM, COMM 114.111010,4 80.51111MI MIMI SE! RIMILINE.11 I11.00(.....94...1 in UM M.= WIFINIAIN. current ad campaign, and recently revamped owned assets SONOS 7,7 • Media placements and creative focus on a targeting younger, affluent, cultured, urban crowd ALL SPEND FIGURES INCLUSIVE OF PAID MEDIA ONLY: DO NOT TOTAL MARKETING SPEND. Tuesday, September 18, 12 EFTA01070307 DOMINATE THE CATEGORY MARKETING IMPLICAI IONS • Establish majority marketshare in growing category • Outsmart the competition targeting the ripe 69Ivl • Significantly grow awareness & invest in building brand • Invest in creating best-in-class channel experience • Commit to sustained product & marketing investment EFTA01070308 Q3 + Q4 OUTLOOK EFTA01070309 O3-O4 2012 OUTLOOK TARGET + BASELINE • We are planning for a strong Q4 increase in Speaker sales, fueled by continual growth in the TAM and our market leadership driving solid share - Speakers are a popular Holiday Season seller, with various OEM's seeing a 3x to 10x increase in late Q4 sales over other quarters • The target revenue forecast $300M revenue, assumes some additional upside on speakers and a wider rollout of UP in Q4 • The baseline revenue forecast $244M revenue, driven mainly by speakers, with a limited rollout of UP EFTA01070310 O3-O4 2012 OUTLOOK TARGET + BASELINE • Gross margins benefit from the COGS reductions that we have secured and continue to drive GM expected to increase significantly—rising from today's 16% rate to 23% in Q3 Factored in various Holiday price promotions to drive multi-fold increase in unit volumes in Q4. GM still increase to 25-26% level as we continue to drive Product COGS reductions, use ocean freight, and benefit from the volume effect of Q4 Target forecast has slightly lower GM than the baseline, due to the high COGS on the UP product during its launch EFTA01070311 O3-O4 2012 OUTLOOK TARGL + BASELINE • OpEx increasing at a slower rate than the revenue increase - Most of the increase is for Channel marketing, branding and programs to drive Holiday sales - Continue to add resources to support the 2O13 road map - Target forecast has higher opex than the baseline to accommodate the UP launch and additional channel marketing for the higher speaker volumes EFTA01070312 O3-O4 2012 OUTLOOK TARGET + BASELINE • Operating loss expected to hit inflection point by Q4 - Operating loss approximately the same from Q2 to Q3 - Operating loss moves towards break-even in Q4 due to revenue uplift, improving Product COGS, and slowing increase in Opex spend - Expect operating loss to swing to operating profit through most of next year EFTA01070313 O3-O4 2012 OUTLOOK TARGET + BASELINE • Cash balance increases from today's level thru end of the year - Cumulative operating cash outflow of -$28M for the 2nd Half of 2O12 - Offset by $1OM equity infusion from Mort (Osborne-related) group $25M drawn down on the ABL facility at year end EFTA01070314 2ND HALF 2012 TARGET INCOME STATEMENT ($s in thousands) 2012 Q1 (A) Q2 (P) Q3 (F) Q4 (F) FY 12 (F) Revenue Gross Units Sold 334 496 503 1,718 3,052 Net Units Sold 318 464 473 1,598 2,853 Net Revenue $ 28,453 $ 49,331 $ 56,583 $ 165,957 $ 300,324 Cost of Goods Sold 22,400 41,226 43,621 124,348 231,594 Gross Profit 6,053 8,105 12,963 41,609 68,730 Gross Margin % 21.3% 16.4% 22.9% 25.1% 22.9% Operating Expenses 22,366 24,540 28,648 34,985 110,538 OpEx as % net rev 78.6% 49.7% 50.6% 21.1% 36.8% Operating Income (16,313) (16,434) (15,685) 6,624 (41,808) Opinc as % net rev -57.3% -33.3% -27.7% 4.0% -13.9% r Interest and Other (412) r (232) (19) (149) (811) Pre-tax Income (16,725) (16,666) (15,704) 6,475 (42,619) Net Income $ (16,725) $ (16,666) $ (15,704) $ 6,475 $ (42,619) NOTE: THE FINANCIAL FORECAST EXCLUDES CERTAIN GAAP , NON-CASH ITEMS: REVENUE RECOGNITION UNDER SOP97-2 AND EITF O8-1, FAS123R STOCK BASED COMPENSATION,. Tuesday, September 18, 12 EFTA01070315 2ND HALF 2012 TARGET BALANCE SHEET ($s in thousands) 2012 Q1 Actual Q2 Prelim Q3 Fcst Q4 Fcst Assets Current Assets: Cash and Cash Equivalents $ 52,899 $ 35,178 $ 34,587 $ 43,350 Accounts Receivable, Net of Allow. 3,623 29,797 24,401 64,442 Other Receivables - - Inventory 14,796 15,355 28,397 16,903 Prepaid Inventory 2,921 2,772 568 507 Other Current Assets 4,020 8,130 2,500 2,500 Total Current Assets 78,260 91,232 90,453 127,702 Property and Equipment, Net 5,977 6,024 7,725 7,875 Other Long-term Assets 4,514 3,811 3,301 2,903 Total Assets $ 88,751 $ 101,067 $101,479 $ 138,480 Liabilities and Shareholders' Equity Current Liabilities: Accounts Payable $ 17,444 $ 25,641 $ 22,854 $ 38,550 Other Current Liabilities 32,632 43,129 52,032 66,861 Total Current Liabilities 50,075 68,770 74,886 105,412 Total Liabilities 50,075 68,770 74,886 105,412 Total Shareholders' Equity 38,676 32,297 26,593 33,069 Total Current Liab & Shareholders' Equity $ 88,751 $ 101,067 $101,479 $ 138,480 NOTE: THE FINANCIAL FORECAST EXCLUDES CERTAIN GAAP , NON-CASH ITEMS: REVENUE RECOGNITION UNDER SOP97-2 AND EITF 08-1, FAS123R STOCK BASED COMPENSATION,. Tuesday, September 18, 12 EFTA01070316 2ND HALF 2012 TARGET CASHFLOW ($s in thousands) 2012 Q1 Actual Q2 Prelim Q3 FCST Q4 FCST Cash Flow From Operating Activities Net Income/Loss $ (16,725) $ (16,666) $ (15,704) $ 6,475 Reconciling Adjustments: Depreciation & Arnmortization 375 639 698 698 Changes in Operating Assets and Liabilities: Accounts Receivable 15,065 (26,174) 5,396 (40,041) (45,753) Other Current Assets and Other Assets 210 (3,258) 8,343 459 5,754 Inventory (2,546) (559) (13,041) 11,494 (4,653) Accounts Payable (12,422) 8,197 (2,787) 15,697 8,685 Other Current Liabilities and Other Liabilities (7,825) 10,498 8,903 14,829 26,404 Net Cash Provided ByOperating Activities (23,867) (27,322) (8,193) 9,611 Cash Flow From Investing Activities Purchase of Short-Term Investments Capital Expenditures ' (691) (897) (2,399) (848) Unrealized Gain/(Loss) On Investments ✓ r r r Net Cash Used In Investing Activities (691) (897) (2,399) (848) Cash Flow From Financing Activities Net Cash Provided by Financing Activities 392 10,334 10,000 Net Increase in Cash and Cash Equivalents (24,167) (17,721) (591) 8,763 Cash and Cash Equivalents at Beginning of Period 77,066 52,899 35,178 34,587 Cash and Cash Equivalents at End of Period $ 52,899 $ 35,178 $ 34,587 $ 43,350 NOTE: THE FINANCIAL FORECAST EXCLUDES CERTAIN GAAP , NON-CASH ITEMS: REVENUE RECOGNITION UNDER SOP97-2 AND EITF 08-1, FAS123R STOCK BASED COMPENSATION,. Tuesday, September 18, 12 EFTA01070317 2ND HALF 2012 BASELINE INCOME STATPIENT ($s in thousands) 2012 Q1 (A) Q2 (P) Q3 (F) Q4 (F) FY12 (F) Revenue Gross Units Sold 334 496 486 1,015 2,332 Net Units Sold 318 464 457 954 2,193 Net Revenue $ 28,453 $ 49,331 $ 53,974 $ 113,080 $ 244,838 Cost of Goods Sold 22,400 41,226 41,540 82,996 188,162 Gross Profit 6,053 8,105 12,434 30,084 56,676 Gross Margin % 21.3% 16.4% 23.0% 26.6% 23.1% Operating Expenses 22,366 24,540 27,848 31,779 106,533 OpEx as % net rev 78.6% 49.7% 51.6% 28.1% 43.5% Operating Income (16,313) (16,434) (15,414) (1,696) (49,857) Op Inc as % net rev -57.3% -33.3% -28.6% -1.5% -20.4% Interest and Other F (412) ' (232) (18) (148) (809) Pre-tax Income (16,725) (16,666) (15,431) (1,843) (50,666) Net Income $ (16,725) $ (16,666) $ (15,431) $ (1,843) $ (50,666) NOTE: THE FINANCIAL FORECAST EXCLUDES CERTAIN GAAP , NON-CASH ITEMS: REVENUE RECOGNITION UNDER SOP97-2 AND EITF O8-1, FAS123R STOCK BASED COMPENSATION,. Tuesday, September 18, 12 EFTA01070318 2ND HALF 2012 BASELINE BALANCE SHEET ($s in thousands) 2012 Q1 Actual Q2 Prelim Q3 Fcst Q4 Fcst Assets Current Assets: Cash and Cash Equivalents S 52,899 $ 35,178 $ 31,693 $ 44,631 Accounts Receivable, Net of Allow. 3,623 29,797 23,235 37,673 Other Receivables - - Inventory 14,796 15,355 29,480 22,260 Prepaid Inventory 2,921 2,772 590 668 Other Current Assets 4,020 8,130 2,500 2,500 Total Current Assets 78,260 91,232 87,498 107,732 Propertyand Equipment, Net 5,977 6,024 7,725 7,875 Other Long-term Assets 4,514 3,811 3,301 2,903 Total Assets S 88,751 $ 101,067 $ 98,524 $118,510 Liabilities and Shareholders' Equity Current Liabilities: Accounts Payable S 17,444 $ 25,641 $ 21,242 $ 30,528 Other Current Liabilities 32,632 43,129 50,417 62,960 Total Current Liabilities 50,075 68,770 71,659 93,488 Total Liabilities 50,075 68,770 71,659 93,488 Total Shareholders' Equity 38,676 32,297 26,866 25,022 Total Current Liab & Shareholders' Equity S 88,751 $ 101,067 $ 98,524 $118,510 NOTE: THE FINANCIAL FORECAST EXCLUDES CERTAIN GAAP , NON-CASH ITEMS: REVENUE RECOGNITION UNDER SOP97-2 AND EITF 08-1, FAS123R STOCK BASED COMPENSATION,. Tuesday, September 18, 12 EFTA01070319 2ND HALF 2012 BASELINE CASHFLOW ($s in thousands) 2012 Q1 Actual Q2 Prelim Q3 FCST Q4 FCST FY 12 (9 Cash Flow From Operating Activities Net Income/Loss $ (16,725) $ (16,666) $ (15,431) $ (1,843) $ (50,666) Reconciling Adjustments: Depreciation & Arnmortization 375 639 698 698 2,410 Changes in Operating Assets and Liabilities: Accounts Receivable 15,065 (26,174) 6,562 (14,438) (18,984) Other Current Assets and Other Assets 210 (3,258) 8,322 320 5,594 Inventory (2,546) (559) (14,125) 7,220 (10,010) Accounts Payable (12,422) 8,197 (4,399) 9,286 663 Other Current Liabilities and Other Liabilities (7,825) 10,498 7,288 12,543 22,503 Net Cash Provided ByOperating Activities (23,867) (27,322) (11,087) 13,786 (48,490) Cash Flow From Investing Activities Purchase of Short-Term Investments ► Capital Expenditures (691) (897) (2,399) (848) (4,835) Unrealized Gain/(Loss) On Investments Net Cash Used In Investing Activities (691) (897) (2,399) (848) (4,835) Cash Flow From Financing Activities Net Cash Provided by Financing Activities 392 10,334 10,000 20,726 Net Increase in Cash and Cash Equivalents (24,167) (17,721) (3,485) 12,938 (32,435) Cash and Cash Equivalents at Beginning of Period 77,066 52,899 35,178 31,693 77,066 Cash and Cash Equivalents at End of Period $ 52,899 $ 35,178 $ 31,693 $ 44,631 $ 44,631 NOTE: THE FINANCIAL FORECAST EXCLUDES CERTAIN GAAP , NON-CASH ITEMS: REVENUE RECOGNITION UNDER SOP97-2 AND EITF O8-1, FAS123R STOCK BASED COMPENSATION,. Tuesday, September 18, 12 EFTA01070320 JAWBONE EFTA01070321