Old Point.360 425 Business combination disclosure

Exhibit 99.3

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED BALANCE SHEET

MARCH 31, 2007

	Historical			Historical						Pro Forma			Pro Forma
	DG FastChannel			Pathfire			Subtotal			Adjustments			Combined
Cash	$	24,574		$	1,740		$	26,314		$	(16,314	)(1)	$	10,000
Accounts receivable, net	16,322			2,567			18,889			(280		)(5)	18,609
Inventory	—			46			46			—			46
Deferred Income taxes	2,129			—			2,129			—			2,129
Other current assets	1,370			323			1,693			—			1,693
Assets held for sale from discontinued operations	267			—			267			—			267
Total current assets	44,662			4,676			49,338			(16,594		)	32,744
Property and equipment, net	11,837			3,271			15,108			—			15,108
Long term investments	5,773			—			5,773			—			5,773
Goodwill	65,194			—			65,194			18,875		(2), (4)	84,069
Deferred income taxes, net	8,949			—			8,949			(4,800		)(4)	4,149
Intangible assets, net	34,525			—			34,525			12,000		(2)	46,525
Other noncurrent assets	914			1,480			2,394			—			2,394
Noncurrent assets held for sale from discontinued operations	1,755			—			1,755			—			1,755
Total assets	$	173,609		$	9,427		$	183,036		$	9,481		$	192,517
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	9,018		$	1,928		$	10,946		$	(280	)(5)	$	10,666
Deferred revenue	1,159			2,021			3,180			—			3,180
Current portion of long-term debt and capital leases	4,188			2,426			6,614			(2,426		)(1)	4,188
Obligations of discontinued operations	221			—			221			—			221
Total current liabilities	14,586			6,375			20,961			(2,706		)	18,255
Long-term debt and capital leases	14,800			2,353			17,153			11,433		(1)	28,586
Other long-term liabilities	—			1,453			1,453			—			1,453
Total liabilities	29,386			10,181			39,567			8,727			48,294
Redeemable convertible preferred stock	—			131,933			131,933			(131,933		)(3)	—
Shareholders’ equity:
Capital stock	333,983			5,169			339,152			(5,169		)(1), (3)	333,983
Accumulated deficit	(189,159		)	(137,856		)	(327,015		)	137,856		(3)	(189,159		)
Treasury stock, at cost	(853		)	—			(853		)	—			(853		)
Other comprehensive income	252			—			252			—			252
Total shareholders’ equity	144,223			(132,687		)	11,536			132,687			144,223
Total liabilities, redeemable convertible preferred stock and shareholders’ equity	$	173,609		$	9,427		$	183,036		$	9,481		$	192,517

Pro Forma Adjustments
(1)	Records the purchase price for Pathfire.
(2)	Allocates the purchase price as follows:

	Total
Tangible net assets	$	(5,554	)
Purchased intangibles	12,000
Goodwill	18,875
Total purchase price	$	25,321

(3)	Eliminates historical Pathfire redeemable convertible preferred stock and equity in consolidation.
(4)	Records deferred taxes on basis difference created by purchase accounting entries.
(5)	Eliminates inter-company payable/receivable

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2007

	Historical
	DG FastChannel			Pathfire			Subtotal			Pro Forma Adjustments			Pro Forma Combined
Revenues:	$	19,894		$	4,267		$	24,161		$	(25	)(4)	$	24,136
Costs and expenses:
Cost of revenues	8,870			1,969			10,839			—			10,839
Sales and marketing	1,362			599			1,961			—			1,961
Research and development	476			758			1,234			—			1,234
General and administrative	2,584			685			3,269			—			3,269
Depreciation and amortization	2,545			612			3,157			300		(1)	3,457
Total costs and expenses	15,837			4,623			20,460			300			20,760
Income (loss) from operations	4,057			(356		)	3,701			(325		)	3,376
Other (income) expense:
Interest income and other (income) expense, net	(196		)	(29		)	(225		)	130		(2)	(95		)
Interest expense	370			176			546			276		(2)	822
Total other (income) expense	174			147			321			406			727
Net income (loss) before provision for income taxes from continuing operations	3,883			(503		)	3,380			(731		)	2,649
Provision for income taxes	1,551			—			1,551			(494		)(3)	1,057
Net income (loss) from continuing operations	2,332			$	(503	)	$	1,829		$	(237	)	$	1,592
Basic net income (loss) per common share from continuing operations	$	0.15											$	0.10
Diluted net income (loss) per common share from continuing operations	$	0.15											$	0.10
Basic weighted average common shares outstanding	15,844						15,844						15,844
Diluted weighted average common shares outstanding	16,148						16,148						16,148

Pro Forma Adjustments

(1)Records additional amortization expense related to purchased intangibles based upon an assumed 10 year life.

(2)Reflects additional interest expense from debt portion of purchase price and reduces interest income for cash portion of purchase price.

(3)Applies an estimated effective tax rate of 40% to the additional pro forma expenses and to the losses of Pathfire.

(4)Eliminates intercompany revenue.

COMBINED COMPANY UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2006

	Historical
	DG FastChannel			Pathfire			Subtotal			Pro Forma Adjustments			Pro Forma Combined
Revenues:	$	68,667		$	16,225		$	84,892		$	(100	)(4)	$	84,792
Costs and expenses:
Cost of revenues	33,322			8,103			41,425			—			41,425
Sales and marketing	4,240			2,332			6,572			—			6,572
Research and development	1,779			2,756			4,535			—			4,535
General and administrative	10,462			3,883			14,345			—			14,345
Depreciation and amortization	8,563			2,517			11,080			1,200		(1)	12,280
Total costs and expenses	58,366			19,591			77,957			1,200			79,157
Income (loss) from operations	10,301			(3,366		)	6,935			(1,300		)	5,635
Other (income) expense:
Reduction in fair value of long-term investments	4,758			—			4,758			—			4,758
Interest income and other (income) expense, net	(58		)	(82		)	(140		)	—			(140		)
Interest expense	2,844			718			3,562			1,944		(2)	5,506
Total other (income) expense	7,544			636			8,180			1,944			10,124
Net income (loss) before provision for income taxes from continuing operations	2,757			(4,002		)	(1,245		)	(3,244		)	(4,489		)
Provision (benefit) for income taxes	2,378			—			2,378			(2,898		)(3)	(520		)
Net income (loss) from continuing operations	379			(4,002		)	(3,623		)	(346		)	(3,969		)
Basic net income (loss) per common share from continuing operations	$	0.04											($0.38		)
Diluted net income (loss) per common share from continuing operations	$	0.04											($0.38		)
Basic weighted average common shares outstanding	10,568						10,568						10,568
Diluted weighted average common shares outstanding	10,568						10,568						10,568

Pro Forma Adjustments

(1)Records additional amortization expense related to purchased intangibles based on an assumed 10 year life.

(2)Reflects additional interest expense from debt issued to purchase Pathfire.

(3)Applies an estimated effective statutory tax rate of 40% to the additional pro forma expenses and to the losses of Pathfire.

(4)Eliminates intercompany revenue.