Bitstream Inc.

On November 10, 2011, the Board of Directors of Bitstream authorized the contribution of the Pageflex and Bolt Products from Bitstream to Bitstream’s wholly-owned subsidiary, Marlborough Software Development Holdings, Inc. (“MSDH”), (the “Separation”), and the distribution of shares of MSDH stock to holders of Bitstream stock on a one for one basis, (the “Distribution”), MSDH was formed in conjunction with Bitstream’s planned merger (the “Bitstream Merger”) with and acquisition by a newly-formed subsidiary (“Merger Sub”) of Monotype Imaging Holdings Inc., a Delaware corporation (“Monotype”). The completion of the Separation and Distribution are conditions precedent to the Bitstream Merger. Management and the Board of Directors of Bitstream believe that it is in the best interest of shareholders to separate and allow for the merger of Bitstream’s business relating to its OEM and retail font and font technology products with Monotype’s Merger Sub.

Also, on November 10, 2011, Bitstream and Monotype signed the Merger Agreement contemplated by the above actions, and Monotype entered into voting agreements with each of the directors and executive officers of Bitstream and certain stockholders of Bitstream that beneficially own in the aggregate approximately 44% of Bitstream’s common stock, pursuant to which they have agreed to vote their shares of Bitstream common stock in favor of the Merger Agreement and the transactions contemplated thereby, including the Merger. On November 10, 2011, MSDH filed a Registration Statement on Form S-1 with the SEC to register the shares of MSDH common stock that will be distributed to holders of Bitstream common stock pursuant to the Distribution.

On November 10, 2011, the Board of Directors of Bitstream authorized the contribution of the Pageflex and Bolt Products from Bitstream to Bitstream’s wholly owned subsidiary, Marlborough Software Development Holdings, Inc. (“MSDH”) , (the “Separation”) and the distribution of shares of MSDH stock to holders of Bitstream stock on a one for one basis, (the “Distribution”), MSDH was formed in conjunction with Bitstream’s planned merger (the “Bitstream Merger”) with and acquisition by a newly-formed subsidiary (“Merger Sub”) of Monotype Imaging Holdings Inc., a Delaware corporation (“Monotype”). MSDH consists of the Pageflex and Bolt product lines that were contributed to it by Bitstream. The completion of the Separation and Distribution are conditions precedent to the Bitstream Merger and the Distribution must be completed at least three business days prior to the completion of the Bitstream Merger. The Separation, Distribution and Bitstream Merger will be consummated because management and the Board of Directors of Bitstream believe that it is in the best interest of shareholders to separate and allow for the merger of Bitstream’s business relating to its OEM and retail font and font technology products with Monotype’s Merger Sub.

Also, on November 10, 2011, Bitstream and Monotype signed the Merger Agreement contemplated by the above actions, and Monotype entered into voting agreements with each of the directors and executive officers of Bitstream and certain stockholders of Bitstream that beneficially own in the aggregate approximately 44% of Bitstream’s common stock, pursuant to which they have agreed to vote their shares of Bitstream common stock in favor of the Merger Agreement and the transactions contemplated thereby, including the Merger. On November 10, 2011, MSDH filed a Registration Statement on Form S-1 with the SEC to register the shares of MSDH common stock that will be distributed to holders of Bitstream common stock pursuant to the Distribution.

The announcement of our pending merger with a subsidiary of Monotype Imaging Holdings Inc. (“Monotype Imaging”) and the related pending distribution to our existing stockholders (the “Spin-Off”) of all of the shares of common stock of Marlborough Software Development Holdings Inc., a Delaware corporation and our wholly-owned subsidiary (“MSDH”), which owns and controls all of our assets, liabilities and operations relating to our Pageflex and Bolt products, whether or not consummated, may result in a loss of key personnel and may disrupt our sales and operations, which may have an impact on our financial performance. The merger agreement generally requires us to operate our business in the ordinary course pending consummation of the merger, but includes certain contractual restrictions on the conduct of our business that may affect our ability to execute on our business strategies and attain our financial goals. Additionally, the announcement of the pending merger and Spin-Off, whether or not consummated, may impact our relationships with third parties.

The completion of the pending merger is subject to certain conditions, including, among others (i) adoption of the merger agreement by our shareholders, (ii) the consummation of the Spin-Off prior to the effective time of the merger; (iii) subject to certain materiality exceptions, the accuracy of the representations and warranties made in the merger agreement by us and by Monotype Imaging and its subsidiary, respectively, and compliance by us and by Monotype Imaging and its subsidiary with our and their respective obligations under the merger agreement and (v) the non-occurrence of an event having a “Company Material Adverse Effect” (as defined in the merger agreement) on us. The completion of the Spin-Off is subject to the declaration of the effectiveness by the SEC of the registration statement on Form S-1 filed by MSDH with the SEC with respect to the Spin-Off .

We cannot predict whether all of the closing conditions for the pending merger set forth in the merger agreement will be satisfied. As a result, we cannot assure you that the pending merger will be completed. If the closing conditions for the pending merger set forth in the merger agreement are not satisfied or waived pursuant to the merger agreement, or if the transaction is not completed for any other reason, the market price of our common stock may decline. In addition, if the pending merger and Spin-Off do not occur, we will nonetheless remain liable for significant expenses that we have incurred related to the transactions, as well as potentially being liable for a termination fee and/or Monotype Imaging’s expenses incurred in connection with the merger, as described above.

These matters, alone or in combination, could have a material adverse effect on our business and financial results.