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OF THE SECURITIES EXCHANGE ACT OF 1934
8THFLOOR, 207 TIDING BOULEVARD, SECTION 2, TAIPEI 114, TAIWAN, R.O.C.
(Address of principal executive offices)
8THFLOOR, 207 TIDING BOULEVARD, SECTION 2, TAIPEI 114, TAIWAN, R.O.C.
Tel: 886-2-2656-8000; Fax: 886-2-2656-8003
Title of Each Class | Name of Each Exchange on Which Registered | |
Ordinary Shares | The NASDAQ Stock Market LLC |
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Large accelerated filero | Accelerated filerþ | Non-accelerated filero |
U.S. GAAPþ | International Financial Reporting Standards as issued by the International Accounting Standards Boardo | Othero |
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Exhibit 4.45 | ||||||||
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Exhibit 18.1 | ||||||||
Exhibit 18.2 |
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• | our business plan and strategies; |
• | our future business development and potential financial condition, results of operations and other projected financial information; |
• | our ability to manage current and potential future growth; |
• | expected continued acceptance of our revenue model; |
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• | our plans for strategic partnerships, licenses and alliances; |
• | our acquisition and strategic investment strategy, and ability to successfully integrate any past, current, or future acquisitions into our operations; |
• | our ability to protect our intellectual property rights and the security of our customers’ information; |
• | the launch of new online games according to our timetable; |
• | expected continued acceptance of our online games, including expected growth of the online games industry, and consumer preferences for our products and services; |
• | the in-house development of new online games and our plans to expand our in-house online game development team; |
• | the performance of Everest Gaming and developments in the online gaming industry; |
• | our plans to license additional games from third parties, and the launch of these new games or gaming software systems, including the timing of any such development, licenses or launches, in various geographic markets; |
• | our ability to maintain and strengthen our position as one of the largest online MahJong operators in Taiwan; |
• | the potential entry of new competitors in any of our business lines; |
• | changes in the global regulatory environment relating to the online gaming business; |
• | changes or stability in certain regulatory environments relating to Everest Gaming’s operations or gaming licenses; |
• | changes in PRC laws and regulations, and future enforcement of those laws and regulations, including laws and regulations relating to Internet usage, advertising over the Internet, Internet content providers, foreign investment and ownership in online business, distribution of dividends and foreign exchange controls; |
• | the outcome of ongoing, or any future, litigation or arbitration; and |
• | our corporate classification by various governmental entities. |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
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ITEM 3. | KEY INFORMATION |
(in thousands except for earnings per share amounts)
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
STATEMENT OF OPERATIONS DATA: | ||||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||
Gaming software and service revenues | 55,019 | 118,950 | 144,765 | 112,694 | 25,820 | |||||||||||||||
Asian online game and service revenues | 18,692 | 32,764 | 45,604 | 46,887 | 38,862 | |||||||||||||||
Total operating revenues | 73,711 | 151,714 | 190,369 | 159,581 | 64,682 | |||||||||||||||
OPERATING COSTS | ||||||||||||||||||||
Cost of gaming software and service revenues | (7,824 | ) | (16,201 | ) | (22,770 | ) | (20,102 | ) | (4,010 | ) | ||||||||||
Cost of Asian online game and service revenues | (3,667 | ) | (9,118 | ) | (12,404 | ) | (16,785 | ) | (17,103 | ) | ||||||||||
Total operating costs | (11,491 | ) | (25,319 | ) | (35,174 | ) | (36,887 | ) | (21,113 | ) | ||||||||||
GROSS PROFIT | 62,220 | 126,395 | 155,195 | 122,694 | 43,569 | |||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||
Product development and engineering expenses | (5,244 | ) | (7,338 | ) | (13,455 | ) | (14,195 | ) | (7,301 | ) | ||||||||||
Selling and marketing expenses | (27,653 | ) | (60,106 | ) | (74,173 | ) | (79,421 | ) | (21,589 | ) | ||||||||||
General and administrative expenses | (11,096 | ) | (20,983 | ) | (25,035 | ) | (29,692 | ) | (31,780 | ) | ||||||||||
Bad debt expenses | (448 | ) | (548 | ) | (2,905 | ) | (1,092 | ) | (1,639 | ) | ||||||||||
Impairment loss on property, plant, and equipment | 0 | 0 | 0 | (1,250 | ) | (278 | ) | |||||||||||||
Impairment loss on goodwill | 0 | 0 | 0 | (14,103 | ) | (2,255 | ) | |||||||||||||
Impairment loss on prepaid licensing fees and intangible assets | 0 | 0 | (1,524 | ) | (23,002 | ) | (2,200 | ) | ||||||||||||
Impairment loss on deconsolidation of T2CN | 0 | 0 | 0 | 0 | (22,234 | ) | ||||||||||||||
Other | 0 | 0 | 0 | 0 | (1,989 | ) | ||||||||||||||
Total operating expenses | (44,441 | ) | (88,975 | ) | (117,092 | ) | (162,755 | ) | (91,265 | ) | ||||||||||
Income (loss) from operations | 17,779 | 37,420 | 38,103 | (40,061 | ) | (47,696 | ) | |||||||||||||
Income (loss) from continuing operations | 18,173 | 39,083 | 35,710 | (56,102 | ) | 1,408 | ||||||||||||||
Income (loss) from discontinued operations | 12,932 | 1,088 | 9,435 | 222 | (128 | ) | ||||||||||||||
Net income (loss) | 31,105 | 40,171 | 45,145 | (55,880 | ) | 1,280 |
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2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
Less: Net (income) loss attributable to the noncontrolling interest and subsidiary preferred shares | (321 | ) | (1,281 | ) | (757 | ) | 6,795 | 1,370 | ||||||||||||
Net income (loss) attributable to GigaMedia | 30,784 | 38,890 | 44,388 | (49,085 | ) | 2,650 | ||||||||||||||
Earnings (loss) per share (in dollars): | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Income (loss) from continuing operations | 0.35 | 0.72 | 0.65 | (0.90 | ) | 0.05 | ||||||||||||||
Income (loss) from discontinued operations | 0.25 | 0.02 | 0.17 | 0.00 | 0.00 | |||||||||||||||
Net income (loss) | 0.60 | 0.74 | 0.82 | (0.90 | ) | 0.05 | ||||||||||||||
Diluted: | ||||||||||||||||||||
Income (loss) from continuing operations | 0.30 | 0.63 | 0.58 | (0.90 | ) | 0.04 | ||||||||||||||
Income (loss) from discontinued operations | 0.21 | 0.02 | 0.16 | 0.00 | 0.00 | |||||||||||||||
Net income (loss) | 0.51 | 0.65 | 0.74 | (0.90 | ) | 0.04 | ||||||||||||||
(US dollars in thousands except for number of issued shares)
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Total current assets | 64,176 | 115,417 | 128,799 | 104,839 | 93,088 | |||||||||||||||
Property, plant and equipment-net | 10,098 | 13,008 | 13,468 | 5,989 | 5,301 | |||||||||||||||
Goodwill | 55,817 | 85,149 | 87,098 | 44,417 | 39,493 | |||||||||||||||
Intangible assets-net | 23,067 | 26,060 | 28,930 | 18,924 | 19,769 | |||||||||||||||
Total assets | 182,619 | 283,865 | 316,793 | 260,181 | 267,589 | |||||||||||||||
Total GigaMedia’s shareholders’ equity | 134,087 | 180,655 | 228,456 | 184,745 | 217,521 | |||||||||||||||
Common shares, no par value, and additional paid-in capital | 289,495 | �� | 296,793 | 300,021 | 304,379 | 309,332 | ||||||||||||||
Number of issued shares (in thousands) | 51,495 | 53,700 | 54,365 | 54,995 | 56,263 | |||||||||||||||
Dividends declared per share (in dollars) | 0 | 0 | 0 | 0 | 0 |
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• | respond to technological changes or resolve unexpected service interruptions in a timely manner; |
• | adapt to regulatory changes; |
• | retain existing customers or attract new customers; |
• | license, develop, or acquire additional online games that are appealing to consumers; |
• | anticipate and adapt to changing consumer preferences; |
• | adapt to competitive market conditions; |
• | adequately and efficiently operate, upgrade and develop our transaction and service platforms; and |
• | maintain adequate control of our expenses. |
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• | the popularity of existing and new online games operated by us; |
• | the introduction of new online games by us or third parties, competing with or replacing our existing online games; |
• | general economic conditions, particularly economic conditions adversely affecting discretionary consumer spending; |
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• | changes in our customer demands and preferences; |
• | regulatory and other risks associated with our operations in China, Taiwan and Southeast Asia; |
• | the availability of other forms of entertainment; and |
• | critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted. |
• | Gaming software and service business: the regulatory restrictions applicable to the Internet gaming industry; global economic conditions and general economic conditions of the markets where the products of Everest Gaming target; availability of the Internet infrastructure; and the technological and other competition from existing and new competitors of Everest Gaming. |
• | Asian online game and service business: our ability to retain existing users; attract new users and maintain user satisfaction; the pace of rolling out new games or updating existing games by us or our competitors; the amount and timing of operating costs and capital expenditures relating to our business operations and expansion; seasonal trends in Internet use; price competition in the industry; regulatory and other risks associated from our operations in the PRC, Taiwan and Southeast Asia. |
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• | fund our operations; |
• | enhance and expand the range of products and services we offer; and |
• | respond to competitive pressures and perceived opportunities, such as investment, acquisition and international expansion activities. |
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ITEM 4. | INFORMATION ON THE COMPANY |
Time | Event | |
April 2004 | We acquired the business and operations of Grand Virtual, Inc., a privately-held gaming software developer and application service provider, and its affiliates. | |
September 2005 | We sold all of our ownership interest in the Rose Records and Tachung Records music store chains with a view to eliminating non-core operations. | |
January 2006 | We acquired FunTown, an Asian online game and service business operated in Taiwan and Hong Kong, to enhance our position in the online entertainment market. | |
May 2006 | We disposed of our ADSL business, which was an operational line of our Internet access and services business. | |
December 2006 | We acquired preferred shares in IAHGames, a leading online game operator, publisher and distributor in Southeast Asia, which were convertible into a 32.26 percent ordinary share interest in IAHGames. In 2007, due to IAHGames’ issuance of new preferred shares to third parties, the Company’s ownership percentage in IAHGames’ common equity on an as converted basis was reduced to 28.43 percent. In July 2010, we increased our ownership percentage in IAHGames to 80 percent by the acquisition of certain preferred shares from existing shareholders and the subscription for new preferred shares. | |
June 2007 | We completed the acquisition of the controlling interest in T2CN, one of the online casual game operators in the PRC. On August 8 and August 12, 2009, we acquired certain ordinary shares of T2CN from two existing shareholders respectively. As of May 31, 2011, we held approximately 67.09 percent of the total outstanding voting rights of T2CN. | |
September 2008 | We sold our last remaining non-core business, our consumer cable modem and corporate ISP business, to China Network Systems Co., Ltd. and its affiliates. The disposal effectively completed our business restructuring process which we began in 2004. For additional information, see Item 5, “Operating and Financial Review and Prospects — Certain Significant Events affecting Our Results of Operations for 2007, 2008 and 2009 — Divestiture of our legacy Internet access and service business” and Item 10, “Additional Information — C. Material Contracts — Sale of Internet Access and Service Business” in this annual report. | |
April 2010 | We completed the sale of a 60 percent interest in our online gaming software business to BetClic, a leading European sports betting and online gaming group. The strategic alliance with BetClic was structured as a stock and asset sale to a newly-formed French entity, Everest Gaming, in which we received a 40 percent stake. As part of and as a condition to the completion of the transaction, we purchased the shares of our then-major licensee, UIM, all of the material assets of which were sold to Everest Gaming as part of the transaction. | |
April 2010 | We entered into several agreements with IAHGames itself and certain shareholders of IAHGames, to acquire additional preferred shares of IAHGames. The acquisition of IAHGames was completed on July 1, 2010. As a result of the acquisition, we hold preferred shares convertible into 80 percent of common shares of IAHGames. IAHGames is a leading publisher, operator and distributor based in Singapore and operates several award-winning titles including EA SPORTS™ FIFA Online 2, Granado Espada and Dragonica and distributes Take Two Interactive products such as Grand Theft Auto IV™ and the NBA®2K series. IAHGames, through its wholly owned subsidiary Monsoon, entered into various agreements with Blizzard to distribute selected Blizzard Entertainment® games in Singapore, Malaysia, Thailand, Indonesia and the Philippines, including bestselling games from Blizzard’s Diablo® action-role-playing-game series, Warcraft® and StarCraft® real-time strategy-game series, including StarCraft II: | |
Wings of Liberty™, and World of Warcraft® and its three expansion sets, The Burning Crusade®, Wrath of the Lich King® and Cataclysm™. |
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• | broader range of players, including casual players, due to the casual nature and relatively short duration; and |
• | a greater breadth of tools, engines, middleware and server solutions that can make development of casual games relatively more cost-effective. |
Commercial | Revenue | |||||||||
Game | Description | Launch | Game Source | Model | Market | |||||
Tales Runner | Sports — Obstacle running | June 2006 in Taiwan August 2006 in Hong Kong | Licensed | Item-billing | Taiwan Hong Kong | |||||
Nanaimo | Action | December 2007 | Licensed | Item-billing | Hong Kong | |||||
EA Sports™ FIFA Online 2 (Thai) | Online Sports Game | December 11, 2008 | Licensed | Item-billing | Thailand | |||||
EA Sports™ FIFA Online 2 (Vietnamese) | Online Sports Game | January 8, 2009 | Licensed | Item-billing | Vietnam | |||||
EA Sports™ FIFA Online 2 (English) | Online Sports Game | January 23, 2009 | Licensed | Item-billing | Singapore Malaysia | |||||
Casual Web Game | December 23, 2009 in Hong Kong March 25, 2010 in Taiwan | Licensed | Item-billing | Hong Kong | ||||||
StarCraft® II: Wings of Liberty™ | Real-time Strategy Game | July 27, 2010 release of boxed licensed products November 2010 Commercial launch of licensed game online | Licensed | Buy-to-play or Pay-to-Play | Singapore Malaysia Thailand Indonesia Philippines Hong Kong Macau | |||||
Counter-Strike Online | First Person Shooting Game | October 27, 2010 | Licensed | Item-billing | Singapore Malaysia | |||||
Paperman | First Person Shooting Game | November 12, 2010 | Licensed | Item-billing | Thailand | |||||
Alliance of Valiant Arms | Massively multiplayer First Person Shooting Game | November 17, 2010 | Licensed | Item-billing | Taiwan Hong Kong Macau |
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Game | Description | Status | Game Source | Target Market | ||||
Paperman | First Person Shooting Game | Game Localization | Licensed | Indonesia | ||||
EA Sports™ FIFA Online 2 (English) | Online Sports Game | Closed Beta Testing | Licensed | Indonesia |
Commercial | Game | Revenue | ||||||||
Game | Description | Launch | Source | Model | Market | |||||
Granado Espada | MMORPG | August 20, 2007 | Licensed | Item-billing | Singapore Malaysia Philippines | |||||
Emil Chronicle Online | MMORPG | September 14, 2007 | Licensed | Item-billing | Thailand | |||||
Dragonica (Chinese) | MMORPG | June 4, 2009 | Licensed | Item-billing | Malaysia | |||||
Nan Di Bei Gai or NS Master | 2D Flash MMORPG | April 25, 2011 | Joint Operation | Free-to-Play | PRC |
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Started | ||||||||
Game | Description | Distribution | Game Source | Market | ||||
World of Warcraft®: Cataclysm™ | MMORPG | December 7, 2010 | Licensed | Singapore, Malaysia Thailand, Indonesia Philippines | ||||
World of Warcraft®: Wrath of the Lich King® | MMORPG | January 12, 2010 | Licensed | Singapore, Malaysia Thailand, Indonesia Philippines | ||||
World of Warcraft®: The Burning Crusade® | MMORPG | January 12, 2010 | Licensed | Singapore, Malaysia Thailand, Indonesia Philippines | ||||
World of Warcraft® | MMORPG | January 12, 2010 | Licensed | Singapore, Malaysia Thailand, Indonesia Philippines | ||||
World of Warcraft® Prepaid Game Cards | MMORPG | January 12, 2010 | Licensed | Singapore, Malaysia Thailand, Indonesia Philippines |
Game | Description | Status | Game Source | Target Market | ||||
ArcheAge | Medieval Fantasy Themed Action Role-Playing Game | Closed Beta Testing in Korea | Licensed | Taiwan Hong Kong Macau | ||||
4Story | Cartoon Fantasy Themed Role-Playing Game | Game Localization | Licensed | Taiwan Hong Kong Macau | ||||
SpongeBob SquarePants | MMORPG | Under Development | Co-Development | Asia |
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Game | Description | Started Distribution | Game Source | Markets | ||||
Grand Theft Auto IV™ | Action | April 29, 2008 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Borderlands | First Person Shooter & RPG | October 20, 2009 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
StarCraft® Battle Chest® | Real-time Strategy Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Warcraft® Battle Chest® | Real-time Strategy Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Diablo® Battle Chest® | Action Role Playing Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Diablo® II | Action Role Playing Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Diablo® II Expansion Set: Lord of Destruction® | Action Role Playing Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Warcraft® III: Reign of Chaos® | Real-time Strategy Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Warcraft® III: The Frozen Throne® | Real-time Strategy Game | January 12, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Red Dead Redemption | Open War Shooter | May 18, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines | ||||
Sid Meier’s Civilization V® | Strategy | September 21, 2010 | Licensed | Singapore, Malaysia, Thailand, Indonesia, Philippines |
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• | Player Clubs. FunTown offers online club services in its game community. FunTown players can form their own clubs, invite other players with similar interests or skill levels to join, and organize online and offline events for club members. Player clubs complement the strong social features of online games by helping to maintain an online game community. |
• | Tournaments. FunTown provides various tournaments for its online MahJong players. After players join a club, they can participate in online in-club tournaments and compete in weekly online inter-club tournaments. On an annual basis, FunTown organizes large-scale tournaments, in which a large number of players are invited to the tournament premises and compete online via computers. |
• | Avatars. To enhance players’ overall entertainment experience, FunTown offers many in-game virtual items which may be purchased by players to customize their online personal graphic profiles, or avatars. Players use avatars to create their own unique look while participating in the online community. The virtual items for avatars include facial expressions, clothes and different accessories. These items are particularly popular with younger players, who customize their avatars to establish unique identities and pursue distinct fashions in the online community. |
• | Friends and Family Messenger. The FunTown platform has a unique function designed for players’ personal contacts, which is similar to the contact list of instant message programs. This enables players to see when their friends and family members are online and invite people in their personal network to play games together. |
• | Social Networking. The FunTown platform provides an online social networking community called FunTown Village, in which players meet each other through their online avatars. In FunTown Village, players can interact and communicate, purchase virtual items, and even get married virtually. FunTown plans to introduce more virtual items within FunTown Village to address the strong social interests of its players and to help increase FunTown’s overall appeal as a distinct online game community. |
• | Customer Services. FunTown provides support and services to its customers primarily through walk-in customer service centers in Taipei and Hong Kong and e-mails and online bulletin boards where players can inquire and receive responses from FunTown and other players. |
• | Other Platforms. FunTown expects to launch its current online games onto other platforms, including Android platform and Apple’s iOS platform and to allow data synchronization between each of these platforms. |
• | Membership Management. IAHGames utilizes an integrated service platform, namely IAHGames Passport, to provide one-stop service to customers. IAHGames Passport is an integrated membership management and payment system, which allows IAHGames to maintain a single customer database containing each customer’s profile and transaction history. Customers may log in, activate the games they wish to play, top up their game accounts or pay to use any of the fee-based products and services. IAHGames Passport offers a variety of payment methods including pre-paid cards, online payments, credit card payment as well as mobile payment. To date, IAHGames Passport can collect payment (with pre-paid card integration) from Singapore, Thailand, Malaysia, Indonesia, Philippines, Hong Kong and Taiwan. Players can use IAHGames Passport to purchase game credits for any game offered by IAHGames in micro transactions. Apart from IAHGames Passport, IAHGames has an ecosystem of websites, forums and customer relationship management for any online game IAHGames publishes and operates. IAHGames Passport offers users “single sign-in” access to all these services. |
• | Tournaments. IAHGames provides various tournaments for its online games players. IAHGames organizes both online and off-line tournaments for its various games, where the winners can win prizes and qualify to take part in national or regional tournaments. On an annual basis, IAHGames organizes large-scale tournaments, where winners of national tournaments come together to compete in a regional competition. |
• | Game Masters. IAHGames delegates game masters to provide various in-game services for its online game players. Game masters are responsible for organizing in-game events, troubleshooting and actively and continuously monitoring the online game environment. They respond to players’ inquiries, handle error reporting and removal process, and identify and deter inappropriate player behaviors. IAHGames believes that the provision of game masters is an important customer service function to maintain customer loyalty and effectively address technical problems as they arise. |
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• | Customer Services. IAHGames focuses on providing quality customer service in order to retain its existing customers as well as attract new customers. IAHGames offers multiple communication channels, including telephone hotline and customer service ticketing system, for the customers to provide feedback and complaints about its products or services at any time. |
• | Membership Management. JIDI utilizes an integrated service platform, namely JIDI-Passport, to provide one-stop service to customers as well as distributors. JIDI-Passport is an integrated membership management and payment system, which allows JIDI to maintain a single customer database containing each customer’s profile and transaction history. Customers may log in, pay and use any of the fee-based products and services. In addition, JIDI-Passport allows our distributors to sell our game points to Internet cafés. Internet cafés can also use JIDI-Passport to check their point-balances and make payment on behalf of individual purchasers. |
• | Virtual Items. To enhance players’ overall entertainment experience, JIDI offers many in-game virtual items which may be purchased by players to enhance the player attacking or defense power, the armor and weapons and to customize their online personal graphic profiles or avatars. Players are able to enhance their attacking and/or defense power with an alternative virtual item purchase instead of going through a certain amount of hours in game mission based practice. Such armor and weapon virtual items are popular for players in war story line based and Chinese Kung Fu type online games. Furthermore, players use avatars to create their own unique look while participating in the online community. The virtual items for avatars include facial expressions, clothes and different accessories. These items are particularly popular with younger players, who customize their avatars to establish unique identities and pursue distinct fashions in the online community. |
• | Social Networking. JIDI’s integrated system also incorporates a variety of online community features, such as bulletin boards which allow registered users to post notes or inquiries and respond to other users’ questions and comments. JIDI believes these features increase the user stickiness on our site and facilitate player interaction. JIDI is currently building an online social networking community to further facilitate access to its online game offering and accommodate different social net working needs of its users in the PRC. |
• | Customer Services. JIDI focuses on providing quality customer service in order to retain its existing customers as well as attract new customers. JIDI offers multiple communication channels, including telephone hotline and customer service email, for the customers to provide feedback and complaints about its products or services at any time. |
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• | Infrastructure Design and Management Services. CESL provided the architectural design of various infrastructure elements, including the servers, databases, networks, routers, firewalls and management tools that are required for Internet gaming operations. |
• | Transaction Processing Services. These services included (i) payment consultation for designing timely collection and distribution systems for payments through a variety of channels and merchants; (ii) billing consultation for designing real-time and out-of-band transaction processing and order management; and (iii) risk management consultation for creating and designing tools and processes for fraud detection, prevention and management. |
• | Customer Support Services. CESL offered UIM a comprehensive round-the-clock consultation support to resolve infrastructure issues. CESL also provided platform technical support during periodic maintenance to update, patch, and fine-tune the system performance of our software solutions. |
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• | Custom Gaming Software Development Services. CESL customized the entertainment modules and interfaces for the gaming platform to meet specific requests of UIM’s affiliates or partners. |
• | Marketing Support Services. CESL created branded websites and provide marketing support services to assist UIM in attracting new players. |
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• | MIIT (formerly the Ministry of Information Industry); |
• | the Ministry of Culture, or MOC; |
• | the General Administration of Press and Publication, or GAPP (formerly known as the State Press and Publications Administration, or SPPA); |
• | the Ministry of Public Security; |
• | the State Administration of Industry and Commerce, or SAIC; |
• | the State Administration for Radio, Film and Television, or SARFT; |
• | the State Council Information Office, or SCIO; and |
• | the Ministry of Commerce, or MOFCOM. |
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• | the Broadcasting Act (Chapter 28) of Singapore (the “Broadcasting Act”) and its subsidiary legislation, which regulates, inter alia, the operation of Internet websites; |
• | the Telecommunications Act (Chapter 323) of Singapore (the “Telecommunications Act”) and its subsidiary legislation, which regulates the operation of telecommunications systems and the provision of telecommunications services; and |
• | the Common Gaming Houses Act (Chapter 49) of Singapore (the “CGH Act”) and the Betting Act (Chapter 21) of Singapore (the “Betting Act”) and subsidiary legislation, which regulate, inter alia, gaming and lotteries. |
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• | Each of the shareholders of T2 Entertainment has irrevocably granted T2 Technology, the wholly-owned subsidiary of T2CN in the PRC, the power to exercise all of their voting rights of T2 Entertainment pursuant to the relevant voting rights and proxy agreement; |
• | Each of the shareholders of T2 Advertisement has irrevocably granted T2 Technology the power to exercise all of their voting rights of T2 Advertisement pursuant to the relevant voting rights and proxy agreement; |
• | Each of the shareholders of Jinyou has irrevocably granted T2 Technology the power to exercise all of their voting rights of Jinyou pursuant to the relevant voting rights and proxy agreement; |
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• | Our majority-owned subsidiary in China has the power to appoint all directors and senior management members of the three VIEs; |
• | Each of the shareholders of T2 Entertainment has pledged all of their respective equity interests in T2 Entertainment as security for the full performance of their respective obligations under all of their agreements with T2 Technology; |
• | Each of the shareholders of T2 Advertisement has pledged all of their respective equity interests in T2 Advertisement as security for the full performance of their respective obligations under all of their agreements with T2 Technology; |
• | Each of the shareholders of Jinyou has pledged all of their respective equity interests in Jinyou as security for the full performance of their respective obligations under all of their agreements with T2 Technology; |
• | Each of the shareholders of T2 Entertainment has granted T2 Technology an irrevocable option to acquire all or part of the equity interests held by them in T2 Entertainment pursuant to the relevant exclusive call option agreement, to the extent permitted by then-effective laws and regulations in the PRC; |
• | Each of the shareholders of T2 Advertisement has granted T2 Technology an irrevocable option to acquire all or part of the equity interests held by them in T2 Advertisement pursuant to the relevant exclusive call option agreement, to the extent permitted by then-effective laws and regulations in the PRC; and |
• | Each of the shareholders of Jinyou has granted T2 Technology an irrevocable option to acquire all or part of the equity interests held by them in Jinyou pursuant to the relevant exclusive call option agreement, to the extent permitted by then-effective laws and regulations in the PRC. |
• | Each of the shareholders of Shanghai JIDI has irrevocably granted JIDI, among other things, the power to attend shareholders meeting, to exercise voting rights, to exercise all other rights as shareholder of Shanghai JIDI and to appoint the legal representative, directors and senior management of Shanghai JIDI pursuant to an authorization and proxy letter; |
• | Each of the shareholders of Shanghai JIDI has entered into an agreement with GigaMedia (HK) Limited, our wholly owned subsidiary under which each of the shareholders agrees to accept certain amount of payments provided by GigaMedia (HK) Limited and agrees to use such amount only for the incorporation of Shanghai JIDI; and |
• | Each of the shareholders of Shanghai JIDI has agreed to pledge their respective shares in Shanghai JIDI on request to secure the payments granted by GigaMedia (HK) Limited to the shareholders respectively. |
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Our | ||||||||||||
Year of | Place of | Percentage | ||||||||||
Entity | Incorporation | Incorporation | Holding | Principal Activities | ||||||||
Held by our Company | ||||||||||||
GigaMedia International Holdings Limited | 2004 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia (Taiwan) Limited | 2004 | Taiwan | 100 | % | Holding company | |||||||
Held by GigaMedia International Holdings Limited | ||||||||||||
GigaMedia SuperCup Holdings Limited | 2008 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Global Limited | 2004 | British Virgin Islands | 100 | % | Online games | |||||||
Cambridge Entertainment Software Limited | 2004 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia (HK) Limited | 2004 | Hong Kong | 100 | % | Holding company | |||||||
Crestmillion International Limited | 2007 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Japan Pte. Ltd. | 2007 | Singapore | 100 | % | Holding company | |||||||
GigaMedia Finance International Limited | 2000 | Cayman Islands | 100 | % | Holding company | |||||||
Bridgepoint International Limited | 2004 | British Virgin Islands | 100 | % | Holding company | |||||||
Gloryland Asia Limited | 2008 | British Virgin Islands | 100 | % | �� | Online games | ||||||
GigaMedia Online Entertainment Corp. | 2009 | Cayman Islands | 100 | % | Holding company | |||||||
Held by GigaMedia Online Entertainment Corp. | ||||||||||||
FunTown World Limited | 2005 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Asia Limited | 2005 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Asia Pacific Limited | 2006 | British Virgin Islands | 100 | % | Holding company | |||||||
Skyace Pacific Limited | 2006 | British Virgin Islands | 100 | % | Online games |
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Our | ||||||||||||
Year of | Place of | Percentage | ||||||||||
Entity | Incorporation | Incorporation | Holding | Principal Activities | ||||||||
Centermax Limited | 2007 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Capital Limited | 2007 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Development Limited | 2007 | British Virgin Islands | 100 | % | Online games | |||||||
Giga Slam Dunk Corporation | 2007 | Labuan | 100 | % | Online games | |||||||
Giga Wartime Corporation | 2007 | Labuan | 100 | % | Online games | |||||||
E-Sports International Corporation Limited | 2008 | Hong Kong | 100 | % | Online games | |||||||
Dragon Mark Holdings Limited | 2008 | British Virgin Islands | 100 | % | Holding company | |||||||
Premier Vantage Holdings Limited | 2009 | British Virgin Islands | 100 | % | Holding company | |||||||
GigaMedia Freestyle Holdings Limited | 2009 | British Virgin Islands | 100 | % | Holding company | |||||||
Spring Asia Limited (formally known as New Media Investment Corporation) | 2009 | Labuan | 100 | % | Holding company | |||||||
Asia Online Games Corporation (formally known as GigaMedia (Labuan New) Limited) | 2006 | Labuan | 100 | % | Holding company | |||||||
GigaMedia (Labuan) Limited | 2005 | Labuan | 100 | % | Holding company | |||||||
Megabiz Limited | 2010 | British Virgin Islands | 100 | % | Holding company | |||||||
Nova Matrix Limited | 2010 | British Virgin Islands | 100 | % | Holding company | |||||||
Possibility Space Incorporated | 2005 | British Virgin Islands | 49 | % | Holding company | |||||||
Held by FunTown World Limited | ||||||||||||
FunTown Hong Kong Limited | 1999 | Hong Kong | 100 | % | Online games | |||||||
Held by FunTown Hong Kong Limited | ||||||||||||
FunTown Software (Shanghai) Limited | 2006 | PRC | 100 | % | Online games | |||||||
Held by Skyace Pacific Limited | ||||||||||||
Dragongate Enterprises Limited | 2006 | British Virgin Islands | 70 | % | Online games |
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Our | ||||||||||||
Year of | Place of | Percentage | ||||||||||
Entity | Incorporation | Incorporation | Holding | Principal Activities | ||||||||
Held by Dragongate Enterprises Limited | ||||||||||||
GigaMedia Dragongate Limited | 2007 | Labuan | 100 | % | Online games | |||||||
Held by Cambridge Entertainment Software Limited | ||||||||||||
Cambridge Interactive Development Corporation | 1997 | U.S.A. | 100 | % | Software development and application services | |||||||
Cambridge Interactive Development Corporation (Quebec) Inc. | 2005 | Canada | 100 | % | Financial and management services | |||||||
Internet Media Licensing Limited | 2005 | British Virgin Islands | 100 | % | Software development and application services | |||||||
Held by Internet Media Licensing Limited | ||||||||||||
GigaMedia Europe Limited S.à.r.l. | 2010 | Luxembourg | 100 | % | Holding company for 40% of Everest Gaming | |||||||
Ultra Internet Media S.A. | 2004 | Nevis | 100 | % | Online entertainment operator | |||||||
Held by Ultra Internet Media S.A. | ||||||||||||
Everest Games Ltd | 2008 | British Virgin Islands | 100 | % | Online gaming operator | |||||||
Global Interactive Services Inc. | 2005 | Canada | 100 | % | Holding company | |||||||
9218-2146 Quebec Inc. | 2010 | Canada | 100 | % | Holding company | |||||||
9218-2161 Quebec Inc. | 2010 | Canada | 100 | % | Holding company | |||||||
9218-2179 Quebec Inc. | 2010 | Cananda | 100 | % | Holding company | |||||||
Held by GigaMedia Europe Limited S.à.r.l. | ||||||||||||
Mangas Everest S.A.S. | 2010 | France | 40 | % | Online gaming operator | |||||||
Held by Dragon Mark Holdings Limited | ||||||||||||
Wolverine Holdings Group Limited | 2009 | British Virgin Islands | 100 | % | Holding company |
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Our | ||||||||||||
Year of | Place of | Percentage | ||||||||||
Entity | Incorporation | Incorporation | Holding | Principal Activities | ||||||||
Held by GigaMedia (Labuan) Limited | ||||||||||||
Leisure Alliance Sdn. Bhd. | 2009 | Malaysia | 100 | % | Holding company | |||||||
Held by Leisure Alliance Sdn. Bhd. | ||||||||||||
Hoshin GigaMedia Center Inc. | 1998 | Taiwan | 100 | % | Online games | |||||||
Held by Bridgepoint International Limited | ||||||||||||
Implus International Limited | 2004 | British Virgin Islands | 100 | % | Holding company | |||||||
Held by GigaMedia Asia Pacific Limited | ||||||||||||
Spring Asia Limited | 2005 | British Virgin Islands | 100 | % | Holding company | |||||||
Infocomm Asia Holdings Pte. Ltd. | 2004 | Singapore | 80 | % | Online games | |||||||
Held by Infocomm Asia Holdings Pte. Ltd. | ||||||||||||
Monsoon Online Pte. Ltd. | 2009 | the Republic of Singapore | 100 | % | Online games | |||||||
Held by GigaMedia Asia Limited | ||||||||||||
GigaMedia China Limited | 2005 | British Virgin Islands | 100 | % | Holding company | |||||||
Held by GigaMedia China Limited | ||||||||||||
T2CN Holding Limited | 2004 | British Virgin Islands | 67.087 | % | Online games | |||||||
Held by T2CN Holding Limited | ||||||||||||
J-Town Information (Shanghai) Co., Ltd. | 2005 | PRC | 100 | % | Online games | |||||||
T2CN Information Technology (Shanghai) Co., Ltd. | 2004 | PRC | 100 | % | Online games | |||||||
Controlled by T2CN Information Technology (Shanghai) Co., Ltd. | ||||||||||||
Shanghai T2 Entertainment Co., Ltd. | 2004 | PRC | * | Online games | ||||||||
Shanghai T2 Advertisement Co., Ltd. | 2006 | PRC | * | Advertising | ||||||||
Shanghai Jinyou Network & Technology Co., Ltd. | 2007 | PRC | * | Online games | ||||||||
Held by GigaMedia (HK) Limited | ||||||||||||
JIDI Network Technology (Shanghai) Co., Ltd. | 2010 | PRC | 100 | % | Online games | |||||||
Controlled by JIDI Network Technology (Shanghai) Co., Ltd. | ||||||||||||
Shanghai JIDI Network Technology Co., Ltd. | 2010 | PRC | ** | Online games |
* | We had entered into a series of contractual arrangements through which we had effective control over these entities until June 30, 2010. Due to the dispute with T2CN’s former chief executive officer, we have effectively lost control over these entities since July 1, 2010. | |
** | We have entered into a series of contractual arrangements through which we have effective control over this entity. |
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• | Our Asian online game and service business operates a portfolio of online games, primarily targeting online game players across Asia, including Greater China and Southeast Asia. |
• | Gaming software and service business, of which we retain a 40 percent equity interest, develops and licenses online poker, casino, and sports betting gaming software solutions and application services, primarily targeting continental European markets. |
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(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Revenue | $ | 9,289 | $ | 159 | $ | 146 | ||||||
Income (loss) from discontinued operations before tax | $ | (593 | ) | $ | 222 | $ | (128 | ) | ||||
Gain on sale of the discontinued operations before tax | 11,014 | — | — | |||||||||
Income tax expenses | (986 | ) | — | — | ||||||||
Income (loss) from discontinued operations | $ | 9,435 | $ | 222 | $ | (128 | ) | |||||
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(in US$ thousands) | Amount | |||
Cash | $ | 493 | ||
Accounts receivable | 2,325 | |||
Other current assets | 1,125 | |||
Property and equipment | 4,328 | |||
Other assets | 165 | |||
Total assets | $ | 8,436 | ||
Accounts payable | $ | 1,056 | ||
Other current liabilities | 759 | |||
Noncurrent liabilities | 672 | |||
Total liabilities | $ | 2,487 | ||
(in US$ thousands) | Amount | |||
Assets Held for Sale-Current | ||||
Cash | $ | 35,015 | ||
Accounts receivable | 15,817 | |||
Prepaid expenses | 7,609 | |||
Other current assets | 632 | |||
Less: retained ownership | (23,629 | ) | ||
$ | 35,444 | |||
Assets Held for Sale-Noncurrent | ||||
Property, plant and equipment | $ | 7,358 | ||
Goodwill | 29,243 | |||
Intangible assets | 11,368 | |||
Other assets | 4,199 | |||
Less: retained ownership | (20,867 | ) | ||
$ | 31,301 | |||
Liabilities Held for Sale-Current | ||||
Accounts payable | $ | 11 | ||
Accrued compensation | 1,076 | |||
Accrued expenses | 6,869 | |||
Player account balances | 35,015 | |||
Other current liabilities | 1,126 | |||
Less: retained ownership | (17,639 | ) | ||
$ | 26,458 | |||
Liabilities Held for Sale-Noncurrent | ||||
Other liabilities | $ | 2,266 | ||
Less: retained ownership | (906 | ) | ||
$ | 1,360 | |||
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(in US$ thousands) | Amount | |||
Retained ownership of gaming software and service business | ||||
Current assets | $ | 23,629 | ||
Noncurrent assets | 20,867 | |||
Current liabilities | (17,639 | ) | ||
Noncurrent liabilities | (906 | ) | ||
$ | 25,951 | |||
(in US$ thousands) | Amount | |||
The fair value of any consideration received, including purchase price adjustments, net of any transaction costs | $ | 82,984 | ||
The fair value of the 40% retained noncontrolling investment in the gaming software and service business at the date the business was deconsolidated | 54,240 | |||
Less: The carrying amount of the gaming software and service business at the date of the deconsolidation | (58,084 | ) | ||
Gain on deconsolidation of the gaming software and service business | $ | 79,140 | ||
Accumulated | ||||||||||||
(in US$ thousands) | voting interest | |||||||||||
Date of acquisition | Amount | Description | at those points in time | |||||||||
December, 2006 | $ | 5,750 | * | Purchased 500,000 convertible voting preferred shares-Series B | 32.26 | % | ||||||
May, 2010 | $ | 2,192 | ** | Purchased 208,881 convertible voting preferred shares-Series B | 40.30 | % | ||||||
July, 2010 | $ | 4,500 | Purchased 5,982,230 convertible voting preferred shares-Series A | 57.87 | % | |||||||
July, 2010 | $ | 10,000 | Purchased 500,000 convertible voting preferred shares-Series B | 80.00 | % |
* | The original investment amount of $10 million was written down to $5.8 million, resulting from an impairment charge of $4.2 million recorded in 2009. | |
** | We issued 866,373 common shares, valued at approximately $2.2 million as consideration. |
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(in US$ thousands) | Amortization Life (in years) | Amount | ||||
Cash acquired | $ | 9,070 | ||||
Accounts receivable | 5,715 | |||||
Other current assets | 5,129 | |||||
Equity method investments | 20,319 | |||||
Fixed assets/ non-current assets | 721 | |||||
Non-compete contracts | 3 | 387 | ||||
Favorable lease right | 13.5 | 2,861 | ||||
Prepaid licensing and royalty fees | 1.75 ~ 4 | 1,010 | ||||
Goodwill | N/A | 12,188 | ||||
Total assets acquired | 57,400 | |||||
Current liabilities | 23,304 | |||||
Noncurrent liabilities | 9,145 | |||||
Total liabilities assumed | 32,449 | |||||
Preferred shares (Series A) | (1,317 | ) | ||||
Noncontrolling interest | (1,192 | ) | ||||
Total purchase price | $ | 22,442 | ||||
Year Ended December 31 | ||||||||
(in US$ thousands, except per share figures) | 2009 | 2010 | ||||||
Unaudited | Unaudited | |||||||
Net revenue | $ | 165,883 | $ | 69,403 | ||||
Loss from operations | (41,812 | ) | (50,378 | ) | ||||
Net loss | (56,226 | ) | (1,570 | ) | ||||
Net (loss) income attributable to us | (49,574 | ) | 255 | |||||
Basic (loss) earnings per share attributable to us | (0.89 | ) | 0.00 | |||||
Diluted (loss) earnings per share attributable to us | (0.89 | ) | 0.00 |
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Accumulated | ||||||||||
(in US$ thousands) | voting interest | |||||||||
Date of acquisition | Amount | Description | at those points in time | |||||||
2006 | $ | 15,000 | Purchased 7,500,000 convertible voting preferred shares | 19.02 | % | |||||
2007 | $ | 23,736 | * | Acquired 31,113,681 common shares (including convertible voting preferred shares converted into common shares) in total | 58.11 | % | ||||
2008 | $ | 3,375 | Purchased 4,500,000 common shares | 65.68 | % | |||||
2009 | $ | 285 | Purchased 520,000 common shares | 67.09 | % |
* | The purchase price includes the issuance of 226,385 common shares of us, valued at approximately $2.7 million. |
(in US$ thousands) | Amount | |||
Cash | $ | 12,903 | ||
Other current assets | 1,266 | |||
Fixed assets/ non-current assets | 1,679 | |||
Prepaid licensing and royalty | 5,339 | |||
Intangible assets | 1,098 | |||
Total assets of T2CN | 22,285 | |||
Total liabilities of T2CN | (12,331 | ) | ||
Net equity of T2CN | 9,954 | |||
Noncontrolling interest | (3,276 | ) | ||
Goodwill acquired | 17,500 | |||
Advances to the entities held by T2CN | 1,405 | |||
$ | 25,583 | |||
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(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Total revenue | $ | 20,312 | $ | 18,673 | $ | 10,126 | ||||||
Net income (loss) | $ | 1,571 | $ | (2,990 | ) | $ | 834 | |||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Total revenue | $ | 144,765 | $ | 112,694 | $ | 25,820 | ||||||
Net income (loss) | $ | (206 | ) | $ | (1,226 | ) | $ | 1,514 | ||||
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1) | In 2006, we acquired voting preferred shares in IAHGames which were convertible into a 32.26% ordinary share interest in IAHGames at a cost of US$10 million. In 2007, due to IAHGames’ issuance of new preferred shares to third parties, the Company’s percentage ownership in IAHGames’ common equity on an as converted basis was reduced to 28.43%. As a result of deteriorating earnings by IAHGames during 2009, we determined our investment in IAHGames to be partially impaired. During the fourth quarter of 2009, we recorded an impairment charge of US$4.2 million to write down our investment to its fair value of approximately US$5.8 million. |
2) | In 2007, we made an investment in preferred shares of Neostorm of US$5.6 million. During 2009, games developed by Neostorm proved to be unsuccessful, and we wrote off our investment in Neostorm. |
3) | In 2008, we made an investment in preferred shares of SuperCup of US$2.0 million. SuperCup ceased operations in 2009, and we wrote off our investment in SuperCup. |
4) | In 2009, we made an investment in common shares of JC Entertainment Corporation of US$7.1 million. We recorded impairment loss of $2.9 million in the fourth quarter of 2009 based on the excess of its market value derived from listed price as of December 31, 2009 over its carrying value. |
1) | In 2008, we made an investment in preferred shares of Access China (“ACC”) of US$3 million. As a result of deteriorating earnings and inability to meet its projections and forecasts, we decided to write off our investments in ACC in 2010. |
2) | In 2010, we made an investment in preferred shares of PSI of US$1.5 million, which ceased operations in December 2010. We fully wrote off this investment in 2010. |
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• | the development and regulation of these industries; |
• | our adaptation to technological change; |
• | changing consumer preferences; |
• | legal development affecting these industries, in particular the gaming software and service industry; and |
• | general economic conditions in the markets where we or our licensees operate. |
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For the Year Ended December 31, | ||||||||||||||||||||||||
2008 | 2009 | 2010 | ||||||||||||||||||||||
Amount in | % of | Amount | % of | Amount | % of | |||||||||||||||||||
US$ | total | in US$ | total | in US$ | total | |||||||||||||||||||
thousands | revenues | thousands | revenues | thousands | revenues | |||||||||||||||||||
Particulars | ||||||||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Gaming software and service revenues | 144,765 | 76.0 | 112,694 | 70.6 | 25,820 | 39.9 | ||||||||||||||||||
Asian online game and service revenues | 45,604 | 24.0 | 46,887 | 29.4 | 38,862 | 60.1 | ||||||||||||||||||
Total operating revenues | 190,369 | 100.0 | 159,581 | 100.0 | 64,682 | 100.0 | ||||||||||||||||||
OPERATING COSTS | ||||||||||||||||||||||||
Cost of gaming software and service revenues | 22,770 | 12.0 | 20,102 | 12.6 | 4,010 | 6.2 | ||||||||||||||||||
Cost of Asian online game and service revenues | 12,404 | 6.5 | 16,785 | 10.5 | 17,103 | 26.4 | ||||||||||||||||||
Total operating costs | 35,174 | 18.5 | 36,887 | 23.1 | 21,113 | 32.6 | ||||||||||||||||||
Gross profit | 155,195 | 81.5 | 122,694 | 76.9 | 43,569 | 67.4 | ||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Product development and engineering expenses | 13,455 | 7.1 | 14,195 | 8.9 | 7,301 | 11.3 | ||||||||||||||||||
Selling and marketing expenses | 74,173 | 39.0 | 79,421 | 49.8 | 21,589 | 33.4 | ||||||||||||||||||
General and administrative expenses | 25,035 | 13.2 | 29,692 | 18.6 | 31,780 | 49.1 | ||||||||||||||||||
Bad debt expense | 2,905 | 1.5 | 1,092 | 0.7 | 1,639 | 2.5 | ||||||||||||||||||
Impairment loss on property, plant, and equipment | — | — | 1,250 | 0.8 | 278 | 0.4 | ||||||||||||||||||
Impairment loss on goodwill | — | — | 14,103 | 8.8 | 2,255 | 3.5 | ||||||||||||||||||
Impairment loss on prepaid licensing fees and intangible assets | 1,524 | 0.8 | 23,002 | 14.4 | 2,200 | 3.4 | ||||||||||||||||||
Impairment loss on deconsolidation of T2CN | — | — | — | — | 22,234 | 34.4 | ||||||||||||||||||
Other | — | — | — | — | 1,989 | 3.1 | ||||||||||||||||||
Total operating expenses | 117,092 | 61.6 | 162,755 | 102.0 | 91,265 | 141.1 | ||||||||||||||||||
Income (loss) from operations | 38,103 | 19.9 | (40,061 | ) | (25.1 | ) | (47,696 | ) | (73.7 | ) | ||||||||||||||
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For the Year Ended December 31, | ||||||||||||||||||||||||
2008 | 2009 | 2010 | ||||||||||||||||||||||
Amount in | % of | Amount | % of | Amount | % of | |||||||||||||||||||
US$ | total | in US$ | total | in US$ | total | |||||||||||||||||||
thousands | revenues | thousands | revenues | thousands | revenues | |||||||||||||||||||
NON-OPERATING INCOME (EXPENSES) | (1,324 | ) | (0.7 | ) | (15,524 | ) | (9.8 | ) | 56,364 | 87.1 | ||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 36,779 | 19.3 | (55,585 | ) | (34.9 | ) | 8,668 | 13.4 | ||||||||||||||||
INCOME TAX EXPENSE | (1,069 | ) | (0.6 | ) | (517 | ) | (0.3 | ) | (7,260 | ) | (11.2 | ) | ||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 35,710 | 18.7 | (56,102 | ) | (35.2 | ) | 1,408 | 2.2 | ||||||||||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS | 9,435 | 5.0 | 222 | 0.2 | (128 | ) | (0.2 | ) | ||||||||||||||||
NET INCOME (LOSS) | 45,145 | 23.7 | (55,880 | ) | (35.0 | ) | 1,280 | 2.0 | ||||||||||||||||
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST AND SUBSIDIARY PREFERRED SHARES | (757 | ) | (0.4 | ) | 6,795 | 4.2 | 1,370 | 2.1 | ||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO GIGAMEDIA | 44,388 | 23.3 | (49,085 | ) | (30.8 | ) | 2,650 | 4.1 | ||||||||||||||||
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• | the rate at which we enter into strategic transactions; |
• | the rate at which we expand our operations and employee base; |
• | the timing of entry into new markets and new services offered; |
• | changes in revenues and cost splits with our business partners; |
• | the rate at which we invest in developing and licensing our products and upgrading and maintaining our network and future technologies; and |
• | the rate at which we grow and monetize our customer bases. |
For the Year Ended December, 31 | ||||||||||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Net cash provided by (used in ) operating activities | $ | 50,750 | $ | 8,636 | $ | (8,922 | ) | |||||
Net cash provided by (used in ) investing activities | (6,420 | ) | (22,078 | ) | 50,022 | |||||||
Net cash provided by (used in ) financing activities | (17,876 | ) | 8,426 | (12,364 | ) | |||||||
Exchange difference | 936 | (356 | ) | (410 | ) | |||||||
Cash balance included in assets held for sale and retained ownership of gaming software and service business | — | (35,015 | ) | — | ||||||||
Deconsolidation of T2CN | — | — | (12,903 | ) | ||||||||
Net increase (decrease) in cash and cash equivalent | 27,390 | (40,387 | ) | 15,423 | ||||||||
Cash and cash equivalents at beginning of year | 68,563 | 95,953 | 55,566 | |||||||||
Cash and cash equivalents at end of year | $ | 95,953 | $ | 55,566 | $ | 70,989 | ||||||
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Payment Due by Period (in US$ thousand) | ||||||||||||||||||||
Within 1 year | 1-3 years | 3-5 years | >5 years | Total | ||||||||||||||||
1. Operating leases | 1,151 | 683 | 239 | 1,236 | 3,309 | |||||||||||||||
2. License fees* | 741 | 500 | 500 | — | 1,741 | |||||||||||||||
3. Minimum guarantees against royalties | 9,633 | 5,500 | — | — | 15,133 | |||||||||||||||
Total contractual cash obligations | 11,525 | 6,683 | 739 | 1,236 | 20,183 | |||||||||||||||
4. Other liabilities-accrued pension liabilities | — | — | — | 44 | 44 | |||||||||||||||
* | According to our license contracts, the total license fee payable, assuming all milestones or conditions under such license contracts were met, is approximately US$6.9 million. Considering game performance, industry environment and business situation, management determined that certain license fees will unlikely become payable and such amount have not been included in the above table. |
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Year Appointed to | ||||||||
Name | Age | Position | Current Position | |||||
DING, Michael Y.J. | 54 | Chairman of the Board, Chairman of the Audit Committee of the Board and Independent Non-Executive Director | 2009/2003 | |||||
LEE, Yichin | 50 | Chief Executive Officer and Director | 2011*/2003 | |||||
HUI, Thomas T. | 39 | Director, President and Chief Operating Officer | 2005/2007 | |||||
WANG, Arthur M. | 50 | Director | 2003 | |||||
CHIEN, Mo-Na | 67 | Chairman of the Compensation of the Board and Independent Non-Executive Director | 2011**/2010 | |||||
LEE, Howe Yong | 55 | Independent Non-Executive Director | 2004 | |||||
HUANG, John Ping Chang | 59 | Independent Non-Executive Director | 2011 | *** | ||||
LIU, Nick Chia-En | 49 | Independent Non-Executive Director | 2011 | **** | ||||
TANG, Quincy Li Zhong | 48 | Chief Financial Officer | 2008 | |||||
WONG, Lester A. | 44 | General Counsel | 2008 | |||||
LEE, John Francis Woon-Jae | 40 | Chief Strategy Officer and Head of International Business | 2008 |
* | Mr. LEE Yichin was appointed as Chief Executive Officer of our Company following the resignation of Mr. WANG Arthur M., the former Chief Executive Officer, on March 15, 2011. | |
** | Mr. CHIEN Mo-Na was appointed as Chairman of the Compensation Committee of the Board on March 15, 2011 following the resignation of Mr. LEE Yichin, the former Chairman of the Compensation Committee, on March 15, 2011. He was appointed as Independent Non-Executive Director of the Board on August 2, 2010. | |
*** | Mr. HUANG John Ping Chang was appointed as Independent Non-Executive Director of the Board on January 31, 2011. | |
**** | Mr. LIU Nick Chia-En was appointed as Independent Non-Executive Director of the Board on March 15, 2011. |
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Number of | Number of Shares | |||||||
Common | Issuable upon exercise | |||||||
Person | Shares | of options | ||||||
DING, Michael Y.J. | * | * | ||||||
WANG, Arthur M. | * | 2,409,000 | ||||||
HUI, Thomas T. | * | 2,300,000 | ||||||
HU ZEE, Nancy Jing-Ying | * | * | ||||||
LEE, Howe Yong | * | * | ||||||
LEE, John Francis Woon-Jae | 0 | * | ||||||
LEE, Yichin | * | 1,100,000 | ||||||
TANG, Quincy Li Zhong | 0 | * | ||||||
WONG, Lester A. | 0 | * | ||||||
CHIEN, Mo-Na | 0 | * | ||||||
HUANG, John Ping Chang | 0 | * | ||||||
LIU, Nick Chia-En | 0 | * | ||||||
Directors and Officers as a group | * | 6,924,000 |
* | Less than 1 percent |
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Options outstanding | Option currently exercisable | |||||||||||
Weighted average | ||||||||||||
No. of Shares | remaining contractual | No. of Shares | ||||||||||
Exercise price | (in thousands) | life | Exercise price | (in thousands) | ||||||||
Under $1 | 5,201 | 3.50 years | Under $1 | 5,201 | ||||||||
$1~$10 | 3,950 | 8.19 years | $1~$10 | 1,452 | ||||||||
$10~$20 | 629 | 6.65 years | $10~$20 | 537 | ||||||||
9,780 | 7,190 | |||||||||||
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Ordinary Shares | ||||||||||||
Underlying | ||||||||||||
Outstanding | Exercise Price | |||||||||||
Date of Grant | Options | ($/Share) | Date of Expiration | |||||||||
August 12, 2004 | 3,519,000 | 0.79 | June 29, 2014 | |||||||||
August 9, 2007 | 200,000 | 10.15 | August 9, 2017 | |||||||||
December 1, 2008 | 400,000 | 4.24 | June 29, 2017 | |||||||||
495,000 | 4.24 | June 19, 2018 | ||||||||||
May 13, 2010 | 1,250,000 | 2.47 | May 13, 2020 | |||||||||
March 15, 2011 | 1,000,000 | 1.05 | March 15, 2021 | |||||||||
May 20, 2011 | 60,000 | 1.25 | May 20, 2021 | |||||||||
Total | 6,924,000 | |||||||||||
Percentage of | ||||||||
Name of Owner | Shares Owned | Shares Owned | ||||||
Best Method Limited (1) | 10,799,999 | 19.19 | % | |||||
Martin Currie Investment Management Ltd.(2) | 5,181,665 | 9.21 | % |
(1) | Through Best Method Limited, a British Virgin Islands company, Jeffrey Koo, Jr. and Andre Koo jointly have a beneficial ownership of 10,799,999 common shares of our Company. | |
(2) | Martin Currie Investment Management Ltd. owns 901,270 common shares of our Company through its wholly owned subsidiary Martin Currie China Ltd. |
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Common Shares | ||||||||
High | Low | |||||||
Year Ending December 31 | (in US$) | |||||||
2005 | $ | 2.99 | $ | 1.30 | ||||
2006 | $ | 12.38 | $ | 2.90 | ||||
2007 | $ | 24.61 | $ | 9.28 | ||||
2008 | $ | 20.70 | $ | 2.90 | ||||
2009 | $ | 7.47 | $ | 3.04 | ||||
2010 | $ | 3.32 | $ | 1.40 |
Common Shares | ||||||||
High | Low | |||||||
Year Ending December 31, 2010 | (in US$) | |||||||
First quarter | $ | 3.32 | $ | 2.74 | ||||
Second quarter | $ | 3.25 | $ | 2.03 | ||||
Third quarter | $ | 2.34 | $ | 1.91 | ||||
Fourth quarter | $ | 2.10 | $ | 1.40 |
Common Shares | ||||||||
High | Low | |||||||
Year Ending December 31, 2011 | (in US$) | |||||||
First quarter | $ | 1.56 | $ | 1.03 | ||||
Second quarter (through June 24, 2011) | $ | 1.60 | $ | 1.11 |
Common Shares | ||||||||
High | Low | |||||||
Monthly Highs and Lows | (in US$) | |||||||
December 2010 | $ | 1.60 | $ | 1.45 | ||||
January 2011 | $ | 1.56 | $ | 1.14 | ||||
February 2011 | $ | 1.28 | $ | 1.13 | ||||
March 2011 | $ | 1.48 | $ | 1.03 | ||||
April 2011 | $ | 1.60 | $ | 1.21 | ||||
May 2011 | $ | 1.47 | $ | 1.22 | ||||
June 2011 (only through June 24, 2011) | $ | 1.29 | $ | 1.11 |
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• | the dividends are received from a jurisdiction with a maximum tax rate on the trade or business income of a company of at least 15 percent; and | ||
• | the dividends themselves, or the income from which they are paid, have been subject to tax in the foreign jurisdiction or have been exempted from tax under an incentive granted for substantive business activities. |
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• | bank; |
• | broker-dealer; |
• | financial institution or insurance company; |
• | tax-exempt entity; |
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• | person holding Shares as part of a straddle, hedge, conversion or other integrated investment; |
• | a person owning, actually or constructively, 10 percent or more of the combined voting power of all classes of our stock; or |
• | a person whose “functional currency” is not the U.S. dollar. |
• | individual who is a citizen or resident of the United States; |
• | corporation, or other entity treated as a corporation, created or organized under the laws of the United States or any political subdivision thereof; |
• | estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | trust if (1) it is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) it has otherwise elected to be treated as a U.S. person under the Internal Revenue Code. |
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For the Years Ended December 31, | 2009 | 2010 | ||||||
(in US$) | (in US$) | |||||||
Audit Fees | 994,207 | 833,796 | ||||||
Audit-Related Fees | 12,746 | 43,229 | ||||||
Tax Fees | 23,123 | 18,676 | ||||||
All Other Fees | 0 | 0 |
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Page | ||||
(a) Report of Independent Registered Public Accounting Firm | F-1–F-2 | |||
(b) Consolidated Balance Sheets as of December 31, 2009 and 2010 | F-3–F-4 | |||
(c) Consolidated Statements of Operations for the years ended December 31, 2008, 2009 and 2010 | F-5 | |||
(d) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2008, 2009 and 2010 | F-6 | |||
(e) Consolidated Statements of Equity for the years ended December 31, 2008, 2009 and 2010 | F-7 | |||
(f) Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2009 and 2010 | F-8–F-9 | |||
(g) Notes to the consolidated financial statements | F-10–F-101 |
EXHIBIT | INDEX | |||
1.1 | Amended Memorandum and Articles of Association of our Company, incorporated by reference to Exhibit 1.3 to our annual report for the year 2006 on Form 20-F filed with the SEC on June 29, 2007 | |||
4.1 | End-User License Agreement between Internet Media Licensing Limited and Ultra Internet Media, S.A., dated April 1, 2004, incorporated by reference to Exhibit 4.41 to our annual report for the year 2004 on Form 20-F filed with the SEC on June 30, 2005 | |||
4.2 | Second Amendment to the End-User License Agreement between Internet Media Licensing Limited and Ultra Internet Media, S.A., dated March 1, 2006, incorporated by reference to Exhibit 4.41 to our annual report for the year 2005 on Form 20-F filed with the SEC on June 28, 2006 | |||
4.3 | Third Amendment to the End-User License Agreement between Internet Media Licensing Limited and Ultra Internet Media, S.A., dated March 1, 2007, incorporated by reference to Exhibit 4.50 to our annual report for the year 2006 on Form 20-F filed with the SEC on June 29, 2007 |
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EXHIBIT | INDEX | |||
4.4 | Fourth Amendment to the End-User License Agreement between Internet Media Licensing Limited and Ultra Internet Media, S.A., dated March 1, 2008, incorporated by reference to Exhibit 4.4 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2007 | |||
4.5 | Exclusive Business Consultancy Service Agreement between T2 Technology and T2 Entertainment, dated November 15, 2006, incorporated by reference to Exhibit 4.55 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.6 | Supplemental Agreement to Exclusive Business Consultancy Service Agreement between T2 Technology and T2 Entertainment, dated April 1, 2007, incorporated by reference to Exhibit 4.56 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.7 | Exclusive Technical Service and Consultancy Agreement between T2 Entertainment and T2 Technology, dated November 15, 2006, incorporated by reference to Exhibit 4.57 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.8 | Supplemental Agreement to Exclusive Technical Service and Consultancy Agreement between T2 Entertainment and T2 Technology, dated April 1, 2007, incorporated by reference to Exhibit 4.58 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.9 | Agreement for Pledge of Shares in T2 Entertainment between Wang Chi, Lu Ning and T2 Technology, dated February 9, 2007, incorporated by reference to Exhibit 4.59 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.10 | Exclusive Call Option Agreement regarding T2 Entertainment between Wang Chi, Lu Ning, T2 Entertainment and T2 Technology, dated February 9, 2007, incorporated by reference to Exhibit 4.60 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.11 | Proxy Voting Agreement regarding T2 Entertainment between T2 Technology, T2 Entertainment, Wang Chi and Lu Ning, dated February 9, 2007, incorporated by reference to Exhibit 4.61 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.12 | Exclusive Business Consultancy Service Agreement between T2 Technology and T2 Advertisement, dated November 15, 2006, incorporated by reference to Exhibit 4.62 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.13 | Supplemental Agreement to Exclusive Business Consultancy Service Agreement between T2 Technology and T2 Advertisement, dated January 1, 2007, incorporated by reference to Exhibit 4.63 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.14 | Agreement for Pledge of Shares in T2 Advertisement between Chi Min, Chang Tao and T2 Technology, dated March 20, 2008, incorporated by reference to Exhibit 4.64 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.15 | Exclusive Call Option Agreement regarding T2 Advertisement between Chi Min, Chang Tao, T2 Advertisement and T2 Technology, dated March 20, 2008, incorporated by reference to Exhibit 4.65 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.16 | Proxy Voting Agreement regarding T2 Advertisement between T2 Technology, T2 Advertisement, Chi Min and Chang Tao, dated March 20, 2008, incorporated by reference to Exhibit 4.66 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.17 | Share Purchase Agreement between William Zhu and GigaMedia China Limited, dated June 3, 2007, incorporated by reference to Exhibit 4.67 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.18 | Share Purchase Agreement between Yu-Chia Lee and GigaMedia China Limited, dated June 6, 2007, incorporated by reference to Exhibit 4.68 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 |
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EXHIBIT | INDEX | |||
4.19 | Share Purchase Agreement between Zheng Bin and GigaMedia China Limited, dated June 10, 2007, incorporated by reference to Exhibit 4.69 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.20 | Share Purchase Agreement between J&R Music LLC, Ya-Tsen Lin and GigaMedia China Limited, dated July 5, 2007, incorporated by reference to Exhibit 4.70 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.21 | Share Purchase Agreement between Kingland Overseas Development Inc. and GigaMedia China Limited, dated July 6, 2007, incorporated by reference to Exhibit 4.71 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.22 | Share Purchase Agreement between Jim Ji Wang and GigaMedia China Limited, dated July 6, 2007, incorporated by reference to Exhibit 4.72 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.23 | Share Purchase Agreement between Marvel City Investments Limited and GigaMedia China Limited, dated May 26, 2008, incorporated by reference to Exhibit 4.73 to our annual report for the year 2007 on Form 20-F filed with the SEC on June 30, 2008 | |||
4.24 | Agreement for Pledge of Shares in Jinyou among Yang Zhuojun, Tan Yihui and T2 Technology, dated June 15, 2009, incorporated by reference to Exhibit 4.24 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.25 | Exclusive Call Option Agreement regarding Jinyou among Yang Zhuojun, Tan Yihui, Jinyou and T2 Technology, dated June 15, 2009, incorporated by reference to Exhibit 4.25 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.26 | Proxy Voting Agreement regarding Jinyou among T2 Technology, Jinyou, Yang Zhuojun and Tan Yihui, dated June 15, 2009, incorporated by reference to Exhibit 4.26 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.27 | Exclusive Business Consultancy Service Agreement between T2 Technology and Jinyou, dated November 26, 2007, incorporated by reference to Exhibit 4.27 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.28 | Exclusive Technical Service and Consultancy Agreement between Jinyou and T2 Technology, dated November 26, 2007, incorporated by reference to Exhibit 4.28 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.29 | Share Sales and Purchase Agreement among Champion Limited, Gigamedia International Holdings Limited and GigaMedia, dated August 28, 2008, incorporated by reference to Exhibit 4.29 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.30 | Share Sales and Purchase Agreement between China Network Systems Co., Ltd. and Hoshin GigaMedia, dated August 28, 2008, incorporated by reference to Exhibit 4.30 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.31 | Asset Sale and Purchase Agreement among Ko Ying, Hoshin GigaMedia and China Network Systems Co., Ltd., dated August 28, 2008, incorporated by reference to Exhibit 4.31 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.32 | Transitional Service Agreement among Ko Ying, Hoshin GigaMedia and KBT, dated September 3, 2008, incorporated by reference to Exhibit 4.32 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 | |||
4.33 | Assignment and Assumption Agreement between Hoshin GigaMedia and Hoshin Multimedia, dated September 3, 2008, incorporated by reference to Exhibit 4.33 to our annual report for the year 2008 on Form 20-F filed with the SEC on June 26, 2009 |
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EXHIBIT | INDEX | |||
4.34 | Subscription Agreement between IAHGames and GigaMedia Asia Pacific Limited, dated April 30, 2010, incorporated by reference to Exhibit 4.34 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.35 | The Amendment to the Subscription Agreement between IAHGames and GigaMedia Asia Pacific Limited, dated June 25, 2010, incorporated by reference to Exhibit 4.35 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.36 | Share Purchase Agreement between Infocomm Investments Pte Ltd and GigaMedia Asia Pacific Limited, dated April 30, 2010, incorporated by reference to Exhibit 4.36 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.37 | Share Purchase Agreement between Bodhi Investments LLC and GigaMedia Asia Pacific Limited, dated April 30, 2010, incorporated by reference to Exhibit 4.37 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.38 | Deed of Guarantee, Undertaking and Indemnity among GigaMedia Asia Pacific Limited, Management Capital International Ltd and China Interactive Limited, dated April 30, 2010, incorporated by reference to Exhibit 4.38 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.39 | Shareholder Loan Agreement between GigaMedia Asia Pacific Limited and IAHGames, dated April 30, 2010, incorporated by reference to Exhibit 4.39 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.40 | Loan Assignment Agreement among GigaMedia Asia Pacific Limited, IAHGames and Spring Asia Limited, dated June 1, 2010, incorporated by reference to Exhibit 4.40 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.41 | Loan Agreement between Spring Asia Limited and IAHGames, dated May 20, 2010, incorporated by reference to Exhibit 4.41 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.42 | Stock and Asset Purchase Agreement among BetClic, GigaMedia Limited, UIM and the Other Parties Named Thereto dated December 15, 2009 and Amendment No.1 to Stock and Asset Purchase Agreement, dated March 31, 2010, incorporated by reference to Exhibit 4.42 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.43 | Fifth Amendment to the End-User License Agreement between Internet Media Licensing Limited and Ultra Internet Media, S.A., dated April 1, 2009, incorporated by reference to Exhibit 4.43 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.44 | Share Purchase Agreement between China Interactive Limited and GigaMedia Asia Pacific Limited, dated June 30, 2010, incorporated by reference to Exhibit 4.44 to our annual report for the year 2009 on Form 20-F filed with the SEC on June 30, 2010 | |||
4.45 | Instrument Constituting Warrants to Subscribe for Shares in IAHGames among IAHGames, Management Capital International Limited and Mr. Ong Toon Wan, dated April 30, 2010# | |||
4.46 | Deed of Amendment among IAHGames, Management Capital International Limited and Mr. Ong Toon Wan, dated May 20, 2010# | |||
4.47 | Security over Shares Agreement between IAHGames and Blizzard, dated April 30, 2010# | |||
4.48 | Deed of Undertaking between GigaMedia Asia Pacific Limited and Blizzard, dated April 30, 2010# | |||
4.49 | Prepayment Agreement between GigaMedia (HK) Limited and Mi Saiyu, dated September 18, 2010# | |||
4.50 | Prepayment Agreement between GigaMedia (HK) Limited and Song Yunv, dated October 12, 2010# | |||
4.51 | Authorization and Proxy Letter by Mi Saiyu, dated December 6, 2010# | |||
4.52 | Authorization and Proxy Letter by Song Yunv, dated December 6, 2010# | |||
4.53 | Exclusive Technical Services Agreement between JIDI and Shanghai JIDI, dated January 1, 2011# |
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EXHIBIT | INDEX | |||
8.1 | List of Subsidiaries# | |||
12.1 | Certification by our Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act# | |||
12.2 | Certification by our Chief Financial Officer pursuant to Rule13a-14(b) of the Securities Exchange Act# | |||
13.1 | Certification by our Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002# | |||
13.2 | Certification by our Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002# | |||
15.1 | Consent of GHP Horwath, P.C., Independent Registered Public Accounting Firm# | |||
15.2 | Consent of Crowe Horwath First Trust LLP, Independent Auditors | |||
15.3 | Consent of GHP Horwath, P.C., Independent Auditors | |||
18.1 | Financial Statements of Monsoon Online Pte. Ltd. for the financial period from October 22, 2009 (the date of incorporation) to December 31, 2010 # | |||
18.2 | Consolidated financial statements of Mangas Everest S.A.S. as of and for the nine-months ended December 31, 2010 # |
# | Filed herewith. |
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By: | /s/ Yichin LEE | |||
Chief Executive Officer | ||||
Date: June 30, 2011 |
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CONSOLIDATED FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DECEMBER 31, 2009 AND 2010 AND
FOR THE YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Table of Contents
GHP Horwath, P.C. Member Crowe Horwath International 1670 Broadway, Suite 3000 Denver, Colorado 80202 +1 303.831.5000 +1 303.831.5032 Fax www.GHPHorwath.com |
GigaMedia Limited
A GHP Financial Group Company GHP Horwath, P.C. is an independent member firm of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. |
F-1
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June 30, 2011
F-2
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CONSOLIDATED BALANCE SHEETS
December 31, 2009 and 2010
(in thousands)
December 31 | ||||||||
2009 | 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents (Note 11) | $ | 55,566 | $ | 70,989 | ||||
Marketable securities-current (Note 12) | 3,486 | 3,553 | ||||||
Accounts receivable-net (Note 13) | 4,228 | 9,506 | ||||||
Prepaid expenses | 1,204 | 1,996 | ||||||
Restricted cash (Note 17) | 932 | 5,000 | ||||||
Assets held for sale-current (Note 6) | 35,444 | — | ||||||
Other current assets (Notes 14 and 25) | 3,979 | 2,044 | ||||||
Total Current Assets | 104,839 | 93,088 | ||||||
Marketable securities-noncurrent (Note 15) | 18,356 | 33,389 | ||||||
Investments (Note 16) | 3,477 | 66,774 | ||||||
Retained ownership of gaming software and service business (Note 6) | 25,951 | — | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||||
Land and buildings | 1,171 | 1,286 | ||||||
Information and communication equipment | 6,928 | 5,892 | ||||||
Office furniture and fixtures | 915 | 907 | ||||||
Leasehold improvements | 2,643 | 2,133 | ||||||
Other | 148 | 1,073 | ||||||
11,805 | 11,291 | |||||||
Less: Accumulated depreciation | ( 5,816 | ) | ( 5,990 | ) | ||||
5,989 | 5,301 | |||||||
GOODWILL (Note 7) | 44,417 | 39,493 | ||||||
INTANGIBLE ASSETS-NET (Note 8) | 18,924 | 19,769 | ||||||
ASSETS HELD FOR SALE-NONCURRENT (Note 6) | 31,301 | — | ||||||
OTHER ASSETS | ||||||||
Refundable deposits | 1,079 | 2,163 | ||||||
Prepaid licensing and royalty fees (Notes 9 and 27) | 5,557 | 4,214 | ||||||
Other (Note 25 and 26) | 291 | 3,398 | ||||||
Total Other Assets | 6,927 | 9,775 | ||||||
TOTAL ASSETS | $ | 260,181 | $ | 267,589 | ||||
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CONSOLIDATED BALANCE SHEETS-(Continued)
December 31, 2009 and 2010
(in thousands)
December 31 | ||||||||
2009 | 2010 | |||||||
LIABILITIES & EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 591 | $ | 4,305 | ||||
Accrued compensation | 2,814 | 4,239 | ||||||
Accrued expenses (Note 18) | 6,719 | 10,986 | ||||||
Short-term borrowings (Notes 17 and 26) | 22,503 | 12,413 | ||||||
Liabilities held for sale-current (Note 6) | 26,458 | — | ||||||
Other current liabilities (Notes 19 and 25) | 13,244 | 11,350 | ||||||
Total Current Liabilities | 72,329 | 43,293 | ||||||
OTHER LIABILITIES | ||||||||
Accrued pension liabilities (Note 20) | 83 | 44 | ||||||
Liabilities held for sale-noncurrent (Note 6) | 1,360 | — | ||||||
Other (Note 21 and 25) | 49 | 7,686 | ||||||
Total Other Liabilities | 1,492 | 7,730 | ||||||
Total Liabilities | 73,821 | 51,023 | ||||||
COMMITMENTS AND CONTINGENCIES (Notes 27 and 28) | — | — | ||||||
SUBSIDIARY PREFERRED SHARES (Note 22) | ||||||||
Par value $1, redeemable; convertible; issued and outstanding 2,018 thousand shares on December 31, 2010 | — | 1,465 | ||||||
EQUITY (Note 23) | ||||||||
GigaMedia Shareholders’ Equity: | ||||||||
Common shares, no par value, and additional paid-in capital; issued and outstanding 54,995 thousand and 56,263 thousand shares on December 31, 2009 and 2010 | 304,379 | 309,332 | ||||||
Accumulated deficit | (94,389 | ) | (91,739 | ) | ||||
Accumulated other comprehensive loss | (25,245 | ) | (72 | ) | ||||
Total GigaMedia shareholders’ equity | 184,745 | 217,521 | ||||||
Noncontrolling interest | 1,615 | (2,420 | ) | |||||
Total Equity | 186,360 | 215,101 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 260,181 | $ | 267,589 | ||||
F-4
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CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2008, 2009 and 2010
(in thousands except for earnings per share amounts)
2008 | 2009 | 2010 | ||||||||||
OPERATING REVENUES | ||||||||||||
Gaming software and service revenues | $ | 144,765 | $ | 112,694 | $ | 25,820 | ||||||
Asian online game and service revenues | 45,604 | 46,887 | 38,862 | |||||||||
Total | 190,369 | 159,581 | 64,682 | |||||||||
OPERATING COSTS | ||||||||||||
Cost of gaming software and service revenues | (22,770 | ) | (20,102 | ) | (4,010 | ) | ||||||
Cost of Asian online game and service revenues | (12,404 | ) | (16,785 | ) | (17,103 | ) | ||||||
(35,174 | ) | (36,887 | ) | (21,113 | ) | |||||||
GROSS PROFIT | 155,195 | 122,694 | 43,569 | |||||||||
OPERATING EXPENSES | ||||||||||||
Product development and engineering expenses | (13,455 | ) | (14,195 | ) | (7,301 | ) | ||||||
Selling and marketing expenses | (74,173 | ) | (79,421 | ) | (21,589 | ) | ||||||
General and administrative expenses | (25,035 | ) | (29,692 | ) | (31,780 | ) | ||||||
Bad debt expenses (Notes 13 and 14) | (2,905 | ) | (1,092 | ) | (1,639 | ) | ||||||
Impairment loss on property, plant and equipment (Note 10) | — | (1,250 | ) | (278 | ) | |||||||
Impairment loss on goodwill (Note 10) | — | (14,103 | ) | (2,255 | ) | |||||||
Impairment loss on prepaid licensing fees and intangible assets (Note 10) | (1,524 | ) | (23,002 | ) | (2,200 | ) | ||||||
Impairment loss on deconsolidation of T2CN (Note 5 and 10) | — | — | (22,234 | ) | ||||||||
Other | — | — | (1,989 | ) | ||||||||
(117,092 | ) | (162,755 | ) | (91,265 | ) | |||||||
INCOME (LOSS) FROM OPERATIONS | 38,103 | (40,061 | ) | (47,696 | ) | |||||||
NON-OPERATING INCOME (EXPENSES) | ||||||||||||
Interest income | 1,460 | 432 | 956 | |||||||||
Gain on sales of marketable securities | 373 | — | — | |||||||||
Interest expense | (976 | ) | (390 | ) | (370 | ) | ||||||
Foreign exchange (loss) gain | 240 | 168 | (606 | ) | ||||||||
Loss on disposal of property, plant and equipment | (253 | ) | (31 | ) | (125 | ) | ||||||
Loss on equity method investments — net | (3,010 | ) | (87 | ) | (20,770 | ) | ||||||
Impairment loss on marketable securities and investments (Note 10) | — | (15,743 | ) | (4,677 | ) | |||||||
Gain on deconsolidation of the gaming software and service business (Note 6) | — | — | 79,140 | |||||||||
Gain on fair value changes of warrant derivative (Note 10) | — | — | 2,595 | |||||||||
Other | 842 | 127 | 221 | |||||||||
(1,324 | ) | (15,524 | ) | 56,364 | ||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 36,779 | (55,585 | ) | 8,668 | ||||||||
INCOME TAX EXPENSE (Note 25) | (1,069 | ) | (517 | ) | (7,260 | ) | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 35,710 | (56,102 | ) | 1,408 | ||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS — NET OF TAX (Note 6) | 9,435 | 222 | (128 | ) | ||||||||
NET INCOME (LOSS) | 45,145 | (55,880 | ) | 1,280 | ||||||||
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO THE NONCONTROLLING INTEREST AND SUBSIDIARY PREFERRED SHARES | (757 | ) | 6,795 | 1,370 | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO GIGAMEDIA | $ | 44,388 | $ | (49,085 | ) | $ | 2,650 | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO GIGAMEDIA: | ||||||||||||
Income (loss) from continuing operations — net of tax | $ | 34,953 | $ | (49,307 | ) | $ | 2,778 | |||||
Income (loss) from discontinued operations — net of tax | 9,435 | 222 | (128 | ) | ||||||||
$ | 44,388 | $ | (49,085 | ) | $ | 2,650 | ||||||
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO GIGAMEDIA | ||||||||||||
Basic: | ||||||||||||
Income (loss) from continuing operations | $ | 0.65 | $ | (0.90 | ) | $ | 0.05 | |||||
Income from discontinued operations | 0.17 | — | — | |||||||||
Net income (loss) | $ | 0.82 | $ | (0.90 | ) | $ | 0.05 | |||||
Diluted: | ||||||||||||
Income (loss) from continuing operations | $ | 0.58 | $ | (0.90 | ) | $ | 0.04 | |||||
Income from discontinued operations | 0.16 | — | — | |||||||||
Net income (loss) | $ | 0.74 | $ | (0.90 | ) | $ | 0.04 | |||||
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO GIGAMEDIA (Note 2) | ||||||||||||
Basic | 54,110 | 54,524 | 55,834 | |||||||||
Diluted | 60,152 | 54,524 | 59,291 | |||||||||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2008, 2009 and 2010
(in thousands)
2008 | 2009 | 2010 | ||||||||||
NET INCOME (LOSS) | $ | 45,145 | $ | (55,880 | ) | $ | 1,280 | |||||
OTHER COMPREHENSIVE INCOME-NET OF TAX: | ||||||||||||
Unrealized gain (loss) on marketable securities | (282 | ) | 67 | 21,789 | ||||||||
Defined benefit pension plan adjustment | 95 | (68 | ) | 31 | ||||||||
Foreign currency translation adjustments | 893 | 1,003 | 4,756 | |||||||||
Deconsolidation of T2CN | — | — | (1,311 | ) | ||||||||
706 | 1,002 | 25,265 | ||||||||||
COMPREHENSIVE INCOME (LOSS) | 45,851 | (54,878 | ) | 26,545 | ||||||||
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO THE NONCONTROLLING INTEREST AND SUBSIDIARY PREFERRED SHARES | (1,288 | ) | 6,809 | 1,278 | ||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO GIGAMEDIA | $ | 44,563 | $ | (48,069 | ) | $ | 27,823 | |||||
F-6
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CONSOLIDATED STATEMENTS OF EQUITY
For the Years Ended December 31, 2008, 2009 and 2010
(in thousands, except per share amounts)
GIGAMEDIA SHAREHOLDERS | ||||||||||||||||||||||||
Common shares | Accumulated other | |||||||||||||||||||||||
and additional paid-in capital | Accumulated | comprehensive | Noncontrolling | |||||||||||||||||||||
Shares | Amount | deficit (Note 23) | income (loss) | interest | Total | |||||||||||||||||||
Balance as of January 1, 2008 | 53,700 | $ | 296,793 | $ | (89,692 | ) | $ | (26,436 | ) | $ | 9,810 | $ | 190,475 | |||||||||||
Issuance of common shares from exercise of stock options and RSUs | 665 | 495 | — | — | — | 495 | ||||||||||||||||||
Stock-based compensation | — | 2,733 | — | — | 79 | 2,812 | ||||||||||||||||||
Purchase of T2CN common shares from noncontrolling interest and T2CN buy back and cancellation of its common shares | — | — | — | — | (2,257 | ) | (2,257 | ) | ||||||||||||||||
Cash dividend to noncontrolling interest shareholders of variable interest entity | — | — | — | — | (300 | ) | (300 | ) | ||||||||||||||||
Net income | — | — | 44,388 | — | 757 | 45,145 | ||||||||||||||||||
Components of other comprehensive income (loss): | ||||||||||||||||||||||||
Change in unrealized gain (loss) on marketable securities | — | — | — | (282 | ) | — | (282 | ) | ||||||||||||||||
Defined benefit pension plan adjustment | — | — | — | 95 | — | 95 | ||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 362 | 531 | 893 | ||||||||||||||||||
Total comprehensive income | — | — | — | — | — | 45,851 | ||||||||||||||||||
Balance as of December 31, 2008 | 54,365 | 300,021 | (45,304 | ) | (26,261 | ) | 8,620 | 237,076 | ||||||||||||||||
Issuance of common shares from exercise of stock options and RSUs | 630 | 1,320 | — | — | — | 1,320 | ||||||||||||||||||
Stock-based compensation | — | 3,150 | — | — | 127 | 3,277 | ||||||||||||||||||
Purchase of T2CN common shares from noncontrolling interest | — | (112 | ) | — | — | (173 | ) | (285 | ) | |||||||||||||||
Cash dividend to noncontrolling interest shareholders of variable interest entity | — | — | — | — | (150 | ) | (150 | ) | ||||||||||||||||
Net loss | — | — | (49,085 | ) | — | (6,795 | ) | (55,880 | ) | |||||||||||||||
Components of other comprehensive income (loss): | ||||||||||||||||||||||||
Change in unrealized gain (loss) on marketable securities | — | — | — | 67 | — | 67 | ||||||||||||||||||
Defined benefit pension plan adjustment | — | — | — | (68 | ) | — | (68 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | 1,017 | (14 | ) | 1,003 | |||||||||||||||||
Total comprehensive loss | — | — | — | — | — | (54,878 | ) | |||||||||||||||||
Balance as of December 31, 2009 | 54,995 | 304,379 | (94,389 | ) | (25,245 | ) | 1,615 | 186,360 | ||||||||||||||||
Issuance of common shares from exercise of stock options and RSUs | 402 | 174 | — | — | — | 174 | ||||||||||||||||||
Stock-based compensation | — | 2,961 | — | — | 53 | 3,014 | ||||||||||||||||||
Acquisition of IAHGames (Note 4) | 866 | 2,192 | — | — | 1,192 | 3,384 | ||||||||||||||||||
Acquisition of UIM (Note 3) | — | 178 | — | — | (578 | ) | (400 | ) | ||||||||||||||||
Deconsolidation of T2CN (Note 5) | — | (552 | ) | — | — | (3,276 | ) | (3,828 | ) | |||||||||||||||
Cumulative dividend to subsidiary preferred shares (Note 22) | — | — | — | — | (148 | ) | (148 | ) | ||||||||||||||||
Net income | — | — | 2,650 | — | (1,370 | ) | 1,280 | |||||||||||||||||
Components of other comprehensive income (loss): | ||||||||||||||||||||||||
Change in unrealized gain (loss) on marketable securities | — | — | — | 21,789 | — | 21,789 | ||||||||||||||||||
Defined benefit pension plan adjustment | — | — | — | 31 | — | 31 | ||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 4,744 | 12 | 4,756 | ||||||||||||||||||
Deconsolidation of T2CN (Note 5) | — | — | — | (1,391 | ) | 80 | (1,311 | ) | ||||||||||||||||
Total comprehensive income | — | — | — | — | — | 26,545 | ||||||||||||||||||
Balance as of December 31, 2010 | 56,263 | $ | 309,332 | $ | (91,739 | ) | $ | (72 | ) | $ | (2,420 | ) | $ | 215,101 | ||||||||||
F-7
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2008, 2009 and 2010
(in thousands)
2008 | 2009 | 2010 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income (loss) | $ | 45,145 | $ | (55,880 | ) | $ | 1,280 | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation | 4,031 | 4,358 | 2,092 | |||||||||
Amortization | 4,342 | 5,219 | 2,779 | |||||||||
Stock-based compensation | 2,780 | 3,277 | 3,014 | |||||||||
Gain on deconsolidation of gaming software and service business | — | — | (79,140 | ) | ||||||||
Impairment loss on property, plant and equipment | — | 1,250 | 278 | |||||||||
Impairment loss on goodwill | — | 14,103 | 2,255 | |||||||||
Impairment loss on prepaid licensing fees and intangible assets | 1,524 | 23,002 | 2,200 | |||||||||
Provision for bad debt expenses | 2,953 | 1,092 | 1,639 | |||||||||
Gain on divestiture of business | (11,014 | ) | — | — | ||||||||
Loss on disposal of property, plant and equipment | 282 | 31 | 125 | |||||||||
Gain on sale of marketable securities | (400 | ) | — | — | ||||||||
Loss on equity method investments | 3,010 | 87 | 20,770 | |||||||||
Impairment loss on marketable securities and investments | — | 15,743 | 4,677 | |||||||||
Impairment loss on deconsolidation of T2CN | — | — | 22,234 | |||||||||
Gain on fair value changes of warrant derivative | — | — | (2,595 | ) | ||||||||
Other | 300 | 25 | (125 | ) | ||||||||
Net changes in operating assets and liabilities, net of business acquisitions and divestitures: | ||||||||||||
Accounts receivable | 465 | (5,015 | ) | 3,263 | ||||||||
Prepaid expenses | (4,373 | ) | 1,061 | (2,992 | ) | |||||||
Other current assets | (2,304 | ) | (553 | ) | 2,215 | |||||||
Accounts payable | 33 | (298 | ) | 1,867 | ||||||||
Accrued expenses | 2,326 | 2,243 | 3,519 | |||||||||
Accrued compensation | (2,057 | ) | 386 | 1,667 | ||||||||
Player account balances | 5,691 | 2,187 | 229 | |||||||||
Other current liabilities | 336 | 1,500 | 4,568 | |||||||||
Accrued pension liabilities | (167 | ) | (25 | ) | (39 | ) | ||||||
Prepaid licensing and royalty fees | (4,685 | ) | (4,216 | ) | (3,855 | ) | ||||||
Other | 2,532 | (941 | ) | (847 | ) | |||||||
Net cash provided by (used in) operating activities | 50,750 | 8,636 | (8,922 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Decrease (increase) in restricted cash | 4,122 | 187 | (4,068 | ) | ||||||||
Cash dividends received from equity method investees | — | — | 945 | |||||||||
Proceeds from disposal of marketable securities | 25,095 | — | — | |||||||||
Divestiture of business, net of cash transferred | 16,471 | 1,006 | — | |||||||||
Purchase of property, plant and equipment | (8,814 | ) | (5,761 | ) | (3,784 | ) | ||||||
Proceeds from disposal of property, plant and equipment | 35 | 17 | 119 | |||||||||
Prodeeds from disposal of gaming software and service business, net of transaction costs | — | — | 85,669 | |||||||||
Purchase of marketable securities | (24,746 | ) | (7,052 | ) | (1,500 | ) | ||||||
Purchase of investments | (190 | ) | (2,612 | ) | (5,261 | ) | ||||||
Purchase of intangible assets | (7,509 | ) | (8,807 | ) | (2,317 | ) | ||||||
Acquisitions, net of cash acquired | (4,642 | ) | (285 | ) | (5,831 | ) | ||||||
Advances to equity investees | — | (637 | ) | (13,804 | ) | |||||||
Decrease (increase) in refundable deposits | (5,862 | ) | 1,986 | (146 | ) | |||||||
Other | (380 | ) | (120 | ) | — | |||||||
Net cash (used in) provided by investing activities | (6,420 | ) | (22,078 | ) | 50,022 | |||||||
F-8
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
For the Years Ended December 31, 2008, 2009 and 2010
(in thousands)
2008 | 2009 | 2010 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Proceeds from (repayment of) short-term borrowings | (18,058 | ) | 7,261 | (12,543 | ) | |||||||
Cash received from the exercise of stock options | 495 | 1,320 | 174 | |||||||||
Cash dividend to noncontrolling shareholders of variable interest entity | (300 | ) | (150 | ) | — | |||||||
Other | (13 | ) | (5 | ) | 5 | |||||||
Net cash (used in) provided by financing activities | (17,876 | ) | 8,426 | (12,364 | ) | |||||||
Exchange difference | 936 | (356 | ) | (410 | ) | |||||||
Cash balance included in assets held for sale and retained ownership of gaming software and service business | — | (35,015 | ) | — | ||||||||
Deconsolidation of T2CN | — | — | (12,903 | ) | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 27,390 | (40,387 | ) | 15,423 | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 68,563 | 95,953 | 55,566 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 95,953 | $ | 55,566 | $ | 70,989 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||
Interest paid during the year | $ | 1,008 | $ | 388 | $ | 313 | ||||||
Income tax paid during the year | $ | 1,412 | $ | 1,230 | $ | 3,799 | ||||||
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||||||||||||
Change in unrealized holding gain (loss) on available-for-sale securities | $ | (282 | ) | $ | 67 | $ | 21,789 | |||||
Issuance of common shares for acquisition | $ | — | $ | — | $ | 2,192 | ||||||
Divestiture of business — consideration receivable | $ | 1,006 | $ | — | $ | — | ||||||
F-9
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
NOTE 1. | BUSINESS OVERVIEW, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Categories | Years | |
Buildings | 50 | |
Information and communication equipment | 2 to 5 | |
Office furniture and equipment | 3 to 5 | |
Leasehold improvements | 3 to 5 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in thousand shares) | 2008 | 2009 | 2010 | |||||||||
Weighted average number of outstanding shares | ||||||||||||
Basic | 54,110 | 54,524 | 55,834 | |||||||||
Effect of dilutive securities | ||||||||||||
Employee share-based compensation | 6,042 | — | 3,457 | |||||||||
Diluted | 60,152 | 54,524 | 59,291 | |||||||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Total revenue | $ | 144,765 | $ | 112,694 | $ | 25,820 | ||||||
Net (loss) income | $ | (206 | ) | $ | (1,226 | ) | $ | 1,514 | ||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Total revenues | $ | 20,312 | $ | 18,673 | $ | 10,126 | ||||||
Net income (loss) | $ | 1,571 | $ | (2,990 | ) | $ | 834 | |||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Accumulated voting | ||||||||||
interest at those | ||||||||||
Date of acquisition | Amount | Description | points in time | |||||||
December 2006 | $ | 5,750 | * | Purchased 500,000 convertible voting preferred shares-Series B | 32.26 | % | ||||
May 2010 | $ | 2,192 | ** | Purchased 208,881 convertible voting preferred shares-Series B | 40.30 | % | ||||
July 2010 | $ | 4,500 | Purchased 5,982,230 convertible voting preferred shares-Series A | 57.87 | % | |||||
July 2010 | $ | 10,000 | Purchased 500,000 convertible voting preferred shares-Series B | 80.00 | % |
* | The original investment amount of $10 million was written down to $5.8 million, resulting from an impairment charge of $4.2 million recorded in 2009. | |
** | GigaMedia issued 866,373 common shares, valued at approximately $2.2 million as consideration. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Amortization life | ||||||
(in US$ thousands) | (in years) | Amount | ||||
Cash acquired | $ | 9,070 | ||||
Accounts receivable | 5,715 | |||||
Other current assets | 5,129 | |||||
Equity method investments | 20,319 | |||||
Fixed assets / non-current assets | 721 | |||||
Non-Compete Contracts | 3 | 387 | ||||
Favorable lease right | 13.5 | 2,861 | ||||
Prepaid licensing and royalty fees | 1.75 ~ 4 | 1,010 | ||||
Goodwill | N/A | 12,188 | ||||
Total assets acquired | 57,400 | |||||
Current liabilities | 23,304 | |||||
Noncurrent liabilities | 9,145 | |||||
Total liabilities assumed | 32,449 | |||||
Preferred shares (Series A) | (1,317 | ) | ||||
Noncontrolling interest | (1,192 | ) | ||||
Total purchase price | $ | 22,442 | ||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands, | Year ended December 31 | |||||||
except per share figures) | 2009 | 2010 | ||||||
Unaudited | Unaudited | |||||||
Net revenue | $ | 165,883 | $ | 69,403 | ||||
Loss from operations | (41,812 | ) | (50,378 | ) | ||||
Net loss | (56,226 | ) | (1,570 | ) | ||||
Net (loss) income attributable to GigaMedia | (49,574 | ) | 255 | |||||
Basic (loss) earnings per share attributable to GigaMedia | (0.89 | ) | 0.00 | |||||
Diluted (loss) earnings per share attributable to GigaMedia | (0.89 | ) | 0.00 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Accumulated voting | ||||||||||
Date of | interest at those | |||||||||
acquisition | Purchase Price | Description | points in time | |||||||
2006 | $ | 15,000 | Purchased 7,500,000 convertible voting preferred shares | 19.02 | % | |||||
2007 | $ | 23,736 | * | Acquired 31,113,681 common shares (including convertible voting preferred shares converted into common shares) in total. | 58.11 | % | ||||
2008 | $ | 3,375 | Purchased 4,500,000 common shares | 65.68 | % | |||||
2009 | $ | 285 | Purchased 520,000 common shares | 67.09 | % |
* | The purchase price includes the issuance of 226,385 common shares of GigaMedia, valued at approximately $2.7 million. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | Amount | |||
Cash | $ | 12,903 | ||
Other current assets | 1,266 | |||
Fixed assets / non-current assets | 1,679 | |||
Prepaid licensing and royalty | 5,339 | |||
Intangible assets | 1,098 | |||
Total assets of T2CN | 22,285 | |||
Total liabilities of T2CN | (12,331 | ) | ||
Net equity of T2CN | 9,954 | |||
Noncontrolling interest | (3,276 | ) | ||
Goodwill acquired | 17,500 | |||
Advances to the entities held by T2CN | 1,405 | |||
$ | 25,583 | |||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Revenue | $ | 9,289 | $ | 159 | $ | 146 | ||||||
(Loss) income from discontinued operations before tax | $ | (593 | ) | $ | 222 | $ | (128 | ) | ||||
Gain on sale of the discontinued operations before tax | 11,014 | — | — | |||||||||
Income tax expense | (986 | ) | — | — | ||||||||
Income (loss) from discontinued operations | $ | 9,435 | $ | 222 | $ | (128 | ) | |||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | Amount | |||
Assets Held for Sale-Current | ||||
Cash | $ | 35,015 | ||
Accounts receivable | 15,817 | |||
Prepaid expenses | 7,609 | |||
Other current assets | 632 | |||
Less: retained ownership | (23,629 | ) | ||
$ | 35,444 | |||
Assets Held for Sale-Noncurrent | ||||
Property, plant and equipment | $ | 7,358 | ||
Goodwill | 29,243 | |||
Intangible assets | 11,368 | |||
Other assets | 4,199 | |||
Less: retained ownership | (20,867 | ) | ||
$ | 31,301 | |||
Liabilities Held for Sale-Current | ||||
Accounts payable | $ | 11 | ||
Accrued compensation | 1,076 | |||
Accrued expenses | 6,869 | |||
Player account balances | 35,015 | |||
Other current liabilities | 1,126 | |||
Less: retained ownership | (17,639 | ) | ||
$ | 26,458 | |||
Liabilities Held for Sale-Noncurrent | ||||
Other liabilities | $ | 2,266 | ||
Less: retained ownership | (906 | ) | ||
$ | 1,360 | |||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | ||||
Retained ownership of gaming software and service business: | ||||
Current assets | $ | 23,629 | ||
Noncurrent assets | 20,867 | |||
Current liabilities | (17,639 | ) | ||
Noncurrent liabilities | (906 | ) | ||
$ | 25,951 | |||
(In US$ thousands) | Amount | |||
The fair value of any consideration received, including purchase price adjustments, net of any transaction costs | $ | 82,984 | ||
The fair value of the 40% retained noncontrolling investment in the gaming software and service business at the date the business was deconsolidated | 54,240 | |||
Less : The carrying amount of the gaming software and service business at the date of the deconsolidation | (58,084 | ) | ||
Gain on deconsolidation of the gaming software and services business | $ | 79,140 | ||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Gaming software | Asian online game | |||||||||||
(In US$ thousands) | and service | and service | Total | |||||||||
Balance as of December 31, 2008 | $ | 29,243 | $ | 57,855 | $ | 87,098 | ||||||
Impairment charge — T2CN (Note 10) | — | (14,103 | ) | (14,103 | ) | |||||||
Goodwill included in assets held for sale and retained ownership of gaming software and service business (Note 6) | (29,243 | ) | — | (29,243 | ) | |||||||
Translation adjustment | — | 665 | 665 | |||||||||
Balance as of December 31, 2009 | — | 44,417 | 44,417 | |||||||||
Acquisition — IAHGames (Note 4) | — | 12,188 | 12,188 | |||||||||
Impairment charge — T2CN (Note 5) | — | (17,500 | ) | (17,500 | ) | |||||||
Impairment charge — IAHGames (Note 10) | — | (2,255 | ) | (2,255 | ) | |||||||
Translation adjustment | — | 2,643 | 2,643 | |||||||||
Balance as of December 31, 2010 | $ | — | $ | 39,493 | $ | 39,493 | ||||||
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(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31, 2010 | ||||||||||||
Gross carrying | Accumulated | |||||||||||
(In US$ thousands) | amount | amortization | Net | |||||||||
Completed technology | $ | 2,595 | $ | (1,854 | ) | $ | 741 | |||||
Trade name, trademark and non-competition agreements | 12,248 | (40 | ) | 12,208 | ||||||||
Capitalized software cost | 6,599 | (5,388 | ) | 1,211 | ||||||||
Customer relationships | 6,255 | (3,475 | ) | 2,780 | ||||||||
Favorable lease right | 2,861 | (106 | ) | 2,755 | ||||||||
Other | 126 | (52 | ) | 74 | ||||||||
Total | $ | 30,684 | $ | (10,915 | ) | $ | 19,769 | |||||
December 31, 2009 | ||||||||||||
Gross carrying | Accumulated | |||||||||||
(In US$ thousands) | amount | amortization | Net | |||||||||
Completed technology | $ | 2,363 | $ | (1,350 | ) | $ | 1,013 | |||||
Trade name, trademark and non-competition agreements | 11,160 | (15 | ) | 11,145 | ||||||||
Capitalized software cost | 8,633 | (5,137 | ) | 3,496 | ||||||||
Customer relationships | 5,695 | (2,531 | ) | 3,164 | ||||||||
Other | 115 | (9 | ) | 106 | ||||||||
Total | $ | 27,966 | $ | (9,042 | ) | $ | 18,924 | |||||
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(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(In US$ thousands) | Amount | |||
2011 | $ | 1,770 | ||
2012 | 1,717 | |||
2013 | 1,295 | |||
2014 | 907 | |||
2015 | 212 | |||
Total | $ | 5,901 | ||
(in US$ thousands) | 2009 | 2010 | ||||||
Beginning balance | $ | 20,540 | $ | 5,557 | ||||
Additions | 5,484 | 3,987 | ||||||
Acqusition — IAHGames (Note 4) | — | 1,010 | ||||||
Amortization of licensing and royalty costs | (2,146 | ) | (573 | ) | ||||
Deconsolidation — T2CN (Note 5) | — | (5,339 | ) | |||||
Impairment charges (Note 10) | (18,301 | ) | (870 | ) | ||||
Translation adjustment | (20 | ) | 442 | |||||
Balance as of December 31 | $ | 5,557 | $ | 4,214 | ||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Year Ended | ||||||||||||||||
Fair Value Measurement Using | December | |||||||||||||||
(in US$ thousands) | Level 1 | Level 2 | Level 3 | 31, 2010 | ||||||||||||
Assets | ||||||||||||||||
Cash equivalents — time deposits | $ | — | $ | 1,012 | $ | — | $ | 1,012 | ||||||||
Marketable securities — current | ||||||||||||||||
Open-end fund | — | 3,553 | — | 3,553 | ||||||||||||
Marketable securities — noncurrent | ||||||||||||||||
Debt securities | — | — | 5,454 | 5,454 | ||||||||||||
Equity securities | 25,553 | 2,382 | — | 27,935 | ||||||||||||
Subtotal | 25,553 | 6,947 | 5,454 | 37,954 | ||||||||||||
Liabilties | ||||||||||||||||
Other liabilities — other Warrant derivative | — | — | (665 | ) | (665 | ) | ||||||||||
Total | $ | 25,553 | $ | 6,947 | $ | 4,789 | $ | 37,289 | ||||||||
Year Ended | ||||||||||||||||
Fair Value Measurement Using | December | |||||||||||||||
(in US$ thousands) | Level 1 | Level 2 | Level 3 | 31, 2009 | ||||||||||||
Assets | ||||||||||||||||
Marketable securities — current | $ | — | $ | 3,486 | $ | — | $ | 3,486 | ||||||||
Open-end fund | ||||||||||||||||
Marketable securities — noncurrent | ||||||||||||||||
Debt securities | — | — | 14,204 | 14,204 | ||||||||||||
Equity securities | 4,152 | — | — | 4,152 | ||||||||||||
Total | $ | 4,152 | $ | 3,486 | $ | 14,204 | $ | 21,842 | ||||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Fair Value Measurements | ||||||||
Using Significant Unobservable | ||||||||
Inputs | ||||||||
Marketable Securities - Debt | ||||||||
Securities | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Beginning balance | $ | 26,041 | $ | 14,204 | ||||
Total gains or losses (realized/unrealized) | ||||||||
included in earnings | (11,837 | ) | (4,500 | ) | ||||
included in other comprehensive income | — | — | ||||||
Purchase and settlements | — | 1,500 | ||||||
Transfers in and/or out of Level 3 | — | (5,750 | ) | |||||
Ending balance | $ | 14,204 | $ | 5,454 | ||||
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date | None | None | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Fair Value Measurements | ||||
Using Significant | ||||
Unobservable Inputs | ||||
(Level 3) | ||||
Other liabilities - Warrant | ||||
Derivative | ||||
(in US$ thousands) | 2010 | |||
Beginning balance | $ | — | ||
Total (gains) or losses (realized/unrealized) | ||||
included in earnings | (2,595 | ) | ||
included in other comprehensive income | — | |||
Purchase and settlements | 3,260 | |||
Transfers in and/or out of Level 3 | — | |||
Ending balance | $ | 665 | ||
The amount of total (gains) or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to liabilities still held at the reporting date | $ | (2,595 | ) | |
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Year Ended | Total | |||||||||||||||||||
Fair Value measurement Using | December | Impairment | ||||||||||||||||||
(in US$ thousands) | Level 1 | Level 2 | Level 3 | 31, 2010 | Losses | |||||||||||||||
Assets | ||||||||||||||||||||
(a) Investment — Equity method | $ | — | $ | — | $ | — | $ | — | $ | 177 | ||||||||||
(b) Property, plant and equipment - Information and communication equipment | — | — | — | — | 278 | |||||||||||||||
(c) Goodwill — Resulting from acquisition of IAH | — | — | 9,933 | 9,933 | 2,255 | |||||||||||||||
(d) Intangible assets — Capitalized software cost | — | — | — | — | 1,007 | |||||||||||||||
(d) Intangible assets - Non-Compete Contracts | — | — | — | — | 323 | |||||||||||||||
(e) Prepaid licensing and royalty | — | — | 200 | 200 | 870 | |||||||||||||||
(f) Investment in T2CN | — | — | — | — | 22,234 | |||||||||||||||
Total | $ | — | $ | — | $ | 10,133 | $ | 10,133 | $ | 27,144 | ||||||||||
Year Ended | Total | |||||||||||||||||||
Fair Value measurement Using | December | Impairment | ||||||||||||||||||
(in US$ thousands) | Level 1 | Level 2 | Level 3 | 31, 2009 | Losses | |||||||||||||||
Assets | ||||||||||||||||||||
(a) Investment — Cost method | $ | — | $ | — | $ | 700 | $ | 700 | $ | 1,005 | ||||||||||
(b) Property, plant and equipment - Land and Building | — | 1,171 | — | 1,171 | 473 | |||||||||||||||
(b) Property, plant and equipment - Information and communication equipment | — | — | 79 | 79 | 777 | |||||||||||||||
(c) Goodwill — Resulting from acquisition of T2CN | — | — | 17,500 | 17,500 | 14,103 | |||||||||||||||
(d) Intangible assets — Capitalized software cost | — | — | — | — | 4,701 | |||||||||||||||
(e) Prepaid licensing and royalty | — | — | — | — | 18,301 | |||||||||||||||
Total | $ | — | $ | 1,171 | $ | 18,279 | $ | 19,450 | $ | 39,360 | ||||||||||
(a) | Impairment losses on certain cost method and equity method investments which were determined to be impaired: |
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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(Continued)
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Cash and checking and savings accounts | $ | 55,566 | $ | 69,977 | ||||
Time deposits | — | 1,012 | ||||||
Total | $ | 55,566 | $ | 70,989 | ||||
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Available-for-sale securities: | ||||||||
Open-end funds | $ | 3,486 | $ | 3,553 | ||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Accounts receivable | $ | 4,428 | $ | 10,348 | ||||
Less: Allowance for doubful accounts | (200 | ) | (842 | ) | ||||
Net | $ | 4,228 | $ | 9,506 | ||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Balance at beginning of year | $ | 1,362 | $ | 254 | $ | 200 | ||||||
Additions: Provision for bad debt expense | 313 | 158 | 156 | |||||||||
Less: Write-offs | (399 | ) | (216 | ) | (219 | ) | ||||||
Acquisiton — IAHGames | — | — | 691 | |||||||||
Divestiture — Internet access and service business | (1,041 | ) | — | — | ||||||||
Translation adjustment | 19 | 4 | 14 | |||||||||
Balance at end of year | $ | 254 | $ | 200 | $ | 842 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Loans receivable — current | $ | 4,074 | $ | 5,761 | ||||
Less: Allowance for loans receivable — current | (3,574 | ) | (5,057 | ) | ||||
Deferred income tax assets — current, net (Note 25) | 1,116 | 581 | ||||||
Other | 2,363 | 759 | ||||||
Total | $ | 3,979 | $ | 2,044 | ||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Balance at beginning of year | $ | — | $ | 2,640 | $ | 3,574 | ||||||
Additions: Provision for bad debt expenses | 2,640 | 934 | 1,483 | |||||||||
Balance at end of year | $ | 2,640 | $ | 3,574 | $ | 5,057 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Available-for-sale securities | ||||||||
Debt securities | $ | 14,204 | $ | 5,454 | ||||
Equity securities | 4,152 | 27,935 | ||||||
Total | $ | 18,356 | $ | 33,389 | ||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
2009 | 2010 | |||||||
Amount | Amount | |||||||
Investments accounted for under the equity method | $ | 222 | $ | 65,395 | ||||
Investments accounted for under the cost method | 3,255 | 1,379 | ||||||
$ | 3,477 | $ | 66,774 | |||||
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December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Accrued advertising expenses | $ | 2,382 | $ | 770 | ||||
Accrued royalties | 52 | 1,499 | ||||||
Accrued professional fees | 1,160 | 3,676 | ||||||
Purchase price adjustment accrual to BetClic | — | 2,326 | ||||||
Other | 3,125 | 2,715 | ||||||
$ | 6,719 | $ | 10,986 | |||||
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Deferred revenue | $ | 8,295 | $ | 5,249 | ||||
Income taxes payable | 1,222 | 4,980 | ||||||
Other | 3,727 | 1,121 | ||||||
Total | $ | 13,244 | $ | 11,350 | ||||
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December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Contingent payment of minimum guarantee under licensing agreement | $ | — | $ | 5,885 | ||||
Warrant derivative (Note 10) | — | 665 | ||||||
Other | 49 | 1,136 | ||||||
Total | $ | 49 | $ | 7,686 | ||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Cost of online game and service revenues | $ | 27 | $ | 101 | $ | 10 | ||||||
Product development & engineering expenses | 480 | 59 | 18 | |||||||||
Selling and marketing expenses | 244 | 231 | 64 | |||||||||
General and administrative expenses | 1,954 | 2,886 | 2,922 | |||||||||
Pre-tax stock-based compensation expense | 2,705 | 3,277 | 3,014 | |||||||||
Income tax benefit | (497 | ) | (382 | ) | (90 | ) | ||||||
Total stock-based compensation expense reported in continuing operations | $ | 2,208 | $ | 2,895 | $ | 2,924 | ||||||
Total stock-based compensation expense reported in discontinued operations, net of tax | $ | 63 | $ | — | $ | — | ||||||
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Stock-Based | Granted | Options’ exercise | RSUs’ grant date | |||||||
compensation plan | awards | Vesting schedule | price | fair value | ||||||
2002 Plan | 3,000,000 | immediately upon granting | $0.79 | — | ||||||
2004 Plan | 7,703,185 | * | immediately upon granting to four years | $0.79~$2.55 | — | |||||
2006 Plan | 1,117,333 | ** | immediately upon granting to four years | $2.47~$16.6 | $2.91~$16.01 | |||||
2007 Plan | 2,431,907 | *** | immediately upon granting to four years | $2.47~$18.17 | $2.47~15.35 | |||||
2008 Plan | 1,000,000 | immediately upon granting to six years | $2.47~4.24 | — | ||||||
2009 Plan | 1,500,000 | immediately upon granting to four years | $2.47 | — |
* | The granted awards, net of forfeited or canceled shares, were within reserved shares of seven million common shares. | |
** | The granted awards, net of forfeited or canceled shares, were within reserved shares of one million common shares. | |
*** | The granted awards, net of forfeited or canceled shares, were within reserved shares of two million common shares. |
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
2008 | 2010 | |||||||
Option term (years) | 2.77~4.58 | 6.48 | ||||||
Volatility | 58%~65 | % | 65 | % | ||||
Weighted-average volatility | 64 | % | 65 | % | ||||
Risk-free interest rate | 1.72%~2.88 | % | 2.77 | % | ||||
Dividend yield | 0 | % | 0 | % | ||||
Weighted-average fair value of option granted | $ | 2.36 | $ | 1.55 |
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
2008 | 2009 | 2010 | ||||||||||||||||||||||||||||||||||||||
Weighted- | ||||||||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Average | Aggregate | ||||||||||||||||||||||||||||||||||||
Avg. | No.of | Avg. | No.of | Avg. | No.of | Remaining | Intrinsic | |||||||||||||||||||||||||||||||||
Exercise | Shares | Exercise | Shares | Exercise | Shares | Contractual | Value | |||||||||||||||||||||||||||||||||
Price | (in thousands) | Price | (in thousands) | Price | (in thousands) | Term | (in thousands) | |||||||||||||||||||||||||||||||||
Balance at January 31 | $ | 2.42 | 7,912 | $ | 2.47 | 8,287 | $ | 2.36 | 7,689 | |||||||||||||||||||||||||||||||
Options granted | 4.69 | 1,341 | — | — | 2.47 | 2,565 | ||||||||||||||||||||||||||||||||||
Options exercised | 0.95 | (518 | ) | 2.42 | (543 | ) | 0.87 | (201 | ) | |||||||||||||||||||||||||||||||
Options | ||||||||||||||||||||||||||||||||||||||||
Forfeited / canceled / expired | 9.97 | (448 | ) | 17.98 | (55 | ) | 5.66 | (273 | ) | |||||||||||||||||||||||||||||||
Balance at December 31 | $ | 2.47 | 8,287 | $ | 2.36 | 7,689 | $ | 2.33 | 9,780 | 5.60 | $ | 3,591 | ||||||||||||||||||||||||||||
Exercisable at December 31 | $ | 1.33 | 6,448 | $ | 1.65 | 6,420 | $ | 2.04 | 7,190 | 4.46 | $ | 3,591 | ||||||||||||||||||||||||||||
Vested and expected to vest at December 31 | $ | 2.47 | 8,287 | $ | 2.36 | 7,689 | $ | 2.33 | 9,780 | 5.60 | $ | 3,591 | ||||||||||||||||||||||||||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Options outstanding | Option currently exercisable | |||||||||||||||
Weighted | ||||||||||||||||
average | ||||||||||||||||
No. of Shares | remaining | No. of Shares | ||||||||||||||
Exercise price | (in thousands) | contractual life | Exercise price | (in thousands) | ||||||||||||
Under $1 | 5,201 | 3.50 years | Under $1 | 5,201 | ||||||||||||
$1~$10 | 3,950 | 8.19 years | $1~$10 | 1,452 | ||||||||||||
$10~$20 | 629 | 6.65 years | $10~$20 | 537 | ||||||||||||
9,780 | 7,190 | |||||||||||||||
2009 | 2010 | |||||||||||||||
Weighted- | Weighted- | |||||||||||||||
Number of | average | Number of | average | |||||||||||||
units | grant date fair | units | grant date | |||||||||||||
(in thousands) | value | (in thousands) | fair value | |||||||||||||
Nonvested at January 1 | 641 | $ | 10.41 | 640 | $ | 9.83 | ||||||||||
Granted | 100 | 6.01 | 119 | 2.68 | ||||||||||||
Vested | (86 | ) | 10.15 | (201 | ) | 4.88 | ||||||||||
Forfeited | (15 | ) | 7.19 | (168 | ) | 8.00 | ||||||||||
Nonvested at December 31 | 640 | $ | 9.83 | 390 | $ | 10.99 | ||||||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
For the years ended December 31 | ||||||||||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
U.S. operations | $ | 1,095 | $ | 1,324 | $ | 5,678 | ||||||
Non-U.S. operations | 35,684 | (56,909 | ) | 2,990 | ||||||||
$ | 36,779 | $ | (55,585 | ) | $ | 8,668 | ||||||
For the years ended December 31 | ||||||||||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
U.S. operations | $ | 620 | $ | 557 | $ | 4,992 | ||||||
Non-U.S. operations | 449 | (40 | ) | 2,268 | ||||||||
$ | 1,069 | $ | 517 | $ | 7,260 | |||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
For the years ended December 31 | ||||||||||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
U.S. Federal: | ||||||||||||
Current | $ | (57 | ) | $ | 863 | $ | 4,244 | |||||
Deferred | 528 | (443 | ) | 20 | ||||||||
$ | 471 | $ | 420 | $ | 4,264 | |||||||
U.S. State and Local: | ||||||||||||
Current | $ | 208 | $ | 156 | $ | 617 | ||||||
Deferred | (59 | ) | (19 | ) | 111 | |||||||
$ | 149 | $ | 137 | $ | 728 | |||||||
Non — U.S.: | ||||||||||||
Current | $ | 976 | $ | 967 | $ | 2,032 | ||||||
Deferred | (527 | ) | (1,007 | ) | 236 | |||||||
$ | 449 | $ | (40 | ) | $ | 2,268 | ||||||
Total income tax provision | $ | 1,069 | $ | 517 | $ | 7,260 | ||||||
For the years ended December 31 | ||||||||||||
2008 | 2009 | 2010 | ||||||||||
Federal statutory rate | 34.00 | % | 34.00 | % | 34.00 | % | ||||||
State and local — net of federal tax benefit | 6.27 | % | 8.14 | % | 6.69 | % | ||||||
Foreign tax differential | (32.56 | %) | (43.53 | %) | (88.75 | %) | ||||||
Permanent differences | 0.76 | % | 2.18 | % | 31.58 | % | ||||||
Change in valuation allowance | (4.69 | %) | (1.73 | %) | 52.73 | % | ||||||
Tax effect of earnings for equity method investees and certain subsidiaries | — | — | 42.72 | % | ||||||||
Other | (0.87 | %) | 0.01 | % | 4.79 | % | ||||||
Effective rate | 2.91 | % | (0.93 | %) | 83.76 | % | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Net operating loss carryforwards | $ | 80 | $ | 4,880 | ||||
Deferred revenue | 540 | 9 | ||||||
Loss on equity method investment | — | 2,813 | ||||||
Share-based compensation | 230 | 162 | ||||||
Impairment charges | 1,465 | 16 | ||||||
Pension expense | 41 | 33 | ||||||
Depreciation | 86 | 52 | ||||||
Other | (15 | ) | 18 | |||||
2,427 | 7,983 | |||||||
Less: valuation allowance | (1,068 | ) | (7,402 | ) | ||||
Deferred tax assets — net | $ | 1,359 | $ | 581 | ||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
December 31 | ||||||||
(in US$ thousands) | 2009 | 2010 | ||||||
Depreciation and amortization | $ | 69 | $ | 117 | ||||
Tax effect on undistributed earnings of equity method investees | — | 1,010 | ||||||
Other | (37 | ) | — | |||||
Deferred tax liabilities — net | $ | 32 | $ | 1,127 | ||||
For the years ended December 31, | ||||||||||||
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Balance at beginning of year | $ | 3,012 | $ | 106 | $ | 1,068 | ||||||
Subsequent reversal/utilization of valuation allowance | (2,787 | ) | (45 | ) | (12 | ) | ||||||
Additions to valuation allowance | — | 1,006 | 4,583 | |||||||||
Divestitures | (219 | ) | — | (874 | ) | |||||||
Acquisitions | — | — | 2,624 | |||||||||
Exchange differences | 100 | 1 | 13 | |||||||||
Balance at end of year | $ | 106 | $ | 1,068 | $ | 7,402 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | ||||||||
Jurisdiction | Amount | Expiring year | ||||||
Singapore | $ | 19,296 | indefinite | |||||
Hong Kong | 4,928 | indefinite | ||||||
Taiwan | 1,871 | 2020 | ||||||
Other | 1,841 | |||||||
Total | $ | 27,936 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | Amount | |||
Balance at January 1, 2008 | $ | 127 | ||
Decrease due to settlement | (127 | ) | ||
Balance at December 31, 2008 | — | |||
Increase for prior year tax positions | 220 | |||
Increase for current year tax positions | 460 | |||
Exchange differences | 22 | |||
Balance at December 31, 2009 | 702 | |||
Acqusition of IAHGames | 535 | |||
Increase for prior year tax positions | 194 | |||
Increase for current year tax positions | 323 | |||
Decrease due to settlement | (166 | ) | ||
Exchange differences | 79 | |||
Balance at December 31, 2010 | $ | 1,667 | ||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | ||||
Year | ||||
2011 | $ | 1,151 | ||
2012 | 559 | |||
2013 | 124 | |||
2014 | 118 | |||
2015 | 121 | |||
2016 and after | 1,236 | |||
Total | $ | 3,309 | ||
Minimum | ||||||||||||
guarantees | ||||||||||||
against future | ||||||||||||
(in US$ thousands) | License fees | royalties | Total | |||||||||
Minimum required payments: | ||||||||||||
In 2011 | $ | 741 | $ | 9,633 | $ | 10,374 | ||||||
After 2011 | 6,200 | 5,500 | 11,700 | |||||||||
$ | 6,941 | $ | 15,133 | $ | 22,074 | |||||||
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Gaming | Asian online | |||||||||||
software and | game and | |||||||||||
(in US$ thousands) | service | service | Total | |||||||||
2008: | ||||||||||||
Segment profit or loss: | ||||||||||||
Net revenue from external customers | $ | 144,765 | $ | 45,604 | $ | 190,369 | ||||||
Income from operations | $ | 36,360 | $ | 7,998 | $ | 44,358 | ||||||
Share-based compensation | $ | 1,249 | $ | 547 | $ | 1,796 | ||||||
Impairment loss on prepaid licensing fees and intangible assets | $ | — | $ | 1,524 | $ | 1,524 | ||||||
Interest income | $ | 680 | $ | 367 | $ | 1,047 | ||||||
Interest expense | $ | 7 | $ | — | $ | 7 | ||||||
Gains on sales of marketable securities | $ | — | $ | 4 | $ | 4 | ||||||
Foreign exchange gain (loss) | $ | 269 | $ | (124 | ) | $ | 145 | |||||
Loss on equity method investments | $ | — | $ | 3,010 | $ | 3,010 | ||||||
Depreciation | $ | 2,064 | $ | 1,080 | $ | 3,144 | ||||||
Amortization, including intangible assets | $ | 1,704 | $ | 2,549 | $ | 4,253 | ||||||
Income tax expense | $ | 743 | $ | 326 | $ | 1,069 | ||||||
Segment assets: | ||||||||||||
Equity method investments | $ | — | $ | 75 | $ | 75 | ||||||
Additions to property, plant and equipment | $ | 6,095 | $ | 1,585 | $ | 7,680 | ||||||
Additions to intangible assets | $ | 3,953 | $ | 3,383 | $ | 7,336 | ||||||
Additions to goodwill | $ | — | $ | 2,249 | $ | 2,249 | ||||||
Total assets | $ | 132,631 | $ | 130,327 | $ | 262,958 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Gaming | Asian online | |||||||||||
software and | game and | |||||||||||
(in US$ thousands) | service | service | Total | |||||||||
2009: | ||||||||||||
Segment profit or loss: | ||||||||||||
Net revenue from external customers | $ | 112,694 | $ | 46,887 | $ | 159,581 | ||||||
Income (loss) from operations | $ | 7,472 | $ | (34,649 | ) | $ | (27,177 | ) | ||||
Share-based compensation | $ | 501 | $ | 931 | $ | 1,432 | ||||||
Impairment loss on prepaid licensing fees and intangible assets | $ | 212 | $ | 22,787 | $ | 22,999 | ||||||
Impairment loss on property, plant and equipment | $ | — | $ | 777 | $ | 777 | ||||||
Impairment loss on goodwill | $ | — | $ | 14,103 | $ | 14,103 | ||||||
Interest income | $ | 242 | $ | 129 | $ | 371 | ||||||
Interest expense | $ | — | $ | — | $ | — | ||||||
Foreign exchange gain (loss) | $ | 521 | $ | (114 | ) | $ | 407 | |||||
Loss on equity method investments | $ | — | $ | 87 | $ | 87 | ||||||
Impairment loss on marketable securities and investments | $ | — | $ | 13,719 | $ | 13,719 | ||||||
Depreciation | $ | 2,279 | $ | 1,500 | $ | 3,779 | ||||||
Amortization, including intangible assets | $ | 2,027 | $ | 3,120 | $ | 5,147 | ||||||
Income tax expense (benefit) | $ | 871 | $ | (101 | ) | $ | 770 | |||||
Segment assets: | ||||||||||||
Equity method investments | $ | — | $ | 222 | $ | 222 | ||||||
Additions to property, plant and equipment | $ | 2,731 | $ | 2,929 | $ | 5,660 | ||||||
Additions to intangible assets | $ | 5,793 | $ | 2,307 | $ | 8,100 | ||||||
Additions to goodwill | $ | — | $ | — | $ | — | ||||||
Total assets | $ | 145,776 | $ | 111,354 | $ | 257,130 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
Gaming | Asian online | |||||||||||
software and | game and | |||||||||||
(in US$ thousands) | service | service | Total | |||||||||
2010: | ||||||||||||
Segment profit or loss: | ||||||||||||
Net revenue from external customers | $ | 25,820 | $ | 38,862 | $ | 64,682 | ||||||
Income (loss) from operations | $ | 78 | $ | (31,554 | ) | $ | (31,476 | ) | ||||
Share-based compensation | $ | 80 | $ | 342 | $ | 422 | ||||||
Impairment loss on prepaid licensing fees and intangible assets | $ | — | $ | 2,200 | $ | 2,200 | ||||||
Impairment loss on property, plant and equipment | $ | — | $ | 278 | $ | 278 | ||||||
Impairment loss on goodwill | $ | — | $ | 2,255 | $ | 2,255 | ||||||
Impairment loss on deconsolidation of T2CN | $ | — | $ | 22,234 | $ | 22,234 | ||||||
Interest income | $ | 83 | $ | 438 | $ | 521 | ||||||
Interest expense | $ | 1 | $ | 59 | $ | 60 | ||||||
Foreign exchange gain (loss) | $ | (29 | ) | $ | 91 | $ | 62 | |||||
Loss on equity method investments — net | $ | 9,768 | $ | 11,002 | $ | 20,770 | ||||||
Impairment loss on marketable securities and investments | $ | — | $ | 4,677 | $ | 4,677 | ||||||
Depreciation | $ | — | $ | 1,556 | $ | 1,556 | ||||||
Amortization, including intangible assets | $ | — | $ | 2,696 | $ | 2,696 | ||||||
Income tax expense | $ | 6,445 | $ | 1,118 | $ | 7,563 | ||||||
Segment assets: | ||||||||||||
Equity method investments | $ | 44,472 | $ | 20,923 | $ | 65,395 | ||||||
Additions to property, plant and equipment | $ | 1,209 | $ | 1,534 | $ | 2,743 | ||||||
Additions to intangible assets | $ | 1,198 | $ | 1,114 | $ | 2,312 | ||||||
Additions to goodwill | $ | — | $ | 12,188 | $ | 12,188 | ||||||
Total assets | $ | 168,671 | $ | 76,679 | $ | 245,350 | ||||||
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Gaming | Asian online | |||||||||||
software and | game and | |||||||||||
(in US$ thousands) | service | service | Total | |||||||||
Depreciation | $ | — | $ | 1,556 | $ | 1,556 | ||||||
Amortization, including intangible assets | $ | — | $ | 2,696 | $ | 2,696 | ||||||
Income tax expense | $ | 6,445 | $ | 1,118 | $ | 7,563 | ||||||
Segment assets: | ||||||||||||
Equity method investments | $ | 44,472 | $ | 20,923 | $ | 65,395 | ||||||
Additions to property, plant and equipment | $ | 1,209 | $ | 1,534 | $ | 2,743 | ||||||
Additions to intangible assets | $ | 1,198 | $ | 1,114 | $ | 2,312 | ||||||
Additions to goodwill | $ | — | $ | 12,188 | $ | 12,188 | ||||||
Total assets | $ | 168,671 | $ | 76,679 | $ | 245,350 | ||||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Income (loss) from operations: | ||||||||||||
Total segments | $ | 44,358 | $ | (27,177 | ) | $ | (31,476 | ) | ||||
Adjustment* | (6,255 | ) | (12,884 | ) | (16,220 | ) | ||||||
Total GigaMedia consolidated | $ | 38,103 | $ | (40,061 | ) | $ | (47,696 | ) | ||||
Share-based compensation | ||||||||||||
Total segments | $ | 1,796 | $ | 1,432 | $ | 422 | ||||||
Adjustment* | 909 | 1,845 | 2,592 | |||||||||
Total GigaMedia consolidated | $ | 2,705 | $ | 3,277 | $ | 3,014 | ||||||
Impairment loss on prepaid licensing fees and intangible assets: | ||||||||||||
Total segments | $ | 1,524 | $ | 22,999 | $ | 2,200 | ||||||
Adjustment* | — | 3 | — | |||||||||
Total GigaMedia consolidated | $ | 1,524 | $ | 23,002 | $ | 2,200 | ||||||
Impairment loss on property, plant and equipment: | ||||||||||||
Total segments | $ | — | $ | 777 | $ | 278 | ||||||
Adjustment* | — | 473 | — | |||||||||
Total GigaMedia consolidated | $ | — | $ | 1,250 | $ | 278 | ||||||
Interest income: | ||||||||||||
Total segments | $ | 1,047 | $ | 371 | $ | 521 | ||||||
Adjustment* | 413 | 61 | 435 | |||||||||
Total GigaMedia consolidated | $ | 1,460 | $ | 432 | $ | 956 | ||||||
Interest expense: | ||||||||||||
Total segments | $ | 7 | $ | — | $ | 60 | ||||||
Adjustment* | 969 | 390 | 310 | |||||||||
Total GigaMedia consolidated | $ | 976 | $ | 390 | $ | 370 | ||||||
Gain (loss) on sales of marketable securities: | ||||||||||||
Total segments | $ | 4 | $ | — | $ | — | ||||||
Adjustments* | 369 | — | — | |||||||||
Total GigaMedia consolidated | $ | 373 | $ | — | $ | — | ||||||
Foreign exchange gain (loss): | ||||||||||||
Total segments | $ | 145 | $ | 407 | $ | 62 | ||||||
Adjustments* | 95 | (239 | ) | (668 | ) | |||||||
Total GigaMedia consolidated | $ | 240 | $ | 168 | $ | (606 | ) | |||||
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YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | 2008 | 2009 | 2010 | |||||||||
Impairment loss on marketable securities and investments: | ||||||||||||
Total segments | $ | — | $ | 13,719 | $ | 4,677 | ||||||
Adjustment* | — | 2,024 | — | |||||||||
Total GigaMedia consolidated | $ | — | $ | 15,743 | $ | 4,677 | ||||||
Depreciation: | ||||||||||||
Total segments | $ | 3,144 | $ | 3,779 | $ | 1,556 | ||||||
Adjustments* | 177 | 579 | 536 | |||||||||
Total GigaMedia consolidated | $ | 3,321 | $ | 4,358 | $ | 2,092 | ||||||
Amortization: | ||||||||||||
Total segments | $ | 4,253 | $ | 5,147 | $ | 2,696 | ||||||
Adjustments* | 34 | 72 | 83 | |||||||||
Total GigaMedia consolidated | $ | 4,287 | $ | 5,219 | $ | 2,779 | ||||||
Income tax expense: | ||||||||||||
Total segments | $ | 1,069 | $ | 770 | $ | 7,563 | ||||||
Adjustments* | — | (253 | ) | (303 | ) | |||||||
Total GigaMedia consolidated | $ | 1,069 | $ | 517 | $ | 7,260 | ||||||
Additions to property, plant and equipment: | ||||||||||||
Total segments | $ | 7,680 | $ | 5,660 | $ | 2,743 | ||||||
Adjustments** | 1,134 | 101 | 1,041 | |||||||||
Total GigaMedia consolidated | $ | 8,814 | $ | 5,761 | $ | 3,784 | ||||||
Additions to intangible assets: | ||||||||||||
Total segments | $ | 7,336 | $ | 8,100 | $ | 2,312 | ||||||
Adjustments** | 309 | 707 | 5 | |||||||||
Total GigaMedia consolidated | $ | 7,645 | $ | 8,807 | $ | 2,317 | ||||||
Total assets: | ||||||||||||
Total segments | $ | 262,958 | $ | 257,130 | $ | 245,350 | ||||||
Adjustment** | 53,835 | 3,051 | 22,239 | |||||||||
Total GigaMedia consolidated | $ | 316,793 | $ | 260,181 | $ | 267,589 | ||||||
* | Adjustment items include corporate and certain back-office costs and expenses not attributable to any specific segment. | |
** | Adjustment items include total corporate assets, the Internet access and service business segment and eliminations. |
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(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
(in US$ thousands) | ||||||||||||
Geographic region / country | 2008 | 2009 | 2010 | |||||||||
Canada | $ | 144,765 | $ | 112,694 | $ | 25,820 | ||||||
Taiwan | 20,932 | 24,869 | 19,449 | |||||||||
PRC | 19,652 | 18,318 | 9,885 | |||||||||
Hong Kong | 4,964 | 3,700 | 4,026 | |||||||||
Singapore | — | — | 3,702 | |||||||||
Malaysia | — | — | 1,603 | |||||||||
Others | 56 | — | 197 | |||||||||
Total | $ | 190,369 | $ | 159,581 | $ | 64,682 | ||||||
(in US$ thousands) | December 31, | |||||||||||
Geographic region / country | 2008 | 2009 | 2010 | |||||||||
Taiwan | $ | 4,118 | $ | 3,642 | $ | 3,130 | ||||||
Canada | 2,264 | — | — | |||||||||
PRC | 1,734 | 1,920 | 921 | |||||||||
United States | 4,642 | — | — | |||||||||
Hong Kong | 710 | 427 | 213 | |||||||||
Singapore | — | — | 902 | |||||||||
Malaysia | — | — | 20 | |||||||||
Other | — | — | 115 | |||||||||
Total | $ | 13,468 | $ | 5,989 | $ | 5,301 | ||||||
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(Continued)
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
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