Augme Technologies, Inc. ("Augme") is obligated, pursuant to Section 2.3 of the Amended and Restated Asset Purchase Agreement (the "Agreement") dated August 25, 2011 between Augme and Hipcricket, Inc. ("Hipcricket"), to pay a total Earnout (as defined in the Agreement) in the amount of $21,999,780. One-half of the Earnout was allocated pro rata among the former stockholders of Hipcricket (the "Stockholder Earnout") and one-half of the Earnout was allocated among current and former employees (the "Employee Earnout").

As reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on August 30, 2012, on August 25, 2012 Augme paid the Stockholder Earnout in shares of its common stock valued at $2.00 per share.

In accordance with the Agreement, Augme elected to pay the net amount of the Employee Earnout after tax withholding in shares of its common stock valued at $2.00 per share. Accordingly, on November 2, 2012, Augme issued a total of 3,734,835 shares of common stock (the "Employee Earnout Shares") in full satisfaction of the Employee Earnout.

The shares of common stock issued in payment of the Employee Earnout were issued pursuant to Section 4(a)(2) of the Securities Act of 1933 inasmuch as the employees' status relative to the issuer afforded them effective access to the information registration would otherwise provide and Augme did not engage in any general advertisement or general solicitation in connection with the offering of the Employee Earnout Shares.