8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): July 20, 2010

SuccessFactors, Inc.

(Exact Name of the Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-33755	94-3398453
(Commission File Number)	(IRS Employer Identification No.)

1500 Fashion Island Blvd., Suite 300, San Mateo, CA	94404
(Address of Principal Executive Offices)	(Zip Code)

(650) 645-2000

(Registrant’s Telephone Number, Including Area Code)

(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 (see General Instruction A.2. below):

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

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

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

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

Item 2.01. Completion of Acquisition or Disposition of Assets.

On July 20, 2010, SuccessFactors, Inc. (the “Company”) completed its acquisition of CubeTree, Inc., a Development Stage Enterprise (“CubeTree”). The Company’s acquisition of CubeTree was reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2010 (the “Initial Form 8-K”). The Company is filing this Amended Current Report to include the financial statements and unaudited pro forma financial information required by Item 9.01 of Form 8-K, which were excluded from the Initial Form 8-K in reliance on Items 9.01(a) and 9.01(b).

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The audited financial statements of CubeTree, including the balance sheets as of December 31, 2009 and 2008 and the related statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009 and the notes thereto, and the Independent Auditors’ Report thereon, are filed as Exhibit 99.1 to this current report on Form 8-K/A.

The unaudited condensed financial statements of CubeTree, including the balance sheet as of June 30, 2010, and the related statements of operations and cash flows for the six month periods ended June 30, 2010 and 2009 and for the period from February 11, 2008 (inception) to June 30, 2010, and the notes to the unaudited condensed financial statements are filed as Exhibit 99.2 to this current report on Form 8-K/A.

(b) Pro Forma Financial Information.

The unaudited pro forma financial statements of the Company giving effect to the acquisition of CubeTree, including the unaudited pro forma condensed balance sheet as of June 30, 2010, and unaudited pro forma condensed statements of operations for the year ended December 31, 2009, and for the six month period ended June 30, 2010, are filed as Exhibit 99.3 to this current report on Form 8-K/A.

(d) Exhibits.

Number	Description
23.1	Consent of KPMG LLP, Independent Auditors
99.1	Audited financial statements of CubeTree, Inc. (a Development Stage Enterprise) as of December 31, 2009 and 2008, the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009
99.2	Unaudited condensed financial statements of CubeTree, Inc. (a Development Stage Enterprise) as of June 30, 2010, and for the six month periods ended June 30, 2010 and 2009, and for the period from February 11, 2008 (inception) to June 30, 2010
99.3	Unaudited pro forma condensed balance sheet of the Company as of June 30, 2010, and pro forma condensed statements of operations for the year ended December 31, 2009, and for the six month period ended June 30, 2010

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 thereunto duly authorized.

SUCCESSFACTORS, INC.
By:	/S/    HILLARY SMITH
	Hillary Smith
	General Counsel and Secretary

Date: October 5, 2010

EXHIBIT INDEX

Number	Description
23.1	Consent of KPMG LLP, Independent Auditors
99.1	Audited financial statements of CubeTree, Inc. (a Development Stage Enterprise) as of December 31, 2009 and 2008, the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009
99.2	Unaudited condensed financial statements of CubeTree, Inc. (a Development Stage Enterprise) as of June 30, 2010 and for the six month periods ended June 30, 2010 and 2009, and for the period from February 11, 2008 (inception) to June 30, 2010
99.3	Unaudited pro forma condensed balance sheet of the Company as of June 30, 2010, and pro forma condensed statements of operations for the year ended December 31, 2009 and for the six month period ended June 30, 2010

EX-23.1

Exhibit 23.1

Consent of Independent Auditors

The Board of Directors

SuccessFactors, Inc.:

We consent to incorporation by reference in the registration statements on Forms S-8 (333-166490, 333-159087, and 333-147909) and Form S-3 (333-169134) of SuccessFactors, Inc. of our report dated October 4, 2010, relating to the balance sheets of CubeTree, Inc. (a Development Stage Enterprise) as of December 31, 2009 and 2008, and the related statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009, which report appears in the Form 8-K/A of SuccessFactors, Inc. dated October 5, 2010.

/s/ KPMG LLP

Mountain View, California

October 4, 2010

EX-99.1

Exhibit 99.1

CUBETREE, INC.

(A Development Stage Enterprise)

Table of Contents

	Page
Audited Financial Statements:
Independent Auditors’ Report	1
Balance Sheets as of December 31, 2009 and 2008	2
Statements of Operations for the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009	3
Statements of Stockholders’ Equity for the year ended December 31, 2009, and the period from February 11, 2008 (inception) to December 31, 2008	4
Statements of Cash Flows for the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008 and the period from February 11, 2008 (inception) to December 31, 2009	5
Notes to Audited Financial Statements	6 – 16

Independent Auditors’ Report

The Board of Directors

CubeTree, Inc.:

We have audited the accompanying balance sheets of CubeTree, Inc. (a Development Stage Enterprise) as of December 31, 2009 and 2008, and the related statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these 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 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 opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CubeTree, Inc. (a Development Stage Enterprise) as of December 31, 2009 and 2008, and the related statements of operations, stockholders’ equity and cash flows for year ended December 31, 2009, the period from February 11, 2008 (inception) to December 31, 2008, and the period from February 11, 2008 (inception) to December 31, 2009, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Mountain View, California

October 4, 2010

CUBETREE, INC.

(A Development Stage Enterprise)

Balance Sheets

December 31, 2009, and 2008

(In thousands, except par value)

Assets	2009			2008
Current assets:
Cash and cash equivalents	$	7,695		$	2,165
Prepaid expenses and other assets		76			13
Total current assets		7,771			2,178
Property and equipment, net		42			48
Other assets		13			13
Total assets	$	7,826		$	2,239
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29		$	—
Accrued compensation		96			12
Other accrued expenses		44			73
Total current liabilities		169			85
Commitments – see note 6
Stockholders’ equity:
Series A Preferred Stock – $0.001 par value: 6,897 shares authorized, issued and outstanding at December 31, 2009 and 2008 (liquidation preference of $3,500)		7			7
Series B Preferred Stock – $0.001 par value: 12,100 shares authorized; 11,965 and 0 shares issued and outstanding at December 31, 2009 and 2008, respectively (liquidation preference of $8,100)		12			—
Common Stock; $0.001 par value: 31,000 and 24,000 shares authorized; 6,469 and 5,890 shares issued and outstanding at December 31, 2009 and 2008, respectively		6			5
Additional paid-in capital		11,553			3,511
Deficit accumulated during development stage		(3,921	)		(1,369	)
Total stockholders’ equity		7,657			2,154
Total liabilities and stockholders’ equity	$	7,826		$	2,239

See accompanying notes to financial statements.

2

CUBETREE, INC.

(A Development Stage Enterprise)

Statements of Operations

Year ended December 31, 2009,

period from February 11, 2008 (inception) to December 31, 2008,

and period from February 11, 2008 (inception) to December 31, 2009

(In thousands)

	2009			Period from February 11, 2008 (inception) to December 31, 2008			Period from February 11, 2008 (inception) to December 31, 2009
Revenue	$	5		$	—		$	5
Costs and expenses:
Cost of revenue		62			—			62
Research and development		1,490			872			2,362
General and administrative		360			366			726
Sales and marketing		647			67			714
Total costs and expenses		2,559			1,305			3,864
Operating loss		(2,554	)		(1,305	)		(3,859	)
Other income (expense), net		2			(64	)		(62	)
Net loss	$	(2,552	)	$	(1,369	)	$	(3,921	)

See accompanying notes to financial statements.

3

CUBETREE, INC.

(A Development Stage Enterprise)

Statements of Stockholders’ Equity

Year ended December 31, 2009 and period from February 11, 2008 (inception) through December 31, 2008

(In thousands)

														Deficit
														accumulated
	Series A Preferred Stock			Series B Preferred Stock			Common stock					Additional		during
	Shares outstanding	Amount		Shares outstanding	Amount		Shares outstanding		Amount			paid in capital		development stage			Total
Issuance of Series A preferred stock in April 2008 for cash (net of issuance costs of $73)	6,117	$	6	—	$	—	—		$	—		$	3,106	$	—		$	3,112
Conversion of convertible debt with beneficial conversion feature	780		1	—		—	—			—			405		—			406
Issuance of common stock in February and March 2008 for cash	—		—	—		—	6,469			6			—		—			6
Common stock repurchase	—		—	—		—	(579	)		(1	)		—		—			(1	)
Net loss	—		—	—		—	—			—			—		(1,369	)		(1,369	)
Balance at December 31, 2008	6,897		7	—		—	5,890			5			3,511		(1,369	)		2,154
Stock-based compensation expense	—		—	—		—	—			—			30		—			30
Issuance of common stock in October 2009 for cash	—		—	—		—	579			1			—		—			1
Issuance of Series B preferred stock in October 2009 for cash (net of issuance costs of $76)	—		—	11,965		12	—			—			8,012		—			8,024
Net loss	—		—	—		—	—			—			—		(2,552	)		(2,552	)
Balance at December 31, 2009	6,897	$	7	11,965	$	12	6,469		$	6		$	11,553	$	(3,921	)		7,657

See accompanying notes to financial statements.

4

CUBETREE, INC.

(A Development Stage Enterprise)

Statements of Cash Flows

Year ended December 31, 2009,

period from February 11, 2008 (inception) to December 31, 2008,

and period from February 11, 2008 (inception) to December 31, 2009

(In thousands)

	2009			Period from February 11, 2008 (inception) to December 31, 2008			Period from February 11, 2008 (inception) to December 31, 2009
Cash flows from operating activities:
Net loss	$	(2,552	)	$	(1,369	)	$	(3,921	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		18			8			26
Stock-based compensation		30			—			30
Noncash interest charge for beneficial conversion feature of convertible debt		—			91			91
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(63	)		(26	)		(89	)
Accounts payable		29			—			29
Accrued compensation		85			12			97
Other accrued expenses		(30	)		73			43
Net cash used in operating activities		(2,483	)		(1,211	)		(3,694	)
Cash flows from investing activities:
Purchase of property and equipment		(12	)		(56	)		(68	)
Net cash used in investing activities		(12	)		(56	)		(68	)
Cash flows from financing activities:
Proceeds from issuance of convertible promissory notes		—			315			315
Proceeds from issuance of common stock		1			6			7
Repurchase of common stock		—			(1	)		(1	)
Proceeds from issuance of Series A Preferred Stock (net of issuance costs of $73)		—			3,112			3,112
Proceeds from issuance of Series B Preferred Stock (net of issuance costs of $76)		8,024			—			8,024
Net cash provided by financing activities		8,025			3,432			11,457
Net increase in cash and cash equivalents		5,530			2,165			7,695
Cash and cash equivalents at beginning of period		2,165			—			—
Cash and cash equivalents at end of period	$	7,695		$	2,165		$	7,695
Noncash investing and financing activities:
Conversion of promissory notes into Series A preferred stock (see note 4)	$	—		$	315		$	315

See accompanying notes to financial statements.

5

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

(1) Significant Accounting Policies

(a) Description of Business

CubeTree, Inc. (the Company) was incorporated in Delaware on February 11, 2008 and maintains its headquarters in Redwood City, California. The Company’s core product is an Enterprise 2.0 collaboration software product designed to help improve how employees find and share information.

The Company is considered to be in the development stage. Since its inception, the Company’s activities have been primarily focused on research and product development, market development, business and financial planning, and fund raising. The Company’s financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Since inception, the Company has incurred net losses and has an accumulated deficit of approximately $3.9 million as of December 31, 2009. Management plans to continue to finance the Company’s operations with a combination of equity issuances and debt arrangements as well as cash flows from operations. If adequate funds are not available, the Company may be required to delay, reduce the scope of, or eliminate certain of its critical activities, including product development, or suspend its business operations. On July 20, 2010, the Company was acquired by SuccessFactors, Inc. (SuccessFactors). Refer to note 9.

(b) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, although estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future.

(c) Cash and Cash Equivalents

The Company classifies all highly liquid investments with original maturities of three months or less on the date of purchase as cash equivalents. As of December 31, 2009 and 2008, cash and cash equivalents consist of cash on-hand, cash balances with banks, and money market funds. Other income (expense), net includes interest income of $2,000 in 2009 and $28,000 for the period from February 11, 2008 (inception) to December 31, 2008.

The Company’s cash and cash equivalents are held at two financial institutions, often with balances that are in excess of the $250,000 amount insured by the Federal Deposit Insurance Corporation (FDIC).

6 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

(d) Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, as follows:

Furniture and equipment	5 years
Computer equipment and software	3 years

(e) Revenue Recognition

As the Company is in development stage, there have been no significant revenue arrangements through December 31, 2009. For the arrangements that have been entered into, revenue consists of subscription fees for the Company’s cloud-based software and fees for the provision of other services. The Company’s customers do not have the contractual right to take possession of software in substantially all of the transactions. Instead, the software is delivered through the cloud from the Company’s hosting facilities. Therefore, these arrangements are treated as service agreements. The Company commences revenue recognition when all of the following conditions are met:

• there is persuasive evidence of an arrangement;

• the subscription or services have been delivered to the customer;

• the collection of related fees is reasonably assured; and

• the amount of related fees is fixed or determinable.

(f) Cost of Revenue

Cost of revenue primarily consists of costs related to hosting the Company’s application suite, and expenses related to its hosting facility.

(g) Software Development Costs

All costs related to the development of the Company’s software product were expensed in accordance with the applicable authoritative guidance, which requires that all costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed should be expensed when incurred and qualifying costs incurred thereafter should be capitalized until the software product is made generally available.

(h) Advertising Costs

Advertising costs are charged to expense as incurred and amounted to $19,000 and $0 for the year ended December 31, 2009 and the period from February 11, 2008 (inception) to December 31, 2008, respectively.

7 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

(i) Fair Value Measurements

For all assets or liabilities recognized or disclosed at fair value, the Company measures the fair value in accordance with authoritative guidance that defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and establishes a three-tier value hierarchy based on the inputs used in the valuation techniques to derive fair value. The hierarchy used to determine the fair value is as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

As of December 31, 2009 and 2008, the Company’s financial instruments measured at fair value on a recurring basis consisted of cash equivalents with both a carrying amount and fair value of approximately $7.6 million and $2.0 million, respectively, consisting of money market instruments, with maturities of three months or less. The money market instruments are classified within Level 1 of the fair value hierarchy. As of December 31, 2009 and 2008, the Company had no fair value measurements using Level 2 or Level 3 inputs.

(j) Income Taxes

The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes. Under this method, deferred tax assets and liabilities are determined based on future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

Effective January 1, 2009, the Company adopted the authoritative guidance for accounting for uncertainty in income taxes, which prescribes that the Company recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. There was no cumulative effect of adopting this authoritative guidance. See note 8.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expense. As of January 1, 2009 and December 31, 2009, the Company had not accrued any interest related to unrecognized tax benefits, and the Company did not recognize any amounts for penalties related to unrecognized tax benefits for the year ended December 31, 2009.

8 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

(k) Stock-Based Compensation

The Company accounts for stock-based awards to employees using the fair value-based method in accordance with the authoritative guidance for stock-based compensation, which requires the measurement of compensation expense based on the estimated fair value of the awards on the date of grant and the recognition of the expense over the requisite service period. Compensation expense is recognized on a straight-line basis over the requisite service period for the entire award.

There were no options granted from February 11, 2008 (inception) to December 31, 2008. The Company granted stock options to employees during the year ended December 31, 2009, with exercise prices equal to the estimated fair value of the underlying common stock on the date of grant, as determined by management with input from a third party valuation specialist. The fair value estimate incorporated various subjective assumptions, including information about comparable public companies and expectations as to future cash flows and liquidity events.

The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, which requires the use of the following assumptions: (i) the expected volatility of the Company’s common stock, which is based on volatility data of certain peer companies; (ii) the expected term of the option award determined as the period of time between the date of grant and the midpoint between option vesting date and expiration date; (iii) an expected dividend yield, which is assumed to be 0% as the Company has not paid and, as of the date of grant, did not anticipate paying dividends in the foreseeable future; and (iv) a risk-free interest rate, which is based on the U.S. Treasury yield curve in effect on the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to expected term of the option award.

The fair value of options granted to employees during the year ended December 31, 2009, was determined using the following weighted average assumptions:

Expected dividend yield		—
Expected volatility		63.3	%
Risk-free interest rate		1.15	%
Expected term		5.15 years
Weighted average fair value of options granted	$	0.09

Stock-based compensation expense for the year ended December 31, 2009, and the period from February 11, 2008 (inception) to December 31, 2008 was $30,000 and $0, respectively. Stock-based compensation expense in 2009 includes $12,000 related to shares of common stock sold to a founder at a price that was below the fair value of the Company’s common stock on the date of issuance.

(2) Recent Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board issued new revenue recognition standards for arrangements with multiple deliverables, where certain of those deliverables are nonsoftware related. The new standards permit entities to initially use management’s best estimate of selling price to value individual deliverables when those deliverables do not have vendor specific objective evidence of fair value or when third-party evidence is not available. Additionally, these new standards modify the manner in which the transaction consideration is allocated across the separately identified deliverables by no longer permitting the residual method of allocating arrangement consideration. These new standards are effective for fiscal years beginning on or after June 15, 2010 and are effective for us beginning fiscal 2011, however early adoption is permitted. We are currently evaluating the impact of adopting these new standards on our financial position, results of operations and cash flows.

9 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

(3) Balance Sheet Accounts

Property and equipment, net consisted of (in thousands):

	December 31,
	2009			2008
Furniture and equipment	$	19		18
Computer equipment and software		49		38
Total property and equipment		68		56
Less accumulated depreciation and amortization		(26	)	(8	)
	$	42		48

For year ended December 31, 2009 and the period from February 11, 2008 (inception) to December 31, 2008, depreciation and amortization expense was $18,000 and $8,000, respectively.

Accrued compensation consisted of the following (in thousands):

	December 31,
	2009		2008
Accrued salaries	$	55	$	—
Accrued vacation		19		9
Accrued 401(k)		12		3
Accrued bonuses		10		—
Total accrued compensation	$	96	$	12

Other accrued liabilities consisted of the following (in thousands):

	December 31,
	2009		2008
Accrued professional fees	$	—	$	61
Accrued legal costs		31		6
Other		13		6
Total other accrued liabilities	$	44	$	73

10 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

(4) Convertible Promissory Notes

In February and March 2008, the Company entered into Convertible Promissory Notes (the Notes) with two investors, for a combined principal amount of $315,000. The Notes bore interest at a rate of 3.11% per annum and were payable at the discretion of the investors at any time after December 31, 2008. The Notes were contingently convertible into the Company’s equity securities issued or sold in connection with the Company’s Next Equity Financing, defined as a single transaction or a series of related transactions in which the Company raised at least $2.5 million in aggregate proceeds. The number of equity shares to be issued on conversion of the Notes was equal to the amount obtained by multiplying the principal amount of the Notes by 77.5% of the price per share of the equity securities issued in the Next Equity Financing. The Notes were considered to have a beneficial conversion feature, as the conversion price of the Notes would be less than the fair value of the equity securities issued upon conversion. In April 2008, the investors converted the Notes into 780,578 shares of the Company’s Series A preferred stock. Upon conversion of the Notes, the Company recorded a charge related to the beneficial conversion feature of $91,000, which is included in interest expense for the period from February 11, 2008 (inception) to December 31, 2008.

(5) Stockholder’s Equity

Common Stock

As of December 31, 2009 and 2008, the Company was authorized to issue 31,000,000 and 24,000,000 shares of common stock, respectively.

Preferred Stock

The Company is authorized to issue 6,897,275 shares of Series A preferred stock and 12,100,000 shares of Series B preferred stock. The table below provides information on the Company’s preferred stock offerings (in thousands, except price per share):

	Dated issued	Shares issued		Price per share		Gross proceeds		Liquidation preference
Series A preferred stock	April 2, 2008	$	6,897	$	0.52	$	3,500	$	3,500
Series B preferred stock	October 27, 2009		11,965		0.68		8,100		8,100

Of the $3.5 million proceeds from the issuance of the Series A preferred stock, $406,000 represents the conversion of the Notes including the beneficial conversion feature (see note 4).

Conversion

Each share of the Series A and Series B preferred stock is convertible into shares of common stock, at the option of the holder and at any time after the date of issuance of such share, on a one-for-one ratio. In addition, the Series A and Series B preferred stock would automatically convert into shares of common stock (i) upon the closing of a firm commitment underwritten public offering in which the public offering price is no less than $2.03 per share and which results in aggregate proceeds to the Company of no less than $25.0 million, or (ii) on the date specified by a written consent or agreement of the holders of at least 61% of the then outstanding shares of Series A and Series B preferred stock.

11 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

Voting

Each holder of the Series A and Series B preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of preferred stock are convertible.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of the preferred stock are entitled to receive $0.52 per share and $0.68 per share for each share of Series A and Series B preferred stock, respectively, plus any declared and unpaid dividends on such shares. A liquidation is deemed to occur by (a) the consummation of a merger or consolidation with any other entity; (b) the closing of the transfer of the Company’s securities; or (c) a sale, lease, assignment, transfer or disposal of all or substantially all of the assets of the Company.

Dividends

The holders of the Series A and Series B preferred stock are entitled to receive dividends, when and if declared by the Board of Directors, at a dividend rate of $0.03 per share for the Series A preferred stock and $0.04 per share for the Series B preferred stock (adjusted for stock splits, stock dividends, reclassification and the like), per annum on each outstanding share. The dividends are noncumulative and nonmandatory.

(6) Commitments

Effective April 14, 2008, the Company entered into a two-year facility operating lease, commencing on June 1, 2008 for its corporate headquarters that contains escalating payments over the two-year term. The lease includes one option to extend the lease term for one year. Minimum rent payments under the lease are recognized on a straight-line basis over the term of the lease. Rent expense was $79,000 and $46,000 for the year ended December 31, 2009 and the period from February 11, 2008 (inception) to December 31, 2008, respectively.

Minimum future payments under the operating leases will be $33,000 in fiscal 2010 and $0 thereafter.

(7) Stock Compensation Plan

In 2008, the Company adopted a stock compensation plan (the Plan) pursuant to which the Company’s board of directors may grant stock options or nonvested shares to officers and key employees. Stock options can be granted with an exercise price less than, equal to or greater than the underlying common stock’s fair value at the date of grant. These awards generally have vesting terms of 1/4th of the total number of shares on the twelve-month anniversary of the vesting commencement date and 1/48th of the original number of shares each month thereafter and expire 10 years from the date of grant.

12 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

The following table summarizes the activity for stock options (including nominal nonemployee grants) for the year ended December 31, 2009 (in thousands, except per share and term data):

	Number of options		Weighted average exercise price		Weighted average remaining contractual life (years)
Balance at January 1, 2009	—		$	—
Granted	1,430			0.16
Exercised	—			—
Forfeited	(52	)		0.16
Cancelled	(10	)		0.16
Balance at December 31, 2009	1,368		$	0.16	2.9
Vested and expected to vest at December 31, 2009	1,336		$	0.16	2.9
Exercisable at December 31, 2009	270		$	0.16	2.4

At December 31, 2009, there were approximately 23,100,000 additional shares available for the Company to grant under the Plan.

As of December 31, 2009, the Company had $101,000 of unrecognized compensation cost related to unvested stock options, which are expected to be recognized over a weighted average period of approximately 2.9 years.

In certain of the Company’s stock purchase agreements, there is an option that allows the Company, upon voluntary or involuntary termination of service, to repurchase, at the employee’s original purchase price, all or any portion of the shares held by the employee that have not yet been released from the repurchase option per a specified vesting schedule. The repurchase option is exercisable by the employer upon termination of service, and expires upon release of the shares from the option per the vesting terms. To date, the Company has not received any material proceeds from the exercise of options or sales of shares subject to these repurchase provisions.

13 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

A summary of the status of the Company’s nonvested shares as of December 31, 2009 and 2008, and changes during the year ended December 31, 2009, and from February 11, 2008 (inception) to December 31, 2008, is presented below (in thousands except per share data):

Nonvested shares	Shares		Weighted average fair value on date of issuance
Sold	5,771		$	0.002
Vested	(1,330	)		(0.002	)
Forfeited	—			—
Balance at December 31, 2008	4,441			0.002
Sold	579			0.160
Vested	(2,223	)		0.001
Forfeited	—			—
Balance at December 31, 2009	2,797		$	0.034

As discussed in note 1(k), shares of common stock were sold to a founder in 2009 at a price that was below the estimated fair value of the Company’s common stock on the date of issuance. The amount of unrecognized compensation cost related to the unvested shares was $80,000 as of December 31, 2009, and is expected to be recognized over a period of approximately 1.7 years.

(8) Income Taxes

The Company had no material provision for income taxes for the year ended December 31, 2009 and the period from February 11, 2008 (inception) to December 31, 2008. Those amounts differed from the amounts computed by applying the U.S. federal income tax rates of 34% to loss before provision for income taxes as follows:

	December 31
	2009		2008
Federal tax at statutory rate	34.00	%	34.00	%
State tax statutory rate	5.76		5.88
Permanent differences	(2.07	)	(1.45	)
Valuation allowance	(37.69	)	(38.43	)
Effective tax rate	—	%	—	%

14 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets are presented as follows (in thousands):

	December 31
	2009			2008
Net operating loss carryforwards	$	1,328		$	397
Other		55			24
Total deferred tax assets		1,383			421
Valuation allowance		(1,383	)		(421	)
Net deferred tax assets	$	—		$	—

Recognition of deferred tax assets is appropriate when realization of such assets is more likely than not. Based upon the weight of available evidence, which includes the Company’s historical operating performance and the U.S. cumulative net losses in all prior periods, the Company has provided a full valuation allowance against its U.S. deferred tax assets as management believes that realization of these assets is not more likely than not. The Company’s valuation allowance increased by $961,000 during the year ended December 31, 2009. As of December 31, 2009, the Company had U.S. federal and state net operating losses of approximately $3.3 million and $3.3 million respectively, which expire beginning in the year 2029.

As discussed in note 1 (j) effective January 1, 2009, the Company adopted the authoritative guidance for accounting for uncertainty income taxes, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Upon adopting this authoritative guidance, the Company recognized no change in the liability for unrecognized tax benefits related to tax positions taken in prior periods.

The Company’s only major tax jurisdictions are the United States federal and California. The tax years 2008 through 2009 remain open and subject to examinations by the appropriate governmental agencies in the United States jurisdictions.

(9) Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through October 4, 2010, the date at which the financial statements were available to be issued.

On April 26, 2010, the Company entered into a new three-year lease agreement for its corporate headquarters, commencing May 1, 2010, with semi-annual and annual escalating payments over the lease term and with future minimum lease payments totaling approximately $523,000. Under the lease, the Company provided a letter of credit of $100,000 to the landlord as collateral in the event of default.

15 (Continued)

CUBETREE, INC.

(A Development Stage Enterprise)

Notes to Financial Statements

December 31, 2009 and 2008

On July 19, 2010, the Company declared a cash dividend of $0.12 per share, payable on July 20, 2010 to holders of record of the Company’s common stock and preferred stock on July 19, 2010, for a total of $3.0 million.

On July 20, 2010, the Company was acquired by and became a wholly owned subsidiary of SuccessFactors, a provider of on-demand business execution software solutions, for approximately $18.9 million in shares of SuccessFactors’ common stock, plus future contingent cash payment based on changes in the value of SuccessFactors’ common stock.

16

EX-99.2

Exhibit 99.2

CUBETREE, INC.

(A Development Stage Enterprise)

Table of Contents

	Page
Unaudited Condensed Financial Statements:
Balance Sheet as of June 30, 2010	1
Statements of Operations for the six months ended June 30, 2010 and 2009, and for the period from February 11, 2008 (inception) to June 30, 2010	2
Statements of Cash Flows for the six months ended June 30, 2010 and 2009, and for the period from February 11, 2008 (inception) to June 30, 2010	3
Notes to Unaudited Condensed Financial Statements	4 – 6

CUBETREE, INC.

(A Development Stage Enterprise)

UNAUDITED CONDENSED BALANCE SHEET

JUNE 30, 2010

(in thousands)

	2010
ASSETS
Current assets:
Cash and cash equivalents	$	5,422
Accounts receivable		38
Prepaid expenses and other assets		92
Total current assets		5,552
Property and equipment, net of accumulated depreciation		125
Restricted cash		100
Total assets	$	5,777
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	247
Accrued compensation		225
Other accrued expenses		81
Deferred revenue		159
Total current liabilities		712
Deferred revenue, net of current portion		240
Total liabilities		952
Commitments - See Note 6
Stockholders’ equity:
Series A Preferred Stock		7
Series B Preferred Stock		12
Common Stock		6
Additional paid-in capital		11,600
Deficit accumulated during development stage		(6,800	)
Total stockholders’ equity		4,825
Total liabilities and stockholders’ equity	$	5,777

See accompanying notes to unaudited condensed financial statements.

1

CUBETREE, INC.

(A Development Stage Enterprise)

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2010 AND 2009 AND PERIOD

FROM FEBRUARY 11, 2008 (INCEPTION) TO JUNE 30, 2010

(in thousands)	2010			2009			Period from February 11, 2008 (inception) to June 30, 2010
Revenue	$	96		$	—		$	101
Costs and expenses:
Cost of revenue		64			—			126
Research and development		1,013			34			3,375
General and administrative		834			983			1,560
Sales and marketing		1,067			58			1,781
Total costs and expenses		2,978			1,075			6,842
Operating loss		(2,882	)		(1,075	)		(6,741	)
Other income (expense), net		3			1			(59	)
Net loss	$	(2,879	)	$	(1,074	)	$	(6,800	)

See accompanying notes to unaudited condensed financial statements.

2

CUBETREE, INC. (A Development Stage Enterprise)

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2010 AND 2009

AND PERIOD FROM FEBRUARY 11, 2008 (INCEPTION) TO JUNE 30, 2010

(in thousands)	2010			2009			Period from February 11, 2008 (inception) to June 30, 2010
Cash flows from operating activities:
Net loss	$	(2,879	)	$	(1,074	)	$	(6,800	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		12			—			38
Stock-based compensation		44			—			74
Non-cash interest charge for beneficial conversion feature of convertible debt		—			—			91
Changes in operating assets and liabilities:
Accounts receivable		(38	)		—			(38	)
Prepaid expenses and other assets		(4	)		10			(93	)
Accounts payable		220			—			249
Accrued compensation		128			(3	)		225
Other accrued expenses		40			(72	)		83
Deferred revenue		398			—			398
Net cash used in operating activities		(2,079	)		(1,139	)		(5,773	)
Cash flows from investing activities:
Purchase of property and equipment		(96	)		(6	)		(164	)
Change in restricted cash deposit		(100	)		—			(100	)
Net cash used in investing activities		(196	)		(6	)		(264	)
Cash flows from financing activities:
Proceeds from the issuance of common stock upon the exercise of stock options		2			—			2
Proceeds from issuance of convertible promissory notes		—			—			315
Proceeds from issuance of common stock		—			—			7
Repurchase of common stock		—			—			(1	)
Proceeds from issuance of preferred stock		—			—			11,136
Net cash provided by financing activities		2			—			11,459
Net increase in cash and cash equivalents		(2,273	)		(1,145	)		5,422
Cash and cash equivalents at beginning of period		7,695			2,165			—
Cash and cash equivalents at end of period	$	5,422		$	1,020		$	5,422

See accompanying notes to unaudited condensed financial statements.

3

CUBETREE, INC.

(A Development Stage Enterprise)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company has prepared the accompanying unaudited condensed financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). In management’s opinion, the Company has made all adjustments necessary to fairly present its financial position, results of operations and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

Description of Business

CubeTree, Inc. (the “Company”) was incorporated in Delaware on February 11, 2008 and maintains its headquarters in Redwood City, California. The Company’s core product is an Enterprise 2.0 collaboration software product designed to help improve how employees find and share information.

The Company is considered to be in the development stage. Since its inception, the Company’s activities have been primarily focused on research and product development, market development, business and financial planning, and fund raising. The Company’s financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Since inception, the Company has incurred net losses and has an accumulated deficit of approximately $6.8 million as of June 30, 2010. On July 20, 2010, the Company was acquired by SuccessFactors, Inc. (“SuccessFactors”). Refer to Note 4.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, although estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future.

Revenue Recognition

The Company’s revenue primarily consists of subscription fees for its cloud-based software. The Company’s customers do not have the contractual right to take possession of the software in substantially all of its transactions, instead, the software is delivered through the cloud from the Company’s hosting facilities. Therefore, these arrangements are treated as service agreements. The Company also generates revenue from other arrangements with customers, including arrangements for software licenses and product development. In all arrangements, the Company commences revenue recognition when all of the following conditions are met:

• there is persuasive evidence of an arrangement;

• the subscription or services have been delivered to the customer;

• the collection of related fees is reasonably assured; and

• the amount of related fees is fixed or determinable.

4

CUBETREE, INC.

(A Development Stage Enterprise)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

During the six month ended June 30, 2010, one customer represented 24% of total revenue, and another customer represented 23% of total revenue.

Cost of Revenue

Cost of revenue primarily consists of costs related to hosting of the Company’s application suite, and expenses related to its hosting facility.

Fair Value Measurements

For all assets or liabilities recognized or disclosed at fair value, the Company measures the fair value in accordance with authoritative guidance that defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and establishes a three-tier value hierarchy based on the inputs used in the valuation techniques to derive fair value. The hierarchy used to determine the fair value is as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

As of June 30, 2010, the Company’s financial instruments measured at fair value on a recurring basis consisted of cash equivalents with both a carrying amount and fair value of approximately $5.0 million, consisting of money market instruments, with maturities of three months or less. The money market instruments are classified within Level 1 of the fair value hierarchy. As of June 30, 2010, the Company had no fair value measurements using Level 2 or Level 3 inputs.

2. BALANCE SHEET ACCOUNTS

Accrued compensation consisted of the following (in thousands):

	June 30, 2010
Accrued salaries	$	58
Accrued vacation		61
Accrued 401(k)		8
Accrued bonuses		98
Total accrued compensation	$	225

5

CUBETREE, INC.

(A Development Stage Enterprise)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Other accrued liabilities consisted of the following (in thousands):

	June 30, 2010
Accrued professional fees	$	28
Accrued legal costs		24
Other		29
Total other accrued liabilities	$	81

3 COMMITMENTS

On April 14, 2008, the Company entered into a two-year facility operating lease, commencing on June 1, 2008 for its corporate headquarters, with escalating payments over the two-year term. On April 26, 2010, the Company entered into a new three-year lease agreement for its corporate headquarters, commencing on May 1, 2010, with semi-annual and annual escalating payments over the lease term and with future minimum lease payments totaling approximately $523,000. Under the new lease, the Company provided a letter of credit of $100,000 to the landlord as collateral in the event of default. This amount is classified as restricted cash on the Company’s balance sheet as of June 30, 2010. Rent expense was approximately $58,000 and $45,000 for the six months ended June 30, 2010 and 2009, respectively.

4. SUBSEQUENT EVENTS

On July 19, 2010, the Company declared a cash dividend of $0.12 per share, payable on July 20, 2010 to holders of record of the Company’s common stock and preferred stock on July 19, 2010, for a total of $3.0 million.

On July 20, 2010, the Company was acquired by and became a wholly-owned subsidiary of SuccessFactors, a provider of on-demand business execution software solutions, for approximately $18.9 million in shares of SuccessFactors’ common stock, plus future contingent cash payment based on changes in the value of SuccessFactors’ common stock.

6

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

SuccessFactors Inc, (“SuccessFactors” or “the Company”) acquired CubeTree, Inc. (“CubeTree”), on July 20, 2010. The acquisition of CubeTree has been accounted for using the purchase method of accounting and, accordingly, the tangible and intangible assets acquired and liabilities assumed from CubeTree were recorded at their estimated fair values as of the date of the acquisition. Our preliminary allocation of the purchase price is pending completion of several elements, including the finalization of the Company’s appraisal for the purposes of measuring the fair value of acquired intangible assets. Accordingly, there may be material adjustments to the allocation of the purchase price.

The unaudited pro forma condensed consolidated financial statements are based on estimates and assumptions which are preliminary and have been made solely for the purposes of developing such pro forma information. The estimated pro forma adjustments arising from the acquisition are derived from the preliminary estimated fair value of assets acquired and liabilities assumed, and the related allocation of the purchase price consideration. The final determination of the purchase price allocation will be based on the established fair value of the assets acquired, including the fair value of the identifiable intangible assets, and liabilities assumed as of July 20, 2010 (the acquisition date). The excess of the purchase price over the fair value of net assets acquired is allocated to goodwill. The final determination of the purchase price, fair values, and resulting goodwill may differ significantly from what is reflected in these unaudited pro forma condensed consolidated financial statements.

The following unaudited pro forma condensed statements of operations combine the statement of operations data for SuccessFactors and CubeTree for the year ended December 31, 2009, and for the six months ended June 30, 2010, as if the acquisition had been completed as of January 1, 2009. The pro forma financial information is based upon the historical consolidated financial statements of SuccessFactors and CubeTree and the assumptions, estimates and adjustments which are described in the notes to the unaudited pro forma condensed consolidated financial statements. The assumptions, estimates and adjustments are preliminary and have been made solely for purposes of developing such pro forma information. The unaudited pro forma condensed consolidated financial statements include adjustments that have been made to reflect the preliminary purchase price allocations. These preliminary allocations represent estimates made for purposes of these unaudited pro forma condensed consolidated financial statements and are subject to change upon a final determination of fair value.

The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the consolidated results of operations of SuccessFactors that would have been reported had the acquisition occurred on the dates indicated, nor do they represent a forecast of the consolidated results of operations for any future period. Furthermore, no effect has been given in the unaudited pro forma condensed consolidated statements of operations for synergistic benefits or cost savings that may be realized through the combination of SuccessFactors and CubeTree or costs that may be incurred in integrating the two companies. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes, together with management’s discussion and analysis of financial condition and results of operations, contained in the SuccessFactors’ Annual Report on Form 10-K for the year ended December 31, 2009, which is on file with the Securities and Exchange Commission (“SEC”), and the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2010 and the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2010, each of which is incorporated herein by reference, and the historical financial statements and related notes of SucessFactors included in this Form 8-K/A.

A summary of the estimated purchase price allocation to the fair value of assets acquired and liabilities assumed is as follows (in thousands):

Stock consideration				$	18,933
Contingent consideration					27,720
				$	46,653
Preliminary allocation of purchase price as of July 20, 2010:
Current assets	$	377
Fixed assets		133
Current liabilities		(208	)
					302
Fair value of identifiable intangible assets acquired:
Software		8,160
Customer relationships		850
					9,010
Goodwill					37,341
				$	46,653

The amount allocated to the intangible assets represents the Company’s preliminary estimate of the identifiable intangible assets acquired from CubeTree, consisting of the CubeTree software and customer relationships.

SuccessFactors, Inc.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

JUNE 30, 2010

(IN THOUSANDS, PAR VALUE DATA)

	HISTORICAL						PRO FORMA ADJUSTMENTS			NOTES	TOTAL
	SUCCESSFACTORS			CUBETREE
ASSETS:
Current assets:
Cash and cash equivalents	$	86,671		$	5,422		$	(4,840	)	(A)	$	87,253
Marketable securities		256,573			—			—				256,573
Accounts receivable, net of allowance for doubtful accounts		46,210			38			—				46,248
Deferred commissions		6,205			—			—				6,205
Prepaid expenses and other current assets		9,040			92			—				9,132
Total current assets		404,699			5,552			(4,840	)			405,411
Restricted cash		918			100			—				1,018
Property and equipment, net		5,661			125			—				5,786
Deferred commissions, net of current portion		8,947			—			—				8,947
Intangible assets		—			—			5,525		(B)		5,525
Goodwill		—			—			37,259		(C)		37,259
Other assets		805			—			—				805
Total assets	$	421,030		$	5,777		$	37,944			$	464,751
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	1,074		$	247		$	—			$	1,321
Accrued expenses and other current liabilities		7,750			81			—				7,831
Accrued employee compensation		11,150			225			—				11,375
Deferred revenue		167,125			159			(159	)	(D)		167,125
Total current liabilities		187,099			712			(159	)			187,652
Deferred revenue, net of current portion		24,687			240			(240	)	(D)		24,687
Long-term tax payable		1,527			—			—				1,527
Contingent consideration		—			—			27,720		(E)		27,720
Other long-term liabilities		144			—			—				144
Total liabilities		213,457			952			27,321				241,730
Stockholders’ equity:
Series A Preferred Stock		—			7			(7	)	(D)		—
Series B Preferred Stock		—			12			(12	)	(D)		—
Common Stock		—			6			(6	)	(D)		—
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding as of June 30, 2010		—			—			—				—
Common stock, $0.001 par value; 200,000 shares authorized; 72,957 shares outstanding and 73,861 pro forma shares outstanding as of June 30, 2010		73			—			1		(F)		74
Additional paid-in capital		435,594			11,600			7,623		(G)		454,817
Accumulated other comprehensive loss		(67	)		—			—				(67	)
Accumulated deficit		(228,027	)		(6,800	)		3,024		(H)		(231,803	)
Total stockholders’ equity		207,573			4,825			10,623				223,021
Total liabilities and stockholders’ equity	$	421,030		$	5,777		$	37,944			$	464,751

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

SuccessFactors, Inc.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2009

(IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)

	HISTORICAL						PRO FORMA ADJUSTMENTS			NOTES	TOTAL
	SUCCESSFACTORS			CUBETREE
Revenue	$	153,054		$	5		$	—			$	153,059
Cost of revenue		35,323			62			2,335		(H)		37,720
Gross profit		117,731			(57	)		(2,335	)			115,339
Operating expenses:
Sales and marketing		80,431			647			11		(H)		81,089
Research and development		24,427			1,490			171		(H)		26,088
General and administrative		24,995			360			—				25,355
Total operating expenses		129,853			2,497			182				132,532
Loss from operations		(12,122	)		(2,554	)		(2,517	)			(17,193	)
Interest income (expense) and other, net		810			2			—				812
Loss before provision for income taxes		(11,312	)		(2,552	)		(2,517	)			(16,381	)
Provision for income taxes		(1,322	)		—			—				(1,322	)
Net loss	$	(12,634	)	$	(2,552	)	$	(2,517	)		$	(17,703	)
Net loss per common share, basic and diluted	$	(0.21	)	$	—		$	—			$	(0.29	)
Shares used in computing net loss per common share, basic and diluted		59,534			—			713		(I)		60,247

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

SuccessFactors, Inc.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2010

(IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)

	HISTORICAL						PRO FORMA ADJUSTMENTS			NOTES	TOTAL
	SUCCESSFACTORS			CUBETREE
Revenue	$	90,619		$	96		$	(22	)	(J)	$	90,693
Cost of revenue		22,325			64			1,168		(H)		23,557
Gross profit		68,294			32			(1,190	)			67,136
Operating expenses:
Sales and marketing		44,335			1,067			5		(H)		45,407
Research and development		16,651			1,013			86		(H)		17,750
General and administrative		15,706			834			—				16,540
Total operating expenses		76,692			2,914			91				79,697
Loss from operations		(8,398	)		(2,882	)		(1,281	)			(12,561	)
Interest income (expense) and other, net		(536	)		3			—				(533	)
Loss before provision for income taxes		(8,934	)		(2,879	)		(1,281	)			(13,094	)
Provision for income taxes		(194	)		—			—				(194	)
Net loss	$	(9,128	)	$	(2,879	)	$	(1,281	)		$	(13,288	)
Net loss per common share, basic and diluted	$	(0.13	)	$	—		$	—			$	(0.18	)
Shares used in computing net loss per common share, basic and diluted		72,328			—			713		(I)		73,041

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

SuccessFactors, Inc.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Year Ended December 31, 2009 and Six Months Ended June 30, 2010

1. Basis of Presentation

The accompanying unaudited pro forma condensed consolidated financial statements are based on the historical financial information of SuccessFactors, Inc. (“SuccessFactors” or “the Company”) and CubeTree, Inc. (“CubeTree”) after giving effect to the acquisition of CubeTree by SuccessFactors using the purchase method of accounting and applying the assumptions and adjustments described in the accompanying notes.

The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2010 and for the twelve months ended December 31, 2009 combines the historical results for SuccessFactors for each of the periods presented, and the historical results for CubeTree for each of the periods presented, as if the acquisition had occurred as of January 1, 2009.

2. Pro Forma Adjustments

The following pro forma adjustments are included in the unaudited pro forma condensed consolidated statements of operations:

(A) Cash balance excludes $3.0 million of cash dividend declared and paid in July 2010 to the former shareholders of CubeTree, and other cash adjustments pursuant to the working capital provision of the merger agreement.

(B) Reflects estimated fair value of identifiable intangible assets acquired from CubeTree, consisting of software and customer relationships with fair values of $8.2 million and $0.9 million, respectively, less accumulated amortization of $3.2 million and $0.4 million as of June 30, 2010.

(C) Goodwill is measured as the excess of the purchase price over the fair value of net assets acquired from CubeTree.

(D) Reflects adjustments for purchase price allocation based on the fair value of assets and liabilities acquired.

(E) Reflects the fair value of the contingent consideration, which provides for the former stockholders of CubeTree to receive a cash payment on the three-year anniversary of the closing or at such earlier time as a change of control of the Company occurs (the “Top-Up Payment Date”). If, on the Top-Up Payment Date, the value of the consideration issued at the closing (the “Market Value”) is less than approximately $47.9 million (the “Guaranteed Value”), subject to adjustments, the Company shall make a payment to such holders in an aggregate amount equal to the difference between the Guaranteed Value and the Market Value (the “Top-Up Payment”). The aggregate Top-Up Payment will be reduced to the extent of any sale, transfer or other disposition of any of the consideration (subject to certain limited exceptions). Such right to receive the Top-Up Payment will terminate in the event the value of the shares of the consideration paid at closing equals or exceeds approximately $47.9 million at any time prior to the Top-Up Payment Date.

(F) Pro forma shares outstanding of 73.9 million as of June 30, 2010 reflect 713,222 shares issued to the former shareholders of CubeTree, including 190,511 shares held in escrow.

(G) Reflects (i) fair value of $18.9 million for the shares of SuccessFactors’ common stock issued in connection with the CubeTree acquisition, and (ii) adjustments for stock-based compensation of $0.2 million and $0.1 million for the twelve months ended December 31, 2009 and the six months ended June 30, 2010, respectively, related to restricted stock units (RSUs) issued to CubeTree employees.

(H) Reflects adjustments for stock-based compensation of $0.2 million and $0.1 million for the twelve months ended December 31, 2009 and the six months ended June 30, 2010, respectively, related to RSUs issued to CubeTree employees, and adjustments for amortization expense of $2.3 million and $1.2 million related to identifiable intangible assets for the twelve months ended December 31, 2009 and the six months ended June 30, 2010, respectively.

(I) Reflects 713,222 shares of SuccessFactors’ common stock issued in connection with the CubeTree acquisition, excluding 190,511 shares of common stock held in escrow in the computation of basic and diluted net loss per common share.

(J) Reflects elimination of revenue related to an OEM agreement with SuccessFactors.