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As filed with the Securities and Exchange Commission on January 27, 2015

Registration No. 333-200695

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2

to

FORM S-4/A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

DIGITAL TURBINE, INC.

(Exact name of registrant as specified in its charter)

2811 Cahuenga Boulevard West

Los Angeles, California 90068

(323) 472-5461

(Address, Including Zip Code, and Telephone Number, Including

Area Code, of Registrant’s Principal Executive Offices)

William Stone

Chief Executive Officer

Digital Turbine, Inc.

2811 Cahuenga Boulevard West

Los Angeles, California 90068

(323) 472-5461

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

With copies to:

Ben D. Orlanski, Esq.

Katherine J. Blair, Esq.

Manatt, Phelps & Phillips, LLP

11355 W. Olympic Blvd.

Los Angeles, California 90064

(310) 312-4000

Approximate date of commencement of proposed sale of the securities to the public:

As soon as practicable after this registration statement becomes effective and upon completion of the merger.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:    ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

If applicable, place an x in the box to designate the appropriate rule provision relied upon in conducting this transaction:

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this proxy statement/prospectus is not complete and may be changed. A registration statement relating to the shares of Mandalay Digital Group, Inc. common stock to be issued in the merger has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This proxy statement/prospectus shall not constitute an offer to sell nor the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

PRELIMINARY PROXY STATEMENT/PROSPECTUS

SUBJECT TO COMPLETION, DATED JANUARY 27, 2015

To the Stockholders of Digital Turbine, Inc. (formerly, Mandalay Digital Group, Inc.) and the Stockholders of Appia, Inc.:

On behalf of the board of directors of Digital Turbine, Inc. (formerly, Mandalay Digital Group, Inc.,) we are pleased to deliver to you this proxy statement/prospectus relating to the proposed issuance and sale by us of shares of our common stock in connection with the merger transaction described below. Note that on January 20, 2015, we changed our name to “Digital Turbine, Inc.” but for purposes of this document we continue to refer to our company as Mandalay Digital.

The accompanying document is being delivered to (1) Mandalay Digital stockholders to solicit proxies to vote at our annual meeting, and (2) Appia, Inc. security holders as Mandalay Digital’s prospectus for its offering of Mandalay Digital common stock in connection with the merger.

On November 13, 2014, we entered into an agreement and plan of merger, which we refer to as the merger agreement, to acquire all the outstanding capital stock of Appia, Inc., which we refer to as Appia, in exchange for the issuance of shares of our common stock to the Appia security holders. DTM Merger Sub, Inc., a wholly-owned subsidiary of Mandalay Digital, will merge with and into Appia, so that Appia as the surviving entity, will become a wholly-owned subsidiary of Mandalay Digital, which transaction we refer to as the merger. In the merger, each security, other than Appia stock options held by employees of Appia, held by an Appia security holder will be converted into the right to receive shares of Mandalay Digital common stock and outstanding Appia stock options held by employees of Appia will be assumed by Mandalay Digital and converted into Mandalay Digital stock options.

Consummation of the merger is subject to a number of conditions described in this proxy statement/prospectus, including the approval by our stockholders of the issuance and sale to the Appia security holders of up to 19,500,000 shares of our common stock, including shares issuable upon exercise of stock options that we will assume pursuant to the merger. For a description of the conditions for the merger, see the section entitled “Summary of the Merger Agreement – Conditions to the Consummation of the Merger” in this proxy statement/prospectus. We are also seeking approval of the issuance of 600,000 shares of our common stock (including a warrant to purchase 400,000 shares) to be issued to a lender in connection with a separate loan transaction. The warrant is not exercisable until the one year anniversary of the closing date of the merger and will terminate if the Company repays the debt prior to such one year anniversary.

Our stockholders are invited to attend the annual meeting of Mandalay Digital on March 5, 2015. This letter is accompanied by the attached document, which the Mandalay Digital board of directors is providing to solicit from our stockholders proxies to vote for the issuance of Mandalay Digital common stock in connection with the merger. Our board of directors unanimously recommends that our stockholders vote “FOR” approval of the proposed issuance and sale by us of shares of our common stock in connection with the merger.

In addition to voting to authorize the issuance of Mandalay Digital common stock in the merger, at the annual meeting our stockholders also will be asked to elect directors, approve, on an advisory basis, the executive compensation of our executive officers and the frequency at which approval of executive compensation will be proposed and ratify the appointment of our auditors. Our board of directors also unanimously recommends that our stockholders vote “FOR” these proposals listed in the proxy statement/prospectus.

The date, time and place of the meeting are as follows:  March 5 10:00 am PT Manatt, Phelps & Phillips, LLP, 11355 Olympic Blvd., Los Angeles CA 90064

Only Mandalay Digital stockholders of record as of January 20, 2015 are entitled to attend and vote at the annual meeting.

If you are a holder of Mandalay Digital shares of common stock or preferred stock, whether or not you plan to attend the annual meeting, your vote is very important. Please sign and submit your proxy as soon as possible so that your shares can be voted at the annual meeting in accordance with your instructions. Whether or not you expect to attend the annual meeting, please submit your proxy promptly. Record holders of our common stock and preferred stock can submit a proxy via the Internet, by telephone, or by mailing the enclosed proxy card (beneficial owners may submit a proxy via the Internet, by telephone, or by mailing the enclosed voting instructions). Instructions for using these convenient services appear on the instructions on the enclosed proxy card or voting instructions. Submitting a proxy now will not prevent you from being able to vote in person at the Mandalay Digital annual meeting.

This proxy statement/prospectus provides information about us, Appia and our proposed merger that our stockholders should know when they vote. In particular, the section entitled “Risk Factors” beginning on page 23 contains a description of risks that you should consider in evaluating the proposed merger. We urge you to read this entire proxy statement/prospectus carefully.

On behalf of our company, we look forward to seeing our stockholders at the annual meeting and we thank you for your support.

Sincerely,

William Stone

Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger, the issuance of the Mandalay Digital common stock in connection with the merger or the other transactions described in this document, or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

Proxy statement/prospectus dated [                    ], 2015 and first mailed to

our stockholders and Appia security holders on or about [                    ], 2015.

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DIGITAL TURBINE, INC.

(formerly, Mandalay Digital Group, Inc.)

2811 CAHUENGA BOULEVARD WEST

LOS ANGELES, CALIFORNIA 90068

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MARCH 5, 2015

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the “annual meeting”) of Digital Turbine, Inc. (formerly, Mandalay Digital Group, Inc.) a Delaware corporation (the “Company”), will be held at 10:00 a.m. Pacific time, on March 5, 2015, at the offices of Manatt, Phelps & Phillips, LLP, 11355 West Olympic Blvd., Los Angeles, California 90064. You are cordially invited to attend the annual meeting, at which stockholders will be asked to consider and vote upon the following proposals, which are more fully described in the enclosed proxy statement/prospectus:

Only our stockholders of record of our common stock and our preferred stock at the close of business on January 20, 2015, (the “Record Date”), are entitled to notice of and vote at the annual meeting and at any adjournments or postponements thereof. A list of such holders as of the Record Date will be available during normal business hours for examination by any such holder for a period of ten days prior to the day of the annual meeting at our principal executive offices.

Our board of directors has approved the issuance of our shares of common stock in connection with the merger with Appia and loan transaction and unanimously recommends that you vote FOR that proposal and FOR the other proposals. A copy of the merger agreement is attached as Appendix A to the accompanying proxy statement/prospectus. The proposals are described in more detail in the accompanying proxy statement/prospectus, which we encourage you to read in its entirety before voting.

All of our stockholders are urged to attend the meeting in person or by proxy. Your vote is important. Whether or not you expect to attend the meeting in person, please sign and submit your proxy as soon as possible so that your shares can be voted at the annual meeting in accordance with the instructions on the enclosed proxy card. The proxy is revocable and will not affect your right to vote in person in the event you attend the annual meeting. You may revoke your proxy at any time before it is voted. If you receive more than one proxy card because your shares are registered in different names or at different addresses, please sign and return each proxy card so that all of your shares will be represented at the annual meeting.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors,

William Stone

Chief Executive Officer

Los Angeles, California

[—], 2015

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Important Notice Regarding Availability of Proxy Materials

for the Fiscal 2015 Annual Meeting of Stockholders to be Held on March 5, 2015

Our Proxy Statement, Annual Report on Form 10-K, and form of proxy card are available on the Internet at www.proxyvote.com.

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ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates by reference important business and financial information about us that is not included in or delivered with this proxy statement/prospectus. You may request this information, which includes copies of our annual, quarterly, and special reports, proxy statements, and other information, from us, without charge, excluding all exhibits, unless we have specifically incorporated by reference an exhibit in this proxy statement/prospectus. Our stockholders and Appia stockholders may obtain documents incorporated by reference in this proxy statement/prospectus by requesting them from us in writing or by telephone at the following address or telephone number:

Digital Turbine, Inc.

(formerly, Mandalay Digital Group, Inc.)

2811 Cahuenga Boulevard West

Los Angeles, California 90068

(323) 472-5461

To obtain timely delivery, any request for information should be made no later than March 2, 2015.

In addition, we provide copies of our Forms 8-K, 10-K, 10-Q, Proxy Statement, and Annual Report at no charge to investors upon request and we make electronic copies of our most recently filed reports available through our website at http://ir.digitalturbine.com/all-sec-filings as soon as reasonably practicable after filing such material with the SEC.

For a more detailed description of the information incorporated by reference into this proxy statement/prospectus and how you may obtain it, see the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Information by Reference.”

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document forms a part of a Registration Statement on Form S-4 filed by Digital Turbine, Inc. (formerly, Mandalay Digital Group, Inc.) (the “Company”) with the Securities and Exchange Commission (the “SEC”). This document constitutes a prospectus of the Company under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of our common stock to be issued in connection with the proposed merger. In addition, this document constitutes a notice of meeting with respect to the Company’s annual meeting and a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Company has not authorized anyone to give any information or make any statement about the merger that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that the Company has incorporated by reference into this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus unless the information specifically indicates that another date applies.

Holders of our common stock who have questions about the annual meeting or how to vote or revote their proxy please contact:

MACKENZIE PARTNERS, INC.

105 Madison Avenue

New York, New York 10016

Call Toll-Free (800) 322-2885

Call Collect (212) 929-5500

Email: proxy@mackenziepartners.com

If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you.

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER

The following are answers to certain questions that you may have regarding the merger and the annual meeting. We urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to, and the documents incorporated by reference in, this document. On January 20, 2015, we changed our name to “Digital Turbine, Inc.” but for purposes of this proxy statement/prospectus, we continue to refer to our company as “Mandalay Digital.”

GENERAL

As a prospectus, this document is being provided to Appia’s security holders because Mandalay Digital is offering to issue shares of its common stock for shares of Appia securities upon completion of the merger.

THE ANNUAL MEETING

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Mandalay Digital will transact no other business at the annual meeting except for business properly brought before the annual meeting or any adjournment or postponement thereof.

The six nominees for director who receive the most votes from common and preferred stockholders, voting together as a single class, will be elected (Proposal 2).

Assuming a quorum is present, the affirmative vote of a majority of the shares of common stock and preferred stock, voting together as a single class on an as-converted to common stock basis, either in person or represented by proxy at the annual meeting and entitled to vote on the proposal is required to approve the advisory Say-on-pay proposal (Proposal 3), the annual (one-year) alternative in the Say-on-frequency proposal (Proposal 4), and the ratification of SingerLewak LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2015 (Proposal 5).

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The rules of the NASDAQ Stock Market, where our shares of common stock are listed for trading, require the approval of our stockholders prior to the issuance of additional shares of our common stock in connection with the acquisition of the stock or assets of another company if:

Therefore, your approval is required for the issuance of shares of our common stock (including a warrant to purchase shares of our common stock) in connection with the merger and a separate loan transaction. Our stockholders are not being asked to vote on the proposed merger itself, but instead solely on whether we may issue the shares of common stock (including a warrant to purchase shares of our common stock) in connection with the merger and a separate loan transaction. If the requisite number of our shares are not voted in favor of the issuance, we will be unable to effect the merger under the terms set forth in the merger agreement.

Holder of Record:   If your shares of our stock are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares of

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our stock, the holder of record, and these proxy materials are being sent directly to you by us. As the holder of record, you have the right to grant your voting proxy directly to our company or to vote in person at the annual meeting. We have enclosed a proxy card for you to use.

Beneficial Owner:   If your shares of our stock are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of securities held in street name, and these proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those securities, the holder of record. As the beneficial owner, you have the right to direct your broker or nominee on how to vote and you are also invited to attend the annual meeting. Your broker or nominee has enclosed a voting instruction card for you to use in directing the broker or nominee regarding how to vote your securities. The voting instruction card provides various alternative voting methods, such as via the Internet, by telephone, or by mail.

By the Internet:   Go to www.voteproxy.com and follow the instructions. You will need the control number that appears on your proxy card included in this proxy statement/prospectus. This method of submitting your proxy will be available until 8:59 p.m., Pacific time, on March 4, 2015.

By telephone:   On a touch-tone telephone, call toll-free (800) 690-6903 and follow the instructions. You will need the control number that appears in the box on the front of your proxy card included in this proxy statement/prospectus. This method of submitting your proxy will be available until 8:59 p.m., Pacific time, on March 4, 2015.

By mail:   If you submit a by traditional proxy card, mark your selections on the proxy card, date the card, and sign your name exactly as it appears on the card, then mail it in the postage-paid envelope enclosed with the materials. You should mail the proxy card in plenty of time to allow delivery prior to the meeting.

If you are a stockholder of record and attend the meeting, you may deliver your completed proxy card in person. If you are not the stockholder of record (that is, your shares are held in the name of a bank, broker, or other holder of record, which is often referred to as held in “street name”) then you will

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receive instructions from the holder of record that you must follow to ensure that your shares are voted as you wish. You will not be able to vote those shares at the meeting unless you have received, in advance, a proxy card from the record holder (that is, the bank, broker, or other holder of record).

If you complete and properly sign and timely return a proxy card to us or complete your proxy by telephone or online, your shares will be voted as you direct.

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THE MERGER

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Mandalay Digital expects to issue, pursuant to the merger agreement, up to 19,500,000 shares of common stock (including shares underlying assumed stock options). Accordingly, we are asking our stockholders to consider and vote upon the issuance and sale of up to 19,500,000 shares of our common stock in connection with the proposed merger with Appia, Inc. (including shares of common stock issuable upon exercise of stock options to be assumed by Mandalay Digital pursuant to the merger agreement and 1,000,000 shares to be deposited into escrow).

The aggregate number shares of Mandalay Digital common stock to be issued pursuant to the merger agreement will vary depending on a number of factors, including the amount of the estimated net debt at closing. The merger agreement does not provide for an adjustment in the aggregate number of shares of Mandalay Digital common stock or options to be issued by Mandalay Digital to Appia’s security holders in the acquisition in the event of fluctuations in the market value of Mandalay Digital’s common stock up through the closing date. However, the number of shares to be issued by Mandalay Digital pursuant to the merger agreement is subject to adjustment based on Appia’s working capital and net debt as of the closing date of the merger. We estimate that, if the merger had closed on January 31, 2015, we would have issued 19,056,392 shares; additionally, we would have assumed options for 277,376 shares of our common stock, for an aggregate of 19,333,768 shares, which would represent approximately 33% of the Company’s outstanding shares of common stock as of November 13, 2014 (after giving effect to such issuance). Appia’s actual results of operations between the date of the financial information included in this proxy statement/prospectus and the closing date may differ from the forecasted results used in this estimate, resulting in differences between the forecast and actual amounts of Appia’s working capital and net debt, including transaction expenses, as of the closing date of the merger. See “The Merger – Consideration Payable in the Merger” located on page 69 of this proxy statement/prospectus for further information and a discussion of the assumptions in calculating the potential amount of shares to be issued by Mandalay Digital in the merger.

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Upon consummation of the merger, Mandalay Digital will issue a secured guaranty to each of the SVB Debt and North Atlantic Debt whereby we will guarantee all of Appia’s obligations in connection with such indebtedness and pledge substantially all of our assets, including our intellectual property. The secured guarantees will contain cross-default provisions and covenants, among others, limiting our ability to undergo a change of control, incur indebtedness, grant liens, make dividends in cash and other customary covenants. Mandalay will also issue to North Atlantic 200,000 shares of its common stock and a common stock warrant to purchase 400,000 shares of its common stock, all of which will have registration rights requiring Mandalay Digital to file a registration statement 15 business days after the closing of the merger with Appia. The warrant will have an exercise price of $0.01 per share exercisable for 10 years, but it will not be exercisable until the one year anniversary of the closing date of the merger and will terminate if the Company repays the North Atlantic Debt prior to such one year

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anniversary. We intend to refinance the Appia debt as soon as practicable following the closing of the merger. See “Ancillary Agreements – The Financing Agreements” on page 98 for further information.

The merger is intended to qualify, as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. Assuming the merger qualifies as a reorganization, Appia stockholders generally will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their shares of Appia stock for shares of Mandalay Digital common stock in connection with the merger. For a more detailed discussion of the material U.S. federal income tax consequences of the transaction, please see the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 78.

Tax matters are very complicated, and the tax consequences of the merger to any particular stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor for a full understanding of the tax consequences from the merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws.

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED

FINANCIAL DATA

The following Unaudited Pro Forma Combined Financial Statements have been developed from the historical consolidated financial statements of Mandalay Digital and Appia. Mandalay Digital’s financials are incorporated by reference into this proxy statement/prospectus and Appia’s financials are included elsewhere in this proxy statement/prospectus. The table below should be read together with, and is qualified in its entirety by the historical financial statements, including the notes thereto, of Mandalay Digital and Appia, respectively, as well as the information provided about Appia’s revenue included in “Management’s Discussion and Analysis of Financial Condition and Result of Operations of the Business of Appia” and the more detailed Unaudited Pro Forma Condensed Combined Financial Statements, including the notes thereto, appearing under “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 101 of this proxy statement/prospectus.

Mandalay Digital and Appia have different fiscal year ends, with the most recent annual period of Mandalay Digital ended on March 31, 2014, and the most recent annual period of Appia ended on December 31, 2013. As such, amounts related to the historical operations of Appia have been adjusted to align the periods over which those operations occurred with the periods presented by adding the necessary quarterly results together to match Mandalay Digital’s fiscal reporting periods. The Unaudited Pro Forma Combined Statements of Operations for the six months ended September 30, 2014 and for the year ended March 31, 2014 combine the historical consolidated statements of operations of Mandalay Digital and Appia, giving effect to the merger as if it had been consummated on April 1, 2013, the beginning of the earliest period presented. The Unaudited Pro Forma Combined Balance Sheet combines the consolidated balance sheets of Mandalay Digital and Appia, giving effect to the merger as if it had been consummated on September 30, 2014.

The Unaudited Pro Forma Combined Financial Statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Mandalay Digital would have been if the merger had occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. The Unaudited Pro Forma Combined Financial Statements do not reflect the costs of any integration activities including planning costs or any benefits that may result from realization of future cost savings from operating efficiencies or revenue synergies expected to result from the merger, except to the extent that such integration costs have been incurred during the periods presented. In addition, the Unaudited Pro Forma Combined Financial Statements (excluding the balance sheet) do not include one-time costs directly attributable to the transaction or professional fees incurred by Mandalay Digital or Appia pursuant to provisions contained in the merger agreement as those costs are not considered part of the purchase price.

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For the Six Months Ended September 30, 2014 and the Year Ended March 31, 2014

(In thousands, except per-share amounts )

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STOCK PRICE AND DIVIDEND INFORMATION

Mandalay Digital

Stock Price Information

The table below sets forth the high and low sales prices per share of our common stock, as reported on the NASDAQ Stock Market. On January 20, 2015, we changed our name to “Digital Turbine, Inc” and our common stock is listed on the NASDAQ Stock Market under the symbol “APPS.” Share prices have been adjusted to reflect a 1-for-5 reverse stock split effective on April 12, 2013.

The market price of our common stock could change significantly. Because the equity consideration to be paid in the merger will not be adjusted for changes in the market price of our common stock through the closing date of the merger, the value of the consideration that holders of Appia shares will receive in the merger may vary significantly from the market value of our common stock that holders of Appia shares would have received if the merger was completed on November 13, 2014, the trading day on which the announcement of the merger was made, or on the date of this proxy statement/prospectus.

Holders

As of January 20, 2015, the record date for the annual meeting, there were 135 holders of record of our common stock. There were also an undetermined number of holders who hold their stock in nominee or “street” name.

Dividend Policies

We have not declared cash dividends on our common stock since our inception and we do not anticipate paying any cash dividends in the foreseeable future. Following completion of the merger, the holders of our common stock will be entitled to receive any dividends as may be declared by our board of directors from funds legally available therefor; provided, however, that we will be subject to covenants restricting our ability to pay dividends pursuant to the terms of the secured guarantees that we will enter into in connection with the closing of the merger. The dividend policy of the combined company will be determined by our board of directors.

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Appia

Historical market price information regarding Appia capital stock is not provided because there is no public market for Appia’s common stock. As of November 13, 2014, there were 40 holders of Appia capital stock. Appia has not declared cash dividends on its common stock since its inception and it does not anticipate paying any cash dividends in the foreseeable future.

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RISK FACTORS

Our stockholders should carefully consider the following factors in evaluating whether to approve the issuance of our common stock in connection with the merger, and Appia’s stockholders should carefully consider the following factors in connection with their potential receipt of shares of our common stock in the merger. These factors should be considered in conjunction with the other information included or incorporated by reference in this proxy statement/prospectus. Additional risks and uncertainties not presently known to us, or that are not currently believed to be important to you, also may adversely affect the stockholders of Appia and us following the merger.

Risks Related to the Merger

Even if the proposed merger is completed, we may not be able to fully realize all of the projected synergies and anticipated benefits of the merger.

The success of the merger will depend on, among other things, the ability to realize anticipated revenue and cost savings, enhance the combined company’s global reach, enhance our scalable, low capex business model that drives EBITDA and to combine our business with Appia in a manner that potentially creates opportunities through strategic relationships, such as leveraging advertising opportunities and increasing revenue streams for carriers, that does not materially disrupt existing relationships or otherwise result in decreased productivity and that allows us to capitalize on the capabilities of the combined company. If these objectives are not achieved, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

We may not realize projected revenue gains, cost savings and synergies in connection with the proposed merger on the timetable contemplated, if at all. In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual revenue and cost synergies, if achieved at all, may not be achieved at the levels expected and may take longer than anticipated. If these challenges are not adequately addressed, Mandalay Digital and Appia may be unable to realize the anticipated benefits of the integration of the two companies. An inability to realize the full extent of, or any of, the anticipated benefits of the merger, as well as any delays encountered in the integration process, could have a material adverse effect on the combined company’s business and results of operations, which may affect the value of the shares of the combined company’s common stock.

We may not realize the operating and financial benefits we expect from the merger.

The post-acquisition integration of our company and Appia would be complex, time-consuming, and expensive, and may disrupt the day-to-day management and operation of our respective businesses. Both Mandalay Digital and Appia have operated and, until the completion of the merger, will continue to operate independently. It is possible that the integration process could result in the disruption of our or Appia’s ongoing businesses or inconsistencies in standards, controls, procedures or policies that could adversely affect the ability of the combined company to maintain relationships with third parties and employees or to achieve the anticipated benefits of the merger. After the merger, the combined company would need to overcome significant challenges in order to realize any benefits or synergies from the merger. These challenges include the timely, efficient, and successful completion of a number of post-acquisition events, including the following:

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The execution of these post-acquisition integration events would involve considerable risks and may not be successfully implemented, or if implemented, on a timely basis. These risks include the following:

The combined company may not succeed in mitigating these risks or any other problems encountered in connection with the merger. The inability to successfully integrate the operations, technology, and personnel of our company and Appia, or any significant delay in achieving integration of the companies, could have a material adverse effect on the combined company after the merger and, as a result, on the market price of our common stock following the merger.

Failure to complete, or a delay in completing, the proposed merger could adversely affect our and Appia’s future business and operations.

The proposed merger is subject to the satisfaction of various closing conditions, including the approval by both our and Appia’s stockholders and other conditions described in the merger agreement that are outside the control of us and Appia that may prevent, delay or otherwise materially adversely affect its completion. Our and Appia’s respective obligations to complete the merger are also subject to the other conditions listed under “Summary of the Merger Agreement — Conditions to Consummation of the Merger” on page 93. We cannot assure you whether or when these conditions will be satisfied, or whether the merger will be successfully completed. Any delay in completing the merger could cause the combined company not to realize some or all of the synergies and other benefits that we and Appia expect to achieve if the merger is successfully completed within its expected time frame. For instance, a delay in completing the merger may materially adversely affect Appia’s cash flow and Appia may require additional financing or take steps to reduce costs prior to the completion of the merger, and as a result would reduce the financial benefits that the combined company would expect to achieve, once the merger is completed.

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In the event that the merger is not completed:

Any such events could adversely affect our and Appia’s business and operating results.

Our and Appia’s business could suffer due to the announcement, pendency, and consummation of the proposed merger.

The announcement, pendency, and consummation of the merger may have a negative impact on our, Appia’s, and the combined company’s ability to sell their respective products and services, attract and retain key management, technical, sales, or other personnel, maintain and attract new customers, and maintain strategic relationships with third parties. For example, we and Appia, and following consummation of the merger, the combined company, may experience the deferral, cancellation, or a decline in the size or rate of orders for our services or a deterioration in customer relationships. If this were to occur, our and Appia’s cash flows and revenue, respectively, and the revenues of the combined company, could decline materially or any anticipated increases in revenue could be lower than expected. Also, speculation regarding the likelihood of the closing of the merger could increase the volatility of our share price. Any such events could harm our and Appia’s, and following the merger the combined company’s, operating results and financial condition.

The price of our common stock may fluctuate, and the purchase price payable in the merger will not be adjusted for any changes in the price of our common stock.

The consideration payable in connection with the merger will be paid through the issuance to the stockholders of Appia of up to 19,500,000 shares of our common stock. Under the merger agreement, other than as a result of reclassifications, stock splits, stock dividends, and similar changes effected by us, the number of shares of our common stock to be issued will not be adjusted even if the market price of our common stock fluctuates between the date of the merger agreement and the closing date of the merger. The market price of our common stock at the closing of the merger will likely vary from the market price at the date of this proxy statement/prospectus and at the date of our stockholders’ meeting. Stock price changes may result from a variety of factors that are beyond the control of us or Appia, including:

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Neither party is permitted to “walk away” from the merger or re-solicit the vote of its stockholders solely because of changes in the market price, and therefore value, of our common stock through the closing date of the merger. Any reduction in our stock price would result in Appia stockholders receiving less value in the merger. Conversely, any increase in our stock price would potentially result in Appia stockholders receiving greater value in the merger. The specific dollar value per share of our common stock that Appia’s stockholders would receive upon completion of the merger will depend on, among other things, the market value of our common stock at that time and other factors discussed in this proxy statement/prospectus. Our stockholders will not know the exact value of our common stock to be issued in the merger at the time of the stockholders’ meeting.

If the merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, the stockholders of Appia may be required to pay substantial U.S. federal income taxes.

Mandalay Digital and Appia intend, and their respective tax counsel will provide opinions to the effect, that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The opinions of their respective tax counsel will be based on certain assumptions, representations and covenants made by Mandalay Digital, Merger Sub and Appia. If any of those representations, covenants and assumptions is inaccurate, the conclusions reached by counsel in such opinions may not apply. Moreover, the opinions of their respective tax counsel do not bind the Internal Revenue Service, or IRS, nor do they prevent the IRS from adopting a contrary position. Neither Mandalay Digital nor Appia has requested, or intends to request, a ruling from the IRS, with respect to the tax consequences of the merger, and there can be no assurance that the companies’ position would be sustained by a court if challenged by the IRS. If the merger does not qualify as a reorganization within the meaning of Section 368(a) of the Code, Appia stockholders will recognize gain or loss upon their receipt of Mandalay Digital common stock in connection with the merger. For a more complete discussion of the tax consequences of the merger, see the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 78.

The merger is expected to result in an ownership change for Appia and may result in an ownership change for Mandalay Digital under Section 382 of the Code, substantially limiting the use of the net operating loss, referred to as “NOL,” carryforwards and other tax attributes of Appia and possibly of Mandalay Digital to offset future taxable income of the combined company.

In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” within the meaning of Section 382 of the Code is subject to limitations on the utilization of net operating loss carryforwards, which we refer to as NOL carryforwards, generated prior to such ownership change to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (which is generally three years). If an ownership change occurs, Section 382 imposes an annual limitation on the amount of income against which pre ownership change NOL carryforwards may be offset generally equal to the value of the stock of the corporation immediately prior to the ownership change, multiplied by the adjusted federal tax-exempt rate set by the IRS.

The merger is expected to result in an ownership change for Appia and may result in an ownership change for Mandalay Digital under Section 382 of the Code, potentially limiting the use of the NOL carryforwards of Appia and Mandalay Digital to offset future taxable income of the combined company for both federal and state income tax purposes. Whether the merger results in an ownership change for Mandalay Digital depends on other past and future changes in stock ownership. Moreover, the utilization of the combined

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company’s NOL carryforwards depends on the timing and amount of taxable income earned in the future, which neither Appia nor Mandalay Digital is able to predict. These tax attributes are subject to expiration at various times in the future to the extent that they have not been applied to offset the taxable income of the combined company. These limitations may affect the timing of when these NOL carryforwards can be used which, in turn, may impact the timing of when cash is used to pay the taxes of the combined company and could limit the benefits of NOL carryforwards for the business, financial condition or results of operations of the combined company.

The merger could cause us or Appia to lose key personnel, which could materially affect the combined company’s business and require the combined company to incur substantial costs to recruit replacements for lost personnel.

As a result of the merger, our current and prospective employees and Appia’s employees could experience uncertainty about their future roles within the combined company. This uncertainty may adversely affect their ability or willingness to continue with the combined company, and the ability of the combined company to attract and retain key management, sales, marketing, and technical personnel. Any failure to retain and attract key personnel could have a material adverse effect on our and Appia’s current business and the business of the combined company after the completion of the merger.

Some of Appia’s officers and directors have conflicts of interest that may influence them to support or approve the issuance of shares in connection with the Merger.

Certain officers and directors of Appia participate in arrangements that provide them with material interests in the merger that are different from and in addition to those of our stockholders and Appia’s stockholders, including, among others, employment agreements and compensation arrangements for key officers, and indemnification arrangements for Appia’s directors and officers. These interests, among others, may influence our directors and officers and the directors and officers of Appia to support or approve the merger. For a more detailed discussion, see the section entitled “The Merger — Interests of Certain Appia Directors, Officers, and Affiliates in the Merger” on page 72.

We incur a variety of costs as a result of being a public company, and those costs may increase as a result of the merger.

As a U.S. public company registered with the SEC under the Exchange Act, we incur significant legal, accounting, and other expenses. In addition, the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the NASDAQ Stock Market, frequently require changes in corporate governance policies and practices of companies registered with the SEC under the Exchange Act. These rules and regulations increase legal and financial compliance costs and make some activities more time-consuming and costly. In addition, we incur additional costs associated with our Exchange Act public company reporting requirements. These rules and regulations also may make it more difficult and more expensive for us to obtain and pay for, at commercially reasonable rates, director and officer liability insurance, and the combined company may be required to accept reduced policy limits and reduced scope of coverage or incur substantially higher costs to obtain the same or similar levels of coverage. As a result, it may be more difficult for the combined company to attract and retain qualified persons to serve on its board of directors or as executive officers. As a result, implementation of disclosure controls, internal controls, and financial reporting systems complying with the requirements of U.S. GAAP and U.S. securities laws and regulations required as a result of our continued status as a reporting company under the Exchange Act following effectiveness of the merger may be more difficult and costly than anticipated.

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Following the effectiveness of the merger, the current principal owners of Appia are expected to own a substantial percentage of our common stock.

We estimate that if the merger had closed on January 31, 2015, we would have issued 19,056,392 shares; additionally, we would have assumed options for 277,376 shares of our common stock, for an aggregate of 19,333,768 shares to Appia’s former security holders, which would represent approximately 33% of our outstanding shares of common stock as of November 13, 2014 (after giving effect to such issuance). The former Appia stockholders will have influence over our management, operations, and potential significant corporate actions. The interests of the former Appia stockholders could conflict with the interests of our other stockholders and there can be no assurance that the former Appia stockholders would not take actions that favor their interests and not the interests of our other stockholders.

Current holders of our common stock would suffer substantial dilution if the merger is effected.

The merger would dilute the ownership position of our current stockholders. If the merger is effected, we estimate that we would issue 19,056,392 shares; additionally, we would assume options for 277,376 shares of our common stock, for an aggregate of 19,333,768 shares to Appia’s former security holders if the merger had closed on January 31, 2015, which would represent approximately 33% of our outstanding shares of common stock as of November 13, 2014 (after giving effect to such issuance). We will also issue to a lender 200,000 shares of common stock and a warrant to purchase 400,000 shares of common stock in connection with a separate loan transaction. Consequently, following the merger our current stockholders, as a general matter, would have less influence over the management and policies of our company than they currently exercise over the management and policies of our company.

The shares of our common stock to be received by Appia stockholders as a result of the merger will have different rights from the shares of Appia stock.

Upon consummation of the merger, Appia stockholders, other than those who properly exercise dissenters’ rights, will become our stockholders, and their rights as stockholders will be governed by our Certificate of Incorporation and Bylaws. Certain of the rights associated with our common stock are different from, and may be viewed as less favorable than, the rights associated with Appia’s outstanding common stock and preferred stock. See “Comparison of Rights of Stockholders of Mandalay Digital and Appia” beginning on page 124 of this proxy statement/ prospectus for a discussion of the different rights associated with our common stock.

We expect to incur significant costs as a result of the integration of our operations with Appia.

There are inconsistencies in standards, controls, procedures and policies, business cultures, and compensation structures between us and Appia. The integration of our operations and the operations of Appia and reconciling the inconsistencies in the standards, controls, procedures and policies, business cultures, and compensation structures between us and Appia may result in additional costs for the combined company. There are no assurances that such inconsistencies can be reconciled seamlessly or at all. The failure to reconcile such inconsistencies may lessen the anticipated benefits of the merger.

The unaudited pro forma condensed combined financial statements included in this proxy statement/prospectus are preliminary and the actual financial condition and results of operations after the merger may differ materially.

The unaudited pro forma condensed combined financial statements in this proxy statement/prospectus are presented for illustrative purposes only are not necessarily indicative of what Mandalay Digital’s actual financial condition or results or operations would have been had the merger been completed on the dates indicated. The unaudited pro forma condensed combined financial statements reflect adjustments, which are

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based upon preliminary estimates, to record Appia’s identifiable assets acquired and liabilities assumed at fair value and the resulting goodwill recognized. The purchase price allocation reflected in this document is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Appia as of the date of the completion of the merger. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this document.

Risks Related to the Combined Company

The combined company will operate in an intensely competitive industry, and the combined company may not be able to compete successfully.

The mobile advertising market is highly competitive, with numerous companies providing mobile advertising services. The combined company’s mobile advertising platform will compete primarily with Facebook, Twitter, and Google, all of which are significantly larger than the combined company and have far more capital to invest in their mobile advertising businesses. The combined company will also compete with in-house solutions used by companies who choose to coordinate mobile advertising across their own properties, such as Yahoo!, Pandora, and other independent publishers. They, or other companies that offer competing mobile advertising solutions, may establish or strengthen cooperative relationships with their mobile operator partners, app developers or other parties, thereby limiting the combined company’s ability to promote its services and generate revenue. Competitors could also seek to gain market share from the combined company by reducing the prices they charge to advertisers or by introducing new technology tools for developers. Moreover, increased competition for mobile advertising space from developers could result in an increase in the portion of advertiser revenue that the combined company must pay to developers to acquire that advertising space.

The combined company’s business will suffer to the extent that its developers and advertisers purchase and sell mobile advertising directly from each other or through other companies that are able to become intermediaries between developers and advertisers. For example, companies may have substantial existing platforms for developers who had previously not heavily used those platforms for mobile advertising campaigns. These companies could compete with the combined company to the extent they expand into mobile advertising. Other companies, such as large app developers with a substantial mobile advertising business, may decide to directly monetize some or all of their advertising space without utilizing the combined company’s services. Other companies that offer analytics, mediation, exchange or other third party services may also become intermediaries between mobile advertisers and developers and thereby compete with the combined company. Any of these developments would make it more difficult for the combined company to sell its services and could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses or the loss of market share.

The mobile advertising market may develop more slowly than expected, which could harm the business of the combined company.

Advertisers have historically spent a smaller portion of their advertising budgets on mobile media as compared to traditional advertising methods, such as television, newspapers, radio and billboards, or online advertising over the internet, such as placing banner ads on websites. Future demand and market acceptance for mobile advertising is uncertain. Many advertisers still have limited experience with mobile advertising and may continue to devote larger portions of their advertising budgets to more traditional offline or online personal computer-based advertising, instead of shifting additional advertising resources to mobile advertising. If the market for mobile advertising deteriorates, or develops more slowly than we expect, the combined company may not be able to increase its revenue.

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The combined company’s mobile advertising business will be dependent on the continued growth in usage of smartphones, tablets and other mobile connected devices.

The combined company’s mobile advertising business will depend on the continued proliferation of mobile connected devices, such as smartphones and tablets, that can connect to the internet over a cellular, wireless or other network, as well as the increased consumption of content through those devices. Consumer usage of these mobile connected devices may be inhibited for a number of reasons, such as:

• inadequate network infrastructure to support advanced features beyond just mobile web access;

• users’ concerns about the security of these devices;

• inconsistent quality of cellular or wireless connection;

• unavailability of cost-effective, high-speed internet service; and

• changes in network carrier pricing plans that charge device users based on the amount of data consumed.

For any of these reasons, users of mobile connected devices may limit the amount of time they spend on these devices and the number of apps they download on these devices. If user adoption of mobile connected devices and consumer consumption of content on those devices do not continue to grow, the combined company’s total addressable market size may be significantly limited, which could compromise the combined company’s ability to increase revenue and to become profitable.

The combined company will have indebtedness, which could limit its financial flexibility.

The combined company’s indebtedness could have significant negative consequences including:

Although we currently intend to refinance the indebtedness as soon as practicable following the closing of the merger, we cannot provide any assurance that we will be successful or that we will be able to refinance the debt on acceptable terms.

The combined company would need to invest in its operations to integrate us and Appia and to maintain and grow the combined business, and may need additional funds to do so.

The combined company would depend on the availability of adequate capital to maintain and develop its business. We believe that the combined company can meet its capital requirements from internally generated funds, cash in hand, and available borrowings. If the combined company is unable to fund its capital

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requirements as currently planned, however, it would have a material adverse effect on the combined company’s business, financial condition, and operating results. If the combined company does not achieve our expected operating results, the combined company would need to reallocate its sources and uses of operating cash flows. This may include borrowing additional funds to service debt payments, which may impair the ability of the combined company to make investments in the business or to integrate us and Appia. There is no assurance that the combined company would be able to borrow any such additional funds when needed on commercially acceptable terms or at all.

Should the combined company need to raise funds through incurring additional debt, the combined company may become subject to covenants even more restrictive than those contained in our or Appia’s current debt instruments. Furthermore, if we issue additional equity, our equity holders would suffer dilution. There can be no assurance that additional capital would be available on a timely basis, on favorable terms, or at all.

The combined company will be in a net loss position, may incur substantial net losses in the future, and may not achieve profitability.

The combined company will be in a net loss position because, prior to the merger, both Mandalay Digital and Appia accumulated significant net losses and were not profitable. If the combined company is unable to reduce costs and increase revenues, then the combined company may incur further net losses and may not be able to achieve profitability in the future. If there are delays in the distribution of the combined company’s products or if it is unable to successfully negotiate with carriers or mobile operators or if these negotiations cannot occur on a timely basis, the combined company may not be able to generate revenues sufficient to meet the needs of the business in the foreseeable future or at all. If the combined company fails to achieve and maintain profitability, the value of the combined company and its common stock could decline significantly.

The combined company’s ability to maintain and grow its business will be impaired if mobile connected devices, their operating systems or content distribution channels, including those controlled by the primary competitors of the combined company, develop in ways that prevent the combined company’s advertising from being delivered to their users.

The combined company’s business model will depend upon the continued compatibility of its mobile advertising platform with most mobile connected devices, as well as the major operating systems that run on them and the thousands of apps that are downloaded onto them.

The design of mobile devices and operating systems is controlled by third parties. These parties frequently introduce new devices, and from time to time they may introduce new operating systems or modify existing ones. Network carriers, such as AT&T, Sprint, as well as other domestic and global operators, may also affect the ability of users to download apps or access specified content on mobile devices. The combined company will have some relationship with T-Mobile and Verizon but these relationships are specific and subject to contractual performance which may not be achieved.

In some cases, the parties that control the development of mobile connected devices and operating systems include companies that the combined company would regard as its most significant competitors. For example, Apple controls two of the most popular mobile devices, the iPhone^® and the iPad^®, as well as the iOS operating system that runs on them. Apple also controls the App Store for downloading apps that run on Apple^® mobile devices. Similarly, Google controls the Google Play and Android™ platform operating system. If the combined company’s mobile advertising platform were unable to work on these devices or operating systems, either because of technological constraints or because a maker of these devices or developer of these operating systems wished to impair the combined company’s ability to provide ads on them or its ability to fulfill advertising space, or inventory, from developers whose apps are distributed through their controlled channels, the combined company’s ability to maintain and grow its business will be impaired.

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The combined company will not control the mobile networks over which it will provide its advertising services.

The combined company’s mobile advertising platform will be dependent on the reliability of network operators and carriers who maintain sophisticated and complex mobile networks, as well as its ability to deliver ads on those networks at prices that enable it to realize a profit. Mobile networks have been subject to rapid growth and technological change, particularly in recent years. The combined company will not control these networks.

Mobile networks could fail for a variety of reasons, including new technology incompatibility, the degradation of network performance under the strain of too many mobile consumers using the network, a general failure from natural disaster or a political or regulatory shut-down. Individuals and groups who develop and deploy viruses, worms and other malicious software programs could also attack mobile networks and the devices that run on those networks. Any actual or perceived security threat to mobile devices or any mobile network could lead existing and potential device users to reduce or refrain from mobile usage or reduce or refrain from responding to the services offered by the combined company’s advertising clients. If the network of a mobile operator should fail for any reason, the combined company would not be able to effectively provide its services to its clients through that mobile network. This, in turn, could hurt the combined company’s reputation and cause it to lose significant revenue.

Mobile carriers may also increase restrictions on the amounts or types of data that can be transmitted over their networks. The combined company anticipates generating different amounts of revenue from its advertiser clients based on the kinds of ads the combined company delivers, such as display ads, rich media ads or video ads. In most cases, the combined company will be paid by advertisers on a cost-per-install basis, when a user downloads an advertised app. In other cases, the combined company will be paid on a cost-per-thousand basis depending on the number of ads shown, or on a cost-per-click, or cost-per-action, basis depending on the actions taken by the mobile device user. Different types of ads consume differing amounts of bandwidth and network capacity. If a network carrier were to restrict the amounts of data that can be delivered on that carrier’s network, or otherwise control the kinds of content that may be downloaded to a device that operates on the network, it could negatively affect the combined company’s pricing practices and inhibit its ability to deliver targeted advertising to that carrier’s users, both of which could impair the combined company’s ability to generate revenue.

Mobile connected device users may choose not to allow advertising on their devices.

The success of the combined company’s business model will depend on its ability to deliver targeted, highly relevant ads to consumers on their mobile connected devices. Targeted advertising is done primarily through analysis of data, much of which is collected on the basis of user-provided permissions. This data might include a device’s location or data collected when device users view an ad or video or when they click on or otherwise engage with an ad. Users may elect not to allow data sharing for targeted advertising for a number of reasons, such as privacy concerns, or pricing mechanisms that may charge the user based upon the amount or types of data consumed on the device. Users may also elect to opt out of receiving targeted advertising from combined company’s platform. In addition, the designers of mobile device operating systems are increasingly promoting features that allow device users to disable some of the functionality, which may impair or disable the delivery of ads on their devices, and device manufacturers may include these features as part of their standard device specifications. Although we are not aware of any such products that are widely used in the market today, as has occurred in the online advertising industry, companies may develop products that enable users to prevent ads from appearing on their mobile device screens. If any of these developments were to occur, the combined company’s ability to deliver effective advertising campaigns on behalf of its advertiser clients would suffer, which could hurt its ability to generate revenue and become profitable.

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The combined company may not be able to enhance its mobile advertising platform to keep pace with technological and market developments.

The market for mobile advertising services is characterized by rapid technological change, evolving industry standards and frequent new service introductions. To keep pace with technological developments, satisfy increasing advertiser and developer requirements, maintain the attractiveness and competitiveness of the combined company’s mobile advertising solutions and ensure compatibility with evolving industry standards and protocols, the combined company will need to regularly enhance its current services and to develop and introduce new services on a timely basis. Appia has invested significant resources in building and developing real-time bidding, or RTB, infrastructure to provide access to large amounts of advertising inventory and publishers. If the combined company’s RTB platform is not attractive to its customers or is not able to compete with alterative mobile advertising solutions, the combined company will not have access to as much advertising inventory and may experience increased pressure on margins.

In addition, advances in technology that allow developers to generate revenue from their apps without assistance from the combined company could harm its relationships with developers and diminish its available advertising inventory within their apps. Similarly, technological developments that allow third parties to better mediate the delivery of ads between advertisers and developers by introducing an intermediate layer between the combined company and its developers could impair its relationships with those developers. The combined company’s inability, for technological, business or other reasons, to enhance, develop, introduce and deliver compelling mobile advertising services in response to changing market conditions and technologies or evolving expectations of advertisers or mobile device users could hurt its ability to grow its business and could result in its mobile advertising platform becoming obsolete.

The combined company will depend on publishers, developers and distribution partners for mobile advertising space to deliver its advertiser clients’ advertising campaigns, and any decline in the supply of advertising inventory could hurt its business.

The combined company will depend on publishers, developers and distribution partners to provide it with space within their apps, which we refer to as “advertising inventory,” on which the combined company will deliver ads. We anticipate that a significant portion of the combined company’s revenue will derive from the advertising inventory provided by a limited number of publishers, developers and distribution partners. The combined company will have minimum or fixed commitments for advertising inventory with some but not all of its publishers, developers and distribution partners, including certain wireless carriers in the United States and internationally. The combined company intends to expand the number of publishers, developers and distribution partners subject to minimum or fixed arrangements. Outside of those relationships however, the publishers, developers and distribution partners that will sell their advertising inventory to the combined company are not required to provide any minimum amounts of advertising space to the combined company, nor are they contractually bound to provide the combined company with a consistent supply of advertising inventory. Such publishers, developers and distribution partners can change the amount of inventory they make available to the combined company at any time. They may also change the price at which they offer inventory to the combined company, or they may elect to make advertising space available to its competitors who offer ads to them on more favorable economic terms. In addition, publishers, developers and distribution partners may place significant restrictions on the combined company’s use of their advertising inventory. These restrictions may prohibit ads from specific advertisers or specific industries, or they could restrict the use of specified creative content or format. They may also use a fee-based or subscription-based business model to generate revenue from their content, in lieu of or to reduce their reliance on ads.

If publishers, developers and distribution partners decide not to make advertising inventory available to the combined company for any of these reasons, decide to increase the price of inventory, or place significant restrictions on the combined company’s use of their advertising space, the combined company may not be able to

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replace this with inventory from others that satisfy the combined company’s requirements in a timely and cost-effective manner. If this happens, the combined company’s revenue could decline or its cost of acquiring inventory could increase.

The combined company’s business will depend on its ability to collect and use data to deliver ads, and any limitation on the collection and use of this data could significantly diminish the value of the combined company’s services and cause it to lose clients and revenue.

When the combined company delivers an ad to a mobile device, it will often be able to collect anonymous information about the placement of the ad and the interaction of the mobile device user with the ad, such as whether the user visited a landing page or installed an app. As the combined company collects and aggregates this data provided by billions of ad impressions, it intends to analyze it in order to optimize the placement and scheduling of ads across the advertising inventory provided to it by developers. For example, the combined company may use the collected information to limit the number of times a specific ad is presented to the same mobile device, to provide an ad to only certain types of mobile devices, or to provide a report to an advertiser client on the number of its ads that were clicked.

Although the data the combined company will collect is not personally identifiable information, its clients might decide not to allow it to collect some or all of this data or might limit its use of this data. For example, app developers may not agree to provide the combined company with the data generated by interactions with the content on their apps, or device users may not consent to having information about their device usage provided to the developer. Any limitation on the combined company’s ability to collect data about user behavior and interaction with mobile device content could make it more difficult for the combined company to deliver effective mobile advertising programs that meet the demands of its advertiser clients.

Although the combined company’s contracts with advertisers will generally permit it to aggregate data from advertising campaigns, these clients might nonetheless request that the combined company discontinue using data obtained from their campaigns that have already been aggregated with other clients’ campaign data. It would be difficult, if not impossible, to comply with these requests, and responding to these kinds of requests could also cause the combined company to spend significant amounts of resources. Interruptions, failures or defects in its data collection, mining, analysis and storage systems, as well as privacy concerns and regulatory restrictions regarding the collection of data, could also limit its ability to aggregate and analyze mobile device user data from its clients’ advertising campaigns. If that happens, the combined company may not be able to optimize the placement of advertising for the benefit of its advertiser clients, which could make its services less valuable, and, as a result, it may lose clients and its revenue may decline.

The combined company’s business may depend in part on its ability to collect and use location-based information about mobile connected device users.

The combined company’s business model will depend in part upon its ability to collect data about the location of mobile connected device users when they are interacting with their devices, and then to use that information to provide effective targeted advertising on behalf of its advertising clients. The combined company’s ability to either collect or use location-based data could be restricted by a number of factors, including new laws or regulations, technology or consumer choice. Limitations on its ability to either collect or use location data could impact the effectiveness of the combined company’s platform and its ability to target ads.

The combined company will not have long-term agreements with its advertiser clients, and it may be unable to retain key clients, attract new clients or replace departing clients with clients that can provide comparable revenue to the combined company.

The combined company’s success will depend on its ability to maintain and expand its current advertiser client relationships and to develop new relationships. The combined company’s contracts with its advertiser clients will not generally include long-term obligations requiring them to purchase the combined company’s

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services and are cancelable upon short or no notice and without penalty. As a result, the combined company may have limited visibility as to its future advertising revenue streams. The combined company will not be able to provide assurance that its advertiser clients will continue to use its services or that it will be able to replace, in a timely or effective manner, departing clients with new clients that generate comparable revenue. If a major advertising client representing a significant portion of the combined company’s business decides to materially reduce its use of the combined company’s platform or to cease using the combined company’s platform altogether, it is possible that the combined company may not have a sufficient supply of ads to fill its developers’ advertising inventory, in which case the combined company’s revenue could be significantly reduced. Revenue derived from performance advertisers in particular is subject to fluctuation and competitive pressures. Such advertisers, which seek to drive app downloads, are less consistent with respect to their spending volume, and may decide to substantially increase or decrease their use of the combined company’s platform based on seasonality or popularity of a particular app. Advertisers in general may shift their business to a competitor’s platform because of new or more compelling offerings, strategic relationships, technological developments, pricing and other financial considerations, or a variety of other reasons. Any non-renewal, renegotiation, cancellation or deferral of large advertising contracts, or a number of contracts that in the aggregate account for a significant amount of revenue, could cause an immediate and significant decline in the combined company’s revenue and harm its business.

The combined company’s business practices with respect to data could give rise to liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to consumer privacy and data protection.

In the course of providing its services, the combined company will transmit and store information related to mobile devices and the ads it places, which may include a device’s geographic location for the purpose of delivering targeted location-based ads to the user of the device, with that user’s consent. Federal, state and international laws and regulations govern the collection, use, retention, sharing and security of data that the combined company will collect across its mobile advertising platform. The combined company will strive to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection. However, it is possible that these requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or its practices. Any failure, or perceived failure, by it to comply with U.S. federal, state, or international laws, including laws and regulations regulating privacy, data security, or consumer protection, could result in proceedings or actions against the combined company by governmental entities or others. Any such proceedings could hurt the combined company’s reputation, force it to spend significant amounts in defense of these proceedings, distract its management, increase its costs of doing business, adversely affect the demand for its services and ultimately result in the imposition of monetary liability. The combined company may also be contractually liable to indemnify and hold harmless its clients from the costs or consequences of inadvertent or unauthorized disclosure of data that it stores or handles as part of providing its services.

The regulatory framework for privacy issues worldwide is evolving, and various government and consumer agencies and public advocacy groups have called for new regulation and changes in industry practices, including some directed at the mobile industry in particular. For example, in early 2012, the State of California entered into an agreement with several major mobile app platforms under which the platforms have agreed to require mobile apps to meet specified standards to ensure consumer privacy. Subsequently, in January 2013, the State of California released a series of recommendations for privacy best practices for the mobile industry. In January 2014, a California law also became effective amending the required disclosures for online privacy policies. It is possible that new laws and regulations will be adopted in the United States and internationally, or existing laws and regulations may be interpreted in new ways, that would affect the combined company’s business, particularly with regard to location-based services, collection or use of data to target ads, and communication with consumers via mobile devices.

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The U.S. government, including the Federal Trade Commission, or FTC, and the Department of Commerce, is focused on the need for greater regulation of the collection of consumer information, including regulation aimed at restricting some targeted advertising practices. In December 2012, the FTC adopted revisions to the Children’s Online Privacy Protection Act, or COPPA, that went into effect on July 1, 2013. COPPA imposes a number of obligations on operators of websites and online services including mobile apps, such as obtaining parental consent, if the operator collects specified information from users and either the site or service is directed to children under 13 years old or the site or service knows that a specific user is a child under 13 years old. The changes broaden the applicability of COPPA, including the types of information that are subject to these regulations, and may apply to information that the combined company will collect through mobile devices or apps that, prior to the adoption of these new regulations, was not subject to COPPA. These revisions will impose new compliance burdens on the combined company. In February 2013, the FTC issued a staff report containing recommendations for best practices with respect to consumer privacy for the mobile industry. To the extent that the combined company or its clients choose to adopt these recommendations, or other regulatory or industry requirements become applicable to the combined company, it may have greater compliance burdens.

As the combined company expands its operations globally, compliance with regulations that differ from country to country may also impose substantial burdens on its business. In particular, the European Union has traditionally taken a broader view as to what is considered personal information and has imposed greater obligations under data privacy regulations. In addition, individual EU member countries have had discretion with respect to their interpretation and implementation of the regulations, which has resulted in variation of privacy standards from country to country. Complying with any new regulatory requirements could force it to incur substantial costs or require us to change its business practices in a manner that could compromise its ability to effectively pursue its growth strategy.

The combined company’s business may involve the use, transmission and storage of confidential information, and the failure to properly safeguard such information could result in significant reputational harm and monetary damages.

The combined company may at times collect, store and transmit information of, or on behalf of, its clients that may include certain types of confidential information that may be considered personal or sensitive, and that are subject to laws that apply to data breaches. The combined company intends to take reasonable steps to protect the security, integrity and confidentiality of the information it collects and stores, but there is no guarantee that inadvertent or unauthorized disclosure will not occur or that third parties will not gain unauthorized access to this information despite the combined company’s efforts to protect this information. If such unauthorized disclosure or access does occur, the combined company may be required to notify persons whose information was disclosed or accessed. Most states have enacted data breach notification laws and, in addition to federal laws that apply to certain types of information, such as financial information, federal legislation has been proposed that would establish broader federal obligations with respect to data breaches. The combined company may also be subject to claims of breach of contract for such disclosure, investigation and penalties by regulatory authorities and potential claims by persons whose information was disclosed. The unauthorized disclosure of information may result in the termination of one or more of its commercial relationships or a reduction in client confidence and usage of its services. The combined company may also be subject to litigation alleging the improper use, transmission or storage of confidential information, which could damage its reputation among its current and potential clients, require significant expenditures of capital and other resources and cause it to lose business and revenue.

As a result of the merger, we and Appia, as a combined company, would be a substantially larger and broader organization, with a greater geographic diversity relative to our and Appia’s current operations, and if management is unable to sufficiently manage the combined company, operating and financial results would suffer.

As a result of the merger, the combined company would have more employees, greater geographic diversity, and customers in multiple distribution channels. The combined company would face challenges

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inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate policies, benefits, reporting, management, and compliance programs and systems. The inability to manage successfully the larger and internationally diverse organization, or any significant delay in achieving successful management of the organization, could have a material adverse effect on the combined company and, as a result, on the market price of our common stock.

Changes to current accounting principles could have a significant effect on the combined company’s reported financial results or the way in which it conducts its business.

We prepare our financial statements in conformity with U.S. GAAP, which are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC, and various other authorities formed to interpret, recommend, and announce appropriate accounting principles, policies, and practices. A change in these principles could have a significant effect on our reported financial results and may even retroactively affect the accounting for previously reported transactions. Our accounting policies that recently have been or may in the future be affected by changes in the accounting principles are as follows:

Changes in these or other rules may have a significant adverse effect on our reported financial results or in the way in which we conduct our business. See the discussion in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014, which is incorporated by reference into this proxy statement/prospectus, under “Summary of Significant Accounting Policies” and the Notes to Unaudited Consolidated Financial Statements included therein, for additional information about our accounting policies and estimates and associated risks.

Loss or reduction of business from the combined company’s large advertiser clients could have a significant impact on the combined company’s revenues, results of operations and overall financial condition.

From time to time, a limited number of the combined company’s advertiser clients will be expected to account for a significant share of its advertising revenue. This customer concentration increases the risk of quarterly fluctuations in the combined company’s revenues and operating results. The combined company’s advertiser clients may reduce or terminate their business with it at any time for any reason, including changes in their financial condition or other business circumstances. If a large advertising client representing a substantial portion of its business decided to materially reduce or discontinue its use of its platform, it could cause an immediate and significant decline in its revenue and negatively affect its results of operations and financial condition.

The combined company’s customer concentration also increases the concentration of its accounts receivable and its exposure to payment defaults by key customers. The combined company will generate significant accounts receivable for the services that it provides to its key advertiser clients, which could expose it to substantial and potentially unrecoverable costs if it does not receive payment from them.

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The combined company’s business will be harmed if it cannot increase the capacity of its mobile advertising technology platform to meet advertiser or device user demand.

The combined company must be able to continue to increase the capacity of its technology platforms in order to support substantial increases in the number of advertisers and device users, to support an increasing variety of advertising formats and to maintain a stable service infrastructure and reliable service delivery for its mobile advertising campaigns. If the combined company is unable to efficiently and effectively increase the scale of its mobile advertising platforms to support and manage a substantial increase in the number of advertisers and mobile device users, while also maintaining a high level of performance, the quality of its services could decline and its reputation and business could be seriously harmed. In addition, if the combined company is not able to support emerging mobile advertising formats or services preferred by advertisers, it may be unable to obtain new advertising clients or may lose existing advertising clients, and in either case its revenue could decline.

If the combined company fails to detect click fraud or other invalid clicks on ads, it could lose the confidence of its advertiser clients, which would cause its business to suffer.

The combined company’s business will rely on delivering positive results to its advertiser clients. The combined company will be exposed to the risk of fraudulent and other invalid clicks or conversions that advertisers may perceive as undesirable. Because of their smaller sizes as compared to personal computers, mobile device usage could result in a higher rate of accidental or otherwise inadvertent clicks by a user. Invalid clicks could also result from click fraud, where a mobile device user intentionally clicks on ads for reasons other than to access the underlying content of the ads. If fraudulent or other malicious activity is perpetrated by others, and the combined company is unable to detect and prevent it, the affected advertisers may experience or perceive a reduced return on their investment. High levels of invalid click activity could lead to dissatisfaction with its advertising services, refusals to pay, refund demands or withdrawal of future business. Any of these occurrences could damage the combined company’s brand and lead to a loss of advertisers and revenue.

System failures could significantly disrupt the combined company’s operations and cause it to lose advertiser clients or advertising inventory.

The combined company’s success will depend on the continuing and uninterrupted performance of its own internal systems, which the combined company will utilize to place ads, monitor the performance of advertising campaigns and manage its inventory of advertising space. Its revenue will depend on the technological ability of its platforms to deliver ads. Sustained or repeated system failures that interrupt its ability to provide services to clients, including technological failures affecting its ability to deliver ads quickly and accurately and to process mobile device users’ responses to ads, could significantly reduce the attractiveness of its services to advertisers and reduce its revenue. The combined systems are vulnerable to damage from a variety of sources, including telecommunications failures, power outages, malicious human acts and natural disasters. In addition, any steps the combined company takes to increase the reliability and redundancy of its systems may be expensive and may not ultimately be successful in preventing system failures.

Activities of the combined company’s advertiser clients could damage the combined company’s reputation or give rise to legal claims against it.

The combined company’s advertiser clients’ promotion of their products and services may not comply with federal, state and local laws, including, but not limited to, laws and regulations relating to mobile communications. Failure of its clients to comply with federal, state or local laws or its policies could damage its reputation and expose it to liability under these laws. The combined company may also be liable to third parties for content in the ads it delivers if the artwork, text or other content involved violates copyrights, trademarks or other intellectual property rights of third parties or if the content is defamatory, unfair and deceptive, or otherwise in violation of applicable laws. Although the combined company will generally receive assurance from its advertisers that their ads are lawful and that they have the right to use any copyrights, trademarks or other

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intellectual property included in an ad, and although it will normally be indemnified by the advertisers, a third party or regulatory authority may still file a claim against the combined company. Any such claims could be costly and time-consuming to defend and could also hurt the combined company’s reputation. Further, if it is exposed to legal liability as a result of the activities of its advertiser clients, the combined company could be required to pay substantial fines or penalties, redesign its business methods, discontinue some of its services or otherwise expend significant resources.

The combined company’s business depends on its ability to maintain the quality of its advertiser and developer content.

The combined company must be able to ensure that its clients’ ads are not placed in developer content that is unlawful or inappropriate. Likewise, its developers will rely upon the combined company not to place ads in their apps that are unlawful or inappropriate. If the combined company is unable to ensure that the quality of its advertiser and developer content does not decline as the number of advertisers and developers it works with continues to grow, then the combined company’s reputation and business may suffer.

Other Risks Factors of Mandalay

In addition to the foregoing risks, Mandalay is, and will continue to be, subject to the risks described in its Annual Report on Form 10-K for the year ended March 31, 2014, and as updated by subsequent Quarterly Reports on Form 10-Q and any amendments thereto, and Current Reports on Form 8-K, all of which are incorporated by reference into this proxy statement/prospectus. See the sections “Where You Can Find More Information” on page 153 and “Incorporation of Certain Information by Reference” on page 154.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. These forward-looking statements include all matters that are not historical facts. This proxy statement/prospectus and documents incorporated by reference contain these types of statements. Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes,” “may,” or “should” and words or terms of similar substance used in connection with any discussion of future operating results or financial performance identify forward-looking statements. Also, as examples, forward-looking statements may include statements concerning future results from operations, financial position, economic conditions, product releases, revenue and product synergies, cost savings, product or competitive enhancements and any other statement that may be construed as a prediction of future performance or events, including that Appia’s technology will enhance Mandalay Digital’s existing products or foster new technology innovation, perceived benefits from the business combination to the combined company, or that the acquisition will result in increased revenue, cost savings and better competitive position, or that Mandalay Digital will successfully integrate Appia’s technology. These forward-looking statements involve certain known and unknown risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, the following factors:

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See also the section entitled “Risk Factors” in this proxy statement/prospectus and the risk factors disclosed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These risks and uncertainties are not exhaustive. Other sections of this proxy statement/prospectus describe additional factors that could adversely impact the combined company’s business and financial performance. Moreover, the combined company will operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact that these factors will have on the combined company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the uncertainty and any risk resulting from such uncertainty in connection with any forward-looking statement that may be made herein. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus in the case of forward-looking statements contained in this proxy statement/prospectus, or the dates of the documents incorporated by reference into this proxy statement/prospectus in the case of forward-looking statements made in those incorporated documents. You should carefully review this proxy statement/prospectus in its entirety, including, but not limited to, our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and the accompanying notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, and incorporated by reference herein, and the risks described in the section entitled “Risk Factors” in this proxy statement/prospectus. You should also review the description of Appia’s business in the sections entitled “Information Regarding Appia’s Operations” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Business of Appia,” and the financial statements and the accompanying notes thereto in this proxy statement/prospectus. Except for our ongoing obligation to disclose material information under U.S. federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events, or to report the occurrence of unanticipated events.

We expressly qualify in their entirety all forward-looking statements attributable to us, Appia or the combined company, or any person acting on their behalf, by the cautionary statements contained or referred to in this section.

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ANNUAL MEETING OF MANDALAY DIGITAL STOCKHOLDERS

General

We are furnishing this proxy statement/prospectus to holders of our common and preferred stock in connection with the solicitation of proxies by our board of directors for use at the annual meeting of stockholders to be held on March 5, 2015 and at any adjournment, postponement, or continuation thereof. This proxy statement/prospectus is first being furnished to our stockholders on or about February 3, 2015. In addition, this proxy statement/prospectus is being mailed to the Appia stockholders as a prospectus of Mandalay Digital in connection with the issuance by us of shares of our common stock to Appia in connection with the merger described in this proxy statement/prospectus.

Important Notice Regarding the Availability of Proxy Materials

for the Stockholders Meeting To Be Held on March 5, 2015

We are providing you access to this proxy statement, the accompanying form of proxy card and our annual report on Form 10-K and Form 10-K/A for the fiscal year ended March 31, 2014 both by sending you these proxy materials and by notifying you of the availability of these proxy materials on the Internet. These proxy materials are available on the Internet at www.proxyvote.com.

Date, Time, and Place

The annual meeting of our stockholders will be held on March 5, 2015 at 10:00 a.m., Pacific time, at the offices of Manatt, Phelps & Phillips, LLP, 11355 W. Olympic Boulevard, Los Angeles, CA 90064.

Purpose of the Mandalay Digital Annual Meeting

At the annual meeting of our stockholders, and at any adjournment, postponement, or continuation thereof, our stockholders will be asked to consider and vote upon the following proposals:

(1)         To consider and vote upon the issuance and sale of (a) up to 19,500,000 shares of our common stock pursuant to the merger agreement with Appia, Inc. (including shares of common stock issuable upon exercise of stock options to be assumed by Mandalay Digital pursuant to the merger agreement and 1,000,000 shares to be deposited into escrow) and, (b) an additional 600,000 shares of our common stock (including a warrant to purchase 400,000 shares, which vests 12 months after issuance under certain circumstances) to be issued to a lender in connection with a separate loan transaction, all of which aggregates to more than 20% of Mandalay Digital’s common stock outstanding under applicable listing rules of The NASDAQ Stock Market LLC;

(2)         To elect six directors to serve on our board of directors for a one-year term ending as of our annual meeting of stockholders in 2016.

(3)         To approve, in a non-binding advisory vote, the compensation of our named executive officers, commonly referred to as “Say-on-pay”.

(4)         To hold an advisory, non-binding vote on the frequency of future advisory votes on the compensation of our named executive officers, commonly referred to as “Say-on-frequency”.

(5)         To ratify the appointment of SingerLewak as our independent registered public accounting firm for the fiscal year ending March 31, 2015.

(6)         Transact such other business as may properly come before the meeting and/or any adjournment or postponement thereof.

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Board Recommendation

Our board of directors has approved and we have executed the merger agreement, and our board of directors has approved the issuance of shares of our common stock in the merger and loan transaction, and recommends that our stockholders vote “FOR” approval of the issuance of shares of our common stock in the merger pursuant to the merger agreement and in the separate loan transaction, the election of the six director nominees and “FOR” the other proposal described in this proxy statement/ prospectus.

Record Date, Outstanding Shares, and Quorum

Only holders of records of our common stock and our preferred stock at the close of business on January 20, 2015 (the “Record Date”) are entitled to notice of and to vote at our annual meeting and any adjournments thereof. As of the Record Date, 37,824,011 shares of our common stock and 100,000 shares of preferred stock, which are convertible into 20,000 shares of common stock, were issued and outstanding.

Holders of our common stock are entitled to one vote at the annual meeting for each share of common stock held that was issued and outstanding as of the Record Date. The Series A preferred stock is entitled to vote together with the common stock as a single class (on an as-converted to common stock basis) on any matters submitted to the holders of the Company’s common stock, together with any other voting rights provided to the Series A Preferred under law or the General Corporation Law of the State of Delaware.

The presence, in person or by proxy, of stockholders holding at least a majority of our outstanding common stock and preferred stock, voting together as a class, will constitute a quorum for the transaction of business at our annual meeting. If a quorum is not present at the annual meeting, we expect that the meeting will be adjourned or postponed to solicit additional proxies. Your shares will be counted towards the quorum only if you submit a valid proxy or vote at the annual meeting.

How to Vote

Voting in Person

All stockholders as of the close of business on January 20, 2015 can attend the annual meeting. If you plan to attend the annual meeting and wish to vote in person, you will be given a ballot at the annual meeting. You may vote at the annual meeting if you are a stockholder of record (your shares are directly registered in your name on our books and not held through a broker, bank or other nominee). In order to vote at the annual meeting shares held in “street name,” you must obtain a valid proxy from your broker, bank, or other nominee, and bring it to the meeting. Follow the instructions from your broker, bank, or other nominee included with these proxy materials, or contact your broker, bank, or other nominee to request a proxy form.

Voting by Proxy

We request that our stockholders complete, date, and sign the accompanying proxy and promptly return it in the accompanying envelope or otherwise mail it to us. All properly executed proxies that we receive prior to the vote at the annual meeting (that have not been revoked) will be voted in accordance with the instructions indicated on the proxies. All properly executed proxies that we receive prior to the vote at the annual meeting that do not provide any direction as to how to vote will be voted in accordance with the recommendations of our board of directors.

If your shares are held in street name, you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares.

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Revocation of Proxies

You can revoke your proxy at any time before your shares are voted at the annual meeting by (i) sending a written notice of revocation to Corporate Secretary, Mandalay Digital Group, Inc., 2811 Cahuenga Boulevard West, Los Angeles, CA 90068, (ii) submitting by mail, telephone or the Internet another proxy dated as of a later date, or (iii) voting in person at the annual meeting. Merely attending the annual meeting will not revoke your proxy. All revocations of your proxy must be received prior to the voting of your shares at the annual meeting. Voting in person at the annual meeting will replace any previous votes submitted by proxy. If the annual meeting were to be postponed or adjourned, your proxy would still be valid and will be voted at the postponed or adjourned meeting. You would still be able to revoke your proxy until it was voted.

Voting Your Shares

If you complete and submit your proxy voting instructions, the persons named as proxies will follow your instructions. If you submit your proxy voting instructions but do not direct how to vote on each item, the persons named as proxies will vote your shares

The persons named as proxies will vote on any other matters properly presented at the annual meeting in accordance with their best judgment. We have not received notice of other matters that may be properly presented for voting at the annual meeting.

Votes Required

The affirmative vote of a majority of the votes cast by our common and preferred stock present, in person or by proxy, voting as a single class on an as-converted to common stock basis, at the annual meeting is required to approve the issuance of the shares of Mandalay Digital common stock pursuant to the merger agreement and the separate loan transaction (Proposal 1). The directors will be elected by a plurality of the voting power of our common stock and preferred stock, voting together as a single class on an as-converted to common stock basis, at the annual meeting (Proposal 2). The affirmative vote of a majority of the voting power of our common and preferred stock present, in person or by proxy, voting as a single class on an as-converted to common stock basis, at the annual meeting is required to approve the advisory Say-on-pay and Say-on-frequency proposals, and to ratify the appointment of SingerLewak as our independent registered public accounting firm for the fiscal year ending March 31, 2015 (Proposals 3, 4 and 5, respectively).

Withholding Your Vote, Abstentions and Broker non-votes

In the election of the directors (Proposal 2), you can withhold your vote for any or all of the nominees. Withheld votes will be excluded entirely from the vote and will have no effect on the outcome. With regard to all other proposals, you can vote to “abstain.” If you vote to “abstain,” your shares will be counted as present at the meeting for purposes of determining whether a quorum exists, but such abstention will have the effect of a vote against the proposal.

A “broker non-vote” occurs when a broker submits a proxy without voting on one or more of the non-routine matters. A bank, brokerage firm or other nominee is not permitted by applicable regulatory requirements

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to vote on non-routine matters without instructions from the beneficial owner of the shares. The share issuance proposal, the election of directors and the advisory Say-on-pay and Say-on frequency proposals are deemed non-routine matters; consequently, absent instructions from you, your broker may not vote your shares on the share issuance proposal, the election of the directors and the advisory Say-on-pay and Say-on-frequency proposals (Proposals 1, 2, 3 and 4). Your broker may vote your shares on the ratification of the appointment of our independent registered public accounting firm (Proposals 5). A broker non-vote is considered present at the meeting for purposes of determining whether a quorum exists but is not counted as a vote cast on any non-routine matter presented at the annual meeting.

Proxy Solicitation

We will bear the entire cost of solicitation of proxies from our stockholders, including preparation, assembly, printing, and mailing of this proxy statement/prospectus and the proxy card. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries, and custodians holding in their names shares of our common stock or preferred stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of our common stock for their costs of forwarding solicitation materials to such beneficial owners. In addition to solicitation by use of the mails, proxies may be solicited by directors, officers, employees, or agents of our company in person or by telephone or other means of communication. No additional compensation will be paid to directors, officers, or other regular employees of ours for such services.

We have retained MacKenzie Partners to aid in the solicitation of proxies from banks, brokers, nominees, and intermediaries. We will pay MacKenzie a fee of $15,000 for its services, plus we will reimburse MacKenzie for various out-of-pocket and other expenses.

Other Business; Adjournments

We do not expect that any matter other than the proposals presented in this proxy statement/prospectus will be brought before our annual meeting. However, if other matters incident to the conduct of the annual meeting are properly presented at the annual meeting or any adjournment, postponement, or continuation of the annual meeting, the persons named as proxies will vote in accordance with their best judgment with respect to those matters.

Adjournments may be made for the purpose of, among other things, soliciting additional proxies.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of January 20, 2015, there were approximately 37,824,011 shares of our common stock and 100,000 shares of preferred stock outstanding, which are convertible into 20,000 shares of common stock. The following table presents information regarding the beneficial ownership of our common stock, including shares of common stock issuable upon conversion of our preferred stock, as of such date by:

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally provide that a person is the “beneficial owner” of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities or has the right to acquire such powers within 60 days. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, warrants or rights held by that person that are currently exercisable or convertible or exercisable, convertible or issuable within 60 days of January 20, 2015, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The percentages in the table have been rounded to the nearest hundredth. Except as specifically indicated in the footnotes to this table, we believe that the persons identified in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.

* Represents less than 1%.

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PROPOSAL 1

APPROVAL OF THE ISSUANCE OF SHARES OF MANDALAY DIGITAL COMMON STOCK

We are seeking the approval of our stockholders, as required by NASDAQ Marketplace Rule 5635(a)(1), for the issuance of up to 19,500,000 shares pursuant to the merger agreement and an additional 600,000 shares of our common stock (including a warrant to purchase 400,000 shares, which vests 12 months after issuance under certain circumstances) in a separate loan transaction as described in this proxy statement/prospectus. Approval of our stockholders of the issuance of those shares is a condition to the obligations of our company and Appia to effecting the merger. If the proposal to issue up to 19,500,000 shares of our common stock is not approved, we cannot effect the merger under the terms set forth in the merger agreement.

Nasdaq Requirements

Our common stock is listed for trading on the NASDAQ Stock Market. The Marketplace Rules of the NASDAQ Stock Market require that we obtain the approval of holders of our common and preferred stock prior to the issuance of additional shares of our common stock in any transaction if:

As of the Record Date, there were 37,824,011 shares of our common stock outstanding and 100,000 shares of preferred outstanding, which are convertible to 20,000 shares of common stock.

Pursuant to the merger agreement and in connection with the merger, we will issue up to 19,500,000 shares of our common stock. The merger agreement does not provide for an adjustment in the aggregate number of shares of Mandalay Digital common stock or options to be issued by Mandalay Digital to Appia’s security holders in the acquisition in the event of fluctuations in the market value of Mandalay Digital’s common stock up through the closing date. However, the number of shares to be issued by Mandalay Digital is subject to adjustment based on Appia’s working capital and net indebtedness as of the closing date of the merger. We estimate that, if the merger had closed on January 31, 2015, we would have issued 19,056,392 shares; additionally, we would have assumed options for 277,376 shares of our common stock, for an aggregate of 19,333,768 shares, representing approximately 33% of our common stock outstanding after giving effect to the merger, based on the number of shares of our common stock outstanding on November 13, 2014. Appia’s actual results of operations between the date of the financial information included in this proxy statement/prospectus and the closing date may differ from the forecasted results used in this estimate, resulting in differences between the forecast and actual amounts of Appia’s working capital and net indebtedness as of the closing date of the merger. See “The Merger – Consideration Payable in the Merger” located on page 69 of this proxy statement/prospectus for further information and a discussion of the assumptions in calculating the potential amount of shares to be issued by Mandalay Digital in the merger.

We will also issue, in a separate private placement, 200,000 shares of common stock plus a common stock purchase warrant exercisable for 400,000 shares of common stock to a lender pursuant to financing arrangements. See “Ancillary Agreements – The Financing Agreements” on page 97 for further information about assumption of debt and issuance of guarantees in connection with the financing arrangements.

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Impact of Issuance on Existing Stockholders

Existing holders of our common stock will have rights that are equal to those of the holders of the shares of our common stock that would be issued in the merger, as the shares to be issued in the merger are the same class of common stock as the class of our common stock currently outstanding. In determining whether to vote for this proposal, stockholders should consider that they are subject to the risk of substantial dilution of their interests that will result from the issuance of shares of our common stock, and that as a result of the issuance of such shares of our common stock, the current stockholders will own a smaller percentage of our outstanding shares of common stock. The Appia stockholders would hold approximately 33% of our common stock outstanding after giving effect to the merger and assuming it were to close on January 31, 2015, based on the number of shares of our common stock outstanding on November 13, 2014.

Stockholder Vote Requirement

Approval of the issuance of the Mandalay Digital common stock in connection with the merger requires the affirmative vote of not less than a majority of the votes of holders of our common and preferred stock, voting together as a single class on an as-converted to common stock basis, present in person or represented by proxy at the annual meeting and entitled to vote thereon, provided that a quorum is present at the annual meeting.

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THE MERGER

The following is a description of the material aspects of the merger. While Mandalay Digital believes that the following description covers the material terms of the merger, the description may not contain all of the information that is important to Mandalay Digital stockholders and Appia stockholders. Mandalay Digital encourages its stockholders and the Appia security holders to carefully read this entire proxy statement/prospectus, including “Summary of the Merger Agreement” stating on page 81 and the merger agreement attached to this proxy statement/prospectus as Appendix A and incorporated herein by reference, for a more complete understanding of the merger.

Overview

The Mandalay Digital board of directors has approved, and on November 13, 2014 we entered into, the merger agreement, which provides for Merger Sub, a wholly-owned subsidiary of Mandalay Digital, to be merged with and into Appia, with Appia surviving the merger as a wholly-owned subsidiary of Mandalay Digital.

At the effective time of the merger, on the terms and subject to the conditions set forth in the merger agreement, all of the equity securities of Appia outstanding immediately prior to the effective time (including outstanding stock options, which will be assumed by Mandalay Digital), other than equity securities held by stockholders that exercise dissenters’ rights under applicable law, will be converted into the right to receive a number of shares (or, in the case of stock options being assumed, stock options) of Mandalay Digital common stock, equal to $100 million less Appia’s net debt and transaction expenses at the time of closing (subject to a working capital adjustment), divided by $4.50.

Mandalay Digital expects to issue, pursuant to the merger agreement, up to 19,500,000 shares of common stock (including shares underlying assumed stock options and 1,000,000 shares to be deposited into escrow). The aggregate number shares of Mandalay Digital common stock to be issued pursuant to the merger agreement will vary depending on a number of factors, including the amount of the estimated net debt at closing. The merger agreement does not provide for an adjustment in the aggregate number of shares of Mandalay Digital common stock or options to be issued by Mandalay Digital to Appia’s security holders in the acquisition in the event of fluctuations in the market value of Mandalay Digital’s common stock up through the closing date. However, the number of shares to be issued by Mandalay Digital pursuant to the merger agreement is subject to adjustment based on Appia’s working capital and net debt as of the closing date of the merger. We estimate that if the merger had closed on January 31, 2015, we would have issued 19,056,392 shares; additionally, we would have assumed options for 277,376 shares of our common stock, for an aggregate of 19,333,768 shares, which would represent approximately 33% of the Company’s outstanding shares of common stock as of November 13, 2014 (after giving effect to such issuance). Appia’s actual results of operations between the date of the financial information included in this proxy statement/prospectus and the closing date may differ from the forecasted results used in this estimate, resulting in differences between the forecast and actual amounts of Appia’s working capital and net debt, including transaction expenses, as of the closing date of the merger. See “The Merger – Consideration Payable in the Merger” located on page 69 of this proxy statement/prospectus for further information and a discussion of the assumptions in calculating the potential amount of shares to be issued by Mandalay Digital in the merger.

We will deposit 1,000,000 of the shares into an escrow account to cover indemnification claims by Mandalay Digital pursuant to the terms of the merger agreement, which shares will be released one year after the closing, subject to any then pending claims. As of January 20, 2015, there were 37,824,011 shares of our common stock outstanding. The shares of our common stock to be issued in the merger will be issued from our authorized but unissued shares of common stock.

Upon consummation of the merger, Mandalay Digital will guarantee Appia’s existing indebtedness outstanding as of closing, which amount is approximately $9.5 million (excluding the transaction fees and expenses) assuming the merger closed on January 31, 2015. See “The Merger – Consideration Payable

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in the Merger” located on page 69 of this proxy statement/prospectus for further information and assumptions about Appia’s forecasted indebtedness based on certain closing dates. Upon consummation, and as a condition to the closing, of the merger, Appia will enter into an amended loan agreement with its current senior lender, Silicon Valley Bank, and a securities purchase agreement with Mandalay Digital and North Atlantic pursuant to which Appia will issue to North Atlantic a subordinated debenture in the aggregate principal amount of $8.0 million, which amount is included in the $9.5 million referenced above, to retire a like amount of outstanding debt to North Atlantic.

Mandalay Digital will issue a secured guaranty of each of the SVB Debt and North Atlantic Debt whereby we will guarantee all of Appia’s obligations in connection with such indebtedness and pledge substantially all of its assets, including its intellectual property. The secured guarantees will contain cross-default provisions and covenants, among others, limiting our ability to undergo a change of control, incur indebtedness, grant liens, make dividends in cash and other customary covenants. The SVB Debt will mature at June 30, 2015, with respect to the revolving line, and April 1, 2016, with respect to the term loan. The North Atlantic Debt will mature two years after the date of issuance. SVB and North Atlantic will also enter into a subordination agreement pursuant to which North Atlantic will agree to, among other things, limit its rights to receive payment, exercise remedies and enforce its rights for a certain period while an event of default under the North Atlantic debt exists.

Mandalay will also issue to North Atlantic 200,000 shares of its common stock and a common stock warrant to purchase 400,000 shares of its common stock all of which will have registration rights requiring Mandalay Digital to file a registration statement 15 business days after the closing of the merger with Appia. The warrant will have an exercise price of $0.01 per share exercisable for 10 years, but it is not exercisable until the one year anniversary of the closing date of the merger and will terminate if Mandalay Digital repays the North Atlantic Debt prior to such one year anniversary. We intend to refinance the Appia debt as soon as practicable following the closing of the merger.

Appia stockholders will be subject to lock up restrictions lapsing with respect to one-third of such shares at each of the six, nine and 12 month anniversaries of the closing date. Upon the closing of the merger, Mandalay Digital will appoint Jud Bowman and Craig Forman as members to the board of directors.

Background of the Merger

From time to time, Mandalay Digital considers various potential strategic acquisition transactions to enhance shareholder value. Mandalay Digital has completed four strategic transactions since late 2011 and has reviewed others, including the opportunities to acquire intellectual property and technologies, to acquire distribution for products and services in geographies not currently served and to acquire a complementary advertising tech platform.

In May 2012, William Stone, Mandalay Digital’s Chief Executive Officer (and then a consultant to Mandalay Digital) contacted Judson S. Bowman, Appia’s Chief Executive Officer, to discuss potential operator business development relationships. Mr. Stone had previously been introduced to Mr. Bowman in 2009 when Appia (then named Pocketgear) acquired Handango, Inc., an independent, third party application store. Mr. Stone served on the board of directors of Handango at the time of the acquisition and had previously been the Chief Executive Officer of Handango (although Mr. Stone did not receive any consideration in connection with the acquisition). While the May 2012 meeting did not conclude with any specific next steps, Mr. Stone and Mr. Bowman agreed to stay in touch and look for opportunities to collaborate. In July and August 2013, Mr. Stone and Mr. Bowman had several conversations about the shared vision for Mandalay Digital and Appia and how both companies could be more valuable together versus standalone. Although Mandalay Digital and Appia shared a common vision, the combination of the parties’ valuation expectations and the limited operating history of each company made any potential acquisition discussions premature at the time. Thus, Mr. Bowman and Mr. Stone agreed to stay in touch and look for commercial opportunities to work together. They discussed

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one specific opportunity in July and August of 2013 where Mandalay Digital would potentially acquire some of Appia’s legacy assets and contracts. Although the parties did not enter into a commercial transaction at that time they agreed to continue to look for opportunities to work together in the future.

Mandalay Digital’s executive management team believed that given Mandalay Digital’s pending United States summer 2014 launch of its advertising business with DT Ignite and DT IQ, Mandalay Digital would benefit significantly from building, acquiring and/or contracting with third parties such as Appia to use a sophisticated mobile app advertising platform. In light of the length of time it would take to build such a platform, the related execution risk (and Appia’s status as a leading independent app installation network) and the pending launch of the advertising business, in March 2014, Mr. Stone contacted Mr. Bowman again to discuss potential strategic relationships and transactions.

On March 13, 2014, Mr. Stone and Andrew Schleimer, Mandalay Digital’s Executive Vice President and Chief Financial Officer (and then a consultant to Mandalay Digital), held a telephone conference with Mr. Bowman and Timothy Oakley, Appia’s Chief Financial Officer, to discuss Mandalay Digital’s capitalization, financial condition and operations.

On March 18, 2014, Mr. Stone delivered a non-binding letter of intent outlining a proposed structure and purchase price for an acquisition of Appia by Mandalay Digital. Mandalay Digital’s proposal contemplated total aggregate consideration of up to $110 million to acquire Appia on a cash free and debt free basis, consisting of $30 million in cash, $50 million in Mandalay Digital common stock and potential earnout consideration of up to $30 million (involving the same relative mix of cash and stock).

On March 22, 2014, representatives of America’s Growth Capital (AGC), financial advisors to Appia, responded to Mr. Stone’s proposal by proposing a $125 million aggregate purchase price for Appia, consisting of $30 million in cash, $65 million in Mandalay Digital common stock and $30 million of potential earnout consideration.

During the course of the next several months, representatives of Mandalay Digital and Appia, including Mr. Stone, Mr. Schleimer and Jeffrey Klausner, Mandalay Digital’s then Chief Financial Officer, engaged in a number of meetings and discussions regarding the terms of the proposed business combination transaction as well as preliminary due diligence matters. In March, 2014, Mandalay Digital engaged legal and accounting advisors to assist in its preliminary evaluation of a potential transaction, retaining Latham & Watkins LLP (Latham) as M&A counsel and Edward Thomas Associates, Inc. as external accounting advisor. Mandalay Digital provided Appia with a preliminary due diligence request on April 5, 2014 and, commencing April 17, 2014, Appia began providing Mandalay Digital and its outside advisors, including Latham and Edward Thomas Associates, with access to certain due diligence materials through an online data room.

Based on its preliminary due diligence investigation of Appia’s financial results, on April 23, 2014, Mandalay Digital submitted a revised non-binding letter of intent to Appia, proposing aggregate consideration of up to $100 million, consisting of $30 million of cash, $40 million of Mandalay Digital common stock and potential cash and stock earnout consideration of up to $30 million.

On April 28, 2014, Mandalay Digital’s Board of Directors (the Board) held a meeting and discussed, among other things, the Appia opportunity and the status of the proposed transaction including the proposed terms of the transaction. The Board directed Mandalay Digital’s management to continue discussions with Appia with the objective of entering into a non-binding letter of intent outlining the principal terms of a potential transaction.

On April 29, 2014, Mr. Stone, Mr. Schleimer, Mr. Bowman and a representative of AGC participated on a conference call to discuss the potential transaction.

Following this call on April 29, 2014, representatives of AGC submitted a counterproposal to Mandalay Digital which provided for up to $115 million of total consideration, consisting of $30 million in cash, $55 million of stock and potential cash and stock earnout consideration of $30 million.

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On May 6, 2014, Mr. Schleimer, Mr. Bowman and a representative of AGC met in person in New York City to negotiate open issues with respect to Mandalay Digital’s proposal. In addition to the amount of the overall purchase price, one of the issues of significant importance to Mandalay Digital in those discussions was the imposition of a minimum “floor” on the deemed value of Mandalay Digital’s stock for purposes of determining how many shares of Mandalay Digital stock would be issued in the transaction. Representatives of Appia, in turn, proposed an overall “cap” on the deemed value of Mandalay Digital’s stock for purposes of the transaction. The parties exchanged revised drafts of the non-binding letter of intent over the next several days.

On May 14, 2014, Mandalay Digital and Appia entered into non-binding letter of intent with respect to a business combination transaction which contemplated Mandalay Digital’s acquisition of Appia for total aggregate consideration of up to $115 million consisting of $30 million in cash, $55 million in Mandalay Digital stock and up to $30 million of proposed contingent earnout consideration. The May 2014 letter of intent provided that the number of shares of Mandalay Digital common stock to be issued in the transaction would be calculated based on the 25 trading day value of Mandalay Digital’s shares prior to the execution of definitive agreements with respect to the transaction, subject to a “floor” of $4.10 per share and a “cap” of $5.00 per share. Mandalay Digital’s common stock closed at $3.66 per share on May 14, 2014. The letter of intent also contemplated that the definitive agreements would provide for a termination fee of $2.0 million in the event Mandalay Digital was unable to consummate the transaction due to its inability to secure financing or stockholder approval.

On June 1, 2014, Mr. Stone and Mr. Schleimer circulated a memorandum to Mandalay Digital’s Board providing a status update with respect to the transaction. Mr. Stone and Mr. Schleimer also recommended the engagement of specialty financial advisory firms to assist with an evaluation of potential financing sources to fund the cash portion of the purchase price and to refinance Appia’s existing indebtedness.

During the course of the month of June 2014, representatives of Mandalay Digital and Appia engaged in numerous meetings and conference calls to discuss due diligence matters, as well as potential modifications to the structure of the proposed transaction.

On June 12, 2014 Mandalay Digital engaged two specialized financial advisory firms to assist Mandalay Digital in arranging potential debt financing alternatives.

From June 12 through August 1, 2014 Mr. Stone, Mr. Schleimer and Robert Deutschman, an outside director of Mandalay Digital, together with Mandalay Digital’s advisors, met with potential lenders on numerous occasions to determine financing alternatives and structures available to Mandalay Digital. Mandalay Digital held separate parallel discussions with Silicon Valley Bank (SVB) regarding a potential financing arrangement with respect to the proposed transaction.

On June 25, 2014 and July 23, 204, Mandalay Digital’s Board held meetings and discussed, among other things, the status of the proposed transaction, an update on transaction timing and process, and an update on the financing alternatives that would potentially be available to Mandalay Digital.

During July 2014, representatives of Mandalay Digital and Appia held numerous in person and telephonic meetings to, among other things, further discuss due diligence matters, for Appia to provide Mandalay Digital with an update on Appia’s second quarter financial results and to discuss potential alternative transaction structures.

On July 25, representatives of Mandalay Digital updated representatives of Appia on the status of discussions with potential sources of financing. At that time representatives of Mandalay Digital proposed to representatives of Appia that a portion of the consideration to be paid in the transaction should be in the form of subordinated notes to be issued to Appia stockholders so as to reduce the overall cost of funds in the transaction. In addition, Mandalay Digital and Appia’s representatives discussed the possibility of simplifying the transaction structure by eliminating the $30 million of potential earnout consideration in exchange for increasing the value of

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the consideration to be paid at closing by $15 million (to an aggregate of $100 million). Based on these discussions, it became clear that both parties believed that the elimination of the earnout consideration would simplify the transaction and better align the incentives of all parties (to maximize the value of Mandalay Digital common stock) following the closing of a transaction.

Consistent with the foregoing, on July 31, 2014, Mr. Schleimer delivered a new proposal to representatives of Appia for the structure and financing of the proposed transaction. The revised proposal contemplated payment of an aggregate of $100 million of consideration to acquire Appia on a cash free, debt free basis with a normalized level of working capital, consisting of $15.0 million in cash, $60 million of Mandalay Digital common stock and $25 million of Mandalay Digital subordinated notes (and no earnout consideration). A revised amended and restated letter of intent reflecting these terms was delivered to representatives of Appia on August 5, 2014.

On August 7, 2014, representatives of Appia advised Mr. Schleimer that Appia would be prepared to move forward under the new structure that had been proposed by Mandalay Digital if Mandalay Digital would agree to eliminate the “floor” and “cap” on the deemed value of Mandalay Digital shares for purposes of the transaction and if a conversion feature were added to the proposed subordinated notes.

On August 11, 2014, Mandalay Digital’s Board met via conference call to discuss the key terms and conditions of Mandalay Digital’s updated proposal and Appia’s response thereto, as well as the various financing alternatives that were potentially available to Mandalay Digital, including the possibility of paying a portion of the consideration in the form of subordinated notes to Appia equity holders.

Following this board meeting, representatives of Mandalay Digital informed representatives of Appia that Mandalay Digital would be willing to eliminate the “floor” and “cap” on the deemed value of Mandalay Digital stock but that Mandalay Digital would not agree to Appia’s proposal that the subordinated notes should be convertible into shares of Mandalay Digital common stock.

On August 18, 2014, Appia and Mandalay Digital signed a revised non-binding letter of intent generally reflecting the terms proposed in Mandalay Digital’s July 31, 2014 proposal, except that the “floor” and “cap” on the deemed value of Mandalay Digital stock was eliminated. Mandalay Digital’s common stock closed at $4.51 per share on August 18, 2014.

On August 22, 2014, Mr. Bowman, Mr. Oakley, Mr. Schleimer and representatives of AGC, Latham, Manatt, Phelps and Phillips, LLP, Mandalay Digital’s outside corporate and securities counsel (Manatt), Morningstar Law Group, Appia’s outside corporate and securities counsel (Morningstar), and Goodwin Procter LLP, Appia’s outside M&A counsel (Goodwin), participated in a call to discuss certain legal and timing issues related to the proposed transaction.

During the course of the next several weeks, representatives of Mandalay Digital and Appia met in person and by telephone to discuss the financial performance of the respective companies and other due diligence matters, including meetings of the respective senior management teams of Appia and Mandalay Digital in Orange County, California on September 10 and September 11, 2014. During this period, the parties also discussed the possibility of further simplifying the transaction structure by having all of the consideration paid in the form of Mandalay Digital common stock (and eliminating the subordinated notes). Mandalay Digital’s executive management team believed that this change in structure, if accomplished at an appropriate valuation of Mandalay Digital common stock, would benefit the combined company by significantly reducing its debt burden. Representatives of Appia indicated to representatives of Mandalay Digital that various Appia stockholders would prefer to pursue an all-stock transaction.

On September 15, 2014 Mr. Schleimer delivered a further amended and restated draft of a letter of intent to Appia’s representatives which contemplated that all of the consideration to be paid in the transaction would be

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paid in the form of Mandalay Digital common stock, subject to adjustment for the amount of net debt of Appia at closing and subject to a customary working capital adjustment. Although the parties never executed this further amended and restated letter of intent, they agreed in principle to this change in structure and instructed their legal advisors to begin preparing and negotiating drafts of definitive agreements.

On September 29, 2014, Mandalay Digital entered into a non-binding term sheet for a formula-based revolving line of credit with Silicon Valley Bank SVB to finance the acquisition and support working capital needs.

On October 3, 2014, representatives of Latham circulated on behalf of Mandalay Digital a draft of a proposed definitive merger agreement to representatives of Goodwin.

From October 3 until November 13, 2014, representatives of Appia, Mandalay Digital, Latham, Morningstar and Goodwin exchanged drafts of, and discussed terms of, the merger agreement, support agreements and other ancillary documents. These discussions focused on, among other things:

From October 3 until November 13, 2014, Mr. Stone and Mr. Schleimer held numerous meetings with Mr. Deutschman in his capacity as an outside director of Mandalay Digital to update and discuss with him the terms of the merger agreement, support agreements and other ancillary documents.

On October 6, 2014, Mr. Schleimer contacted AGC and informed them that based on conversations to date with potential sources of financing and input from Mandalay Digital’s Board, Mandalay Digital would be requesting that Appia’s existing lenders (North Atlantic Capital (NAC) and Silicon Valley Bank (SVB)) participate in the transaction by rolling over (or otherwise amending and/or restating) their existing debt facilities (subject to agreed-upon modifications) following the closing, thereby obviating the need for Mandalay Digital to secure outside third party financing to refinance those debt facilities.

During the week of October 6, 2014, representatives of Appia engaged in discussions with NAC and SVB and reported back to Mandalay Digital that both lenders had indicated their willingness to proceed on the basis of Mandalay Digital’s proposal, subject to negotiation and execution of definitive agreements and Mandalay Digital’s willingness to guarantee Appia’s indebtedness following the closing.

Based on the progress in discussions, Mandalay Digital decided that it would be prudent to engage an investment banking firm to render a fairness opinion in the event that Mandalay Digital proceeded with a transaction. On October 17, 2014, Mandalay Digital retained Needham & Company to render an opinion to the Mandalay Digital board as to the fairness, from a financial point of view, of the consideration that might be paid in a transaction with Appia.

On October 7, 2014, Mr. Stone, Mr. Schleimer, Mr. Bowman and Mr. Oakley participated in a telephone conference in which Mr. Bowman and Mr. Oakley presented Appia’s preliminary financial and operating results for the third quarter.

During the week of October 14, 2014, representatives of Mandalay Digital, Appia and NAC exchanged drafts of a term sheet regarding the terms of the roll-over of the NAC debt following the closing.

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On October 23, 2014, Mr. Bowman, Mr. Schleimer and representatives of AGC, Latham and Goodwin met in New York City to discuss the terms of the Merger Agreement.

On October 28, 2014, NAC and Mandalay Digital signed a revised term sheet with respect to the replacement of the existing NAC debt facilities with a single new facility of equal principal amount following the closing.

From October 28 until November 13, 2014, representatives of Appia, Mandalay Digital, Latham, Morningstar, SVB and NAC exchanged drafts of, and discussed terms of, the SVB and NAC consent agreements to the debt roll-over and related loan documentation.

On November 3, 2014, Mr. Stone, Mr. Schleimer, Mr. Bowman and Mr. Forman held a conference call to negotiate certain terms of the Merger Agreement and ancillary documents. During this conference call Mr. Stone and Mr. Schleimer informed Mr. Bowman and Mr. Forman that Mandalay Digital would be willing to proceed with the transaction only if the Mandalay Digital common stock price were fixed at $4.50 per share for purposes of determining how many shares of Mandalay Digital common stock would be issued to Appia’s stockholders in the transaction. Mandalay Digital’s closing stock price on November 3, 2014 was $3.75 and, during the period from March 3, 2014 through November 3, 2014 had ranged from $3.16 to $5.89. On the following day, representatives of Appia informed representatives of Mandalay Digital that Appia’s principal stockholders would be willing to proceed with the transaction on the basis of a $4.50 deemed value for Mandalay Digital’s common stock (although the consideration would be allocated internally among Appia preferred and common stockholders according to the Appia charter documents and Appia’s internal agreements).

On November 9, 2014, Mandalay Digital’s Board of directors held a special meeting to review the transaction. At this meeting:

In addition, at this meeting members of the Board discussed the proposed termination fee of $1.5 million and expense reimbursement obligation of up to $500,000 that would be payable under certain circumstances by Mandalay Digital if Mandalay Digital’s stockholders did not approve the proposed transaction. Based on these discussions, the Board directed management to contact representatives of Appia to request a reduction in the amount of the proposed $1.5 million termination fee.

On November 9, 2014, Mr. Schleimer contacted representatives of Appia to discuss various outstanding issues, including the amount of the proposed termination fee and the lock up release dates. During that discussion, representatives of Appia indicated that they were prepared to agree to a reduction in the termination fee and separately requested the post-closing lock-up periods with respect to Mandalay Digital common stock issued in the transaction be relaxed (at that time, Mandalay Digital proposed to release shares from the lock-ups on the one year anniversary of the transaction with respect to Mr. Bowman and on the 6, 9 and 12 month anniversaries of the closing date (with respect to 25%, 25% and 50% of the shares respectively) with respect to all other Appia stockholders). Following these discussions, the parties agreed to reduce the amount of the termination fee from $1.5 million to $1.0 million and that the shares of Mandalay Digital common stock issued to all Appia stockholders would be released from the lock-up obligations in three equal installments on the 6, 9 and 12 month anniversaries of the closing date.

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From November 9, 2014 through November 13, 2014, representatives of Appia, Mandalay Digital, Latham, Goodwin, Morningstar, SVB and NAC exchanged drafts of definitive agreements relating to the merger and the debt financing transactions.

On November 12, 2014, Mandalay Digital’s Board of directors met to consider the proposed merger agreement, support agreements and debt financing arrangements with SVB and NAC. At this meeting:

After discussions with executive management, Latham, Manatt and Needham & Company, Mandalay Digital’s Board adopted resolutions approving the merger, the merger agreement, the debt financing arrangements and the transactions contemplated thereby.

On November 13, 2014, Appia’s board of directors adopted resolutions by written consent unanimously approving the merger, the merger agreement and the transaction contemplated thereby.

On November 13, 2014 after the public markets closed on that date, representatives of Appia and Mandalay Digital executed and delivered the merger agreement, the parties to the support agreements executed and delivered the support agreements and representatives of Appia, Mandalay Digital, NAC and SVB executed consents and waivers under the existing NAC and SVB debt facilities with respect the transaction, which included forms of the definitive financing arrangements to be executed by the parties at the closing.

After the public markets closed on that date, Mandalay Digital and Appia issued a press release announcing the execution of the merger agreement.

Reasons for the Merger and Recommendation of Mandalay Digital’s Board of Directors

By vote at a meeting held on November 12, 2014, Mandalay Digital’s board of directors determined that the merger agreement and the merger, including the issuance of Mandalay Digital common stock in connection with the merger are advisable and in the best interests of Mandalay Digital and its stockholders and approved the merger agreement, the merger and the other transactions contemplated thereby. Mandalay Digital’s board of directors recommends that Mandalay Digital stockholders vote FOR the issuance of up to 19,500,000 shares of our common stock pursuant to the merger agreement.

In evaluating the merger agreement, Mandalay Digital’s board of directors consulted with Mandalay Digital’s management, Mandalay Digital’s legal advisors and reviewed the analysis and opinion of Needham & Company and, in deciding to approve the merger agreement and to recommend that Mandalay Digital stockholders vote to approve the issuance of Mandalay Digital common stock to Appia stockholders pursuant to the merger agreement, Mandalay Digital’s board of directors considered several factors that it viewed as supporting its decision, including the following material factors:

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Mandalay Digital’s board of directors also considered a variety of risks and other potentially negative factors concerning the merger agreement and the transaction contemplated thereby. These factors included:

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This discussion of the information and factors considered by Mandalay Digital’s board of directors in reaching its conclusion and recommendations is not intended to be exhaustive and is not provided in any specific order or ranking. In view of the wide variety of factors considered by Mandalay Digital’s board of directors in evaluating the merger agreement and the transactions contemplated by it, including the merger, and the complexity of these matters, Mandalay Digital’s board of directors did not find it practicable to, and did not attempt to, quantify, rank or otherwise assign relative weight to those factors. In addition, different members of Mandalay Digital’s board of directors may have given different weight to different factors. Mandalay Digital’s board of directors did not reach any specific conclusion with respect to any of the factors considered and instead conducted an overall review of such factors and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the merger agreement and the issuance of shares of Mandalay Digital common stock thereunder.

Opinion of Needham & Company, LLC

We retained Needham & Company, LLC (“Needham & Company”) to render an opinion as to the fairness, from a financial point of view, to us of the consideration to be paid by us in the merger pursuant to the merger agreement. Needham & Company was not requested to, and did not, provide independent financial advice to us during the course of the negotiation or structuring of the merger or participate in the negotiation or structuring of the merger.

On November 12, 2014, Needham & Company delivered its oral opinion, which it subsequently confirmed in writing, to our board of directors that, as of that date and based upon and subject to the assumptions and other matters described in the written opinion, the consideration to be paid by us in the merger pursuant to the merger agreement was fair to us from a financial point of view. Needham & Company provided its opinion for the information and assistance of our board of directors (in its capacity as such) in connection with and for the purpose of the board’s evaluation of the transaction contemplated by the merger agreement. Needham & Company’s opinion relates only to the fairness, from a financial point of view, to us of the consideration to be paid by us in the merger, which was determined through arm’s length negotiations between Mandalay Digital and Appia and not by Needham & Company. Needham & Company’s opinion does not address any other aspect of the merger, or any related transaction, and does not constitute a recommendation to any stockholder of Mandalay Digital as to how that stockholder should vote or act on any matter relating to the merger.

The complete text of Needham & Company’s opinion, which sets forth the assumptions made, procedures followed, matters considered, and qualifications and limitations on and scope of the review undertaken by Needham & Company, is attached to this proxy statement/prospectus as Appendix C and is incorporated by reference in this proxy statement/prospectus. The summary of Needham & Company’s opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Mandalay Digital stockholders should read this opinion carefully and in its entirety.

In arriving at its opinion, Needham & Company, among other things:

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In connection with its review and in arriving at its opinion, Needham & Company assumed and relied on the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or reviewed by it for purposes of its opinion and did not independently verify, nor did Needham & Company assume responsibility for independent verification of, any of that information. Needham & Company assumed the accuracy in all material respects of the representations and warranties contained in the merger agreement and all agreements related thereto. In addition, Needham & Company assumed that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986 and will be consummated on the terms and subject to the conditions set forth in the draft merger agreement furnished to Needham & Company without waiver, modification or amendment of any material term, condition or agreement thereof and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the merger, no material delay, limitation, restriction or condition will be imposed that would have an adverse effect on Mandalay Digital, Appia or the contemplated benefits of the merger. Needham & Company also assumed that any adjustments pursuant to the terms of the merger agreement to the aggregate exercise price of all Appia options, as provided to Needham & Company by Mandalay Digital and used by Needham & Company in its analyses, or the Adjustment Amount (as defined in the merger agreement) calculated as of September 30, 2014, would not be material to Needham & Company’s analyses. In addition, Needham & Company assumed that the financial forecasts for Mandalay Digital and Appia prepared by the respective managements of Mandalay Digital and Appia (including adjustments thereto expected by Mandalay Digital to result from the merger) were reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements, at the time of preparation, of the future operating and financial performance of Mandalay Digital, Appia and the combined companies, and Needham & Company relied, without independent verification, upon the estimates of Mandalay Digital management of the potential cost savings and other synergies, including the amount and timing thereof, that may be achieved as a result of the merger. Needham & Company expressed no opinion with respect to any of those forecasts, including those costs savings and other synergies, or the assumptions on which they were based.

Needham & Company did not assume any responsibility for or make or obtain any independent evaluation, appraisal or physical inspection of the assets or liabilities of Mandalay Digital, Appia or any of their respective subsidiaries nor did Needham & Company evaluate the solvency or fair value of Mandalay Digital, Appia or any of their respective subsidiaries under any state or federal laws relating to bankruptcy, insolvency or

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similar matters. Needham & Company’s opinion states that it was based on economic, monetary and market conditions as they existed and could be evaluated as of its date, and Needham & Company assumed no responsibility to update or revise its opinion based upon circumstances and events occurring after its date. Needham & Company’s opinion is limited to the fairness, from a financial point of view, to us of the consideration to be paid by us pursuant to the merger agreement and Needham & Company expressed no opinion as to the fairness of the merger to, or any consideration received in connection therewith by, the holders of any class of securities, creditors or other constituencies of Mandalay Digital, or as to our underlying business decision to engage in the merger or the relative merits of the merger as compared to other business strategies that might be available to us. In addition, Needham & Company expressed no opinion with respect to the amount or nature or any other aspect of any compensation payable to or to be received by any officers, directors or employees of any party to the merger, or any class of those persons, relative to the consideration to be paid by us pursuant to the merger agreement or with respect to the fairness of any such compensation. Needham & Company did not express any opinion as to what the value of our common stock will be when issued pursuant to the merger or the prices at which our common stock will actually trade at any time.

We imposed no limitations on Needham & Company with respect to the investigations made or procedures followed by Needham & Company in rendering its opinion.

In preparing its opinion, Needham & Company performed a variety of financial and comparative analyses. The following paragraphs summarize the material financial analyses performed by Needham & Company in arriving at its opinion. The order of analyses described does not represent relative importance or weight given to those analyses by Needham & Company. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by Needham & Company, the tables must be read together with the full text of each summary. The following quantitative information, to the extent it is based on market data, is, except as otherwise indicated, based on market data as it existed on or prior to November 12, 2014, and is not necessarily indicative of current or future market conditions.

Contribution Analysis. Needham & Company reviewed and analyzed the implied percentage contribution of each of Mandalay Digital and Appia to pro forma combined operating results for the last 12 months ended September 30, 2014, and pro forma projected fiscal year 2015 and fiscal year 2016 combined operating results. In calculating the pro forma projected combined operating results, Needham & Company used Mandalay Digital management’s financial forecasts of Mandalay Digital’s projected fiscal years 2015 and 2016 operating results and Appia management’s financial forecasts of projected operating results for the four quarter periods that correspond to Mandalay Digital’s fiscal years 2015 and 2016. Needham & Company assumed that each company’s contribution to the applicable financial metric reflected its contribution to the combined company’s corresponding pro forma financial metric and did not take into account any of the possible synergies or expenses that may be realized as a result of or following completion of the merger. Needham & Company reviewed, among other things, the implied percentage contributions to pro forma combined revenue, gross profit, and earnings before interest, taxes, depreciation, amortization, and stock compensation expense, or adjusted EBITDA. Needham & Company also reviewed the implied percentage contributions to pro forma combined net cash as of September 30, 2014. The following tables present the results of this analysis and the estimated percentage ownership of the combined company on a pro forma basis by the Mandalay Digital stockholders and Appia stockholders, based on an assumed total of 20.1 million shares of our common stock to be issued pursuant to the merger assuming the Adjustment Amount (as defined in the merger agreement) calculated as of September 30, 2014. In calculating pro forma equity ownership, Needham & Company used the treasury stock method to calculate the number of pro forma fully diluted shares of our common stock outstanding after the merger.

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Information as to relative contributions to EBITDA for the last 12 months and projected fiscal year 2015 was not meaningful due to Mandalay Digital’s and Appia’s actual and projected negative EBITDA for those periods.

The results of the contribution analysis are not necessarily indicative of the contributions that the respective businesses may have in the future.

Selected Companies Analysis — Appia. Using publicly available information, Needham & Company compared selected historical and projected financial and market data ratios for Appia implied by the merger to the corresponding data and ratios of publicly traded companies that Needham & Company deemed relevant because they have lines of businesses that may be considered similar to or have similar characteristics with Appia’s lines of business. These companies, referred to as the Appia selected companies, consisted of the following:

Conversant, Inc.

Criteo S.A.

Mandalay Digital

Marin Software Incorporated

Millennial Media, Inc.

Rocket Fuel Inc.

The Rubicon Project, Inc.

Tremor Video, Inc.

TubeMogul, Inc.

YuMe, Inc.

The following table sets forth information concerning the following multiples for the Appia selected companies, to the extent publicly available, and for Appia implied by the merger:

Needham & Company also reviewed, to the extent publicly available, for the Appia selected companies, enterprise value as a multiple of LTM, projected calendar year 2014 and projected calendar year 2015 adjusted EBITDA, but did not compare the results with corresponding data of Appia because of Appia’s negative LTM, projected calendar year 2014 and projected calendar year 2015 adjusted EBITDA.

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Needham & Company calculated multiples for the Appia selected companies based on the closing stock prices of those companies on November 11, 2014 and for Appia based on an implied enterprise value of $78.7 million reflecting the assumed merger consideration of 20.1 million shares of our common stock assuming the Adjustment Amount (as defined in the merger agreement) calculated as of September 30, 2014 and our closing stock price on November 11, 2014. All financial information excludes the impact of non-recurring items. Adjusted EBITDA amounts excluded the impact of stock-based compensation expense.

Needham & Company also reviewed, for the selected companies and for Appia, and on a calendar year basis, projected 2013 to 2014, 2014 to 2015, and 2015 to 2016 revenue growth percentages, and noted that Appia’s projected decrease in revenue from 2013 to 2014 of 34.9% fell below the mean and median 2013 to 2014 revenue growth percentages of the selected companies of 35.3% and 25.6%, respectively, but that Appia’s projected 2014 to 2015 and 2015 to 2016 revenue growth percentages of 66.0% and 72.5% exceeded the mean and median projected growth percentages of the selected companies of 55.1% and 24.7% for 2014 to 2015 and 22.0% and 22.9% for 2015 to 2016, respectively.

Selected Transactions Analysis. Needham & Company analyzed publicly available financial information for the following selected merger and acquisition transactions, which represent transactions announced since June 1, 2011 that involved target companies that were advertising technology companies involved in lines of business that may be considered similar to or have similar characteristics with Appia’s lines of business and with enterprise values of less than $650 million:

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Needham & Company also analyzed publicly available financial information for the following selected merger and acquisition transactions, which represent additional transactions announced since June 1, 2011 that involved privately-held target companies that were advertising technology companies involved in lines of business that may be considered similar to or have similar characteristics with Appia’s lines of business and with enterprise values of less than $650 million. These selected transactions were differentiated from the transactions described in the preceding paragraph by the fact that, because the target companies were privately-held, disclosure of their underlying financial information was generally limited and/or not necessarily proximate to the announcement date of the transaction. While still being relevant information, this lack of proximity generally resulted in LTM metrics that were not fully comparable to those calculated for the transactions described in the preceding paragraph and, thus, were separately shown.

In reviewing the selected transactions, Needham & Company calculated for the selected transactions, to the extent publicly available, and for Appia implied by the merger:

Needham & Company also reviewed, for the selected transactions, enterprise value as a multiple of LTM adjusted EBITDA, but determined that the results were not meaningful because of Appia’s negative LTM adjusted EBITDA.

Needham & Company calculated multiples for Appia based on an implied enterprise value of $78.7 million reflecting the assumed merger consideration of 20.1 million shares of our common stock and our closing stock price on November 11, 2014.

The following table sets forth information concerning the multiples described above for the selected transactions and the same multiples implied by the merger.

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Discounted Cash Flow Analysis. Needham & Company performed an illustrative discounted cash flow analysis to determine indicators of illustrative implied equity values for Appia based on Appia management’s financial forecasts. Needham & Company calculated a range of indications of the present value of unlevered free cash flows for Appia for projected calendar years 2015 through 2017 using discount rates ranging from 15.0% to 20.0%. The range of discount rates, reflecting an estimated range of weighted average costs of capital of Appia, was selected by Needham & Company utilizing its professional judgment and experience after taking into account the trading price volatility and risk associated with the common stocks of the 10 selected publicly-traded advertising technology companies, including Mandalay Digital, listed under “Selected Companies Analysis—Appia” as a surrogate for Appia common stock, the current market environment, the opportunity cost of equity capital and other relevant factors. Needham & Company then calculated a range of illustrative terminal values at the end of 2017 by applying multiples ranging from 1.7x to 2.9x to Appia management’s estimate of its projected calendar year 2017 revenues. The range of multiples was selected by Needham & Company utilizing its professional judgment and experience after taking into account the enterprise value to LTM revenues multiple of 2.6x implied by the merger. These illustrative terminal values were then discounted to calculate ranges of implied indications of present values using discount rates ranging from 15.0% to 20.0%. Needham & Company then added the ranges of the implied present values of Appia’s unlevered free cash flows for the projected years to the ranges of implied present values of Appia’s terminal values to derive ranges of implied present enterprise values of Appia. Needham & Company then added net cash (debt) as of September 30, 2014, to derive a range of illustrative implied present equity values of $112.4 million to $222.4 million. Needham & Company noted that the equity value implied by the assumed consideration of 20.1 million shares of our common stock and our common stock closing stock price on November 11, 2014 of $3.45 was $69.2 milllion.

Selected Companies Analysis — Mandalay Digital. Using publicly available information, Needham & Company compared selected historical and projected financial and market data ratios for Mandalay Digital to the corresponding data and ratios of publicly traded companies that Needham & Company deemed relevant because they have lines of businesses that may be considered similar to or have similar characteristics with our lines of business. These companies, referred to as the Mandalay selected companies, consisted of the following:

Conversant, Inc.

Criteo S.A.

Marin Software Incorporated

Millennial Media, Inc.

Rocket Fuel Inc.

The Rubicon Project, Inc.

Tremor Video, Inc.

TubeMogul, Inc.

YuMe, Inc.

The following table sets forth information concerning the following multiples for the Mandalay selected companies, to the extent publicly available, and for us:

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Needham & Company also reviewed, for the Mandalay selected companies, enterprise value as a multiple of projected calendar 2016 revenues and enterprise value as a multiple of LTM, projected calendar year 2014 and projected calendar year 2016 adjusted EBITDA, but did not compare the results with our corresponding data because of our negative LTM and projected calendar year 2014 adjusted EBITDA and unavailable projected calendar year 2016 revenues and adjusted EBITDA.

Needham & Company calculated multiples for the Mandalay selected companies and for us based on the closing stock prices of those companies on November 11, 2014. All financial information excludes the impact of non-recurring items. Adjusted EBITDA amounts excluded the impact of stock-based compensation expense.

Pro Forma Transaction Analysis. Needham & Company prepared pro forma analyses of the financial impact of the merger based on an assumed merger consideration of 20.1 million shares of our common stock and using our management’s financial forecasts of our projected fiscal year 2016 operating results, Appia management’s financial forecasts of projected operating results for the four quarter periods that correspond to our fiscal year 2016, and estimates of synergies and transaction expenses from our management. Based on these estimates and assumptions, Needham & Company’s analysis showed that the merger would result in accretion to our estimated fiscal year 2016 non-GAAP earnings per share. The financial forecasts that underlie this analysis are subject to substantial uncertainty and, therefore, actual results may be substantially different, and these differences may be material.

No company, transaction or business used in the “Selected Companies Analysis—Appia,” “Selected Transactions Analysis” or “Selected Companies Analysis—Mandalay” as a comparison is identical to Appia, Mandalay Digital or the merger. Accordingly, an evaluation of the results of these analyses is not entirely mathematical; rather, it involves complex considerations and judgments concerning differences in the financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the selected companies or selected transactions or the business segment, company or transaction to which they are being compared.

The summary set forth above does not purport to be a complete description of the analyses performed by Needham & Company in connection with the rendering of its opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant quantitative and qualitative methods of financial analyses and the application of those methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to summary description. Accordingly, Needham & Company believes that its analyses must be considered as a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying its analyses and opinion. Needham & Company did not attribute any specific

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weight to any factor or analysis considered by it. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis.

In performing its analyses, Needham & Company made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond our or Appia’s control. Any estimates contained in or underlying these analyses, including estimates of future performance, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those estimates. Additionally, analyses relating to the values of businesses or assets do not purport to be appraisals or necessarily reflect the prices at which businesses or assets may actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. Needham & Company’s opinion and its related analyses were only one of many factors considered by our board of directors in its evaluation of the merger and should not be viewed as determinative of the views of our board of directors or management with respect to the exchange ratio or the merger.

Under the terms of its engagement letter with Needham & Company, we have paid or agreed to pay Needham & Company a nonrefundable fee for rendering the Needham & Company opinion that we and Needham & Company believe is customary for transactions of this nature. Needham & Company’s fee is not contingent on the consummation of the merger. In addition, we have agreed to reimburse Needham & Company for certain of its out-of-pocket expenses and to indemnify Needham & Company and related persons against various liabilities, including certain liabilities under the federal securities laws.

Needham & Company is a nationally recognized investment banking firm. As part of its investment banking services, Needham & Company is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of securities, private placements and other purposes. Needham & Company was retained by our board of directors to render an opinion in connection with the merger based on Needham & Company’s experience as a financial advisor in mergers and acquisitions as well as Needham & Company’s familiarity with us and our industry generally. Needham & Company has not in the past two years provided investment banking or financial advisory services to us or Appia for which Needham & Company has have received compensation. Needham & Company may in the future provide investment banking and financial advisory services to Mandalay Digital, Appia or their respective affiliates unrelated to the merger, for which services Needham & Company would expect to receive compensation. In the normal course of its business, Needham & Company may actively trade the equity securities of Mandalay Digital for its own account or for the account of its customers and, therefore, may at any time hold a long or short position in those securities.

Conditions to Completion of the Merger

Our and Appia’s obligation to complete the merger is subject to the satisfaction or waiver of various conditions, including the following:

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For further information relating to the various conditions to closing of the merger, see the section entitled “Summary of the Merger Agreement —Conditions to the Consummation of the Merger” on page 92.

Expected Timing of the Merger

We and Appia expect to complete the merger after all the conditions to the merger in the merger agreement are satisfied or waived, including after the receipt of approval of our stockholders of the issuance of shares of our common stock at our annual meeting and receipt of the approval of the requisite vote by Appia’s stockholders, and the receipt of all required regulatory approvals. We and Appia currently expect to complete the merger during the first calendar quarter of 2015. However, it is possible that factors outside of either company’s control could cause the merger to be completed at a later time or not at all. The merger agreement provides that the merger agreement may be terminated at any time prior to closing of the merger if, among other things, the conditions to the effectiveness of the merger have not been satisfied or waived on or before April 30, 2015 and the party requesting the termination has not willfully breached a covenant in the merger agreement that causes the condition not to occur.

Consideration Payable in the Merger

At the effective time of the merger, on the terms and subject to the conditions set forth in the merger agreement, all of the equity securities of Appia outstanding immediately prior to the effective time (including shares of common stock issuable upon exercise of stock options to be assumed by Mandalay Digital pursuant to the merger agreement), other than stockholders exercising dissenter’s rights under applicable law, will be converted into the right to receive a number of shares (or, in the case of stock options being assumed, stock options) of Mandalay Digital common stock, equal to $100 million less Appia’s net debt and transaction fees and expenses at the time of closing (subject to a working capital adjustment), divided by $4.50. For further information see “Summary of the Merger Agreement – Conversion of Securities in the Merger” starting on page 81.

The following table illustrates the aggregate number of shares that Mandalay Digital would issue to the Appia stockholders assuming a closing date of September 30, 2014, February 28, 2015, January 31, 2015 and March 31, 2015. The September 30, 2014 information is based on the unaudited pro forma financial statements included in the section “Unaudited Pro Forma Condensed Combined Financial Information” on page 101 of this proxy statement/prospectus. The information included for January 31, February 28, and March 31, 2015 is based on information and financial projections provided by Appia and is based on certain assumptions, including the following:

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The information provided in the table below is for illustrative purposes only. The actual aggregate number of shares that Mandalay Digital will issue at the closing of the merger will be based on the existing indebtedness, aggregate transaction fees and expenses and working capital at that time. There can be no guarantee that the assumptions on which the forecasts in the table below will be correct. In addition, there can be no assurance that Appia’s working capital adjustment and net debt will not be significantly higher or lower than projected. This information was not prepared with a view to public disclosure or compliance with the published guidelines of the SEC or guidelines established by the American Institute of Certified Public Accountants regarding forecasts or projections. These forecasts do not purport to present our operations in accordance with U.S. GAAP. Appia’s actual results of operations between the date of the financial information included in this proxy statement/prospectus and the closing date may differ materially from the forecasted results used in this estimate, resulting in differences between the forecast and actual amounts of Appia’s working capital and net indebtedness as of the closing date of the merger.

No independent accountants have compiled, examined or performed any procedures with respect to this information nor have any independent accountants expressed any opinion or any other form of assurance on such information or its achievability or the assumptions on which they are based.

(in thousands, except per-share amounts):

Based on Appia’s estimated indebtedness, transaction fees and expenses and working capital adjustment and assuming a closing date during the first quarter of calendar 2015, Mandalay Digital currently expects to issue, pursuant to the merger agreement, up to 19,500,000 shares of common stock (including shares underlying assumed stock options and 1,000,000 shares to be deposited into escrow). If the merger had closed on January 31, 2015, we estimate that we would have issued 19,056,392 shares; additionally we would have assumed options for 277,376 shares of our common stock, for an aggregate of 19,333,768 shares, which would represent approximately 33% of the Company’s outstanding shares of common stock as of November 13, 2014 (after giving effect to such issuance). The merger agreement does not provide for an adjustment in the aggregate number of shares of Mandalay Digital common stock or options to be issued by Mandalay Digital to Appia’s security holders in the acquisition in the event of fluctuations in the market value of Mandalay Digital’s common stock up through the closing date. We will deposit 1,000,000 of the shares issued at the closing into an escrow account to cover indemnification claims by Mandalay Digital pursuant to the terms of the merger agreement, which shares will be released one year after the closing, subject to any then pending claims. As of January 20, 2015, there were 37,824,011 shares of our common stock outstanding. The shares of our common stock to be issued in the merger will be issued from our authorized but unissued shares of common stock.

Debt obligations and Guarantees

Upon consummation of the merger, Mandalay Digital will guarantee Appia’s existing indebtedness outstanding as of closing, which amount is approximately $9.5 million (excluding the transaction fees and expenses) assuming the merger had closed on January 31, 2015. See “The Merger – Consideration Payable

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in the Merger” located on page 69 of this proxy statement/prospectus for further information and assumptions about Appia’s forecasted indebtedness based on certain closing dates. Upon consummation, and as a condition to the closing, of the merger, Appia will enter into an amended loan agreement with its current senior lender, Silicon Valley Bank, and a securities purchase agreement with Mandalay Digital and North Atlantic pursuant to which Appia will issue to North Atlantic a subordinated debenture in the aggregate principal amount of $8.0 million, which amount is included in the $9.5 million referenced above, to retire a like amount of outstanding debt to North Atlantic. We will also issue a secured guaranty of each of the SVB Debt and North Atlantic Debt whereby we will guarantee all of Appia’s obligations in connection with such indebtedness and pledge substantially all of its assets, including its intellectual property. The secured guarantees will contain cross-default provisions and covenants, among others, limiting our ability to undergo a change of control, incur indebtedness, grant liens, make dividends in cash and other customary covenants. Mandalay will also issue to North Atlantic 200,000 shares of its common stock and a common stock warrant to purchase 400,000 shares of its common stock all of which will have registration rights requiring Mandalay Digital to file a registration statement 15 business days after the closing of the merger with Appia. The warrant will have an exercise price of $0.01 per share exercisable for 10 years, but it is not exercisable until the one year anniversary of the closing date of the merger and will terminate if Mandalay Digital repays the North Atlantic Debt prior to such one year anniversary. We intend to refinance the Appia debt as soon as practicable following the closing of the merger.

Material U.S. Federal Income Tax Consequences of the Merger

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and it is a condition to the completion of the merger that Mandalay Digital and Appia each receive written opinions from their respective outside legal counsel, dated as of the closing date of the merger, to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Such opinions will be based on certain assumptions, representations and covenants, including representations and covenants contained in representation letters provided by Mandalay Digital, Merger Sub and Appia. Assuming the merger qualifies as a reorganization, Appia stockholders generally will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their shares of Appia stock for shares of Mandalay Digital common stock in connection with the merger. The issuance of shares of Mandalay common stock in connection with the merger will not be a taxable transaction to Mandalay Digital stockholders for U.S. federal income tax purposes.

Tax matters are very complicated, and the tax consequences of the merger to a particular stockholder will depend on such stockholder’s circumstances. Accordingly, you are urged to consult your tax advisor for a full understanding of the tax consequences of the merger to you, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For more information, see the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page  78.

Regulatory Approvals Required For the Merger

Other than (i) the requirement that this proxy statement/prospectus be filed with the SEC; (ii) the requirement that the SEC declare the registration statement of which this proxy statement/prospectus is a part effective and that we distribute this proxy statement/prospectus as required under the Securities Act and the Exchange Act; and (iii) the requirement that we make certain other filings under the Exchange Act and pursuant to NASDAQ Stock Market rules, we are not aware of any material federal or state regulatory requirements or approvals that must be complied with or obtained in connection with the merger. We cannot predict whether we will obtain all required regulatory approvals to complete the merger, or whether any approvals will include conditions that would be detrimental to us or the combined company.

Fees and Expenses of the Merger

Generally, all fees and expenses incurred in connection with the merger agreement, the merger, or the transactions related thereto will be paid by the party incurring such fees and expenses. See “Summary of Merger Agreement – Termination of the Merger Agreement” on page 96 for a description of fees payable upon termination.

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Anticipated Accounting Treatment of the Merger

The acquisition of Appia by us in the merger will be accounted for under the acquisition method of accounting in accordance with U.S. GAAP. From the date of the completion of the merger, the combined company’s results of operations will include Appia’s operating results and Appia’s assets and liabilities, including identifiable intangible assets, at fair value with the excess purchase price allocated to goodwill.

Appraisal Rights of Holders of Mandalay Digital Common Stock

Under Delaware law and our Certificate of Incorporation, our stockholders are not entitled to any rights to seek appraisal of their shares of our common stock or to exercise any “dissenter’s rights” or preemptive rights in connection with the proposal to approve the share issuance to be made pursuant to the merger agreement.

Securities Law Restrictions on Shares of Mandalay Common Stock Received in the Merger

We anticipate that all shares of our common stock issued to Appia security holders in connection with the merger will be freely transferable under applicable U.S. securities laws, except as to each recipient of Mandalay Digital shares that is considered an “affiliate” (as such term is defined in the Securities Act) of Mandalay Digital, in which case such affiliates will be permitted to sell the shares of our common stock received in the merger only pursuant to an effective registration statement or an exemption from the registration requirements of the Securities Act. Shares issued pursuant to the merger agreement will also be subject to lock-up restrictions as described below. This proxy statement/prospectus does not register the resale of shares of our stock held by affiliates.

Lock-up Restrictions

All of the Appia stockholders that signed the support agreements agreed that, and pursuant to the terms of the merger agreement, the shares of Mandalay Digital common stock to be received by stockholders in the merger are all subject to lock up restrictions, which restrictions will lapse with respect to one-third of such stockholders share of Mandalay Digital common stock at each of the six, nine and 12 month anniversaries of the closing date. See section entitled “Ancillary Agreements – The Support Agreement” on page 98.

Rights Pertaining to the Shares of Common Stock Received in the Merger

The shares of our common stock to be issued in the merger will be the same class of capital stock as our currently outstanding common stock and thus have rights identical to our currently outstanding shares of common stock. See the section entitled “Comparison of Rights of Stockholders of Mandalay Digital and Appia” on page 124.

Dividends on Mandalay Digital Common Stock Received in the Merger

We have not declared cash dividends on our common stock since our inception and we do not anticipate paying any cash dividends in the foreseeable future. Following completion of the merger, the holders of our common stock will be entitled to receive any dividends as may be declared by our board of directors from funds legally available therefor; provided, however, that we will be subject to covenants restricting our ability to pay dividends pursuant to the terms of the secured guarantees that we will enter into in connection with the closing of the merger. The dividend policy of the combined company will be determined by our board of directors.

Interests of Certain Appia Directors, Officers, and Affiliates in the Merger

Appia’s executive officers and members of Appia’s board may have interests in the merger that are different from, or are in addition to, the interests of Appia stockholders generally. Appia’s board was aware of

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these interests and considered them, among other matters, in adopting resolutions approving and declaring advisable the merger, the merger agreement and the transactions contemplated thereby and recommending to the stockholders of Appia that they consent to the merger agreement and merger.

Executive Officer Employment Arrangements

Judson Bowman, Appia’s chief executive officer, is party to an employment agreement with Appia. In the event that Mr. Bowman is not employed by the surviving entity after the merger, Mr. Bowman will be entitled to receive salary continuation payments at his current annual base salary of $200,000 for a period of eighteen (18) months and medical, disability and life insurance coverage at substantially the same coverage levels as Mr. Bowman has on the date of his termination for a period of eighteen (18) months. Mr. Bowman would be required to execute a general release in favor of Appia to receive his salary and benefits continuation.

Timothy Oakley, Appia’s chief financial officer, is party to an employment letter with Appia. If Mr. Oakley’s employment is terminated by Appia without cause, Mr. Oakley is entitled to receive salary continuation payments at his current annual base salary of $184,250 for a period of ninety (90) days. Mr. Oakley is required to execute a general release in favor of Appia to receive his salary continuation.

Non-Compete Agreement

Mr. Bowman has entered into a Non-Compete Agreement with Mandalay Digital in connection with the execution of the merger agreement that becomes effective upon the consummation of the merger. The Non-Compete Agreement restricts Mr. Bowman for eighteen (18) months following the closing of the merger (i) from providing services to, or otherwise assisting, any business that is competitive with the business of Appia as it is conducted as of the closing date, (ii) from employing or soliciting any employee, consultant, agent or representative of Appia to cease his or her relationship with Appia, and (iii) from soliciting any advertiser, publisher, vendor or supplier to Appia to cease doing business with Appia or to reduce the amount of business that such person does with Appia. Mr. Bowman has not received any additional consideration in connection with the Non-Compete Agreement. It is a condition to the obligations of Mandalay to consummate the merger that the Non-Compete Agreement has not been challenged as unenforceable or repudiated by Mr. Bowman.

Accelerated Vesting of Restricted Stock and Options

Craig Forman, the chairman of Appia’s board, holds a restricted stock grants for 196,500 shares of Appia common stock and an option to purchase 46,968 shares of Appia common stock at an exercise price of $0.28 per share. As of November 13, 2014, 114,000 shares under the restricted stock grants and 35,226 shares subject to the option were unvested. At the closing of the merger, assuming continued service by Mr. Forman to Appia until that time, 27,500 of the unvested shares under the restricted stock grants shall immediately vest and all unvested shares subject to the option shall immediate vest and become exercisable. Such shares are included in the amount of shares to be issued pursuant to the merger agreement.

Ken Hayes, Appia’s chief revenue officer, holds options to purchase 123,250 shares of Appia common stock at exercise prices of $0.26 to $0.28 per share. As of November 13, 2014, 61,189 shares subject to the options were unvested. At the closing of the merger, assuming continued service by Mr. Hayes to Appia until that time, 14,845 unvested shares will immediately vest and become exercisable. If Mr. Hayes’ employment with Appia is terminated without cause within twelve (12) months following the Closing Date, certain of his unvested shares will immediately vest and become exercisable. Such shares are included in the amount of shares to be issued pursuant to the merger agreement.

Timothy Oakley, Appia’s chief financial officer, holds a restricted stock grant for 175,000 shares of Appia common stock. As of November 13, 2014, 98,438 shares under the restricted stock grant were unvested. At the closing of the merger, assuming continued service by Mr. Oakley to Appia until that time, 63,985 unvested shares will immediately vest. Such shares are included in the amount of shares to be issued pursuant to the merger agreement.

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Indemnification; Directors’ and Officers’ Insurance

Following the consummation of the merger for a period of six (6) years, the surviving entity in the merger will indemnify each director or officer of Appia for any and all actions taken by those individuals prior to the Effective Time to the fullest extent and in the same manner as Appia provided indemnification to those directors and officers pursuant to Appia’s Certificate of Incorporation and director and officer indemnity agreements in effect at the Effective Time. In addition, if any indemnified person becomes a defendant in any actual action, the surviving entity will advance to that individual his or her legal and other expenses consistent with the terms and conditions for that advancement under Appia’s indemnification provisions and agreements. Under the terms of the merger agreement, Appia will purchase an extended reporting period endorsement under Appia’s existing directors’ and officers’ liability insurance coverage for Appia’s directors and officers that will provide such directors and officers with coverage for six (6) years following the Effective Time, and the cost of such insurance will be treated as an expense of Appia in connection with the transaction and therefore will be deducted from the consideration available to the Appia stockholders.

Approval of the Merger by Appia Stockholders

The merger and the other transactions contemplated by the merger agreement will require the approval of the holders of (y) at least a majority of the outstanding shares of Appia common stock and Appia preferred stock (voting on an as converted to Appia common stock basis) and (z) two-thirds of the outstanding shares of Appia Series A Preferred Stock, Appia Series B Preferred Stock, Appia Series C Preferred Stock and Appia Series D Preferred Stock (voting on an as converted to Appia common stock basis), in each case entitled to vote upon the merger and the other transactions contemplated by the merger agreement. For further information, see “Ancillary Agreements – The Support Agreement” on page 98.

Directors of Mandalay Digital Following the Merger

Upon the close of the merger, Mandalay Digital will appoint Jud Bowman, Appia’s founder and chief executive officer, and Craig Forman, Appia’s Executive Chairman, as members to the board of directors. Below is further information about Messrs. Bowman and Forman.

Jud Bowman is the founder of Appia, and has served as its Chief Executive Officer since the company’s inception in 2008. Prior to Appia, Mr. Bowman co-founded Motricity (Nasdaq: MOTR) in September 1999 and served as the Chief Technology Officer until 2008. Mr. Bowman is currently on leave from Stanford University, where he was named a President’s Scholar, and is a graduate of the North Carolina School of Science and Mathematics.

Craig Forman currently serves as the Executive Chairman of the board of directors of Appia. From March 2006 to May 2009, Mr. Forman previously served as President of Value Added Services and subsequently as President of Access & Audience at EarthLink Inc. where he also led such shared services as Operations, Information Technology and Customer Support. Prior to joining EarthLink, Mr. Forman was a senior executive at Yahoo Inc., where he had served since February 2004 as head of that Internet portal company’s Media and Information businesses. Mr. Forman is currently the non-executive chairman of Success Television, a company he founded before joining EarthLink, and a director of McClatchy Co., a leading U.S. newspaper and information company (NYSE: MNI) and Yellow Media Ltd. (TSE:Y), a leading Canadian digital media and marketing solutions company. Mr. Forman has a master’s degree in law from Yale and an undergraduate degree from Princeton.

Indemnification

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling our company, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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NASDAQ Listing and Trading

We will apply to have the shares of our common stock to be issued in the merger approved for listing on the NASDAQ Stock Market, where our common stock is currently traded. Following the merger, Appia stockholders who receive shares of our common stock and wish to trade their shares on the NASDAQ Stock Market should contact such stockholders’ financial or brokerage institution for assistance in making the necessary arrangements. Certain limitations may apply to making such arrangements. Appia stockholders who become holders of our common stock are responsible for and must bear all costs arising in connection with the above arrangements.

SEC Reports and Reporting Requirements

As a U.S. public company registered under the Exchange Act and whose common stock is listed on the NASDAQ Stock Market, we are, and we will continue to be, subject to current quarterly and annual financial reporting requirements and we file, and will continue to file, public reports with the SEC that are accessible (in English) on our website at www.digitalturbine.com and at the SEC’s website at www.sec.gov.

All of our stockholders who, directly or indirectly, own more than 5% of the total outstanding shares of our common stock are required to report such ownership to the SEC pursuant to the Exchange Act. These filings are made public by the SEC. Also, directors, certain officers, and holders of 10% or more of our common stock are subject to the insider trading reporting requirements of Section 16 of the Exchange Act.

PRINCIPAL STOCKHOLDERS OF COMBINED COMPANY

The following table and the related notes present certain information with respect to the beneficial ownership of the combined company upon consummation of the merger, by:

The percentage of beneficial ownership calculation assumes that the merger had closed on January 31, 2015 (for further information, see “The Merger – Consideration Payable in the Merger” on page 69) and is based on total outstanding shares of 56,880,403 which is the sum of (i) 37,824,011 shares of common stock outstanding as of January 20, 2015 and (ii) 19,056,392 shares that would be issued to the Appia stockholders in the merger based on a closing date of January 31, 2015, and which amount (x) includes 1,000,000 shares placed in the escrow, and (y) excludes 277,376 shares underlying options that Mandalay Digital would assume based on such closing date. The information below assumes: (i) that no options held by Appia stockholders are exercised upon any vesting of such options at the Effective Time of the merger in accordance with the terms of the merger agreement, (ii) that no additional shares of Mandalay Digital common stock or securities convertible into Mandalay Digital common stock are issued by Mandalay Digital subsequent to January 20, 2015 other than in connection with the merger, and (iii) that each director’s and executive officer’s beneficial ownership of Mandalay Digital common stock does not change prior to consummation of the merger.

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Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally provide that a person is the “beneficial owner” of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities or has the right to acquire such powers within 60 days. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, warrants or rights held by that person that are currently exercisable or convertible or exercisable, convertible or issuable within 60 days of January 31, 2015, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The percentages in the table have been rounded to the nearest hundredth. Except as specifically indicated in the footnotes to this table, we believe that the persons identified in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.

* Represents less than 1%.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes the material U.S. federal income tax consequences of the merger that may be relevant to U.S. holders (as defined below) of shares of Appia stock who exchange their Appia stock for Mandalay Digital common stock in connection with the merger. This discussion is based upon the Code, Treasury regulations, administrative rulings and judicial decisions currently in effect, all of which are subject to change and to differing interpretations, possibly with retroactive effect. Any such change could affect the accuracy of this discussion. Subject to the qualifications, assumptions and limitations contained herein, the statements of law and legal conclusions contained under this caption “Material U.S. Federal Income Tax Consequences” regarding the material U.S. federal income tax consequences of the merger, constitute the opinions of Latham & Watkins LLP and Goodwin Procter LLP, respectively.

The discussion is limited to Appia stockholders who hold their Appia stock, and will hold their Mandalay Digital common stock, as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). In addition, this discussion does not address any U.S. federal estate or gift tax consequences, nor any state, local or foreign tax consequences, of the merger. This discussion also does not address tax considerations applicable to a holder’s particular circumstances or to holders that may be subject to special tax rules, including, without limitation:

Furthermore, this discussion does not consider the potential effects of any state, local or foreign tax laws or the Medicare contribution tax on net investment income. This summary does not purport to be a complete analysis of the potential tax considerations relating to the merger, and is not tax advice. Therefore, you are urged to consult your tax advisors with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the merger arising under the federal estate or gift tax rules, the laws of any state, local, foreign or other taxing jurisdiction or any applicable tax treaty.

For purposes of this discussion, a “U.S. holder” is a beneficial owner of Appia stock who is, for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any of its political subdivisions; (iii) an estate that is subject to U.S. federal income tax on

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its income regardless of its source; or (iv) a trust (A) if a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) that has made a valid election to be treated as a United States person for U.S. federal income tax purposes.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds Appia stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership holding Appia stock, you should consult your tax advisor regarding the tax consequences of the merger to you.

Tax Opinions

Mandalay Digital and Appia intend for the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to the closing of the merger that Latham & Watkins LLP, counsel to Mandalay Digital, and Goodwin Procter LLP, counsel to Appia, deliver opinions, dated as of the closing date, to the effect that the merger will constitute a reorganization under Section 368(a) of the Code. If either Mandalay Digital or Appia waives this opinion condition after the registration statement of which this proxy statement/prospectus is a part is declared effective by the SEC, and the change in tax consequences is material, Mandalay Digital will recirculate an updated version of this proxy statement/prospectus and resolicit proxies from the Mandalay Digital or Appia stockholders, as applicable. These tax opinions will be based on customary assumptions, including assumptions regarding the absence of changes in existing facts and the consummation of the merger strictly in accordance with the merger agreement and this proxy statement/prospectus, and the truth and accuracy, as of the completion of the merger, of certain representations and covenants made in representation letters by Mandalay Digital, Merger Sub and Appia (which we refer to collectively as the “Representations and Assumptions”). If any of these Representations and Assumptions is inaccurate in any way, or any of the covenants are not complied with, these opinions could be adversely affected. Neither Mandalay Digital nor Appia has requested a ruling from the IRS with respect to any of the U.S. federal income tax consequences of the merger, and these tax opinions will not bind the courts or the IRS, nor will they preclude the IRS from adopting a position contrary to those expressed in the opinions.

U.S. Federal Income Tax Consequences of the Merger

Subject to the Representations and Assumptions, the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Assuming that the merger so qualifies, the U.S. federal income tax consequences will be as described below.

Except as discussed below, a U.S. holder of Appia stock generally will recognize no gain or loss upon the receipt of Mandalay Digital common stock for their Appia stock surrendered in the merger. However, each U.S. holder of Appia stock will be treated as receiving in the merger (in addition to Mandalay Digital common stock), an amount of cash equal to the sum of (i) such U.S. holder’s share of the cash set aside to serve as the expense fund to pay and reimburse the stockholder representative for any third party expenses incurred in connection with the stockholder representative performing its duties pursuant to the merger agreement, and (ii) any transfer taxes otherwise payable by such U.S. holder in respect of the merger that are instead paid by Mandalay Digital. Each U.S. holder of Appia stock will recognize gain, but not loss, for U.S. federal income tax purposes in an amount equal to the lesser of (a) the amount of cash such U.S. holder is treated as having received in the merger or (b) the amount, if any, by which the sum of (1) the fair market value, as of the effective time of the merger, of any Mandalay Digital common stock such U.S. holder receives in the merger and (2) the amount of cash such U.S. holder is treated as having received in the merger, exceeds such U.S. holder’s adjusted tax basis in its shares of Appia common stock surrendered in the merger. Any gain recognized generally will be treated as long-term capital gain if the U.S. holder’s holding period for the Appia stock surrendered exceeds one year at the effective time of the merger, except for gain treated as a dividend as discussed below under “—Potential Treatment of Cash as a Dividend.”

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The U.S. holder’s aggregate adjusted tax basis in the Mandalay Digital common stock received in the merger will be equal to the U.S. holder’s aggregate adjusted tax basis in its Appia stock surrendered for the Mandalay Digital common stock, reduced by the amount of cash treated as having been received in exchange for shares of Appia stock in the merger and increased by the amount of gain recognized in the exchange or any amount treated as a dividend, as described below. The holding period for the Mandalay Digital common stock will include the period during which the shares of Appia stock were held.

For the purposes of the above discussion of basis and holding periods for shares of Appia stock and Mandalay Digital common stock, stockholders who acquired different blocks of Appia stock at different times for different prices must calculate their basis and holding periods separately for each identifiable block of such stock exchanged or received in the merger.

Potential Treatment of Cash as a Dividend

Gain recognized by a U.S. holder in the merger as described above may be treated as a dividend for U.S. federal income tax purposes to the extent of the U.S. holder’s ratable share of Appia’s accumulated “earnings and profits” and possibly also Mandalay Digital’s accumulated “earnings and profits.” In general, the determination of whether such gain recognized will be treated as capital gain or a dividend depends upon whether and to what extent the exchange reduces the U.S. holder’s deemed percentage of stock ownership of Mandalay Digital. For purposes of this determination, the U.S. holder generally will be treated as if it first exchanged all of its shares of Appia stock solely for Mandalay Digital common stock and then Mandalay Digital immediately redeemed a portion of the Mandalay Digital common stock in exchange for the cash the U.S. holder was treated as having actually received, which redemption we refer to in this proxy statement/prospectus as the “deemed redemption.” Such gain recognized by a U.S. holder pursuant to the deemed redemption will be treated as capital gain if the deemed redemption is (i) “substantially disproportionate” with respect to the U.S. holder (and after the deemed redemption the U.S. holder actually or constructively owns less than 50% of the voting power of the outstanding Mandalay Digital common stock) or (ii) not “essentially equivalent to a dividend.”

The deemed redemption generally will be “substantially disproportionate” with respect to a U.S. holder if the percentage of the outstanding Mandalay Digital common stock the U.S. holder actually and constructively owns immediately after the deemed redemption is less than 80% of the percentage of the outstanding Mandalay Digital common stock that the U.S. holder is deemed actually and constructively to have owned immediately before the deemed redemption. The deemed redemption will not be considered to be “essentially equivalent to a dividend” if it results in a “meaningful reduction” in the U.S. holder’s deemed percentage of stock ownership of Mandalay Digital. In applying the above tests, the U.S. holder may, under the constructive ownership rules, be deemed to own stock that is owned by other persons or otherwise in addition to the stock the U.S. holder actually owns or owned. The IRS has ruled that a minority shareholder in a publicly held corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is considered to have a “meaningful reduction” if the shareholder has at least a relatively minor reduction in such shareholder’s percentage of stock ownership under the above analysis.

As these rules are complex and dependent upon your specific circumstances, you should consult your tax advisor to determine whether you may be subject to these rules.

Certain Tax Reporting Rules

Under applicable Treasury regulations, “significant holders” of Appia stock generally will be required to comply with certain reporting requirements. An Appia stockholder should be viewed as a “significant holder” if, immediately before the merger, such holder held 1% or more, by vote or value, of the total outstanding Appia stock or Appia stock with a tax basis of $1 million or more. Significant holders generally will be required to file a statement with the holder’s U.S. federal income tax return for the taxable year that includes the consummation of the merger. That statement must set forth the holder’s tax basis in, and the fair market value of, the shares of

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Appia stock surrendered pursuant to the merger (both as determined immediately before the surrender of shares), the date of the merger, and the name and employer identification number of Mandalay Digital, Appia and Merger Sub and the holder will be required to retain permanent records of these facts. You should consult your tax advisor as to whether you may be treated as a “significant holder.”

SUMMARY OF THE MERGER AGREEMENT

Below is a summary of the merger agreement, which is attached to this proxy statement/prospectus as Appendix A and is incorporated by reference into this document. You should read the merger agreement in addition to this Summary. The merger agreement, not this summary, is the legal document which governs the merger. Capitalized terms used in this section and not otherwise defined in this proxy statement/prospectus have the meanings ascribed to them in the merger agreement.

Cautionary Statement Concerning Representations and Warranties Contained in the Merger Agreement

You should not rely upon the representations and warranties contained in the merger agreement or the descriptions of such representations and warranties in this proxy statement/prospectus, as factual information about Mandalay Digital or Appia. In reviewing the agreements included or incorporated by reference in this proxy statement/prospectus, it is important to note that they are included to provide investors and stockholders with information regarding their terms, and are not intended to provide any other factual or disclosure information about Mandalay Digital or Appia or the other parties to the agreements. These representations and warranties have been made solely for the benefit of the other parties to the merger agreement, and were not intended to be and should not be relied upon by stockholders of Mandalay Digital or Appia; should not be treated as categorical statements of fact, but rather as a way of allocating risk between the parties; have in some cases been qualified by disclosures that were made to the other party in connection with the negotiation of the merger agreement, which disclosure schedules are not reflected in the merger agreement or disclosed in this proxy statement/prospectus; may apply standards of materiality in a way that is different from what may be material to investors; and were made only as of the date of the merger agreement or such other date or dates as may be specified in the merger agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Information about Mandalay Digital can be found elsewhere in this proxy statement/prospectus and in other public filings Mandalay Digital makes with the SEC. Information about Appia can be found elsewhere in this proxy statement/prospectus.

General

The Boards of Directors of both Mandalay Digital and Appia have adopted and approved the merger agreement, which provides for the acquisition by Mandalay Digital of Appia through the merger. The merger will result in DTM Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Mandalay Digital, merging with and into Appia, so that Appia, as the surviving corporation, will become a wholly-owned subsidiary of Mandalay Digital. The surviving corporation will be renamed Digital Turbine Media, Inc. In exchange for their shares of Appia’s common stock, preferred stock, and/or options to purchase shares of Appia common stock, the Appia stockholders will receive shares of Mandalay Digital common stock and/or options to purchase shares of Mandalay Digital common stock. Former Appia stockholders will not have any equity ownership interest in the surviving corporation.

Conversion of Securities in the Merger

The Aggregate Stock Consideration is equal to $100,000,000 minus (i) the deemed value of 1,000,000 Mandalay Digital shares to be deposited in escrow ($4,500,000) plus (ii) the aggregate exercise price of all options to purchase shares of Appia common stock plus (iii) the Adjustment Amount (which can be a negative

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number). For purposes of the merger agreement, the “Adjustment Amount” means an amount, which may be a positive or a negative number, equal to (A) the estimated Working Capital as of the closing minus $1,350,000 (the working capital target), minus (B) the estimated Net Debt as of the closing. The number of shares of Mandalay Digital common stock to be issued is determined by dividing the Aggregate Stock Consideration by $4.50 (the “Price Per Share”). As discussed in detail below, the aggregate number shares of Mandalay Digital common stock to be issued in connection with the merger will vary depending on a number of factors, including the amount of the estimated Net Debt at closing.

At the effective time of the merger, each issued and outstanding share of Appia preferred stock (if not otherwise converted into Appia common stock) will be cancelled and extinguished and will be converted automatically into the right to receive the consideration set forth below without interest:

At the effective time of the merger, each issued and outstanding share of Appia common stock (other than any shares of Appia restricted common stock, Dissenting Shares and Treasury Shares) will be cancelled and converted into the right to receive the Per Share Common Consideration and its pro rata portion of shares released from escrow which shall be subject to adjustment and in accordance with the terms of Appia’s restated charter. Each issued and outstanding share of Appia capital stock that is held in the treasury of Appia or owned by Appia, Mandalay Digital or DTM Merger Sub, Inc. will be automatically cancelled and will receive no consideration.

Each issued and outstanding share of the common stock of DTM Merger Sub, Inc. will be converted into and become one fully paid and nonassesable share of common stock of Digital Turbine Media, Inc. (the surviving corporation in the merger).

For the purpose of calculating the Per Share Common Consideration, the Price Per Share ($4.50 per share) and the shares of Mandalay Digital common stock issuable to the holders of Appia common stock, Appia preferred stock, Appia options, Appia restricted common stock and Series C Warrants (as defined below), adjustments will be made to reflect the effect of any stock split, split-up, reverse stock split, dividend or distribution of securities convertible into Appia common stock, Appia preferred stock or Mandalay Digital common stock, reorganization, recapitalization, reclassification or other like change with respect to Appia common stock, Appia preferred stock or Mandalay Digital common stock having a record date occurring on or after the date of the merger agreement and prior to the effective time of the merger. The merger agreement provides that in no event will the number of shares of Mandalay Digital common stock being issued for all

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outstanding shares of Appia capital stock, all Appia options and all Series C Warrants be greater than the Parent Stock Closing Consideration except as a result of adjustments.

The aggregate number shares of Mandalay Digital common stock to be issued in connection with the merger will vary depending on a number of factors, including when the closing occurs and the amount of the Net Debt at closing.

(in thousands, except per-share amounts):

The allocation of shares of Mandalay Digital common stock to be issued in the merger among stockholders of Appia will vary depending on a number of factors, including when the closing occurs, the amount of the Net Debt at closing and the final calculation of the closing price per share of the Mandalay Digital common stock. The final allocation of shares of Mandalay Digital common stock to be issued in the merger among stockholders of Appia will depend on the final calculation of the closing price per share of the Mandalay Digital Common Stock, which is referred to as the Closing Price Per Share in the merger agreement. The Closing Price Per Share shall be equal to the average of the closing prices of the Mandalay Digital common stock over the 30 day period ending three calendar days prior to the closing of the merger, which we refer to as VWAP, except however if the VWAP is greater than $4.50, in which case the Closing Price Per Share shall be equal to $4.50, or if the VWAP is less than $3.50, in which case the Closing Price Per Share shall be equal to $3.50.

Treatment of Series C Warrants

Series C Warrants include, under the merger agreement, the Series C Penny Warrants and Series C Other Warrants under the Preferred Stock Purchase Warrants dated April 4, 2013 and October 31, 2013. The treatment of Series C Warrants under the merger agreement is as follows:

Treatment of Appia Options and Restricted Common Stock

Immediately following the effective time of the merger, each share of Appia restricted stock and each Appia option held by a non-employee director of Appia as of November 13, 2014, will vest in full and become

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exercisable. At the effective time of the merger, each Appia option that is outstanding at the effective time and that is held by a holder who is (a) an employee of Appia or PocketGear and continues his or her employment with Mandalay Digital or one of its subsidiaries or remains or becomes an employee of the surviving corporation or (b) an independent contractor or consultant of Appia or PocketGear who continues its service with Appia, PocketGear or Mandalay Digital, other than a service provider who is not eligible to be included on the Form S-8 registration statement, will be assumed by Mandalay Digital subject to the same terms, conditions and restrictions. Following the effective time, (a) options to purchase Appia common stock will convert to options to purchase a number of shares of Mandalay Digital stock equal to the product of the number of Mandalay Digital shares subject to the outstanding Mandalay Digital option immediately prior to the effective time multiplied by the Option Exchange Ratio (as defined in the merger agreement), rounded down to the nearest whole number of shares of Mandalay Digital common stock, (b) the per share exercise price for Mandalay Digital common stock issuable upon exercise of each assumed option to purchase stock will be equal to the quotient determined by dividing the per share exercise price outstanding immediately prior to the effective time by the Option Exchange Ratio, rounded up to the nearest whole cent, and (c) all references to “Appia” in the 2008 Stock Incentive Plan of Appia and the stock option agreements will instead be references to Mandalay Digital.

Each outstanding, unexercised option to purchase Appia common stock that is vested and exercisable at the effective time and held by a holder (a) that does not continue his or her employment with Mandalay Digital or one of its subsidiaries or remains or becomes an employee of the Surviving Corporation or (b) an independent contractor or consultant of Appia or PocketGear who does not continues his or her service with Appia, PocketGear or Mandalay Digital, other than a service provider who is not eligible to be included on the Form S-8 registration statement (each, a “Deemed Exercise Option”), will be cancelled at the effective time in exchange for a right to receive, subject to any withholding obligations contemplated in the merger agreement, on or after the effective time, the number of shares of Mandalay Digital common stock equal to the quotient obtained by dividing (i) the product of (x) the excess, if any, of the Per Share Common Consideration Equivalent Amount (as defined in the merger agreement) over the applicable exercise price of such option to purchase Appia common stock, times (y) the number of Appia shares subject to the outstanding, unexercised vested option to purchase common stock immediately prior to the effective time, divided by (ii) $4.50, rounded down to the nearest whole share. If the applicable exercise price of such option exceeds the Per Share Common Consideration, no payment will be made and the holder will have no further rights or interests from and after effective time. Each outstanding, unexercised Appia option that is unvested and unexercisable at the effective time and that is held by a holder that does not fall under (a) or (b) above will be cancelled at the effective time for no consideration and in no event will Mandalay Digital assume the Appia options.

At the effective time of the merger, each award of shares of Appia restricted common stock that is outstanding and unvested at the effective time of the merger (each, a “Restricted Stock Award”) will be assumed by Mandalay Digital subject to the same terms, conditions and restrictions and (i) will cover a number of shares of Mandalay Digital common stock equal to the product of the number of Appia shares subject to the outstanding restricted stock immediately prior to the effective time, multiplied by the Per Share Common Consideration, rounded down to the nearest whole number of shares of Mandalay Digital common stock, (ii) a number of the Mandalay Digital common stock subject to the assumed Restricted Stock Award equal to the applicable pro rata allocation of escrowed shares will be held in the escrow account and (iii) all references to “Appia” in the 2008 Stock Incentive Plan of Appia and the stock option agreements will instead be references to Mandalay Digital. Mandalay Digital has agreed to prepare and file with the SEC a registration statement on Form S-8 and use its reasonable best efforts to have it declared effective as soon as reasonably practicable. Appia has agreed to take all necessary actions to effect the termination of the 2008 Stock Incentive Plan and the Appia options and restricted common stock.

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Closing Consideration Schedule

Appia has agreed to deliver to Mandalay Digital, no later than five business days prior to the closing date, a “Closing Consideration Schedule” setting forth, as of closing:

Fractional Shares

No fractional shares of Mandalay Digital common stock will be issued in connection with the merger and no dividends or other distributions with respect to the Mandalay Digital common stock will be payable on or with respect to any fractional share.

Escrow of Consideration; Escrow Account

At the closing, Mandalay Digital, the stockholder representative and American Stock Transfer Company, the Escrow Agent, will enter into the escrow agreement pursuant to which Mandalay Digital will cause to be deposited 1,000,000 shares of Mandalay Digital common stock in an escrow account to be held for the satisfaction of any post-closing purchase price adjustments and any indemnification claims by Mandalay Digital. For purposes of satisfying claims for indemnification or any post-closing adjustment to the purchase price, all shares of Mandalay Digital common stock in the escrow account will be deemed to have a value equal to $4.50 (the “Price Per Share”), as may be adjusted pursuant to the terms of the merger agreement. The Appia stockholders who contribute a portion of the aggregate consideration that they are entitled to receive under the terms of the merger agreement to the escrow will be the owners of the shares deposited in the escrow account and will be entitled to vote all escrowed shares on their own behalf.

In the event of any claim for indemnification under the merger agreement, the Parent Indemnitees (as defined below) will be first to recover any damages from the escrow account then, subject to certain limitations,

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if the remaining shares are insufficient to cover damages, the Parent Indemnitees may seek recovery directly from each Appia stockholder on a pro rata basis. Pursuant to the merger agreement, within five days following the one-year anniversary of the closing date, Mandalay Digital and stockholder representative will instruct the Escrow Agent to deliver to each the applicable Appia stockholders his, her or its pro rata allocation of (i) Mandalay Digital shares of common stock remaining in the escrow account minus (ii) (a) pending claims determined as of the one-year anniversary divided by (b) the Price Per Share. See the section entitled “Summary of the Merger Agreement—Survival; Indemnification” below at page 88.

Working Capital/Net Debt Adjustment

No later than five (5) business days prior to the closing date, Appia will prepare and deliver to Mandalay Digital an unaudited statement of estimated Working Capital as of the Closing Date (the “Pre-Closing Statement”), which shall fairly present in all material respects the estimated Working Capital (the “Estimated Working Capital”) and the estimated Net Debt (the “Estimated Net Debt”) of Appia as of the closing date and of the Adjustment Amount, which Adjustment Amount will be used to calculate the Aggregate Stock Consideration as described above (see “Summary of the Merger Agreement—Conversion of Securities in the Merger” on page 81).

No later than 135 calendar days following the closing, Mandalay Digital has agreed to prepare and deliver to the Stockholder Representative an unaudited statement of Working Capital as of the Closing Date (the “Closing Statement”) presenting Appia’s Working Capital and Net Debt as of the Closing Date and setting forth the final Adjustment Amount.

If the final Adjustment Amount is a positive number, Mandalay Digital agrees to issue to each Appia Equityholder, its pro rata portion of such amount by check or wire transfer of immediately available funds to the Exchange Agent for distribution. If the final Adjustment Amount is a negative number, then Mandalay Digital and Stockholder Representative will execute and deliver joint written instructions to the Escrow Agent instructing distribution to Mandalay Digital from the Escrow Account of a number of shares of Mandalay Digital Common Stock equal to the final Adjustment Amount divided by the Price Per Share.

Appia Designees to Mandalay Digital Board of Directors

Mandalay Digital and Appia agree to cooperate to take all actions reasonably necessary so that immediately following the effective date: (a) the number of directors that will comprise all of the members of the board of directors of Mandalay Digital is increased as required and (b) two individuals currently serving on the Appia’s Board of Directors, and designated by Appia within five calendar days following the date of execution of the merger agreement, are appointed to Mandalay Digital’s Board of Directors. For more information about the designees, see “The Merger – Directors of Mandalay Digital Following the Merger” on page 74.

Stockholder Representative

By executing the merger agreement and upon executing the written consent, the stockholders of Appia, Shareholder Representative Services LLC is appointed as the stockholder representative for purposes of taking certain actions and giving certain consents on behalf of any Appia stockholder relating to the merger agreement and the escrow agreement.

Stockholder Representative Expense Fund

Upon the closing, Appia will wire to the stockholder representative US$25,000 to serve as the expense fund to pay and reimburse the stockholder representative for any third party expenses incurred in connection with the stockholder representative performing its duties pursuant to the merger agreement or the escrow agreement. Any losses incurred in connection with the stockholder representative’s execution and performance of his duties

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(including legal fees and related expenses), may be received from (i) the funds in the expense fund and (ii) to the extent any amounts remain at the end of the escrow period, amounts in the escrow account.

Closing and Effectiveness of the merger

The closing of the merger is to take place on the fifth business day following the satisfaction or, to the extent permitted under the merger agreement and by applicable law, waiver of all conditions to the obligations of the parties set forth in the merger agreement and described below (other than such conditions as may, by their terms, only be satisfied at the closing or on the Closing Date, but subject to such satisfaction or waiver thereof) (see “Summary of the Merger Agreement—Conditions to the Consummation of the Merger” on page 93).

Exchange of Appia Stock Certificates for the Merger Consideration

The merger agreement provides that Digital Turbine Media, Inc. will, cause American Stock Transfer & Trust Company, the exchange agent appointed by Mandalay Digital in connection with the merger, to mail within three business days following the effective time, to each record holder of Appia capital stock, a letter of transmittal and instructions for surrendering and exchanging the record holder’s Appia share certificates for Mandalay Digital common stock. Upon surrender of an Appia share certificate for exchange to the exchange agent, together with a duly completed and validly executed letter of transmittal, and such other documents as the exchange agent may reasonably require, the record holder of the Appia certificate will be entitled to receive the number of uncertificated shares of Mandalay Digital common stock entitled to receive under the merger agreement and as set forth on the Closing Consideration Schedule. No interest will be paid on the merger consideration payable in connection with the merger agreement.

If any Appia share certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed and, if required by Mandalay Digital or the exchange agent, the delivery by such person of an indemnification agreement acceptable to Mandalay Digital and the exchange agent, or if required by the exchange agent, posting by such person of a bond in such amount as Mandalay Digital or the exchange agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such certificate, the exchange agent will deliver in exchange for such lost, stolen or destroyed certificate the consideration payable in respect thereof.

Mandalay Digital, Digital Turbine Media, Inc., the Exchange Agent and the Escrow Agent are entitled to deduct and withhold from consideration otherwise payable under the merger agreement to any Appia Equityholder or Person, amounts needed to be withheld with respect to making any such payment under the Code (as defined in the merger agreement) or any provision of state, local or foreign tax law.

Transfer Restrictions on Mandalay Digital Common Stock

All shares of Mandalay Digital common stock to be issued in connection with the merger shall be subject to restrictions on the transfer of such shares during the one year period following the closing date. The transfer restrictions expire (i) 180 days following the closing date with respect to 33 and 1/3% of each Appia Equityholder’s Mandalay Digital common stock, (ii) 270 days following the closing date with respect to 33 and 1/3% of each Appia Equityholder’s shares of Mandalay Digital common stock and (iii) 365 days following the Commencement Date with respect to 33 and 1/3% of each Appia Equityholder’s Mandalay Digital common stock.

Appraisal Rights

Any shares of Appia company capital stock that are issued and outstanding immediately prior to the effective time of the merger and that have not approved the merger via an affirmative vote or written consent (or which the holder has not effectively withdrawn or lost such holder’s appraisal rights), and with respect to which a

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demand for appraisal has been properly made in accordance with the DGCL, will not be converted into or represent a right to receive the merger consideration otherwise payable with respect to such shares of Appia common stock and preferred stock. If any holder of dissenting shares has effectively withdrawn or loses its appraisal rights, such shares will receive the consideration set forth in the merger agreement. Appia has agreed to give Mandalay Digital (i) prompt notice of any written demand for appraisal received and (ii) the opportunity to participate in all negotiations and proceedings with respect to any demands made prior to closing. Communications between Appia and any Appia stockholder will require the consent of Mandalay Digital. Any excess dissenting share payments will be recoverable by Mandalay Digital. For purposes of distributing any portion of escrowed shares, no dissenting stockholder will participate in the escrow and any payment by Mandalay Digital that would have been required to be made to such holder of dissenting shares will be retained by Mandalay Digital.

Representations and Warranties

The merger agreement contains customary representations and warranties of the parties. These include representations and warranties of Appia with respect to, among other things: organization; the equity interests and liabilities of its subsidiary; capitalization; authorization; consents and approvals; absence of certain changes; facilities; condition and sufficiency of assets; contracts and commitments; permits; no conflict or violation; financial statements and other financial information; undisclosed liabilities; books and records; litigation; labor matters; compliance with law; intellectual property; employee benefit plans; transactions with certain persons; certain payments; tax matters; insurance; publishers; advertisers; accounts receivable; compliance with environmental laws; banking relationships; no brokers; disclosure documents; no other agreements to sell the assets or capital stock of Appia and vote required. The merger agreement also contains customary representations and warranties of Mandalay Digital and DTM Merger Sub, Inc., including among other things: organization; authorization; no conflict or violation; Mandalay Digital common stock; no brokers; SEC reports and financial statements; disclosure documents; Mandalay Digital capitalization; litigation;, absence of certain changes; compliance with law and intellectual property.

The representations, warranties and covenants made by Appia in the merger agreement are qualified by information contained in a disclosure memorandum delivered to Mandalay Digital and DTM Merger Sub, Inc. in connection with the execution of the merger agreement. The representations, warranties and covenants made by Mandalay Digital and DTM Merger Sub, Inc. in the merger agreement are also qualified by information contained in a disclosure memorandum delivered to Appia in connection with the execution of the merger agreement. Certain representations and warranties were made as of a specific date.

Survival; Indemnification

Survival of Representations and Warranties and Covenants

The representations and warranties of Appia, Mandalay Digital and DTM Merger Sub, Inc. contained in the merger agreement survive for twelve months following the closing date, other than representations and warranties (i) of Appia relating to organization, subsidiaries, capitalization, authorization and no brokers and of Mandalay Digital relating to organization, authorization and no brokers, each of which survive for six years following the closing date, and of Appia relating to tax matters, which shall survive until thirty days following the expiration of the applicable statute of limitations under applicable tax law (collectively, the “Fundamental Representations and Warranties”), and (ii) of Appia with respect to intellectual property, which shall survive for thirty months following the closing date (the “IP Representations”).

Indemnification of Mandalay Digital

Pursuant to the terms of the merger agreement, the Appia Equityholders severally, and not jointly, on a pro rata basis, will indemnify, save and hold harmless Mandalay Digital, DTM Merger Sub, Inc., Appia and each

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of Mandalay Digital’s direct and indirect stockholders, affiliates and subsidiaries (including after the closing, the surviving corporation), and each of their respective representatives (the “Parent Indemnitees”) against any and all costs, losses, taxes, liabilities, obligations, damages, lawsuits, deficiencies, claims, demands, expenses (whether or not arising out of third-party claims), reasonable attorneys’ fees and all amounts paid in investigation, defense or settlement of any of the foregoing (collectively, “Damages”) as a result of:

Indemnification of the Appia Equityholders

Pursuant to the terms of the merger agreement, Mandalay Digital will indemnify, save and hold harmless the equityholders of Appia (the “Appia Equityholders”), from and against any and all Damages incurred in connection with, arising out of, resulting from or incident to (i) any breach of any representation or warranty or the inaccuracy of any representation made by Mandalay Digital or DTM Merger Sub, Inc. in or pursuant to the merger agreement (in each case without giving effect to materiality qualifications or Material Adverse Effect qualifications with respect to the calculation of Damages incurred by an Appia Equityholder Indemnitee); or (ii) any breach of any covenant or agreement made by Mandalay Digital or DTM Merger Sub, Inc. in or pursuant to the merger agreement.

Other Limitations

Neither Mandalay Digital, on the one hand, nor any of the Appia Equityholders, on the other hand, shall be liable for any Damages until the aggregate amount otherwise due to the Appia Equityholders or Parent Indemnitees, as the case may be, exceeds an accumulated total of $350,000 (the “Basket”); provided, that this limitation shall apply only to the extent a party is entitled to indemnification exclusively with respect to any breach of any representation or warranty or the inaccuracy of any representation other than the Fundamental

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Representations or in the case of fraud (which is to be interpreted to require the element of scienter). Once the aggregate amount of Damages exceeds the Basket, then the Appia Equityholders or Parent Indemnitees, as the case may be, shall have the right to recover all Damages from and including the first dollar of damages without regard to the Basket, subject to the other limitations set forth in the merger agreement.

Neither Mandalay Digital, on the one hand, nor any of the Appia Equityholders, on the other hand, shall be liable for any Damages due to the Appia Equityholders or Parent Indemnitees, as the case may be, in excess of $4,500,000; provided, that this limitation shall apply only to the extent a party is entitled to indemnification exclusively with respect to any breach of any representation or warranty or the inaccuracy of any representation other than the Fundamental Representations, the IP Representation or in the case of fraud (which is to be interpreted to require the element of scienter). In addition, the aggregate liability of the Appia Equityholders in connection with indemnification claims for breaches of the IP Representations shall not exceed $20,000,000 in the aggregate (including any amounts recovered from the escrow).

The aggregate liability of the Appia Equityholders in connection with indemnification claims pursuant to the merger agreement shall not exceed the total value of the Aggregate Consideration (valued at the Price Per Share) payable to the Appia Equityholders hereunder (including the amount in escrow); no Appia Equityholder shall be liable to any Parent Indemnitee for any Damages (as defined in the merger agreement) in excess, in the aggregate, of the total value of the Aggregate Consideration (valued at the Price Per Share) payable to such Appia Equityholder under the merger agreement (including any such Appia Equityholder’s Pro Rata Allocation (as defined in the merger agreement) of the amount deposited in escrow), except in the case of fraud (which shall be interpreted to require the element of scienter) committed by an Appia Equityholder (and in the event of such fraud only with respect to the Appia Equityholder who committed such fraud). Mandalay Digital shall not be liable to the Appia Equityholder Indemnitees pursuant to the merger agreement for any Damages in excess, in the aggregate, of the total value of the Aggregate Consideration (valued at the Price Per Share) payable to the Appia Equityholders under the merger agreement (including the amount deposited in escrow).

Covenants of Mandalay Digital and Appia

Covenants Relating to the Conduct of Appia’s Business

Appia has agreed that prior to the closing date, Appia will conduct its business in the ordinary course of business consistent with past practice; and Appia will not take any action inconsistent with the merger agreement or the consummation of the merger. Appia has also agreed that neither it nor PocketGear will take certain other actions during the period between the execution of the merger agreement and the closing date, subject to certain limited exceptions as set forth in the merger agreement, without the prior written consent of Mandalay Digital, including the following:

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