Glu Reports Third Quarter 2009 Financial Results

For the quarter ended September 30, 2009, Glu reported revenues of $19.6
million compared to $23.9 million in the third quarter of 2008. GAAP
loss from operations and net loss were $(2.8) million and $(4.0)
million, respectively, compared to GAAP loss from operations and net
loss of $(54.2) million and $(56.9) million, respectively, in the third
quarter of 2008. GAAP loss per basic share was $(0.13) for the quarter
ended September 30, 2009, compared with a GAAP loss per basic share of
$(1.93) in the same period last year. GAAP net loss for the third
quarter of 2009 included $513,000 of royalty impairments and $919,000 in
restructuring charges.

For the quarter ended September 30, 2009, non-GAAP income from
operations, which excludes stock-based compensation expense,
amortization of intangibles arising from business combinations,
transitional expenses, goodwill impairments, restructuring charges and
MIG earnout expenses, was $300,000, compared to a loss of $(1.0) million
in the same period last year. Non-GAAP net loss, which includes foreign
currency exchange gains and losses primarily related to the revaluation
of assets and liabilities, was $(889,000) for the quarter ended
September 30, 2009, compared to a non-GAAP net loss of $(1.7) million in
the same period last year. Non-GAAP basic loss per share was $(0.03) for
the quarter ended September 30, 2009, compared to a non-GAAP basic loss
per share of $(0.06) in the same period last year.

The company achieved positive cash flow from operations for the second
consecutive quarter, generating $2.7 million in cash from operations
during the third quarter of 2009.

"We were pleased with the company's ability to exceed expectations for
the third consecutive quarter and remain optimistic that our recently
launched titles for the iPhone will improve our paid app ranking," said
Greg Ballard, chief executive officer of Glu. "We are also excited about
the upcoming launch of our social network game initiative and anticipate
our investment to gain traction as we develop and launch new titles in
this growing sector of the gaming market."

Ballard concluded, "With the increasing importance of quality content
for the mobile and social networking platforms, Glu remains well
positioned due to the quality of its game developers, worldwide reach
and stabilized capital structure."

A reconciliation of GAAP to non-GAAP results has been provided in the
financial statement tables included in this press release. An
explanation of these measures is also included below under the heading
"Non-GAAP Financial Measures."

The company ended the quarter with a cash and cash equivalents balance
of $9.9 million, and had $4.1 million outstanding on its line of credit.
The company has successfully fulfilled its fiscal 2009 obligations with
respect to the promissory notes issued to the former shareholders of MIG.

"Our ability to achieve positive cash flow from operations for the
second consecutive quarter highlights the company's commitment to
generate positive cash flow as we continue to invest in new platforms,"
said Eric R. Ludwig, Glu's chief financial officer. "With the strong
cash generation during the third quarter, Glu expects to attain its full
year cash flow objective and remains in position to continue investing
in new markets."

Business Outlook

The following forward-looking statements reflect expectations as of
November 3, 2009. Results may be materially different and are affected
by many factors, such as: consumer demand for mobile entertainment and
specifically Glu's mobile products; consumer demand for gaming on social
networks and specifically Glu's social network gaming products; consumer
demand for mobile handsets, including the next-generation platforms;
carriers' and distributors' marketing to consumers, including premium
deck placement; continued uncertainty in the global economic
environment; carriers' and other distributors' maintaining their
networks and provisioning systems to enable consumer purchases;
development delays on Glu's products; competition in the industry;
changes in foreign exchange rates; Glu's effective tax rate and other
factors detailed in this release and in Glu's SEC filings.

Fourth Quarter Expectations -- Quarter Ending December 31, 2009:

--
GAAP revenue is expected to be between $19.5 million and $20.0 million

--
GAAP net loss is expected to be between $(1.8) million and $(2.2)
million, or a net loss of between $(0.06) and $(0.07) per basic share

--
Non-GAAP operating income is expected to be between $600,000 and $1.0
million. Non-GAAP net income is expected to be between $300,000 and
$600,000, or a net income of $0.01 to $0.02 per diluted share, which
excludes $1.5 million for amortization of intangibles, approximately
$650,000 of anticipated stock-based compensation expense and
approximately $300,000 of restructuring charges

--
Our income tax expense in the fourth quarter of 2009 is expected to be
approximately $92,000

--
Weighted average common shares outstanding for the fourth quarter of
2009 are expected to be approximately 30.4 million basic and 31.2
million diluted

Full Year Expectations - Year Ending December 31, 2009:

--
GAAP revenue is expected to be approximately $79.8 to $80.3 million

--
GAAP net loss is expected to be between $(13.1) million and $(13.4)
million, or a loss of $(0.44) to $(0.45) per basic share

--
Non-GAAP operating income is expected to be between $2.8 million and
$3.2 million. Non-GAAP net loss is expected to be between a net loss
of $(600,000) and $(900,000) or a net loss of $(0.02) to $(0.03) per
basic share, which excludes $7.3 million for amortization of
intangibles, approximately $3.7 million of anticipated stock-based
compensation and the non-equity component of the MIG earnout,
approximately $1.7 million of restructuring charges and $300,000
related to un-hedged foreign exchange gains expected primarily on the
revaluation of assets and liabilities

--
Our income tax expense for the full year is expected to be
approximately $2.6 million

--
Weighted average common shares outstanding for the year ending
December 31, 2009 are expected to be approximately 29.9 million basic
and 30.1 million diluted

Quarterly Conference Call

Glu will discuss its quarterly results via teleconference today at 1:30
p.m. Pacific Time (4:30 p.m. Eastern Time). Please dial (877) 224-2002,
or if outside the U.S., (281) 312-0957, with conference ID # 37862580,
to access the conference call at least five minutes prior to the 1:30
p.m. Pacific Time start time. A live webcast and replay of the call will
also be available at http://www.glu.com/corp/Pages/investors.aspx
under the Investor Calendar and Webcasts menu. An audio replay will be
available between 2:30 p.m. Pacific Time, November 3, 2009, and 8:59
p.m. Pacific Time, November 10, 2009, by calling (800) 642-1687, or
(706) 645-9291, with conference ID # 37862580.

Use of Non-GAAP Financial Measures

To supplement Glu's unaudited condensed consolidated financial
statements presented in accordance with GAAP, Glu uses certain non-GAAP
measures of financial performance. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation from,
as a substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP, and may be different from
non-GAAP financial measures used by other companies. In addition, these
non-GAAP measures have limitations in that they do not reflect all of
the amounts associated with Glu's results of operations as determined in
accordance with GAAP. The non-GAAP financial measures used by Glu
include historical and estimated non-GAAP operating income/(loss),
non-GAAP net income/(loss) and non-GAAP basic and diluted net
income/(loss) per share. These non-GAAP financial measures exclude the
following items from Glu's unaudited consolidated statements of
operations:

--
Acquired in-process research and development

--
Amortization of intangible assets

--
Stock-based compensation expense

--
Gain/impairment of auction-rate securities

--
Restructuring charges

--
MIG earnout expenses

--
Transitional expenses

--
Impairment of goodwill

--
Foreign currency exchange gains and losses primarily related to the
revaluation of assets and liabilities

Glu may consider whether other significant non-recurring items that
arise in the future should also be excluded in calculating the non-GAAP
financial measures it uses.

Glu believes that these non-GAAP financial measures, when taken together
with the corresponding GAAP financial measures, provide meaningful
supplemental information regarding Glu's performance by excluding
certain items that may not be indicative of Glu's core business,
operating results or future outlook. Glu's management uses, and believes
that investors benefit from referring to, these non-GAAP financial
measures in assessing Glu's operating results, as well as when planning,
forecasting and analyzing future periods. These non-GAAP financial
measures also facilitate comparisons of Glu's performance to prior
periods.

Cautions Regarding Forward-Looking Statements

This news release contains forward-looking statements, including those
regarding our "Business Outlook" ("Fourth Quarter Expectations -- Quarter
Ending December 31, 2009" and "Full Year Expectations - Year Ending
December 31, 2009"); our expectations that our recently launched titles
for iPhone will improve our paid app ranking; our expectations that our
investment in our social network game initiative will gain traction as
we develop and launch new titles in this growing sector of the gaming
market; our belief that we will remain well positioned in the mobile and
social networking platforms due to the quality of our game developers,
worldwide reach and stabilized capital structure; our plan to generate
positive cash flow as we continue to invest in new platforms and our
expectation that we can attain our full year cash flow objective and
remain in position to continue investing in new markets. These
forward-looking statements are subject to material risks and
uncertainties that could cause actual results to differ materially from
those in the forward-looking statements. Investors should consider
important risk factors, which include: the risks identified under
"Business Outlook"; the risk that the mobile gaming and social network
gaming markets are not growing at the rate that we anticipate or that we
will be unable to capitalize on any such growth; the risk that our
expense control initiatives will be insufficient to enable us to achieve
positive cash flow from operations for the full fiscal year; the risk
that we may have insufficient working capital to effectively execute our
business strategy, including exploiting next-generation platforms and
social networking platforms while continuing to address our traditional
carrier-based business, and that, even if we do execute our business
strategy, we may not derive the revenues that we expect; the risk that
we may fall out of compliance with the financial and other covenants in
our credit facility; the risk that we may lose a key intellectual
property license or key carrier distribution agreement; the risk that
growth of next-generation handsets and advanced networks does not grow
as significantly as we anticipate; the risk that our development
expenses for games for next-generation handsets and social networking
platforms are greater than we anticipate; the risk that our recently and
newly launched games are less popular than anticipated; the risk that
changes in wireless carrier plans with their customers may adversely
impact sales of our games; the risk that sales of our original
intellectual property titles will not continue to favorably impact
product mix; the risk that our newly released games will be of a quality
less than desired by reviewers and consumers; the risk that the mobile
games and social network gaming markets are smaller than anticipated;
the risk that Greg Ballard may elect to leave our company before we
retain a suitable successor or that we are otherwise unable to effect a
smooth transition of the CEO position; and other risks detailed under
the caption "Risk Factors" in our Form 10-Q filed with the Securities
and Exchange Commission on August 10, 2009 and our other SEC filings.
You can locate these reports through our website at http://www.glu.com/corp/Pages.investors.
We are under no obligation, and expressly disclaim any obligation, to
update or alter our forward-looking statements whether as a result of
new information, future events or otherwise.

About Glu Mobile

Glu (NASDAQ:GLUU) is a leading global publisher of mobile games. Its
portfolio of top-rated games includes original titles Glyder, Bonsai
Blast, Super K.O. Boxing!, Stranded and Brain Genius, and titles based
on major brands from partners including Activision, Atari, Harrah's,
Hasbro, Konami, Microsoft, PlayFirst, PopCap Games, SEGA, Sony and
Warner Bros. Founded in 2001, Glu is based in San Mateo, Calif. and has
offices in Australia, Brazil, Canada, Chile, China, England, France,
Germany, Italy, Mexico, Poland, Russia and Spain. Consumers can find
high-quality, fresh entertainment created exclusively for their mobile
phones wherever they see the 'g' character logo or at www.glu.com.

GLU MOBILE, GLU, BONSAI BLAST, SUPER K.O. BOXING!, STRANDED, BRAIN
GENIUS and the 'g' character logo are trademarks of Glu Mobile Inc.

In the financial tables below, Glu has provided a reconciliation of the
most comparable GAAP financial measure to each of the historical
non-GAAP financial measures used in this press release.

 Glu Mobile Inc.
 Consolidated Balance Sheets
 (in thousands)
 (unaudited)
                                              September 30,       December 31,
                                              2009                2008
 ASSETS
 Cash and cash equivalents                    $    9,861          $    19,166
 Accounts receivable, net                          16,059              19,826
 Prepaid royalties                                 10,126              15,298
 Prepaid expenses and other current assets         2,369               2,704
 Total current assets                              38,415              56,994
 Property and equipment, net                       3,620               4,861
 Prepaid royalties                                 3,391               4,349
 Other long-term assets                            1,015               930
 Intangible assets, net                            14,524              20,320
 Goodwill                                          4,608               4,622
 Total assets                                      65,573              92,076
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Accounts payable                             $    4,090          $    6,569
 Accrued liabilities                               768                 686
 Accrued compensation                              2,511               2,184
 Accrued royalties                                 12,964              18,193
 Accrued restructuring                             1,246               1,000
 Deferred revenues                                 581                 727
 Current portion of long-term debt                 12,564              14,000
 Total current liabilities                         34,724              43,359
 Other long-term liabilities                       10,107              11,798
 Long-term debt, less current portion              3,062               10,125
 Total liabilities                                 47,893              65,282
 Common stock                                      3                   3
 Additional paid-in capital                        187,230             184,757
 Deferred stock-based compensation                 -                   (11      )
 Accumulated other comprehensive income            855                 1,170
 Accumulated deficit                               (170,408 )          (159,125 )
 Stockholders' equity                              17,680              26,794
 Total liabilities and stockholders' equity   $    65,573         $    92,076

Glu Mobile Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                                                                 Three Months Ended                   Nine Months Ended
                                                                 September 30,     September 30,      September 30,      September 30,
                                                                 2009              2008               2009               2008
Revenues                                                         $    19,645       $    23,894        $    60,292        $    68,190
Cost of revenues:
Royalties                                                             5,302             5,753              16,782             16,642
Impairment of prepaid royalties and guarantees                        513               1,921              1,102              2,155
Amortization of intangible assets                                     1,420             3,247              5,680              8,089
Total cost of revenues                                                7,235             10,921             23,564             26,886
Gross profit                                                          12,410            12,973             36,728             41,304
Operating expenses:
Research and development                                              6,662             9,223              19,707             24,604
Sales and marketing                                                   3,556             6,004              11,214             17,828
General and administrative                                            3,986             5,085              12,376             16,576
Amortization of intangible assets                                     58                67                 160                204
Restructuring charge                                                  919               126                1,432              287
Acquired in-process research and development                          -                 -                  -                  1,110
Impairment of goodwill                                                -                 46,618             -                  46,618
Total operating expenses                                              15,181            67,123             44,889             107,227
Loss from operations                                                  (2,771 )          (54,150 )          (8,161  )          (65,923 )
Interest and other income/(expense), net:
Interest income                                                       7                 127                86                 844
Interest expense                                                      (279   )          (30     )          (1,008  )          (50     )
Other income/(expense), net                                           (28    )          (1,991  )          272                (2,175  )
Interest and other income/(expense), net                              (300   )          (1,894  )          (650    )          (1,381  )
Loss before income taxes                                              (3,071 )          (56,044 )          (8,811  )          (67,304 )
Income tax provision                                                  (917   )          (822    )          (2,472  )          (2,165  )
Net loss                                                         $    (3,988 )     $    (56,866 )     $    (11,283 )     $    (69,469 )
Net loss per share - basic and diluted                           $    (0.13  )     $    (1.93   )     $    (0.38   )     $    (2.37   )
Weighted average common shares outstanding - basic and diluted        29,864            29,470             29,694             29,311
Stock-based compensation expense included in:
Research and development                                         $    166          $    261           $    546           $    511
Sales and marketing                                                   170               1,298         $    480                3,903
General and administrative                                            338               569           $    1,176              1,716
Total stock-based compensation expense                           $    674          $    2,128         $    2,202         $    6,130

Glu Mobile Inc.                                      Three Months Ended
GAAP to Non-GAAP Reconciliation                      September 30, 2009
(in thousands, except per share data)
(unaudited)                                          GAAP             Adjustments   Non-GAAP
Amortization of intangible assets                          1,420      (1,420  )           -
Total cost of revenues                                     7,235      (1,420  )           5,815
Gross profit                                               12,410     1,420               13,830
Research and development                                   6,662      (166    )   a       6,496
Sales and marketing                                        3,556      (170    )   a       3,386
General and administrative                                 3,986      (338    )   a       3,648
Amortization of intangible assets                          58         (58     )           -
Restructuring charge                                       919        (919    )           -
Total operating expenses                                   15,181     (1,651  )           13,530
Income/(loss) from operations                              (2,771  )  3,071               300
Interest and other expense, net                            (300    )  28          b       (272   )
Income/(loss) before income taxes                          (3,071  )  3,099               28
Net loss                                                   (3,988  )  3,099               (889   )
Reconciliation of net loss and net loss per share:
Non-GAAP net loss per share - basic                  $     (0.13   )                $     (0.03  )
Non-GAAP net loss per share - diluted                $     (0.13   )                $     (0.03  )
Shares used in computing basic net loss per share          29,864                         29,864
Shares used in computing diluted net loss per share        29,864                         29,864
a - Excluded amount represents stock-based compensation expense of
$674
b - Excluded amount represents foreign currency exchange loss
Glu Mobile Inc.                                      Three Months Ended
GAAP to Non-GAAP Reconciliation                      September 30, 2008
(in thousands, except per share data)
(unaudited)                                          GAAP             Adjustments   Non-GAAP
Amortization of intangible assets                          3,247      (3,247  )           -
Total cost of revenues                                     10,921     (3,247  )           7,674
Gross profit                                               12,973     3,247               16,220
Research and development                                   9,223      (453    )   a       8,770
Sales and marketing                                        6,004      (1,932  )   a       4,072
General and administrative                                 5,085      (711    )   a       4,374
Amortization of intangible assets                          67         (67     )           -
Restructuring charge                                       126        (126    )           -
Impairment of goodwill                                     46,618     (46,618 )           -
Total operating expenses                                   67,123     (49,907 )           17,216
Loss from operations                                       (54,150 )  53,154              (996   )
Interest and other income/(expense), net                   (1,894  )  1,982       b       88
Loss before income taxes                                   (56,044 )  55,136              (908   )
Net loss                                                   (56,866 )  55,136              (1,730 )
Reconciliation of net loss and net loss per share:
Non-GAAP net loss per share - basic                  $ (1.93  )     $ (0.06  )
Non-GAAP net loss per share - diluted                $ (1.93  )     $ (0.06  )
Shares used in computing basic net loss per share      29,470         29,470
Shares used in computing diluted net loss per share    29,470         29,470
a - Excluded amount represents stock-based compensation expense of
$2,128, Superscape and MIG transitional expenses of $347 and MIG
earnout expenses of $621
b - Excluded amount represents impairment of auction-rate securities
of $682 and foreign currency exchange loss of $1,300

Glu Mobile Inc.                                      Nine Months Ended
GAAP to Non-GAAP Reconciliation                      September 30, 2009
(in thousands, except per share data)
(unaudited)                                          GAAP             Adjustments   Non-GAAP
Amortization of intangible assets                          5,680      (5,680  )           -
Total cost of revenues                                     23,564     (5,680  )           17,884
Gross profit                                               36,728     5,680               42,408
Research and development                                   19,707     (546    )   a       19,161
Sales and marketing                                        11,214     (1,355  )   a       9,859
General and administrative                                 12,376     (1,176  )   a       11,200
Amortization of intangible assets                          160        (160    )           -
Restructuring charge                                       1,432      (1,432  )           -
Total operating expenses                                   44,889     (4,669  )           40,220
Income/(loss) from operations                              (8,161  )  10,349              2,188
Interest and other expense, net                            (650    )  (270    )   b       (920   )
Income/(loss) before income taxes                          (8,811  )  10,079              1,268
Net loss                                                   (11,283 )  10,079              (1,204 )
Reconciliation of net loss and net loss per share:
Non-GAAP net loss per share - basic                  $     (0.38   )                $     (0.04  )
Non-GAAP net loss per share - diluted                $     (0.38   )                $     (0.04  )
Shares used in computing basic net loss per share          29,694                         29,694
Shares used in computing diluted net loss per share        29,694                         29,694
a - Excluded amount represents stock-based compensation expense of
$2,202 and MIG earnout expense of $875
b - Excluded amount represents foreign currency exchange gains
Glu Mobile Inc.                                      Nine Months Ended
GAAP to Non-GAAP Reconciliation                      September 30, 2008
(in thousands, except per share data)
(unaudited)                                          GAAP             Adjustments   Non-GAAP
Amortization of intangible assets                          8,089      (8,089  )           -
Total cost of revenues                                     26,886     (8,089  )           18,797
Gross profit                                               41,304     8,089               49,393
Research and development                                   24,604     (931    )   a       23,673
Sales and marketing                                        17,828     (5,828  )   a       12,000
General and administrative                                 16,576     (2,453  )   a       14,123
Amortization of intangible assets                          204        (204    )           -
Restructuring charge                                       287        (287    )           -
Acquired in-process research and development               1,110      (1,110  )           -
Impairment of goodwill                                     46,618     (46,618 )           -
Total operating expenses                                   107,227    (57,431 )           49,796
Loss from operations                                       (65,923 )  65,520              (403   )
Interest and other income/(expense), net                   (1,381  )  2,201       b       820
Income/(loss) before income taxes                          (67,304 )  67,721              417
Net loss                                                   (69,469 )  67,721              (1,748 )
Reconciliation of net loss and net loss per share:
Non-GAAP net loss per share - basic                  $ (2.37  )     $ (0.06  )
Non-GAAP net loss per share - diluted                $ (2.37  )     $ (0.06  )
Shares used in computing basic net loss per share      29,311         29,311
Shares used in computing diluted net loss per share    29,311         29,311
a - Excluded amount represents stock-based compensation expense of
$6,130, Superscape and MIG transitional expenses of $1,218 and MIG
earnout expenses of $1,864
b - Excluded amount represents impairment of auction-rate securities
of $1,152 and foreign currency exchange loss of $1,049

In addition to the reasons stated above, which are generally applicable
to each of the items Glu excludes from its non-GAAP financial measures,
Glu believes it is appropriate to exclude certain items for the
following reasons:

Acquired In-Process Research and Development. Glu recorded
charges for acquired in-process research and development ("IPR&D"),
included in its GAAP presentation of operating expenses, in connection
with its acquisition of Superscape. These amounts were expensed on the
acquisition date as the acquired technology had not yet reached
technological feasibility and had no future alternative uses. There can
be no assurance that the acquisition of businesses, products or
technologies in the future will not result in substantial charges for
acquired IPR&D. Accordingly, acquired IPR&D is non-recurring and
generally unpredictable. Glu believes it is useful to provide, as a
supplement to its GAAP operating results, a non-GAAP financial measure
that excludes acquired IPR&D.

Amortization of Intangible Assets. When analyzing the operating
performance of an acquired entity, Glu's management focuses on the total
return provided by the investment (i.e., operating profit generated from
the acquired entity as compared to the purchase price paid) without
taking into consideration any allocations made for accounting purposes.
Because the purchase price for an acquisition necessarily reflects the
accounting value assigned to intangible assets (including acquired
in-process technology and goodwill), when analyzing the operating
performance of an acquisition in subsequent periods, Glu's management
excludes the GAAP impact of acquired intangible assets to its financial
results. Glu believes that such an approach is useful in understanding
the long-term return provided by an acquisition and that investors
benefit from a supplemental non-GAAP financial measure that excludes the
accounting expense associated with acquired intangible assets.

In addition, in accordance with GAAP, Glu generally recognizes expenses
for internally-developed intangible assets as they are incurred until
technological feasibility is reached, notwithstanding the potential
future benefit such assets may provide. Unlike internally-developed
intangible assets, however, and also in accordance with GAAP, Glu
generally capitalizes the cost of acquired intangible assets and
recognizes that cost as an expense over the useful lives of the assets
acquired (other than goodwill, which is not amortized, and acquired
in-process technology, which is expensed immediately, as required under
GAAP). As a result of their GAAP treatment, there is an inherent lack of
comparability between the financial performance of internally-developed
intangible assets and acquired intangible assets. Accordingly, Glu
believes it is useful to provide, as a supplement to its GAAP operating
results, a non-GAAP financial measure that excludes the amortization of
acquired intangibles.

Stock-Based Compensation Expense. Glu adopted SFAS 123R,
"Share-Based Payment" beginning in its fiscal year ended December 31,
2006. When evaluating the performance of its consolidated results, Glu
does not consider stock-based compensation charges. Likewise, Glu's
management team excludes stock-based compensation expense from its short
and long-term operating plans. In contrast, Glu's management team is
held accountable for cash-based compensation and such amounts are
included in its operating plans. Further, when considering the impact of
equity award grants, Glu places a greater emphasis on overall
stockholder dilution rather than the accounting charges associated with
such grants.

Glu believes it is useful to provide a non-GAAP financial measure that
excludes stock-based compensation in order to better understand the
long-term performance of its business. In addition, given Glu's adoption
of SFAS 123R beginning with its fiscal year ended December 31, 2006, Glu
believes that a non-GAAP financial measure that excludes stock-based
compensation will facilitate the comparison of its year-over-year
results.

Gain/Impairment of Auction-Rate Securities. Glu recorded
impairment charges related to its auction-rate securities ("ARS") that
were deemed to have an other-than-temporary decrease in fair value based
on third-party valuation models and other indicative factors. The ARS
previously held by the company were private placement securities with
long-term nominal maturities for which the interest rates were reset
through a Dutch auction each month. The monthly auctions historically
provided a liquid market for these securities. The company's previous
investments in ARS represented interests in collateralized debt
obligations supported by pools of residential and commercial mortgages
or credit cards, insurance securitizations and other structured credits,
including corporate bonds. Upon full redemption of the ARS by the
sponsoring broker, Glu reversed all previously recorded impairments.

Glu believes that the impairment/gain of these investments does not
reflect the company's ongoing operations and that investors benefit from
a supplemental non-GAAP financial measure that excludes these
impairments.

Restructuring Charges. Glu undertook restructuring activities in
2008 to (1) relocate its operations in France from Nice to Paris and to
terminate certain employees located in Glu's Hong Kong office and (2)
terminate certain employees and exit a portion of the company's
corporate offices. The resulting restructuring charges principally
consisted of costs associated with employee termination benefits,
depreciation (a non-cash charge) and remaining lease payment
obligations. Glu recorded the severance costs as an operating expense
when it communicated the benefit arrangement to the employee and no
significant future services, other than a minimum retention period, were
required of the employee to earn the termination benefits. In 2009, Glu
recorded (1) a non-cash restructuring charge due to a change in the
sublease probability assumptions for the portion of the company's
corporate headquarters that were vacated in 2008 (2) a restructuring
charge related to termination benefits to be paid pursuant to the
transition agreement with the CEO and (3) cash restructuring charges due
to termination of certain employees in Glu's US and EMEA offices. Glu
believes that these restructuring charges do not reflect the company's
ongoing operations and that investors benefit from a supplemental
non-GAAP financial measure that excludes these charges.

MIG Earnout Expenses. As part of the acquisition of MIG, Glu
committed to pay additional consideration in the form of cash and stock
to the MIG shareholders and bonus payments in the form of stock to two
officers of MIG, who were also MIG shareholders. Glu initially recorded
the estimated contingent consideration and bonuses earned by the two
officers as stock-based and non-equity compensation over the two-year
vesting period ending December 31, 2009, and has excluded from its
non-GAAP financial measures the impact of the non-equity component of
the additional consideration. In the quarter ended December 31, 2008,
Glu restructured these payments into debt obligations that become due at
various times through December 31, 2010. Glu believes that these earnout
expenses affect comparability from period to period and that investors
benefit from a supplemental non-GAAP financial measure that excludes
these charges.

Transitional Costs. Glu has incurred various costs related to the
transition and integration of Superscape and MIG into Glu's operations.
Glu recorded these non-recurring costs as operating expenses when they
were incurred. Glu believes that these transitional costs affect
comparability from period to period and that investors benefit from a
supplemental non-GAAP financial measure that excludes these expenses.

Impairment of Goodwill. In accordance with FAS 142 "Goodwill and Other
Intangible Assets" Glu performs its annual goodwill impairment test as
of September 30. Glu recorded a goodwill impairment charge in the third
quarter of 2008 as the fair value of two of its three reporting units
was determined to be below the carrying value of their respective
goodwill balances. As this impairment is non-recurring, Glu believes it
does not reflect Glu's ongoing operations and that investors benefit
from a supplemental non-GAAP financial measure that excludes this
impairment, enabling them to compare Glu's core operating results in
different periods without this variability.

Foreign currency exchange gains and losses. Foreign currency
exchange gains and losses represent the net gain or loss that Glu has
recorded for the impact of currency exchange rate movements on cash and
other assets and liabilities denominated in foreign currencies related
to the revaluation of assets and liabilities. Accordingly, foreign
currency exchange gains and losses are generally unpredictable and can
cause Glu's reported results to vary significantly. Due to the unusual
magnitude of these losses in the quarter ended December 31, 2008 and the
fact that Glu has not engaged in hedging or taken other actions to
reduce the likelihood of incurring a sizeable net gain or loss in future
periods, Glu began, with the quarter ended December 31, 2008, to present
non-GAAP net loss and net loss per share excluding foreign exchange
gains and losses for comparability purposes. Glu believes that these
gains and losses do not reflect its ongoing operations and that
investors benefit from a supplemental non-GAAP financial measure that
excludes these items, enabling investors to compare the company's core
operating results in different periods without this variability. Foreign
exchange gains/(losses) recognized during 2008 and 2009 were as follows
(in thousands):

March 31, 2008       $ 318
June 30, 2008          (66    )
September 30, 2008     (1,301 )
December 31, 2008      (1,984 )
FY2008               $ (3,033 )
March 31, 2009       $ (461   )
June 30, 2009          759
September 30, 2009     (28    )
FY2009 (YTD)         $ 270

SOURCE: Glu Mobile Inc.

Media: 
Dig Communications 
Michaela Wilkinson, 415-233-4075 
Mobile: 415-608-1778 
mwilkinson@digcommunications.com 
or 
Investor Relations: 
ICR 
Seth Potter, 646-277-1230 
ir@glu.com

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