Exhibit 99.2

Mandalay Digital Group, Inc.

and Mirror Image International Holdings Pty Ltd.

Pro Forma Combined Financial Statements

(unaudited)

Contents

 

     Page  

Pro Forma Combined Financial Statements (Unaudited):

  

Pro Forma Combined Balance Sheet as of March 31, 2013 (unaudited)

     2   

Pro Forma Combined Statement of Operations for the Year ended March 31, 2013 (unaudited)

     3   

Notes to Pro Forma Combined Financial Statements (unaudited)

     4   

 

1


Mandalay Digital Group, Inc.

and Mirror Image International Holdings Pty Ltd.

Pro Forma Combined Balance Sheet

March 31, 2013

(unaudited)

 

     Mandalay
Digital

Group, Inc. (1)
    Mirror Image
International
Holdings Pty Ltd (2)
     Pro Forma
Adjustments
         Pro Forma
Combined
 
ASSETS             

CURRENT ASSETS

            

Cash & cash equivalents

   $ 1,149,000      $ 628,000       $ (1,287,000   a    $ 490,000   

Accounts receivable

     1,995,000        2,854,000         —             4,849,000   

Prepaid expenses and other current assets

     848,000        934,000         —             1,782,000   

Due from related parties

     —          25,000         —             25,000   
  

 

 

   

 

 

    

 

 

      

 

 

 

TOTAL CURRENT ASSETS

     3,992,000        4,441,000         (1,287,000        7,146,000   

Property and equipment, net

     148,000        608,000         (53,000   b      703,000   

Intangible assets, net

     4,757,000        —           6,874,000      c      11,631,000   

Goodwill

     3,588,000        —           1,319,000      d      4,907,000   

Other assets

     —          —           —             —     
  

 

 

   

 

 

    

 

 

      

 

 

 

TOTAL ASSETS

   $ 12,485,000      $ 5,049,000       $ 6,853,000         $ 24,387,000   
  

 

 

   

 

 

    

 

 

      

 

 

 
LIABILITIES AND SHAREHOLDERS’ DEFICIT             

CURRENT LIABILITIES

            

Accounts payable

   $ 3,783,000      $ 1,575,000       $ —           $ 5,358,000   

Accrueed expenses

     1,361,000        2,957,000         —             4,318,000   

Current maturities and short term loans

     3,777,000        —           —             3,777,000   

Other current liabilities

     734,000        216,000         —             950,000   

Due to related parties

     —          —           —             —     
  

 

 

   

 

 

    

 

 

      

 

 

 

TOTAL CURRENT LIABILITIES

     9,655,000        4,748,000         —             14,403,000   

Long term debt and convertible debt

     1,252,000        —           2,404,000      e      3,656,000   

Provision for uncertain tax provisions

     —          —           —             —     

Other long term liabilities

     841,000        —           —             841,000   
  

 

 

   

 

 

    

 

 

   

 

  

 

 

 

TOTAL LIABILITIES

     11,748,000        4,748,000         2,404,000           18,900,000   

SHAREHOLDERS’ EQUITY

            

Preferred stock

     100,000        —                100,000   

Common stock

     7,000        —           1,000      f      8,000   

Treasury stock

     (71,000     —                (71,000

Additional paid in capital

     142,571,000        —                147,320,000   
          17,000      g   
          284,000      h   
          4,448,000      f   

Accumulated other comprehensive income (loss)

     (266,000     17,000         (17,000   g      (266,000

(Accumulated deficit) retained earnings

     (141,604,000     284,000         (284,000   h      (141,604,000
  

 

 

   

 

 

    

 

 

      

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

     737,000        301,000         4,449,000           5,487,000   
  

 

 

   

 

 

    

 

 

      

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 12,485,000      $ 5,049,000       $ 6,853,000         $ 24,387,000   
  

 

 

   

 

 

    

 

 

      

 

 

 

 

(1) Source: unaudited financial statements of Mandalay Digital Group, Inc.
(2) Source: audited financial statements of Mirror Image International Holdings Pty LTd. as of March 31, 2013 included elsewhere in this 8-K

See accompanying notes to unaudited pro forma combined financial statements

 

2


Mandalay Digital Group, Inc.

and Mirror Image International Holdings Pty Ltd.

Pro Forma Combined Statement of Operations

For the Year Ended March 31, 2013

(unaudited)

 

     Mandalay
Digital
Group, Inc. (1)
    Mirror  Image
International
Holdings Pty Ltd (2)
    Pro  Forma
Adjustments
         Pro Forma
Combined
 

Net revenue

   $ 6,025,000      $ 13,358,000      $ —           $ 19,383,000   

Cost of revenue

     2,611,000        7,562,000        —             10,173,000   
  

 

 

   

 

 

   

 

 

      

 

 

 

Gross profit

     3,414,000        5,796,000        —             9,210,000   

Product development

     1,712,000        —          —             1,712,000   

Selling, general and administrative

     12,963,000        6,338,000        1,320,000      (i)      20,621,000   

Impairment of goodwill

     1,119,000        —          —             1,119,000   
  

 

 

   

 

 

   

 

 

      

 

 

 

Loss from operations

     (12,380,000     (542,000     (1,320,000        (14,242,000

Non-operating expense

     (1,691,000     (58,000     36,000      (j)      (1,713,000
  

 

 

   

 

 

   

 

 

      

 

 

 

Loss before provision for income taxes

     (14,071,000     (600,000     (1,284,000        (15,955,000

Provision for income taxes

     90,000        92,000        —             182,000   
  

 

 

   

 

 

   

 

 

      

 

 

 

Net loss

   $ (14,161,000   $ (692,000   $ (1,284,000      $ (16,137,000
  

 

 

   

 

 

   

 

 

      

 

 

 

Weighted average shares outstanding :

           

Basic

     17,631,000               22,686,822   
  

 

 

          

 

 

 

Diluted

     17,631,000               22,686,822   
  

 

 

          

 

 

 

Basic and diluted earnings per share

   $ (0.80          $ (0.71
  

 

 

          

 

 

 

 

(1) Source: unaudited financial statements of Mandalay Digital Group, Inc.
(2) Source: audited financial statements of Mirror Image International Holdings Pty LTd. for the year ended March 31, 2013 included elsewhere in this 8-K

See accompanying notes to unaudited pro forma combined financial statements

 

3


Mandalay Digital Group, Inc.

and Mirror Image International Holdings Pty Ltd.

Notes to Unaudited Pro forma Combined Financial Statements

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited pro forma combined balance sheet presents the accounts of Mandalay Digital Group, Inc. (“Mandalay”) and Mirror Image International Holdings Pty Ltd and its wholly owned subsidiary Mirror Image Access (Australia) Pty Ltd, as well as MIA Technology Pty Ltd (together, “Mirror Image International Holdings Pty Ltd”) as if the acquisition of Mirror Image International Holdings Pty Ltd occurred on March 31, 2013. The accompanying unaudited pro forma combined statement of operations presents the accounts of Mandalay and the Mirror Image International Holdings Pty Ltd for the year ended March 31, 2013 as if the acquisition occurred on April 1, 2012. For accounting purposes, the transaction is being accounted for as an acquisition of a business.

The following adjustments would be required if the acquisition occurred as indicated above:

 

a. To record the $1,287,000 cash paid to the sellers.

 

b. To record the $53,000 decrease in the fair value of the property and equipment.

 

c. To record the $6,874,000 fair value of purchased intangible assets.

 

d. To record the $1,574,000 fair value of goodwill.

 

e. To record the $2,404,000 note payable issued to the sellers.

 

f. To record the $4,449,000 fair value of the 5,055,822 shares issued to the sellers.

 

g. To eliminate Mirror Image International Holdings Pty Ltd’s pre-acquisition other comprehensive income of $17,000.

 

h. To eliminate Mirror Image International Holdings Pty Ltd pre-acquisition retained earnings of $284,000.

 

i. To record amortization expense of $1,320,000 related to the purchased intangibles.

 

j. To record additional interest expense of $36,000 related to the 6% note payable due in 90 days that was issued to the sellers.

 

4