Exhibit 99.2
Mandalay Digital Group, Inc.
and Subsidiaries Acquired From Logia Group, Ltd.
Pro Forma Combined Financial Statements
(unaudited)
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| Pro Forma Combined Financial Statements: |
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| Pro Forma Combined Balance Sheet as of June 30, 2012 (unaudited) |
28 | |||
| Pro Forma Combined Statement of Operations for the three months ended June 30, 2012 (unaudited) |
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| Pro Forma Combined Statement of Operations for the year ended March 31, 2012 (unaudited) |
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| Notes to Pro Forma Combined Financial Statements (unaudited) |
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27
Mandalay Digital Group, Inc.
and Subsidiaries Acquired From Logia Group, Ltd.
Pro Forma Combined Balance Sheet
June 30, 2012
(unaudited)
| Mandalay Digital Group, Inc. (1) |
Subsidiaries Acquired From Logia Group, Ltd.(2) |
Pro Forma Adjustments |
Pro Forma Combined |
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| (historical) | (historical) | |||||||||||||||
| ASSETS | ||||||||||||||||
| CURRENT ASSETS |
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| Cash & cash equivalents |
$ | 8,240,000 | $ | 22,000 | $ | (3,416,000 | ) a | $ | 4,846,000 | |||||||
| Accounts receivable |
1,019,000 | 800,000 | — | 1,819,000 | ||||||||||||
| Prepaid expenses and other current assets |
136,000 | 32,000 | — | 168,000 | ||||||||||||
| Due from related parties |
— | — | — | — | ||||||||||||
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| TOTAL CURRENT ASSETS |
9,395,000 | 854,000 | (3,416,000 | ) | 6,833,000 | |||||||||||
| Restricted cash |
— | 197,000 | — | 197,000 | ||||||||||||
| Property and equipment, net |
201,000 | 53,000 | 254,000 | |||||||||||||
| Intangible assets, net |
759,000 | — | 4,470,000 | b | 5,229,000 | |||||||||||
| Goodwill |
3,640,000 | — | 492,000 | c | 4,132,000 | |||||||||||
| Other assets |
— | 104,000 | — | 104,000 | ||||||||||||
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| TOTAL ASSETS |
$ | 13,995,000 | $ | 1,208,000 | $ | 1,546,000 | $ | 16,749,000 | ||||||||
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| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||||||
| CURRENT LIABILITIES |
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| Accounts payable |
$ | 3,032,000 | $ | 707,000 | $ | — | $ | 3,739,000 | ||||||||
| Accrued license fees |
1,049,000 | — | — | 1,049,000 | ||||||||||||
| Accrueed compensation |
370,000 | — | — | 370,000 | ||||||||||||
| Current maturities and short term loans |
2,234,000 | 745,000 | — | 2,979,000 | ||||||||||||
| Other current liabilities |
553,000 | 944,000 | — | 1,497,000 | ||||||||||||
| Due to related parties |
— | 86,000 | — | 86,000 | ||||||||||||
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| TOTAL CURRENT LIABILITIES |
7,238,000 | 2,482,000 | — | 9,720,000 | ||||||||||||
| Long term debt and convertible debt |
1,378,000 | — | 1,378,000 | |||||||||||||
| Provision for uncertain tax provisions |
— | 360,000 | 360,000 | |||||||||||||
| Other long term liabilities |
— | 34,000 | 758,000 | d | 792,000 | |||||||||||
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| TOTAL LIABILITIES |
8,616,000 | 2,876,000 | 758,000 | 12,250,000 | ||||||||||||
| SHAREHOLDERS’ EQUITY |
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| Preferred stock |
100,000 | — | 100,000 | |||||||||||||
| Common stock |
7,000 | 1,000 | (1,000 | ) f | 7,000 | |||||||||||
| Treasury stock |
(71,000 | ) | — | (71,000 | ) | |||||||||||
| Additional paid in capital |
135,702,000 | 257,000 | 1,000 | f | 134,822,000 | |||||||||||
| 94,000 | g | |||||||||||||||
| (2,020,000 | ) h | |||||||||||||||
| 788,000 | e | |||||||||||||||
| Accumulated other comprehensive loss |
(163,000 | ) | 94,000 | (94,000 | ) g | (163,000 | ) | |||||||||
| Accumulated deficit |
(130,196,000 | ) | (2,020,000 | ) | 2,020,000 | h | (130,196,000 | ) | ||||||||
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| TOTAL SHAREHOLDERS’ EQUITY |
5,379,000 | (1,668,000 | ) | 788,000 | 4,499,000 | |||||||||||
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| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 13,995,000 | $ | 1,208,000 | $ | 1,546,000 | $ | 16,749,000 | ||||||||
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| (1) | Source: unaudited financial statements of Mandalay Digital Group, Inc. obtained from 10-Q filing with the SEC for period ended June 30, 2012. |
| (2) | Source: unaudited financial statements of Subsidiaries Acquired from Logia Group, Ltd. as of June 30, 2012 included elsewhere in this 8-K |
See accompanying notes to pro forma combined financial statements
28
Mandalay Digital Group, Inc.
and Subsidiaries Acquired From Logia Group Ltd.
Pro Forma Combined Statement of Operations
| Three Months Ended June 30, 2012 | ||||||||||||||||
| Mandalay Digital Group, Inc. (1) |
Subsidiaries Acquired From Logia Group, Ltd.(2) |
Pro Forma Adjustments |
Pro Forma Combined |
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| Net revenue |
$ | 1,290,000 | $ | 1,429,000 | $ | — | $ | 2,719,000 | ||||||||
| Cost of revenue |
672,000 | 1,046,000 | — | 1,718,000 | ||||||||||||
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| Gross profit |
618,000 | 383,000 | — | 1,001,000 | ||||||||||||
| Product development |
366,000 | — | — | 366,000 | ||||||||||||
| Selling, general and administrative |
2,504,000 | 122,000 | 117,250 | (i) | 2,743,250 | |||||||||||
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| Income from operations |
(2,252,000 | ) | 261,000 | (117,250 | ) | (2,108,250 | ) | |||||||||
| Non-operating expense |
(487,000 | ) | (63,000 | ) | — | (550,000 | ) | |||||||||
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| Income before provision for income taxes |
(2,739,000 | ) | 198,000 | (117,250 | ) | (2,658,250 | ) | |||||||||
| Provision for income taxes |
14,000 | 16,000 | — | 30,000 | ||||||||||||
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| Net income (loss) |
$ | (2,753,000 | ) | $ | 182,000 | $ | (117,250 | ) | $ | (2,688,250 | ) | |||||
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| Weighted average shares outstanding : |
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| Basic |
84,504,000 | 85,441,500 | ||||||||||||||
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| Diluted |
84,504,000 | 85,441,500 | ||||||||||||||
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| Basic and diluted earnings per share |
$ | (0.03 | ) | $ | (0.03 | ) | ||||||||||
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| (1) | Source: unaudited financial statements of Mandalay Digital Group, Inc. obtained from 10-Q filing with the SEC for period ended June 30, 2012. |
| (2) | Source: unaudited financial statements of Subsidiaries Acquired from Logia Group, Ltd. for the period ended June 30, 2012 |
See accompanying notes to pro forma combined financial statements
29
Mandalay Digital Group, Inc.
and Subsidiaries Acquired From Logia Group Ltd.
Pro Forma Combined Statement of Operations
| Year Ended March 31, 2012 | ||||||||||||||||
| Mandalay Digital Group, Inc. (1) |
Subsidiaries Acquired From Logia Group, Ltd.(2) |
Pro Forma Adjustments |
Pro Forma Combined |
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| Net revenue |
$ | 7,230,000 | $ | 8,863,000 | $ | — | $ | 16,093,000 | ||||||||
| Cost of revenue |
2,873,000 | 8,481,000 | — | 11,354,000 | ||||||||||||
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| Gross profit |
4,357,000 | 382,000 | — | 4,739,000 | ||||||||||||
| Product development |
2,154,000 | — | — | 2,154,000 | ||||||||||||
| Selling, general and administrative |
13,886,000 | 843,000 | 469,000 | (i) | 15,198,000 | |||||||||||
| Impairment of intangibles including goodwill |
5,288,000 | — | — | 5,288,000 | ||||||||||||
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| Income (loss) from operations |
(16,971,000 | ) | (461,000 | ) | (469,000 | ) | (17,901,000 | ) | ||||||||
| Non-operating expense |
(13,626,000 | ) | (246,000 | ) | — | (13,872,000 | ) | |||||||||
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| Income before provision for income taxes |
(30,597,000 | ) | (707,000 | ) | (469,000 | ) | (31,773,000 | ) | ||||||||
| Provision for income taxes |
110,000 | — | 110,000 | |||||||||||||
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| Net income (loss) |
$ | (30,707,000 | ) | $ | (707,000 | ) | $ | (469,000 | ) | $ | (31,883,000 | ) | ||||
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| Weighted average shares outstanding: |
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| Basic |
49,418,000 | 50,355,500 | ||||||||||||||
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| Diluted |
49,418,000 | 50,355,500 | ||||||||||||||
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| Basic and diluted earnings per share |
$ | (0.62 | ) | $ | (0.63 | ) | ||||||||||
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| (1) | Source: audited financial statements of Mandalay Digital Group, Inc. obtained from 10-K filing with the SEC for year ended March 31, 2012. |
| (2) | Source: audited financial statements of Subsidiaries Acquired from Logia Group, Ltd. for the year ended December 31, 2011 included elsewhere in this 8-K |
See accompanying notes to pro forma combined financial statements
30
Mandalay Digital Group, Inc.
and Subsidiaries Acquired From Logia Group, Ltd.
Notes to Pro Forma Combined Financial Statements
NOTE 1 - BASIS OF PRESENTATION
The accompanying pro forma combined balance sheet presents the accounts of Mandalay Digital Group, Inc. (“Mandalay”) and Logia Content Development and Management, Ltd., Volas Entertainment, Ltd. and Mail Bit-Logia (2008) Ltd. (together: The “Subsidiaries Acquired From Logia Group Ltd”) as if the acquisition of the Subsidiaries Acquired From Logia Group, Ltd. occurred on April 1, 2011. The accompanying pro forma combined statement of operations presents the accounts of Mandalay and the Subsidiaries Acquired From Logia Group, Ltd. for the year ended March 31, 2012, and for the three months ended June 30, 2012 as if the acquisition occurred on April 1, 2011. For accounting purposes, the transaction is being accounted for as an acquisition of a business.
The following adjustments (unaudited) would be required if the acquisition occurred as indicated above:
| a. | To record the $3,416,000 cash paid to the sellers. |
| b. | To record the $4,470,000 fair value of purchased intangible assets. |
| c. | To record the $492,000 fair value of goodwill. |
| d. | To record the $758,000 fair value of the contingent consideration, net of discount of $242,000. |
| e. | To record the $788,000 fair value of the 937,500 shares issued to the sellers. |
| f. | To eliminate the common stock of the Subsidiaries Acquired From Logia Group, Ltd. |
| g. | To eliminate the pre-acquisition of other comprehensive loss of the Subsidiaries Acquired From Logia Group, Ltd. |
| h. | To eliminate pre-acquisition accumulated deficit of the Subsidiaries Acquired From Logia Group, Ltd. |
| i. | To record amortization of purchased intangibles. |
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