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Acquisitions and Disposals | 3 Months Ended
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Jun. 30, 2014
Acquisitions and Disposals |
3. | Acquisitions and Disposals
DT APAC On April 12, 2013, Mandalay Digital, through its indirect wholly owned subsidiary DT APAC, acquired all of the issued and outstanding stock of MIAH. MIAH owns directly or indirectly subsidiaries Mirror Image Access (Australia) Pty Ltd (MIA), MIA Technology Australia Pty Ltd (MIATA) and MIA Technology IP Pty Ltd. The purpose of the DT APAC acquisition was an effort to not only build on the Company’s current distribution network, but to enhance its mobile content infrastructure with the IP acquired in the purchase. The acquisition of DT APAC was capitalized through a combination of intercompany debt and the issuance of equity. The purchase consideration for the transaction was comprised of cash, a note, and common stock of the Company, as follows:
| (1) | At closing AUD 1,220 in cash, translated to $1,287 for US GAAP reporting purposes;
| (2) | Convertible Note payable of AUD 2,280, translated to $2,404;
| (3) | Shares of common stock of the Company (the “Closing Shares”) equivalent to AUD 3,500, translated to $3,691 and under the agreement, converted to shares at $3.65 per share, or 1,011,164 shares of the common stock of the Company. The closing price of the stock on that day was $4.40 per share, for a total value of $4,449.
The Closing Shares are subject to a Registration Rights Agreement that provides for piggyback rights for 3 years and inclusion on the Company’s Form S-3 filed August 30, 2013, and subsequently made effective on October 31, 2013. The following table summarizes the final fair values of the assets acquired and liabilities assumed at the date of acquisition.
|  | Unaudited |
Cash |  | $ | 513 |
Accounts receivable |  |  | 2,809 |
Prepaid expenses and other assets |  |  | 896 |
Property, plant and equipment |  |  | 300 |
Customer relationships |  |  | 1,600 |
Developed technology |  |  | 3,400 |
Trade names / trademarks |  |  | 54 |
Library |  |  | 300 |
Goodwill |  |  | 2,654 |
Accounts payable |  |  | (1,151 | )
Accrued liabilities |  |  | (2,890 | )
Accrued compensation |  |  | (345 | )
Purchase price |  | $ | 8,140 |
In addition to the value assigned to the acquired workforce, the Company recorded the excess of the purchase price over the estimated fair value of the assets acquired as an increase in goodwill. This goodwill arises because the purchase price reflects the strategic fit and resulting synergies that the acquired business brings to the Company’s existing operations. In the fiscal year ended March 31, 2014, the Company recorded an impairment charge of $54 to write down trade names pursuant to its decision to rename and rebrand DT APAC. In the period ended June 30, 2014, the Company finalized the purchase price allocation of DT APAC, which resulted in an adjustment from intangibles to goodwill of $1,472. The amortization period for the intangible assets acquired in the MIA transaction is as follows:
|  | Remaining Useful Life |
Customer relationships |  |  | 14 years |
Developed technology |  |  | 5 years |
Trade names / Trademarks |  |  | 5 years |
Library |  |  | 5 years |
Goodwill |  |  | Indefinite |
The pro forma financial information of the Company’s consolidated operations if the acquisition of DT APAC had occurred as of April 1, 2012 is presented below.
|  | Unaudited |
|  | Three Months Ended June 30, |
|  | 2013 |
Revenues |  | $ | 5,617 |
Cost of goods sold |  |  | 3,640 |
Gross profit |  |  | 1,977 |
Operating expenses |  |  | 6,215 |
Loss from operations |  |  | (4,238 | )
Non-operating expense |  |  | 1,600 |
Loss before provision for income taxes |  |  | (5,838 | )
Provision for income taxes |  |  | (135 | )
Net loss |  | $ | (5,703 | )
Basic and diluted loss per share |  | $ | (0.30 | )

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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