Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 27, 2012

SYNCHRONOSS TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (866) 620-3940

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Table of Contents

TABLE OF CONTENTS

2

Table of Contents

EXPLANATORY NOTE

On December 27, 2012, Synchronoss Technologies, Inc. (“Synchronoss” or the “Company”) filed a Current Report on Form 8-K (the “Initial Form 8-K”) reporting the acquisition by Synchronoss Technologies Ireland, Ltd. (“Synchronoss Ireland”), a wholly owned subsidiary of Synchronoss, of Newbay Software Limited (“Newbay”).  This amendment to the Initial Form 8-K amends and supplements the information required pursuant to Item 9.01(b) of Form 8-K.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements of Business Acquired

The Consolidated Financial Statements of Newbay as of December 31, 2010 and 2011 and for the years ended December 31, 2010 and 2011 and accompanying consolidated notes are included as Exhibit 99.1 to this Current Report on Form 8-K/A.

The Unaudited Condensed Consolidated Financial Statements of Newbay as of September 30, 2012 and for the nine-month periods ended September 30, 2011 and 2012 and accompanying consolidated notes are included as Exhibit 99.2 to this Current Report on Form 8-K/A.

(b) Pro Forma Financial Information

The following Unaudited Pro Forma Condensed Consolidated Combined Financial Statements are included as Exhibit 99.3 to this Current Report on Form 8-K/A:

(i)    Unaudited Pro Forma Condensed Consolidated Combined Balance Sheet as of September 30, 2012

(ii)   Unaudited Pro Forma Condensed Consolidated Combined Statements of Operations for the year ended December 31, 2011 and the nine-month period ended September 30, 2012

(iii)  Notes to the Unaudited Pro Forma Condensed Consolidated Combined Financial Statements

(d)  Exhibits

3

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

4

Table of Contents

SYNCHRONOSS TECHNOLOGIES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(In thousands)

EXHIBITS INDEX

5

Exhibit 23

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement (Form S-8 No. 333-136088)  pertaining to the 2006 Equity Incentive Plan, Registration Statement (Form S-3 No. 333-164619) of Synchronoss Technologies, Inc., Registration Statement (Form S-8 No. 333-167000) pertaining to the 2006 Equity Incentive Plan, Registration Statement (Form S-8 No. 333-168745) pertaining to the 2010 New Hire Equity Incentive Plan, and Registration Statement (Form S-8 No. 333-179544) pertaining to the Employee Stock Purchase Plan of our report dated March 7, 2013, relating to the consolidated financial statements of Newbay Software Limited and subsidiaries (the “Company”) appearing in this Form 8-KA of Synchronoss Technologies, Inc.

Exhibit 99.1

NewBay Software Limited

Non-Statutory Consolidated Financial Statements

As of January 1, 2010 and December 31, 2010 and 2011 and for the Years
Ended December 31, 2010 and 2011

Non-Statutory Consolidated Financial Statements 2010 and 2011

Independent Auditors’ Report

To the Board of Directors of

NewBay Software Limited

Dublin, Ireland

We have audited the accompanying consolidated statement of financial position of NewBay Software Limited and its subsidiaries (the “Company”), as of January 1, 2010 and December 31, 2010 and 2011 and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2010 and 2011.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our audit opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of NewBay Software Limited and its subsidiaries as of January 1, 2010 and December 31, 2010 and 2011, and the results of their operations and their cash flows for the years ended December 31, 2010 and 2011 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

In these non-statutory consolidated financial statements the Company adopted IFRS effective January 1, 2010.  A reconciliation of amounts previously reported in accordance with generally accepted accounting principles in Ireland to those reported under IFRS is set out in note 27.

/s/ DELOITTE & TOUCHE

Dublin

Ireland

March 7, 2013

F-2

NewBay Software Limited

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

F-3

NewBay Software Limited

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

F-4

NewBay Software Limited

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

F-5

NewBay Software Limited

CONSOLIDATED STATEMENTS OF CASH FLOWS

F-6

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS

1.              General information

NewBay Software Limited (the “Company”) and subsidiaries (together with the Company, the “Group”), an Ireland corporation, was formed on November 28, 2002.  The address of the registered office is The Academy, 42 Pearse Street, Dublin 2, Ireland.

The Group has offices in the US and Ireland and it is engaged in digital content services, enabling operators and device makers to deliver a lifetime of content experiences across connected devices such as mobiles, PCs, tablets and TVs. NewBay provides an open, white label software platform, called LifeCache, that powers cloud-based services for storing, sharing, accessing and organising digital content across any Internet connected device. Access to the software is either provided through a hosting arrangement or where the customer runs the software on their own hardware the Group provides on-going support and maintenance.

2.              Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1                     Statement of compliance

The Group financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and their interpretations issued by the International Accounting Standards Board (“IASB”).

2.2                     Basis of preparation

The consolidated financial statements have been prepared under the historical cost convention and in accordance with the Group’s accounting policies under IFRS. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The financial statements for the years ended December 31, 2010 and 2011 have been presented for the first time under IFRS with effect from the transition date of January 1, 2010. The impact on the reported results, financial position and cash flows of the Group on transition to IFRS is set out in Note 27.

IFRS applied by the Group in the preparation of these financial statements is that which was effective at December 31, 2011.

2.3                     New and revised IFRSs issued but not yet effective

Standards issued but not yet effective up to the date of issuance of the Group’s financial statements are listed below. This listing is of standards and interpretations issued, which the Group reasonably expects to be applicable at a future date.

·       IFRS 9 “Financial Instruments” (effective for annual periods beginning on or after January 1, 2015) IFRS 9 is the first Phase of the Board’s project to replace IAS 39 “Financial Instruments: Recognition and Measurement” (“IAS 39”) and deals with the classification and measurement of financial assets and financial liabilities. The IASB intends to expand IFRS 9 in subsequent phases in order to add new requirements for impairment and hedge accounting.

·       IFRS 13 “Fair Value Measurement” (effective for annual periods beginning on or after January 1, 2013) IFRS 13 provides new guidance on fair value measurement and disclosure requirements. These requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs.  IFRS 13 provides a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs.  Disclosure requirements are enhanced and apply to all assets and liabilities measured at fair value.

F-7

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

·       IAS 1 (Amendment) “Presentation of Financial Statements” (effective for annual periods beginning on or after July 1, 2012)   The amendment requires entities to separate items presented in other comprehensive income into two groups, based on whether or not they may be recycled to profit or loss in the future.

·       IFRS 7 (Amendment) “Financial Instruments: Disclosures” (effective for annual periods beginning on or after January 1, 2013) The IASB has published this amendment to include information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position.

·        IAS 32 (Amendment) “Financial Instruments: Presentation” (effective for annual periods beginning on or after January 1, 2014). This amendment to the application guidance in IAS 32 clarifies some of the requirements for offsetting financial assets and financial liabilities on the statement of financial position.

In May 2011, a package of five standards on consolidation, joint arrangements, associates and disclosures was issued, including IFRS 10, IFRS 11, IFRS 12, IAS 27 (as revised in 2011) and IAS 28 (as revised in 2011).  Key requirements of these five standards are described below.

·        IFRS 10 “Consolidated Financial Statements” (effective for annual periods beginning on or after January 1, 2013) replaces the part of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements. SIC-12 Consolidation — Special Purpose Entities will be withdrawn upon the effective date of IFRS 10. Under IFRS 10, there is only one basis for consolidation, that is, control. In addition, IFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to effect the amount of the investor’s return. Extensive guidance has been added in IFRS 10 to deal with complex scenarios.

·        IFRS 11 “Joint Arrangements” (effective for annual periods beginning on or after January 1, 2013) replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. Standing Interpretations Committee (“SIC”) 13 Jointly Controlled Entities — Non-monetary Contributions by Venturers will be withdrawn upon the effective date of IFRS 11. Under IFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast, under IAS 31, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly controlled operations. In addition, joint ventures under IFRS 11 are required to be accounted for using the equity method of accounting, whereas jointly controlled entities under IAS 31 can be accounted for using the equity method of accounting or proportional consolidation.

·        IFRS 12 “Disclosure of Interests in Other Entities” (effective for annual periods beginning on or after January 1, 2013) is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than those in the current standards.

In June 2012, amendments to IFRS 10, IFRS 11 and IFRS 12 were issued to clarify certain transitional guidance on the application of these IFRSs for the first time.

The Group has not voluntarily applied any of the new or amended regulations mentioned above before their binding date of application and is currently assessing the impact of the standards on consolidated financial statements.

F-8

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.4                     Consolidation

(a)                       Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated.

2.5                     Revenue Recognition

The Group derives its revenue from the sale of software licences, related hardware, customisation and deployment services, hosting services and maintenance. Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied or services rendered, stated net of discounts, returns and value added taxes.

(a)    Sale of hardware

The Group recognises revenue from the sale of hardware when the goods are delivered and title has passed, at which time all of the following conditions are satisfied:

·                  the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

·                  the Group retains neither continuing managerial involvement to the degrees usually associated with ownership nor effective control over the goods sold;

·                  the amount of revenue can be reliably measured;

·                  it is probable that future economic benefits will flow to the entity; and

·                  the costs incurred or to be incurred in respect of the transaction can be measured reliably.

(b)    Rendering of services

Set-up fees for service arrangements are deferred and recognised on a straight-line basis over the term of the contract since these amounts would not have been paid by the customer without the related hosting or maintenance arrangement. Software licence fees are also deferred and recognised on a straight line basis over the term of the contract.

Professional service arrangements can include customisation and deployment services. They can be provided on a standalone basis or supplied in conjunction with software arrangements. They are accounted for separately when the professional services have standalone value to the customer and there is reliable evidence of the fair value of the professional services. When accounted for separately, revenues are recognised as services are performed and all other elements of revenue recognition have been satisfied. Where professional service arrangements do not to qualify to be accounted for separately, revenues are recognised rateably over the term of the contract.

Hosting services and maintenance and support revenues are recognised rateably over the term of the contract.

Deferred revenues represent billings to customers for services in advance of performance of the services.

Amounts recoverable on contracts represent revenues that have been earned, having met the criteria for revenue recognition, but not yet invoiced.

F-9

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.6                     Foreign currency translation

a)                           Functional and presentational currency

The Group’s financial statements are presented in euros.

b)                           Foreign currency transactions

Items included in the financial statements of a subsidiary are measured using the currency of the primary economic environment in which the subsidiary operates (the “functional currency”). Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing at the reporting date. Exchange movements on these are recognised in the consolidated statement of comprehensive income in the period in which they arise.

c)                            Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into euros at exchange rates at the reporting date. The income and expenses of foreign operations are translated into euro at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income, and presented in the exchange translation reserve in equity

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such item are considered to form part of the net investment in the foreign operation and are recognised in other comprehensive income, and presented in the exchange translation reserve in equity.

2.7                     Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, over the lease term.

The estimated useful lives of tangible fixed assets by reference to which depreciation has been calculated are as follows:

Assets under construction are carried at cost less any recognised impairment loss. Depreciation on these assets, on the same basis as other property, plant and equipment, commences when the assets are ready for their intended use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of an asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and it is recognised in the consolidated statement of comprehensive income.

F-10

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.8                     Impairment of property, plant and equipment

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash inflows. Property, plant and equipment that suffered an impairment are reviewed subsequently for possible reversal of the impairment at each reporting date.

2.9                     Research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:

·                                the technical feasibility of completing the intangible asset so that it will be available for use or sale.

·                                its intention to complete the intangible asset and use or sell it.

·                                its ability to use or sell the intangible asset.

·                                how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

·                                the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

·                                its ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Development costs are expensed as incurred unless they meet the criteria (noted above) for deferral and amortisation. Software development costs incurred to date did not meet these criteria and have been expensed as incurred.

2.10              Trade receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer) they are classified as current assets. If not they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.11              Cash and cash equivalents

Cash and cash equivalents comprise cash and short term cash deposits with an original maturity of three months or less, net of outstanding overdrafts. The carrying amounts of these assets is approximately equal to their fair value due to their short term nature.

F-11

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.12              Share capital

Ordinary shares, “B” ordinary shares and Series “A” Convertible Preference shares are classified as equity. Cumulative redeemable preference shares are classified as a financial liability.

2.13              Financial assets, liabilities and equity instruments

Financial assets and liabilities are recognised on the balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders’ funds) only to the extent that they meet the following two conditions:

(i)                           They include no contractual obligation upon the Group to deliver cash or other financial assets to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and

(ii)                        Where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company’s own equity instruments or is derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability.

Finance payments associated with financial liabilities are dealt with as part of interest payable and similar charges.

2.14              Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.15              Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of comprehensive income over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.

Preference shares, which are mandatorily redeemable on a specific date, are classified as financial liabilities. The dividends on these preference shares are recognised in the consolidated statement of comprehensive income as finance costs.

2.16              Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for this intended use or sale, are added to the cost of those assets, until such time as the assets are ready for their intended use or sale.  All other borrowing costs are recognised in the consolidated statement of comprehensive income in the period in which they are incurred.

F-12

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.17              Provisions

Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows when the effect of the time value of money is material.

2.18              Taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income, except to the extent that it relates to items recognised directly in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax is charged or credited in the consolidated statement of comprehensive income, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income

Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2.19              Employee benefits

(a) Defined contribution retirement benefit plan

The Group companies operate a defined contribution retirement benefit plan. Payments to the defined contribution retirement benefit scheme are charged as an expense when employees have rendered service entitling them to the contributions.

F-13

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(b) Profit-sharing and bonus plans

The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

2.20              Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

2.21              Finance leases

The Group leases certain office and computer equipment. Leases of office and computer equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased equipment and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included as appropriate in current and non-current liabilities. The interest element of the finance cost is charged to the consolidated statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The office and computer equipment capitalised under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

2.22              Government grants

Government grants are recognized where there is a reasonable assurance that the grant will be received and all attaching conditions will be complied with.

Capital grants are credited to the balance sheet when the related eligible expenditure is incurred. Annual transfers to the consolidated statement of comprehensive income are made to amortize such grants at the same rate at which the related fixed assets are depreciated.

Revenue grants are recognized in the consolidated statement of comprehensive income in the period in which the related expenditure is incurred.

Research and Development tax credits received are treated as a government grant deducted in reporting the related expenditure.

F-14

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.23              Share based payments

The Company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of the shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.

Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

All employee share options were exercised on October 24, 2011. The amount that would have otherwise been recognised over the remainder of the vesting period was recognised immediately.

2.24              Effective interest method

Revenue and expense on financial instruments classified as loans and receivables or financial liabilities at amortised cost, are recognised on an effective interest rate basis. This calculation takes into account interest received or paid and fees and commissions paid or received that are integral to the yield as well as incremental transaction costs. The effective interest rate is the rate that discounts the expected future cash flows over the expected life of the financial instrument or, where appropriate, a shorter period, to the net carrying amount of the financial instrument at initial recognition.

F-15

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.                                 Financial risk management

Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure for the Group consists of net debt (loans as detailed in Note 12 offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves, and accumulated deficits as detailed in the Consolidated Statement of Changes in Equity).

The Group seeks to reduce exposures to foreign exchange and other financial risks, to ensure liquidity is available to meet the foreseeable needs of the Group and to invest cash assets safely and profitably. The Group does not engage in speculative trading in financial instruments and transacts only in relation to underlying business requirements.

The Board provides principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk and credit risk.

Financial risk management objectives

The Group’s finance function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Foreign exchange risk management

The Group seeks to reduce exposures to foreign exchange and other financial risks, to ensure liquidity is available to meet the foreseeable needs of the Group and to invest cash assets safely and profitably. The Group does not engage in speculative trading in financial instruments and transacts only in relation to underlying business requirements.

Foreign exchange rate risk is the risk that the fair value of future cash flows will fluctuate because of the changes in foreign exchange rates. The Group’s foreign currency exposures are principally to the US Dollar.

Although a substantial proportion of the Group’s revenue and profit is earned outside Ireland, subsidiaries generally only trade in their own currency. The Group is therefore not subject to any significant foreign exchange transactional exposure within these subsidiaries. The Group’s principal exposure to foreign currency, therefore, lies in the translation of overseas profits into Euro.

The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

F-16

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of January 1, 2010, December 31, 2010 and 2011, if the currency had strengthened or weakened by 10% against the US dollar with all other variables held constant, the loss for the year would have been impacted by €nil.  Equity would have been €585,131 lower and €715,161 higher (December 31, 2010: €33,550 lower and €41,005 higher, January 1, 2010: €63,474 lower and €77,579 higher) mainly as a result of foreign exchange gains/losses on translation of US subsidiary.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages its exposure to liquidity risk by monitoring rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. This table includes both interest and principal cash flows.

F-17

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit risk

Credit risk is the risk that a counterparty may default on their obligation to the Group in relation to settlement. The Group’s credit risk primarily arises from trade and other receivables. The amounts included in the balance sheet are net of allowances for impaired receivables. An allowance for impaired receivables is made when there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of cash flows. Each local entity is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered.

4.              Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.  The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period or in the period of the revision and future periods if the revision affects both current and future periods.

The directors consider the critical accounting policies to be the recognition of revenue, going concern and valuation of warrants and share options.

Revenue recognition

Application of the accounting principles related to the measurement and recognition of revenue requires the Group to make judgments and estimates. Even for the same service, the Group often has to interpret contract terms to determine the appropriate accounting treatments and whether a contract containing multiple deliverables can be accounted for as separate units of accounting. Significant judgment is also required in determining the fair values of the separate units of accounting.

Revenue recognition is also impacted by various factors, including the credit-worthiness of the customer. Estimates of these factors are evaluated periodically to assess the adequacy of the estimates. If the estimates were changed, revenue would be impacted.

The Group provides professional services which can include customisation and deployment services. They may be provided on a standalone basis or supplied along with software transaction arrangements. When the professional services have standalone value to the customer and there is reliable evidence of fair value of the professional service they are accounted for separately by reference to their stage of completion.

Use of the stage-of-completion method requires the Group to estimate the services performed to date as a proportion of the total services to be performed. Were the proportion of services performed to total services to be performed to differ by 10% from management’s estimates, the amount of revenue recognised in the year would be increased/ (decreased) by €81,228 if the proportion performed were increased/ (decreased).

Going concern

The Group has incurred losses in the current and previous years and is reporting significant net liabilities at the reporting date. Action has been taken to reduce these losses and the Group’s current ultimate parent company, Synchronoss Technologies Inc., has confirmed that it will continue to support the Group for a period of at least twelve months from the date of the latest consolidated statement of financial position enable liabilities to be met as they fall due.

F-18

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Valuation of warrants and share options

The Group has issued warrants, which are accounted for as financial liabilities through profit and loss.  As described in Notes 8 and 9, the Group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair value of its warrants and share options.  Notes 8 and 9 provide detailed information about the key assumptions used in the determination of the fair value of these financial instruments.

The Group believes that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of the financial instruments.

5.              Interest in subsidiaries

Set out below are the Group’s principal subsidiaries as of December 31, 2011 and 2010. Unless otherwise stated, the subsidiaries as listed below have share capital consisting solely of ordinary shares, which are held directly by the Group and the proportion of ownership interests held equals to the voting rights held by Group. The country of incorporation or registration is also their principal place of business.

F-19

NewBay Software Limited

NOTES TO THE NON-STATUTORY CONSOLIDATED FINANCIAL STATEMENTS

6.              Property, plant and equipment